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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.

 

Commentary

5-28-14 Playing By The Rules

28 May 2014 7:46am

 

Information on today's Anchorage meeting with Commonwealth North on Government equity interest in an Alaska gas pipeline.

Politico by Tal Kopan.  “I would be warning against using a chess analogy because in chess we have rules, and clearly Putin doesn’t care about rules because what he’s been doing now in Ukraine, it violates international law and international treaties Russia has signed before,” Kasparov said on CNN’s “The Lead.”


Comment: The rule of law is all about citizens living within the law.  

When a president like Putin cheats in chess or sends a disguised army into Ukraine, how can he be a trustworthy energy producer and marketer, business partner or neighbor?  See our commentary, yesterday.  

When a president like Obama unilaterally enforces or ignores laws, illegally targets political opponents with the power of government (1, 2, 3), has agencies overreach lawful authority, lies, or creates law by fiat, how is he to be trusted to defend the Constitution against all enemies, foreign and domestic?  How can he be thought to fairly administer national energy policy?     -dh

 

Categories:

5-27-14 The Russians Are Coming. No, The Russians Have Come!

27 May 2014 10:52am

The Russians Have Come

by

Dave Harbour

Dear Reader: we always solicit new content, comment and facts from our highly knowledgeable and experienced readers -- along with additions/corrections to our commentary.   Maintaining accuracy, with your help, is critical to the usefulness of our hundreds of thousands of pages of Northern energy archives spanning over 4 decades (See our internal 'search bar', upper right).  -dh

In yesterday's Memorial Day commentary, amid unhappiness in Ukraine, we again reminded ourselves that the former owners of Alaska have returned as Alaska North Slope (ANS) investors.  (We are also sensitive to US-Russian efforts to create an International park that could someday affect Alaska's commercial fisheries, energy and mining developers, Alaska Native Regional and Village Corporations, and free use of the Northwest Passage.)

One of our  foreign, Pacific Rim readers observed that the logical extension of Russian ANS involvement, under Alaska Statutes, could have the result of, at least indirectly, introducing Alaska to the current Russian - Ukrainian dispute.

Yesterday, we also heard from another NGP reader, James Halloran, a Trustee of the Ohio Oil and Gas Association who is an astute analyst and observer of energy matters.

He commented on the big, $400 billion China-Russian gas sale and pipeline agreement which would result in a $20 billion gas pipeline investment in China and a $75 billion investment in Russia -- not counting the value of the gas sale.  (We also note the market power Russia and China will be able to exercise on Western support industries beholden to them for service, supply and logistical contracts.) 

Halloran said that, "We spent four years (1974-77) actively involved with the construction of the $1 billion (estimate) Trans Alaska Pipeline System, that eventually cost $8.9 billion. Factoring in inflation since the 1970s, we would estimate the Sino-Russian pipeline system is a comparable project, in terms of complexity and remote geography.  TAPS got done on time, but it had the finest engineering teams in the world, plus the resources of five major oil companies, to accomplish the task. We also think this is going to be a project worthy of keeping the popcorn ready for watching it unfold. It is instructive that the Russians insist on their part of the pipeline as costing 'at least' $55 billion."

Below, let's review current headlines helping readers connect some of the world-wide dots reflecting Russia's energy strategy.  In doing so, we recall the observation of our Pacific Rim reader yesterday about, "...ongoing interest in investing in Russia with the likes of Rosneft, notwithstanding the sanctions imposed upon Rosneft's CEO, Igor Sechin, personally.":

  • Evaluate Energy, by Ilda Sejda.  Recently, foreign companies have been moving into the Russian oil and gas sector at a rate that has never been seen before.

  • GE and OJSC Rosneft, a leader in Russia’s petroleum industry, today signed a memorandum of understanding (MOU) that lays the foundation for the two companies to jointly evaluate and develop commercial opportunities in oil and gas exploration and production in the Russian Federation.  The MOU was signed by John Krenicki, GE vice chairman and president and CEO of GE Energy; and Igor Sechin, president of Rosneft. 

