Lindsay Newland Bowker

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A People's Fund To Share all Profits from Natural Resource Extraction on a Per Capita Basis (like the Alaska Permanent Fund)

Don't the profits of oil companies tell us that we are not getting a big enough cut of the value of the natural resources extracted?

Under the permit system for extraction on public land we collect a small fee to allow the exclusive rights to exploration and extract a small royalty on every barel or ton that is extracted. None of it is directly redistributed back to the people and the lions share of value goes to the permit holder...except in Alaska where every person is paid a dividen every year. Alaska is practically a tax free state and the dividend covers all federal taxes due for many citizens.

Subce funds, called "sovereign Welath Funds" exist in two other states but don't pay dividends to each person in the state.

But with the dividend model it is possible we wouldn't need food stamps, or welfare or public housing? That there is enough wealth in our natural resources to provide a thriveable life with food and housing security for all?

So what do you think. Want one in your state? Want one at the Federal level as truman once proposed?

Can we force this by refusing at th elocal level to allow any use of natural resources not srving local communities..not directly benfiting them. The town of Shapleigh, Maine successfuly blocked huge MNC Netsle from extracting their town's water. Can we do that across the board?

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    Dec 3 2011: Worldwide,there are about 54 SWFs in 37 countries with estimated total asset holdings of
    t $5.3 trillion.
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    Nov 29 2011: Further thoughts from Jim Delcamp and a reminder that Land Grant Colleges were also a way of sharing the value of "the commons"

    "Water resources. The Great Lakes states have combined to say no to any export of Great Lake watershed water, but if we have excess, as we do some years when the lakes are high, we couold sell it to thirsty regions (like the southwest) as long as the profits flow (in part) to all of us, to our SWF possibly rather than entirely to private, already wealthy corporations.
    The people of Michigan benefited in the past from the use of natural resources for public good in the form of "land grant colleges" such as Michigan State, where revenue from the sale of public land was used to support these institutions.
    I only wish the State would have done the same with our once vast forests, derived revenue form them to support our state once the forests were cut.
    (In the 1860s propasals were made to set aside 1/3 of our forested public lands as a preserve. What a fabulous natural region of pristine old growth forest would have been created. Of course lumber baron influence made the idea unattainable. They had to have it all and they had to have it now, like bad greedy children). Forests preserved, and slowly harvested at a sustainable yeild, and profits going for permanent public benefits would have been a better legacy).

    I like the world wide discussion going on in TED with participation from Fiji and consideration of the SWF of Norway. It expands my horizons. I will join in the discussion on the TED site in the future.
    Jim Delcamp
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    Nov 16 2011: An Email from J Delcamp who tried to persuade Michigan voters to create a Sovereign Wealth Fund. Michigna voters ddn't get it either. Eyes glazed over justl ike here at TED.

    Is the term itself a turn off" Soverign Wealth Fund"?
    Does it seem to good to be true?
    I' am very curious to know why folk don't resonate with this obvious , elegant and proven way. I sure would like to get a check every year that is my fair share of revenue from natiral resources.I sure would like everyone of my head start kids to have a check when they graduate from high school for the life time accumulation of funds in their account.

    Excerpts from Jim's email below explains that the establishment of a sovereign wealth fund doesn't change ownership of resources in any way, doesn't necessitate any legislative revisting of "the commons"

    ".Hi Lindsay,Very glad to hear from you regarding the ideas brought up in my web site, and on TED.I ran for State House in Michigan in the last election (and lost - but the same party always wins in my district) - I repeatedly brought up the idea of a Michigan Sovereign Wealth Fund with liberals and conservatives including tea party folk and received very positive responses all around.My opponent and the press said nothing about it - merely ignored the idea.
    I
    It is, I believe a powerful idea.My father said Truman propsed something along these lines at the National level - funding public education from the natural resource revenue of the entire nation. Thus, my father said, states without natural resources still could get revenue from the fund.The Alaska Fund began in 1978 with only $750 thousand dollars or so, and was 38 billion last year, so the fund started small and took a long time to reach its present affluence. So this is no immediate panacea. A fund would start small , but the sooner started the better.

