"Those who cannot remember the past are condemned to repeat it."

G. Santayana (Photo)

If you tax something, you get less of it.

Alaska: "Essentially a third world government." -Frasier Institute Global Petroleum Survey

Globe and Mail (3/12) reports, “The Alberta government is rolling back a royalty regime loathed by the province's all-important energy industry, in a bid to revive its political fortunes and lure oil and gas investment back into the province. After months of feeling the wrath of an industry chafing under a year-old royalty hike intended to give Albertans a greater share of windfall profits, Premier Ed Stelmach's government is now reversing course and almost completely abandoning the increases. It is slashing the highest royalty rates - those designed to kick in only when energy prices are high and profits are surging - on oil and gas wells. The province is also moving to cut industry red tape, promising a new report to speed regulatory processes within 90 days. The energy sector is vital to Alberta's financial well-being. Fully 30 per cent of the province's economy flows from oil and gas. The Premier resisted calling the royalty hike a mistake, instead painting the rollback as a response to events beyond his control.

Calgary Herald by Dan Healing.  Calgary oil and gas producers and analysts generally welcome the province's commitment to lower initial royalties and maximum rates but they are frustrated at being asked to wait both for details on royalty curves -- the information on what gets charged for wells that fall between the minimum and maximum royalties -- and for a task force to look at making regulatory bodies more efficient.  “On the surface it all bodes well — it’s certainly better than the status quo,” said Alan Knowles, an analyst for Haywood Securities.

Alaska Dispatch by Rena Delbridge.  ... The issue is at the heart of the biggest matters before the Legislature this session, with several changes to the ACES oil tax on the table. But luring companies to seek out new oil has been at the center of major controversial debates throughout the decade. Battles were fought in 2006 and 2007 over how to structure a state tax system to drive companies into uncharted terrain in pursuit of fresh flow.  ...  Several proposals this year call for Alaska to offer a sweeter tax deal for producers. Republicans backing the breaks say tax cuts will give companies more money to invest in new developments on the Slope.  Rep. Craig Johnson, R-Anchorage, sponsored one of the bills amending oil taxes.  ... He said Alaska must encourage more production out of the legacy fields in order to maintain pipeline flow.  "Anytime we lose sight of the fact oil is king in Alaska, we're doing a disservice," he said. "Those fields are our lifelines."

"Remember the Alamo!"

"Remember Pearl Harbor!"

"Remember Bunker Hill!"

"Remember the Maine!"

"Remember 'Nuts'!"

The Mexicans, Japanese, Spanish, Germans and British--once our enemies--became our friends because we prevailed.  Had we not prevailed, America's democracy would have vanished long before now. 

Today, our own Federal leaders are attacking the institutions of freedom through propaganda and demonization, over-regulation, delay tactics and executive orders that evade Congressional oversight and constitute the acts of modern-day despots.  

The American citizen is an endangered species, suffering economic death by a thousand cuts at the hands of a ruthless government.  

-dh

Wall Street Journal.  President Obama used his January State of the Union speech to promise "a new generation of safe, clean nuclear power plants" and "new offshore areas for oil and gas development." Judging by its recent decisions, we'd say his Cabinet hasn't received the memo.  Congress's ban on offshore drilling expired in September 2008, and a Bush Administration plan for leasing the energy-rich Outer Continental Shelf was due to begin this year. Yet within a month of taking office, Interior Secretary Ken Salazar (NGP Photo) halted leasing by extending the public comment period by six months. When that period ended last September, Interior said ...   

Calgary Herald by Dina O'Meara.  Environmental groups attack regulatory process.

Fairbanks News Miner by Joshua Armstrong.  The commissioner of the Alaska Department of Natural Resources defended the state’s natural gas pipeline efforts and promoted Outer Continental Shelf drilling Thursday, saying both are in the country’s best interests.  Tom Irwin (NGP Photo) cautioned against dependence on foreign oil and underdeveloping Alaska’s resources in a speech at the Alaska Miners Association symposium at the Westmark Hotel.  He said the U.S. could “shut down” in a matter of weeks if Middle Eastern oil producers cut off their supply.  “We can argue if we want development or not,” he said. “But those arguments go away when we go to anarchy.”

