EDITORIAL: Alaskans — and lawmakers — should plan for growth
Alaskans heard Gov. Sean Parnell’s State of the State address to the 27th Alaska Legislature recently.
It was more than a good speech, perhaps his best to date, but in it, he charted a course for faster growth and greater opportunity for Alaska and its people. He pointed out five critical areas.
Gov. Parnell is a fiscal conservative. His intent is a balanced budget, holding down government spending and increasing savings. His proposed budget reduces expenses by $856 million, but includes $1 billion for infrastructure projects — such as airports, harbors, roads and the Alaska Marine Highway System. As a result, 288 vacant government positions will be eliminated.
Oil provides 90 percent of the state’s revenue. Gov. Parnell favors efforts to encourage more private investment in oil production.
The amount of oil flowing through the Trans-Alaska Pipeline is down from 1 million barrels daily to 650,000. Some experts say the pipeline will shut down when it reaches 300,000; others say 100,000, according to Parnell. But, with oil clearly being what fills the state coffer, neither is acceptable.
Also, with the declining oil flow, it is the high price of oil that makes up for the loss. If prices decline faster than the private sector can explore and develop new oil, Alaska might have to tap into its savings earlier than expected. This is avoidable — if Parnell and the Legislature act this session. Any delays only increase the likelihood of financial peril in the not-too-distant future.
Gov. Parnell’s goal is 1 million barrels a day.
It will require lawmakers to produce oil tax reform legislation. With reform will come at least $5 billion in new investments promised by the oil industry. The permitting process likely will need to be streamlined as part of the effort to realize more oil flowing through the pipeline.
Beyond oil, Alaska has abundant sources of natural gas — more than 200 trillion cubic feet. A natural gas pipeline needs to be built to direct this energy to market. In the process, an opportunity to provide reduced-cost heating to Alaska homes and businesses can be created.
But oil and gas aren’t the only natural resources Alaska has to offer. This state has the world’s best seafood; its mining industry supports more than 5,500 jobs, with the potential for many more as Alaska’s deposits of rare earth elements are explored and developed.
The Parnell administration continues to assist the timber industry. It has opened up more land for timber harvest as a result of expanding the Southeast State Forest.
Finally, Gov. Parnell is looking toward increasing opportunity for Alaska’s small businesses. It is helping new businesses to launch more quickly and with better access to capital. It has increased its tourism marketing in hopes of businesses seeing greater customer response.
All of this will be backed up with the governor’s unceasing commitment to education. He touted the success of his Alaska Performance Scholarship program, which has given students incentive to perform at higher levels of achievement. He asked the Legislature to create a fund for the $400 million set aside last year for the program, allowing for its earnings to continue to replenish the scholarship fund. He also is committed to providing funds for five of the highest-priority rural school projects. Perhaps the Legislature will add to his generosity by increasing the base allocation its gives school districts for students.
The key to building Alaska is developing its natural resources. It’s a natural-resource state, with oil, gas, minerals, seafood and natural beauty. It also has untapped potential studying in its schools. Gov. Parnell can see the future and has set a path for Alaska to follow this year and in years to come that will keep the lights on and the “open for business” sign illuminated.
Alaskans should follow his lead.