Governor Walker today signed a bill formalizing a five-year contract, allowing Tesoro to purchase up to 25,000 barrels of oil per day from the state’s share of royalty oil.
Walker’s office says the agreement will circulate $127 million in the economy and provide a steady source of oil for the Nikiski refinery, which employs more than 200 Alaskans.
Department of Natural Resources’ Jim Shine…
Shine: “We estimate the commercial section has looked at the production forecast and current levels, that we have approximately 50-52,000 barrels of royalty oil available right now.”
Shine said oil production will continue to fall.
The state has two options when dealing with oil royalties, either taking the royalties in cash or oil. In this case, the state opted to take oil royalties and then sell them to Tesoro. The DNR estimates the state will receive$45 million to $56 million more in revenue over the next five years with this contract than if they’d taken a cash payout.
The bill mirrors a similar two-year measure passed in 2014 by then-Governor Sean Parnell.
