Record oil profits could fund slate of Alaska projects
Published Saturday, June 28, 2008
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Stumble It!JUNEAU — If oil prices stay high in the coming fiscal year, Alaska will be in a unique position to spend outside the box.
Build the bridge? Sure.
Put in a gas pipeline from the North Slope to Anchorage? No problem.
Fund education two or three times over? With money to spare.
The state’s fiscal year ends Tuesday, and the Department of Revenue is expecting record unrestricted revenues of about $9.8 billion, according to Cherie Nienhuis, the department’s acting chief economist. That’s billions more than last year, and about $1.2 billion more than the department projected just a few months ago.
Fiscal 2009 revenues could be even higher. The department hasn’t revised its official estimates, but if oil prices stay at or above $130 a barrel through the year, the state would bring in something like $15.6 billion, Nienhuis said Friday.
By comparison, state lawmakers and Gov. Sarah Palin used about one-third of that — $5.6 billion — to pay for schools, roads and all the other state services this year.
The inflated revenues come from the state’s new oil and gas production tax and from the high commodity prices, Nienhuis said.
North Slope oil production continues to drop.
Lawmakers and the governor chose to save a good chunk of the surplus this year. But they also looked into sharing some of the money with Alaskans — many of whom are struggling with the same high energy prices that are boosting revenues — and will consider the idea again this summer. Palin has proposed eliminating the gasoline tax for a year and giving every Alaskan $1,200.
Cash handouts aside, Palin spokeswoman Sharon Leighow suggested Friday the governor wouldn’t change her fiscal philosophy or approach to budgeting just because of a few rich years.
“We must continue to slow the growth of government and invest this surplus so that it helps our future generations,” Leighow wrote in an e-mail. “Gov. Palin will continue to focus her spending priorities on deferred maintenance, infrastructure projects and resource development.”
Sen. Joe Thomas, a Fairbanks Democrat and member of the Senate Finance Committee, offered a different idea — save some money but build the Susitna Dam, too.
Thomas said if the project worked out, a dam on the Susitna River could provide inexpensive power to Alaskans and “last forever.” Essentially, the state could use oil revenues to help Alaskans get away from the high-priced, non-renewable fuel, he said.
Will other lawmakers be willing to spend big?
“If they’re getting the kind of mail I am,” Thomas said. “People are changing their minds about government involvement and the best interest of the (residents) of Alaska.”
Community Discussion
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Yes- so the Susitna hydroelectric project. Good idea. Thanks Joe. But unlike the Susitna dam you have multiple voters mandates to build an All Alaska Gasline to Valdez. (Not Anchorage, Stefan).
So get cracking. Stop screwing around with a Canadian pipeline deal that doesn't do diddly squat for Alaskans for- at best- many, many years.
Think strategically so my kids can have a better state than the one I inherited.
Its important to spend and save wisely here. No one in the future will ever forget how it was spent.
Prudent investment in Alaska will pay dividends far greater than the Permanent Fund's shaky Stock Market portfolio. It is time to bring much of Alaska from the "Dark Ages" with a ray of hope. Invest wise, forget about regional jealousy, and let's get ALL Alaska on the road to prosperity.
Start building some roads so this State can develop other resources and not be dependent on oil and gas. Look where we are with that a lot of money and people can't survive this winter.
Remember they estimated a gas pipeline in at 30 billion plus, The difference would have to be paid out of the APF. Let industry pay for it. If the Japanese want the LNG, let them pay for it. All I heard was they were willing to buy gas, not build a line to Valdez. Let them build and pay for their own darn line. There are some out there that will promise you the sky so they fill their own pockets with money.
The sky is not falling for all the chicken littles who want the State to spend your APF. Remember once it is gone, you will never see it again despite their promise of the great wealth for each person.
How about paying off the PERS/TRS retirement deficit? It's one of the single largest debts we have today. The new formula seems to be working in keeping the debt from growing..let's take care of the remainder while we can. There will soon be a large batch of new state retirees that we must, by law, fund their retirement and benefits for...let's fix this while we have the funds to do so.
I say spend some money and stop the crime. Thousands of Alaskan children are having their lives ruined as the victims of rape, as we have the highest sex abuse rates in the entire country with a government leadership that doesn't seem to care a whit about it.
I, too, have my personal "Spend HERE"'s (liek relief from this $2.65/kWh electricity), but -
1. Woodman's "Let the Japs pay for their own darn LNG line"? I don't think so. No one is going to throw billions in, for example, Alaska when the identical product is available from, say Indonesia for less. Ain't nothing special about our commodity, boyz 'n grilz.
2. Out in the Cold's "Permanent Fund's shaky stock market portfolio" - dig. Those PROFESSIONALS managing our money do a far far better job at prudently investing it - and it's extremely well diversified in an excellent basket of investments - over the short, medium and long term, than either we collectively can handle our own investments (loke those PFD checks we get each year), or, more importantly and depressingly, the state's "managers" of its roads and other infrastructure.
I can see the headlines now," Alaskans freezing to death/can't afford oil to heat their homes, while the state racks in billions".
Those headlines will ensure A LOT of confidense in this state!
The only project I care about right now is heating oil assistance for this winter. No of the other pet projects will mean anything if I have to move 'cause I can't afford to live here.
Spend outside the box? Our state spends enough on the ridiculous things.
