Regulatory and fiscal stability herald bright future for investment in Alaska
There is a renaissance underway on the North Slope driven primarily by two huge projects – Santos’ and Eni’s Pikka development and ConocoPhillips’ Willow. Together, these two, new oil fields will increase production to levels not seen in in two decades.
Despite the challenges that come with operating in the Arctic – high costs, harsh weather, supply chain issues, legal hurdles and fluctuating oil prices –Alaska can expect $22 billion in planned oil and gas industry investment between 2025 and 2030, according to a petroleum economics study by Anchorage-based McKinley Research.
“By 2034, more than 60% of North Slope production will come from fields that, today, have yet to put a single drop into the Trans Alaska Pipeline System,” the study found.
We cannot control many of the challenges Arctic operations bring, but we can maintain fair and stable tax policies that attract the capital needed to keep our resource industries healthy so they can produce jobs and revenues for Alaskans.
Let’s keep Alaska competitive!
What’s at stake
$4B
State & Local Revenue
FY25
70,425
Alaskan Jobs Supported
Direct/Indirect
$0.5B
Grow the Permanent Fund
FY22 Dedicated Revenues to Corpus
$5.8B
Spending with Local Businesses
Annual
Source: McKinley Research for AOGA
Stable tax policy leads to resource renaissance on the North Slope
Now that Pikka Phase 1 is days away from first oil, Santos says it’s just getting started.
Santos’ first Alaska development sits on 17,000 acres of land, just 1% of its total leasehold on the North Slope. "We have a huge amount of running room and this is exactly what our subsurface team is looking at,” Pete Laliberte, Vice President of Business Development, said during the AOGA conference.
"This is our core development area, so when we sanctioned Pikka Phase 1, we sanctioned it in this core development area with our partner Repsol."
Santos believes this core area contains three Pikkas.
"I think that we've got the one Pikka development that we're doing right now, but we also have a unit called Horseshoe and a unit called Quokka," Laliberte said. "In Quokka we're drilling another appraisal well this winter and, in the Quokka and Horseshoe units we see “the potential for two more Pikkas."
In other words, Santos has much more to come on the Slope. During its 2026 Plan of Development approved by the state, Santos committed to complete all remaining facility and infrastructure work at Pikka 1 and drill an additional eight wells. Then it’s on to the south and west.
"We've also got a major discovery in Lagniappe in the eastern North Slope and that's with our partners, APA Corporation and Armstrong," he said. "And then finally we've got a big NPR (National Petroleum Reserve-Alaska) position – probably a little bit longer term."
“The oil and gas industry is generally an area of strength right now,” says Dan Stickel, Chief Economist at the Alaska Department of Revenue. “Prices are not great, but they are sufficient to allow quality projects to proceed.”
Alaska Business takes a look at the state’s economy in 2026, interviewing a variety of economists and business leaders. Here are some of its findings:
Rebecca Logan, CEO of the Alaska Support Industry Alliance, is optimistic about the potential growth for the oil and gas industry, as well as the mining industry. “People feel pretty good about the work they have for 2026,” says Logan. “The big excitement is about what can be solidified in 2026.”
First out of the gate is Pikka, an 80,000-barrel/day shot in the arm for the Trans Alaska Pipeline System, followed in a couple of years by Willow.
While these mega projects anchor the North Slope for now, many economists and researchers say Alaska needs to strike a balance between optimism and realism. “Global economic uncertainty, strong US production, geopolitical events in Russia and Iran, and OPEC policy have led to a decline in oil prices in the last six to twelve months. OPEC has signaled a willingness and ability to put further pressure on US producers in order to reclaim market share,” says Brett Watson, UAA associate professor of Applied and Natural Resource Economics.
Even if activity keeps up its tempo, the industry is changing and fewer Alaskans are likely to draw paychecks from it. “Like many industries, oil and gas has achieved more operational efficiencies over the last decade or so as it was forced to slim down employment in the face of lower prices,” Watson says. “Wells require fewer workers and are drilled in faster than in years past. Horizontal drilling accommodates many wells to a pad. Artificial intelligence [AI] presents new opportunities for this (and every other industry) to do the same.”
There’s more on Alaska’s outlook here: www.akbizmag.com/industry/government/alaskas-economic-forecast-for-2026/
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Letter from the co-chairs
Fair and Competitive oil taxes are working
There is a resurgence in oil production and jobs in Alaska that is directly related to our current oil tax policy. SB 21, a fair and competitive tax policy, replaced the antiquated ACES tax structure that drove down petroleum investment for more than a decade. Thanks to SB 21, Alaskans have the greatest opportunity of our generation on the North Slope today.
Some present and former legislators argue that SB 21 was a mistake, but the facts speak for themselves.
The Willow and Pikka projects, years in the making, are in active development, with Pikka now expecting first production any day now. These and other robust investments in Alaska’s future would not have occurred under the previous punitive tax regime. Between the Willow and Pikka projects alone, the oil and gas industry is spending over $10 billion in Alaska, with each project generating thousands of construction jobs and hundreds of operating jobs.
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