The Alaska state university system will receive millions of dollars from oil revenues in the form of donations from BP (British Petroleum) and ConocoPhillips, UA President Mark Hamilton announced Monday, Dec. 5.
The total amount of the payments is expected to be $4.78 million, with $2.28 million from BP and $2.5 million from ConocoPhillips. The money will go to the UA Foundation, a non-profit entity that invests and manages money for the university.
Though the payments have been characterized as donations in university press releases, they are actually the result of a contractual agreement written in the late 1990s between the companies and the Knowles administration, and are perhaps better thought of as a tax. UA Director of Public Affairs Kate Ripley said the university describes the payments as a show of gratitude.
The agreement has so far provided the university system with $22.8 million since 2000. The total holdings of the UA Foundation, which includes land grant endowments, are $243.6 million.
Hamilton said that the oil industry’s money is “a beautiful opportunity,” and is extremely useful for the university; made more so because, unlike endowments, of which only the generated interest may be spent, the money from the oil companies can be used at the administration’s discretion. This, said Hamilton, allows him to bridge “great ideas” until permanent funding can be found.
It is an opportunity that raises concerns for some members of the university community, like Kotzebue professor John Creed who worries that a dependence on “donations” from the oil industry could damage the university’s ability to be impartial.
Alternatively, Alaska’s taxation of the oil industry is very low by international standards, and the industry’s booming profits have led to criticism that Alaska should expect a bigger share of oil revenues. Hamilton said that he personally has faith in the market economy, but that the university has no position on such issues.
“There’s and old saying that you get what you negotiate for,” he said. “We don’t have an official position on very much at all, other than on the value of a state university to the state and the economy, though I’m certain that I have individual professors who have strong and learned opinions about all kinds of things.”
Hamilton said that he would like to see the governor’s administration make fuller use of the broad range of expertise held by the university’s professors.
“I have made an open invitation,” he said. “But it hasn’t been utilized.”