State leader sees the oil era ending, but development still vital to Alaska’s economy.

By Daniel J. Graeber     |   Sept. 1, 2015 

ANCHORAGE, Alaska, Sept. 1 (UPI) — Alaska needs to exploit its vast natural resources, but do so in a way that heeds the growing threats of climate changes, the state’s lieutenant governor said.

President Barack Obama is in Alaska touting the dual agenda of taking the steps needed to slow the impacts of climate change while ensuring state revenue from the oil and gas industry remains durable. Obama’s plan to cut greenhouse gas emissions while at the same time signing off on arctic drilling permits for Royal Dutch Shell has earned both praise and condemnation.

Speaking at an Alaskan arctic conference in Anchorage, Lt. Gov. Byron Mallott said the state needs to exploit the oil and gas resources it has, but in a way that recognizes the industry’s impact on climate change.

“We need help to continue, yes in the waning days of the petroleum era, to make the transition from petroleum to a new world built upon renewable energy,” he said. “We need to develop Alaska’s resources, a need to do it in a way that recognizes the impact upon the arctic and the consequences of ill-devised action that would occur and impact climate change if we are not smart and we are not resilient.”

The Alaska Oil and Gas Association said close to 90 percent of state revenue has come from oil and natural gas development since Alaska became a state in 1959. Gov. Bill Walker, however, said the state faces a $3.5 billion deficit and much of the state pipelines are running at less than full capacity.

On a controversial drilling program led by Royal Dutch Shell, the governor said the state can’t turn away from the potential economic opportunity.

The Intergovernmental Panel on Climate Change last year found carbon dioxide, a potent greenhouse gas, from the combustion of fossil fuels accounted for 78 percent of the total emissions increase from 1970 to 2010.

Michael LeVine, a senior counsel on the Pacific region for advocacy group Oceana, said in response to email questions Alaska may be forced to address serious long-term economic questions. There’s a clear need to diversify an economy so dependent on oil and gas. While Shell’s campaign may provide short-term economic stimulus, it’s not a long-term economic solution.

“Without a durable solution, the government is just giving shell what it wants in the hope that someday something good will come of it,” he said. “That is not sound economic or environmental policy.”

Alaskan oil and natural gas production is in decline in part because legacy fields are approaching maturation. A federal study of the Burger prospect targeted by Shell described it as likely the largest reserve pool of its kind off the Alaskan coast.

Shell said its committed to operating in the region safely and in an environmentally responsible manner.

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