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Northern Gas Pipelines is your public service 1-stop-shop for Alaska and Canadian Arctic energy commentary, news, history, projects and people. It is informal and rich with new information, updated daily. Here is the most timely and complete Arctic gas pipeline and northern energy archive available 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 suggest others existing before 2001.  -dh

 

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Commentary

4-17-15 Will Excessive Pride Hinder Governor Walker's Ability to Succeed?

17 April 2015 6:28am

Sen. Murkowski: Iran Oil Could Hurt U.S. Production if Prohibition on Exporting Domestic Crude Oil isn’t Lifted

Restrictions on U.S. Oil Trade Amount to “Domestic Sanctions”

Washington, D.C. – U.S. Sen. Lisa Murkowski, R-Alaska, today drew attention to the potential impact that ending sanctions against Iran could have on U.S. production if the outdated prohibition on exporting domestic crude oil is not also lifted.

Click to view video

Will Excessive Pride Hinder Governor Walker's Ability to Succeed?

by

Dave Harbour

On February 25, we expressed optimism that Alaska's new, "'All Alaska' governor has the insight, courage, wisdom and grace to be both humbled at the challenges he faces and capable enough to overcome them.  We are also optimistic that Walker’s propensity to be flexible will enable him to reverse course if he sees the ship of state headed toward rocky shoals."

On February 28, our Daily Planet friend, Paul Jenkins wondered if Governor Walker is "crazy like a fox or crazy as a loon" when dealing with gas pipeline policy. 

Journal of Commerce writer, Tim Bradner, on March 4, 2015, thought the Governor might be throwing a 'wrench in the works', of the AK-LNG project.

In our April 3, 2015 editorial, we expressed concern about, "Administration interference with the Ak-LNG project by even talking about government involvement in a competing project...."

*     *     *

At yesterday's 'press availability', a reporter asked the Governor to comment on legislative suggestions that he may be 'paranoid'.  "I am not paranoid," he said.

Yet, during its due diligence stageWalker has risked losing the most advanced, Alaska North Slope gas pipeline project in history by demonstrating he does not trust the project to guarantee commercialization of gas.  To remedy that, he hopes to plow hundreds of millions in state monies into creating a competing gas transportation and marketing effort.  He believes that if the major AK-LNG project fails because of marginal economics, the state should be able to advance the competing effort because it could accept a lower profit margin than the producers.  (Astute observers, however, note that major Alaska producers are capable of financing a gas pipeline whereas Governor Walker does not have ready access to such financing.)

Yesterday's Senate Resources Committee hearing focused on the very dangerous effects of having the state create a gas pipeline project to compete with another gas pipeline project in which it is also invested.  (We were embarrassed that East Anchorage Senator  Bill Wielechowski tried to interrogate Legislative consultants on what the Legislature was paying them, etc...obviously attempting to divert the discussion from merits of proposed policies to irrelevant matters.)

Today, the Governor issued a news release commenting on his decision to withdraw his proclamation, calling on the Legislature to meet in joint session this morning to act on his appointees.

Walker appears to not trust the Legislature to do its job of voting on his appointments, fearing all the appointments could be made void should the session end this week without appointee confirmations.

Today's release below damns the Legislature by faint praise.  It suggests that he was successful in forcing the Legislature to provide him with a guarantee they would meet and act.

He goes on to suggest that this guarantee will improve relations between the Legislature and himself, that now he
"trusts them".  This is delusionary and prideful.

Then, late today (Friday), as we were completing this commentary, he vetoed the bill designed to keep him from using state resources to compete against the state's investment in the main gas pipeline project

We believe that Alaska's new governor could be honest and well intentioned.  That said, we also believe that, at best, he has a very sophomoric approach to professional relationships with high level public officials and corporate executives.

You don't ask sophisticated companies or elected officials to give you guarantees on matters that are best assured by simple, honest, effective communications and negotiated agreements.

Walker has established himself as a person who lacks the personal self confidence to communicate professionally and successfully with either Legislative or Corporate leaders.

Simply put, he is out of his league and Alaska will pay for his juvenile performance.

The two examples cited above demonstrate that Alaska certainly does not have a governor who is "crazy like a fox," nor has it been shown that his actions are free of paranoid motivations.

As we have often said, we wish Alaska's new governor well but now believe his unjustified sense of self pride may be a major factor in his desire to be a successful state governor.

-dh

“If sanctions on Iran are lifted, Tehran will be able to make money by selling their oil to our friends and may use that money to destabilize our allies,” Murkowski said. “If we lift the current sanctions on Iran while keeping in place our own domestic sanctions on crude oil exports, America’s ability to increase its domestic energy security and that of our allies will suffer.”

Click to view video

Adam Sieminski, administrator of the Energy Information Administration (EIA), testified before the Senate Energy and Natural Resources Committee on Thursday that sanction relief could result in as much as 1 million barrels a day of Iranian oil flooding the global market. Meanwhile, most U.S. oil production is blocked from competing on the world market by regulations leftover from the 1970s.

Murkowski, chairman of the energy committee, stressed the strategic benefits to the United States of rising domestic oil production, including providing flexibility in dealing with trouble spots such as Iran. “It doesn’t make sense that American producers are blocked by U.S. law from selling to the same markets that Iran could reach once the sanctions are lifted,” Murkowski said. 

“It is important for us to recognize that if these sanctions on Iran are lifted and we in fact keep our own domestic sanctions in place it effectively ends up being a liability for us,” Murkowski said. “U.S. producers should be allowed to compete directly with Iran in the global market.”

Click to view video

EIA Administrator Sieminski said rising U.S. oil production – currently at 9.2 million barrels a day, its highest level since 1972 – has helped stabilize world markets and keep prices in check.

“The impact of U.S. production goes beyond just the Iranian sanctions issue,” Sieminski said. “Back in 2012 and 2013, there were some really serious interruptions in oil production in countries like Libya, Sudan, Yemen, Syria, and others. They add up to a huge amount of oil – over 2 million barrels a day, at one point approaching 3 million barrels a day. If it hadn’t been for the growth in shale production in the U.S. and production in a few other countries, including Canada, the price of oil would have been a lot higher. Obviously that would have been a benefit to producers but the overall impact on the economy could have been pretty devastating. The growth in production in the U.S. played an important role in stabilizing the global oil markets.”