Calgary Herald by Shaun Polczer. Get ready, because today's going to be a Big Day for oil and gas types in Alberta. In fact, the next 48 hours promise to be a barnburner that's going to set the tone for the next decade or so as far as the importance of petroleum in this province.  Around 3 PM MST we're going to get the goods on the latest Alberta land sale, where an area the size the Netherlands is up for bid. Speculation is rampant that EnCana, Shell, Esso or all of the above are going to be blowing their brains out over a potential new shale play. Add to that to the Pembina Cardium, the Nikinassan, or any other old rock zone that's been made new again with horizontal multi stage drilling and you've got a story in the making.

Juneau.  The House Resources Committee this evening passed their committee substitute for House Bill 369, House Speaker Mike Chenault's, R-Nikiski, proposal creating the Joint In-State Gasline Development Team.  "I'm grateful for the work put in on the bill, and look forward to seeing it work its way through the process. We heard from committee members, and we all agreed that it's time to focus on bringing forward an in-state line that serves all areas of the state. It was my intent to see the state unify the various agencies and assets at our disposal, and the substitute kept the emphasis in the legislation on that."

McLean's by Colby Cosh.  I’m in the sumptuous Palomino Room at Calgary’s BMO Centre, waiting with an audience of about one thousand to witness Sarah Palin’s (NGP Photo) first live address outside the United States, depending on which media personage in the back row you ask. ... She talks about bringing TransCanada Pipelines in on the Alaska Gas Line project… as part of her goal of helping establish “energy independence” for the United States. 

Sarah Palin Promotional Webpage downplays White House support for Alaska gas pipeline.

Alaska Dispatch by Rena Delbridge.   ...two new bills hit the Senate on Monday, delivering, as promised, a major change to the state's oil and gas tax structure as a pipeline open season approaches.  The bills, SB 305 (.pdf), and SB 306, would tax oil and gas separately instead of as a combined resource. Senate President Gary Stevens (NGP Photo-l) , R-Kodiak, took the unusual step of referring the bills to only one committee. Typically, bills are sent to three for hearings.  Some lawmakers -- most vocally, Sitka Republican Sen. Bert Stedman (NGP Photo-l) -- say a tax change is necessary, and soon, in order to protect Alaska's treasury once gas is flowing a decade or more from now.  (Comment:  The effect of these bills is to increase taxes on oil/gas producers that invest in and transport their gas via an ANS gas pipeline, further diluting the incentive for investing in a pipeline.   As our Legislative leaders seek, year by year, to creep closer and closer to more complete appropriation of the 'means of production' they may find out sooner than they think that 100% of nothing, is less than they had in mind.  See our further comment below.   -dh)

ADN by Richard Mauer.  The House majority leader returned to work after last week’s Energy Council break with a significant dose of pessimism about the future of a big gas pipeline from Alaska through Canada to the Lower 48.  The source of that concern: new techniques that can be used to free gas and oil from huge shale deposits in the Plains states. ...  More than 20 legislators left Juneau last week to attend meetings of the Energy Council in Washington, D.C. They’re back at work today.  (Note: 1.  see our Energy Council Report.)  *   Alaska Gas Pipeline Blog.  Alaska Department of Natural Resources Division of Oil and Gas have published regulations aimed at setting values on Alaska gas for royalty purposes. See below: The Proposed Regulation LINKS: (11 AAC Royalty Election Under Alaska Gasline Inducement Act.); (Gas 15 AAC Gas Production Tax Exemption under Alaska Gasline Inducement Act); Read more: http://alaska-gas-pipeline.blogspot.com/2010/03/proposed-regulations-for-alaska-gas.html#ixzz0hh6qLtir

Commentary:  The competitive status of ANS gas is based on many factors, including the cost of production.  Yes, a greater Lower 48 shale gas supply could depress gas prices, as could lower consumer demand.  As market prices drop, therefore, production costs and/or profit margins must drop if the product is to remain competitive and the pipeline capital investment viable.  The largest if not only investors in an Alaska gas pipeline are expected to be Alaska gas producers, who must risk that over the life of the pipeline, prices will be sufficient to compensate their shareholders for costs plus a reasonable return of and on the investment.  Alaska hosts an array of huge non-variable costs that work against our competitiveness: high labor, transportation, supply, climactic costs.  One notes that most of our gas competitors in the world enjoy locations either closer to the market (i.e. shale gas), and/or at tidewater, and/or usually in much more temperate, low-cost zones.   One of the most burdensome of the production costs is the cost of taxation.  Alaska's oil and gas taxes--among the highest anywere--inhibit investment.  Our taxes create a high marginal cost that provides a restricted opportunity for a producer to adjust prices downward in response to supply and demand variables.  Therefore, producers can only finance big projects like pipelines when they can project the price of produced products to be high enough to survive competing energy supply challengers that have fewer roadblocks than those confronting Alaska investors.  Our counsel for Alaska remains focused on improvement of the investment climate and a lower cost of taxation, factors over which lawmakers have significant control.  -dh  (See our earlier tax commentaries.)

