Alaska's oil tax is working just fine

Keeping a fair and stable oil tax in place is how this generation of Alaskans honors our obligations to the future. Once oil is produced and sold it is gone forever. The constitutional principle of retaining the maximum benefits from this resource must constantly guide us.

Indeed, recent good news from the Alaska oil patch indicates that ACES is working very well. The news that this coming winter promises to be the busiest in decades for exploration drilling is cause for celebration. Moreover, development drilling in existing fields continues at a strong pace. Just one example of a recent success is that wells being punched into the Ugnu formation, an enormous heavy oil deposit that sits in shallow ground above much of the Prudhoe Bay region, are producing at rates well above predictions. Heavy oil could make a big difference in stemming the decline of pipeline throughput.

In light of these facts, why make a change? Simply pushing state money across the table to some of the biggest and richest corporations in the world and then hoping that they will spend more in Alaska is an unwise strategy for the future. The $8 billion we would lose in the governor's bill is just too much to give away. The oil wealth of Alaska must be managed more prudently than that.

That said, we must also be open to improving our system.

One area of concern is oil field jobs. While oil field employment in Alaska is at an all-time high, the Department of Labor reports that more than half of new jobs are going to Outsiders. That is unacceptable. My colleague Sen. Egan conducted hearings this month to look into the issue, and I, as a former oil field worker, welcomed that inquiry. Oil executives should continue to be pressed to explain why Alaskans can't fill these jobs.

One law I will propose is to require that new oil jobs available in Alaska be reported to the Department of Labor, so they can make the information known to the public on a website. Alaskans looking for work in Alaska oil fields should have easy access to knowledge about where the openings are.

The second idea deals with a persistent issue that comes up in my conversations with industry leaders -- access to capital. Alaska is a high-cost place to do business. Given our climate and our position on the globe, that is unlikely to change anytime soon. Everything costs more on the North Slope and high costs mean that only the most deep-pocketed companies have sufficient capital to risk on new ventures. I participated in the recent Norway policy tour and was intrigued to learn that besides their state-owned oil company, StatOil, Norway also makes direct investments in some promising fields.

We could do the same thing, using some of our oil wealth to invest in our own oil fields. The state would be a financial partner with the industry, sharing in the risks and also sharing in the rewards. ACES currently uses a method of tax credits to help lower the cost of investing -- and the credit system is working well -- but the profits flow back to BP, Conoco Phillips and Exxon, not the state. By putting its own money to work alongside oil company money, the state can become a more active participant in its most valuable industry.

Sen. Hollis French, D-Anchorage, has served in the state Senate since 2003.