    .This is an involved topic, and there is much more to be considered.Thank you for your e-mailt and thank you for reading this. Jim Delcamp"
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    Nov 15 2011: Just Stumbled on this book and this excerpt from the author's blog

    :“Alaska currently has no sales tax, no state income tax, and low property taxes, and in 2008 paid every citizen $3,800, more than enough to cover the property tax costs of most landowners and enough in many cases to cover the cost of federal Income taxes.It is possible to imagine a day when Alaska has enough money in their sovereign wealth fund (through growth of the fund) that all of the cost of government federal, state and local can be covered by the fund - while still paying a regular dividend.Voila, Alaska will have Zero Cost Government.”

    http://0costliving.blogspot.com/p/zero-cost-government.htm

    Zero Cost Living: Exploring Extreme Frugality. James R. Delcamp

    Also tthis wonderful article also advocating innvoative uses of soverign welath funds for a kind of public revenue sharing from all natural reserources revenue. He also addresses the thorny issue of "the commons" and how soverign wealth funds accomplish the same thing without visiting "the commons".

    http://www.policyinnovations.org/ideas/innovations/data/000186
  • Nov 7 2011: Bula Lindsay, thank for the warm welcome and your note on the water and gold resources here. At present, there is increased taxes on water harvested so that money will go to the basket of funds to be distributed to the landowners.
    A number of other mineral resources explored recently have had payout to the landowners and to the government. The income obtained is really not distributed per capita but to the landowners to look after developments like education, health, etc.

    I think that the interim government has found out how the previous investors have done to the earlier investments that were approved by previous governments, where the cream is harvested and the country is left with close to nothing, eg. the tourism industry investors.
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    Nov 6 2011: In the U.S. there are currently three sovereign wealth funds;all state initiated;yoming, Alaska and New Mexico..all based primarily on income earned by the state from natural resource leases, fees and other payments and exchanges.of public lands and minerals

    So the idea of segregating income from natural resources into an invetsment fund is not new.It already exists. The oil based Alaska Permanent Fund,, is the closest in purpose and form to what is proposed here and the only one that includes a "dividend to the people" It has been in operation for several years and is an excellent model. A fund could be a common fund for all public lands and minerals and other natural resources.

    In Alaska the value of all natural resources exports is $6.1 mill per capita.

    Wyomings fund includes revenues from coal , oil and gas. New Mexico's includes leases from all public lands and income from tobacco settlements.Neither Wyomings or New Mexico's includes any payments to state residents.

    So far no fund includes water but I am suggesting all water extraction would be included .

    They are big "investment portfolios" owned by the state , similar to how a pension fund or insurance company invests assets..The idea proposed here , is to segregate "the peoples income" ( iei funds payabe to the state or federal government) from extraction and sale of natural resources, the leases income from all public lands ( tthe common ground) . The investment strateg for this fund could also be geared to emerging technologies that are "thriveable"..alternative renewable energy, production and manufacturing systems which converse and protect natura resources. Norways Fund boycotts investments in any company contrbuting to war or environmental degradation.The fund would be perfectly transparent and 100% accountable to its shareholders. "we the people' We can use the economic clout of our fund to change the policies and focus of companies worldwide; topromote and support a thriveable global econom
  • Nov 5 2011: interesting to see what is happening in the US. In Fiji we are going through the same processes where all our resources that used to be shared and sold within the domestic market and exported are now having to pay the State and the landowners royalty. companies that are using our water, mining our minerals and exploring to look for oil.

    I still feel that not enough is given to the landowners - the working out or calculations do not take care of the future generation who will have to live without being able to use their land to plant their taro, vegetables, fish from their shores etc.
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      Nov 6 2011: Api,

      First, welcome to TED Conversations. So glad to have you here and so happy that this conversation has brought you here

      .You are an amazing woman with great courage.

      I found this excellent Mother Jones Article on FIJI Water that includes a little background on the closing of the gold mine, the military junta and the great poverty in Fiji. I am embarrassed and ashamed that it is the democrats and leaders like Al Gore, Hillary Clinton and our own President who indulge Fiji water and have it on tables in frontt of them at conferences on environmnetal issues, issues of social and economic justice

      http://motherjones.com/politics/2009/09/fiji-spin-bottle?page=3

      The author of this article for Mother Jones said she was almost arrested when she was there doing this story..that the military police had intercepted her emails.Is there no emergent leadership in Fiji that can return democracy there and bring a modelof democracy better than what we have here in the U.S.?

      What do you think of this idea of a sovereign fund..a fund for the people from which the income from natural resources would be distributed back to the people on a per capita basis?

      It's appalling what foreign interests have done to Fiji. I hope one day your gold and your beautiful living water will be under the mangement of the people of Fiji and for the benefit of the people of Fiji.

      Thank you so much again, Api, for joining this conversation.
  • Nov 5 2011: I think the mining, processing, prospecting and risk associated with finding and selling natural resources should be rewarded by private enterprise as it is now. However, I think the government should get some percentage if it is a depleting natural resource. I like the Alaskan model, but I would have to think about whether I would give the money to the people or fund Social programs with it.

    That being said, I am sure many would disagree with me, particularly those feeling entitled to anything their land produces. One might argue food, wood, water, or similar products also fall in this category. Do we want governments deciding what is ample reward for resource speculation, or the market? That question would be a good debate, except one side would be exceptionally well funded.
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      Nov 5 2011: And the other side well populated..