  • Igor Sechin, President and Chairman of the Management Board, Rosneft and Dinesh Kumar Sarraf, Chairman of the Board of Directors, ONGC Videsh Ltd and Chairman & Managing Director, ONGC signed a Memorandum of Understanding at the St. Petersburg International Economic Forum, in the presence of Mr. Vladimir Putin, President of the Russian Federation. The Memorandum paves the way for the companies’ cooperation in subsurface surveys, exploration and appraisal activities and hydrocarbons production in Russia’s offshore Arctic.  (WEN by Joseph R. Fonseca​)

  • Rosneft and BP signed an agreement on Saturday to jointly explore for hard-to-recover oil in Russia, the first major deal for the state-run Russian oil company since the West imposed sanctions over Ukraine in March.  Rosneft chief executive Igor Sechin, a close ally of President Vladimir Putin, has been targeted by U.S. sanctions along with some other members of Putin's so-called inner circle following Russia's annexation of Crimea from Ukraine in March.​  (WEN by Joseph R. Fonseca​)

  • ...at the 18th St. Petersburg International Economic Forum, Rosneft signed an Investment and Cooperation Agreement with North Atlantic Drilling Ltd. (NADL) and Seadrill Limited to form a long-term partnership aimed to develop Rosneft’s offshore and onshore projects until at least 2022.   (WEL by George Backwell​)

  • Venezuela's state-run oil firm PDVSA said on Saturday a $2 billion pre-payment from Russian oil producer Rosneft will be destined in part to develop its coveted Orinoco belt.  (WEL by Joseph R. Fonseca​)

  • A major gas deal between Russia and China could finally be sealed this week when Russian President Vladimir Putin visits China on May 20-21 and meets with President Xi Jinping.​ ​(Energy Daily, by Nick Cunningham)

  • Russia and Jordan's Shale Potential.

  • Russia and Iran's oil.

  • Yves-Louis Darricarrère, Total's head of Exploration and Production, said that his group is committed to expand its activities in Russia and forecasts the country becoming the largest contributor to its production by 2020.  Russia is key to Total's strategy of finding new reserves....  (WSJ, by Géraldine Amiel)

  • Here's the bottom line: in addition to the above, Reuters outstanding news team reports (by Vladimir Soldatkin; Editing by Lidia Kelly and David Evans), via Yahoo Finance, UK, that, "...Rosneft signed several deals at the St Petersburg International Economic Forum over the weekend, despite sanctions imposed on the company's chief executive Igor Sechin...," including:

    • "Rosneft and Union Cuba Petroleo (CUPET) signed Memorandum of Cooperation on projects in Cuba.

    • "Rosneft and United Arab Emirates' Mubadala Petroleum signed a cooperation agreement to "foster greater co-operation between the two companies in exploration and production".

    • "Rosneft and India's ONGC Videsh Limited signed a Memorandum of Understanding (MOU) for cooperation in exploration, appraisal and hydrocarbon production....

    • "Rosneft and PetroVietnam Oil Corporation agreed on key terms of long-term oil supplies to Vietnam...of up to 6 million tonnes a year via Russia's Pacific's Kozmino terminal in 2014-2039.

    • "Rosneft and Mongolia's NIC LLC signed a five-year oil products supply deal...for supply of more than 1.2 million tonnes of oil products from June 2014 to May 2019.

    • "Rosneft and Pirelli signed a Memorandum of understanding over marketing projects in Rosneft's retail network.

    • "Rosneft and Azerbaijan's energy firm SOCAR signed a joint-venture agreement...for oil and gas exploration and production projects including in Azerbaijan and Russia.

    • "Rosneft ... said the memorandum foresees a possibility of installation of different Alstom's "solutions and products for power generation, industrial automation and emission control...."

    • "Rosneft signed long-term gas supply deal with Fortum.

    • "Rosneft signed gas supply deal with RUSAL, EuroSibEnergo and Russian Machines."

Our Comments On These Connecting Dots:

1.  Rosneft is an energy arm of the Russian bureaucracy.  While decision making can be swift and supported by the weight of Russia's authoritarian leadership, it can also produce stunning failures arising from a) the presence of political influence, b) the possibility if not the likelihood of graft and corruption, and c) the ultimately, and by definition, "unmanageable" movements of the free market.  

