In 1968, the Prudhoe Bay Oil Field opened in Alaska, producing hundreds of thousands of barrels of oil per day and becoming the largest field of its kind in North America. This North Slope production area became so immensely profitable that by 1976, the Alaskan government had more money than it knew what to do with. Rather than keep the surplus to themselves, government officials decided to give back to their fellow Alaskans for generations to come, creating the Alaska Permanent Fund Corporation and, subsequently, the Permanent Fund Dividend, a yearly payout for all qualifying residents.
Last week, Alaskans received $1,884, so long as they resided in the state for a year, filed the proper paperwork and avoided felony convictions or jail time. Considering the average Alaskan is almost $29,000 in debt, this is a considerable payment. The lowest payment was in 1984 ($331.29) and the highest in 2008 ($2,069).
Once upon a time, the oil market was linked directly to the size of the dividend, explained Roger Marks, an independent petroleum economist and former Alaska state tax revenue official. Now, the two are far more loosely connected. "The relationship, under business as usual, between ongoing state revenues and the payout, is fairly weak," he said. "It used to be strong." Though 2014 was not a great year for the Alaskan oil sector—marked by job cuts, tax plans gone awry and the surprising fall through of a North Slope deal between Rosneft and ExxonMobil—the dividend payout was one of the largest in recent history.