Leman: State should save oil revenue surplus

Posted: Wednesday, August 31, 2005

Alaska Lt. Gov. Loren Leman said Alaska needs to be cautious with revenue generated by high oil prices in order to prepare for tougher financial times.

"Go out and fill your truck today," Leman told the Soldotna Chamber of Commerce on Tuesday, speculating that high crude oil prices will again drive up gasoline prices this week.

Leman said Hurricane a, which has interrupted oil production in the Gulf of Mexico, likely will drive up oil prices even more — resulting in increased oil revenues for the state.

However, if prices fall in the future, Alaska may be in a bad situation, he said.

"The tendency is to think about spending the windfall," he said. "I don't want to see Alaska lose it all."

Leman said the state needs to reduce the size of government so when there are harder times, it is ready.

Looking forward to work force needs, Leman said the state needs to invest in training now so Alaskans are ready to build a natural gas pipeline, work in the construction field and in hospitals, to name a few.

Addressing the natural gas needs of Southcentral Alaska, he said any contract to build a gas pipeline from the North Slope needs to include a way to bring gas to the state's most populous region.

"Any North Slope gas project must include a supply for Southcentral Alaska," he said.

He added that he has not been involved in Gov. Frank Murkowski's pipeline negotiations.

Leman said the oil and gas, tourism and commercial fishing industries are important to the Kenai Peninsula's economy, and he said he hopes they continue to grow. He cited Agrium's recent announcement that it postponed closing its North Kenai fertilizer plant until next year as a positive sign for the local economy.

He also said there is one more thing that may be good for the peninsula's economy — the Pebble gold mine project on the west side of Cook Inlet.

"If that project goes, the impact on the Kenai Peninsula will be huge," he said.

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