Oil & gas: contributing to Alaska's future jobs and economy: how Alaska manages its fiscal gap will dictate the future of oil and gas development in this state for the next decade.

• Author: Meyers, Kevin

If there's one thing Alaskans know about the world oil market, it's how volatile the market can be. Five years ago, oil prices were less than $10 a barrel and today prices have reached all-time highs. Even with the best crystal ball, no one could predict the dramatic swings that we have seen in the markets. Those of us in the industry know that you cannot plan based on today's price, but you must plan for the long term.

In Alaska, ConocoPhillips is the largest producer of oil and gas and also the largest explorer. ConocoPhillips drilled five wells on the North Slope this winter, more than any other company. To maintain our Alaska production, we must continue to invest and explore in Alaska.

This year ConocoPhillips will invest $600 million of direct capital, an increase of 11 percent from 2003. More than $500 million of that capital is dedicated to exploration and production at Prudhoe Bay, Kuparuk, Cook Inlet and Alpine. About $100 million will go toward our ongoing program to construct the five new double-hulled, Endeavour-class tankers.

In addition to the capital investment, ConocoPhillips will spend nearly $900 million in 2004 to operate and maintain its existing Alaska assets. All together, we will spend $1.5 billion in Alaska this year. Conoco-Phillips is proud of its commitment to develop Alaska's resources safely and responsibly.

As the state's largest taxpayer, Conoco-Phillips would like to commend Gov. Frank Murkowski and the Alaska Legislature on their leadership in bringing the issue of the state fiscal gap before the Alaska public. However, I'm concerned by recent legislative proposals for additional oil industry taxes, which some legislators see as a short term solution to the budget shortfall.

These proposals fall short of considering Alaska's future and the long-term negative impacts that increased taxes will have on everyone in our state. As residents of Alaska, we've enjoyed the benefits the oil and gas industry has brought to our state's economy. Not only from the billions of dollars of investment, but also in the form of infrastructure, direct and indirect employment, and the taxes and royalties earned by state and local governments.

The latest estimates from the Alaska Department of Revenue show that 87 percent of the state's general fund budget comes from revenues generated by oil and gas investments. In addition, the industry's investments benefit everyone through jobs, a healthy economy and demand for goods and...