Murkowski has long called for modernizing U.S. energy and trade policy to end the ban on crude oil exports. In March, she held a hearing looking at the economic and strategic benefits of ending the outdated export prohibition. Murkowski released a report last year on the need to liberalize America’s energy trade policies.

Chairman Murkowski opening statement is available on the Senate Energy and Natural Resources Committee website. The EIA’s Annual Energy Outlook is available here.


The end of week Consumer Energy Alliance energy links:

The Wall Street JournalObama Administration Proposes New Offshore Drilling Rules
The Obama administration on Monday proposed new offshore oil and natural-gas drilling regulations aimed at preventing the kind of explosion that erupted nearly five years ago on BP PLC’s Deepwater Horizon rig, including provisions the industry has already adopted.
 
The Wall Street Journal: The Dirty Secret of Obama’s Carbon Plan
Americans don’t give much thought to whether their electricity will be there when they need it. You flip a switch, the lights go on. Your phone charges up. The medical equipment in the emergency room does its job. Yet electric reliability, long a bedrock of this country’s prosperity and high standard of living, does not come as easily as its steady presence might suggest.
 
CNBCWhat shuttering coal plants means for energy jobs
With new environmental rules looming this week, coal-driven power plants are closing all over the United States, and jobs are going with them. Utilities have been shuttering plants almost since regulatory changes were announced back in December 2011, but the number of closures has spiked recently, and several more plants are scheduled to close in the next few years.
 
ReutersU.S. shale oil output to fall in May, first drop in 4 years
Oil production from the fastest-growing U.S. shale plays is set to fall some 45,000 barrels per day to 4.98 million bpd in May from April, the first monthly decline in over four years, projections from the U.S. Energy Information Administration showed on Monday.
 
CNBCOPEC slams oil producers with 'go-it-alone' attitudes
The Organization of the Petroleum Exporting Countries published a stinging critique on Monday of oil-producing countries that had refused to follow its lead in holding back supply in an effort to boost prices.
 
The Washington PostWhat environmentalists get wrong when they use the California drought to attack fracking
With the continual worsening of California’s drought, an odd argument — in some ways as much meme as argument — has arisen. It’s the notion that in the context of the drought, it’s important to cut back on the water used in industrial hydraulic fracturing or “fracking” operations in the state.
 
The Dallas Morning NewsA new era for nuclear power?
For decades the U.S. nuclear power industry has stood at a virtual standstill, a victim of economics and fears over safety. But as President Barack Obama prepares to roll out new carbon emission regulations targeting the power industry, nuclear companies are hoping a new era is upon them.
 
MarketWatch: Natural-gas market is ready to rally
Winter demand for natural gas has ended, but the fuel’s prospects for a price rally are just beginning. The U.S. natural-gas market has seen enough supply over the past year to “greatly reduce” the large storage deficit that followed last year, but there has also been enough cold weather to keep storage levels slightly below the five-year average, Tim Evans, energy futures specialist at Citi Futures, said in a weekly report issuedMonday.
 
The HillStates outpacing feds in safety regs for fracking
The Department of the Interior recently introduced a rule to regulate hydraulic fracturing on federal lands to much fanfare. Stating the need to update 30-year-old regulations, Interior Secretary Sally Jewell characterized Interior’s action as taking the lead and giving the states an example to follow.
 
The HillEPA blasts GOP’s bill to change climate rule
The top Democrat on the House Energy and Commerce Committee joined the Environmental Protection Agency Monday in criticizing the House GOP’s efforts to weaken the Obama administration’s climate rule for power plants.
 
GallupAmericans Choose the Environment over Energy Development
About half of Americans (49%) say that protection of environment should be given priority, even at the risk of limiting the amount of energy supplies, virtually unchanged from their sentiment last year. Fewer than four in 10 (39%) prioritize the development of U.S. energy supplies even if the environment suffers to some extent.
 
E&E PublishingBoth sides ready arguments for case that could scotch EPA power plant rule
Energy companies and 15 predominantly Republican-led states will press federal judges this week to halt President Obama's greenhouse gas standards for power plants.
 
ForbesUpstart Siluria Technologies Turns Shale Gas into Plastics and Gasoline
San Francisco-based startup Siluria Technologies has attracted $120 million in venture capital from the likes of Saudi Aramco on the promise that it has discovered a Holy Grail of the petrochemicals industry. Last month Siluria unveiled its new plant tucked in among dozens of giant petrochemical complexes on the Houston Ship Channel.
 
FuelFixOil firms may have to cut deeper than $126B, report says
The next round of oil-company earnings might show investors just how much firms still need to cut, even after executives stripped $126 billion from annual spending plans this year, a new report says.
 
FuelFixAs costs fall, companies may start completing wells again
Oil companies keeping thousands of barrels of crude off the market by drilling but not completing wells may soon start flooding the market again.
 
The HillTribes say no to Keystone
Native Americans are pressuring the Obama administration to reject the Keystone XL pipeline, warning the project could infringe on their water rights, harm sacred land and violate America’s treaty obligations. Tribes sent more than 100 pages of letters to the Interior Department earlier this year raising concerns about the project, which would carry oil sands from Canada to refineries on the Gulf Coast.
 
Billings GazetteSafety is TransCanada's top pipeline priority
I am writing on behalf of TransCanada to address concerns over the Keystone XL pipeline plans raised in an article appearing on your website on April 5 titled "After two Montana breaks, scrutiny builds over federal pipeline regs". TransCanada has worked with PHMSA in planning Keystone XL, and has voluntarily agreed to 59 new safety procedures. Among these, river crossing precautions have been paramount.
 
Associated PressTexas House set to vote on bill banning local fracking bans
The Texas Legislature is poised to take a major step toward wiping out a highly-publicized local ban on hydraulic fracturing approved by a college town near Dallas — and ensuring that other communities don't follow suit.
 
Durango HeraldFrackers average at least two violations a day
Fracking companies average more than 2½ violations a day, according to a study of just a small portion of the public record. The Natural Resources Defense Council studied online reports for Colorado, Pennsylvania and West Virginia covering five years.
 
Akron Beakon JournalMedina County group pushing community rights charter vote
A Medina County grass-roots group is launching a drive to adopt a new county charter with a community rights that might be used to block a planned natural gas pipeline.
 
