Thoughts on Alaska Oil & Gas

Earlier this fall we wrote a piece discussing Governor Hammond’s original plan for building the Permanent Fund and thereafter using the earnings derived from the fund. “Fully implementing Governor Hammond’s 50/50 plan (or, how to find another $1.5 billion in annual revenue without PFD cuts and taxes)…”, https://goo.gl/7Ct8B5.

As reflected in his final book, Diapering the Devil (https://goo.gl/FFTi9M at 15, 19), Governor Hammond’s vision was simple:

“I wanted to transform oil wells pumping oil for a finite period into money wells pumping money for infinity. …[Once the “money wells” were pumping] each year one-half of the account’s earnings would be dispersed among Alaska residents …. The other half of the earnings could be used for essential government services.”

.As we noted in that piece, while the first and second steps have long since been implemented in the form of the Permanent Fund (the “money wells”) and PFD (“one-half of the account’s earnings would be dispersed among Alaska citizens”), the third and final step — the “other half of the earnings could be used for essential government services” — never has.

Our earlier piece discussed how to — and the importance of — implementing that final step.

Yesterday, we turned the piece into slide deck form and discussed it with the Fairbanks Chapter of the Alaska Support Industry Alliance.  A copy of the slide deck is above, or can be viewed and downloaded here:  https://goo.gl/m1W1Jh.

We at Alaskans for Sustainable Budgets will be talking about this more — lots more — in the coming weeks and months.

Alaskans for Sustainable Budgets Founder Brad Keithley will be publicly discussing the need for and implementation of Governor Hammond’s original 50/50 plan for the use of earnings from the Permanent Fund two times over the next two weeks.

The first will be tomorrow (Wednesday, December 7) at the monthly luncheon of the Fairbanks Chapter of the Alaska Support Industry Alliance,  https://goo.gl/Yl9jJj.   The second will be as part of a panel discussion next Monday (December 12) afternoon during Law Seminars International Annual Two-Day Conference on Alaska Energy Markets and Regulation,   https://goo.gl/ZaYPW5.

In Diapering the Devil, Governor Hammond described his vision for the use of Permanent Fund earnings this way: Continue reading →

Alaskans for Sustainable Budgets Founder Brad Keithley today issued the following response to incoming Senate President Pete Kelly’s statement yesterday (https://goo.gl/P4mJx2)  supporting the “restructuring” of the Alaska Permanent Fund:

“I disagree with Senator Kelly’s approach to the extent he is continuing to call for a cut in the Alaska PFD.

In a report last March the University of Alaska – Anchorage’s Institute for Social Economic Research (ISER) found cutting Alaska’s Permanent Fund Dividend (PFD) to be the ‘most regressive’ and to have the ‘largest adverse impact’ on the overall Alaska economy of all of the state’s fiscal options.

In a subsequent report just this past October one of the authors of the earlier report went on to find that ‘reducing the PFD by $1,000 will likely increase the number of Alaskans below the poverty line by 12-15,000 (2% of Alaskans).’

And cutting the PFD is hugely unfair to Alaskans.  According to the ISER reports, ‘[f]or every $100 million raised with PFD cuts, the ten percent of Alaskan households with the lowest income lose 3.3 percent of per-capita disposable income, compared with only 0.1 percent among households with the highest incomes.’ Continue reading →

Last week we wrote a piece with the title, Two questions for Senate President Kevin Meyer this coming Tuesday …, https://goo.gl/4URKrN.   The piece outlined two questions we intended to ask Senator Meyer at an upcoming forum about SB 128 — the bill which permanently would have cut (i.e., taxed) the PFD received by individual Alaskans by more than half and transferred the difference to government revenues.

The bill subsequently was voted down in the House Finance Committee, but threatens to return this coming session.

The moderator of the forum directly asked the first question and Senator Meyer later answered the second in the course of responding to another question.  Understandably, the answers largely were a defense of SB 128, but in the course of answering those and one other about the PFD Senator Meyer used a phrase that has triggered some additional thought on our part. Continue reading →