For Alaska's economy, the future is now.

• Author: Lawer, Betsy
• Position: OPINION - Tax credits to be given to petroleum industry for Alaska's economic growth

You've heard a lot about the future of Alaska's economy lately, and I hope this article will add something positive to the discussion. But before we look ahead, let's take a look at Alaska's economy a short 50 years ago. Those of you who were here, as I was, know that life was good, but much different than today, economics-wise.

In 1960, our economy was small, with only 90,000 jobs, and half of those were with the federal government. It was extremely seasonal--the number of private-sector summer jobs was double the amount in the winter. Household income for Alaskans was 10 percent to 20 percent below the U.S. average, and the new state's infrastructure was primitive by today's standards.

We all know that picture has brightened considerably. Today, Alaska is home to more than 350,000 jobs, income has risen from $3 billion in 1960 to $24 billion, and population from 230, 000 to 660,000. In terms of raw numbers, Alaska's economic growth has been a huge success story.

So what happened to fuel that growth? We all know the answer to that one, too. Prudhoe Bay.

With the discovery of billions of barrels of oil on the North Slope, Alaska entered a new era, one where the economy was significantly and permanently changed. With oil revenue flowing into the State's coffers (85 percent of general fund revenue is from petroleum sources), the economy became a dynamic engine for accelerated growth and increased income, with a certain stability, too. The petroleum industry became a key support for the "three-legged stool" of Alaska's economy--petroleum being one leg, federal spending another. All other basic industries combined, such as fishing, tourism and mining, make up the remaining leg.

We've been extremely fortunate to have the petroleum industry underpinning the Alaska economy. For 40 years, we've enjoyed unparalleled prosperity in all corners of the state, in all sectors of our economy. The construction industry knows better than any how important the petroleum industry has been to our state and to the build-up of our infrastructure.

BUT THINGS ARE CHANGING

The easy-to-reach oil on the North Slope is running out. Production has been declining for a number of years, a fact masked by the higher oil prices of recent years. The petroleum industry has taken a wait-and-see attitude on additional investment in Alaska because of uncertainly in tax structure and fiscal policy matters. In the '80s, the price of oil dropped precipitously. Income from petroleum...