The Wheeling Intelligencer‘Nuisance Oil’ Term in Contract Annoys Belmont County Landowner
Curtis Wallner is not sure what "nuisance oil" extracted via fracking is. Neither is a spokesman for the Ohio Department of Natural Resources, which oversees mineral extraction in the Buckeye State.
 
Pittsburgh Tribune-ReviewGovernor Wolf appoints business recruiter to advise on energy and manufacturing
Gov. Tom Wolf has tapped Democrat and lawyer-lobbyist David Sweet to fill a new advisory position the governor says he established to stimulate growth and competition in Pennsylvania's energy and manufacturing industries.
 
The Bradford EraTrailblazing classes: Shale gas emergency training held in Smethport
History was made over the weekend in training classes at the Tri-County Fire School Inc. in Smethport. The two-day, 16-hour class, “Firefighting at Shale Gas Emergencies,” was conducted for the first time in Pennsylvania, noted Jack Fowler, president of the school, which this year marks its 50th anniversary of providing fire training to area volunteer and industrial firefighters.
 
Huntington NewsFracking Waste Chemicals Allegedly Found in WV Near Drinking Water Inputs
Dr Gupta, this open letter is to ask for your participation in the upcoming public hearing held by the WV Dept. of Environmental Protection (DEP) for the permitting of two Lochgelly horizontal hydrofracturing (frack) waste injection wells that have been operating out of compliance, and unpermitted, for over a year, and to apprise you of the surrounding issue.
 
News & RecordProposed bill puts limit on fracking
A Piedmont Triad legislator has filed a bill that would prevent companies from being able to drill for natural gas on a person’s property without the landowner’s consent.
 
Maine Public BroadcastingMaine Governor Wants Nuclear Power Back on Energy Table
Maine Gov. Paul LePage has submitted legislation that would make it easier to site a small nuclear plant in Maine. The administration says it's time to update the law that governs siting of nuclear plants in the state.
 
Capital New YorkFracking protesters turn attention to Port Ambrose project
New York State's successful anti-fracking movement has found a new cause: Port Ambrose. The planned liquefied natural gas facility, to be built 19 miles off the coast of Long Island, has already generated vocal opposition from activists, residents and elected officials at rallies, hearings and in official correspondence.

 

FOR IMMEDIATE RELEASE                                                                                                            No. 15-036

Contact: Grace Jang, Press Secretary – (907) 465-3976
Katie Marquette, Deputy Press Secretary – (907) 465-5801

 

Governor Walker Secures Promise from Legislative Leadership on Confirmation Votes

April 17, 2015 JUNEAU—Governor Bill Walker today revoked his proclamation to convene the House and Senate into a joint session today at 10 a.m. to vote on his appointments.

“I just wrapped up a meeting with House Speaker Mike Chenault and Senate President Kevin Meyer,” Governor Walker said. “They gave me their word that each of the 89 appointments would be given an up or down vote on Sunday. I trust them.”

Governor Walker said revoking the proclamation is an important step toward a positive relationship with legislative leadership.


 

FOR IMMEDIATE RELEASE                                                                             No. 15-37

Contact: Grace Jang, Press Secretary – (907) 465-3976
Katie Marquette, Deputy Press Secretary – (907) 465-5801

 

Governor Walker Vetoes Bill That Ties Alaska’s Hands During Pipeline Negotiations

April 17, 2015 JUNEAU – Governor Bill Walker today vetoed HB 132, making good on a March 2 promise when the bill was introduced.

“This veto in no way means the end of discussions with legislative leadership,” Governor Walker said. “We continue to have multiple meetings to ensure AKLNG is successful and remains the priority while maintaining access to a backup option.”

HB 132 limits the Alaska Gasline Development Corporation (AGDC) from actively working on any gas line project other than the Alaska Liquefied Natural Gas (AKLNG) line. The State of Alaska is a partner in AKLNG along with TransCanada, ExxonMobil, ConocoPhillips and BP.

“We cannot have legislation that ties Alaska’s hands while we are trying to negotiate the best possible gas line deal for Alaskans,” Governor Walker said. “This bill prevents the state from having an adequate backup plan should the AKLNG efforts not proceed.”

Governor Walker also continues to meet with AKLNG partners to advance this project.  Governor Walker has said multiple times AKLNG remains his administration’s priority and having a backup option with the ASAP line will not interfere with the AKLNG project.

(Attached: Veto letters to House Speaker & Senate President; Governor’s veto signature)

###

Categories:

4-3-15 Gas Line Collision

03 April 2015 8:09am

AJOC by Tim Bradner  With about two weeks left on the clock, the 2015 session of the Legislature seems set to end with a big bang. A collision is shaping up between legislators and Gov. Bill Walker (NGP Photo) over the governor’s vision of a large state-led gas pipeline.

Notes from the road: We have little time to write while traveling (Today in L.A. on the way to Anchorage).  We do note that as the Alaska legislative session comes to an end our greatest concerns are:

  • Administration interference with Ak-LNG project by even talking about government involvement in a competing project; and
  • Administration support for a poorly thought out, government sponsored Interior Energy Project; and
  • Administration not using bully pulpit to support adequate spending cuts (i.e. the State Chamber calls them 'cosmetic') to create a sustainable government going forward...along with legislative proclivity to not cut spending due to last day 'trading' of special interest projects; and
  • Legislative initiative to create requirements for Regulatory Commission of Alaska to approve expensive, non-economically feasible alternative energy projects, subsidized by utility ratepayers (HB 78); and
  • In wake of low oil prices, lack of will to cut government spending, hostility of governor toward industry/legislature/Ak-LNG project, we anticipate the Governor working with certain constituencies to increase oil taxes within the next year or two.  Hoping this to be incorrect but fearing it isn't, we could foresee an "economic death spiral" wherein lack of spending discipline begets higher oil taxes, which begets lower oil industry capital spending, begetting lower production, which begets even lower state revenue, resulting in higher oil taxes, and so forth.  
  • Faced with such challenges, we believe Alaska's bright future can only unfold with leaders possessing wisdom, a spiritual connection with our creator and a commitment to become honest, effective communicators.

-dh

Categories:

4-1-15 Happy April Fools Day! Commentary: Are We The Fools?

31 March 2015 11:30pm

See National Ocean Policy Council Alert Here!

