Some call Alaska the Norway of America. Why is that? What are the similarities and differences between the two countries?
Alaska and Norway are at the same latitude so climate is largely the same. The topography is also similar: mountainous regions in the interior, fjord-rich coastline, tundra landscapes to the north and rich natural resources. Also oil wealth and tourism are similar. But there are many differences too.
Alaska has a $50 billion permanent fund compared to Norway’s massive $900 billion sovereign wealth fund. Norway has more people and less land mass than Alaska. But what Norway do have, is more proven reserves of oil. Today, Norway is one of the richest countries in the world. Even since 2008, Norway has been one of the only countries that has has managed the financial crisis relatively well. This is in large part due to Norway’s oil industry, perhaps one of the most important similarities between Alaska and Norway.
In the late 1950s, very few people believed that the Norwegian continental shelf might conceal rich oil and gas deposits. However after the Ekofisk discovery in 1969, the Norwegian oil adventure really began. Little did we know the significance of the petroleum industry would be for the Norwegian economy when the first licenses were awarded mid-1960s. 50 years later, the industry is Norway’s most important both in terms of revenues to the treasury, investments and share of total value added.
Despite all the all the wealth the oil-money leads to, there has been an oil-crisis before. The oil crisis hit the Western world in 1973. The crisis came as a result of OPEC implemented an oil embargo and a sharp increase punitive to countries that supported Israel during the Yom Kippur War in 1973. The oil price was increased by 70 percent in October 1973, followed a new increase of 130 percent in December. In December 1973, it also initiated a temporary blockade of all shipments of oil to ports in the United States and the Netherlands. But, we got trough it. If you take look at the graph below, you can see an overview of the oil price over the years. You can see that we are on the brink of a new oil crisis.