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Bill Includes “Cook Inlet Stampede” Tax Credits to Incentivize Jack-Up Drill Rig Exploration of Cook Inlet

Juneau – Sen. Tom Wagoner, R-Kenai, today said the inclusion in SB 309 of incentives for deep level exploration of the Cook Inlet basin will trigger a stampede to bring a jack-up drill rig into the area. Amendments made in the Senate Finance committee incorporate the incentives from Wagoner’s SB 290. Wagoner worked with Sen. Lesil McGuire, R-Anchorage, to put the language in SB 309, and with House Speaker Mike Chenault, R-Nikiski, who introduced a companion bill in the House of Representatives.

“The only way we are ever going to offset the declining oil and gas production in Cook Inlet is to get down to the Jurassic zone and start producing the hydrocarbons in those reservoirs,” Wagoner said. “Cook Inlet is an underexplored basin, and there has not been a jack-up drill rig operating there since the early 1990s. I believe the way these credits are structured will cause a stampede by independents to the Inlet.”

“At a time when natural gas production and supply in the Cook Inlet is declining and demand continues to grow, this legislation will strongly encourage companies to invest additional capital in exploring for new gas reserves,” said Senator McGuire. “This will be another step that will help provide energy for South Central Alaska.”

The tax credits will apply to the first three unaffiliated explorers to drill down to the pre-Tertiary, or into the Jurassic zone, and are structured as follows:

• First explorer is credited 100 percent of costs, or up to $25 million;
• Second explorer is credited 90 percent, or up to $22.5 million;
• Third explorer is credited 80 percent, or up to $20 million.

If the exploration results in sustained oil and/or gas production from a reservoir discovered by the drilling, then 50 percent of the credits awarded would be repaid to the state.

A jack-up drill rig is a mobile drilling platform that uses extendable legs that reach the ocean floor for support and stability.

SB 309 passed the House of Representatives by a vote of 37-2 and passed the Senate unanimously last week.

Legislature Passes House Bill 101 to Better Protect Annuities and Life Insurance from Garnishment – Sen. Coghill in Unusual Position of Voting for his Bill in Both House and Senate

Juneau – HB 101 increases to $500,000 the $10,000 cap on annuities and life insurance, allowing Alaskan families to plan for their retirement without the threat of garnishment.

While public retirement programs have exemption without limitation, non-government workers and small business owners rely on life insurance and annuity contracts to supplement their retirements. This bill ensures that life insurance and annuities have limited liability to satisfy debt created after the effective date of the legislation.

“With the uncertain fiscal situation we as a country find ourselves in, most of us are not planning on social security as our only form of retirement or to leave to our survivors,” Coghill said. “This bill allows Alaskans to better plan for their retirement, and for the provision of their loved ones, by adding protection to life insurance and annuities.”

When HB 101 was calendared for a vote in the Senate on April 6th of this year, Senator Coghill found himself in an unusual position of being able to vote in both the House and Senate to pass HB 101, a bill he introduced last year to provide a higher level of protection against garnishment for life insurance and annuities. The bill passed the House unanimously on April 3, 2009.

Today the House concurred in amendments made to the bill in the Senate, and it now awaits transmittal to the Governor for his signature.