While Alaska isn’t ready yet to give up oil and gas, it has recently faced struggles in starting new projects, forcing the state government to be more open to alternative energy projects.
Like many other oil economies, Alaska is realising the importance of hedging its bets, with projects such as carbon production, as new discoveries in traditional oil and gas fields slow down to a trickle.
Last May, the ConocoPhilips Willow project was given federal approval, allowing digging at the North Slope which could contain 600 million barrels of oil, but it could take years before such oil could reach the market.
Oil Industry
Nearly 85% of Alaska’s revenue comes from oil, making it the most oil-reliant US state, however the industry faced a recent decline as a shift develops towards greener energy worldwide.
And for a long time, Alaska has put all its eggs in one basket, with support from major oil companies, however as such projects become more difficult with less support from the federal government, Alaska has no choice but to focus on greener projects.
Thus the state is exploring the carbon compensation market, with new projects allowing Alaska to sell carbon credits to carbon-producing companies, with proceeds used to compensate for such emissions and support the community.
As many global government and companies impose heavy goals in constraining carbon emissions, they continue to see carbon credits everywhere to balance their emission sheets.
Alaska is following the steps of many other governments, which launched carbon compensation programs to finance green energy operations.
Schemes like this was recently announced by several airliners, which allows clients to pay for carbon credits instead of the usual fees, with the money going to charities related to the airlines to remove carbon or compensate it.
Such schemes were highly criticised for their lack of supervision, however if the fund in Alaska go directly to the government itself, it could monitor the new investments very closely and support a clean transition to the state economy.