CONSTRUCTION
Images of Infrastructure What industry has made of Alaska
A
laskans are both connected to, and disconnected from, oil and gas in a way that isn’t replicated anywhere else. The development of oil and gas resources directly impacts every Alaskan resident through dividends paid out from the Alaska Permanent Fund. This was a deliberate choice made by Alaskans for the benefit of generations to come. According to the History of the Alaska Permanent Fund by the Alaska Permanent Fund Corporation, “In 1974, as construction of the Trans Alaska Pipeline neared completion, Alaskans were looking towards the future and deliberating on how to best utilize the anticipated mineral royalties… Alaska’s Constitution does not allow for dedicated funds, so in order to direct these oil revenues into a permanent fund, the Constitution had to be amended.” In 1976, “by a margin of 75,588 to 38,518, a Constitutional Amendment establishing the Permanent Fund was approved.” The Alaska Constitution now states: “At least twenty-five percent of all mineral lease rentals, royalties, royalty sale proceeds, federal mineral revenue sharing payments and bonuses received by the State shall
100 | September 2021
be placed in a permanent fund, the principal of which shall be used only for those income-producing investments specifically designated by law as eligible for permanent fund investments. All income from the permanent fund shall be deposited in the general fund unless otherwise provided by law.” The first deposit into the fund, on February 28, 1977, was $734,000. The first dividend check of $1,000 was distributed two years later. It has since grown: as of December 31, 2020, the total fund value was approximately $71.7 billion. Over the years, as production and oil prices have waxed and waned, how much money every Alaskan finds in his or her pocket has varied significantly. The lowest individual payment to ever come out of the fund was $331.29 in 1984. The highest was $2,072 in 2015 (though in 2008 when then-Governor Sarah Palin signed Senate Bill 4002, which distributed a one-time payment of $1,200 to every PDF-eligible Alaskan, it made the total for that year higher). But although the amount has varied, every year since 1978 Alaskans have had direct access to funds provided by oil and gas development,
which they use in countless ways: paying down debt, funding vacations, purchasing luxury items, catching up on bills, building savings accounts—and the possibilities have only expanded over the years through Alaska Permanent Fund programs like Pick.Click.Give, which connects Alaskans to nonprofits, or the Education Raffle, a quick and convenient way for Alaskans to opt into supporting public education. Oil money is everywhere, and not just through the Permanent Fund Dividend. According to The Role of the Oil & Gas Industry in Alaska’s Economy, published in January 2020 and prepared by McKinley Research (formerly McDowell Group) for the Alaska Oil and Gas Association, “Combined, [in 2018] the employment and wages impacts of Primary Company spending in the private sector together with taxes and royalties to Alaska’s state and local governments totals 77,600 jobs in Alaska, or 24 percent of all wage and salary jobs in Alaska [and] $4.8 billion in Alaska wages (including all multiplier impacts and jobs related to taxes and royalties). For every Primary
Alaska Business www.akbizmag.com
Alyeska Pipeline Service Company
By Tasha Anderson