      An excellent question..who decides how to reward the front end costs. In a joint venture , public private ( as opposed to the current lease model) that would be specufied..perhaps as simmple as actual costs + and perhaps the private partner is paid out of first draws of the resource..they get as mcu as needed to pay off the investment upfront ( That's a fabulous deal by the way)., And of course all should be competitively bid as Norway does it. That way we get the most favorable terms from the most well equipped and experienced private partner. Each agreement could be tailored to what is known about the site, the technology involved in extracting, and how long it takes the site to get into production.

      The share on the oil can also be site specific based on conditions at the field.

      The Sovereign Wealth Fund woud make sure it doesn;t go back into taury or the J/v..everthing that goes into the soverign welath fund ( in my proposal) belongs to the people and is to be fully distributed to the people according to its charter.

      Any thoughts on the issue of local conttrol/local ownership?
  • Nov 5 2011: Resource-Based Economy.
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      Nov 5 2011: can you say more on how that applies to the proposal and questions at hand?

      I am not a fan of either of the two movements most associated with this phrase but I do believe that a thriveable economy, by its very nature must be resource based. In the sense that:

      resources are managed wisely rather than exploited and depleted
      not built on things that are non-renewable
      that we live within our means..not on debt
      that we try to grow our resources wherever possible to keep pace withgrowth itself
      that minerals, water, oil, coal, natural gas are "in the common"..owned by each and every person in common

      hoping we can talk about that..about who owns oil, gas, etc. the nation and all its people? The state (is all that new oil the people of north dakota's? does it belong to the town where it is?

      Am interested in your views on this.

      Do you think there is enough value in your nations resources to provide an annual payment to every man woman and child that would provide basic food, clothing and shelter?
  • Nov 5 2011: Alaska provides its citizens yearly income from the extraction of oil. This might be a good model.
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      Nov 5 2011: Hi Robert.

      Yes..

      Can you tell us more about that?

      I am also looking to Norway's model which is much more balanced and providesmuch more benefit for all the people than ours does. Perhaps we can find others.

      In this discussion I am just running his up the flag pole to see if it resonantes with nayone else the way it resonates with me.

      The more reserach I do, the more I believe it is iterally true that if we weer partners with the extarctors and therefor e partners in the resources recoverd and a reasoanble share o f that were reurned per capita we wouldn't need a big government..we wouldn't need food stamps or housing programs ..every man woman and child in America would have enough to meet basic needs.

      I will be posting more info on Sovereign Welath Funds..most are not about distributions but asset growth..no reason it couln't be both. But it would be a "people's fund"..belong to all the people.

      Do you like the idea?

      Know of any other models that would be worth lookig at?
      • Nov 5 2011: http://en.wikipedia.org/wiki/Alaska_Permanent_Fund

        This wiki does a good job...

        Might also check out this link...looks like an old idea!
        http://en.wikipedia.org/wiki/Asset-based_egalitarianism
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          Nov 5 2011: Robert,

          Thanks,Yes. both excellent resources.

          The Alaska Permanent Fund is a Soverign Wealth Fund and is very close to what I am suggesting we should do in lieu of the exsting permit process for oil ( and all other natural resource extraction).Very cool that evry person in Alaska got $3,000 alone from that one year

          Part of what I am inviting comment on is the issue of natural resources as national vs local.

          Does Alaska own ts own oil? Should a state or county or city be deemed to own all natural resources in its territory.?

          ?I wasn't familiar with that term "asset based egalitarianism). Whjat I am thinking of is a bit different, on the same principal that natural resources belong to all the people and should benefit all the people. I like that idea of a distribution "at the age of majority"..of children receiving their accumulated share over their life times at the eage of majority..that way it is truly theirs and truly their for them. Also I am not thinking of a one time payment at the age of mahority but f a continual sharing as with the Alasks Fund.The uses of a Sovereign Wealth Fund as it is loosely framed in my thinking now is more along the lines of nationalization of all resources n the "common ground" but more along the lines of public private partnerships. Stillplenty of opportunity for private profit and plenty of incentive for new technology development in the private sector just a more balanced and equitable reconginition that all natural resources belong to all the people..

          Old or new, what do you think?Do you agree the existing permit process for oil ( that's the one i know the most about) is absurd and not even close to a fair return to the public for the value of this common resource.I am just assuming you agree that that these resources belong to "we the people"..and guessing you also agree we should get a fair share of that..and also have some say in that
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      Nov 16 2011: Robert,

      I rewrote and reframed the original question to point directly to the Alaska Permanent Fund".Thanks for pointing me in a direction that helped me understand these funds and their current use more fully and to appreciate the very real posisbility that simply by state law we could hve one in every state

      .Love the idea of receiving a dividend from the government instead of paying taxes to the government. The more I explore this, the more convinced I am that this is very doable in every state in the union..and in every nation..including poor FIJI.

