An oxen didn't make it out of the Bering Land Bridge Natural Preserve. REUTERS You may have noticed we haven't heard much talk about opening the Alaska National Wildlife Refuge recently.

For decades, America debated whether to open up federally protected land that is said to contain lots and lots of oil (though exact estimates are plagued by uncertainty).

What happened? "Saudi" America.

Everyone — including drillers — has now shifted their focus to the lower-48 state's midsection, where oil and gas are now being pumped out like crazy thanks to the boom in shale production.

As a result, Alaska is in big economic trouble.

First, to put oil production shift in perspective, here's the output chart for shale country:

And now, Alaska:

Now consider this: 90% of Alaska's public budget comes from oil-related revenues; the state has no income or sales tax.

According to Pew's Jim Malewitz, state coffers remain 19% below their pre-recession peak.

Not surprisingly, given the chart immediately above, resource extraction employment growth in the state has stagnated, and remains below historical norms:

So what to do?

This spring, Gov. Sean Parnell approved a tax cut for oil companies that is expected to see the state forego hundreds of millions in revenue in exchange for the prospect for reigniting interest in drilling in Alaska.

The bill, a 35% flat-tax on all oil profits, became a priority after oil execs including Exxon counsel Dan Seckers complained that the previous regime, a progressive tax enacted by former Gov. Sarah Palin in a spasm of populism, created "a major disincentive" to investment, according to National Geographic's Joe Eaton.

But Eaton says many credit the progressive scheme with buoying the state through the recession by creating a $17-billion rainy day fund.

State Democrats say the flat tax is a huge give away with no promise that anything will actually come of it, Eaton reports. Alaska Dispatch's Pat Forgey says the measure will "guarantee budget deficits for years to come." There's already an initiative to repeal it.

In its recent earnings call, ConocoPhillips offered a fairly mild endorsement of the measure:

We continue to analyze the impact to our business related to the recent passage of Senate Bill 21, and we expect to pursue additional opportunities for investments over time.

The picture is not entirely gloomy. The Department of Interior has ramped up leasing on Alaska's North Slope, but it's been slow going, as we saw with Shell's failure to off the ground.

Plus, Alaska has enjoyed historically low unemployment rate, and it remains below the national average

A section of the Trans-Alaska Pipeline, which is in danger of shutting down for lack of volume. Wikimedia But Judith Dwarkin, chief energy economist at Calgary-based ITG Investment Research, told us by email that the worst may still be in store: the TransAlaska pipeline, the main artery for transporting Alaskan hydrocarbons, is in danger of being shut down as it gets squeezed by lower-48 infrastructure.

[Alaska North Slope] production has been in decline since the early 1990s, to the point now that the TransAlaska Pipeline (which carries it to port) is at risk of not maintaining minimum throughput to remain operational.

...

The principle market for ANS at present is the L48 west coast of the US, which has not as yet been deeply penetrated by incremental light tight oil production in the L48 because it isn’t well connected by either pipe or rail to the areas producing this crude. Additional rail receipt terminals are planned in PADD 5, but this is a slow process, particularly in California.

...

If L48 LTO and Canadian heavies manage to penetrate this market more seriously, this will put a dent in the price ANS is able to attract.

This may not end well.