Calgary Herald/Edmonton Journal by Dina O'Meara.  Natural gas production in Canada slipped four per cent last year reflecting a continuing trend of declining volumes, but not an industry death knell, say industry observers.  There are huge resources available in Alberta and Western Canada that just need time and money to develop -- unconventional resources such as shale gas and tight gas plays, analyst Jeff Fetterly said.

Alaska Dispatch by Scott Woodham.  In a new op-ed in The Globe and Mail (Canada) following recent reports of Korean Gas Corp.'s entry into unconventional North American natural gas production, Gwyn Morgan, EnCana Corp.'s retired founding CEO says that news is another sign that the future of natural gas production in North America is unconventional (meaning shale gas deposits), not conventional. The editorial covers ground that may be familiar to hard-core oil and gas news junkies, but Morgan's frank statement about shale gas's impact on Arctic natural gas pipelines is of interest: " ... cost estimates for the Arctic lines have escalated from billions to tens of billions of dollars and neither the Alaska Highway nor the Mackenzie Valley pipelines have been built. And burgeoning new gas supplies much closer to markets make it highly unlikely they ever will." Read more here. 

Juneau Empire by Pat Forgey.  President Obama plans to boost the effort to develop Alaska's natural gas resources into the executive office of the White House, according to legislators who visited Washington, D.C., to discuss energy issued with other legislators.  Sen. Mark Begich (NGP Photo-r), D-Alaska, recently nominated legislative aide Larry Persily (NGP Photo-l) for the Obama appointment as federal coordinator. Persily has support from Sen. Lisa Murkowski, R-Alaska, as well.  He is now awaiting confirmation by the Senate, after having been approved by the Senate Energy Committee.  Senate Majority Leader Johnny Ellis, D-Anchorage, said a top Obama administration official, former Alaskan Pete Rouse, told Alaska legislators in Washington that Obama would be more than just verbally supporting the Alaska natural gas pipeline.  "Mr. Rouse said the president was planning to elevate the Alaska gas line coordinator's office effort into the executive office of the president once Mr. Persily is in place and is official," he said.

See Our Original Moratoria Story With Many National Media Links

Here is audio of the Alaska Legislators' report on the Energy Council Meeting

Washington, D.C., by NGP Staff.  On Saturday, March 6, public officials from throughout the U.S. heard a report from the NARUC-administered Study Group on findings of its almost 2-year-long, $300 thousand study to determine the social, economic and environmental costs of continuing a national policy that restricts access to energy resources on Federal lands.

The Energy Council was convened at its 2010 Federal Energy & Environmental Matters Conference at the Madison Hotel in Washington D.C. on March 4-6, in a joint gathering with the Interstate Oil and Gas Compact Commission (IOGCC) and the Pacific NorthWest Economic Region (PNWER).

Senator Lesil McGuire, PNWER Vice President, introduced the Moratoria Study Group panel presentation.  NARUC Commissioner Emeritus Dave Harbour moderated the Moratoria Study Group presentation via teleconference.  He opened with an introduction (video below) for about 120 Energy Council attendees, then turned to a panel that included Rick Irby (NGP Photo-r) of SAIC, Alaska Oil and Gas Conservation Commissioner Dan Seamount (NGP Photo-l), Texas Railroad Commissioner Victor Carrillo (NGP Photo-below) and Consumer Energy Alliance - Southeast Executive Director Michael Whatley. Commissioner Carrillo participated with a statement delivered by Commissioner Seamount. 

Panelists noted that Congress and the previous Administration removed or did not reinstate expiring oil and gas moratoria on public lands in the fall of 2008, following a big run-up in oil prices.  They said that their study was as useful as ever now since energy supply and prices are such a large component of current economic challenges the country faces.  They also noted that as yet, no oil and gas development is occuring on the previously restricted lands.  

