North Slope oil key to Alaska’s prosperity

Alaska’s North Slope has enough oil to support 50 to 100 more years of production, creating a flow of money that could solve the state government’s fiscal problems, the new governor said in his recent state-of-the-state address.

“What’s our plan for increasing revenue? Well, ladies and gentlemen, the single word is oil,” Republican Gov. Frank Murkowski told a joint session of Alaska’s legislature.

Alaska has no personal income tax and no state sales tax. Most of its revenues come from oil royalties, taxes and fees.

But with North Slope oil production at half its 1988 peak of two million barrels a day, Alaska’s budget deficit has grown to $1 billion, and by 2005 this deficit will wipe out a special savings account used to balance annual budgets.

The new governor outlined a series of steps he hopes to take to reduce state regulation of oil development. He plans to strip one agency, the Department of Fish and Game’s Division of Habitat, of its permitting authority.

He said he was optimistic that Congress would approve oil development in the Arctic National Wildlife Refuge in northeast Alaska, a goal of President George W. Bush, which environmental groups have opposed.

Murkowski also said he was optimistic about prospects for building a new pipeline to transport the North Slope’s natural gas reserves to new markets.