(Readers will understand the importance of this alert after reading today's commentary, below. -dh)
Related Commentary: "The Sting"
"Today, we are releasing the first Report on the Implementation of the National Ocean Policy, which highlights the progress we’ve made since we released an action plan last year. From supporting the ocean economy to ensuring the security of our ports and waterways, and from improving coastal and ocean resilience to providing local communities with tools to plan for a better future, we’ve made tremendous strides in undertaking our role as responsible stewards of this Nation’s great oceans.
"Among the activities described are a host of steps to promote sustainable energy development and aquaculture practices—including ensuring that permitting processes for these activities are...."
This massive undertaking -- which will ultimately affect all waterways feeding the Great Lakes and Oceans -- is a regulatory monster created by President Obama early in his first term. See our original, 2009 report here. See strategy of NOAA support here.
The oceans, Great Lakes, and all waterways and lands surrounding them are destined to be regulated under a new regime called, ecosystem-based management (EBM).
Our astute, NGP readers can just imagine the havoc that Obama, Kerttula and their massive grass roots constituencies can bring to America's traditional use of our waters.
Not only does this effort threaten any natural resource activity in Alaska (i.e. which has 3/4 of America's coastline and over 3 million lakes, rivers and streams), but can severely affect every single American.
The direct effects will be felt by commercial fishermen and others who make a maritime living--and even farmers whose activity on private land can be deemed to affect waters leading into lakes and oceans.
Indirect effects will descend upon every American who will ultimately pay for the cost of this regulation and with more jobs exported to countries which do not have such regulatory obstacles.
The final insult to our way of life is that this whole, massive effort is unapproved and unfunded by Congress.
Obama has done it all by Executive Order and memorandum. It is run under the cover of the White House's Council on Environmental Quality and by his order, dozens of government agencies are indirectly funding the effort -- redirecting their own congressionally approved funds and people to this dangerous activity.
We believe that this is one of the greatest examples to date of Obama's unconstitutional usurpation of Congressional powers.
We also wonder why more Governors and Congressional Delegations are not literally handcuffing themselves to the White House fences until this sort of illegal activity ceases.
Until and unless relief from such usurpation comes from some as yet unidentified champion, we can only conclude that America's rule of law is finished and that we have entered a new era of elected fascists who create law out of thin air by the memorada edicts and Executive Orders.
Oh, and about DOI's affirmation of Lease Sale 193 yesterday, good luck.
Yes, we have been set up and stung again and again; and this is the latest sting by this administration.
American citizens have, indeed, been played for fools by those they elected.
Commentary: "The Set Up".
Yesterday, the Department of the Interior issued a Record of Decision affirming Chukchi Sea OCS Oil and Gas Lease Sale 193 and the remaining oil and gas leases issued in 2008 as a result of the sale. Press release (Comment: Now that DOI has finally validated its own lease sale (i.e. and long ago accepted payment by industry), observers will now watch carefully to see if the regulators deny access through the permitting process. We hope the outcome is not a statement months or even weeks from now to the effect that, "Our policy is that exploration and development should occur in these areas, but only under responsible conditions. To date, those applying for permits have not demonstrated that exploration -- much less development -- can occur responsibly in these areas. Accordingly, the applications for permits are denied." -dh)
The Alaska Senate passed a bill Tuesday that would temporarily restrict participation by a state-sponsored corporation in an alternate gas pipeline project proposed by Gov. Bill Walker.
The vote followed a failed attempt by legislative leaders and Walker to reach an agreement.
The vote was 13-7, but notice of reconsideration was given, meaning the bill could be voted on again before advancing. It passed the House last week.
Walker has said he would veto the bill. A legislative override would require the support of at least 40 legislators.