But Russia's grand energy strategy is not guaranteed.  What if its effort and enormous investments into 'managing the mode and means of world energy production' could become frustrated by a) new and more aggressive competition (i.e. shale); b) unexpected and expensive technical delays (i.e. China gas pipeline); or, c) a dramatic world economic decline and an accompanying decline in energy demand.  In that case, we believe Russia's current Ukrainian tantrum demonstrates its leader's propensity to adopt nationalism and imperialism as a means of confronting internal social and economic challenges.  Doesn't this propensity make Russia a very dangerous bear, indeed, to have as a bedmate or energy partner?

2.  Russia is one of the world's largest holders of natural gas and oil reserves.  However, this week's events shown above demonstrate a move to more effectively dominate world oil and gas supplies and supply/distribution chains.  The effect of such a growing monopoly (i.e. not forgetting China's equally aggressive oil and gas acquisition policy), is to make European and even Asian energy users less capable of acquiring reasonably priced and secure supplies from Russian (i.e. or Chinese) energy competitors.  This would ordinarily bode well for Alaska's remote energy reserves, but then we note Rosneft's presence there, too.

We believe that investment advisors, were they to counsel Putin, might say that, "Adding external oil and gas investments to your already large internal reserves of oil and gas has the effect of concentrating, not diversifying, Russian investments.  This increases the odds that with passage of time natural and artificial market forces could result in both massive national profits for Russia, and massive economic decline."  Other world powers, depending on Russia's contractual and military stability and non-aggression have reason -- but not necessarily the insight or desire -- to believe that they share the risk of Russia's concentration of energy investments.  Russia's growing energy market power can manifest itself as market strength; it can also result in the power to intimidate and create predatory pricing/supply policies, as we have witnessed in Europe.

3.  Some of the flood of deals Putin succeeded in achieving last weekend may have been too hastily organized to meet an artificial, strategic deadline.  Yes, he might have achieved some tactical benefit from stitching many of the world's largest oil and gas producers and support companies into a blanket of political and economic support.   The modern-day Prince Putin provided a very impressive display of government/industrial coordination and effectiveness.  However, history tells us that there are chinks in the armor that, as we describe above, may put the world at risk as Russia encounters unexpected bad results trickling from the impressive portfolio of Memoranda of Understanding (MOU).  

  • Take the deal with Argentina.  A major oil company, Repsol, found out not too long ago that Argentina is not a trustworthy partner, as we reported here.
  • Likewise, Argentina and other companies and governments involved in MOUs with Russia must trust in Russia's commitment to the 'Rule of Law', to living up to its contractual commitments.  This might take on more of a 'religious leap of faith' than normal 'due diligence' in light of how Russia is treating European customers depending on it for stable, secure supplies of energy.
  • With mounting aggressiveness, will Russia use the market power achieved through the weekend MOU and agreement signings to neutralize worldwide opposition to its dangerous designs on former and currently free Soviet republics?  For example, will General Electric supply gas turbines and other technology to the Sino-Russian gas pipeline...and feel obliged to use its significant political muscle in the United States and Italy to urge appeasement in the face of Russian aggression?  Will Total be inclined (or "encouraged") to advise the French and other governments on political matters affecting Russia, such as appeasement or increasing economic sanctions?

No, the Russians are not coming.  They are already here in North America, South America, Western Europe, the Middle East, Africa, Asia and points between.

Those "Points" of Russian presence are like dots on a map.

We hope readers will connect them and apply their own conclusions and strategies to their own corporate, state, provincial and national interests.

The Russians are chess masters.  Chess is the greatest game of strategy.  It can be played innocently for fun and brain development.   Its principles can also be used by expert players to outwit amateurs and more naive, less patient, less developed thinkers.  A cheater can also 'win' a chess game that would otherwise be lost to a superior player.

Partners and opponents alike should be equally nervous about the presence, in their midst, of a modern, Russian prince proclaiming friendship or planning retribution.

We believe that those noted above do not fully comprehend the dangerous game in which they are engaged, with a partner/opponent who embraces such unpredictable values and unexpected aggressive capability.

See our brief commentary tomorrow, "Playing By The Rules", matching the trustworthiness of two of the world's major energy leaders.


