Daily Archives: August 9, 2012

Our Oil? Then it is Time for Our Investment

(Reprinted from the Juneau Empire, Aug. 9, 2012Alaska Business Monthly website, Aug. 9, 2012; Alaska Dispatch, Aug. 9, 2o12Ketchikan Daily News, Weekend Ed. Aug. 11-12, 2012Fairbanks 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