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      This is your public service 1-stop-shop for Alaskan and Canadian Arctic energy commentary, news, history, projects and people. We update it daily for you. It is the most timely and complete northern energy archive anywhere — used by media, academia, government and industry officials throughout the world. Northern Gas Pipelines may be the oldest Alaska blog; we invite readers to name others existing before 2001.  -dh

 

Alaska Taxes

2-8-16 We prefer good news but cannot ignore reality....

08 February 2016 5:52am

Alaskans Have Not Found Common Ground With Industry In the Midst of Fiscal Crisis -- But Canadians Are Getting There

We prefer good news but cannot ignore reality....  Below is a comment from a longtime Kenai Peninsula, Alaska reader.  It refers to our commentary last Friday.  Perhaps a good way to start the week, absent wonderful news, is to consider what steps must be taken to create good news.  After all, isn't the first step in a 12 step recovery program simply to admit fault?  -dh


From our Mid-Atlantic energy analyst friend:

As we mentioned recently, our information from sources has underscored an apparent concern on the part of the Fed regarding capitalization levels of the nation’s banks. It is perhaps self-serving to the Fed (at least to a cynic such as this writer) that it keeps pushing the notion that interest rates could rise perhaps four more times this year. Such moves, if implemented successfully, could serve to raise the earnings potential of the banks and provide an opportunity for increased capital levels through operations. However, a quick glance at the 10-year bond yield (1.85%, lower than a year ago), gold (up 10.7% since the December rate rise), the 4Q GDP (0.7%), and the trend of job numbers indicates there is not a snowball’s chance in hell of the economy supporting a series of interest rate increases as of now.

 

Thus, the current economic morass in the Oil Patch presents the overseers of the banking system with a growing major problem. While not talking much about it publicly, there are solid drum beats coming out of the brush that the regulators (the Fed and the OCC) are very focused on the growing debt problems being created by the E&Ps and market participants related to them. This is no small dilemma: theoverseers do not want act is such a way that elevates public concern, but they are being pushed hard to DO SOMETHING. As noted in the third article below about the actions being taken by the credit agency Moody’s (and others), they also are focused on the credit situation of Energy companies; our conversations with those who have interfaced with the ratings agencies would indicate the raters are getting external pressure, likely including from the Fed.

From a reader email received this morning:

Referencing 2nd of Your paragraphs:    We see no such cooperative efforts on behalf of the Alaska and U.S. Federal administrations.  We see hostility, demonizing, lack of due process, land access restrictions, constricting regulations and higher energy tax rhetoric.  

In a low price environment like this, we can only observe today that history will show such acts -- West and South of Canada's border -- to be either, "intentionally anti-development or downright unintelligent".

Dear Dave –  Went to lunch after church and thought I’d check my emails when I saw your Friday report and  I was especially SAD to read the 2 paragraphs at the beginning of our email.    I REALLY  hope it changes because I NEVER LIKE HOSTILITY AND RESTRICTIONS that are imposed by our government when our businesses are trying so hard to succeed. 

And it is quite inspirational that you shared that we actually received this offer =è=è that politically liberal Canadian Provincial and Federal governments are extending olive branches to oil industry executives.  They are asking, "What can we do to help you be successful in a low price environment?"  

I will keep the Northern Gas Pipelines and its STAFF and LEADERS - -  in our daily prayers.  I will ALSO pray that our Alaska and U.S. Federal Administrations become COOPERATIVE AND SUPPORTIVE.  OH MY GOSH. . . YOU ALL TAKE CARE!  I will be printing this for my husband to read. . . I know he’s going to wonder what is going on with our government!  We look forward to hearing GOOD NEWS!


CBC, by Andrea Ross. Canadian Government and Industry Are Reaching Common Ground On Pipeline Policy....

Alberta energy companies and the NDP government don't always see eye to eye, but they seem to agree on one thing - the province needs more pipelines to carry its most valuable commodity to global markets.

A consistent problem facing the industry is that most of Alberta's oil — around two and a half million barrels per day — is sold to U.S. customers at prices well below that of global crude oil, resulting in billions of dollars in lost revenues every year, according to Natural Resources Canada.