Irby emphasized the independence of his company's work and described several of the study's findings, that maintaining moratoria and keeping domestic energy resources inaccessible between now and 2030 produced a number of effects using a version of the government's national energy modeling system together with an updated estimate of resources.  The effects of maintaining moratoria against domestic energy production include: decreased oil (15%) and natural gas (9%) production; natural gas (17%) and electricity (5%) price increases; $4,500 per capita loss of disposable income; a .52% annual decrease in GDP; and INCREASED payments to OPEC of $607 billion.

Seamount said he participated to represent the States' rights viewpoint held by his national organization, the Interstate Oil and Gas Compact Commission, several of whose members helped oversee the study.  "Similar studies should be done every time any public land is considered for moratoria", he said.  "The American people need to know what enormous cost they are paying to keep so much of America's rich resources off limits to proven low risk operations.

Seamount said that he is "officially neutral" on the study results, adding that, "the decision makers need to see the whole picture--social, economic, as well as environmental--in order to make informed decisions. And if they decide that the potential environmental risks outweigh the social and economic cost, then we have to respect our elected and appointed officials’ decisions."

We began the day yesterday with former Anchorage Mayor Rick Mystrom's briefing on an an Alaska Railroad extension that could ameliorate gas pipeline logistical costs; we ended it with the Iditarod Mushers' Banquet  (Stories and Photos coming....)

Tomorrow will be another big day in Washington: tune in over the weekend and find out why before you read about it elsewhere.

Alaska Dispatch by Rena Delbridge.  The state has directed an estimated $142 million toward gas line development in the past six or so years. Now Gov. Sean Parnell is asking the Legislature for another $167 million through June 2011 for more work linking North Slope gas with in-state and Outside markets.  Some put the estimate of state pipeline spending even higher. Larry Persily (NGP Photo-l, Federal Alaska Gas Pipeline Coordinator-designee, describing gas pipeline status to retired legislator Vic Fisher last September), staff to Rep. Mike Hawker (NGP Photo-r), figures the spending since the early 2000s could be at least $200 million if this year's request is funded. That's excluding $140 million of Parnell's request, which goes toward reimbursing a major pipeline project.  But some members of the House Finance Committee are wary of making big investments without assurances that a large-diameter gas pipeline will actually be built.

News Times. Bob Bleaney, general manager of Denali Canada, told the Canadian Institute's Arctic Gas Symposium earlier this week that no proponent has an exclusive right to build pipelines in the United States or Canada.Bob Bleaney, general manager of Denali Canada, told the Canadian Institute's Arctic Gas Symposium earlier this week that no proponent has an exclusive right to build pipelines in the United States or Canada.  (Calgary symposium link here.)

Calgary Herald by Deborah Yedlin.  Wednesday's Throne Speech contained one good tidbit for the energy and mining sectors - a promise that the regulatory process will be streamlined to eliminate the "daunting maze of regulations".  The goal here is to eliminate the layers and multiple reviews that have the potential to discourage investment.  Gee. Can you say, Mackenzie Valley Pipeline?

Calgary Herald by Dan Healing.  Energy and business leaders in Calgary welcomed the Harper government's commitment to cut red tape while condemning its continued deficits following Thursday's federal budget.  The Tories will shift responsibility for energy project environmental assessments to the National Energy Board from the Canadian Environmental Assessment Agency, a bureaucracy-cutting decision that won kudos from the Canadian Energy Pipeline Association.  Association president Brenda Kenny said the move -- which affects only projects that are federally regulated, such as pipelines that cross provincial borders -- would have reduced the near decade it took to have the Mackenzie Valley natural gas pipeline project approved.  "Something like that up front would have saved a huge amount of time before the project even got underway," Kenny said.  Earlier this year, a review panel report conditionally supporting the project was presented to Ottawa, three years late and $10 million over budget.  ... "What we're proposing, amongst other things, is the elimination of duplication," said Environment Minister Jim Prentice in a later interview. "So this is about balancing, on the one hand, the need to have first-class environmental assessments but also to not duplicate."  Pius Rolheiser, spokesman for the Mackenzie Valley project's lead partner, Imperial Oil, said it's unclear how much the change would have affected the wait for the proposed 1,200-kilo-metre pipeline.  Dave Collyer, president of the Canadian Association of Petroleum Producers, said a focus on regulatory efficiency is a "positive," but otherwise there wasn't much in the budget for the oil and gas sector....

