Alaska's Oil Wealth

The lowest official estimate of Alaska's income from petroleum resources over the next ten years is 455 billion dollars.

That statement was made at a recent symposium in Anchorage on energy wealth redistribution sponsored by the Alaska Growth Policy Council. Even those people at the meeting who were familiar with big numbers had a hard time comprehending just how much money 455 billion dollars really is and what it might buy.

Whatever that sum means, the speaker citing the amount went on to quote former legislator Steve Cowper who said that it was more money than Alaska will be allowed to keep, and of course, that was the central topic of the symposium.

Supposing that Alaska is allowed to keep the money, I did a little calculation to see how far the money would stretch if it were given out to each Alaskan resident. Rounding off the numbers a bit, assume there are 400,000 Alaskans and that the 10 years of oil wealth is just 400 billion dollars. Averaged over the ten years, that amounts to 40 billion dollars per year to distribute. Equal division among the citizens yields one hundred thousand dollars each, per year. That's a right tidy sum; a family of two adults and three children could get by very nicely on a half million dollars each year.

Maybe it's not such a good idea just to give out that much money because we would not have anything left to run state government and provide the public services we desire. Instead, we could hire the citizens to work for the state to provide whatever government and services we want, and we could just pay each family $100,000 per anum, leaving more than half the total to bank. If that sounds far-fetched, consider that more than half of job holders living in Alaska already work for governments: federal, state or local. (Don't take this suggestion seriously!)