Our Quick Takes On Current Alaska Journal of Commerce Headlines:
Legislation introduced to level playing field on utility tariffs - Don't be deceived; a trick to get ratepayers to pay more for subsidized, alternative energy schemes. -dh
Several options on table for delivering gas to Fairbanks - The government presence and subsidies required make this more an experiment in socialism than a valid, market-driven project. -dh
ConocoPhillips moves ahead with Slope project at Kuparuk - Kudos to COP for patiently dealing with a difficult regulatory environment. -dh
Resources Committee takes up gasline board appointments The lack of experience of the new board members, compared to the ones Governor Walker fired, could make for troublesome confirmations. -dh
Caelus Energy sanctions development of Nuna - Could this be a much bigger find than is now known? -dh
Hilcorp Energy keeps up spending despite oil price slide - More respect and kudos to one of Alaska's great new companies. -dh
From Brent Greenfield, National Ocean Policy Coalition (Mentioned in commentary, right column. Please act today. Note that our preference would be to defund the entire, ocean policy process completely and surgically remove all funding from all agencies devoted to supporting this unfunded government program. You can support the NOPC letter but we would recommend separate letters to your Congressional delegations recommending total defunding. -dh)
Newsmax by Ken Mandel. The Keystone pipeline project transports oil from Canada to refineries in Illinois and Texas via eight U.S. states. Completed in 2014, a shortcut known as the Keystone XL was approved by Congress the next year, but vetoed by President Barack Obama.
The debate continues to rage. Here are eight quotes from oil company executives, who stand to benefit from the pipeline's construction:
1. "Anything could happen, we don't know, but we remain confident that when Keystone is ultimately built, it will be the safest pipeline that has ever been constructed in this country." — Andrew Craig, TransCanada's land manager for Keystone projects and development, told NBC News.
Forbes (3/27/15) editorializes: “This Saturday marks the seventh annual observance of “Human Achievement Hour,” a celebration of technology and prosperity hosted by my organization, the Competitive Enterprise Institute. Originally created as an alternative to the World Wildlife Fund’s “Earth Hour” campaign (which urges people to turn off their lights in the name of environmental conservation), Human Achievement Hour counters widespread predictions of environmental and societal doom.”
Posted: 31 Mar 2015 11:21 AM PDT
By Mark Edwards
Today we wrap up our series on the Alaska Economic Update. Over the past three posts, we have looked at oil prices, jobs, and population. We wrap things up today with the housing marketing and the building environment. For the complete Alaska Economic Update as well as other important studies, visit our ‘Resources’ section.
Home lending activity flat - The Alaska Housing Finance Corporation (AHFC) released its third quarter report on Alaska housing indicators. It tracks new loan activity for single family homes and condominiums in Alaska. The data is based on a survey representing approximately 95% of mortgage lenders in Alaska and also includes AHFC loans. The survey covered mortgage lending activity in the first nine months of 2014.
It reported 6,889 loans were originated statewide for single family homes and condominiums for a total amount of $1.8 billion. This is nearly identical to the volume in the first 9 months of 2013. Loans were done with an average down payment of 11% for the last five years. Single family homes accounted for 87% of statewide mortgage lending activity with 52% of those loans occurring in Anchorage. The Mat-Su contributed 18% of the volume, 10% in Fairbanks, 8% in Kenai, 5% Juneau, 2% Kodiak, and 1% in Ketchikan.
10% of total mortgage activity for the quarter was for condominiums and only 3% was multi-family. 91% of condominiums were financed in Anchorage. Juneau accounted for 5%, and the Mat-Su, Kenai and Fairbanks 1%.
Refinance activity slowed rapidly in 2014, but may rise as interest rates are falling again - 30 year conventional fixed interest rate mortgage loans have been getting less expensive for three decades. In 1981 they peaked at 16.6% and have undergone a slow and steady decline ever since. In early 2009 rates dipped under 5% on average for the first time and a surge in refinance activity began.
According to AHFC statistics, there was less than $200 million in refinance loans completed per quarter in Alaska in 2006 and 2007. In 2008, the average rose to $400 million. Then in the first quarter of 2009 the activity spiked to $1.4 billion, followed by $1.2 billion in the second quarter. During this time, the average 30 year interest rate declined nearly 1.5% in six months.
The refinance pace slowed somewhat in the last half of 2009, but still finished the year with $3.7 billion in refinanced mortgage loans according to AHFC statistics. In 2010, the refinance volume declined to $2.4 billion, followed by $2.1 billion in 2011. 2012 saw an unexpected decrease in interest rates again to an all-time historic low of 3.3% by the end of the year. This led to an increase to $3.1 billion in refinance activity.
