Last Friday over 100 Alaskans gathered in the Hilton’s Chart Room for a report on Institute of the North’s Norway Policy Tour. In August 2011, 45 people, including 12 Alaskan legislators, traveled around the Scandinavian nation to speak with individuals involved on all levels of Norway’s oil and gas production.
While Norway’s oil and gas production is expected to remain steady for the next several decades, Alaska’s production is projected to decline. Can Alaska learn anything from Norway’s success?
Ira Perman, Chairman of the Board at Institute of the North, said Norway’s permanent fund from oil/gas revenue is currently $570 billion, while Alaska’s permanent fund sits at $40 billion. General Manager of Alaska Industry Support Alliance, Rebecca Logan later explained that Norway has invested all oil/gas revenue in this fund, while Alaska has invested only a portion.
Unlike Alaska, which repealed the personal income tax in 1980 due to oil revenue, Norway continues to save all oil/gas revenue in this rainy day fund and to collect taxes.
Brad Keithley, who is the partner and co-head of Perkins Coie’s oil and gas practice, described Alaska’s role in oil/gas development as that of a “backseat driver” via regulation. In contrast, Norway participates in oil production as a co-investor. This co-investment is accomplished through owning Petoro, a domestic oil/gas company. Norway also owns over 60% of Statoil, a now-international oil/gas company which holds 60-80% of the leases in Norway. In this way, Keithley said, more discussion occurs about how to “increase the pie” versus fighting about who gets what piece.
Statoli’s Stakeholder Engagement Manager, Ellie Ede, highlighted one of the tour’s outings: a trip to Statoil’s Snøhvit LNG Facility. The facility is located in Hammerfest, a city which sits at nearly the same latitude as Barrow, Alaska. The facility’s construction began in 2007 and it became operational in 2011. Originally, Statoil had planned to export LNG from the facility to the United States. The advent of shale gas production in the US drove Norway to look to Asian markets instead.
The next World Affairs Council program begins at noon on Friday, January 20 at the Hilton. Doors open at 11:30. Lunch is $30 for non-members, $25 for members, and coffee with dessert for $15. To RSVP for the program or learn more about becoming a member contact us at email@example.com.