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Tough funding decisions for DNR; Myers argues for business approach
With the Alaska Department of Natural Resources playing a key role in Alaska’s resource-based economy, state agency funding decisions in the face of state budget constraints should use a business-style approach, recognizing the financial return to the state from money invested in the agencies, Mark Myers, DNR commissioner, told the Commonwealth North Energy Action Coalition on Sept. 28.
Rather than applying cuts to the state administration across the board, funding for individual agencies such as DNR should relate to the value that the agency returns to the state, Myers said. And, with money spent on funding DNR resulting in a financial return to the state treasury, a cut to DNR results in a cut to the state’s revenue stream he said. DNR has a role of ensuring access to state resources and ensuring access in an environmentally acceptable manner.
Yet DNR funding only represents about 2 percent of the state’s budget, Myers said.
“We’re at a point where we have to make a different funding model, because if we keep taking these across-the-board cuts we will not be managing these resources pro-actively, and we’ll be shutting down significant industries,” Myers said.
Cutback in operations? Myers said that, with his department’s staffing level already cut well below the level needed to achieve administrative efficiency, further cuts would trigger corresponding cuts in department operations. The result will be a choice between shutting down agriculture operations, shutting down forest fire fighting, slowing down oil and gas lease sales, slowing down permitting or slowing down the transfer of lands, he said.
Last year the department ended its gravity and magnetic survey program and came close to ending all of its timber sales, Myers said. Alaska is poorly mapped, despite the dependence of the state’s economy on the state’s natural resources - DNR, through the geological survey, has been putting major effort into mapping and delineating those resources, he said.
Citing the possibility of a shutdown in agriculture, should a state-operated meat processing plant or the state inspection services have to close, Myers commented that some agency cutbacks could have dire consequences for economic activity in the state.
Industry transition Myers also said that DNR is currently experiencing a transition in the Alaska oil and gas industry, with the large oil fields in decline, while new, smaller fields come on line, and with a more diversified portfolio of oil companies operating in the state.
“We’re seeing a real robust level of activity,” he said, commenting on the drilling that has been taking place in the area between the Kuparuk and Alpine fields on the North Slope.
Myers also commented on success in revitalizing the Cook Inlet oil and gas industry. Faced with pending brownouts in Southcentral Alaska gas-fueled electricity supplies, the state had conducted an analysis of missed opportunities in the oil and gas fields, along with implementing incentives for developing new resources. Credits for the industry have been generous, but some of the potential new natural gas has now come on line, Myers said.
But, in a state with an economy based on a non-renewable resource, the exploration for and development of new oil and gas fields is critically important, Myers warned.
- ALAN BAILEY
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