Alaska’s Petrobucks: Where Have All the Dollars Gone?
On the 35th anniversary of the Trans-Alaska Pipeline – TAPS – the University of Alaska Institute for Economic Research published a report on Alaska’s petrodollars and how they have been spent. It’s an interesting read.
Alaska’s Petrodollars and Where They Went
So about three-quarters of Alaska’s oil revenue has been spent. The results of spending range from utterly wasted – the grain terminal in Valdez, for example – to vanity projects – the Anchorage Alaska Performing Arts Center in Anchorage – to useful stuff like schools, housing and infrastructure. There’s another $34 billion earned by the State’s three big savings accounts, but $26 billion of that went down the Alaska Permanent Fund rathole. Alaska has managed to accumulate about $57 billion in savings.
Okay, so we’ve spent most of it. What did we get?
Sustainable resources, like farming? Dairy? Locally-raised beef and pork? Um, no. Modest points for trying, WC supposes.
Greatly improved infrastructure? Lots of new roads? Can anyone name a new highway built since the Parks Highway opened in 1977? We’ve done a better job with local schools, but only after Molly Hootch, with the State’s figurative feet held to the fire. So that may not count. And, weirdly, we still make municipalities incur bonded debt to pay a chunk of the school construction cost.
Improved public safety? Are women and children safer? The Alaska rape rate is 2.5 times the national average. Child sexual assault in Alaska is almost six times the national average. Alaska has the highest rate per capita of men murdering women. So pretty definitely no.
Have we boosted the tourism industry? Have we created new destinations? No so much. And the rest stops on the Parks Highway still aren’t maintained through the winter.
Major new industries in Alaska? Nope. A couple of mining projects, but, so far as WC is aware, none of Alaska’s petrodollars supported Red Dog, Fort Knox or Tek-Pogo. The gas line? Very much in doubt, and the $500 million to TransCanada is definitely petrodollars, and threatens to become the biggest boondoggle of them all.
Most of it seems to have just been frittered away. Sad, but true. Don’t get WC started on the Alaska Permanent Fund dividend, now a sacred cow in Alaska politics. Johne Binkley told WC one time that it was better to let the public fritter the money away as PFDs than to let the Legislature fritter it away on various boondoggles.
The money’s gone either way. WC looks forward to your opinions.
I would hardly call the Alaska Center for the Performing Arts a “vanity” project. Along with the Sullivan Arena and Library (also paid for with oil bucks), these buildings attract Alaskans from all of South Central AK with their events – after fishing season is over…
Dan Heynen
September 7, 2012 at 2:06 pm
If you live in Fairbanks, and know the incredible history of the cost overruns for the Performing Arts Center, you’d regard it as a vanity project, too.
/WC
Wickersham's Conscience
September 7, 2012 at 3:20 pm
Wait, there’s more. Well, a lot more, I could go on and on. However, besides the massive investments in single projects, that may or may not been for the public good, depending upon your point of view, there were many appropriations much smaller in scale but undoubtedly in total those contributed to the most waste. Of course, worst of all is the 38 million Ted Stevens blew on the railroad station at Anchroage International in order to get the airport named after himself, albeit the station was/is named after Schefield and the money was an “earmark” straight out of the Federal Treasury, and not our oil wealth.
For instance, the unnecessary build up of government in the late 70s and early 80s. Hey, I’m not a government hater either. Example: the Hammond administration felt compelled to merge the Dept. of Highways and the Dept. of Public Works, into one gigantic inefficient agency, the DOT&PF. Believe it or not, that merger created perhaps a 30% increase in executive type positions alone. The Hammond boys had campaigned on the premise that Egan and Hickel had built “boondoggles” without sufficient public due diligence. So they funded a humongous planning division within that new department; with not enough work to go around because there were way too many planners on the payroll. Later, one of the governor’s most trusted advisors conceded to me, “When we came in, it was all building and no planning, now it is all planning and no building”.
But what got to me was the millions spent on many relatively small grants for consultant studies. One can not fathom the number of worthless “feasibility studies” that no one read and eventually went into the land fills. Almost anybody that could manipulate a word processor at the time, got a hand out from their favorite legislator to compile one of these. As an example, I did a short stint with the DOT&PF during the fat days myself, at one time one of our aviation engineers came to me with a $250,000 appropriation that had been given to the department in order to study the feasibility of a “rotorless helicopter”. Don’t laugh, its true. He wanted to know what that was all about. I had no idea. So he contacted the Anchorage Republican Senator, a short time Alaskan who came up during the boom, but the one who had his name on the bill. The answer was, “you are supposed to forward the money on to me in the form of a grant. I’ll do the study”. I can’t even remember his name, but he had a used aircraft sales business on Lake Hood, eventually he became notorious as just another Juneau statesperson crook and went back home to some other state.
The performing Arts Center was part of George Sullivan’s Project 80s dream. There was a lot of dough blown on that dream, some good. The art center’s original design was by a New York outfit, it was so crazy that the incoming Knowles’ Administration had to revamp it, still there were mistakes. Was it worth it, probably no, but I have to admit that when, on theatre nights, we first go out to eat down-town then attend a production, I have mixed feelings, kinda nice.
twaharpies
September 9, 2012 at 8:51 am
Oops—I meant “tail rotorless helicopter” not “rotorless helicopter. Sorry
twaharpies
September 9, 2012 at 9:22 am