Sunday, June 1, 2014

How to Solve Alaska's Climate and Energy Woes

By Ceal Smith 
There's no doubt about it. Alaska is different. For one thing, the 49th state owns most non-native subsurface mineral rights and public ownership of natural resources is written into the state constitution.  Alaskans fully expect the oil and gas industry to pay for extracting their finite energy resources for private gain.

Oil Giveaway on the Ballot! The Mudflats, 7.29.13
Ever since the discovery of the Prudhoe Bay Oil Field in 1968, the question has been, not if, but how much Conoco Phillips, Exxon Mobile and BP should pay for the monopoly privilege of exploiting the North Slope. 

Epic story short....last year, under strong pressure from Governor Sean Parnell, a former Conoco Phillips lobbyist turned politician, aided by new industry owned "elected" officials, the state legislature gave Big Oil a massive break in the form of SB21.

Dubbed "The $Billion Giveaway" by grassroots activists hellbent on repeal,  SB 21 replaced Alaska's Clear and Equitable Share (ACES), Governor Palin's "socialist" energy policy enacted in 2007 (before she drank the tea party elixir and abandoned Alaska).

Wildly popular, ACES taxed oil and gas companies progressively on production and invested the revenue in education, Alaska's Permanent Fund and other public programs.

Facing intense scrutiny, including a likely ballot initiative this fall, many Alaskans believe SB21 is responsible for the looming budget shortfalls of $3 billion or more that the state is facing between now and 2015.

In a state that derives 90% of its revenue from the oil and gas industry and has no sales or income tax, this is no laughing matter.

Without question, Alaska has massive oil and gas reserves.  Still it is not immune to rising costs and resource depletion.  By industries own accounts, even here in the fossil fuel Mother Lode, oil and gas is ever more difficult and costly to produce. 
Exxon Valdez oil spill, 1989

Climate change isn't a popular topic of conversation outside of Alaska's scientific and impacted Bush communities.  By all accounts, the climate is warming twice as fast here as in the lower 48.  Average temperatures in Alaska have climbed 3.4°F over the past 50 years and winter's are an alarming 6.3°F warmer.  Average annual temperatures are expected to rise 3.5 to 7°F by 2050, a mere 36 years from now.

A major voice in the ongoing SB21 debate, Anchorage Daily News columnist Shannyn Moore recently asked: "Do we really want to guarantee that the state will have to search for other sources of revenue to fund itself in the future?"

While rhetorical in arguing against SB 21, it's actually a key question that many Alaskans on both sides of the oil tax debate seem to want to avoid. 

Viewed from the broader lens of climate change and diminishing oil reserves, the inescapable answer is that, sooner or later, like it or not, Alaskans have no other choice but to identify other sources of revenue to fund state coffers.  Multiple forces are at work -- resource depletion, inevitable carbon taxes, a growing international fossil fuel resistance movement -- that lead to increasingly unfavorable oil and gas cost-benefit ratios for Alaska.

Erosion doubles along Alaska's Arctic Coast, USGS
Coastal erosion is already beating Alaskan bush communities to a pulp.  The 284 square mile Funny River megafire is another dreadful reminder of the potential for a hotter, dryer climate to stress our communities.

Groundwork was laid in the previous decade to move Alaska to a secure future based on an abundance of inflation-proof energy (see the Alaska Energy Report). Unbearably high energy costs continue to spur bush communities to seek more affordable, reliable and sustainable energy sources.

Rural Alaskan village utilizing wind energy
Instead of spending untold $billions trying to sell high cost natural gas in a flooded market, Alaskans would get a far better return on investment in renewable energy.  If pushed, feed-in tariffs (FiT), Property Assessed Clean Energy (PACE) and similar  policies would foster energy independence throughout Alaska while stabilizing the economy and empowering our Ownership State.