(Readers will understand the importance of this alert after reading today's commentary, below.  -dh)

See Part 4, Alaska Economic Report Below

Related Commentary: "The Sting"

Last Friday, former Alaska Legislator Beth Kerttula, posted this NEW OCEAN POLICY announcement

"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...."

Here is a report from the private sector's "National Ocean Policy Coalition".  See Action Alert Here!

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.

-dh

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)


Fox Business News.  

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:

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)

Our readers:

With Congress set to soon begin drafting bills to fund the federal government for FY 2016, and with National Ocean Policy implementation continuing and very potentially impactful actions currently slated for FY 2016, NOPC has drafted a letter to House and Senate Appropriations Committee leadership in support of language that would achieve a 1-year pause in implementation of two of the policy's most concerning components.  Many of you have signed on to similar letters in the past, and your support is greatly appreciated. 
 
We are at a pivotal juncture with respect to policy implementation, and demonstrating the maintenance and broadening of support for a time-out will be critical to securing effective congressional action.  To that end, please review the draft text below and let us know by COB Wednesday, April 8 if we can add your organization's name as a signatory.  Also, please let us know if there are other organizations in your network that might be interested in signing on.  Thank you again for all your support.
 
Best,
Brent
 
 
Brent Greenfield
National Ocean Policy Coalition
2211 Norfolk
Suite 410
Houston, Texas 77098
 
 
DRAFT
 
Dear Chairmen Rogers and Cochran and Ranking Member Lowey and Vice Chairwoman Mikulski:
 
In connection with the drafting of legislation to fund the federal government for Fiscal Year 2016, the undersigned groups request your support for including language in all appropriations bills that ensures commercial and recreational interests spanning nearly every sector of the U.S. economy are not saddled with additional uncertainty or new regulatory hurdles as a result of implementation of two particular components of the July 2010 Executive Order establishing the National Ocean Policy. 
 
Among other things, the Executive Order directs a multitude of federal entities to participate in “Coastal and Marine Spatial Planning” (CMSP) in all nine U.S. coastal regions.  CMSP is described as a process "to better determine how the ocean, coasts, and Great Lakes are sustainably used and protected," and the Interior Department has likened CMSP to a “national zoning plan” that “will serve as an overlay” in federal decisions.  Concerns are further heightened given that the geographic coverage of CMSP includes inland bays and estuaries and upland areas as new governmental “Regional Planning Bodies” deem appropriate, and since federal entities will “address priority…ocean management issues associated with marine planning as described in the Executive Order” regardless of whether all states in a region decide not to participate.
 
In addition to CMSP, the National Ocean Policy requires the federal government to implement “Ecosystem-Based Management” (EBM), which is described as a “fundamental shift” in how the U.S. manages ocean, coastal, and Great Lakes resources.  Among other things, federal entities are required to “[i]ncorporate EBM into Federal agency environmental planning and review processes” by 2016.
 
Language adopted by the Executive Order states that effective National Ocean Policy implementation would “require clear and easily understood requirements and regulations, where appropriate, that include enforcement as a critical component,”and acknowledges that the policy “may create a level of uncertainty and anxiety among those who rely on these resources and may generate questions about how they align with existing processes, authorities, and budget challenges.”  In order to ensure that further implementation of some of the most concerning and potentially impactful aspects of an initiative that has not been authorized by Congress does not create additional regulatory uncertainty, result in new regulatory hurdles, or siphon away scarce federal dollars from critical and authorized activities, the undersigned groups respectfully request that all appropriations bills include language stating that "None of the funds made available by this Act may be used to further implementation of the coastal and marine spatial planning and ecosystem-based management components of the National Ocean Policy developed under Executive Order 13547."
 
Including this language will provide Congress with an important opportunity to more closely examine the National Ocean Policy and the full range of its potential impacts before it is fully implemented.  In closing, we appreciate your attention to this issue and respectfully request inclusion of the proposed language in all Fiscal Year 2016 appropriations bills. 
 
Sincerely,

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. 

Read More....


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.”

Alaska Economic Update- Part 4  -  Parts 1-4 Here

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. 

Graph 1

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.

Graph 2

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.

Graph 3

Graph 4

Categories:

3-20-15 Alaskan and Canadian Energy Investors Face a Competitive New World

20 March 2015 7:46am

See this week's Petroleum News, just released.

Compared to Russian and Canadian Arctic energy initiatives, U.S. efforts are pathetic.  Russia's Arctic power could well influence competitive factors discussed below in ways detrimental to the world's democracies.  Read more....    -dh 


Decision makers: look below, and ignore the competitive, new, worldwide oil & gas market at your own peril and at the risk of removing opportunities from your succeeding generation of young, hopeful, ambitious children that you and your friends enjoyed.  -dh

Today, an energy analyst friend privately opines on natural gas pricing, which should be of some interest to potential investors in a $40 - 60 billion Alaska natural gas pipeline--as well as Canadian project participants.  Read below.

We hasten to add that natural gas supply and pricing is still not as "world-wide fungible" as oil.  

Until now, the North American gas market has focused almost completely on North American supply/demand factors...unlike oil which has traded within a fairly narrow worldwide price range--offsetting U.S. prices somewhat because of the multi-decade crude oil export ban.  

U.S. Sen. Lisa Murkowski yesterday stressed the economic and national security benefits of ending the 1975 federal ban on exporting domestically produced crude oil at a hearing before the Senate Energy and Natural Resources Committee.  See the video, also featuring ConocoPhillips Chairman & CEO Ryan Lance (NGP Photo).  

However, because of extensive, competing world-wide LNG export projects, the continuing expansion of world-wide shale technology, and the increasing attraction of natural gas for power generation it is probably only a matter of time before we approach a worldwide pricing range and supply balance for natural gas.  

Investors must absorb and interpret these rapidly changing and multi-dimensional factors as they consider different lease sale bidding strategies and varied projects in different jurisdictions with wide-ranging rules and risks.  This reality makes it essential that Alaska's and Canada's energy decision makers (i.e. our readership base) retreat from unpredictable, greedy and provincial tax, royalty, regulatory policies and lavish spending practices--which affect tax policies.  

