​Alaska Oil & Gas Tax Reform ProposalAs Governor, I would propose this plan to the Legislature. Alaska’s current oil and gas tax system is overly complex, unpredictable, and vulnerable to accounting strategies that reduce the state’s share even when prices and production are strong. This has led to unstable revenue, reduced public trust, and long-term fiscal uncertainty.
The goal of this reform is to:
  • Simplify the tax structure
  • Ensure Alaska receives a fair and predictable return
  • Encourage new development without giveaways
  • Protect in-state energy security
  • Treat different basins according to their real-world economics
I have reached out to several industry leaders to discuss this plan because we appreciate what they have done in Alaska, and we want to work together to achieve responsible, sustainable solutions.

Core Reform: North Slope Gross-Value TaxBase Structure
  • Establish a 10% gross-value production tax on North Slope oil and gas production.
  • Tax is assessed on the value of production before deductions, eliminating loopholes that currently reduce effective tax rates.
  • Existing state royalties and property taxes remain unchanged.
Why Gross-Value Taxation
  • Predictable revenue for the state
  • Easier to administer and audit
  • Prevents zero-tax years during high production
  • Reduces litigation and accounting disputes
  • Aligns Alaska with proven models used successfully in other producing states

Cook Inlet: Legacy vs. New WellsAlaska recognizes that Cook Inlet is a unique, aging, and locally critical resource. This plan distinguishes legacy wells from new wells, ensuring that energy security and affordability are protected while allowing fair taxation on future development.
1. Legacy Wells
  • Defined as wells drilled before January 1, 2026.
  • Continue under a protective, low-rate tax framework to preserve production, support local energy security, and avoid cost shocks to Alaskans.
  • Legacy wells may deduct necessary maintenance, safety upgrades, and environmental compliance costs.
  • Optional: temporary incentives for upgrades that extend productive life.
2. New Wells
  • Defined as wells drilled after January 1, 2026.
  • Subject to the standard North Slope-inspired gross-value tax, with early-stage production incentives for high-cost or marginal wells.
  • Incentives are narrow, transparent, and temporary, intended to encourage investment without permanent loopholes.
3. Oversight & Transparency
  • Separate accounting for legacy vs. new wells.
  • Annual public reporting of revenues, production, and incentives by well type.
  • Legislative review every 2–3 years to ensure effectiveness.

Incentives for New North Slope & Cook Inlet Development
  • New oil wells receive a temporary reduced gross tax rate during early production years.
  • Rates phase up gradually to the full rate once production stabilizes.
  • Targeted, time-limited credits may be used for:
    • High-cost frontier wells
    • Stranded or technically challenging resources
    • Low-output or marginal wells during startup
  • Incentives are transparent, narrow, and temporary, unlocking production without permanent giveaways.

Stranded Gas & Environmental Benefits
  • Reduced tax rates for stranded or remote gas fields during early development.
  • Incentives for gas capture to reduce flaring.
  • Support for infrastructure that safely and efficiently brings gas to market.
This encourages:
  • Cleaner operations
  • Better use of existing resources
  • Long-term energy supply stability

Transparency & Oversight
  • Annual public reporting on:
    • Revenue collected
    • Incentives granted
    • Production changes
  • Regular legislative and public review of outcomes.
  • Automatic review and adjustment provisions based on performance metrics.

What This Plan Achieves
  • Fixes a broken North Slope tax system.
  • Protects Cook Inlet energy security and jobs.
  • Stabilizes state revenue without overtaxing marginal production.
  • Encourages responsible development.
  • Restores public trust through transparency and simplicity.

Bottom LineThis reform recognizes a simple truth: Alaska’s resources are diverse, and responsible management requires precision — not one-size-fits-all policy.
By fixing what’s broken, protecting what works, and governing with realism instead of ideology, Alaska can once again manage its oil and gas wealth for the benefit of the people who live here — now and for generations to come.
This plan protects legacy Cook Inlet wells to ensure energy security and affordability, while fairly taxing new wells to provide revenue for the state. It balances conservation, economic development, and Alaska-first priorities.

Legislative Requirement
This proposal requires approval from the Alaska Legislature to take effect. By working together with lawmakers and industry leaders, we can achieve a fair, sustainable, and Alaska-first approach to managing our state’s most valuable resources.