 

CWN Forum – Today, May 28th  

12:00pm-1:15pm, Dena'ina Center

Doors open at 11:30AM, program begins promptly at noon

Click Here to Register

On Wednesday, May 28th, Commonwealth North will hold the third of a three-part series discussing the State's plan to take a twenty percent equity share in a North Slope natural gas pipeline project. The Alaska Constitution states that, "The legislature shall provide for the utilization, development, and conservation of all natural resources belonging to the State, including land and waters, for the maximum benefit of its people."

-What does, "maximum benefit" mean?
-Should rural Alaskan's benefit from a project focused on the Railbelt?
-Should Alaskan's expect access to gas at below market prices?

Our panel will discuss the concept of ensuring the maximum benefit of Alaska's resources in the context of this historic, multibillion dollar investment in a gas pipeline project.  

The panel will include:

Gunnar Knapp, Ph.D., has been on the faculty of the University of Alaska Anchorage Institute of Social and Economic Research since receiving his Ph.D. in Economics from Yale University in 1981. Dr. Knapp has conducted a wide variety of research on the Alaska economy and Alaska resources, including in particular markets for Alaska seafood and management of Alaska fisheries resources. 

Marty Rutherford retired in 2010 as Deputy Commissioner, Alaska State Department of Natural Resources. Rutherford has extensive experience with 26 years in Alaska state government, much of it in various positions in the Department of Natural Resources. Marty is currently Special Projects Manager for the Anchorage Office of Linc Energy. 

Dermot Cole is a longtime Alaska reporter, columnist and author, based in Fairbanks. He has written extensively about Alaska and Alaska history for more than 35 years. A former reporter for the Fairbanks Daily News-Miner, his most recent book is "North to the Future: The Alaska Story, 1959 - 2009." Cole grew up in Pennsylvania and lived in Taiwan, Montana and Hong Kong before moving to Alaska in 1974. He is a graduate of the University of Alaska Fairbanks. 

Larry Persily will moderate the panel.  Persily is the federal coordinator for Alaska natural gas pipeline projects and a former deputy commissioner at the Alaska Department of Revenue.   

Click Here to Register for Next Week's Forum

Members, $20; Non-Members, $35

Thank you to our event sponsors! 

Northrim Bank     

 

  Alaska Journal

Categories:

5-26-14 Memorial Day - As Russia Threatens Ukraine Will Alaska Invite Russian Support of Gas Pipeline/LNG Project?

26 May 2014 12:47pm

Point of Personal Privilege: On this Memorial Day I honor the memory of Dad (Col. Dave Harbour) and Mom (Bobbie) who were married in Honolulu a few days after the Japanese attack in 1941...and fellow veterans and supportive families, past and present, who defended America's constitutional principles through the country's majestic history of freedom and prosperity.  -dh


Russian Company Involvement In Alaska Gas Pipeline Project?

(Refer to our 2-14-13 related posting.)

One of our Pacific Rim readers writes over the weekend, "that Rosneft was granted by Exxon to come into Point Thomson (and hence the North Slope LNG project).

"Over recent days the Majors have been lining up to affirm their ongoing interest in investing in Russia with the likes of Rosneft, notwithstanding the sanctions imposed upon Rosneft's CEO, Igor Sechin, personally.

"The State of Alaska will become part of the current Ukrainian dispute with Russia if Rosneft exercises its option over Point Thomson, as the State law states:

11 AAC 82.605. Assignments 

(a) Leases, oil and gas exploration licenses, permits, or interests in leases, oil and gas exploration licenses, or permits, may, with the approval of the commissioner, be assigned or subleased as provided in this section to a person or persons qualified to hold a lease. 

"The Commissioner will therefore have to determine if Rosneft is a party that is “qualified” under Alaskan law to hold a lease!"

This reader, who is attracted by the State's opportunities, and searches for Alaskan investments, says, "I’ll continue to watch with interest from afar."

Please remember that, above all, we seek accuracy and are responsible for the reliability of our hundreds of thousands of pages of archives.  We would encourage readers with additions/corrections -- or a different take on the ROSNEFT investment -- to comment either confidentially (as this reader requested), or on the record.   -dh

Categories:

5-25-14 Government Decisions Matter

25 May 2014 2:05am

Sunday, Post Church Service Commentary:

Charles Stanley, Photo by Dave Harbour, first baptist church of AtlantaDr. Charles Stanley (www.intouch.org, NGP Photo) gently reminds us that our actions have consequences and that we reap, "what we sow, more than we sow and later than we sow."  We include this reference not to suggest that decision makers are bad or good people, but to emphasize the principle that actions have consequences.