Everywhere, those blessed with oil and gas supply should keep one eye on the competition and one eye on reducing public spending to sustainable, essential levels.   See yesterday's examples, "Lessons For Alaska From Canada".    -dh


Our energy analyst friend writes, "Natural gas has seemingly had a lot going for it in the past year:

  • The US came out of last winter at record low inventories
  • Pipelines keep getting added and redirected to distribute natural gas to hungry markets (although slowly)
  • The weather has been brutal east of the Rockies, all the way into the South
  • More gas keeps displacing coalmoving to Mexico, and benefiting slightly from a modestly improving economy
  • The number of gas (and especially oil) rigs has dropped off big-time

"Despite it all, natural gas is in the doldrums  price-wise. The HH is $2.83, and some recent negative basis-priced gas has sold for 99 cents.  The worst of it all, however, is that it is hard to see the end of the “tunnel”. There is no futures monthly price that hits $4 until 2022."


For our Alaskan and Canadian decision maker friends: here is the face of worldwide oil & gas competition from Energypedia:

GoM: Statoil adds acreage in the Gulf of Mexico Central Lease Sale
http://www.energy-pedia.com/news/gulf-of-mexico/new-162961?editionid=101595

Brazil: Petrobras breaks record for well drilling depth in Sergipe-Alagoas Basin http://www.energy-pedia.com/news/brazil/new-162960?editionid=101595

Ophir Energy announces full year results - updates operations  http://www.energy-pedia.com/news/general/new-162959?editionid=101595

Tower Resources announces corporate update
http://www.energy-pedia.com/news/general/new-162958?editionid=101595

Trinidad: Range Resources announces Trinidad operational update 
http://www.energy-pedia.com/news/trinidad/new-162957?editionid=101595

Iran upstream could be open for business this year
http://www.energy-pedia.com/ajax.aspx?advertid=11045&referurl=http://www.af
razadvisers.com/toolkit.html&editionid=101595

Colombia: Anadarko awards CGG the largest proprietary 3D marine seismic survey in Colombia
http://www.energy-pedia.com/news/colombia/new-162956?editionid=101595
 
Bulgaria’s Mizia Oil and Gas awarded four exploration blocks in Bulgaria  <http://www.energy-pedia.com/news/bulgaria/new-162955?editionid=101595>

UK: Britain hands lifeline to North Sea oil industry with tax cuts  http://www.energy-pedia.com/news/united-kingdom/new-162954?editionid=101595

UK: Grangemouth operator INEOS begins fracking consultation  http://www.energy-pedia.com/news/united-kingdom/new-162953?editionid=101595

Australia: Gardline CGG to acquire Gippsland 2D infill seismic survey for Geoscience Australia  http://www.energy-pedia.com/news/australia/new-162952?editionid=101595

US shale oil firms brace for more pain as crude resumes slide  http://www.energy-pedia.com/news/usa/new-162951?editionid=101595  

UK Budget lays strong foundations for regeneration of the UK North Sea  http://www.energy-pedia.com/news/united-kingdom/new-162950?editionid=101595
Oil & Gas UK welcomes the Chancellor’s decisive move to restructure the North Sea tax regime ....

GoM: Gulf of Mexico Lease Sale 235 yields $539 million in high bids on nearly one million acres in Central Planning Area http://www.energy-pedia.com/news/gulf-of-mexico/new-162949?editionid=101595

Canada: Conoco to cut 7 percent of Canadian workforce
http://www.energy-pedia.com/news/canada/new-162948?editionid=101595  ConocoPhillips plans to cut about 7 percent ... as tumbling oil prices have made its operations in the country less profitable.

Israel's Tamar group to sell gas to Egypt via pipeline
http://www.energy-pedia.com/news/israel/new-162947?editionid=101595.  A group of private customers in Egypt has agreed to buy at least $1.2
billion of natural gas from Israel's ....

Iraq: Gulf Keystone ramping up Shaikan production
http://www.energy-pedia.com/news/iraq/new-162946?editionid=101595  

Morocco: Mubadala Petroleum signs geological study agreement with Morocco  http://www.energy-pedia.com/news/morocco/new-162945?editionid=101595

Indonesia: Statoil awarded new licence offshore Indonesia  http://www.energy-pedia.com/news/indonesia/new-162944?editionid=101595


While the U.S. administration characteristically fumbles with global warming and Arctic regulatory issues, Russia -- and to a similar but smaller degree, Canada -- moves out smartly to take the initiative while establishing and enforcing jurisdiction -- and sovereignty.  More below....  -dh

Barents Observer by Atle Staalesen.  As Russia is unfolding a major combat alert drill in its Northern Fleet, the country’s government approves the setup of a new federal Arctic Commission. Headed by hardline Deputy Prime Minister Dmitry Rogozin, the Commission will coordinate all government authorities involved in regional developments.

Included in the Commission mandate are issues of social, economic, political, as well as military, importance, newspaper Kommersant reports.

...

Rogozin will have five Commission deputies to his disposal: Minister of Natural Resources Sergey Donskoy, Minister of Energy Aleksandr Novak, Minister of Economic Development Aleksey Ulyukaev, Minister of Transport Maksim Sokolov and Deputy Secretary of the national Security Council Vladimir Nazarov. A total of 60 people will be included in the new structure, among them representatives of the oil and gas industry, the ministry of Defence, the FSB, the Presidential Administration and regional governors.

Categories:

3-13-15 Apology to Canada (and the world)

13 March 2015 2:17am

See Alaskanomics Posting of Mike Bradner's Column Re: State Spending.  Why do we at Northern Gas Pipelines often focus on the importance of a 'sustainable Alaska budget'?  Because if the state cannot control spending and continues deficit spending, no infrastructure project in the future will be safe from sudden, unplanned, predatory taxation to stave off bankruptcy: hence, no gas pipeline.  That's why.  -dh


Apology To Canada And To The World

by

Dave Harbour

Back in the olden days, 1979 or thereabouts, I had just finished my assignment as public affairs director for the U.S. portion of the grand, 27-member Canadian / American Arctic Gas Pipeline consortium.  I had an office and secretary in both our Anchorage and D.C. offices.  I traveled weekly between the two locations and Canada for six years--often with company president, Bob Ward, former Alaskan Lieutenant Governor.  Working with my Canadian public affairs counterpart, author Earle Gray, was another of many important cross-border relationships.

