A Big Oil spending spree in Alaska could reverse a half- decade of declining oil production as companies plan the largest energy project in the state's history and a series of other investments to rejuvenate its biggest oil fields.

Unless, oil companies say, state voters in August dismantle a new oil tax regime that Houston-based ConocoPhillips and others say makes the state far more attractive than it was under higher levies imposed in 2007 by the legislature and former Alaska Gov. Sarah Palin.

Lawmakers killed those levies last year, but voters could reinstate them by referendum in two months.

For now, oil companies are pressing ahead with plans to build a massive liquefied natural gas project that could cost $45 billion to $65 billion - a far higher price tag than the 1977 construction cost of the state's 800-mile Trans-Alaska Pipeline.

Exxon Mobil, BP, ConocoPhillips, TransCanada and the state of Alaska expect to finish designing the project late next year.

It would include gas treatment facilities at a giant oil field on the North Slope, an export terminal in a southern region of the state near Anchorage and another 800-mile pipeline linking the two. The state, which would be a part owner in the venture, gave the project a green light in April.

"More favorable taxes really do change the pace and the scale of what we're able to do here, and the state becoming an equity partner enables us to feel this is much more stable," Janet Weiss, president of BP Alaska, said in a recent interview with the Houston Chronicle.

"We've got to make sure we're capital efficient and we have tax stability," she said.

Natural gas surplus

The LNG project is a bid to send Alaska's surplus natural gas supplies - 17 million to 18 million metric tons of LNG per year - to Asian buyers eager to use more gas in their power generation.

It's also part of a larger industry effort to bolster oil production in a state where daily oil production has fallen by 75 percent since its heyday in the 1980s.

Opponents of the oil tax cuts, including the nonprofit group Repeal the Giveaway, say the new laws would drain the state's $16 billion savings fund and cost state coffers $4.6 billion through the end of the decade.

The state stands to lose $1 billion a year in tax revenue because of the new oil taxes, making the old system's $5 billion to $9 billion annual revenue impossible, said Bill Wielechowski, a Democratic state senator.

"It's a great bill for the oil industry, but it's a bad bill for the people of Alaska," Wielechowski said.

Alaskans are invested in the oil business because, unlike any other state, Alaska owns all of the subsurface rights, and its constitution requires it to receive "the maximum benefit" from its resources, he said.

But the oil industry is fighting hard against the repeal.

"You can't turn on a TV without seeing a commercial paid for by BP, ConocoPhillips and Exxon," he said. "They're using their financial resources" to sway the electorate.

Kara Moriarty, president and CEO of the Alaska Oil and Gas Association, said the August vote could be close, as was the one in the Legislature but that the damaging effects of the old system were clear.

"Our investment remained stagnant from 2007 to 2013, when prices were rising and oil companies were investing twice as much in the Lower 48 and across the globe," she said.

On the decline

Alaska's oil production fell 21 percent to 531,000 barrels per day from 2011 to 2013, and state regulators expect another 41 percent drop by the end of the decade.

During the state's production peak in the 1980s, Alaskan oil wells pumped 2 million barrels per day. Alaskan regulators do not include planned projects in their calculations of the state's daily oil production, but oil companies believe the new capital influx could stem the decline.

At least partly because of the old oil income taxes - which were tied to oil prices - the state's output dropped even as the Lower 48 states experienced a surge in shale play production.

Alaskan lawmakers' overhaul of the state's oil taxes last year was a bid to draw more drilling activity.

Before Alaska Gov. Sean Parnell began the push last year to install a lower, flat tax, the region was too expensive for the increasingly tightfisted industry.

The August ballot includes a measure that essentially would undo the new oil tax laws and all the planning that international players have done in the past year, said Scott Jespen, a spokesman for ConocoPhillips in Alaska.

"From our perspective, that puts all the projects in jeopardy and potentially jeopardizes the LNG project," Jepsen said.

"If the referendum passes, it would have a chilling effect on investment in Alaska. These projects are going to add tens of thousands of barrels of new production, and without them the production would be that much lower."

Oil companies say Alaskan costs have risen five times above their levels two decades ago, as they build entire islands of gravel, 30-mile ice roads and central oil-well pads to reach deep-seated bounties under remote, bare and often frozen oil land.

Three crucial fields

Three of the state's giant oil fields - BP's Prudhoe Bay and ConocoPhillips' Alpine and Kuparuk fields along Alaska's North Slope - are expected to be at the center of Big Oil's renewed push to raise oil harvests in the state in coming years.

At Prudhoe Bay, the largest North American oil field, BP already has pumped 12 billion barrels - 25 percent more than the 9.6 billion barrels scientists predicted in 1968.

BP estimates the field is good for 12 billion barrels more, and also could contribute 28 trillion cubic feet of natural gas to the state's LNG plans.

"I think it would have been all over now, based upon the original plans," said David Eyton, BP's head of technology. "The funny thing about these super-giant fields is that they just keep going on and on and on. You can deploy new generations of technology every five years and get yet another tranche out of it."

Bumping up output

Some of the London oil company's latest advances in the Prudhoe Bay include adding heavier carbon compounds to beef up the gas injections it uses to bolster oil recovery from its wells - a technique that can add 10 percent in production, said Weiss, the BP Alaska president.

BP is planning to deploy two more rigs to Prudhoe Bay in 2015 and 2016 to drill 30 to 40 new wells a year, bringing its rig count there to nine, its highest level in seven years. It expects to spend more than $1 billion to coax more crude from the field, which covers an area half the size of Houston.

BP is evaluating another $3 billion in Alaskan projects that could position over another 200 million barrels of oil in reserves and boost its daily oil production by 40,000 barrels. BP produces 140,000 barrels of oil per day in Alaska.

$2 billion in spending

Not far west of Prudhoe Bay, ConocoPhillips, the largest oil producer in the state, is planning to spend $2 billion to drill more wells in the Alpine and Kuparuk oil fields.

Two of those projects could yield 17,000 barrels of oil per day, but the company will have to build infrastructure around the area, said Jepsen, the company spokesman.

Decades ago, ConocoPhillips and others could expect to yield 80,000 barrels a day from a $1 billion investment, he said.

"Environmental costs tend to be higher, it takes longer to do things, labor is more expensive," he said.