Today's posting is for the benefit of Alaskan and Canadian decision makers who have said, "This is where the oil is; a tax or regulatory increase won't stop those oil companies.  They have to do business with us.  Where else are they going to go?"  

The answer is that investors have a number of alternatives for using their money productively.  They are prudent.  They are decisive.  To them, government support or opposition counts.  

Below, is a relatively small but -- to the greater Norman Wells area -- highly significant way in which an Aboriginally controlled government decision process has adversely affected economic strength, jobs and opportunities in their region.  

Contrast this with the gas sale agreement decision announced in Inuvik a few days ago.

-dh


CBC News.  Husky Energy has withdrawn its application to horizontally drill and frack up to four wells in the Sahtu region of the N.W.T.

In a short note to the Sahtu Land and Water Board, the company said it has decided to postpone drilling for two years. It had intended to start drilling this coming winter.

mi-gregor-harold-mcgregor

Gregor Harold McGregor, mayor of Norman Wells, N.W.T., says Husky's decision to withdraw its fracking application isn't good news for the region's economy. (CBC)

The decision is a disappointment for businesses in the region that were hoping to capitalize on the project.

"I'm in a state of shock at the moment," said Gregor McGregor, mayor of Norman Wells.

"I wasn't expecting it. It sure isn't good news for the area, for the region. The economy here is very fragile, I've said that many times. I guess we're about to find out just how fragile it is."

Husky's decision comes a week after the Sahtu Land and Water Board delayed making a decision on the project. The board wanted more information about the project.

Earlier this year, ConocoPhillips — the other big energy player in the region — announced it will not be drilling in the region next winter.

Categories:

5-23-14 Russia-China Gas Sale Impact On Alaska - Lower 48 - Canadian Exporters

23 May 2014 8:07am

CBC North.  The Town of Inuvik, Dome Church, Russian Orthodox, Canada, Northwest Territories, Yukon, Photo by Dave HarbourInuvik (NGP Photo, Inuvik Russian Orthodox Dome Church, Circa. 2003, and author) has announced it will renew its agreement with Inuvik Gas to distribute fuel to the town, but residents shouldn't expect lower gas bills, says the senior administrative officer.

The Pebble Partnership (PLP) filed suit against the Environmental Protection Agency (EPA) on Wednesday in the U.S. District Court for Alaska.

PLP asked the District Court to stop the EPA's move to pre-emptively veto the Pebble Project under Section 404(c) of the Clean Water Act.  

As we have written, if the EPA succeeds in this overreach, virtually all construction projects will come to be at risk of preemptive project vetos, putting a final nail in the coffin of Constitutionally guaranteed, "due process".  

Read the PLP filing here....  -dh


David Blackmon, CEA, EID, hydraulic fracturing, states rights, Photo by Dave HarbourReal "Energy Policy" Begins And Ends In The States. Forbes, EID’s David Blackmon (NGP Photo). The states are where the issue surrounding well-by-well disclosure of hydraulic fracturing fluid content has been addressed over the last 3 years.

Commentary: Huge Russian - Chinese Natural Gas Sale Agreement Could Impact World Markets and Alaska Project Feasibility

We urge readers to absorb yesterday's Bloomberg report on the Russia-China, $400 billion gas purchase arrangement, By Robert Tuttle, Anna Shiryaevskaya and Isis Almeida.  

(Also see World Energy News report and map and today's WSJ editorial.)  

Our readers are well aware that Asian market demand will be almost exponentially increasing over the next 20 years.  This owes to a growing Japanese appetite for natural gas in wake of the 2011 Fukushima Daiichi disaster, to growing industrial demand throughout the region, and to a trend of conversion from coal to gas fired electrical generation.

Energy Guardian's James Felker said today that the President's latest FERC appointment, Norman Bay, may be in trouble.