Rates increased throughout 2013 and you can see on the far right of the graph, the result has been a steep drop off in refinance activity. Rates began declining again last year and finished 2014 at 3.86% on average. AHFC data is only available through the third quarter of 2014 at this time, so we have not yet seen the year end results. Rates continued lower in February to 3.71%. This should be a positive trend for both home sales and refinance activity this year.
Housing statistics still good relative to the U.S. – The recently released survey by the Mortgage Bankers Association shows that Alaska continues to have some of the lowest levels of foreclosures and delinquencies on residential mortgage loans in the United States. Through the third quarter of 2014, Alaska ranked 5th and 7th best in the nation out of 50 states in foreclosures and delinquencies of all loan types.
The total inventory of foreclosures in process is 0.9% in Alaska, while the country has a much larger lingering foreclosure inventory at 2.4% due to higher rates during the recession and longer resolution times. These rates are an improvement from four years ago when Alaska’s rate was 1.4% and the U.S. foreclosure rate was 4.6%.
Delinquent loans are more than 30 days past due, but not yet in foreclosure. Alaska is fifth best behind North Dakota, South Dakota, Montana and Hawaii in the overall level of delinquent loans. Alaska’s delinquency rate is 3.6%, while the U.S. average is 6% for all loan types. This is an improvement for Alaska from 4.8% four years ago. The U.S. delinquency rate has also come down more dramatically from 9.4% at this time four years ago.
Subprime lending to traditionally non-qualified borrowers was a large contributing factor to the national mortgage problems. The survey covers 95,176 mortgages in Alaska. 6,110 or 6% were considered subprime, compared to 9% nationally. The rate of delinquencies and foreclosures on subprime loans is significantly higher. However, Alaska is in a far better position and again leads the nation as having the lowest level of foreclosures and is second in delinquencies for this important category. Subprime foreclosures in Alaska are at 2% while the national average is 9.8%. Alaska’s subprime delinquency rate is 9.4% compared to the national average of 19.3%.
Building permits up 430 units in 2014, but still historically low - According to the U.S. Census Bureau, the number of building permits for new, privately owned housing of 1 to 5 unit buildings remained low for the 8th straight year. It had been under 1,000 units since 2007, but in 2013 it grew 9% to 1,081. Last year saw a dramatic jump up to 1,509. However, this is still half the level seen 10 years ago.
Growth in single family homes increased from 877 to 1,114 last year. The number of duplexes permitted fell from 66 to 50. The number of structures with three or four living units decreased slightly from 49 to 45.
The other major growth area beyond single family homes was in multi-family. The number of structures with five or more units climbed from 10 in 2013 to 33 in 2014. In terms of housing units that meant a growth from 87 to 300 last year. The biggest challenge has been making new construction affordable enough to meet buyer’s income levels. There is a shortage of low cost housing in Anchorage. Vacancy factors are very low and the number of existing homes under $350,000 is in short supply. It appears builders have started to take more risk in this market segment, likely aided to some extent by government subsidy programs. Anchorage is expected to follow other growing cities by becoming denser, building vertical and redeveloping older properties.
We want to work with our new Governor to progress this great State forward, especially knowing
The two legislators above created the Alaska Gasline Development Corporation (AGDC) concept as an insurance policy for transporting Alaska North Slope (ANS) gas to citizens and to an export facility.
The current governor - who opposed the AGDC/ASAP gasline concept before he supported it .... more coming....
...en route from South America to a stop in Mexico City, then two days in LA, then home to Anchorage.
We apologize if the posts are a little more infrequent than usual.
the difficult times before us. We respect that he is our Governor, duly elected by Alaskans, and we appreciate the respectful acknowledgement that we, too, are representatives duly elected by Alaskans. We all have Alaskans’ best interests at heart, and want a future of prosperity and opportunity in our State.
While we believe we share many of the same goals and values as the Governor, we differ as to the approach to natural gas development that will deliver the greatest benefits to Alaskans.