Windsor Star.  The decades-delayed Mackenzie Valley Pipeline has received a much-needed shot in the arm after an independent panel gave its support for the $16.2-billion mega-project. But many barriers still stand in the way of development, and experts said this is just one step on a very long path to development that is still fraught with uncertainty. ... Given the abundance of shale gas deposits in North America and the fact that natural gas prices have plummeted almost 60% from their peak last year, experts said that building the Mackenzie project does not make much sense right now.  But it is also clear from the report that the pipeline is not expected to be up and running anytime soon.  Bob Hastings, an analyst at Canaccord Adams, noted that the panel report recommends, among other things, a “multi-year study” of permafrost before construction of the pipeline can even begin. That is in addition to many other approvals that would need to be obtained.  “It just reinforces what we thought before: This is going to be a very long and delayed process. The stock market is unlikely to assess any economic value to the potential of this project right now,” he said.

Calgary Herald by David Akin and Jason Fekete.  ... "We're trying to ensure major resource projects are not unnecessarily slowed down by duplicative procedures," said Environment Minister Jim Prentice (NGP Photo), regional minister for southern Alberta.  There's potentially $85 billion worth of oil and gas projects to be built in northern Canada over the next decade, including the Mackenzie Valley and Alaska pipelines, said the Canadian Energy Pipeline Association. But burdensome regulatory approvals are deterring investment and actually hurting the environment because the delays force companies to fit construction into a shorter time frame than hoped, CEPA said.  (See Follow-up story here.)

Alaska Dispatch by Rena Delbridge.  If gas had flowed through a huge pipeline from the North Slope during the past two years, Alaska's linked oil and gas tax would have drawn about $2 billion less in tax revenue than if oil and gas were taxed separately.  That's according to an analysis done by consultant David Wood in response to an inquiry by Senate Finance Committee member Sen. Joe Thomas, D-Fairbanks.  Thomas is among a group of lawmakers led by Senate Finance co-chair Sen. Bert Stedman (NGP Photo), R-Sitka, arguing that the state must break gas out from the oil tax before May 1. That's when an open season on a large-diameter natural gas pipeline could lock the tax rate in for the first 10 years of flow. The lawmakers are concerned that without such action, Alaska's treasury could take a hit as big as the one in Wood's scenario -- or bigger. The way gas and oil production are linked for tax purposes means that, under certain scenarios, producers may pay no tax on gas, and even get a break on oil taxes if they're producing gas too....Governor Sean Parnell told reporters late last week that changes to the gas tax at this stage of the game could hurt pipeline progress under the Alaska Gasline Inducement Act.  (Comment: If there is an advantage in this tax structure to producers bear in mind that it could very well be the only incentive remaining available to them for pursuing politically risky Alaska capital investments.  So, changing the tax structure yet again should be done with this question in mind: "What's better, 100% of nothing or a somewhat smaller percent of several billion dollars a year?"  -dh)   

"Something Has To Be Done"

Alaska Dispatch by Rena Delbridge.  As the House Finance Committee prepares to sign off on a $7.4 billion operating budget, lawmakers are expressing sticker shock at almost six percent growth.  They know it's a futile protest, with all but about twopercent of the swell tied directly to federal rules and formulas. But some are deeply concerned about how to check that growth, expected to continue at similar levels annually well into the future.  Rep. Alan Austerman, R-Kodiak, successfully proposed a new Finance subcommittee that will work through the interim on state spending, better ways to budget, and Alaska's economic future. The group has met once so far, but will buckle down soon now that a heavy schedule of subcommittee meetings on agency budgets has been wiped clear. Serious work starts next week with a presentation by Scott Goldsmith (NGP Photo) of the Institute of Social and Economic Research. At 3:30 p.m. March 11, he'll talk about Alaska's economy and how it plays into the state's fiscal future.  "The imperative is that we're ready when we need something else," Austerman said. "It's getting control of what the budget has done." ... As oil production slips and budgets keep growing, concern is bipartisan. Rep. Mike Doogan, D-Anchorage, will participate in the fiscal policy subcommittee.  "We cannot afford to continue to fund the budget that we're going to pass this year," he said. "If oil prices go down substantially, we're in big trouble. Something has got to be done."  House Finance chair Rep. Mike Hawker, R-Anchorage, who supported Austerman's subcommittee proposal, has been involved in similar talks over the years. Alaska's "delicate fiscal regime" is nothing new, he said.

