Resource Development Council

A Message From The Executive Director

Jason Brune


Alaska Hold’em.  Ever heard of it? It’s a lot like a really popular game out there today named after a state half the size of Alaska that shall remain nameless.  This game has similar rules: two individual cards and five community cards — three cards in the Flop, one in the Turn, and a final card in this game called the Lake (as opposed to the River).  One has seven cards to make the best hand and determine if it’s worth the gamble to invest in this wonderful state.  In Alaska Hold’em, players have the opportunity to win big, but also could lose everything.

To start the game, each player is dealt two cards.  These are the cards you are stuck with for the rest of the game and if they’re not good, you might as well fold.  No sense gambling on the unknown.

Card #1: Abundant Natural Resources This is the reason we’re in the game in the first place, because without our natural resources, Alaska would never have become a state.  We’re blessed with oil and gas, vast mineral wealth, tremendous beauty for tourism, world-class fisheries, and the nation’s two largest national forests.  These resources are Alaska’s ace in the hole.

Card #2: Location Alaska does not have the infrastructure of the Lower 48.  Because of this, everything costs more in Alaska.  To develop a project, roads have to be built, power transmitted, and pipelines constructed.  Because Alaska competes for capital on a worldwide basis, these factors must be considered when determining whether to up the stakes, place a bet, and see the next three cards in the Flop.  Some companies playing Alaska Hold’em fold at this point.  Many place their bets with hopes of a good Flop, Turn, and Lake.

The Flop: The first three community cards we’ve been dealt don’t do much to encourage companies to stay in the game.  They are:

Card #3: Oil & Gas Taxes The Alaska Legislature last year raised the severance taxes so companies today pay nearly three times what they did last year.  Unless things are changed, this will apply to both oil AND gas.  Alaskan voters fortunately rejected a natural gas reserves tax last November.  However, this could come back into play at any time.

Card #4: The Cruiseship Initiative Alaskans voted in favor of the cruiseship initiative last August.  This initiative not only places a $50/person tax on each cruiser, it adds a number of additional onerous requirements that hurt local businesses and do little or nothing to provide additional protections for the environment.

Card #5: Potential Mining Taxes Legislation in Juneau this session has been proposed to raise the taxes on the mining industry.  Threats are also being made by individuals to use the initiative process to raise taxes, ban responsible cyanide use, and lock up even more prospective land as well.

Card #6: The Turn Another community card, the “turn” is what has happened to Alaska’s mentality over the last 30 years.  Alaska has turned from a pro-development environment with a can-do attitude to a tax-everyone-but-me, maintain-my-permanent- fund, and “what-can-you-do-for-me?” mentality.  Not much to encourage a bet.

Card #7: The Lake The final community card, and one that will be felt by every gambler in Alaska Hold’em.  A forthcoming court ruling by the 9th Circuit will prevent tailings from the proposed Kensington Mine to be placed in Lower Slate Lake.  Though this decision appears to affect only mining gamblers, the precedent it sets will be felt throughout Alaska.  It demonstrates once again that policy is made not in Juneau or Washington, DC, but rather in the courts.

All-in or Fold? By the way, there’s one final rule I forgot to tell you about Alaska Hold’em: After companies go all-in, place their bets, and decide to invest in Alaska, the community cards very likely will change, often for the worse.  Perhaps as long as the stakes are high (along with commodity prices), companies will continue to gamble on Alaska.  Unfortunately, seeing the community cards we have to work with, it is unlikely new players will ante up in the first place.