In September, Premier Rachel Notley told an audience at an Alberta Urban Municipalities Association convention that she wants at least one new "drama-free" pipeline built to carry Alberta's oil to world markets.

Her comments came after premiers signed a Canadian Energy Strategy in July, with the intended goal, at least in part, to help energy producers reach wider markets.

Categories:

2-5-16 Can Alaska And Washington Learn From Alberta and Ottawa?

05 February 2016 7:36am

Can Alaska And Washington Learn From Alberta and Ottawa?

Yes.  But Are They Likely To Learn.  No.

1.  Calgary Herald by James Wood.  As Prime Minister Trudeau and Premier Notley hosted a roundtable meeting (Video) in his first visit to Calgary since becoming prime minister, he told a group of top energy executives the government wanted to hear ways Ottawa “can be a better partner in helping you through this difficult time.”

2.  Alaska Headlamp.  ... Rep. Mike Hawker, asked why Governor Bill Walker wants the Legislature to completely reverse its tax credit policy. A Senate working group convened last year by Sen. Cathy Giessel, recommended careful adjustments to protect advancing projects.  Headlamp agrees with Sen. Giessel—protecting ongoing projects should be a principal goal of any tax plan the Governor puts forward this session. Pulling the rug out from....


3.  Politico by Michael Grunwald.  ...the president will propose more than $300 billion worth of investments over the next decade in mass transit, high-speed rail, self-driving cars, and other transportation approaches.... To pay for it all, Obama will call for a $10 “fee” on every barrel of oil, a surcharge ... paid by oil companies but ... presumably ... passed along to consumers.

In the sidebar (1.), readers will first note that Canadian provincial and federal leaders are asking the oil industry how the two interests can cooperate in the current low-price environment.

Farther down (2.), readers will appreciate Alaska Headlamp's viewpoint; Alaska officials who have created a more oil-dependent government than Alberta are less inclined to support the rejuvenation of that economic engine.

At the bottom of the sidebar (3.), we note that the U.S. federal administration continues its harsh and hostile attack on America's principal, bedrock creator of wealth.

The Canadian politicians, though liberal and heavily biased in favor of 'climate change energy policies', seem at least to realize that without fossil fuel wealth producers, the entire Canadian economic infrastructure is threatened.

Alaska's governor, in contrast, has shown a propensity to attack and dictate to the oil industry -- even in a low oil price environment -- rather than reaching out to identify areas of cooperation.

And the U.S. president's whole term of office has been identified with blocking access to energy exploration, over regulating energy and natural resource wealth production in general and disapproving the massive, multi-billion dollar job producing Keystone XL Pipeline.  And now, as if that assault were not sufficient economic assault to totally kill the traditional energy industry -- the president proposes a $10/barrel oil tax increase, thus increasing the current per barrel cost by a third -- a new, de facto fuel tax on consumers that will actually make American crude oil less competitive on the world market.

We don't know whether Canadian provincial and federal outreach efforts will produce workable policies going forward for the oil and gas industry. But we and Canada's oil and gas producers are hopeful.

On the U.S. side, we are less hopeful.  With the type and intensity of opposition and hostility aimed at America's oil and gas industry, the current Alaska and Washington leadership legacies can only be characterized by historians as "intentionally anti-development or downright unintelligent".

Kudos, Canada!  

Wake up, U.S.!

 

Categories:

2-3-16 "Should Alaska 'Control' Natural Resources?"

03 February 2016 5:54am

Why Shouldn't The State Take Control of Oil & Gas and Other Natural Resources?

