The Alaska Department of Revenue's new analysis of the Willow project, calling for it to start paying off to the state treasury by 2030, presents a more positive picture than one the department issued three weeks ago. (via AlaskaBeacon)
three weeks ago. The Feb. 28 analysis estimated that it would take a decade for the Willow project to produce more money for the state treasury than is lost through reduced production taxes from elsewhere on the North Slope. The February analysis found that reduced production taxes would cause the state to lose cumulative $1 billion in revenues during those early years before reaping billions of dollars of benefits later on.
“We still expect a modest reduction in state revenue during construction, and a significant positive after, but peak production is pushed beyond the 10-year window,” he told the Senate Finance Committee in its hearing. by the Biden administration, is expected to produce about 600 million barrels over its lifetime, with peak daily production at 180,000 barrels early in the field’s life.
Another factor changing the analysis is the new projection for oil prices, the two officials said. The Feb. 28 analysis was based on price estimates made in December, while the new analysis factors in the lower oil prices estimated in the spring revenue forecast issued on Wednesday. Lower oil prices generally reduce the level to which producers may claim credits to offset production taxes, the two said.
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