Is the Administration Serious: Increasing Oil and Gas Taxes While Projecting Less OCS Revenue?

U.S. House Committee on Natural Resources.  In the President's budget proposal released yesterday, the Administration is anticipating that revenue from new Outer Continental Shelf (OCS) leasing will decline over the next five years. The only way revenue would decline is if less of the OCS is offered for leasing for energy production.

Canadian Press by Lauren Krugel.  An official working on Alaska's proposed US$30-billion Denali pipeline says there are benefits to moving the project ahead without the help from the state government, which its competitors have secured. ... "No proponent has an exclusive right to build pipelines in the United States or Canada," Bob Bleaney, general manager of Denali Canada, told the Canadian Institute's Arctic Gas Symposium on Tuesday.   ...  "Denali is proceeding outside of AGIA. We think that actually is a benefit for our project because we're not tied to those particular conditions and we think we have a better opportunity to bring forward a successful project without them," he said.   ...  "We believe the best and most effective way to bring the project forward is in the alignment of five key parties: the state of Alaska, the three major North Slope producers and TransCanada," said Tony Palmer, TransCanada's vice-president of Alaska development (NGP Photo, 2-26-10, with longtime Alaska consultant, Patty Bielawski).  

Calgary Herald by Shaun Polczer.  The two main Alaska pipeline proponents on Tuesday continued to trade barbs over who will build the world's largest private construction project.  At an Arctic natural gas conference in Calgary, representatives from TransCanada Corp. and the Denali pipeline consortium took subtle jabs against each others' respective proposals at the Canadian Institutesponsored event.

Anchorage Daily Planet.  "They Get It; We Don't".   As throughput in the trans-Alaska oil pipeline continues to decline, the state of North Dakota is booming from a surge in oil production from the Bakken shale formation - producing 80 million barrels of oil last year.  Using horizontal drilling techniques to extract oil from the Bakken formation, North Dakota has leapt ahead of Oklahoma and Louisiana to become the fourth-largest oil producing state in the country. If current projections hold, North Dakota’s oil production could pass Alaska’s by the end of the decade, the Wall Street Journal reports.  As the national economic downturn has begun to affect Alaska and unemployment has steadily risen, North Dakota’s unemployment rate is 4.3 percent. North Dakota has kept oil taxes low and exploration has boomed even though recovery costs are considerably higher for the oil trapped in the state’s shale formation.  Looking at North Dakota’s example, it is clear that increased oil production spurs economic development and creates more job, yet our state legislators have stuck their proverbial heads in the sand, keeping oil taxes high and killing oil exploration. For 2010, ConocoPhillips will not be drilling an exploratory well in Alaska for the first time in 45 years.  Alaska lawmakers must reconsider the state’s entire oil tax structure, which was ratcheted up in 2007 by then-Gov. Sarah Palin’s Alaska’s Clear and Equitable Share oil tax, if they want the state to be competitive against other oil provinces.

Alaska's economy deteriorates with lower energy production as higher industry taxes nip at the heels of departing jobs and undermine all gas pipeline projects.  Blissfully obese, the bureaucracy and budget crave more and consume our savings.  Unfunded government pension liabilities increase the debt burden to our children and threaten retirees.  Each well-intended elected official has a plan and each plan points to a different path.  Citizens with no intent to invest their own money clamor for public funding of their pet projects.  Predatory federal policies flanked by environmental activist allies persist in efforts to shut down Alaska.  Chaos consumes dialogue as calamity approaches.  The opportunities for leadership--and the risks--are immense.  -dh

What Can I Do to Help?  Join an Alliance: here or here or here or here and pray for leadership.

Juneau Empire by Bill Walker (NGP Photo).  The recent flurry of bills proposing different angles for building a so-called "bullet-line" signal the Legislature's mounting concern with the AGIA process and the ill-fated Canadian gas line route.  While the Legislature is correct to realize Alaska cannot wait for long-term energy solutions, it would be a grave mistake to accept failure and build a small-diameter, low-volume line that will do nothing to provide our children and grandchildren with the same level of prosperity that our generation has enjoyed.

Just Put Your Feet Up.  With a large-diameter gas pipeline uncertain and years out, some lawmakers want to put an in-state natural gas pipeline on the fast track by turning plans over to the Alaska Railroad.  While a huge pipeline such as TransCanada is proposing could link Alaska’s natural gas with North American markets, flow is still a decade away, and only if major hurdles are overcome.

