Is Alaska Turning into a Corpocracy? Part 3: From Progressive to Political Nirvana to Oil and Gas Company

By Hal Shepherd

Because northern latitudes are warming almost three times as fast as the rest of the globe, Alaska’s ecosystems are beginning to unravel. To their credit, almost 50 years ago, the Alaska legislature had the foresight to establish state critical habitat areas, parks and wilderness that have the ability to mitigate the effects of climate change on fish and wildlife habitat by providing cold water refugia, connectivity, cool flows and other strategies.

Yet the state’s progressive approach to protecting its unique fish and wildlife resources lost steam shortly after the discovery of oil in Prudhoe Bay in the 1970s which created a kind of Nirvana, enabling politicians to not only eliminate taxes and bury community programs in money but to give it back to each citizen of Alaska just for being who they are. The state’s oil and gas huge profits which fueled a fiscal growth bubble should have burst as early as the mid- 1980s when global oil prices crashed, almost immediately sending the state into a full recession. But instead of implementing measures such as broad-based taxes, capping of Permanent Fund Dividends, or use of Permanent Fund earnings to pay for state government, the Alaska politicians used the national GOP’s partnership with powerful corporations to create a populist movement of science and economics misinformation in order to doubled down on their reliance on oil. 

In 1994, the New York Times wrote of this phenomenon, “[l]iving off the lard of North America’s largest oil field, the state of Alaska has created a modern superstate unlike anything the world has ever seen—a sort of boreal welfare society in which people are paid to live and are given a monthly bonus if they make it past age 65.” Despite the fact that oil prices briefly came back up during the wars in Iraq, allowing the oil bonanza delusion to continue, Eagen wrote “sadly for Alaskans, even global bad luck can’t last forever…The free ride in the Last Frontier state is nearing an end…On paper, the government of Alaska is nearly broke….”

Rather than listen to criticism regarding the house of cards they were sitting on, however, Alaska politicians developed a sort of fanatical devotion to oil and gas drilling. In 2003, when newly elected governor Frank Murkowski answered the question about what Alaska stands for announced “Ladies and gentlemen, in a single word, it’s oil.” 

Today, even as the impacts of oil and gas development exacerbate Alaska’s contribution to the climate crises, with unraveling ecosystems and economists warning for decades that the state is too dependent on the industry to bail it out from spending at an un-sustainable rate for so many years, the state continues to operate more like an oil and gas corporations than a neutral entity whose mission is to look after the welfare of all of its citizens. True to his word when he took office, when Governor Dunleavy stated Alaska is “open for business,” he has called for more funding and staffing to speed up development of mining and oil and gas drilling projects while, at the same time, moving forward with efforts to weaken the state’s once stringent oil spill prevention laws

More recently, Alaska joined a lawsuit filed in the U.S. District Court for the Western District of Louisiana challenging the Biden Administration’s moratorium placed on the federal oil and gas leasing “pending completion of a comprehensive review and reconsideration of Federal oil and gas permitting and leasing practices.” Once again, in the face of all evidence that the state is over-dependent on oil, Governor Dunleavy says that rather than any real evidence that the moratorium is illegal, the lawsuit “serves as a statement to the new administration about the importance of the oil and gas industry to the State of Alaska.”

Further evidence that the Dunleavy administration has never met an oil and gas project it doesn’t like no matter what the cost to the environment or economy, is illustrated by the fact that even corporations know when enough is enough. This is best illustrated by the administration’s recent attempt to retaliate against banks looking to reduce the contribution of carbon producing drilling activity on Alaska Native communities faced with unraveling fresh water and marine ecosystems in the rapidly heating Arctic for subsistence. After all six major U.S. banks followed by five major Canadian banks adopted policies against financing new Arctic oil development, Governor Dunleavy introduced legislation requiring state departments and agencies to stop doing business with banks that have  adopted such policies

Similarly, the state’s republic party released a resolution indicating the party’s opposition to Deb Haaland as Secretary of Interior because she was an “outspoken opponent of resource development on public lands, which is so important to Alaska’s economy.” Because there is no evidence that Haadan is opposed to oil and gas leasing, however, this statement is just a knee-jerk reaction to Biden leasing moratorium on federal lands. This is illustrated by the fact that the moratorium is merely an effort to issue a timeout on the Trump administration’s fire sale ofmore than 110 million acres of on and offshore oil, gas, and mineral leases during the past four years and the moratorium is merely intended to “provide a path to align the management of America’s public lands and waters with our nation’s climate, conservation, and clean energy goals.”

Alaska’s republican-lead legislature seems similarly willing to sacrifice the state’s fish and wildlife resources and commercial fishing economy in order to appease oil and gas companies. Because of its abundant crab, shrimp, herring, salmon and other sea creatures and its potential to become an eco-tourism center, for example, the biologically rich and visually stunning scenery, for example, Kachemak Bay in South Central Alaska, was closed to oil and gas exploration and development in 1976.

In response to Texas-based BlueCrest Energy Inc's proposal to expand their operations which includes accessing oil by drilling wells under the seafloor from a site near Anchor Point, however, the state legislature is considering HB 82 which would reverse the prohibition, on drilling in Kachemak Bay. The extent to which opening the Bay to drilling could impact the Bay’s productive salmon and other fisheries already feeling the effects of climate change, however, is illustrated by the fact that a loophole in the federal Clean Water Act authorizes oil and gas companies to dump millions of gallons of toxic wastewater into Cook Inlet under as a part of normal drilling operations.

Continued uncontrolled oil and gas development not only contribute to the states carbon signature and exacerbates impacts on marine and fresh water ecosystem’s, but dependence on one resource to save the state from over-spending has, time and again, been proven to be the wrong strategy. The only explanation for Alaska’s political leadership’s obsession with oil and gas development in the face of these impacts, is that it has chosen to move from the management of the state’s natural resources in the best interest of all Alaskans, to a corporate model that benefits only the oil and gas industry. If we are to meet the challenges of recovering the budget and mitigating the impacts of climate change on Alaska’s unique natural and subsistence resources, the delusion of Alaska’s political leadership that continued drilling could take Alaska back to the good ‘ole days of political Nirvana, needs to stop.