The state of Alaska participated in additional reporting about state and local natural resource governance, revenues, and disbursements.
Understanding land ownership
Land ownership in Alaska is unique among states. When the United States purchased Alaska from Russia in 1867, the federal government initially owned all 375 million acres of the Alaska Territory. When Alaska became a state 92 years later, in 1959, the federal government granted 28% of the land to the state through a process that was unique to Alaska. The state selected 103 million acres of land and was granted an additional 1.2 million acres in trust lands; Alaska also owns all mineral rights in its acreage.
The state of Alaska is the second largest landowner in the state (after the U.S. government). It received patent to 90 million of the acres it selected. Some of the areas the state selected have not yet been transferred from the federal government. Learn more about:
The Alaska Mental Health Trust also owns and manages 1 million acres with significant timber, oil, gas, coal, or material resources. Revenues from lands managed by the Trust support mental health programs in the state.
To explore a map of land ownership in Alaska, see the Alaska Department of Natural Resource’s mapping application.
Alaska Native corporations
In most states, American Indian land was taken by force, settled by treaty, or both — but in Alaska, Native claims to land were not settled or resolved until Congress passed the Alaska Native Claims Settlement Act (ANCSA) in 1971. ANCSA granted 44 million acres (both surface and sub-surface) and 1 billion dollars to 12 regional native corporations and 220 village corporations. These village and regional corporations now own 12% of land in Alaska; non-native private lands in Alaska make up just 1% of the land in the state.
These private, for-profit corporations belong to and benefit Alaska Natives in their region or village, but are distinct from tribes. Alaska Natives were allotted shares in Alaska Native corporations when the corporations were created. Unlike shares in a publicly traded corporation, however, Alaska Native corporation shares cannot be traded or sold.
Alaska Native corporations have generated substantial revenues from resource development, though this exposes them to the same revenue sustainability questions that affect state revenues. ANCSA provides for natural revenue sharing among all ANCs, so ANCs may mutually support each other to help smooth revenue volatility: For example, the Red Dog zinc mine has generated $1.3 billion in net proceeds for NANA Regional Corporation since mining began. It has retained about $480 million and shared about $820 million with other ANCs. Of the $480 million retained, about $221 million has been paid out to individual shareholders as dividends.
Separately from the Alaska Native corporations, there are 229 federally recognized tribal entities in Alaska. Until recently, they were viewed as landless (with the exception of one reservation, the Metlakatla Indian Community’s Annette Island Reserve). The Bureau of Indian Affairs recently changed this by establishing Rule 25 CFR Part 151, which allows Alaska tribes to apply to put land into trust.
Alaska state agencies regulate extraction and interact with extractive industry companies in Alaska, particularly when they’re operating on state or private land.
The Alaska Oil and Gas Conservation Commission leads monitoring, enforcement, and restoration activities to support responsible stewardship of Alaska’s oil and gas resources. Its responsibilities include:
- Evaluating and approving drilling operations
- Preventing oil and gas waste at drill sites where the majority of natural gas extraction is flared
- Preventing freshwater contamination throughout drilling
- Administering Alaska’s Underground Injection Control Program
- Inspecting oil field drilling, projecting, metering, and abandonment activities
- Publishing a competitiveness report and annual reports
The Alaska Department of Natural Resources manages Alaska’s natural resources and extraction on state land.
The Division of Oil and Gas is responsible for leasing state lands for oil, gas, and geothermal extraction. It publishes studies, and its activities include:
- Identifying prospective lease areas; evaluating oil and gas resources; and performing geologic, economic, environmental, and social analyses
- Fielding and issuing exploration permits, developing leasing schedules, and conducting public review of proposed sales
- Conducting oil and gas lease sales, negotiating contracts, and conducting royalty audits
- Decommissioning, removal, and restoration regulatory review
- Publishing statutes and regulations governing oil and gas, and geothermal
- Publishing data about oil and gas funds received and distributed
The Mining, Land, and Water Division is the primary manager of Alaska’s land holdings, which are larger by area than any other state, and Alaska’s mineral resources (excluding oil, gas, coalbed methane, and geothermal energy). It is responsible for:
The Alaska Department of Revenue assesses, collects, manages, and distributes the majority of extractives revenues in Alaska.
The Alaska Department of Revenue collects revenue from companies engaged in extraction, with verification from the Oil and Gas Division, and publishes an Annual Report and Revenue Sources Book (PDF).
The Environmental Conservation’s Program Spill Prevention and Response Division (SPAR) prevents spills of oil, prepares for when a spill occurs, and responds rapidly to protect human health and the environment.
Local governance in Alaska
Alaska has two local government structures (PDF): cities and boroughs. All local governments in Alaska enjoy broad powers, but some cities and boroughs are home rule municipalities (PDF), which have the right to “exercise all legislative powers not prohibited by law or by charter.”
In addition to generating revenue and economic activity, extractive industries can bring costs to state and local communities. Development and activity related to the extractive industries are concentrated on Alaska’s northern coast, so attention to costs is concentrated in that part of the state.
For a holistic look at how the North Slope Borough has met the transportation, water, emergency services, and reclamation needs of extractive industries, see the North Slope Borough case study.
Multiple organizations in the Alaska state government work on the reclamation and remediation of sites related to extraction. The Alaska state government invests significant tax dollars to prevent and respond to oil and hazardous substance emergencies, including reclamation services such as managing contaminated drilling sites. The Oil and Hazardous Substance Release Prevention and Response Fund imposes a 4 cent surcharge per barrel of oil for prevention, and a 1 cent surcharge per barrel of oil for response. The Division of Spill Prevention and Response (SPAR) had a total operating budget of $19.9 million in fiscal year 2016. $12.3 million of that went to spill prevention and response in fiscal year 2016.
The DNR Mining, Land, and Water’s Abandoned Mine Lands Program administers the federal AML program in Alaska for coal and select hard rock reclamation projects. The program estimated in May of 2014 that 15 coal projects and 8 non-coal projects remained to be reclaimed. Alaska is a Minimum Program state, meaning it receives $3 million a year from the federal Abandoned Mine Land Reclamation program, with the funds coming from fees paid by current coal mine operators. See examples of AML projects.