Let us be very clear about what we want: We want to commercialize natural gas for the highest value possible, for the Permanent Fund and for the Treasury, so that every Alaskan may share in the wealth of our resources. We want affordable natural gas to flow to our communities that still suffer under the fluctuating prices of fuel oil. And we want a project that includes the necessary elements — including participation of the North Slope producers and the State — for real success, as soon as responsible project engineering and -permitting allows.
The Legislature found that project with the Alaska LNG Project, in which the state is a 25 percent owner.
But we also preserved our ability to pursue a different project, if the Alaska LNG Project does not progress into the next development stage. We have that in the 36-inch line that the Alaska Gasline Development Corporation has developed. It is in prime position to alter if necessary — and if the Alaska LNG Project does not prove viable, we’ll know what adaptations we must make in order to offer a viable project. To increase its size now, to an arbitrary, unsupported volume, is not a prudent use of funds. That does not provide us a viable alternative should Alaska LNG not progress.
The Governor has indicated he sees success in a different framework. Unfortunately, to date, neither he nor his administration have shared those details with us and with the Alaska public. He submitted a letter to the Senate Resources Committee on Friday with some explanations for his alternative approach, and we appreciate that. But Alaskans need to know details. What about the LNG component — who owns that? And the pipeline — is the state to shoulder 100 percent of the risk and cost? Who will ship gas, if one or more of the producers remain engaged in Alaska LNG? If all 3 producers are not partners, how will the state determine its gas share — and is it enough to support our level of equity ownership? We want to better understand the terms and structure of his proposal in order to conduct the rigorous vetting and analysis that will allow us to make an informed, responsible decision on a forward course.
The government process is about thorough, open review of ideas, in the form of legislation, that leads to policies. We hold hearings; explore details; call for experts to analyze and model impacts; vet each and every aspect; hear from the public; undertake legal review; and, finally, debate on whether a policy should be adopted.
It is how Alaskans came to be owners of the Alaska LNG Project; through a deliberate, well-investigated decision.
Certainly, we would have preferred not to have introduced legislation — House Bill 132 — to temporarily restrict an alternative, conflicting approach and to keep Alaska LNG on track. However, we were compelled to, out of grave concern that the Administration’s approach would threaten the viability of the tremendous opportunity before Alaska in the Alaska LNG Project. A project that is on time, on budget, and on track to success. And unfortunately, the few details offered by the Governor’s letter reaffirm that it is more imperative than ever to pass HB 132, as his approach clearly creates a competing alternative that threatens the state’s investment in and the success of Alaska LNG.
The details of any project are crucial. At stake are the value of our royalty gas, which feeds the Permanent Fund; our state share in production, property and income taxes that support the treasury; the availability and cost of gas for Alaskans; and future North Slope resource development. Variations on the SB 138 framework can have significant consequences. These details were not part of the Governor’s letter — and we must have these details in order to make a deliberative decision on natural gas policy, and the responsible fiscal choices our constituents demand.
We want to work together on a path forward that is responsible, allows for public understanding and input, and does not recklessly waste state money pursuing options that lack a proven, commercial foundation. Competing with ourselves, while confusing our partners and the markets, is not in our best interests.
Speaker of the House Mike Chenault represents Niksiki and Rep. Mike Hawker represents Anchorage in the Alaska House of Representatives.
Hearst Newspapers by Jennifer Dlouhy.
The United States should move swiftly to harness the tremendous oil and gas reserves locked under its Arctic waters while the industry improves the equipment used to drill wells and sop up spills, according to a government advisory committee report released Friday.
The analysis, conducted by the National Petroleum Council at the request of Energy Secretary Ernest Moniz, makes the case for the United States to aggressively develop Arctic oil and gas that can help supply the country with energy long after production tails off from onshore fields. More....
Lately, the Alaska Legislature has been talking a lot about the gas pipeline. Under Gov. Sean Parnell, Alaska signed a deal with Big Oil that would build one from the North Slope down to the Kenai Peninsula. By all accounts, that pipeline’s looking like the best way to keep Alaska from going broke in the middle term.
Of course, we’ve thought the same thing before. We thought it about the El Paso proposal, the Foothills Gas Pipeline, the Yukon Pacific Corp. pipeline, the Alaska Gasline Inducement Act and the Denali Gas pipeline. We’ve thought it about bullet lines and small-diameter lines.
