This article made Alaska’s financing of resource extraction projects reminiscent of the Soviet Union’s “more aggressive state role in development.”
In Globalization and the Economies of the North, Alaska is characterized as a case where resource development is primarily driven by market forces but supported by government tax incentives. The Soviet Union’s development strategy is offered in contrast.
However, Huskey’s description of resource development as a vehicle for state sovereignty brought to mind AIDEA’s leases in ANWR, and highlit potential motivations behind choices made by Alaskan leadership.
State autonomy is important to Alaska lawmakers. An outside observer might assume they view their constituency as members of an autonomous state under control of an alien power, rather than participants in a federal system. Choices made by state entities reflect this.
As discussed in this article, resources produced on a frontier must be valuable enough to cover high cost of production and transportation to market. The reading describes the cost of building the Trans Alaska pipeline, and a natural gas pipeline that, in 2023, has yet to be built.
When an ANWR lease sale was held at the end of the Trump Administration, no major oil companies bid on the leases. The lay person may assume market forces had turned away from development in ANWR. AIDEA, a public corporation with a governor-appointed Board of Directors, was the main bidder.
Without the major oil companies, AIDEA’s bid must be considered an act supporting Alaskan sovereignty in defiance of national trends and Outside public opinion. Given the descriptions of various approaches to economic and resource development in the circumpolar market, I believe AIDEA’s recent actions reveal a state sovereignty-driven approach to development, rather than market-driven strategy.
In one of my other classes, we spent last week discussing ANWR and the lease sale held in 2021. I agree with you that during the ANWR lease sale, a market-driven strategy was not supported. The lack of bids demonstrates that oil companies were hesitant to reap the market benefits of drilling when there was a strong stigma and potential for public backlash attached.