U.S. News & World Report: Alaska's Oil Taxes

Alaska Governor, Bill Walker, Means of production, oil and gas, alaska lng, Photo by Dave HarbourWe're not saying Alaskan politicians are beginning to control everything.  However, controlling oil and gas is a big step toward socialism and controlling a gas export project (and a municipal distribution project) are decisive first steps in that direction.  Alaska became great because of a free market, not because of dictator-governors who wanted to, "fundamentally change Alaska's freedoms".   dh     (Photo: Alaska Governor Bill Walker)


Today's Commentary:  "This is big"

David Gottstein, ACES, Alaska oil taxes, AKLNGas, Alaska LNG, Photo by Dave HarbourBelow is part of an email blast from a Matanuska Valley business woman named Beth Fread.  She has arranged for one of Alaska's most effective, liberal activists, David Gottstein (NGP Photo) to make a presentation on his ideas for forwarding the marketing of Alaska North Slope Natural Gas. 

We encourage readers to attend the Friday meeting.  

Why?  Because we believe Gottstein has long been involved in oil and gas taxation issues and that his ideas are not inconsistent with the direction Governor Bill Walker is taking toward controlling the means, transport and distribution of natural resource production in Alaska, beginning with natural gas.

Understanding Gottstein's position, therefore, will enable listeners to more carefully define their own reasonable reactions to it.

Knowledge is power.

Here are links to two documents that Ms. Freid mentions in her meeting invitation: ​

Below is information on Ms. Freid's meeting:

"Mr. David Gottstein has a different opinion and an alternate set of research criteria for the LNG pipeline than has been put forth in the other news sources I am using.  He has offered to come out here this Friday for a presentation of this information.  Some of it is based on the attached documents.  Please be warned, this perspective may rock your boat!

"The presentation will be made in the back room at Mat-Su Family Restaurant.  No-Host dinner at 6:00 pm, meeting at 6:30 pm.

Looking forward to seeing you there ...

bethf ;-)

Beth Fread

907.354.7759

Beth@BethsValleyViews.com"

Our Opinion: "How the Ak-LNG project and Alaska's fiscal crisis are related"

As we direct readers' eyes to the right column commentary, we restate our opinion: Spending a moderate amount of public official time and public debate on supporting private sector efforts to monetize Alaska gas is prudent.  

Spending inordinate amounts of time, as Alaska's governor is, attempting to control resource development in Alaska is a fool's errand to deliver the state into socialism and chaos.  

Exacerbating the foolishness of current "I want government to control the gas pipeline since, 'IT'S OUR GAS'", is the continuous negative meddling of the governor causing project delay.  

Since any LNG export project cannot provide significant economic support to the state before 2025, the state's deficit spending culture will be defunct before a gas project can even partially resuscitate it.  Although, we note, the state probably can deficit spend long enough to complete the current governor's term and the pension sensitive terms of all current Legislators. 

The citizens most adversely affected by current "government should own and control the gas pipeline," are rural residents, mostly Alaska Natives, who will find it harder to 'go South' as the economy heads South.  

Also, everyone knows that rural residents' somewhat idyllic "subsistence lifestyles" are heavily subsidized by government provided checks, food stamps, health care (including air transport to Anchorage Native health facilities), roads, airports, education, ports and fuel subsidies.  

Those beneficiaries could likely learn the hard way that poor financial policy decisions being concocted in Juneau today -- particularly the many poor decisions affecting the petroleum wealth feeding Alaska's economy -- will hurt rural residents more than those in the state's largest cities.  

And this relates to Alaska's fiscal crisis.

Some politicians seem to be trying to mesmerize citizens with shiny objects like 'controlling' 10-year-away, distant gas pipelines.  When citizens are distracted by a far away project, it is easier for them to ignore such critical, here-and-now issues as solving Alaska's huge fiscal crisis.

Alaska's fiscal crisis can only be solved by creating a 'sustainable economy'.  A sustainable economy in a remote, climate and geographically-challenged state like Alaska, can only be achieved by constantly supporting oil and gas, mining, commercial fishing, timber and other natural resource, wealth producing industries...and, by controlling public spending.

