Paul Fuhs: Alaskan oil and gas will be needed for the future.  The world will simply not operate without energy

By PAUL FUHS

Yet another Anchorage Daily News anti oil opinion from retired University of Alaska Anchorage professor Rick Steiner, “The Climate Cost of Alaska’s Oil in the Trillions of Dollars.”

While we expect our professors to be smart, you have to wonder what his real point was?  Formulas and isolated facts are fine, but as a UAA student, I was taught that a legitimate intellectual approach necessarily considers all alternatives and consequences.

As one consequence, you have to wonder if the good professor ever thought about how we were able to pay his university salary for all those years?

While Steiner quotes a lot of numbers about oil production and conversions to CO2, which I don’t dispute, what was the point of it all?  That we should never have developed our oil?  Or that we should shut it down now?

Based on similar analyses, those conclusions were in fact proposed by foolish anti oil extremists like Steiner, who advocated for a complete shutdown of arctic oil and gas development.

Of course, the question they refuse to consider or answer is: what are the alternatives and consequences?  For the United States, the alternative is the Alberta Tar Sands, the dirtiest oil in the world, rivaled only by the bitumen fields of Venezuela which we are now seeking.

The Tar Sands are currently producing about three million barrels a day for an energy hungry US.

Alaska is producing about 450,000 barrels per day. While the “shut down Arctic oil” campaigns were in vogue, the question was raised: Could Alberta pick up the difference in supply and for how long?  We were assured that they could, and based on their reserves could produce at that level for the next 149 years.

Is this what the professor meant?

Will Alaskan oil supply continue to be necessary in the future? Regarding relevant facts, the Energy Information Administration has published data on future world energy demands. Their conclusion: due to increased demands from new energy intensive industries such as AI and world population growth, world energy demand will increase by 28% in 2040.

What then is their projected energy mix? With aggressive renewable energy developments, these  renewable sources will increase by 25% over current levels. But so will oil and gas at the same rate as shown by the attached graph. The only source that will level out is the use of coal which is still substantial. Nuclear will have only modest gains due to long term development times, costs, and community concerns.

So, Alaskan oil and gas will realistically be needed for the future.  The world will simply not operate without energy.  Would there then be any justification for discriminating against us and shutting down Alaska, when it would mean not even one drop less oil being burned?

Regarding alternatives and consequences, what has it meant for Alaska to provide this petroleum energy in the past and in the future?  The benefits include our massive oil revenue investments in schools, airports, roads, community centers, rural health clinics, prisons for criminals, courts, world leading renewable energy projects, and a massive university system with a payroll of $120 million per year with professor salaries of up to $186,000 per year.

Oh, and did I forget to mention the oil based Alaska Permanent Fund, which has paid out $31 billion in dividends to Alaskans over 40 years and which now pays a substantial portion of annual state appropriations for basic services so Alaskans don’t have to pay taxes?

Anybody here want to do without that?

One of the worst things about a disconnected opinion piece like Steiner’s is that this is the worldview being presented to many of our students in Alaska, to the point that they are not interested in working in our oil and gas industry because “we are destroying the planet”.

Due to this, and unrealistic life expectations promoted on social media, our industries are faced with having to hire people from outside Alaska.  For oil and gas on the North Slope the outside workforce is 49%.  In mining it is 42%.  Perhaps a brilliant university professor could tell us what the economic benefit to Alaska would be if our own people were working in our resource industries and that money was circulating in our economy?

What if, instead of the disconnected opinions of Professor Steiner, our students and residents were educated on the actual structure of the world energy economy and Alaska’s responsible role in it?

This whole subject has important implications for the future of Alaska.  Our educational institutions and practitioners, to whom we entrust our children, need to be responsible in their programs and statements.  Our future depends on it.

Paul Fuhs is a lifelong Alaskan, former Mayor of Dutch Harbor and Commissioner of Commerce for Governor Wally Hickel.

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