Department of Revenue presents Senate Finance with 25-scenario sensitivity analysis on Alaska LNG fiscal impact

The Alaska Department of Revenue presented the Senate Finance Committee on Monday with a sensitivity analysis modeling how the proposed Alaska LNG project could affect state revenue through 2062 under different oil price and production assumptions. The committee requested the modeling to understand potential fiscal outcomes under the tax structure in SB 2001.

The analysis ran 25 scenarios, varying oil production losses at Prudhoe Bay (zero to 500 million barrels) and incremental oil production at Point Thompson (zero to 270 million barrels) against different oil prices.

The baseline scenario — no Prudhoe Bay production losses, 270 million additional barrels from Point Thompson as gas development brings on associated liquids — projects $29 billion in net state revenue gains through 2062 under SB 2001.

The worst-case scenario flips both assumptions: a 500 million barrel Prudhoe Bay loss and zero incremental Point Thompson production. Under that combination, outcomes vary sharply with oil price. At $60 per barrel, the state would still see $6.6 billion in revenue gains. At $100 per barrel, the same production scenario produces a $16.2 billion net revenue loss.

"Slide 54 is that $100 per barrel oil impact scenario with the worst-case production scenario under Senate Bill 2001 as introduced by the Governor, which would be a $16.2 billion reduction to state revenue through 2062 in this scenario," DOR's Stickel told the committee.

Recent testimony from the Alaska Oil and Gas Conservation Commission has suggested Point Thompson may produce closer to 80 million additional barrels rather than the 270 million in the baseline — an outcome that sits between the baseline and worst-case modeling.