Alaska's Break Even Oil Price? It depends ...

Earlier this week ANS oil dropped below $100/barrel and has remained there consistently since.  Given developments generally with respect to oil prices, it is likely that the price will continue to drift lower in the days, weeks and months ahead.  With these developments, some have started talking about what the break even price is this year for the state government budget, with most suggesting the price is $100/barrel.  That is true to a degree, but assumes that none of the following savings accounts included in the budget are funded during the year:   Public Education Future Year Funding, Regional Educational Attendance Area School Fund, Renewable Energy Grant Fund, Education Grants/Performance Scholarships Fund, Mariculture/Charter Fisheries/CQE RLFs, AIDEA Sustainable Energy Development Fund, and neither contribution to the Statutory Budget Reserve.  The break even price to fully fund the budget is $110/barrel.  The break even price to fund all of the savings accounts -- including the recently highly touted AIDEA Sustainable Energy Development Fund -- other than the second contribution to the Statutory Budget Reserve, is $104/barrel.

On Glen Biegel this (Tuesday) afternoon ...

... at 4:30p to discuss "Alaska Fiscal Policy|  Where We Have Gone Wrong." We'll see how this goes.  Listen live at 700 AM (KBYR) or online (by clicking on "Listen Live") at The Glen Biegel Show.

Alaska Oil| A note to the Anchorage School Board ...

... an excellent suggestion from "AK Syrin" ... "Every Alaskan teacher should consider this option for the students of Alaska --http://www.petroleumnews.com/education.shtml."  At the link, Petroleum News makes the following offer:  

Petroleum News firmly believes in energy education.

That's why, through our Energy Education Program, we give all elementary and secondary students and teachers across the globe completely free full site access to PetroleumNews.com. Eligible parties can read the weekly newspaper covering North America, search our 7000+ archived articles, and read our special publications. 

It's our contribution to education, and we're happy to make it. 

How can you help? We need everyone's help to spread the word that full access to Petroleum News is available to educators and their students. Further, if your organization has an energy education program of its own, ask your webmaster to post a link to this page anywhere its deemed appropriate. 

Elementary and secondary students and teachers CLICK HERE to email us atenergyeducation@PetroleumNews.com and learn how you and your students/teachers can log in, receiving full access. If you email us from a school or educational email address it will speed up the process.

Revenues from oil are responsible for 90% of Alaska state government general fund revenue and just under a third of Alaska jobs.  There is no better place to learn about events affecting Alaska oil -- and thus, Alaska's future -- than Petroleum News.

Alaska Dispatch| Do you think they calculated ...

Mixing news and editorial commentary, a story in yesterday's Alaska Dispatch touted the positive effect, at least in the Dispatch's eyes, of ACES on state employment.  "A new manufacturing directory says Alaska's oil-and-gas workforce expanded 5 percent over the last year to 9,062 employees, a sign that new tax incentives for exploration continue to work some magic." See New Data Suggest Continued Growth of Alaska Oil Jobs, Alaska Dispatch (May 31, 2012). I read the story to see if they calculated -- or even mentioned -- the potential cost to the state of that approach to adding jobs.  Nope.  One approach is to divide the $400 million in credits included in the FY 2013 budget by the number of jobs which the Dispatch implies were added (the story suggests that number is roughly 430 jobs).  That's $930,000 per job.  Wow.  

Understanding Alaska Spending (Part V) ...

... "Stedman spent the bulk of his time in front of the Sitka Chamber of Commerce addressing the state’s capital budget – namely, the money coming to Sitka. Millions will flow into the community from Juneau this year to fund improvements to a baseball field, a new roof for the hospital, some street paving, a diesel generator for electricity and more."  See Stedman: Could Southeast be support center for Arctic?, KCAW (May 31, 2012).

Fairbanks Natural Gas| I have never quite understood ...

... how the Regulatory Commission of Alaska justifies granting Fairbanks Natural Gas a "certificate" (monopoly) to serve large portions of Fairbanks, while at the same time effectively freeing it from retail price regulation.  Dermot Cole, as usual, has a point, see Parnell should push ahead ASAP on local gas distribution system for Fairbanks, Fairbanks News Miner (May 31, 2012) ("If the rates of Fairbanks Natural Gas become subject to regulation by the state, then perhaps we will get a clearer picture of what is in the best interests of the community. Until then the best option for the community is to pursue some form of cooperative structure for a natural gas distribution system in Fairbanks, which means that community and state leaders, including the governor, are in a position to move forward on this now without waiting for GVEA and FNG or anyone else to reach a deal.")

Alaska Resitricting| I like Bob Herron ...

... and am wondering if this the type of collateral damage that has occurred as the R's have worked to retake the Senate through redistricting.   See Redistricting plan divides and conquers Native vote in Southwest Alaska, Alaska Dispatch (May 31, 2012).