Is Alaska Headed for a Recession? (2013, lease, tax)

[jtee75]

Just wanted to know what others take on the future of Alaska with oil prices being down? Are we headed to another 80's style recession or similar? Shell announced they are drilling but will that be enough to save us from slipping? I heard an estimated 5000 new jobs will be created with Shell's venture which will bring another influx of people from the lower 48's. Will this drive the housing prices even higher?

[Chilkoot]

Oilfield employers are laying off many now and it will increase in the next few months. It will be a while before we'll see much positive affect from Shell. The economy is poised to take a dive although can't imagine it will be as bad as the 80's.

[riceme]

I'm no economist, but I don't think we're in for good times ahead and I certainly don't think that a recession is out of the question.

It is going to get a lot worse before it gets better.

[Dakster]

Cheer up, oil workers are striking, ISIS wants to blow up the Iraqi oil fields. Oil is rising in price fast.

[riceme]

I have been watching with bated breath! This is one of those situations where a terrible thing is a fantastic thing... Did you follow that? lol

And for the record, I would be thrilled if my statement above about this situation getting a lot worse before it gets better were wrong.

[Dakster]

I know riceme... We are on the same page there.

Oil broke into the $50 range today. Much better than the $30s it almost ended up in.

[Wolfhound]

The State of Alaska imposes a production tax, under AS 43.55, on oil and gas produced in the state. The current tax rate of 35% was set in 2013 by Senate Bill 21 (commonly known as the More Alaska Production Act or “MAPA”). The tax is based on the net value of oil and gas, which is the value at the point of production, less all qualified lease expenditures. Qualified lease expenditures include certain qualified capital and operating expenditures. This taken from Alaska Department of Revenue site.
Alaska Department of Revenue - Tax Division

[Dakster]

Oil seems to be solidly back in the $50 a barrel range. Still a far cry from the $100+ range it was in.

The bad part is that the State is probably going to do lay offs - and not just open positions. So some people are going to get pay cuts and others are going to lose their job. My wife may be one of them and that will just annihilate us.

[riceme]

Oh I am so sorry to hear that, Dak... let's just hope it doesn't happen. Having lived in a boom and bust industry for half my career, I can tell you with 100% certainty that half of what is predicted never comes to fruition. Think positively but be proactive and get her resume out there just in case.

I just read a headline (didn't bother to read the article) that OPEC predicts oil prices to explode to $200 per barrel.

Uhh, rockets and feathers, right?

[Dakster]

Yes rockets and feathers... Although oil sure did fall fast this time around. Now the price of gas fell like a feather. Especially up here.

Sucks to have to start looking again for a job and the reason she took the government job was that it is supposed to be "safe". I guess safe(r) is the right word.