The AK LNG — Alaska Liquified Natural Gas — pipeline might yet turn out to be another broken dream. If that happens, the state will be in true financial trouble.
With so much at stake, doesn’t it make sense to have a spare tire?
Walker and legislators can't bridge their divide over Alaska natural gas pipeline
“No one's going to take care of Alaska better than Alaska, and we just have to ... It bars the state's Alaska Gasline Development Corp., or AGDC, from ...
Commentary: Yesterday, the Senate Resources Committee's Chairman, Cathy Giessel (NGP Photo) scheduled testimony on HB 132 clarifying the mission of the state-owned Alaska Gasline Development Corporation.
ON THE FEDERAL SIDE:
ADN Commentary by Randall Luhi (NGP Photo). We need to take our country and economy to the next level in terms of energy security. The only way to do this is to safely and responsibly explore our own offshore energy resources, particularly off Alaska.
SHELL DECISION CLOSE!
ADN by Jennifer Dlouhy. The Obama administration is set to announce within days whether it will reaffirm a seven-year-old government auction of oil leases in the Chukchi Sea — a decision critical to Shell's plans to resume drilling in those Arctic waters this summer.
As our readers know, Governor Bill Walker once opposed AGDC's sponsorship of the medium diameter so-called ASAP gas line from Prudhoe Bay, past gas-hungry Fairbanks to South Central Alaska.
Walker now proposes that AGDC's project be expanded in some as yet undefined way to accommodate high gas volumes.
This would put AGDC's ASAP project in direct competition with its partnership position in support of the Ak-LNG project.
We'll provide a more complete report later; meanwhile, here is a link to the actual video archive of that hearing. -dh
Today's American Energy Alliance links:
Special deals for Tesla:
The Wall Street Journal (3/25/15) editorializes: “California has tried to solve this problem for Tesla with its zero-emissions vehicle mandates, which have other makers buying ZEV credits from Tesla. But the sheer idiocy of these subsidies is a continual risk to Tesla. A ZEV car in California is one with zero emissions at the tailpipe, no matter how much environmental degradation it causes upstream. Toyota, for one, has recently switched its attention to hydrogen-fueled cars, which emit only water and warm air at the tailpipe, never mind that 95% of the world’s hydrogen is manufactured from fossil fuels. Policies that are so transparently stupid and perverse, like the policy of subsidizing rich people with $7,500 tax credits to indulge themselves with Tesla’s products, would not seem a sound basis for a scale auto manufacturer, which Tesla aspires to become.”
Bright Bulb Award:
"Rather than issuing standards and rules to which new wells must conform, the BLM instead has invested itself with the power to either sign off on or block each individual well, operating on a case-by-case basis. (Based on what statutory authority? Are we still even asking that question?) Which is to say, satisfying the letter of the law will not be enough — BLM bureaucrats still will have the final say, employing whatever whimsical standards leap into their perverse little minds. This is a recipe for outright corruption..."
The RFS has a fever. And the only cure is full repeal.
The Wall Street Journal (3/25/15) editorializes: "At the Iowa Agriculture Summit earlier this month, most of the prospective Republican presidential candidates embraced the renewable-fuel standard, one of the worst examples of corporate welfare in America. This federal mandate props up the U.S. ethanol industry by forcing refiners to blend biofuels into gasoline. Despite the fact that it is an obvious business handout, White House hopefuls rarely attack the standard, lest they harm their chances of winning the Iowa caucuses."
Handouts breed corruption, as the Oregon DOJ is about to discover.
The Oregonian (3/24/15) reports: “The Oregon Department of Justice has opened criminal and civil investigations into the award of $11.8 million in state tax credits for a series of solar arrays installed at Oregon State University and the Oregon Institute of Technology. The agency acted after The Oregonian/OregonLive reported earlier this month that developers of the arrays missed deadlines to qualify for subsidies under the state's business energy tax credit. The news organization's investigation found that backers submitted phony and misleading documents to the state to demonstrate construction was underway by the deadline - documents that officials at the Oregon Department of Energy failed to check.”
Does the hypocrisy of it all even remotely cross his mind?