To solve the fiscal crisis: the best things Alaska's rural and urban residents can do for themselves and their families RIGHT NOW -- but perhaps not the best thing for politicians -- is to:

  • Dramatically cut government spending, especially the doubling of costs added in the last decade, and
  • U.S. News by Pete Sepp.  Punitive taxes on the oil industry will not fix Alaska's budget problems, but will hurt its economy....

    not taxing the wealth producing natural resource industries -- including oil -- any more than they are paying now, and

  • supporting, not interfering, with efforts of private industry to invest in oil and gas (i.e. especially gas pipeline) and mining and fishing and timber activities in the state, and
  • not demonizing the very natural resource industries that the constitution and statehood act depended on to sustain Alaska's economy, and
  • only considering additional, job killing taxes and fees when the above actions have been taken.

-dh

Categories:

1-29-16 Climate Change Politics Vs. Energy and Prosperity

29 January 2016 9:07am

CLIMATE CHANGE NARRATIVE EXPOSED
(Note to today's email alert readers.  A good friend wrote, "Why are you 'happy' to report on these stupid events?"  We said we were being facetious but glad it inspired him to write us!  :-)  -dh)
 

ALERT-ALERT-ALERT

In addition to energy-threatening national policies (Column left), citizens must always be alert to dangerous political acts that repel local investment, job creation and overall prosperity.  We would be happy to quote any political party revealing such poor energy leadership.  Today we thank one party and two news organizations for shedding light on such poor leadership that Alaskan industry investment could be, in our opinion, discouraged for years to come.  -dh

Commentary: As the week ends, we bring our readers many of the latest links dealing with climate change activism and the threat it is to natural resource development and prosperity of energy producing nations, states and provinces.  Climate change strategies have resulted in disapproval of 1) the Keystone XL pipeline, and 2) the delay or death of Shell's Alaska exploration program, and 3) blockades of a number of Canadian pipeline and energy programs, and 4) attempts to kill the consumer friendly, North American "clean coal" industry, and 5) even a 'keep it in the ground' natural gas strategy--among many others.  

Video Introduction

See our evidence and follow the money and power: is Climate Change a strategy designed to kill capitalism?  -dh


Updated Links and Commentary: ​

Tip Of the Iceberg: The Climate Change Cabal Links

More 'killing capitalism' cabal links


COMMENTARY

Some say there is "scientific consensus" that 1) climate change is harmful, and 2) man made, and 3) that hundreds of billions of dollars transferred from developed to undeveloped countries via United Nations facilitators will improve climate change metrics.  If 'scientific consensus' exists, how could the impressive list of scientists below, and many others, demonstrate how the Climate Change narrative is a hoax?  Doesn't the five step scientific method suggest that a reasonably challenged hypothesis should be reexamined?                  -dh 

Washington D.C. and Ottawa administrations are drinking climate change Kool-aid.  Based on that philosophy they govern, legislate and regulate in ways that impoverish the lifestyles of their citizens and endanger the security of their countries while redistributing domestic wealth and power to foreigners.
 
Indeed, the Enviro-Industrial-Governmental Cabal has even recruited a number of oil companies into its devious plot to redistribute income and power at the expense of energy companies and their consumers. 
 
All we ask is that Northern Gas Pipelines' cadre of critical thinkers review these links and increase their specific knowledge of an ideology that cannot "save the earth", but which can certainly kill capitalism, freedom and their cherished culture.                -dh
 

Video Introduction:
Professor Ian Plimer, author of one of the most comprehensive books on climate change, addresses  the global-warming/climate-change narrative in this 15-minute video (Upper right column).
 
The video enables viewers to judge the validity of the climate-change, alarmist message simply by applying some common sense, critical thinking.
 
Professor Plimer gives us the reason why we must denounce projects to capture and store carbon dioxide (“CO2”) and projects conducted in an attempt to accelerate the natural sequestration of CO2.
 
Recognizing CO2's role in greening the planet, it would be reasonable to conclude that such projects could conceivably give mankind the power to transform the planet into a desert.
 
Furthermore, the history of the planet's decreasing store of CO2 clearly reveals the absurdity of the belief that we can stabilize the planet's ever-changing climate by restricting our emissions of CO2.
 
 
 
 

 

The Scientific Method

If 'scientific consensus' about 'Climate Change' exists, why do the scientists below, and many others, believe it to be a hoax?  Put another way, is the claim of 'consensus' in and of itself a hoax?  

