Browsing College of Engineering and Mines (CEM) by Subject "Taxation"
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A comprehensive analysis of the oil fields of the North Slope of Alaska: their use as analogs, recent exploration, and forecasted royalty and production tax revenueRevenues from petroleum production supply most of the revenue for unrestricted general funds for the State of Alaska. As such, variations in the price of oil, decline from existing production and new developments greatly affect the money available for the state to spend on everything from roads to education. This study reviewed all producing oil fields on the North Slope, characterized their reservoir performance and forecasted future production. This was coupled with analysis of recent exploration discoveries and ongoing project developments to forecast future North Slope production and create potential royalty and production tax revenue forecasts. After 40 years of production, Prudhoe Bay remains the dominant field on the North Slope, accounting for 45% of current production. Relatively large changes in the non-anchor field pools are only able to change North Slope production by a couple of percent due to the nature of their size compared to Prudhoe Bay, Kuparuk and Alpine. New developments however, are able to materially contribute to changes in North Slope production if they are large enough. With continued activity in the many fields, creating an accurate forecast is challenging, however, without new developments, the Trans Alaska Pipeline will need to make changes to accommodate low flow rates. Currently identified new developments have the potential to extend current production rates 10-20 years. Some of these announced developments and discoveries have announced productivity rates that are not realistic compared to analog well performance, and will likely require many more wells to achieve the announced rates and volumes.
Major impediments to a feasibility study in the case of Smith Bay developmentThe State of Alaska is one of the energy-producing states which rely on revenue from energy extraction, but faces several challenges, especially significant fluctuations in revenue generated by taxes. In the past, oil production from established oil fields on state land yielded sufficient tax revenue. For new sources of oil, oil company owners must make a decision about developing the prospects based on a feasibility study which produces preliminary design, cost estimates, project schedule, including many permits and other uncertainties, financing, and tax credits. When this study is done, the decision can be made to begin development. This paper considers the feasibility studies on main obstacles in the development path of Smith Bay. The evaluation of major tasks needed for a feasibility study, uncertainty and obstacles, combined with our estimation of the time period required for the oil fields to produce oil, led to an estimate of the time before tax money will be provided to the state.