[Research Matters] TAPS at 35: Accounting for the Oil Revenues
Oil started flowing through the trans-Alaska 35 years ago this summer, on June 20, 1977. Since then, the state government has collected $170 billion in revenues from North Slope oil, as measured in today's dollars. A new paper by Scott Goldsmith, professor emeritus of economics at ISER, assesses what the state has done with its oil wealth so far. He finds, among other things:
• The state directly spent about three-quarters of its oil revenues and saved one-quarter in the Permanent Fund and other financial savings accounts.
• State savings accounts built with oil revenues have generated about $46 billion in available earnings, in today's dollars. The state reinvested about $12 billion of those earnings and spent $34 billion for Permanent Fund dividends and government expenses. (These figures do not include additional earnings retained in the Permanent Fund to protect it from the effects of inflation.)
• Oil revenues and earnings from state savings accounts have paid for about 90% of state spending since 1977. Revenues from sources other than oil paid the remaining 10%.
To see the entire paper, click here (PDF, 944.8KB).