Conspiring leftists would say, "You're overreacting.  You are paranoid.  The individuals below are wing nuts."  

Think.  

If Leftists, to win an argument, must call names or demonize, are they really representing a scientific perspective, the SCIENTIFIC METHOD.   No.  As Professor Plimer, suggests in the video above, scientific methodology is not much enhanced by the rather subject concept of "consensus".  

We would add a lay opinion that the science we respect is about research, study, duplication of results, testing of hypotheses, peer review, open minded willingness to explore other, more promising hypotheses.   A seeker of truth, must be prepared for a hypothesis to be found illogical, incorrect.  Anyone who refuses to reconsider reasonably questioned hypotheses, resembles a sophist more than a truth seeking scientist; don't you think?    -dh


Categories:

1-26-16 Alaska's Fiscal Crisis Takes Center Stage, Spotlights Blazing, Audience Cheers and Jeers!

26 January 2016 12:42pm

Alaska's Fiscal Crisis Takes Center Stage

See Alaska Headlamp today for more on government spending....

Juneau Empire by James Brooks.  John Tichotsky, chief economist for the Tax Division of the Alaska Department of Revenue, told legislators that global oil production outpaced demand by almost 2 million barrels per day in 2015....

by

Dave Harbour

​(Note to readers: Please help us assure the accuracy of these archives.  Let us know of any factual additions/corrections needed in any of our news or editorial material and we will initiate immediate changes!)

The Prince, Romeo and Juliet, Center Stage, Dave HarbourYes, we know what center stage is.  For an actor, it is the coveted place of maximum visibility.  It is the forefront, the center of the audience's attention.  

We can approach a real stage in a theater--like the character in the photo.  Or, we can appear in virtual center stages of life: on a basket ball court, in a pulpit, before a political body or in our daily jobs and personal lives.

Today, we think of the virtual stage upon which our political decision makers now begin the 2016 legislative performance.  We particularly focus on the fiscal challenge they face.  Like theater critics, the voting audience analyzes how they have acted and how they are now performing in the bright spotlight of Alaska's center stage.

Yogi Berra"It's tough to make predictions, especially about the future."  From our Aussie Blogger Friend....


CBC.  Montreal Mayor Denis Coderre dialed back the rhetoric on the Energy East pipeline project Tuesday, coming out of a meeting with Prime Minister Justin Trudeau.​

Harbour's Sidebar:

Was it Albert Einstein who defined insanity as 

"doing the same thing over and over again and expecting different results?"
 
Please review our 49North "Fiscal Crisis" column written in 2002; believe me, it is well worth reviewing now!  Here are a few quotes:
  • Over ten years ago, business and academic leaders repeatedly warned the state government that Prudhoe Bay's expected production decline would produce a financial crisis by now.  
  • Warnings were ignored, spending skipped on uninterrupted and prediction has become reality.
  • The state, about 80 percent dependent on oil and gas revenue, has half the oil production it did in the 1970s.  It is spending about $1 billion / year more than it takes in and its savings accounts to fund the shortfalls will be depleted in two years. 
  • The size and cost of ...state government have grown steadily with few cuts.
  • Citizens unfamiliar with economic reality have pressured their elected leaders into exacerbating oil dependency ...  
  • The list of state-funded largess is lengthy....
Observation.  Many of our readers care about common sense and history, and wisdom.  Many of our fellow citizens might wish to apply historical lessons to Alaska's circumstances.  For those who do, examples are both well known and numerous.  
 
We think that philosopher George Santayana was the first to observe that those who ignore history are condemned to repeat it, but other great leaders have used variations of the term again and again.  
 
Alaska's leaders -- decade after decade -- have ignored their own state history as, year-by-year, the state economy becomes less sustainable.  
 
In recent years, knowing what lies ahead, Alaskan citizens have continued to move, lemming-like, toward a fiscal cliff that the Institute of Social and Economic Research has clearly described for two decades.
 
More recently, the late, great Yogi Berra might agree with Einstein's definition of insanity and suggest Alaska must live in a world of, Déjà vu all over again."
 