Here's how to see featured speakers of NARUC's upcoming meeting in Dallas:

•    Cheryl LaFleur, Acting Chair, Federal Energy Regulatory Commission
•    Mignon Clyburn, Commissioner, Federal Communications Commission
•    Lynn Good, President, CEO, Duke Energy
•    Susan Story, CEO, American Water Works Company
•    Mark McFarland, CEO, Luminant
•    Cynthia Quarterman, Administrator, Pipeline and Hazardous Materials Safety Administration


Mobile to host inaugural Gulf Coast Energy Forum June 5.

 
The inaugural Gulf Coast Energy Forum will be held Thursday, June 5 at the Renaissance Mobile Riverview Plaza Hotel, featuring U.S. Rep. Bradley Byrne as one of two keynote speakers. Patrick Sheehan, director of Florida's Office of Energy, will also address the assembly being hosted jointly by the Consumer Energy Alliance and the Partnership for Affordable Clean Energy. In addition, the event features an executive roundtable including utility leaders from Mississippi Power, Tennessee Valley Authority, PowerSouth, Alabama Power and South Mississippi Electric Power

Augmenting demand in Europe, will be the aftermath of a cold curtain of mistrust now trying to separate western European nations from Russian gas production.

The authors of the Bloomberg story point to the nearly half-trillion deal as a game changer for many reasons.  Read about those reasons in their report.

But from our crow's nest looking down at Alaska's potential Alaska North Slope (ANS) LNG export project we see the Russian-Chinese deal as increasing the need for the most competitive, cheapest supplies of imported gas.

The competition could grow as more gas is discovered and developed in the Arctic.  ExxonMobil's Imperial Oil, "...is assembling one of the most comprehensive oil and natural gas exploration programs in Canadian history," for Beaufort sea drilling, according to Gary Park's story in today's Petroleum News

Could Canadian arctic natural gas supplies eventually find their way into an Alaska gas export project, or will they compete with it, we wonder?  Since ExxonMobil owns about a third of Alaska's gas reserves, we would bet effort will be made to work together...as has been the history with the Arctic Gas project of the 1970s and later transportation schemes.  

Those who are most competitive should end up with long term contracts first.

Those who are less competitive are more likely to be late signers with marginal pricing, with some even continuing to be long term owners of their own gas -- or be reduced to selling it in spot markets.

Some could end up with stranded facilities, a risk to companies.  In Alaska's case, since it could be an equity owner of the project, it will be risking public funds and political reputations on the vagaries of the international gas market.  

At least, this could have the advantage of teaching governmental decision makers and citizens about the costs as well as the benefits of engaging in private market activity.

With the list of American and Canadian LNG project applications continuing to grow, one could envision the window of opportunity for sales of Alaska LNG to be diminishing, not improving, over the immediate term.

However, we defer to the investors who would certainly not let such an enormous project migrate from this early, pre engineering stage to a later open season without sufficient confidence that markets for Arctic gas do indeed exist.

On the other hand, if the current competitive gas export market continues to discriminate more and more against the most expensive player --  Alaska  -- it may lead ANS gas marketers to once again reassess the feasibility and changing metrics of value added petrochemical projects within the 49th state.  

After all, windows of opportunity do close and open, close again and open again.  

-dh

Categories:

5-20-14 - Gas Pipelines And State Revenue

20 May 2014 9:18am

Gaetan Caron, national energy board, guitar, fender, Canada, Photo by Dave HarbourOur faithful readers will remember the tributes offered them last week on behalf of retiring National Energy Board Chairman and CEO, Gaétan Caron.  Today, we provide our Canadian readers with the link to apply for a significant, temporary appointment as an NEB Board Member.


Energy Questions For Voters To Ask Candidates

What do daisies and dandelions have to do with energy and voting?

by

Dave Harbour

Today, the House Natural Resources Subcommittee on Fisheries, Wildlife, Oceans and Insular Affairs held an oversight hearing entitled “Oil and Gas Activities within Our Nation’s National Wildlife Refuge System.”


Today, the House Natural Resources Subcommittee on Energy and Mineral Resources held an oversight hearing on “American Energy Jobs: Opportunities for American Manufacturing.” This hearing examined the growing job opportunities in the manufacturing sector made possible by America’s energy renaissance...."

