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Alaskan Oil Windfall
News Bytes 09/21/2022 3 Comments

Tuesday, Alaskans began experiencing an annual bonus payday. The Last Frontier state is distributing payments from its investment fund—an account that has been seeded with money from the state’s oil riches. And while some Alaskans may splurge on luxuries, most will use the income for necessities like groceries and fuel.

A total of $1.6 billion in direct deposits began hitting AK bank accounts Tuesday. Checks will arrive later for those who opted for them.

This year’s payments, officially called the Permanent Fund Dividend, or the PFD, amounted to $2,622—the highest amount ever. Alaska lawmakers added $662 as a one-time benefit to help residents with high energy costs for a grand total of $3,284.

Residents use the money in various ways. Some buy big-screen TVs, vehicles, or other goods; others use it for vacations, savings, or college funds. In rural Alaska, the money can help offset the enormous costs of fuel and food, like $7 per gallon for gas, $14 for a 12-pack of soda, $4 for a celery bunch, and $3 for a small container of Greek yogurt.

“We’re experiencing record high inflation that we haven’t seen since the first PFD was paid in 1982,” Governor Mike Dunleavy said in a video. “Alaskans have been bearing the brunt of this inflation from the gas pump to the grocery store, and this year’s PFD will provide much needed relief as we head into winter.”

Dunleavy is right to worry about and seek to send relief to residents of his state. It’s a sentiment echoed in scripture: “When the righteous increase, the people rejoice, but when the wicked rule, the people groan.” (Proverbs 29:2)

The timing of the checks couldn’t be better for those living on the state’s vast western coast. It was devastated last weekend by the remnants of Typhoon Merbok.

Among the communities experiencing the greatest damage was Nome, the largest city on the coast with about 3,500 residents. It’s best known for being the end point of the Iditarod, the world’s most famous sled dog race.

Howard Farley, now 90, helped secure Nome as the Iditarod’s finish line more than 50 years ago. His home was safe from the storm, but he did lose about 100 feet of beachfront and one building.

Farley says the payments—more than $16,000 for a family of five—are much needed.

“Even people that didn’t have damage, with the inflation up here, that’s really, really hitting hard,” he says.

Farley says the high price of fuel will remain until next spring’s shipment arrives because barges can’t deliver once the Bering Sea freezes.

“The price won’t go down like it does in Anchorage and other places because you guys can get deliveries almost any time,” he says.

The PFD, now worth $73.6 billion, came about during construction of the trans-Alaska pipeline in the 1970s.

There is a yearly application process and residency requirements to qualify for a dividend. Residents received the first check, $1,000, in 1982. Amounts have varied over the years. The smallest check ever was $331 in 1983. The largest before this year was $2,072 in 2015. Someone who collected every check since 1982 would have received a total of $47,049 to date.

Mildred Jonathan, 74, and her husband, Alfred, 79, live about 100 miles west of the Canadian border in the interior Alaska village of Tanacross. Snow was already falling on nearby mountains. Temperatures in the Athabascan village during the winter are typically well below zero. “It’s cold, cold, cold,” she says.

There will be no frivolous spending when they receive their paper check in October. Instead, the Jonathans’ major purchase will be firewood. Any money left over will go to a new hot water system, flooring for their home, and Christmas gifts for their grandchildren.

“The wood I’m hoping to get is $1,600, and it’s a 10-cord load,” Mildred says. “I’ll survive the winter if I buy that.”

(Howard Farley speaks during an interview in 2014 in Nome, Alaska. AP/Mark Thiessen)

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Most recent comments

1st comment

1st comment!!!!!!!!!!!!!!!!!!!!

I live in Alaska. Yeah gas

I live in Alaska. Yeah gas is up to $10 a gallon or more in some places.

3rd comment

Wow I didn't realize it was that bad up there! Those prices are even worse than here!
@ Jack M: Yikes! That's not good! Other than the bad inflation, do you enjoy living in Alaska? I think it would be a cool place to visit! I live in Alaska's little sister. :)

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