The decline of Alaska's oil wealth has been predicted for a long time. It's why the Alaska Permanent Fund was established. Knowing it was a finite resource and believing that one generation wasn't entitled to use it all up, the Fund was set up to help fund government forever. Note: help fund, not pay all the bills. Even before climate change became a household word Alaskans were being told to diversify. Even before the price of oil dropped precipitously. Even before the recent refusal of some the country's biggest banks to fund any more Arctic oil projects. Then the oil companies didn't bid on the ANWR lease sales.
But the oil diehards, like Governor Dunleavy, even proposed legislation to get Alaska agencies to boycott those banks. And to offset the apparent lack of interest in bidding on the ANWR leases, The Alaska Industrial Development and Export Authority, a state owned entity, was the biggest leaser in the auction, bidding about $12 million of the $14 million total bids. This, from a strong supporter of Donald Trump and the Republican Party that is constantly attacking Democrats with the label "socialist."
It's hard to change habits. Our brains even change physiologically so we can do those habits almost without thinking. We all know that mastering all the hand and foot and eye coordination connected with driving a car safely in traffic is rather daunting at first. But eventually most of us get to the point where we drive almost on autopilot, sometimes even getting to our destination without even realizing it.
I think about Anchorage's legendary mall builder, Pete Zamarello. A Greek-Italian immigrant to the US, he worked in construction and then switched to being a builder. Anchorage is littered with his strip malls. He'd figured a formula that made him rich. But when the hot, pipeline economy ended in the 80's, he was still on autopilot. Cranking out strip malls is what he knew how to do.
The ADN wrote when Zamarello died:
"That optimism was on full display in 1984, when Zamarello pooh-poohed predictions of an Alaska economic crash. 'The gurus of financing say that we're going to have a catastrophe, but we're not," he told Alaska Business & Industry magazine then. "This downturn won't happen. The next 10 years are going to be even better.'"
But it did. The blog Wickersham's Conscience wrote:
"In the Alaska real estate crash of 1984-1986, Zamarello helped kill half a dozen financial institutions, bankrupted construction companies and their suppliers and ended up in bankruptcy himself."
The bankers had also gotten into a pre-crash Zamarello lending habit.
And that's where we are today in Alaska. Those who have prospered most directly from oil - those in the oil industry, the oil support industry, and the oil supported legislators - are having a hard time turning off the oil habit. They want to keep doing what they've always done, even though the conditions have changed. And since everyone else in Alaska has benefited indirectly because oil made up 90% of the State budget, many others keep expecting to be able to go on living the good life with no individual state taxes and even a $1000 or more Permanent Fund payout every year.
We're like the rich kid whose Dad has gone bankrupt, and she's having trouble with the fact that her credit cards have been cancelled and the mansion has been replaced with a much smaller apartment and she's going to have to get a job to help out.
We often don't see what's directly in front of us. I think about the story of the Japanese businessman watching how Alaska fishers just tossed all the fish eggs. His reaction created a new product with a large market in Asia for fish roe. (I can't find this story online, so take it with a grain of salt. But I could find documentation that the herring fishery was revitalized by selling herring roe to Japan. And, of course, the indigenous peoples of Alaska had been harvesting herring roe for centuries.)
Alaska Constitution Article 8 - Natural Resources |
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§ 1. Statement of Policy It is the policy of the State to encourage the settlement of its land and the development of its resources by making them available for maximum use consistent with the public interest. § 2. General Authority The legislature shall provide for the utilization, development, and conservation of all natural resources belonging to the State, including land and waters, for the maximum benefit of its people. |
And that's where we are now. While the state's GOP keeps pointing to the State's constitutional duty to develop natural resources as the reason to keep pumping oil, they fail to see the most famous and sustainable and valuable resource of all - our huge, mostly untouched, natural beauty and our wild fauna a flora. These are things the world knows Alaska for. These are the things they come to Alaska to see. Tourism is way below oil now as a source of income for the state, but it has huge potential.
We have some of the largest tracts of nature left in the world. Let's exploit it - sustainably - for tourism, for the health of the planet, for science, for spiritual renewal. In a world fast becoming urban and electronic, Alaska is an oasis of peace and calm as well as awe inspiring powerful natural phenomena from grizzly bears to glaciers to giant mountains and volcanoes and earthquakes.
We'll still produce the oil in existing developed fields. The earth still needs oil as we move to more sustainable and less climate changing sources of energy. But the world knows that we must reduce our carbon output. Just as it was clear to people not living in West Virginia and Kentucky that coal mines had to shut down, it's clear to those not financially benefiting from oil, that the age of oil is over. That's why the banks decided not to finance Arctic oil development and why nobody bid on the ANWR leases.
Everyone knows but our governor and those whose incomes come directly from oil. Even the large oil companies know.
[Yeah, I'm not sure if the title is inspired or awful.]