The State of Alaska Department of Revenue released their Fall Revenue Sources book this month. By FY2015, the state forecasts that total Alaska North Slope production will be 538,000 barrels per day (bpd), down from 603,000 bpd in FY2011. Five years ago, the Fall Revenue Sources book forecast 782,000 bpd of production in FY2011 - a forecast that was off by 179,000 bpd. Because the oil production forecast is a key driver of state government revenues, elected officials may have counted on revenues, particularly in the out years, that did not materialize.
Since those very optimistic projections in FY2006, the state has, for the most part, lowered the oil production forecast each year as shown in the chart below.
Alaska's Department of Revenue noted this trend in the latest forecast: "When reviewing forecasted production versus actual production in previous production forecasts, it is apparent there has been a significant trend towards higher anticipated levels of production than those actually realized." The state incorporated a more in-depth review of the forecast, resulting in lower estimates this year.
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