Anyway, that experience came to an end and, impressed with the entrepreneurial genius of T. Boone Pickens, I wrote him offering my corporate and grass-roots communications services.  

Pickens never wrote back, but, happily, three members of the former Arctic Gas consortium did provide me with continuing U.S./Canadian energy challenges.

First, Cy Orlofsky of Columbia Gas Transmission Company asked me to consult with the Alcan Project controlled by John McMillian Northwest Energy Company, and Bob Blair of Alberta Gas Trunkline, Ltd.  Northern Natural Gas of Omaha -- thanks to a recommendation of VP Dan Dienstbier​ -- brought me on as public affairs director to reorganize that department (i.e. before the company morphed into Internorth and then Enron).  After that brief assignment, Atlantic Richfield's Robert O. Anderson hired me as government affairs director in Alaska and, later, Washington D.C.

T. Boone Pickens as the world has learned, has done just fine in the communications area without Dave Harbour's help.

Nevertheless, my own experience with Arctic Gas and ARCO enabled me to share with Pickens a knowledge of Canadian / American energy interdependence.  Just as Canadian oil and gas flows through the U.S., so do American pipelines move through Canada.  Our oil and gas industries benefit from the experience and technology shared by company employees rotating between U.S. and Canadian project assignments.  We are each other's largest trading partner.  ...not to mention our shared interests in the Arctic and North American military defense.

In 2000-2001, when we created the Northern Gas Pipeline blog, we were determined to encourage greater understanding and rapport between the two great North American neighbors.

Sometimes this was a struggle, as when the U.S. took an ill-considered tariff position regarding the import of Canadian softwood.  Then there were those associated with Alaska energy concepts (i.e. El Paso Natural Gas, Yukon Pacific, Alaska Gasline Port Authority, Backbone, etc.) that often demeaned Canada as a tool for leveraging less-economic or infeasible, "All-Alaska" energy projects.

Fast forward to this era.  TransCanada Pipe Lines, Ltd. has grown into a much bigger energy entity in Canada and the United states.  Its pipelines crisscross North America.  It is a major player in the Ak-LNG project.  And, its Keystone XL project has been front page business news for over a half decade.  

Keystone: Obama's slow-motion Kabuki theatre (See This Edmonton Sun Commentary of March 3) by Kenneth P. Green

The Obama Administration's political rejection of the Keystone XL project was a monumental decision that could shift tens of thousands of energy jobs to other countries; diminish the entire U.S. economy, injure relations with Canada, further demonstrate lack of solid American leadership to the world and seriously damage our efforts to achieve energy independence and stronger national defense capability.

In response to Obama's veto of the Keystone XL project, T. Boone Pickens produced this Op-ed piece in today's Calgary Herald.

In it, Pickens apologizes for Obama's irresponsible Keystone XL veto.  Our readers can join in that apology as we interact with our fellow Canadian and U.S. families, business partners and politicians.

But the purpose of this column today -- after providing a little U.S./Canadian historical and personal background -- is to extend America's apology to not only Canada but the world in general: for the loss -- or, hopefully, just the delay -- of this great project.  

Because of Obama's Keystone XL action:

  • thousands will not have jobs, and
  • U.S. energy prices are likely to be higher, and 
  • government unemployment and social expenses will be higher, and
  • scores/hundreds of local, state and national governments will not have badly needed project tax revenue, and
  • because of the arbitrary and capricious nature of Obama's veto, the country's "rule of law and reliance on due process" is further shaken (Ref: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, etc.), and
  • uncountable personal lives will have been affected in negative ways as unemployment, involuntary transfers, divorces and marriages, home ownership, manufacturing, health, and other human conditions are affected, and
  • project demand for foreign goods and services will affect the economy beyond North American borders, and
  • countries wishing and planning for aggression against North America's people and economies will be given indirect aid and comfort.

Reader letter today: 

Dave, I met Mr. Pickens at a cocktail party in Saratoga Springs in 2008.  He was charming, impressive and extremely credible.  He was advocating natural gas as a way to break America’s dependency on oil, and a substantial portion of my portfolio is dedicated to natural gas investments. 

Lawrence Hamilton

So yes, we join with T. Boone Pickens in apologizing to Canada for America's indefensible delay or killing of the Keystone XL pipeline project.  

But we would go on to extend that apology to America's allies and the people of the entire world.  The U.S. owes this apology to the world for failing to live up to the high standards our fellow humans have come to expect from the "shining city on the hill" that was once the United States of America.  

Once America could say, "We are dedicated by our Constitution and by tradition. to upholding a citizen's right of due process and the rule of law emanating from that guarantee."

We are optimistic that the country can once again regain, embrace, protect and defend its traditional high standards.

We are not optimistic that this return to the Constitution will be easy.

_________________________________________

 

Courtesy of: Alaskanomics.

A Terrible Constitutional Amendment; Constitutionalizing the Dividend

Alaska Legislative Digest- Supplemental Commentary

By: Mike Bradner

Sen. Bill Wielechowski has introduced a proposed constitutional amendment, SJR-1, that would constitutionalize the Permanent Fund dividend. This would essentially take Fund income off the table for spending on the basic purposes of government, such as schools, health and social needs, public safety, and transportation that might be needed under emergency fiscal conditions. 

We’re not picking on Sen. Wielechowski, but he volunteered to be part of this discussion!

 

Basic Politics 101: What’s the primary purpose of government?

The primary purpose of government, Sen. Wielechowski, is to provide public services, not to pay the public a cash dividend. The latter may be feel good politics, but it lacks a place in the fundamental role of government.

None of us know how this fiscal crisis we’re mired in is going to work out. The odds are we’re not going to get through it without some significant budget reductions, harsh enough that they will also put revenue necessities on the table.

Revenue necessities - taxes!

These “revenue necessities” are polite words for “taxes,” money we will have to pay-citizen taxes they’re called. In the agenda of revenue, use of Permanent Fund income, is also a revenue, citizens surrendering a portion of their dividend for public services.

State lawmakers, as well as governors, in recent years have lived in a political environment where taxes have not been part of the discussion with the public.

Taxes is a political “choke word”

Alaskans seem to have a speech impediment. They can say Tanana, Tutatuliak, Tallahassee, Texas, Tatalanika. But ask them to say “taxidermy,” but hold everything after the “x” and they’ll choke up, and perhaps go into apoplectic shock. On the state level, taxes have simply been off the table for decades, not discussable. As a result, the “political culture” of such discussions is also a blank.

