Alaska, Lagging in Oil Production, Looks to Bring Back Boom (+video)

The U.S. is on its way to becoming the world’s top oil producer. The Energy Department believes American output will soar to 9.6 million barrels a day by the year 2016. But surprisingly, Alaska, one of the country’s top oil suppliers, is being left in the dust.

Paul Hughes owns a snowmobile shop near Anchorage. He says there’s one day each year every Alaskan looks forward to: the day the state announces the oil dividend. He said this year it’s almost $900.

Every man woman and child in Alaska gets a check, their share of the state’s vast oil revenues. Hughes told CBS News’ Ben Tracy some people spend the money on snowmobiles and he used one of his kids’ checks to buy a new stove.

However, those annual oil checks are getting smaller because Alaska is producing less oil. Production on the North Slope peaked at 2 million barrels per day in 1988 but has dropped to less than 500,000 barrels currently. There’s so little oil flowing through the 800-mile Trans-Alaskan Pipeline that some state leaders say it may freeze and shutdown.

The problem isn’t that they’re running out of oil in Alaska — the oil industry says there’s still billions of barrels of oil in the North Slope alone. But they say the problem is taxes.”

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