State income from oil production has dropped more than 85% per barrel in the past year. Plummeting from $15.80 per barrel to roughly $2.30, Alaska’s oil production tax is feeling the effects of slumping prices worldwide.
The figures were shared as part of a recent revenue forecast where officials again faced the harsh “fiscal reality” of a $3.5 billion deficit in state spending.
While profits are down, the state isn’t exempt from ongoing industry tax credits, which would shave close to $1 billion from producer tax liabilities this year and in 2016. Many of those credits will go to companies operating in the Cook Inlet, where oil production is relatively low. An average of just 16,000 barrels were produced daily last year.
Adding further concern is the overall drop in production as companies across the globe slow their operations.