Tour offered insight into Norway's oil policies

The Policy Tour was spurred by our interest in new ideas, best practices and strengthened relationships. Three core issues — competitiveness, capacity-building and competency — informed much of the discussion in Norway, whether we were talking about Norway’s role in the Arctic or government’s relationship with the private sector. You can see this in the key takeaways:

• The Norwegian government owns 64 percent of Statoil, a private corporation that is a global leader in offshore oil and gas development. Perhaps surprisingly to most Alaskans, through Statoil, Norway’s government will likely receive more revenue from Alaska’s offshore production than the state of Alaska.

• The No. 1 investor in Norway’s oil and gas development — sharing the risk and the reward — is Norway. Statoil is only one component of this. A 100 percent state-owned and -financed State Directed Financial Interest (similar to AIDEA, the Alaska Industrial Development and Export Authority) invests as a partner in developing potentially successful fields.

• By having a seat at the table in field development, Norway has access to the data it needs to structure a profits-based tax system that is stable and has encouraged industry investment. Norway moved from a royalty/bonus system many years ago because it found it did not lead to investment.

• Norway conducts initial 2-D seismic testing of fields. It has developed clearly articulated safety and environmental regulations and aligned the process to get from license to production quickly.

• Leases are awarded to the most competent, rather than the highest, bidder. Norway also has a “drill or drop” provision for leases that includes firm work commitments and a six-year time horizon.

• Norway saves more than Alaska — 100 percent of its oil and gas revenue goes to its $550 billion Sovereign Wealth Fund (similar to the Alaska Permanent Fund), which spins off 4 percent of its earnings to form 10 percent of the country’s budget and a significant component of its fiscal policy.

Alaskans should not read these as recommendations for how we should do it here. There are many differences between Alaska and Norway. But this trip offered an opportunity to examine how we can improve our system to effectively manage development, encourage investment and ensure Alaskans get their fair share from state-owned resources. We can study what others have done — not to replicate their systems but to improve our own.

Learning from others doesn’t stop in Norway. Iceland’s President Ólafur Ragnar Grímsson has invited us to conduct a technical tour of his country’s energy infrastructure and policy environment. And Scott Goldsmith, researcher at UAA’s Institute of Social and Economic Research, has suggested that a good model to explore is Alberta, Canada. Learning and sharing with Canada could add to the strong collaboration already taking place.

We’ve also heard calls to visit North Dakota. Our two states are different enough — Alaska owns its land and resources; North Dakota does not — that comparisons are difficult at first glimpse. That said, perhaps Alaskans can share some of what we’ve learned with North Dakotans. We managed our oil boom by creating the Alaska Permanent Fund, changing a non-renewable resource into something renewable and sustainable. North Dakota could do the same to ensure its people and communities are supported into the future.

In today’s global economy it’s not enough to say, “We don’t care how they do it somewhere else.” That is not the world we live in. Adapting the lessons learned from others — from Norway to North Dakota — and sharing our experiences while building relationships along the way should be part of the Alaska model.

Nils Andreassen is the managing director of the Institute of the North, a nonprofit organization founded by former Gov. Walter J. Hickel in 1994. Its mission focuses on understanding the reality, the richness and the responsibility of the North. Find out more about the Norway Policy Tour at www.institutenorth.org. Notes found online are not a comprehensive technical overview of Norway’s model, nor has the Institute of the North taken any position on the ideas put forth.