Alaska's government is using its savings accounts, cash flow, borrowing capacity and bonding capability to invest in all sorts of energy projects.  These include an in-state/international gas pipeline/LNG project, an intrastate gas pipeline project, a North Slope LNG trucking project for Fairbanks, a major hydroelectric project and various wind generating and other alternative energy projects.  

A number of these could compete against each other, against other energy developments or against energy entrepreneurs and the private market.  To be fair, some argue that big projects judged to be in the public interest would not happen without public financing.

Be assured that every project a public official desires for a constituent will require him or her to trade votes and public monies to another public official wishing to also bless his/her own constituents with beneficent gifts financed by others--including the next generation.

In the next few years, the marketplace will have its way with all of these concepts, perhaps pronouncing some to be winners along with some losers.

TODAY, U.S. Sen. Lisa Murkowski (NGP Photo) raised concerns with Lisa Murkowski, US Senator, Alaska, FERC, Norman Bay, Photo by Dave HarbourFederal Energy Regulatory Commission (FERC) nominee Norman Bay about the lack of transparency and due process at the enforcement office under his leadership. 

Alaska's history of government owned projects is mixed with what many call a successful Bradley Lake hydro project, Alaska Housing Finance Corporation (AHFC) and various ports, roads and bridges -- balanced by unsuccessful dairy, beer, grain silo and seafood processing experiences.  

Of course, we don't remember when the state administration or legislature followed state grants and equity ownership with robust, annual forensic audits of state supported projects.  These evaluations would try to assure that those projects are free from favoritism, sole source corruption, wasteful spending, an unproductive workforce, etc.  

Government and Dandelions  

See dandelion-daisy video here

See dandelion-daisy photos here

Dandelions, Invasive, Baxter Blvd, Baxter Road Bible Church, Anchorage, Photo by Dave HarbourIt is hard for elected leaders to assure the same efficiency that private investors require.   

For example, if you plant a garden in your yard, you will likely water, weed and fertilize it.  If a dandelion pops up, you'll pull it out by the roots before it spreads its noxious, invasive seeds.

If you are an elected official, you'll vote to build a landscaped road or highway.  And, since you have the 'best intentions', you'll require landscaping that looks pretty, at least for the ribbon cutting.

In the case of Northern Lights Blvd. in Anchorage (and other roads and highways throughout Alaska), builders planted millions of beautiful, long flowering Shasta daises by sprayed seeding on the right of way shoulders. The first few years, they were beautiful...along with the few interspersed Arctic poppies.

The ingenious landscape designer probably convinced government project engineers that this would create the efficiency of both crowding out the weeds and eliminating a lot of grass mowing while creating a beautiful, colorful right of way.

But a few years after construction, 'well intended' street maintenance managers ordered regular mowing at just the wrong times.

In early May, the yellow-headed dandelions emerge, smiling for all the world to see, preparing to evolve into cottony seed and propagate -- trillions and quadrillions of them.

Then, in early June, the beautiful daises emerge from their winter sleep.

Street maintenance managers are not landscape designers, so they do what seems natural.

They wait until the dandelions are ready to go to seed, then mow the rights of way just as the beleaguered daises are laboring to bloom.  This causes killing of the good flowers, homicidia boni flore, along with their premature seeds -- derailing the efficient design purchased with taxpayer dollars.

Yes, all government spending is cloaked in best intentions.  It is up to voters to assure that elected leaders limit spending to sustainable, prudent uses because the voters and their children will inherit the debt as well as any benefit.    

While we're at it, let's ask the State highway departments and municipal street maintenance managers to please mow down the yellow heads before they go to seed and before planted daisies grow high enough to be cut off by the big landscaping mowers.

Otherwise, let's don't waste money in the future trying to beautify rights of way with specialty plants and landscaping unless there is a plan to maintain them.

Why should our kids be paying off highway and road bonds ten or twenty years from now for landscaping that no one cultivates or protects after the ribbon cutting?

And, for those who say this year it is too late to cut down the yellow heads in time, be on notice that a bumper crop of dandelions is waiting to explode forth with fall seeds later this summer! (Public facilities everywhere pay similar homage to the dandelion, which Alaska officials -- ironically -- refer to as an invasive plant.  This is a photo taken near Northern Lights Blvd. at East High School in Anchorage.)