Politicians have to “facilitate” bringing taxes to public discussion

This isn’t to be taken lightly. Politicians have to work up to a dialogue about taxes, as well as use of Permanent Fund income. No one has to rush the barricades. But politicians do have to facilitate “this language,” gradually bringing the public into the discussion. Notice we used the word “facilitate.”

One of the political skills of politicians, especially when they face politically hazardous, and unavoidable, issues is to use their political skills to insure that such issues get on to the table. If they can’t personally touch the issues, then the skill is getting less vulnerable parties to push the issues on the table.

We have not had to deal with revenue issues within the institutional memory of most of our present lawmakers, so it should be no surprise they are reluctant to engage such discussion.

No one yet has put revenue discussion on the table!

• In the aftermath of the 2008 financial crash, and subsequent recession, the first action of many states across the country was to put all their revenues, fees, tax exemptions, and etc. on the table for review (not necessarily advocacy).

• Such a review of our revenues options has yet to occur.

• The recent Commonwealth North report (by people who don’t have to stand for election) managed to do a volume of work without putting revenue issues on the table. They had the opportunity, but made only a reference to such future work.

Talking taxes is politically hazardous, to be sure!

Talking taxes is a hazardous process to be sure. By nature, politicians avoid being first to grab the “third rail” of new and controversial issues. Nurturing revenue issues forward is a delicate dance between legislative leaders, majorities, minorities, and individual lawmakers. Many lawmakers come from districts where such issues may be far more hazardous than others. Then there is the governor, who has a singular constitutional responsibility to lead.

Legislators need to think about the fact that they don’t have to be elected forever.

There is life after politics. They may well have to stand up among flying political bullets. They may survive, they may not. The history of such revenue/tax combat is that the voters, of course, do react. They come down hard on a “tax legislature.” In fact, voters in reaction often don’t distinguish between those who voted for taxes and those who did not - they just whack them all.

However, even where there is a quantum shift in makeup of a Legislature, the new body rarely repeals such taxes. They may move some decimal points, and make political noise, but the revenue enactments generally remain “in place” – they were necessary. However, we are told that many lawmakers who bite the bullet often later get elected again. They apparently were respected for their courage.

Facing up to tough issues, not passing the buck!

Politicians are elected to do what? They are elected to look at complex issues, and at a greater depth than the general public, being busy with their daily personal lives can possibly do.

However, there are many of the elected willing to duck such issues, pass the buck to the public. We’re talking about putting a revenue issue out at public referendum - let the public decide. The result of such a political dodge is that there will be only one answer by the public - that will be an emphatic “no.”

Once putting a tax issue to a public vote, lawmakers are stuck with that as “precedent.”

The odds are repeated efforts will just bring repeated rejection.

 

Income tax, sales tax, or use PF income

The question for such lawmakers who dodge responsibility and pass the buck to the public is:

• “Why the Hell do we elect you.” We elect people to make the tough decision.

The best test of the necessity of a tax is when politicians lay their futures on the line and “do it.”

In the future, like it or not, lawmakers will likely face choices that involves enacting an income tax, a sales tax, and use of Permanent Fund income.

What we “are not” as a state!

We need to remember we are not a “usual state,” we are not Maryland, Delaware,

New Jersey, Connecticut, New Hampshire, Vermont, which you can walk across in a day. Nor are we Ohio, Indiana, Illinois, Iowa , Wisconsin that you can easily drive across in a day. These are states where a kilowatt of electricity can flow border to border, where the tax bases of local governments are relatively uniform, where local governments can support many services without state assistance.

As a state “what we are”

We are is a state that superimposed over the contiguous United States would stretch coast to coast, a fifth the size of the contiguous states. We have two-thirds of the shoreline, an extensive fishery, 82 percent of our communities are connected only by air, the state operating 247 airfields. One marine highway system stretches 1,619 miles along our coastline.

We operate school systems unconnected by roads, and where individual school sites are unconnected from each other. The densities of school populations and school costs defy efficiency in Many of these areas lack a local tax base in the traditional sense. Costs for electricity and heating oil is prohibitively high, climate restricts fuel deliveries to once a year. Community infrastructure is costly and difficult to maintain- water, sewer, waste treatment, and solid waste.

We have gained in our core regional efficiency!

Today the good news is that the costs of our railbelt region (Seward to Fairbanks) are pretty good in comparisons with elsewhere. The same is true for our Southeast Alaska cities and boroughs. The bad news is that a lot of “other Alaska” still has a high cost profile.

All this being said, our windfall of oil revenues due to the 2008 ACES tax, and the escalation of oil prices worldwide, has allowed our budgets to soar.

We can reduce budget, but also have to have a mix with new revenues. A good end result comparison might be with similar core areas in other states.

The same goes regarding what people pay for their services in these ad hoc comparisons.

So what’s going to happen now?

Somewhere here lawmakers have choices to make regarding budget reductions and balancing reductions these with a mix of different kinds of new revenue. Our budget spending is still constrained by oil prices. While we may adopt new revenues that are more predictable, our reliance on oil prices will remain, and oil price will likely remain volatile for some time to come.

There’s a lot more ahead of us!

There is a lot more ahead of us regarding a host of issues that revolve around budget situation. We will have ongoing special reports exploring the shadows of emerging policy. Right now lawmakers are pretty much just looking at budget reductions, disregarding revenue. They are assessing what is structurally possible and over what kind of time span. Cuts take time to implement, programs time to dismantle and phase out. There are also contracts. Likewise new revenue take time to put in place.

For information on subscribing to the Alaska Legislative Digest, email akdigest@gmail.com


Calgary Herald Op-ed by T. Boone Pickins.  To my friends in Calgary and across Canada: I apologize on behalf of my fellow Americans for the United States government’s actions.

Why? Because after years of poring over the engineering, design, geology and the contents of the proposed Keystone XL pipeline, President Barack Obama chose to make a political statement and vetoed a bill to allow construction to begin.

I feel bad about this. I lived in Canada in the 1960s. You have a great country, and it’s a great place to operate in the oil and gas sector. We should have done better by you.

