The Alaska House majority is calling for changes to the state’s current oil tax credit system. On Wednesday, members of the oil industry got a first chance to defend their use of the credits before the new House Resources Committee.

The Alaska Oil and Gas Association (AOGA) and several companies, including oil giants BP, ConocoPhillips and ExxonMobil, warned lawmakers that changing the system could have a harmful effect on production and the economy.

“The current system is bringing in more revenue than the old system and even in these depressed oil prices, we are by far still the largest source of the state’s income,” said Kara Moriarty, CEO of AOGA.

But with a multi-billion dollar budget shortfall, members of the committee questioned how the state could continue to afford them.

“If you want to say that the state forewent or gave up revenue, that’s certainly the perspective one could have,” Scott Jepsen, of ConocoPhillips, answered when asked by Rep. Justin Parish, D-Juneau, about the cost-benefit ratio of the credits. “My perspective would be that it created incentives for investment, that it created a healthy economy.”

By the end of the next fiscal year, the state will owe around $1 billion dollars in backlogged credits to oil companies, according to the state tax division.

KTVA 11’s Liz Raines can be reached via email or on Facebook and Twitter