Alaska’s elected officials — at both the state and federal levels — Tuesday continued efforts to divest the state from Russian assets and to promote the state’s potential for domestic oil and resource production.
In a news conference at the Alaska State Capitol, Gov. Mike Dunleavy repeated his call for the state to divest itself from Russian interests. The governor announced Friday he was directing state agencies to examine contracts and break any relationships with Russia or Russian companies and for a general boycott of Russian goods.
“I call on all Alaskans to think twice before buying Russian products,” Dunleavy said.
He said he had directed the Department of Revenue to divest its assets from Russia, and called on the Alaska Permanent Fund Corp. to do the same. Department of Revenue Commissioner Lucinda Mahoney said at the news conference the state’s Russia investments —which she said constituted a small portion of the state’s investments — were now only worth $10-15 million, down from over $200 million.
Mahoney said at the conference it was no longer prudent to hold those investments but did not say if they had yet been sold.
Dunleavy said many of the state’s actions were largely symbolic, and would likely have minimal impact on the Russian economy, but said it was important for the state to show solidarity with the people of Ukraine.
Oil prices on the rise
During the conference, Dunleavy said the situation in Ukraine — which he at one point called, “for lack of a better expression, a civil war,” — would likely exacerbate inflation and the high costs of oil.
The Associated Press reported Tuesday the ban on Russian oil is likely to increase the already record-high price of oil Americans are currently paying. The price of benchmark U.S. crude jumped 8% Tuesday to more than $129 per barrel, AP reported.
Amid soaring oil prices, oil companies are posting record profits. Reuters reported ExxonMobile recorded its highest profits in seven years, taking in $8.87 billion in the fourth quarter of 2021. Shell reported more than $6 billion in profits during the same period, according to the New York Times and ConocoPhillips announced Feb. 3 it had taken in $8.1 billion in 2021’s last quarter.
Also Tuesday, the Environmental Protection Agency announced it fined oil company Hilcorp Alaska more than $180,000 for Clean Air Act violations at 35 of its Prudhoe Bay, Milne Point, and Kenai Peninsula facilities. HillCorp purchased BP’s assets in Alaska when that company left the state.
The high price of oil will translate to increased revenues for the state, Dunleavy said, likely in the billions of dollars. The governor said he was working with the Legislature to expedite a Permanent Fund Dividend to help Alaskans deal with increased costs. The state’s spring revenue forecast is due next week, the governor said.
Demands for domestic development
President Joe Biden announced Tuesday the U.S. was banning the importation of Russian oil, a move advocated for by Alaska’s congressional delegation.
Sen. Lisa Murkowski, R-Alaska, released a joint statement with Sen. Joe Manchin, D-W.Va. praising the oil ban and calling for increased domestic resource production.
“If there was ever a time to change course on harmful policies that have restricted domestic production, it is right now, “ Murkowski said. “American energy is a solution that can help us address high prices, inflation, and the needs of our allies.”
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On Twitter, Sen. Dan Sullivan, R-Alaska, said the decision to ban Russian oil should have come weeks ago.
“Pres. Biden, tell the truth: We CAN produce the oil & gas we need right here in the US,” Sullivan said on social media. “Americans should NOT be paying outrageous energy costs.”
U.S. Rep Don Young, R-Alaska, and state Sen. Josh Revak, R-Anchorage, co-authored an opinion piece in The Hill advocating for increased oil production in America.
Dunleavy too called on the federal government to fast-track the permitting process for American energy and resources projects and called the Biden administration’s environmental policies an effort to destroy the state of Alaska. Dunleavy said his administration was looking into ending its relationships with financial institutions that have vowed not to invest in Arctic energy projects, calling those policies discriminatory toward Alaska.
According to Dunleavy, federal agencies are “doing everything they can to make sure this state can’t survive as a state. They offer us handouts, that’s great but that’s not how you build a state. Simply leave us alone to develop our resources.”
Bills and resolutions
State Rep. Jonathan Kreiss-Tomkins, D-Sitka, who chairs the House State Affairs Committee said lawmakers will introduce legislation that will completely divest Alaska from Russia, including $81 billion in the Alaska Permanent Fund and $34 billion in pension funds.
“With Russia’s invasion of Ukraine, we are witnessing evil in real time,” Kreiss-Tomkins said in a statement. “Divesting the State of Alaska of its Russian assets — which were once worth in the hundreds of millions of dollars — is one small step Alaskans can take to support Ukrainians and their fight for sovereignty, democracy, and freedom.”
The Alaska State Senate is moving two joint resolutions, one calling for a ban on Russia energy and resource imports and for the development of those industries in Alaska, and another declaring solidarity with Ukraine.
The Alaska Permanent Fund Corp. has said it does not make investment decisions based on political calculations, and that it is monitoring the situation in Ukraine closely. APFC did not immediately respond to request for comment.
But the governor said Tuesday the state should look at other countries the state does business with and consider ending relationships with those that don’t align with the values of the U.S.
“We all need to decide if this is a one-off or do we look at other countries,” Dunleavy said. “There are conflicts all over the world, I think that’s a worthy discussion.”
Dunleavy said Tuesday he believed the COVID-19 pandemic and the war in Ukraine will cause a reverse in globalization the state should capitalize on. The governor repeated his calls for the state to become more independent by increasing resource production and agriculture, and said Alaska should make itself attractive to investors by flattening the permitting process.
“In the end, this is a difficult time we’re going through, we have the ability to make life better for our people through our actions here in Juneau,” Dunleavy said. “We’re coalescing around some concepts, I hope we don’t run out of time.”
• Contact reporter Peter Segall at psegall@juneauempire.com. Follow him on Twitter at @SegallJnuEmpire.