Some things need to be done now to ensure our people can afford to live here. Maybe that the plan. Out price Alaska to everyone and then (and only then) they can finally drill...the entire state.
we all seem to have our pet projects. my main one is, just because america is at the mercy of opec why do we have to be? why can't we use a portion of our natural resources here? drill it, dig it out, pump it out, refine it and keep it here. i hate to say it because it sounds so communistic but maybe the government should get into the energy business. lets remove ourselves from the world market (except the excess that we don't use that we sell off)
The State Public Assistence Program needs to be a Priorty and after going thru the cold winter with high cost of energy,will our State leaders relize that we are going thru another cold winter in a few months,and this money is there for Real Alaskans that lives here for a reason and not useing it for Stupidity.
If you have seed money..
..plant it in fertile soil.
I'm kinda skeptical about stacking 10billion tons of water behind a big dam ontop of an earthquake fault...
suicidal.
just $1million of state funds can be the seed money to fully complete the Susitna Hydroelectric-Hatchery-Hydraulic Gold Mine sluicebox project...
...whuh? whutz DT mumbling about now ???
http://peswiki.com/index.php/Directory:Z...
If you build these gizmos all up and down both sides of the Susitna River you will make the river silt pay for the project, instead of having it be a headache.
You make circular sluiceboxes out of these gizmos by lining the insides of them with astroturf and nomad.
A 40' circular sluicebox can put out 35kw easy [maybe more]
Build a thousand of these gizmos and keep the fish in mind when building them...
a thousand Motel6's for th'fish to make whoopie in.
Salmon can migrate right up through the middle of these gizmos and lay eggs right in the middle of your sluicebox...
fingerlings and gold together..
[actually you make a suitable sidetrack to the flume with peagravel in the bottom for spawning, and the sediment flows in the faster current where the fish won't spawn]
The first $20k invested will yield $20k in gold-dust before the end of the summer.
[same thing with 100mil]
If Alaska wants to build big reservoirs for power storage to use during winter, pick a suitable spot to build a reservoir that's not so dangerous.
Getting geothermal megawatts out of Spurr/Augustine is a much better deal. You get year-round heat and power.
A big insulated plastic pipeline can cheaply supply downtown Anchor-rage with 10,000gpm 100F water from Mt.Spurr
I can tell ya how to use Mt.Augustine to work the PebbleMine with a 0.000001% chance of killing more than 100 fish too....
...but that'll cost ya.
[contact me for further details...(;-P) ]
....splash/mumble
Does this gas line from the slope to anchorage stop in fairbanks it didnt say. Will gas be run to every house. Anyone know what it cost to change an entire house over to gas. Boy them politicians sure sound happy to get to spend that money on what they think is best for alaska. I guess we could use some new roads and better schools new bridges are cool to but will there still be enough people around to use them. Ah who cares as long as politicians have fun spending the money thats all that matters.
I concur that funding TRS/PERS should be done. It shouldn't have been axed in the first place; Gov. Palin now wonders why the State has problems hiring managers, et al.? Mike Kelly who bought us the gutting of TRS/PERS was also with GVEA when then went from coal-produced electricity to petroleum-produced electricity. Can anyone say oil-company connections? Thanks again, voters of Fairbanks.
SPEND SPEND SPEND.....WHAT ABOUT ALASKANS WHO ARE PAYING OUTRAGEOUS FUEL PRICES? AND NOT TO MENTION GVEA AND THEIR PRICES FOR ENERGY. GVEA DOESN'T CARE ABOUT US THEY CARE ABOUT REMAINING A MONOPOLY SO THEY CAN SCREW ALL THE PEOPLE WHO ARE FORCED TO THEIR PRICES FOR POWER! WE NEED A COMPETITOR TO GVEA. STOP BLOCKING THE HEALY COAL PLANT AND GET IT GOING FOR ALL OF OUR SAKES.
We've been told that the answer to the high cost of energy in the Interior and rural Alaska is conserving. OK, I've been without heat since mid-April, unplugged all my unused appliances & line drying my clothes. Everyone write, call or email your legislators and tell them that until we provide equal energy costs across Alaska, put off non-essential spending on pork projects like spending more millions on a study on the Knik Arm Bridge, two fish hatcheries that will cost over $145 million, and other would like to have but unnecessary projects.
What have you done to heat your home in two months. Alternative energy is the answer.
Alaska should sell royalty oil refined products to residents at reduced, below-market prices. By reducing the cost of transportation it would reduce the cost of building materials and groceries. It would help the whole economy, and would only require that the state accept a slightly lower profit margin.
BigOldMooseHunter: Don't get me wrong about Governor Hammond's savings account and getting a little interest money back into the People of Alaska's pockets. I'm for that!!!
The trouble I have with the Alaska Permanent Fund is that it is, for the most part, invested in the stock market and outside real estate. And both of those markets are "shaky" if you have been reading the financial reports.
It all comes down to a basic philosophy of what you want to do:
1.) set on you tail and let someone else do all the work and get a little profit, or
2.) get on your feet and get to work and make a bigger profit.
Probably a little bit of both would be nice.
The "outside the box" spending should grab a hold of everyone and shake them to their toes! We have a state budget process. Nothing, I repeat, NOTHING should be spent on capital projects until they go through the process in their normal session. Having special sessions to decide big budget items is costing us a lot of money.
Fiscal discipline is going to be the key. Sure we have billions in excess, but if we only get ten cents for every dollar we spend, all of those zeros will be a failure. We have debt? Pay it off! We don't need to buy on credit. Wages will catch up with the loss of value on the dollar quickly. We need to invest in infrastrucure, but do it responsibly and our legislature needs to take their time and deliberate the projects.
Grants for energy studies need to go to the university not a COOP that isn't even based in Alaska. Where do we build the roads? DOT get a plan together, but first improve those trails and gravel roads already in existance. That goes for all current programs. Review them, make improvements or do away with those not working and reduce the waste, before we spend "outside the box".
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