Oil production is the economic locomotive of Alaska, funding about 90 percent of the state’s general fund revenue. The oil industry accounts for one-third of Alaska jobs and about one-half of the overall economy, according to Alaska’s Resource Development Council. When oil production expands or contracts, Alaska’s economy follows.
Oil & Gas 360® had an opportunity to speak with Alaska Governor Bill Walker about some of the state’s energy development and budget issues, particularly in light of the current oil price downturn. Walker, 64, is Alaska’s second native-born governor. He paid for college working on the construction of the Trans-Alaska pipeline. Walker was sworn in as Alaska’s 11th chief executive on Dec. 1, 2014.
OAG360: Governor, you have discussed in your ‘State of the Budget’ talk that about 90% of Alaska’s general fund comes from oil revenue, driven by oil price and production. Could you talk about the current oil price slide that we’re going through and the effect that it’s having on Alaska?
GOV. WALKER: Well, it’s significant. It virtually cuts our revenues nearly in half, and it is rather sudden. We’ve certainly been through this before. There’s been a period since the start-up of the Trans-Alaska oil pipeline in the late seventy’s where we’ve seen the downturn in the in the oil prices, so it’s not new to us. We have to adjust for it so that’s what we’re doing. (Read more from “With 50 Billion Barrels Awaiting the Drill Bit, Alaska’s New Governor Wants to Slash the Time Between Lease Acquisition and Drill Rotation” HERE)