The Washington Free Beacon (3/25/15) reports: “Leftist actor Mark Ruffalo, best known for his supporting role in 13 Going on 30, has not let his crusade against fossil fuels get in the way of his mass consumption of them…Though Ruffalo has committed himself to divesting from fossil fuels, he is far from committed to reducing his own fossil fuel use. Ruffalo is currently offering to fly (presumably on a fossil fuel-burning jet) the winners of a raffle he is running to the world premiere of Avengers: Age of Ultron...The winners of Ruffalo’s raffles will be burning just a fraction of the fossil fuels burned during the filming of the latest Avengers movie, which was filmed at 23 locations across the globe. He and the rest of the Avengers filmed in locations ranging from England to South Korea to Bangladesh to South Africa to Italy.”
Let's not kid ourselves: The PTC isn't about developing new technology. It's about lining AWEA's pockets.
The Daily Caller (3/25/15) reports: “Sen. Lamar Alexander has a proposal for Democrats: End subsidies to wind power producers and use that money to double funding for federal energy research at the Department of Energy. “Washington has a bad habit of picking winners and losers, and an addiction to wasteful subsidies of all kinds – we need to end these policies,” the Tennessee Republican said during a hearing on DOE’s 2016 budget request Wednesday. For years, many Republican lawmakers have been looking to end the Wind Production Tax Credit (wind PTC) which has been extended nine times since 1992. The wind PTC pays wind farm operators for the first 10 years of electricity produced. The wind lobby has fought hard to reinstate the subsidy after it expired at the end of last year.”
Ever the good little lemmings, Marylanders are following New York's lead. Over a cliff.
The Baltimore Sun (3/24/15) reports: “Both chambers of the Maryland General Assembly separately passed measures Tuesday that mark the most aggressive action the legislature has taken to curb natural gas extraction in the state. The Maryland House of Delegates passed a three-year ban on fracking and the Senate approved tough new legal standards for drillers. Each bill must still clear the other chamber, but the actions signaled the legislature was willing to go further than it has before to limit natural gas drilling.”
Do you have something to hide, Gina?
The Washington Examiner (3/25/15) reports: “A House committee Wednesdaysubpoenaed Environmental Protection Agency Administrator Gina McCarthy for her cell phone billing records and emails. The subpoena by the Committee on Science, Space and Technology was issued at 1 p.m. Wednesday and seeks the records after the agency failed on at least 10 prior requests from the panel for documents on whether an estimated 5,000 text messages were improperly deleted from McCarthy's device.”
Why the hell is the government giving Alcoa a $259 million loan?
Bloomberg (3/26/15) reports: “ A $25 billion U.S. Energy Department loan program that funded flops like Fisker Automotive Inc. and successes such as Tesla Motors Inc. resumed lending after a four-year hiatus to retool the lending project’s focus. Alcoa Inc. has been approved for a $259 million loan from the Advanced Technology Vehicles Manufacturing program to upgrade a factory making high-strength aluminum that can improve automobile gas mileage.”
At least the Japanese are putting that money to some good use.
The Associated Press (3/26/15) reports: “Despite mounting protests, Japan continues to finance the building of coal-fired power plants with money earmarked for fighting climate change, with two new projects underway in India and Bangladesh, The Associated Press has found. The AP reported in December that Japan had counted $1 billion in loans for coal plants in Indonesia as climate finance, angering critics who say such financing should be going to clean energy like solar and wind power. Japanese officials now say they are also counting $630 million in loans for coal plants in Kudgi, India, and Matarbari, Bangladesh, as climate finance.”
AJOC by Tim Bradner.
Despite Gov. Bill Walker’s threat of a veto, House leaders are pushing ahead with a bill that would put sideboards on the governor’s plan to expand a state-led backup gas pipeline into a large project that could be seen as a competitor to the Alaska LNG Project, the industry-led gas project in which the state is also a 25 percent owner. ...In a related development, Alaska Gasline Development Corp. Public Affairs Manager Miles Baker said the U.S. Army Corps of Engineers informed AGDC on March 2 that it was pausing work on a revised supplemental environmental impact statement on the state’s backup Alaska Stand-Alone Pipeline, or ASAP, until the governor’s intentions for the project are more clear. More...