Alaska Dispatch by Rena Delbridge.  As the 90-day legislative session hits the halfway mark this week, bills are piling up in committee while big issues enjoy hours of debate.

IStockAnalyst.  A two-week study of Alaska's oil and gas tax structure has convinced some state senators that the Legislature needs to act fast to change the system or risk the plundering of state riches.

Alaska Daily Planet by Tom Brennan (NGP Photo-r, 5-15-09).  I don’t have the expertise to counter the oil-tax claim made by the state’s oil and gas consultant, Rich Ruggerio from Gaffney, Cline & Associates, but I sure as hell have a few questions.  Ruggerio said Alaska is about in the middle of oil taxing provinces and its share of the take compares with a number of other parts of the world. I wouldn’t accept that as gospel — I’d be very suspicious, if you want the truth — but I would ask him if the so-called comparable oil provinces were on their way up or, like Alaska, on their way down.  The ones he mentioned, Australia, Brazil and Indonesia, don’t seem in any way comparable to Alaska — except that they are all on the decline the way Alaska is. The risks and investments required to find or develop large reserves there are relatively small and returns far greater than in Alaska, where the reverse is true.  If Alaska is going to compete for industry investment, those provinces are the ones we have to beat. Matching them in tax levels just won’t do the job.

ADN by Tim Mowry.  Priscilla Feral, president of Friends of Animals, one of the country's most prolific animal-rights groups and based in Connecticut, showed up Saturday to testify in support of expanding a 122-square-mile buffer zone. The zone sits on state land in the northeast corner of Denali National Park and Preserve, and trapping wolves is prohibited in the buffer zone.

Meanwhile, the Sierra Club also promotes its anti-civilization agenda in neighboring Canada.  Sierra Club Canada is pleased that so many of our interventions in the hearings for the Mackenzie Gas Project are reflected in the 176 recommendations of the Joint Review Panel for this $16 billion project. Most notably, the Panel has recommended that natural gas from Northern Canada not be used to fuel further tar sands development in Alberta and Saskatchewan.

 Thursday in Anchorage was another big day for discussion of taxes and economics 101.

By Dave Harbour

The 1) Alaska Cruise Association Newsletter reprinted 2) our recent editorial on state tax policy and Alaska's investment climate.

E&E News (2/26, subs. req’d) reports, “Sen. Lisa Murkowski (NGP Photo) will introduce legislation next week barring the president from creating or expanding any national monuments in Alaska without first obtaining congressional approval. ... "Sixty percent of land in Alaska -- some 220 million acres -- is already under federal control, large swaths of which are protected as monuments, parks and wilderness," said Murkowski spokesman Robert Dillon. "That makes it exceedingly difficult for the state to realize its full economic potential."

ADN by Lisa Demer.   Twenty-one Alaska lawmakers, including half the state Senate, are heading to Washington, D.C., this week for an energy conference that some go to year after year.  ...  Five Canadian provinces and the nation of Venezuela also belong to The Energy Council. The 35-year-old organization is based in Dallas....  A 12th state, North Dakota, is joining this year.  Texas, the most populous state in the group, probably is sending about a half dozen lawmakers, Executive Director Lori Cameron said.  Alaska lawmakers who go to Washington say the trip is well worth it because of the chance to learn about new technologies and trends, and to air Alaska issues face-to-face with top federal energy officials and members of Congress.  "They told us three years ago that Arctic gas projects were in trouble," said state Rep. Jay Ramras (NGP Photo)....

National Post by Scott Haggart.  TransCanada Corp. posted a fourth-quarter profit that was up 38% but missed market expectations as it spent more to advance its Alaska pipeline project and power prices dropped.  ...  The company said its profit rose on higher earnings from its gas storage business and improved prices for Bruce's electricity, offsetting increased spending to push its Alaska pipeline project forward and lower power prices in Western Canada and the United States.  It also had 14% more shares out in the quarter, compared with the year-prior period, after issuing stock to pay for its slate of new projects.  Fourth-quarter revenue fell 5% to $2.21-billion.  TransCanada this year filed an open-season plan with the U.S. Federal Energy Regulatory Commission for its Alaska pipeline project in partnership with Exxon Mobil Corp. The open season is a period when would-be customers can commit to shipping gas on the line, which would cost between US$32-billion and US$41-billion.  (See our TransCanada story of last Friday. -dh)