From the Editor

Powering Through Change
I

f one were to anthropomorphize Alaska and the oil and gas industry, it could be said they are in a long-term, committed relationship. It’s mostly stable: their friends would say they’re good for each other, but, like any decades-long relationship, they’ve experienced breathtaking highs (remember that time in ’82 when petroleum revenue accounted for 87 percent of the then-record high $4.1 billion unrestricted general fund? The ’80s… am I right?) and hard-hitting lows (April 2020 comes to mind) since the two met around 1902.

“The truly first Alaskan oil well with commercial production was completed in 1902 in rugged, coastal territory… the Alaska Steam Coal & Petroleum Syndicate produced oil near the remote settlement of Katalla on Alaska’s southern coast. The small oilfield also led to construction of Alaska Territory’s first refinery,” says the American Oil & Gas Historical Society.

Over the past century the two have grown together, becoming a true “power couple.” The North Slope alone has produced more than 18 billion barrels of oil since the discovery of Prudhoe Bay in the late ’60s. Oil production has funded up to 90 percent of the state’s unrestricted general fund revenue in most years and has accounted for more than $180 billion in total revenue since statehood, according to the Resource Development Council.

And, continuing on with our metaphor, the oil and gas industry brings home the proverbial bacon, which the state then uses to make a healthy, happy home. The petroleum industry paid more than $3.1 billion in state and local taxes and royalties in FY2019, including $2.7 billion to state government and $449 million to local governments. It’s not an overstatement to say that Alaska runs on oil. This is one power couple we need to succeed.

So what happens, when, as tends to occur in century-long relationships, something new, a bit younger, perhaps even a little exciting, enters the picture?

Renewable and alternative energy sources have been flirting with Alaska for years and are finally moving in on the couple in a real way. Alaska has a non-binding goal to generate half of its electricity from renewable and alternative energy sources by 2025, according to Rystad Energy. Last year, renewables accounted for about 28 percent of the state’s electricity generation. And it just so happens that Alaska is home to an abundance of renewable energy sources—wind, solar, geothermal, tidal, and biomass are all here, just waiting to be harnessed, and there is no shortage of projects in the works to do just that.

In this month’s cover story, “Meeting in the Middle,” we delve into the relationship between Alaska, fossil fuels, and green energy. We wanted to know: Is there room in this relationship for a third party? The short answer is yes.

It’s easy to try to pit the two industries against one another, but that’s a very simplistic approach to a complex relationship. The truth is that this is not an either/or situation. Embracing traditional and emerging forms of energy production provides the best possible outcome for Alaskans: oil and gas will continue to provide a stable source of income and energy while alternative energy sources offer affordable, sustainable options.

Alaska, meet your new power throuple!

Kathryn MacKenzie wearing a purple mask
Kathryn MacKenzie's signature
Kathryn Mackenzie
Managing Editor, Alaska Business
Kathryn MacKenzie wearing a purple mask
Kathryn MacKenzie's signature
Kathryn Mackenzie
Managing Editor, Alaska Business