A new University of Alaska report aims to help state leaders craft energy policies as the Arctic changes

The report is the first of a planned series of annual briefing reports compiled by the university's experts.

The University of Alaska has released a new report on Alaska energy issues, ranging from its history of fiscal challenges to the potential for a wide variety of renewable energy sources in the future.

The report, titled “Alaska’s Changing Arctic: Energy Issues and Trends,” is the first of what is planned to be a series of annual briefing reports compiled by University of Alaska experts with the intent of informing state leaders on policies.

“As a global leader in Arctic research, policy development and leadership, the university system is uniquely positioned to provide essential information to the state’s leaders and all Alaskans,” University of Alaska President Pat Pitney said in a statement marking the report’s release on Tuesday. “This report, representing the breadth and depth of our Arctic expertise, illustrates how we can support state interests and policy initiatives, such as infrastructure and energy sustainability.”

Authors are from various parts of the university system, including the Center for Arctic Policy Studies and the International Arctic Research Center at the University of Alaska Fairbanks and the Institute of Social and Economic Research at the University of Alaska Anchorage.

The report is something of a state-level parallel to a national-level report, last updated in March of 2022, released by the Congressional Research Office.

One goal is to address the priorities spelled out in the 2015 state law that created an Alaska Arctic policy. The four priorities are to promote economic and resource development, address the state’s gap in response capacity, support healthy communities and strengthen science and research.

The selection of energy as the subject of the first report is timely, said Amy Lauren Lovecraft, director of theCenter for Arctic Policy Studies and one of the leaders of the project.

“Energy is really on everyone’s mind,” Lovecraft said.

Oil prices have taken a tumble in recent months from the highs resulting from Russia’s invasion of Ukraine. That has profound short-term implications for the state budget. Projections for total state revenues in the current fiscal year are about $1 billion lower now than what was expected just last spring, according to the Dec. 15 forecast issued by the Alaska Department of Revenue.

Interwoven into the various energy issues facing the state, and likely other issues, is the challenge posed by climate change. “The issues are interconnected,” Lovecraft said.

The energy report is divided into four sections. The first, on Alaska’s Arctic energy economy, includes an overview of the state’s longstanding budget challenges.  Those include what is referred to as the “polar paradox” – the way high oil prices generate more money for the state but, at the same time, increase the cost of living and inhibit development of new businesses.

The second section, on Alaska’s Arctic energy systems, discusses the way energy is used in Alaska, including potential for modernization and integration of renewables. The third section discusses the need for infrastructure that is resilient to climate change, which is happening faster in Alaska and the Arctic than in almost every other place in the world. That section mentions the disastrous impacts in Alaska last fall of Typhoon Merbok as one recent event that shows the need for climate-adapted infrastructure.

The fourth section discusses Alaska’s role in international affairs.

The report does not recommend any specific policies. However, it does point out the circumstances that legislators and other state leaders will have to address, and it explains how the state got into the current condition.

For example, in summarizing Alaska’s oil history – including the transition from a time when Alaska provided a quarter of the U.S. domestic oil supply to the current 4% — the report points out the cost of the decision in 1980 to eliminate the state income tax. “This decision left the state without an annual, relatively stable revenue stream and severed citizens’ personal relationship with the cost of government. Over the years, the boom-bust cycle of global oil production drove various state energy policies,” it says.

The subjects of future reports are yet to be determined.

The new series of reports, with authors from the three university centers in Fairbanks, Anchorage and Juneau, is related to but separate from a series of science-focused reports issued by UAF’s International Arctic Research Center. Those reports, issued periodically since 2019, focus on climate change and the impacts to natural environments and the people dependent on them.

This story was first published by Alaska Beacon and is republished here under a Creative Commons license. You can read the original here.