      I stumbled on Jim DelCamp who recently ran for election in MIchigan on creation of a sovereign wealth fund.Here are some interesting stats on the Alaska Fund Jim provided in an email to me yesterday

      ." The Alaska Fund began in 1978 with only $750 thousand dollars or so, and was 38 billion last year, so the fund started small and took a long time to reach its present affluence. So this is no immediate panacea. A fund would start small , but the sooner started the better.I offerd to donate half of my income as a State Representative to start the fund even though I am far from well off. (If each of our 140 odd State reps did the same we would have almost 5 million right form the start). Of course the real source of revenue should be the natural resourse of the State used for the continuing benefit of all of the people of the State, instead of flowing into the hands of investors who might live a continent away and already have more money than they know what to with - while basic Michigan public services are being cut and cut again."(James DelCamp..by email to Lindsay Newland Bowker..used with written permission.)See other excerpts from Jim's web site and from his email. Very interestingThanks again for pointing me in a direction that allowed me to more fruitfully frame this conversation
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    Nov 5 2011: http://insideclimatenews.org/news/20100518/research-shows-federal-oil-leasing-and-royalty-income-raw-deal-taxpayers

    Here's a great article anlaysing what's wrong with the economics of oil permitting and royalties from a taxpayers point of view. It ocurred to be doing work at Occupy cafe that so much of what we take for granted as "normal" processes and functions are actually based specifically on exploitation..on old colonialist values that perhaps we need to rethink today

    Here are a few stats from it.

    (1) :per acre lease rates have plummeted almost nine-fold from shortly after the time Ronald Reagan assumed the presidency to the tail end of President George W. Bush’s second term. An average of $2,224 per acre for all federal leases sold between 1954 and 1982 careened to $263 per acre for federal leases sold between 1983 and 2008

    (2) 3,520 leases were sold at the $2,224 average rate, while 21,179 were sold at the $263 rate.(no data available on total acreage

    (3) ince the creation of the DOI's Minerals Management Service" in the 80's), the leasing process has continued to evolve, almost completely privatizing the exploration for and the development and production of offshore energy resources,

    (4). energy companies hold most of the cards, deciding which tracts to bid on and explore based on survey information only available to the largest of those companies.”

    (5) At a minimum, we need to be looking at rates being paid in the rest of the world,” says Freudenburg, citing Norway as an example where the government take is high and the drilling is competitive. “The sensible thing to do is to make our rates that high. ”

    So it is clear that even immediate reform of the whole leasing process would geta better return from our oil for the benefit of the amrecan people than the present process.Do you agree we should get fair vale for all our natural resources and that there should be a way for that befeit to accrue directly to each of us ona per capita basis?
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      Nov 5 2011: Dear Lindsay everything is right (or wrong?) US have to show respect for the others resourses....our oil, our gold, our corn, our land, our water, our seeds, and all our natural resources the has been expoiled by a US foreign intrusion in all possible forms and fields. Its an ethical problem, not an economical problem. It goes beyond the tax payers, beyond the phony showtime before the fall of the empire....goes to the human condition and sins of greed....Mister Freudenburg shows the most insensible form of cinism....let me quest....What happens if the US limits their action just to his own territory and leave the intromision in other countries? With your own resources you cant live well enough.?
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        Nov 5 2011: Yes absoluely, Jaime.

        Each country should and could have the same.

        All the exploitation of foreign countries is by consent of some corrupt leaders..without regard to justice..without regard to the fact that resources belong to all the people.Do you not believe that the 99% of all the world's nations can also rise up and take it back?

        In Venezuela, oil costs .06/gallon. Libya actually had been doing that for its own people with its own oil..They had a very high gdp and a very low poverty rate when Nato interfered in their civil war..Nato didn't like Libya nationalizing its own resources. Norway has a very rational model .The private public model and the nationalization of natural resources is alreday emerging. It is what the Libyan people still want and are doing ( much to Nato's surprise) and that is also the model emerging in new deals in Iraq

        .I truly beieve Jaime, that the natural resource wealth of every nation of earth was fairly shared on a per capita basis there would be no hunger, no poverty, no homelessness.

        Perhaps you could reconsider what I am suggesting? Every nation can do this for itself.

        Don't we have to energize ourselves beyond our rage and pain and begin to envision and walk towards better and more equitable ways.?.we involved in Occupy Cafe are now using the word "thriveable" as the standard for that new vision..not just sustainable but thriveable.(www.occupycafe.org)

        Envison with us with your beautiful heart and big brain..

        What about every person in the wolrd having their fair and absoutely equal ( per capita) share of all the world's resources?

        Doesn't it just strike you as absurd that exclusive private rights to something like oil are sold for pennies to private companies under a permit system? That our cut in royalties is tiny?

        Permits are for street vendors, parades, block parties, concerts..Not for exploiting a nation's resources. Don't you agree?

        BTW, I included the article because it has some very useful and acurate stats,