Alaska Likely to Face Budget Cuts Amid Drop in Oil Prices

MOSCOW, January 27 (Sputnik) — Alaska, one of the main oil-producing regions of the United States, is likely to review expenses amid the drop in global crude prices, Alaskan Governor Bill Walker told RT TV channel in an interview Tuesday.

"We are sort of in the process of looking at what we can consolidate, what we can do more efficiently, etc., and sort of make some reductions first, and we think that is a correct priority before we try to look at different sources of revenue. So that is what we're doing now – looking at the expense side," Walker said, in an exclusive interview Tuesday.

Walker reported that the Alaska oil pipeline is currently transiting oil well below capacity.

"Our oil pipeline in Alaska is about 3/4 empty and so we'd like to put more oil into it. And one way we can increase the revenue is by more oil. So we are working on that part as well," Walker said.

The Alaskan economy, overwhelmingly dependent on oil revenues, is likely to face a $3.5-billion budget deficit in 2015, the Alaskan governor's office stated last week.

Global oil prices have fallen about 50 percent since summer 2014, from about $110 a barrel to less than $50. Experts have predominantly associated the drop in oil prices with the oversupply in the market, aggravated by the decision of the Organization of the Petroleum Exporting Countries (OPEC) to keep oil output at its current high levels.