Restructuring Alaska: An Alaska Oil, Gas and Industry Economic Treatise

Abstract

This paper in the form of a treatise is about how to improve Alaska’s overall socio-economic welfare. It explains economic issues in Alaska starting with the Trans-Alaska (oil) Pipeline System (TAPS) and how TAPS interacts with Alaska’s oil industry and induces risk averse reactions by the state. It also explains how an alternative oil pipeline can replace TAPS in order to reduce Alaska’s expensive oil tax credits. The treatise also explains some of the issues surrounding how the oil tax credits work or don’t work including such interactions as how oil exploration is carried out, why shale-oil will not easily be developed in Alaska and how the credits subsidize Anchorage’s area energy costs to the detriment of the state as a whole. Ideas for economic development of the state are given including building natural gas infrastructure and how to set up electric utilities to maximize their value to the state. An alternative for Anchorage energy needs is a simple natural gas pipeline to Fairbanks with rail connection to Anchorage and eventually the use of TAPS for natural gas. An incentivized management system for monopoly electric power utilities is explained which can provide better cheaper electric power and an incentivized management system for a state owned oil company is explained which can help Alaska negotiate with OPEC to Alaska’s advantage. Aspects of the university and education funding are explained.