A new analysis by Scott Goldsmith, professor of economics at ISER, estimates that Alaska’s state government currently has a petroleum nest egg of about $155 billion, including both the value of revenues from oil and gas yet to be produced and money already in the bank. The state can afford to spend about $6.2 billion a year from the earnings of that nest egg for decades to come, taking population growth into account. But this fiscal year, the state is expected to spend close to $7 billion—shrinking the nest egg for coming generations.
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Scott Goldsmith, professor of economics at ISER, is one of the authors of a new book, Alaska’s Permanent Fund Dividend, describing the history of the dividend and examining whether this unique Alaska program could be a successful model in other places. Dr. Goldsmith’s chapter describes the economic and social impacts of the dividend on Alaska. The book publisher is Palgrave MacMillan, and information about the chapter is available from Springer Link.
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The total value of construction spending statewide in 2012 will be $7.7 billion, up 3% from the level in 2011. That’s the finding of the 2012 Alaska construction spending forecast, prepared by Scott Goldsmith and Mary Killorin of ISER for the Construction Industry Progress Fund and the Associated General Contractors of Alaska. Private spending for construction will be up, and large state capital budgets in recent years have offset the decline in federal construction spending.
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ISER faculty will teach a variety of courses in spring 2012, including classes on energy and environmental economics, communications policy, public land management, research methods, and culture and globalization.
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Since 2005, Alaska’s state government has collected as much in oil revenues as it did during the huge oil-revenue boom of the early 1980s: a combination of high oil prices and changes in the way the state calculates production taxes has created a second huge oil-revenue boom. But the oil creating this wealth is dwindling. That oil is from huge, low-cost oil fields on state-owned land, including the Prudhoe Bay field, and it has supported much of the economy and paid for most state government operations for decades.
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Health-care spending in Alaska reached about $7.5 billion in 2010, according to new estimates by Scott Goldsmith of ISER and Mark Foster of Mark A. Foster and Associates. For comparison, that’s close to half the wellhead value of all the oil produced in Alaska in 2010. The definition of health-care spending is broad, including not only spending for hospitals, doctors, and medical tests, but also prescriptions, nursing homes, medical equipment, and more.
The researchers found:
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Think about this: if oil had never been discovered on the North Slope, Alaska's economy today would be about half as big. And to keep the economy healthy as time goes on, Alaska needs new oil production: nothing else—including North Slope natural gas—can replace oil in the state's economy. These are the findings of a new paper by Scott Goldsmith, professor of economics at ISER.