In March, the University of Alaska Anchorage’s highly respected Institute of Social and Economic Research (“ISER”) published a paper entitled “Managing Alaska’s Petroleum Nest Egg for Maximum Sustainable Yield” (.pdf). The paper is the continuation of an effort started last year (.pdf) by ISER’s Scott Goldsmith to determine the appropriate level of annual state government spending, if the objective is generally to maintain a consistent, inflation adjusted level of state spending over time.
The purpose of ISER’s effort is much the same as retirement planning for an individual. In retirement planning the goal is identify the maximum level of annual spending from an individual’s retirement account that will allow the generation of a relatively consistent stream of annual income for the rest of the retiree’s life. The ISER study is designed to determine the level of spending that is prudent in order to ensure that future Alaskans continue to receive the same level of government goods and services that are available to current Alaskans.
ISER’s terminology – “maximum sustainable yield” – is derived from the Alaska Constitution. Article VIII, Section 4 of the Alaska Constitution provides that “Fish, forests, wildlife, grasslands, and all other replenishable resources belonging to the State shall be utilized, developed, and maintained on the sustained yield principle, subject to preferences among beneficial uses.” Continue reading
An excellent discussion between Steve Coll and Steve Heimel of APRN’s “Talk of Alaska,” focused on Exxon’s role and position in the state.
One of Coll’s observations: “ExxonMobil has this attitude they want low political risk and high political stability. That suits their very rigid, long term business model. And, they regard Alaska as a place that they just can’t seem to figure out politically. They often talk about Alaska the same way they talk about other political environments they can’t seem to manage.”
To the same point from the book, talking about the early years of the second Bush Administration:
Compared with other oil majors, however, ExxonMobil was no longer a dominant player inside the United States. Chevron had inherited some of the longest-lived of Standard Oil’s American oil properties, in California, and Chevron and British Petroleum had moved more boldly than Exxon into the Gulf of Mexico when leasing opened during the Clinton administration. Exxon had opportunities to exploit oil and natural gas in Alaska, but held back from some expensive deals because Raymond had learned after the Valdez that the political risks posed by Alaska’s frontier-minded political culture and populist governors were comparable to those in West Africa.
Interested in Alaska oil policy? This interview offers an excellent insight into an important piece of the puzzle.
An important new book by Steve Coll, a favorite author whose earlier works on the breakup of AT&T and the disastrous acquisition by Texaco of Getty Oil had significant effects on my views.
Coll is hitting the interview circuit this week promoting his most recent book. For Alaskans, one interview of special significance is this morning’s discussion with Steve Inskeep of NPR’s Morning edition on “How The Valdez Oil Spill Shaped ExxonMobil.” Not only is the link to the Valdez oil spill of interest, of even more significance is Coll’s insight into how Exxon thinks and acts. Coll also had second, longer interview focused on other aspects of the book yesterday with Terry Gross on NPR’s Fresh Air.