Kara Moriarty President/ CEO Alaska Oil and Gas Association. AOGA Annual Luncheon May 29, 2014

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1 Kara Moriarty President/ CEO Alaska Oil and Gas Association AOGA Annual Luncheon May 29, 2014

2 AOGA Member Companies

3 Who is AOGA? The Alaska Oil and Gas Association (AOGA) is a business trade association that represents the majority of oil and gas exploration, production, transportation, refining and marketing activities in Alaska. Our mission is to foster the long-term viability of the oil and gas industry in Alaska.

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5 What does AOGA do? Act as the voice of the oil and gas industry in Alaska How: Advocate on behalf of the industry as a whole Testify on legislation affecting industry Develop comments and litigate on issues involving endangered species, environmental regulations (e.g. air and water permits), etc. Inform the public about oil and gas importance to Alaska Interact with policy makers Occasionally get involved with ballot measures

6 What doesn t AOGA do? AOGA is mandated by its bylaws to remain nonpartisan. AOGA does not endorse, support or otherwise get involved with political candidates. AOGA does not have a PAC. AOGA is not an employment coordinator for oil and gas companies. AOGA members all must either produce, explore, transport or refine oil and gas; our members are not contractors.

7 Cook Inlet members

8 North Slope members

9 Arctic Offshore members

10 Refineries

11 Transportation

12 Our members in the Community

13 The Role of the Oil and Gas Industry in Alaska s Economy Prepared for: Alaska Oil and Gas Association (AOGA) Prepared by: McDowell Group, Inc. Juneau Anchorage AOGA Annual Meeting May 29, 2014

14 Assess the statewide and local impact oil and gas industry spending. Municipality of Anchorage Fairbanks North Star Borough Kenai Peninsula Borough Mat-Su Borough North Slope Borough City of Valdez Assess statewide employment impact of taxes and royalties paid by the oil and gas industry

15 Tracked direct spending by the 16 Primary Companies Alyeska Pipeline Service Company, Apache Corporation, BP Exploration (Alaska) Inc., Chevron, ConocoPhillips Alaska, Inc., eni petroleum, ExxonMobil Production Company, Flint Hills Resources, Alaska, Hilcorp, Petro Star Inc., Pioneer Natural Resources Alaska, Inc., Repsol E&P USA Inc., Shell Exploration & Production Company, Statoil, Tesoro Alaska Company, and XTO Energy, Inc. Measured direct, indirect and induced jobs and wages

16 Tracked tax and royalty payments made by the oil and gas industry, and employment and wage impacts: State agency (Operating Budget) State programs Capital projects Permanent Fund Dividend Local government operations

17 Oil and gas production companies, pipelines, and refineries (16 "Primary Companies") Spending with Alaska businesses Wages paid to Alaskan workers Taxes and royalties Indirect employment & wages Induced employment & wages State government spending Local government spending Wages, capital projects, programs Wages, capital projects, programs

18 Direct Impacts of Primary Companies (in 2013): Employed 5,335 workers in Alaska, including: 4,700 Alaska residents, $780 million in wages Spent $5 billion with Alaska vendors Paid $7 billion in taxes and royalties in Alaska

19 Primary Company private sector spending and public sector payments accounted for: 111,500 total jobs, representing 33% of all wage and salary jobs in Alaska $6.43 billion in wages created, representing 38% of all Alaska wages

20 For each Primary Company job, 20 jobs are generated in Alaska

21 Anchorage 31,000 jobs and $2.1 billion in wages 15% of employment and 18% of wages in Anchorage Fairbanks North Star Borough 3,500 jobs and $235 million in wages 1 in 7 FNSB private sector jobs 9% ($10 million) of all FNSB property tax receipts

22 Kenai Peninsula Borough 6,000 jobs and $430 million in wages One quarter of all employment and wages in KPB 13.7% ($8 million) of all KPB property tax receipts Mat-Su Borough 4,000 oil and gas industry jobs held by Mat-Su residents, $310 million in wages 10% of total Mat-Su resident employment and wages

23 North Slope Borough 2,000 jobs and $115 million in wages for NSB residents 99% ($348 million) of all NSB property tax revenue Valdez 700 jobs and $65 million in wages 88% ($35 million) of all Valdez property tax revenue

24 State Government Refineries and Pipelines Health Care and Social Assistance All Sectors (Private and Public) Prof., Scientific, and Technical Services All Private Sectors Oil and Gas Drillers Combined Oil and Gas Industry* Oilfield Support Services Accommodations Scenic and Sightseeing Transportation Seafood Processing 7% 7% 10% 20% 23% 24% 27% 30% 34% 42% 52% 74%

25 FY 2013 oil and gas revenue ($7.4 billion) represented: 47% of all state revenue 92% of all unrestricted revenue Virtually all of Permanent Fund new principal ($856 M) 100% of the Constitutional Budget Reserve Fund new principal ($177 million) $400 million in local property tax revenue

26 State agency operations: 19,500 jobs State programs: 22,200 jobs State capital projects: 12,000 jobs PFD spending: 3,330 jobs Local government ops and projects: 3,500 60,000 jobs and $3 billion in wages

27 This study measured 111,500 oil and gas industryrelated jobs and $6.4 billion in wages in % of all wage and salary jobs and 38% of all wages in Alaska can be attributed to the oil and gas industry 24% of all jobs and 28% of all earnings in Alaska

28 Download our study at: www:aoga.org

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30 Vote No on One Chairs: Bob Berto Rick Boyles Leslie Hajdukovich Linda Leary Rick Mystrom

31 2012: Every State But Alaska Increased Production Source: U.S. Energy Information Administration

32 2013: U.S. Still Booming, but Not Alaska Source: U.S. Energy Information Administration

33 THOUSANDS BARRELS PER DAY Oil Production Forecast History Forecasted Actual Source: DOR RSB Spring 2007

34 Fact: There is NO Giveaway State revenues lower from falling global oil prices and declining production According to Prof. Goldsmith, less than 5% of the revenue shortfall can be attributed to the change in oil tax structure.

35 SB 21 It s Working

36 North Slope Rig Count 7 RIGS 9 RIGS 13 RIGS February 2011 February 2013 February 2014 Source: Baker Hughes North American Rig Count

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39 Be sure to vote NO this AUGUST 19TH Paid for by Vote No on 1, Anchorage, AK Bob Berto, Rick Boyles, Leslie Hajdukovich, Linda Leary and Rick Mystrom, co-chairs, approved this message. Top contributors are BP, Anchorage, Alaska, ConocoPhillips, Anchorage, Alaska, and ExxonMobil, Anchorage, Alaska.