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The Alaskan PFD…welfare or rightful benefit

February 1, 2015

P.1We were about to tilt over and lower an oil rig and I was knee deep in mud dragging an i-hook and wrapping it around whatever my boss, ‘the pusher’ told me to. Lowering that rig would involve four ‘jinn mills, flatbed trucks with steel a frames and a massive two inch steel cable that was now secured to four sides of the oil rig as it was lowered down to a flatbed tractor trailer. I had been with the company for three months now and though still wading around in the mud I had the job of directing the trucks as they lowered the rig. I stood in the center directly under the oil rig and between the trucks lowering that massive superstructure. It was within 8 feet of the bed of the trailer, and I signaled the tilt truck to lower it even more when one of the cables snapped and the rig came crashing down towards me………

That was my first & last experience working around oil rigs, but little was I to know back then I would one day benefit from the oil that rigs like those produced. Of the 58 rigs I helped move 39 hit oil but were capped, because the oil companies that owned them wanted to wait until the price of oil increased before putting them into production. Now living in Alaska each year we receive a check based on the oil produced within my state. The men and woman who wrote the Alaska constitution must have been quite a bit like those who drafted the American constitution because they ensured that all Alaskans would ‘forever’ share in whatever wealth this state would receive from the sale of its natural resources.

A few weeks ago I was bemoaning the fact that oil prices were one half of those of last year and it would effect my PFD check, and a family friend commented that I was after all I have espoused and written not adverse to taking free government money. His sentiments have been echoed lately by many Alaskans who believe that in five years, (our PFD is averaged out over a five year period of revenue from the oil companies), their check will be next to nothing. Both my friend and these Alaskans are wrong but for different reasons.

First my friend equates our PFD fund to welfare, and that is just incorrect. If you owned a rental property and over the years received a check each month for the rent is that welfare? Well in Alaska as written in the states constitution, all Alaskans share equally in its resources and the revenue they generate and that is akin to that rent check you receive because it is profit from something you own.

As far as my fellow Alaskans complaining that the oil companies aren’t paying enough for the oil they produce, consider that todays market price for our oil is $47 a barrel compared to the over $100 a barrel they got for it only a few months ago. So the value of the oil produced is less and naturally we will receive a much smaller check. But sometimes even Alaskans can not see the forrest for the trees, because the price of our heating fuel and gasoline has fallen and what used to cost $45 to fill up at the pump now costs about $30 and I just picked up a barrel of heating oil that before my Texas visit cost $143 and last week cost $101. If you add up the savings over the course of just one year you would see that these savings would more than offset the loss of more than one half of our PFD check this year!

So I say come on people if you are so worried about a short PFD check take the savings on gasoline and heating oil and put it into the bank until the next PFD check is due! To those who think the PFD is a government handout come on up and live in Alaska for two years and tell me you do not feel that you have earned the right to share in our states natural resources.

Much more interesting to me
is why are we still paying so much for gas and heating fuel in Alaska?
The price for a gallon in Fairbanks is $2.67 and when I left Texas it was $1.66 a gallon.
Both states have pipelines and both states have oil refineries so why the difference?

*ie….about that oil rig accident in Oklahoma, it did indeed plow into the earth but I was untouched because the frame of the rig crashed down around me.

 

**Wordpress is again not allowing me to post my links and other photographs

Here are two links for more information….

The Alaska Permanent fund

http://en.wikipedia.org/wiki/Alaska_Permanent_fund

…and the loss of the states income due to the drop in oil revenue

http://www.adn.com/article/20150118/alaskas-fiscal-perfect-storm

 

 

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4 Comments leave one →
  1. February 2, 2015 10:31 am

    I’m finally going to be able to collect my first PFD check later this year. Your point is well made; a lot of people become obsessed with the price on something without thinking through the ramifications. I knew folks in the lower 48 who would drive tens of miles to search out the absolute cheapest price for a gallon of gasoline. Often the difference in the price would be 2 to 3 cents on the gallon and rarely more than 5 cents. If your gas tank holds 18 gallons and you saved 3 cents a gallon that’s a whopping total of 54 cents. Factored against the gas burned while looking, the generally less than pleasant experience of suburban driving and the time involved in such a search I could never understand this ‘logic’…

    Like

  2. February 2, 2015 6:38 pm

    Great points, Pete.

    Like

  3. Jon permalink
    February 7, 2015 11:30 am

    That vacation obviously hasn’t taken away your keen insights & perspectives, Pete.
    Our lowest gas price I saw in the Twin Cities was 1.89.

    Like

  4. February 9, 2015 10:29 pm

    Then there are those that build rental properties and never see a cent…….:)

    Like

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