For the first time in several generations, thanks to falling oil prices, the state confronts a fiscal crisis, forcing deep cuts across state agencies and in public services. The health and well-being of the state and its people, Murkowski emphasizes, hinges on its ability to access new reserves and open more acreage to exploration. Here in Colorado, and indeed throughout the reformed U.S. West and Midwest -- from Texas to North Dakota and From Nebraska to Nevada -- lawmakers similarly fret the decline in oil prices. Even consumers, in fact, are told to lament the drop in oil prices. Communities are revitalizing thanks to newfound revenues, and rural families benefit first from a new economic lifeline in the form of shale oil and natural gas (balanced, though largely contradictory evaluations are available here and here, however). Not only in Alaska, but throughout the Arctic and rural West, we are now dependent on energy and thus a threat to it is a threat to our livelihoods.
But the collapse in oil prices was always going to happen. With it, public finances and ephemeral jobs were always going to be shed. The revitalization, we knew from history, evidence and intuition, was always going to be short-lived.
Murkowski, and her counterparts in industry and government throughout Arctic and western regions, meanwhile, continue to overlook opportunities -- whether in green energies or in a technology-aided service economy -- to diversify state and regional economies, and provide more sustainable well-being for residents.
Murkowski’s “pro-Alaskan people” rhetoric is in fact misleading, and on some level disingenuous. Falling oil prices is only the latest signal, separate of a drastically changing climate, that should spur civic leaders to lay the foundation for a more sustainable, if less frenzied, economic base. This would be an economy that that leaks less revenue to outside ventures in Houston or overseas, concentrates wealth less in only a few companies, while instead provides opportunity for entrepreneurship and broadly-based economic diversity. This will require public investment in schools, broadband and public health, rather than new asphalt for transiting drilling rigs, or in risky drilling in dangerous waters. “Man camps” do not a sustainable economy make.
Oil prices will rebound -- as extant infrastructure, new technology and global demand combine with crises in Iraq and Russia to push prices back up. Oil prices, like all natural resources, are of course volatile. I am not predicting a post-oil world, nor that Alaska can reinvent itself overnight. But lawmakers and civic leaders should be more honest with their constituents -- short term revenues, little of which has benefited health and well-being for local people in fact (see links above), have come at a long-term cost. The answer is not more shortisightedness, but sensible investments in public goods throughout a state and its frontiers, and an energy portfolio that ranges far and wide, decreasing dependency on volatile natural resource prices and diminishing the impact on rural communities and Arctic regions from economic shocks. This is an old story, but one that Murkowski has apparently never read, or, I fear, refuses to.
-Matt Klick, AMRDI