In the past, we've seen street maintenance cut down the daisies in mid summer then not cut the bumper dandelion crop until after they are ready to release seeds to the summer winds.

So, there's still time to change and take this lesson of the dandelions and daisies to the town hall meetings where candidates invite questions.

After all, don't we owe it to our kids if not ourselves?

-dh

Indeed, since political leaders create government supported projects is it really in the interest of those political leaders to find fault with their "investment" of public monies?  Isn't it just more natural to not "rock the boat" if there are no bad headlines...and keep fingers crossed that the project will "be my legacy and not my downfall".

You can bet that, even if a few elected leaders were to take these words seriously and want to require an evaluation of the use of public money in private sector projects, the majority would not want to budget money to enforce best practices.  Nor would the majority of elected leaders want to create a process that could expose "a government investment gone terribly wrong".

So where does this lead us?

Solution

We are in an interim stage between legislative sessions.  It is a stage wherein the Administration is beginning to fashion its budget priorities for the next year.  It is also campaign time, when dozens of citizens are preparing for a primary election in August and a general election in November.   

The solution to the dilemma of how to spend public funds well is to question and talk with candidates.  Ask, "do you support such and such a public investment in such and such energy project?  Can the private sector do it without using state money?  If state money is used, how can you be sure it will not be misused?  If public funds are misused, what are the penalties?  Are you putting public funds into projects that compete with each other or with private sector exploration, production or projects; if so, what is the compelling rationale?  In order to build this project with public funds, what will be the true cost after you have agreed to support other state spending in return for the support of colleagues for your project?  Will your decisions provide a legacy of opportunity for our children, or a burden of debt?  

Scott Goldsmith, ISER, UAA, Sustainable budget, forecast, alaska, Photo by Dave HarbourIn questioning candidates, one could also refer to the University of Alaska's Institute of Social and Economic Research finding that a sustainable 2014 state budget is in the range of $5.5 billion.  Then compare that with economist Scott Goldsmith's (NGP Photo) review of the Administration's Revenue Forecast of last fall suggesting a 2014 revenue forecast of 5.116 billion.  The updated forecast produced this month projects actual revenue to be somewhat more optimistic, in the range of $5.3 billion (but creeping down to $4.5 billion in FY 2015).  Revenue would not even be that good over the long term, we believe, had not the Legislature enacted production tax reform a year ago.  Now, a voters referendum threatens that tax reform and the future of natural resource investments in Alaska.

In sort, good energy and economic questions for candidates come quickly to mind--with just a little thought.

In this way, we might help to assure our children inherit their full and reasonable birthright that includes: 

  • A state enjoying federal and state policies that truly enable citizens to make a living from natural resources as defined in Alaska's constitution (Article VIII, Section 2); and
  • A state that has no unfunded liabilities for public employees or other decisions that would indebt our children for our excesses; and
  • A state that spends within its means; and
  • A state and citizenry that actually celebrate the natural resource industries which its constitutional dependence on natural resources logically requires;
  • Among other things.

For further reading on this subject, we recommend:

Dandelion - Daisy Photos (See Story Above):

Dandelions East High SchoolDandelions, East High School, Anchorage, Ak. (Left)

Anchorage School District Headquarters (Below)

Anchorage School District Dandelions

 

 

 

 

 

 

 

 

 

 

 

 

Adopt a road, Anchorage School District, Antique Auto Mushers of Alaska, Dandelions, Photo by Dave HarbourNorthern Lights at Anchorage School District Headquarters, Antique Auto Mushers of Alaska (Adopt A Road Project)

Dandelions, Chester Creek, Invasive, Northern Lights Blvd, Anchorage, Photo by Dave HarbourChester Creek Greenbelt at Northern Lights Blvd.

Dandelions, Russian Jack Park, Invasive, Northern Lights Blvd, Anchorage, Photo by Dave HarbourRussian Jack Park          

        

Dandelions, Park Strip, Invasive, Downtown Anchorage, Alaska, Photo by Dave HarbourPark Strip, Downtown Anchorage.  Mower spreads invasive dandelions after flowers have evolved into mature seeds.

Daisies, Baxter Road Bible Church, Invasive, Baxter Blvd, Anchorage, Photo by Dave Harbour

Baxter Road Bible Church Daisies.

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