But we do sympathize with leaders.  It is hard to be diplomatic, great, and independent thinking, and analytical and persuasive and wise and popular all at once -- especially when one has to choose between reelection and, in this case, creating a sustainable budget that involves many kinds of sacrifice.
 
Yes, we empathize with the Governor and Legislators.  But with that courtesy out of the way, we expect action that produces a sustainable economy, "sooner".
 
For "later," only means kicking the can further down a more unsustainable path. Another delay, another repetition of history, can only exacerbate the inevitable result of inaction: bankruptcy of the State of Alaska and a return to wardship of the federal government.  
 
We hope that this sobering thought is sufficient to provide motivation as has never before been seen among Alaska's decision makers.
 
Alaska's fiscal crisis is that critical, isn't it?
 
-dh

Late last year, Alaskan leaders gathered in the spotlight of a legislative special session.

With best intentions, they fiddled with spending money they don't really have on equity (i.e. risk) ownership of an unproven gas pipeline/LNG concept that could not come to their financial rescue for ten years, if then.  

For the past three years, they fiddled with the idea of using precious, public funds to bring expensive North Slope or Cook Inlet gas/LNG to Fairbanks when consumer interest in converting from fuel oil in our current low oil-cost environment, is low.  (i.e. the Interior Energy Project, IEP)

Meanwhile, center stage, the fiscal future of the state is in flames while political actors fiddle back stage with issues that are virtually unimportant compared to the conflagration poised to consume them and their constituents: an unsustainable state budget.

The truth hurts us all, but recognizing truth is the first step toward recovery and future success.  The truth is that Alaskans have done a poor job of converting the incredible wealth allotted to them by virtue of their geographical location--into sustainable prosperity.

Imagine this situation.  

Say it is 1977.  The 800 mile Trans Alaska Pipeline System has just begun transporting Alaska's black gold to market.  The state operating budget, compared to today's nearly $5 billion, is about $350 million. (Fiscal Crisis References Here

You are in charge of managing Alaska's projected wealth calculated to be in the scores if not hundreds of billions of dollars.

Some are calling for restraint because, after all, force majure, the end or beginning of an oil embargo and a thousand other factors could affect that single, monopolizing, undiversified income stream of life-sustaining oil.  

Others are crying for you to "Spend it while we have it" (Note).

What are you going to do?

You poll your constituents:

Question One: Check One Option.

  • __"Should we continue to operate a moderate government to serve our existing citizens, and save the overwhelming majority of income for later ... and reasonably tax industry solely for the reasonable needs of the state?"
  • "Or, __ should we continue to raise taxes until Big Oil cries "Uncle!", and spend it while we've got it?"

Question Two: Check One Option.

  • __ "Should we create a modest budget designed to primarily benefit Alaska's current citizens and their offspring -- that generally increases no faster than population and inflation?"
  • Or, ___ "Should we continue to raise industry taxes and spend as much as possible on grants, infrastructure, education, subsidies and programs that also has the effect of attracting waves of new immigrants seeking the benefits of the wealth?"

Question Three: Check One Option

  • ___ "Should Alaska's operating budget (i.e. and municipal and education budgets), on a per capita basis, be generally in the median of per capita Lower 48 spending -- perhaps with an adjustment for higher Alaska transportation and wage costs?"
  • Or, ___ "Should Alaska develop its budget with more regard to funds available than with regard to the level of per capita spending?"

Question Four: Check One Option

  • Should Alaska have a competitive oil tax system -- not higher than the median oil and gas tax level paid in other oil producing states and democracies -- that remains generally constant with a bias toward providing increased tax revenue as our stable tax environment attracts more investment and production?"
  • Or, ___ "Should Alaska disregard its competitive position with respect to other oil producing states, neighboring provinces, other world democracies and investor interests and tax as much as we can to fund the needs solely as defined by annual gatherings of legislators?"

