Norway’s permanent permanent fund

Norway has a permanent fund, established from oil revenues, that was originally based on Alaska’s permanent fund, Ira Perman, chairman of the Institute of the North, commented during an Alaska World Affairs Council panel discussion on comparisons between the Alaska and Norwegian oil industries.

But, despite being in existence for only half the life of Alaska’s fund, and despite the production of less oil during the fund’s existence, Norway’s permanent fund now has assets of about $570 billion, compared with a value of around $40 billion for Alaska’s fund, Perman said.

“They anticipate their permanent fund will be $3 trillion before they run out of oil and gas,” he said.

The difference in the values of the two funds results from the fact that Norway, unlike Alaska, stashes away all of its oil revenues in its permanent fund, with only up to 4 percent of the fund being available annually to supplement the national budget, said panelist Rebecca Logan, general manager of the Alaska Support Industry Alliance.

Essentially, Norway views its permanent fund as a rainy day fund, meantime maintaining the country’s high level of taxation despite the oil wealth that is flowing into the national coffers.

—Alan Bailey