Imagining a Happy New Year
Reimagine new money coming into Alaska
© Patrick Endres / AlaskaStock.com
Welcome to 2016, another year of change for Alaska. At press time in early December 2015, the price of a barrel of Alaska North Slope crude oil destined for West Coast refineries was hovering around $40, and production was a bit over half a million barrels a day. It’s time to reimagine revenues for Alaska. Obviously, we can no longer depend solely on oil to propel the economy, create jobs, and bankroll state government services, spending, and other obligations. We’ve got to reimagine revenue sources—new money coming into Alaska.
Marc Langland was in the office in late November filming an interview for the Junior Achievement Hall of Fame presentation taking place January 27. I had the pleasure of chatting briefly with him while he was here. After fifty years in the banking industry he was set to retire from Northrim at the end of 2015. He was looking forward to that and planning on enjoying his retirement. We also talked about the Alaska economy. He has a three-step plan: we’ve got to cut the state budget, cut and cap the Permanent Fund Dividend, and leverage the Permanent Fund earnings to help fund state government. He was adamant that it all has to be done in the right sequence: first cut the budget, then cut and cap the dividend checks, and then use Permanent Fund earnings. “There is enough [money] if it is done that way,” he said. With a multi-billion dollar deficit staring us in the face amid continuously faltering oil prices, the components of Langland’s plan have been touted by many, including ISER economists, the folks at Alaska Common Ground, and many others. It’s time to take action.
Reimagine revenue sources—that should be the theme for 2016. Reimagine a way for new money to come into the Alaska economy. It’s not just state government that is going to need to tap a different source of money for survival. Businesses, organizations, and communities across the state are going to have to figure out new ways of growing local economies as well as financing city services—all of which will require new sources of revenue.
Delta Western has worked diligently in this very direction. In December the company accepted the first marine shipment of methanol at its new facilities at the Port of Anchorage. The company broke ground last spring to build a Marine Methanol Terminal at the Port of Anchorage. It’s the first new construction at the Port in over four decades, and on December 6 a new commodity crossed the docks—methanol. Some forty thousand barrels of methanol was offloaded from a tanker into Delta Western’s new storage tank, ready to be trucked to the North Slope for use in oilfield operations. It’s a great example of reimagined revenue leading to business growth in Alaska. Delta Western now has twelve fuel terminals in the state and is positioned to generate increased revenues for themselves and for the Port of Anchorage, as well as saving money for its methanol customers by shortening the supply chain—a win for all involved.
As is the January issue of Alaska Business Monthly! We’ve put together another really great magazine—enjoy!
—Susan Harrington, Managing Editor
This article first appeared in the January 2016 print edition of Alaska Business Monthly.