A meandering blog with no clear topic. You will find me talking about knitting, building, kids, social and economic issues, Alaska, and lots of other stuff.

Thursday, July 26, 2007

5 and 1/2 years

Check out this article...


So, production is declining faster than expected at our oil fields. This is not good news for Alaska. 89% of the money that runs the state government comes from oil. The oil companies pay taxes to the state for every barrel they produce, and we depend on this money. Now, I know a lot of people don't like the government, think it should be smaller. Alaska doesn't have just Republicans and Democrats, we have the Alaska Independence Party too, and there are plenty of people in that party. And while I could do without the DMV, and the cops that write parking tickets downtown, and some of the other government agencies, there are plenty that we truly do need. How much better are our lives because our kids can go to school, and the firetrucks and police come when we call 911, and someone looks after abused kids? Now, I may be biased, since I work for the state government, but I think some government services are pretty essential. And without the oil money, Alaska will have just 11% of the money that is currently inadequate, and have to make do with that.

OK, so lets do some math. According to the article in the Alaska Journal of Commerce, production is down 12%. Some of that is due to the pipeline being shut down for a short time, but not most of it. So, say 9%. We produced 738,000 barrels in the 2007 fiscal year, which ended July 1. If it goes down 9% each year, that means it will be 671,580 in fiscal year 2008, and somewhere around 371,000 6 years from now, assuming it declines 9% year over year steadily. This is a huge problem. James was talking today to a retired oil person of some sort. He said that when production goes below 400,000 barrels a day there just won't be enough oil in the pipeline to make it flow all the way from the North Slope to Valdez, a distance of 800 miles. So it won't simply gradually decline. This means that about 5 and 1/2 years from now, the oil money will be gone. GONE. ZERO, ZIP, NADA. GONE. 5 and 1/2 years isn't very long. Now we see why Sarah Palin, Governor, has been pushing so hard to get the gas pipeline built. The oil pipeline can't carry natural gas... we have to start all over. And it would take more than 5 and 1/2 years to build, even if we had the plan finalized.

And, what will happen to the population of Alaska when the oil money is gone? Economists estimate that oil is responsible for at least 1/3 of the state's economy. Does that mean that 1/3 of the jobs will vanish? If 1/3 of the jobs are gone, what kind of ripple effect will that have? 1/3 of the people in the state will be unable to pay their rent or mortgage. Will 1/3 of property owners get foreclosed on? Will 1/3 of cars be repossessed? Or will 1/3 of our population just pack up and head back down the Alcan? Where does that leave the rest? In cities that are only 2/3 inhabited? Seems to me that could lead to a sort of melt-down where anyone not relatively self-sufficient would go back Outside (means leaving Alaska, for those of you unfamiliar with the local dialect). Alaska could be a much different place in the not-too-distant future.

So for those of you that think James and I are crazy for wanting chickens, (and sheep, rabbits, potatoes, etc), get over it. We plan to stay in Alaska, and we think that to do that successfully long term, we need to be fairly self-sufficient. We need to be able to heat our house with firewood, and grow our own food, and darn it, I just want wool to knit, no matter what. So, I need sheep.

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