$2,072 to each citizen is largest payment ever
Eligible Alaskan residents will receive $2,072 each as part of the state’s Permanent Fund Dividend program, according to a release from Alaska Governor Bill Walker. The Department of Revenue for the state of Alaska estimates that 644,511 of the 676,379 applicants who applied for a PFD check will receive a payout this year.
Alaska’s Permanent Fund was established by a constitutional amendment passed by voters in 1976 requiring a portion of state oil revenues to be put into a savings account to be available for the distant future, when North Slope oil fields are tapped out. The payment to citizens is derived from a formula averaging the Permanent Fund earnings over a five-year period.
The North Slope contains more resources than a dozen of the 100 largest oil fields in the United States and several of the 100 largest natural gas fields. Alaska’s Prudhoe Bay field is one of the largest oil fields in the country, although production has fallen to less than 300,000 barrels per day from its peak of 1.6 million barrels per day in 1988, according to the Energy Information Administration (EIA).
The 2015 payout from the Permanent Fund Dividend program will be the largest in its history, passing the previous high of $2,069 paid in 2008. Last year’s payout was $1,884.
To date, the Alaska Permanent Fund is worth over $51.4 billion. Since 1982, just over $23.3 billion has been distributed to Alaskans through PFD checks. The annual payments as they are based off of how well the fund performs, and not directly tied to oil prices.
The largest trust fund in the U.S.
The Permanent Fund is maintained through 25% of the royalties that energy companies pay to produce oil and natural gas on leased state lands, making it the largest trust fund in the United States. Production and income taxes on the crude oil and natural gas industry have provide as much as 90% of Alaska’s fund revenues and more than half of its state revenues from all sources, including federal programs.
Governor Walker critical of the Permanent Fund Payout
In the press release sent out by Governor Walker’s office today, the Alaskan governor made it clear that he thought it was time to revisit how the fund was used. “This is the largest permanent fund dividend payout in Alaska history. We are paying out more in PFD checks than we are for the education of young Alaskans … at a time when we are struggling with a $3.5 billion deficit.”
$1.30 billion was spent on education this year, compared to $1.33 billion spent in PDF checks, according to Walker’s release.
“Across Alaska, we are laying off school teachers, cutting trooper posts, and scaling back services provided by the state,” said Walker. “It is time to have an open and honest conversation about our finances, and how resources like the Permanent Fund can be used as an asset.”
Despite his critical view of the Alaska Permanent Fund, Walker is in favor of developing ANWR and making changes to the state’s permitting process.
“When I look at other states such as North Dakota, New Mexico, Texas, Wyoming, and I look at their permitting processes and how long it takes to get a permit to explore for oil, it’s rather shocking how quickly they can [issue drilling permits] versus how long it takes us,” Walker said during an exclusive interview with Oil & Gas 360. “Much of our land–62% of our land–is federal land in Alaska, and the permitting process is multiple years. Whereas in other locales, it’s a matter of weeks and in some cases days for permits to be issued. So … we’re working on ways of bringing down the cost of doing business in Alaska on the oil exploration side.”