This page started out primarily as a one stop source for oil & gas news of interest to Alaska. That continues to be a focus, with the curated news feeds down the lower right side of this page doing the bulk of that work. Over the past year, however, the commentaries on the left hand side of the page, and the shorter “Observations & Updates” headlined on the upper right, and printed in full here, increasingly have focused also on fiscal issues.
The reason is that, in Alaska, oil and fiscal policy are inextricably intertwined, given Alaska’s reliance on oil revenues to run the state. A recent video from the website Understanding Alaska’s Budget does an excellent job of explaining. As the video explains at the beginning, “Alaska is at a crossroads.” We write hopefully to help shed some light on the factors that go into deciding which path to follow from here.
Our Oil? Then it is Time for Our Investment
(Reprinted from the Juneau Empire, Aug. 9, 2012; Alaska Business Monthly website, Aug. 9, 2012; Alaska Dispatch, Aug. 9, 2o12; Ketchikan Daily News, Weekend Ed. Aug. 11-12, 2012; Fairbanks News-Miner, Aug. 12, 2012)
AN OP-ED BY BRAD KEITHLEY AND REBECCA LOGAN
Alaskans are fond of saying “it’s our oil” when talking about the North Slope. Yet we as Alaskans have never invested in the development of “our oil.”
Instead, from the beginning of the North Slope oil era, Alaska has effectively outsourced responsibility for investing in the development of its oil to independent companies – the “producers.”
Under the lease form used since statehood, the producers have agreed to pay an up front bonus (the source of the $900 million received by Alaska in 1969) and bear the entire amount of the investment required to develop the lands. In exchange, the state contractually has agreed – since it is entirely the producers’ money – that the producers largely can set the pace and amount of subsequent investments they make once oil is discovered. Continue reading →
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Posted in Published Commentaries, Thought Pieces