Homer Alaska - Opinion

Story last updated at 6:46 PM on Wednesday, November 9, 2011

Alaskan now living in Norway sees differences in how resources managed to public's benefit



By Anna Barnwell

As an Alaskan living in Norway, it is easy for me to see the similarities between my two homes. Most obvious are geographical similarities.

Alaska and Norway are at the same latitude so climate is largely the same. The topography is also similar: mountainous regions in the interior, fjord-rich coastline, tundra landscapes to the north and rich natural resources.

As we Alaskans know, there is little that can compare to the wild character of our state. Norway is certainly not as wild, in many respects. For example, an Alaskan eating Norwegian salmon will taste the suspect signs of farmed salmon, in stark contrast to our delicious wild fish.

Like in Alaska, however, exploitation of natural resources has long been the basis for Norway's economic growth. Today, Norway is one of the richest countries in the world. Even since 2008, Norway has been one of the only countries that has a debt surplus and has managed the financial crisis relatively well. This is in large part due to Norway's oil industry, perhaps one of the most important similarities between Alaska and Norway.

How this resource has been managed in Norway, however, is quite different — both from Alaska and the rest of the world. One determining characteristic of Norway's petrol saga has been the involvement of the government. Shortly after finding oil in 1972 Norway created Statoil, a state owned company that currently manages about 80 percent of the Norwegian oil fields. Statoil today is a partially private company, reflective of Norway's combination of state services and presence in the free market. Norway's ownership in Statoil means that the government manages the profits, in addition to other perks like access to information, technology and decision making.

Norway is one of the only countries to have emerged from a history with petroleum unscathed by the so-called "oil curse" seen in many countries with significant oil resources. This is largely because of government institutions in place that helped regulate how the profits of such a rare and highly valuable resource like oil are shared.

Another common problem is "Dutch disease," which Norway solved via the Government Pension Fund, established in 1990. The fund consists of oil revenues, taxes (Norway taxes oil companies at about 78 percent — Statoil included), sales revenues, dividends and licensing fees. It is kind of like the Permanent Fund Dividend, only worth somewhere around $525 billion. So what does the country do with the money? Much of it is invested globally and the fund is known for having extremely high standards for sustainable and ethical companies. Is the money used domestically? It was politically determined that the fund be saved for future generations. Because of this, only 4 percent of the fund is allotted to the national budget and therefore enables a higher quality of welfare state services.

The welfare state is the biggest difference between living in Norway and Alaska. While the salmon is not as good, the services available at a low cost make up for the farmed taste of pinkish salmon.

To clarify, the petroleum fund alone does not account for all costs incurred by the government to provide free school and university system, health care, infrastructure, child care, shorter work weeks, plentiful sick leave, vacation days, and maternity/paternity compensations (to name a few). These services exist because of political decisions having been made by people and politicians that honor egalitarian principles.

How these political decisions work out in the day-in-day out is in more ways than one. (For example, gender equality where Norway ranks as one of the highest in the world.) It is confidence in the economy, even in times of global financial crisis. It is knowing that there is a netting below you, so that if you fall you won't hit the ground.

This is not solely provided through management of Norway's natural resources, but is assisted by excellent foresight of the oil industry. I recognize that at this point many of Norway's policy decisions are not possible in Alaska. However, there are important lessons we can learn from Norway for future Alaska ventures. Perhaps the most important is to recognize that the owner of the resource is the one that holds the power in the bargaining relationship between state and corporation. It is up to the government to come up with the game rules of how the resource is exploited so that it maximizes the benefit for the citizens of the country (and/or state). This doesn't necessarily mean a state-owned company, but may include higher taxation of corporations leading to an eventual higher share of benefits for all citizens. When this is done successfully, the country can prosper.

Today, debate surrounding Norway's petroleum industry is often regarding matters of environmental responsibility. To what extent is Norway responsible for the emissions of the fossil fuel it exports, in addition to those at home? While Statoil is praised for its Corporate Social Responsibility domestically, their involvement in the tar sands of Canada raises eyebrows.

In addition, an increasingly wealthy population has an ever-increasing carbon footprint. How can Norway reconcile its climate change agenda goals with continuing petroleum production? These questions are sensitive here, as they are in Alaska. Again, we end up on the same page. Ironically, for two of the most naturally unique and environmentally valuable places on the planet, Alaska and Norway are stuck in the push-and-pull of exploitation versus environmental considerations.

Anna Barnwell was born and raised in Anchorage. She graduated from Service High School, and while a student there studied in Roros, Norway, as an exchange student under the AFS program. After graduating from Colby College, Waterville, Maine, she returned to Norway to study globalization, politics and culture at the Norwegian University of Science and Technology, graduating with a master's degree in political science. She now lives in Gratangen, Norway, with her fiancé, øistein Stokke Berget, where she teaches English.

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