Government owners of petroleum subsurface rights often face constituent pressure to exercise control over the disposition of these resources in pursuit of economic development objectives. At the same time, states cannot simply dissipate the potential rent from their resources without losing a principal revenue source. The paper takes a retrospective look at the state of Alaska's policies and programmes regarding the disposition of oil and gas resources, focusing on the evolution of the royalty-in-kind programme. It examines the relative success of different programmes in achieving the objectives of import substitution and value-added export relative to the cost in foregone revenue. The analysis leads to general conclusions about programmes of this type, along with specific insights as the state prepares to embark on the biggest test yet related to the disposition of North Slope natural gas.
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