Alaska files suit against U.S. govt.

The state of Alaska filed a US$29-billion lawsuit this summer against the U.S. government to compensate for revenue it claims it has lost by Washington’s closing of mineral-rich federal land.

The federal government reportedly designated millions of acres of mineral and oil-rich federal land as national parks and wildlife preserves, where mining and drilling are banned. The suit says that, in doing so, it violated the law that granted Alaska statehood in 1959.

Alaska Governor Walter Hickel said the US$29 billion was a low estimate of the revenue his state has lost over the past 34 years. Earlier, he said the suit could be as high as US$70 billion.

Kevin Sweeney, a spokesman for Interior Secretary Bruce Babbitt, told The Washington Post that “there may be a political basis for the suit, but there clearly is no legal basis . . . We are unaware of any legal reasons why we’d be obliged to fork out US$29 billion.” Hickel claims Congress persuaded Alaska to ratify statehood in 1958 with promises that federal lands could be developed.

The governor alleged that Congress, instead, “has withdrawn more than 100 million acres of federal land, forever preventing it from producing any income to the state.”

Even without the federal lands, Alaska has reaped large profits from its oil reserves. About 85% of the state’s budget comes from oil taxes and royalties. Each Alaskan receives annually more than US$900 in oil dividends. And thanks to oil, the state has no income or sales tax.

But many state officials say declining oil production will, by the end of the decade, deprive Alaska of revenues needed to balance its budget.