Question 5: Check All Preferred Options

  • ___ Forty Years from now, in 2017, Alaska should have ... the highest per capita state spending in the nation; and
  • ___ Alaska should have the highest per capita debt of all states; and
  • ___ Alaska should create the highest number of partly government supported non-profit organizations in the United States; and
  • ___ Alaska should have one of the highest oil and gas tax structures in the free world; and
  • ___ Alaska's oil tax history should have been highlighted with exorbitant tax hikes and even with retroactive taxation; and
  • ___ Alaska's PERS/TERS unfunded liability should be about 20 or 30 times more than our WHOLE 1977 budget; and
  • ___ We should be incurring a 2017 budget​ deficit ten times the size of our complete 1977 budget at a time when the Trans Alaska Pipeline System (TAPS) produces 85% of the operating budget, is 3/4 empty and oil prices are 3/4 lower than they were when the 2015-16 budget was created?
  • ___ We should continue funding state, municipal and education budgets -- with relatively minor cuts -- after virtually doubling them over the last decade. (i.e. because while everyone knows you can spend yourself into prosperity, you cannot possibly cut yourself into sustainability.)

Well, that is all water under the bridge, though it is useful to review past decision making.  

We can agree some degree of government operating and capital spending was undoubtedly good over the years.

But, if past decisions did not lead to good solutions, in general, they should not be repeated.  If past decisions resulted in economic strength and a sustainable way of life, perhaps those principles could be revisited.

Today, no one believes that the past tax and spend decisions have led to an overall favorable outlook, today.

If that be true, perhaps a different approach, different values, different decisions are in order.  (See definition of 'insanity', above, right column.)

If the actors at Alaska's center stage will in the current legislative session produce decisions leading to a sustainable economy, perhaps a grateful audience of constituents will rise in ovation, inviting the players to provide an encore.  

At least, Alaskans can work and pray toward such an outcome.

*     *     *

Epilogue

Let us state very clearly here and now: "Raising natural resource taxes will not help sustain Alaska's economy.  It may help to temporarily "balance" a failing budget for a year or two but, in fact, increasing industry costs will excite the decline of investment, further endangering economic sustainability."


 

Alaska's Fiscal Crisis References

Plan4Alaska

Alaska's Future

2002 fiscal crisis predictions 

Institute of Social and Economic Research

Alaska Citizen’s Guide to the Budget (ISER)

Commonwealth North

Alaska Common Ground

Institute of the North

Anchorage Economic Development Corporation

Fairbanks Chamber of Commerce

Our Alaska

Alaskanomics (Northrim Bank)

Three-Legged Stool (First National Bank of Alaska)

Alaska Oil and Gas Association

Alaska State Chamber of Commerce

Alaskans for a Sustainable Budget


 

Note: over the years, Alaskans developed a fairly provincial, myopic way of looking at world competition.  Instead of positioning themselves for a day in which production might be lower or the value of production lower, they instead argued for maximum industry taxation and a robust spending program.  During these years, it was sometimes difficult to distinguish liberal from conservative lawmakers.  Because there was so much taxation and so many dollars, it was hard for members of either party to say "no" to members of the other party.  Gridlock was avoided, basically, by unanimous agreement to spend every available dollar on a mind boggling array of programs and projects.  In order to justify the high level of industry taxation and spending over the years, advocates of these policies accrued public support by demonizing the oil industry and appealing to the greed of citizen beneficiaries of programs and projects.  Following are some of the rather silly, anti-investor slogans and themes we have observed over the last 4-5 Its our oildecades on the Alaska political stage:

"It's our oil!"

"Canada's Gas, My Ass"

"My Way Is The Highway"


 

Categories:

1-19-16 Alaska Legislative Session Begins Today Amid Financial Crisis

19 January 2016 10:53am

John Sturgeon, Alaska Patriot, timber, supreme court, land access, hovercraft, Photo by Dave HarbourJohn Sturgeon (NGP Photo), Alaska patriot, seeks justice from the Supreme Court of the United States.


CANADA!


See Additional Alaska Headlamp Coverage Of Some Items Below


Of course, the price of oil and gas directly affects our energy constituencies in Alaska and Western Canada.  Here, our anonymous mid Atlantic energy consultant comments on yesterday's WSJ story 


Anchorage Daily Planet/News Miner, by Max Buxton.  

