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What to do with all that oil wealth preoccupies Alaskans

Like citizens of any other country with new oil wealth, Alaskans are fascinated by details of how the money their arctic oil boom is earning for them will be spent.

One forecast filed in Juneau, the state capital, projects a state treasury surplus of $18 billion by 1985.

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With a tiny population of about 450,000, stretched across an expanse of territory from the outer Aleutian Islands eastward to the panhandle on the Canadian border, Alaska already is phasing out its big income taxes. Many residents are receiving fat tax rebates. No one who has paid tax for the last three years will pay any more.

This week, Gov. Jay Hammond, a former bush pilot, poet, trapper, and fisherman, signs into law a bill pumping $900 million into the Alaska Permanent Fund. This will be a nest egg for economic rainy days in a state that still has one of the nation's highest unemployment rates.

The next step, say civic leaders in this attractive bayside city where about 40 percent of the state's population live, should be to set aside a hefty $500 million -- nearly $1 million per resident -- for low-interest housing loans at 9 1/2 to 10 1/2 percent for veterans.

If state Sen. Bill Sumner (R) of Anchorage has his way, nearly $2 billion will be allocated in loans for home mortgages, small businesses, and processors of fish. Fishing is one of Alaska's main industries, following the production of about 1.5 million barrels per day of oil produced from the Arctic fields at Prudhoe Bay.

In these ways, the state hopes to use most or all of its projected $4 billion surplus through mid-1981. The surplus has been accumulating since oil began flowing through the 796-mile Alaska pipeline from Prudhoe Bay to the port of Valdez in 1978.

As the late springtime sun lingers longer each night, and Anchorage's surrounding snow-tipped mountains prepare to display their wildflowers, the future of this immense (586,000 square miles) state is under intense discussion.

Oil men and developers are eager to increase the approximately one-fifth proportion of US energy requirements already flowing from Alaska.

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If the intensely conservation-minded state and federal authorities would speed up offshore leasing of oil and natural gas concessions, asserts Shell Oil Company's Western exploration manager, Bob Nanz, at a meeting here, Alaska could be producing 4 million barrels a day from offshore wells by 1995.

However, the leasing schedule last approved by the US Department of the Interior shows production falling to only 1 million barrels a day at the end of 20 years. A new leasing schedule is eagerly awaited here this week.

Governor Hammond and US Sen. Ted Stevens (R) want to see Alaska's onshore areas, mostly zones of hard-to-drill permafrost, explored before undertaking the pollution and other risks connected with offshore drilling.

The oil companies, however, are eager to get on as soon as possible with drilling in the Bering Sea near the Soviet Union. Geological structures there, the companies say, promise to rate as "world class" in oil content.

Floor action is scheduled in the US Senate by July 21 on a bill favored by Governor Hammond's administration to prevent the federal government from keeping the vast federal lands here under wildlife protection.

The Alaska Coalition, a Washington conservation lobby whose aim is "to preserve Alaska's national-interest wildlands" and their salmon, caribou, bears, and other wildlife, criticizes Governor Hammond for being overeager to hand the federal lands over to the oil and gas drillers.

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