Texas company eyeing new oil pool in Alaska’s Cook Inlet

Low clouds blanket Anchorage, Alaska, east of downtown, on Friday morning, December 7, 2012. An optical illusion known as Fata Morgana distorts the view of the mountains west of Cook Inlet. Alternating warm and cold layers of air bend light to create the effect. (Marc Lester/Anchorage Daily News/MCT)
Low clouds blanket Anchorage, Alaska, east of downtown, on Friday morning, December 7, 2012. An optical illusion known as Fata Morgana distorts the view of the mountains west of Cook Inlet. (Marc Lester/Anchorage Daily News/MCT)

ANCHORAGE, Alaska (AP) — A small company working to develop Cook Inlet’s first new oil pool in years is urging policymakers to use restraint when considering changes to the state’s controversial oil-tax credit program.

BlueCrest Energy, a Texas company founded by a former Alaskan, may not be able to develop a gas field west of Anchor Point without the credits, The Alaska Dispatch News reports. Founder Benjamin Johnson said if the state pulls support, they will not be able to continue drilling.

The plea comes as a state Senate working group has been scrutinizing the program, which paid $628 million last year to companies on the North Slope, in Cook Inlet and other areas.

With Alaska facing its second consecutive $3 billion budget deficit, Gov. Bill Walker’s administration says the program should be scaled back.

Johnson said he understand that the tax-credit system needs to be changed, but he argues the state should do so carefully so that companies poised for success can meet preexisting commitments.

“The tax credits don’t have to be exactly the same, but if they work and are favorable, then we’ll start drilling next year,” he said.

Lawmakers are looking at ways to both cut down on the state’s fiscal shortfall and continue to encourage development.

Sen. Bill Wielechowski, D-Anchorage, said the tax credits have worked to bring new investment but that changes to the rates have brought few dollars back to the state.

“We need to find a balance,” he said, which could include a larger royalty stake in exchange for credits.

Sen. Cathy Giessel, R-Anchorage, said the program has brought jobs, investments and independents to the state. Giessel convened the working group on the tax credits and said she understands oil companies plan their budgets a year in advance. She said any changes would be gradual.

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