Lawmakers stake positions on oil credits amid news of find

JUNEAU, Alaska (AP) — Alaska lawmakers used the announcement of a major oil find on the North Slope Thursday to stake out positions in the politically charged debate over oil taxes and credits.

Spanish energy company Repsol, which has partnered with Armstrong Energy LLC, said the find could amount to about 1.2 billion barrels of recoverable light oil. Repsol called it the largest U.S. onshore oil discovery in 30 years.

The announcement was hailed by Gov. Bill Walker and Republican U.S. Sen. Dan Sullivan.

But it laid bare a divide, particularly in the Alaska House, over proposals to overhaul the state's oil tax and credit structure. Lawmakers are debating whether to further reduce incentives aimed at encouraging oil activity amid a multibillion-dollar state budget deficit.

In a release, House Resources Committee co-chair Geran Tarr, D-Anchorage, said this and other recent oil announcements underscore the need to finish work on tax credits. Tarr has argued that the state's credit program is too generous and unaffordable.

Her co-chair, Rep. Andy Josephson, D-Anchorage said new oil has the potential to reverse a downward trend of oil flowing through the trans-Alaska pipeline.

"However, these new oil discoveries also have the potential to devastate the budget if we continue a system that requires the state of Alaska to pay billions of dollars in costs with no assurances of future revenue, especially at low oil prices," he said in a release.

Minority House Republicans, meanwhile, saw the announcement as evidence that the system is working.

"Not only will jobs be created, both directly and indirectly, but with these types of discoveries we can allow our current oil and gas tax system to provide benefits to the state," Rep. Dave Talerico, R-Healy, said in a release.

Senate Resources Committee chairwoman Cathy Giessel, in a statement, called the announcement "outstanding."

The Anchorage Republican said the discovery is encouraging and underscores the importance of Alaska being "a stable, reliable place to invest and create jobs."