Hickel's vision inspired Norway policy tour

Gov. Walter Hickel founded the Institute of the North which organized the recent Norway Policy Tour. Hickel long advocated that Alaska, as owner of its natural resources, must take control of its resource development for the benefit of all Alaskans. I was privileged to participate with the legislators and community leaders from Kotzebue, Nome, Bethel, Dillingham, Southeast, Kenai, Kodiak, Wasilla, Fairbanks and Anchorage who met with ambassadors and top level government and industry officials to learn about the Norway “model” of government-owned and developed oil and gas resources.

Having traveled with Hickel to China in 2008, I know he would have been the first to enlist for the Norway trip keeping lock step with us on even on the 18-hour days visiting industry headquarters and facilities across Norway.

Norway directly participates in the development of its resources. Norway and Alaska got into the energy game about the same time with big finds in the 1960s. Norway, however, has maximized its opportunities in contrast to the Alaskan experience. Major oil companies explored for and developed Norway’s first oil and gas fields but the government soon began to play a dominant role. In 1972, the Norwegian State Oil Co., “Statoil,” was formed. Today, Statoil is one of the world’s largest suppliers of oil and gas, operating in more than 30 countries, and the majority of its shares are owned by the Norwegian government.

Norway also instituted its State’s Direct Financial Interest (SDFI) in petroleum operations. Through the SDFI, the government owns an interest in numerous oil and gas fields, pipelines and onshore facilities. As a stakeholder, the government pays its share of investments and costs while also reaping a corresponding share of the profits. This investment gives the government a head seat at the table as a decision maker with full access to all information. Norway does not give development incentives/tax credits which are another form of investment, but one that returns no direct revenue. The government’s investing directly in the fields and sharing in the risk and revenues has not deterred participation as evidenced by the 60-plus companies holding licenses in its oil and gas fields.

0ne example of the government’s participation is its ownership of 46 percent of the country’s nearly 8,000 kilometers of gas pipelines. A separate government entity operates the pipeline system. As we learned from Ole Anders Lindseth, director general of Norway’s Petroleum and Energy Department, “Norway doesn’t view its gas pipelines as profit centers for its resources.” The regulated investment return on the pipelines is limited to 7 percent and therefore, the owners include, in addition to Norway, various pension funds, insurance companies and other entities that are satisfied with a 7 percent return which is wholly insufficient for leaseholders such as ExxonMobil. By comparison, should the state of Alaska embark on the All-Alaska Gasline/liquefied natural gas project (LNG) by taking ownership of the 800-mile gas line as infrastructure, the state would likely receive a federally regulated return of 12 percent — a solid return for the state, but not for the North Slope leaseholders who must appease stockholders with higher returns.

The Norway model is not a perfect fit for Alaska, but perhaps the most valuable lesson can be learned from Norway’s refusal to allow the leaseholders to determine where and when its resources go to market. Alaska must adopt this same approach. While our gas remains idle on the North Slope, multi-billion dollar long term contracts in the Asian markets are announced weekly for LNG projects involving the very same leaseholders currently on the North Slope re-injecting our gas. That is wrong. But as long as we remain complacent, Alaska’s ability to monetize its gas, deliver low cost energy to Alaskans and increase oil production will be stifled. In the same vein as Hickel’s famous pronouncement, “You drill or I will,” it is time for Alaska to step into its ownership role and proclaim, “We can. And we will.”

• Walker represents the Alaska Gasline Port Authority and is a former Democratic candidate for governor.


Thu, 01/19/2017 - 09:41

Letter: A pro-life presidency is something to be thankful for

​On Jan. 20, we will see the inauguration of a new president. From the pro-life perspective, this is something to be thankful for. That day represents the departure from the White House of one of the most pro-abortion presidents we have seen to date. His replacement is a man who has voiced support for a number of pro-life, pro-family initiatives that will protect the rights of the unborn and their mothers. Read more

Thu, 01/19/2017 - 09:22

My Turn: Alaska’s national parks need infrastructure support

In 2016, the National Park Service celebrated its centennial anniversary. 2017 marks the 100th anniversary of Denali National Park, one of the many crown jewels in Alaska’s collection of our national parks. These parks represent the very best and most treasured public lands in our country. As we hear about badly needed infrastructure improvements to our roads, bridges and utilities nationwide, it’s important to remember that our national parks are not immune to these challenges. Denali National Park alone faces an infrastructure repair backlog to roads and facilities of $53 million.

Read more
Thu, 01/19/2017 - 09:22

My Turn: Reflecting on why I love Alaska

Gov. Bill Walker issued a proclamation designating 2017 as a “Year of History and Heritage” in recognition of Alaska’s sesquicentennial — the 150th year since Russia ceded its possessions and interests in Alaska to the United States. Gov. Walker’s proclamation encourages all Alaskans “to study, teach, reflect upon our past, and apply its lessons to a brighter, more inclusive future.”

Read more
Thu, 01/19/2017 - 08:47

Outside Editorial: NATO and the EU: Mend them, don’t end them

The following editorial first appeared in the Chicago Tribune:

In lamenting President Barack Obama's foreign and military policies, Republicans have frequently offered a concise summary: "Our allies don't trust us, and our enemies don't fear us." They didn't imagine the day would come when the same might be said of a Republican president. But that's the prospect Donald Trump raises. Read more


  • Switchboard: 907-586-3740
  • Circulation and Delivery: 907-586-3740
  • Newsroom Fax: 907-586-9097
  • Business Fax: 907-586-9097
  • Accounts Receivable: 907-523-2230
  • View the Staff Directory
  • or Send feedback