Yesterday the Washington Post offered up the brilliant idea that a great way to pay down the US’ national debt would be to sell off the state off Alaska. The writer, Steven Mufson, believes that the sale could generate $2.5 trillion – “…and maybe twice that.”.
There are several really stupid angles to this idea. First, $2.5 – or even five trillion wouldn’t make a dent in the national debt. But that’s not the worst part. Nowhere does the writer even consider that the debt problem is caused by over spending. The money generated by a sale like this would not pay down the debt. Our illustrious Congresscritters would be rubbing their hands together about the windfall and where to
waste spend it.
Then, too, how much sense does it make to consider selling off a state which has some of the most important resources in the nation?
What is Alaska worth today?
There are 3.7 billion barrels of proved oil reserves and 9 trillion cubic feet of proved natural gas reserves in the state, according to the Energy Information Administration. Oil companies are eyeing even bigger potential reserves in unexplored areas. The Interior Department estimates that the Chukchi Sea alone could hold up to 12 billion barrels, equal to half of the country’s proved reserves, and Cook Inlet and the Beaufort Sea as much as 8 billion barrels. The state has large shale areas where new hydraulic fracturing techniques could yield new supplies.
In the mid-1980s, Michael J. Boskin, a Stanford University economist, estimated that Alaska’s oil and gas reserves alone were worth at least $200 billion. But new discoveries have outstripped production, and Boskin was assuming a price of $26 a barrel for oil, less than a third of today’s prices.
Alaska has countless other natural resources, some in areas we hold off limits, such as the Arctic National Wildlife Refuge, and others on state lands. Mining companies are salivating at the prospect of more than $300 billion worth of copper, gold and molybdenum at their proposed Pebble mine in the southwestern part of the state. The state’s forests could also be exploited.”