You may not follow the ins and outs of the U.S. Congress as much as we do, but you probably know Keystone was a bipartisan bill. Republicans and Democrats in the U.S. House and Senate voted for it. That was big news, as Democrats and Republicans working together on anything over the last 10 years has been rare.

There was no good explanation for Obama’s decision to veto the bill. The U.S. Department of State reported previously the environmental effects of the pipeline would be minimal. In its January 2014 report, the department stated: “emissions (from pipeline activities) would be equivalent to greenhouse gas emissions from approximately 300,000 passenger vehicles operating for one year.”

There are 250 million passenger vehicles operating in the U.S.

Keystone would have the effect of adding about 1/10th of one per cent to the fleet.

Because the pipeline crosses national boundaries, the State Department is charged with producing reports. Yet, after State made its report, the White House went “agency shopping” and asked the Environmental Protection Agency (EPA) to take another look at Keystone. To no one’s surprise, the EPA fired off a letter objecting to pipeline construction, citing concerns of increasing greenhouse gas emissions.

Where the EPA went wrong, however, was calculating the effects on greenhouse gases “from the extraction, transport, refining and use of the 830,000 barrels per day of oilsands crude that could be transported by the proposed project at full capacity.”

The problem with the EPA’s math is that Canadians don’t need permission from the U.S. to recover that oil and sell it. Canadians will extract it and ship it overland by train or via pipeline and tanker, not south to the United States, but west to Asia, or elsewhere. When oil prices come back up, Korea, Japan, China and others will benefit from the Canadian oilsands, not the U.S.

It is no surprise to Canadians that Canada is the U.S.’s largest oil-trading partner. But it is a surprise to many U.S. residents. I have long been a supporter of the idea of building on the North American Free Trade Agreement by establishing a North American energy alliance to include Canada, the U.S. and Mexico.

The reason oil prices are not bouncing up and down with every piece of news out of Iraq, Iran and Israel is the U.S. and Canada are using the latest innovative technology to recover oil and natural gas — from sands and shale. Additional production from those sources has provided an international energy price shock absorber. For U.S. consumers, lower gasoline and diesel prices have been like getting a $300-billion bonus. The effect in Canada has likely been similar.

So, why is Obama so opposed to the Keystone XL pipeline? As my dad used to say, “Son, it’s kind of like murder. It’s tough to explain.”

Politics is the most likely answer. The veto lets the president throw a bone to his political left while thwarting a win for the Republican-controlled House and Senate on their bill.

The silver lining is this: Obama’s veto didn’t kill the Keystone XL pipeline. He delayed it. Sooner or later, good planning will trump bad politics and the project will get the green light — we hope.

My Canadian friends, please have patience. The Keystone pipeline will happen.

T. Boone Pickens is the architect of the Pickens Plan, an energy plan for America. He is also chairman and CEO of BP Capital.

 

Categories:

3-1-15 Senator Murkowski Uses Bully Pulpit to Educate America

12 March 2015 12:34pm

Landlocked: Murkowski Explains Alaskans’ Access Frustrations

The Governor and Entire Congressional Delegation Recently Vowed to Fight the Administration's Overreaching Action to Shut Down Alaska Resource Development and Her Economy.  Senator  Murkowski Has Acted to Create A YouTube Video to Highlight Growing Federal Restrictions in Alaska.  Thank you, Senator Murkowski for Effective Work And Quick Action!  We believe that some educational entity could take that map video and expand it into a one hour lesson plan framework for elementary, high school and college students.  -dh

WASHINGTON, D.C. – Senator Lisa Murkowski today released a video to help broadcast the Alaska #ThisIsOurLand movement’s agenda to a wider national audience.

With Alaskans reeling from the Obama administration’s ongoing efforts to block off millions of onshore and offshore acres from energy development, Murkowski produced the two-minute film to speak plainly to Americans who may be unaware of the federal government’s costly, ever-growing overreach in Alaska.

15.03.12.Landlocked

In the video, Murkowski points out that 61 percent of Alaska’s lands are controlled by the federal government – and that almost none of those lands are truly open to energy production.  Instead of allowing Alaskans to responsibly develop the State’s vast resource potential, the Obama Administration has converted an additional 12.2 million acres within ANWR into de facto wilderness; withdrawn 9.8 million additional acres in the offshore Arctic; removed roughly half of the National Petroleum Reserve (NPR-A) from leasing; planned a 685,000-acre “Area of Critical Environmental Concern” in the Fortymile Mining District; proposed sweeping critical habitat designations; and preemptively targeted potential development on State lands.

All of this and more has occurred in conjunction with a series of major federal rules – from the “Waters of the United States” expansion to EPA’s climate regulations – that will bring additional costs and consequences for energy development in Alaska.     

Text of Senator Murkowski’s Remarks

“Hi this is Lisa Murkowski, Senator for Alaska. And I want to talk you about the state of my State. 

“Alaska is about one-fifth of our country, by land mass.  We’re twice as big as Texas, with North Carolina thrown in for good measure.

“If Alaska was overlaid on the Lower 48, we’d stretch from California to South Carolina.  That’s a lot of land – but what you may not know, is who controls it.

“The National Park Service manages about 15 percent. The Bureau of Land Management controls another 20 percent. The Fish and Wildlife Service administers 19 percent. The Forest Service controls another six percent down in Southeast. Then you add one percent for the Department of Defense, and the federal government controlling about 61 percent of Alaska’s lands. 

“That’s more land than Texas and Utah combined. So who controls the rest?

“The State of Alaska has 27 percent. Alaska Natives have 12 percent. And that leaves just one-quarter of one percent of Alaska as private land - barely even noticeable on a map.

“And while the State and Alaska Natives do their best to foster economic development, the federal government has taken the opposite approach. 

“All of the non-yellow lands are federal lands that are now off-limits to resource production. Even the yellow federal areas are hardly “open” to development. All of the dark blue offshore areas have serious development restrictions.  Most recently, the Obama Administration is trying to permanently restrict development in the red and orange areas.  It’s also targeting the area in pink for new limitations.

“When you add it all up, the federal government is now blocking development on our most resource-rich lands and waters.  That’s depriving Alaskans of our ability to produce energy, minerals, timber, and more for the good of our nation.  And it’s depriving our nation of jobs, revenues, security, and prosperity. 

“That’s the state that we’re in, in Alaska.  And that’s why we’re asking for greater access to our lands and waters.”

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