High oil prices put $26 million in contingent state projects within reach

Editor’s note: This story was updated Oct. 31 to lead with $26 million in state capital projects tied to oil prices and to cut details already covered in our Oct. 30 story.

Alaska lawmakers set aside $26 million in capital projects that get funded only if North Slope crude averages $80 a barrel or more from July through December. Four months in, it has averaged $97.

That's according to a daily chart Alaskans for Sustainable Budgets published Friday. For the six-month average to fall below $80, prices would have to average under about $47 a barrel in November and December.

The Legislature's fiscal summary of the budget leaves the projects out of its totals because the state's spring revenue forecast, which assumed $75 oil, wouldn't have triggered them. The summary doesn't name the projects.

The group's chart also looks past this year. Oil futures put North Slope crude at about $95 a barrel in fiscal 2028, about $25 above the spring forecast's $70. Further out, futures run about $9 above the forecast in the midterm and about $2 below it in the long term. Over the 10 years through fiscal 2036, the group puts the average at $82, which would bring in about $490 million a year more than forecast.

For this fiscal year, the group estimates North Slope crude will average $108, bringing in about $1.64 billion more in unrestricted general fund revenue than forecast.

The U.S. Energy Information Administration's October outlook forecasts Brent crude at $105 a barrel this quarter, citing Middle East disruptions and falling global inventories, and $84 next year. Brent peaked at $131 on Sept. 15.