The competitive context in which Alaska operates is critical to understanding investment in Alaska oil and gas. The Alaska oil region does not exist in isolation. As with any investor, oil companies weigh one opportunity against another before committing their capital. As the Fraser Institute reports annually, several factors go into the weighting, but very high on the list is the type and predictability of the the fiscal structure governing the project.
Even though understanding the competitive context is critical to establishing oil policy for a region — and even though Alaska’s economy is hugely dependent on oil — Alaska, particularly the Alaska Legislature, approaches the issue oddly. Rather than developing an ongoing capability in Alaska charged with staying abreast of Alaska’s competitive position and suggesting adjustments as circumstances warrant, the Legislature appears content instead to rely on occasional reports by Outside experts. Continue reading