Hi Rockman,
I understand your point about small operators doing a better job of massaging oil out of marginal fields and that is a good thing.

I was merely indicating that government ownership of mineral rights isn't necessarily all bad. But as I own mineral rights to my few acres of Alaska as do many other surface estate holders, I thought the following should be added.

In Alaska, state ownership of severed mineral interests generally arises from either the state's acquisition from the United States of a previously severed mineral interest, or a mineral reservation by the state when it conveys state lands. Severed mineral estates are common in Alaska as most contracts for the sale, lease, or grant of state lands and most deeds to state lands or interest therein (other than mineral leases or mining leases) must contain an express reservation to the state of all oil, gas, coal, minerals, and geothermal resources.AS 38.05.125(a) I pulled the above out of 1993 letter from the DNR commissioner found http://www.law.state.ak.us/pdf/opinions/opinions_1993/93-019_661930641.pdf

So my statement on government ownership may have been unintentionally misleading. Alaska is unique in that only 1% of the land in the state has private ownership. If the native corporations (odd corporate/communal affairs that were spawned by the Alaska Native Claims Settlement Act 1971, ANCSA, which was enacted to smooth the way for the Trans Alaska Pipeline System, TAPS) are considered private 10% more land is added to that. The other 89% of the land in Alaska has some government entity owning it. Alaska's private land probably would be easier to envision as islands in the sea, ownership wise, and the situation when looked at in that way would not be all that different from other states that hold the offshore mineral rights (Alaska of course has offshore rights as well, but just add those to the sea of government owned land in your mental image).

The permanent fund check all Alaska residents receive (assuming they aren't entangled in the criminal justice system in some fashion) is not a royalty distribution per se. A portion of oil royalties were/are invested in markets and the return on investments had contibuted to the bulk of the permanent fund's value. Individual distributions were not made immediately, but rather the fund was allowed to grow and compound its value for quite few years first. Until this last fall the investments had paid handsomely but the fund lost somewhere between $10-$20 billion of its value when the financial collapse dragged down the markets.

That loss added to the ire of many Alaskan's who had been pushing for the state to use its substantial permanent fund account to build a gas pipeline to the natural gas stranded on the north slope. Of course Alaskan's aren't idiots and few believe the state would be the best possible operator of a pipeline or that the intricacies of state ownership of a pipeline leased to the private sector would necessarily work out in the Alaskan citizen's best interest.

But Alaskans all know that oil royalties fund the bulk of the state operating budget and that Alaska's oil production is declining rapidly. It doesn't take too much of a crystal ball to see how that decline will affect the state's income. New gas and oil production brought on line will of course push the revenue drop out into the future. If no one else steps up to build a gas line pressure will increase for the state to act itself.

Like I said before it is not so simple.

And I haven't even mentioned things like ANWR, melting ice on polar seas and on and on. A whole lot going on up in Seward's Folly, unfortunately a big part of what is happening is the rapid depletion of Alaska's oil reserves. KSA it is not.