Misc. Comment: A friend of the Legislature tells us this morning that, "We think the governor has released his oil tax credit cut plan quietly and privately...but, in any case it won't get read across until tomorrow when the legislature is in session."

John Sturgeon, US Supreme Court, Hovercraft, Alaska access, timber, natural resources, ANILCA, Photo by Dave HarbourNot neglecting our seven years of Federal Overreach commentary, we celebrate the tireless lifetime of John Sturgeon's effort to support sustainable natural resource development in Alaska, consistent with the state's compact with the federal government.  

Here is the latest in his saga to defend Alaska's access to lands within its borders.  

A moose-hunter and his hovercraft tell the Supreme Court Alaska is different.                            -dh

Today is the first of what is expected to be at the very least 90 days of legislative action focused almost singularly on improving Alaska’s financial situation.

It can be near-impossible to stay up-to-date on the many twists and turns of the Legislature — even in a normal session — but with taxes, fundamental changes to the Permanent Fund and cuts to state operations, it’ll be more important than ever.

With the Senate set to gavel in at 11 a.m. and the House set to gavel in at 1 p.m., here’s a guide to keeping up with Juneau.

Straight from the source

Short of booking a constituent ticket to Juneau to see it in person, one of the best ways to keep up with the session is to watch Gavel Alaska’s exhaustive video coverage of the session.   (Full story here....)


 

Here is commentary, by our anonymous, Mid Atlantic energy consultant friend on this WSJ article by Mark Mills: After the Carnage, Shale Will Rise Again

 

BIO: Mark P. Mills is CEO of the Digital Power Group, an energy-tech consultancy and capital advisory.  He is a Senior Fellow at the Manhattan Institute, and a Faculty Fellow at the McCormick School of Engineering and Applied Science at Northwestern University.  He is as well a member of the Advisory Board of the Notre Dame Reilly Center for Science, Technology and Values.  He was formerly the co-founder and chief tech strategist for Digital Power Capital, a boutique venture fund, where co-founded and served as Chairman and CTO of ICx Technologies helping take it public in a 2007 IPO (later purchased by FLIR), and in addition served on numerous Boards, including as Chairman (and an interim CEO) of a lithium battery start-up.

He writes the Energy Intelligence column for Forbes and is co-author of the book, “The Bottomless Well: The Twilight of Fuel, the Virtue of Waste, and Why We Will Never Run Out of Energy”

Note that the last book, ”The Bottomless Well” includes the notion “Why We Will Never Run Out of Energy” as its title. It is a maddening book, because one can read without ever knowing the logic that Mills was following. That is because the assumptions were included in the Foreword to the book (whoever reads the Foreword?).

In any event, Mills is very much an outside-the-box thinker, and usually very good at it. Few people will agree with everything he writes. However, he will make the reader think, and many people can be persuaded to agree with much of his analysis.

So it is with this piece. He is on a roll, in our mind, with his thoughts until the last two paragraphs. He gives a positive message for the domestic oil production business. We will leave it to you to read his suggestion, and decide whether Washington is really ready to take a courageous, forward-thinking, long-term approach to Energy Policy for the first time in history. And we wonder why we really need the government to get involved, in any event.

Probably the best thought we took from the article is the realization that as the shale properties strive to reduce the cost of crude oil production (well under way, to use a slight pun), the OPEC countries will slide toward the other end of the scale of marginal cost. This is not because the direct costs for the are so high, but because their economies are resolutely dependent upon a price in excess of $80/barrel to function as intended. It is this change of position that will set OPEC on its path to either changing their economies or cutting production significantly.

Bottom Line: We concur with the notion that crude oil will likely find its new “balancing point” in the $38-$48 range. The next struggle to watch  is how OPEC adapts to this price range. BTW, much of the recent discussion has involved  Iranian oil being released on to the market. The Iranians suffer as much as any OPEC country at this new level. Their oil fields are old, they need lots of work, and they have higher than average decline rates for Middle East fields. In addition, Iran has to import a significant amount of its refined products.


 

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