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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.

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Federal Obstruction

1-26-15 New Week, New Challenges

26 January 2015 3:47am

NORTH DAKOTA RIG COUNT POINTS TO U.S. OUTPUT DECLINE

The decline in oil drilling that has occurred so far across the United States is probably enough to ensure U.S. production peaks by April or May, though that might not be evident until June or July given delays in publishing production records. If the number of active rigs continues to decline in...


A Good Father Figure

by

Dave Harbour

Please refer to our Sunday review, yesterday, of the President's executive action against Alaska and consumers throughout America

WASHINGTON, D.C. – U.S. Sens. Lisa Murkowski and Dan Sullivan, and Rep. Don Young will hold a press conference today at 2 p.m. in the Senate Radio and TV gallery to respond to the Obama administration’s efforts to lock up millions of acres of the nation’s richest oil and natural gas prospects on the Arctic coastal plain and move to block development of Alaska’s offshore resources.

We will report....  -dh


For those keeping a close eye on the Alaska economy, Alaskanomics produced this report today: 

The Department of Labor and Workforce Development release its monthly unemployment numbers on Friday. The seasonally adjusted unemployment rate for December was down to 6.3 percent. The national rate was 5.6 percent for the same period. Alaska’s unadjusted rate was also at 6.3 percent for December.

The Municipality of Anchorage and the North Slope Borough were the only areas that did not have an increase in the unemployment rate. Anchorage is less subject to seasonal shifts and the North Slope Borough saw an increase with winter construction. The North Slope Borough has the lowest unemployment in the State at 3.7 percent, while Hoonah-Angoon Census Area has the highest with 21.6 percent.

For full statistics....

​Yesterday as I was considering the President's continuing and escalating attack on Alaska's statehood act, constitution and people my mind wandered to how other presidents would be acting.

I first thought of the "Father" of the United States, George Washington.  He endured great hardship with his troops.  He left family behind to fight the nation's enemies.  He protected his people and defended them against internal and external threats.  And, he refused to become "President for life" when the people urged him to do so.

I think of Abraham Lincoln, the father of American unity who poured his energy, soul and his very life into service of his country.

And, I think of their mutual devotion to our Creator, without whom the country could not have achieved maturity and without whom the country cannot long remain great or even exist.

Then, I think of our current president who vacations while his people fight; who deceives the people on all manner of domestic issues; who aligns himself with communists, socialists and anarchists bent on destruction of America's way of life; who will not come to the aid of soldiers and diplomats locked in mortal combat and hesitates not to leave them behind to the cruel devices of our enemies; who claims credit for energy and economic accomplishments occurring in spite of his contrary efforts; who actively blocks energy, mining, timber and other multiple use, wealth and job producing activity on public lands...and so much more.

One asks, when the president of a country birthed in sacrifice and devotion to Christian service separates himself from that legacy, what can the future hold for citizens?

None of us is perfect.  Presidents aren't perfect.  And, regular fathers of families are imperfect, too.

Perfection in our presidents and our fathers is not the issue.  The issue is the purpose, devotion and example of life set for a father's children or a president's citizenry.

On this side let's say you have a father who acknowledges his imperfection yet strives with devotion to his heavenly Father to care for, protect and guide his children to healthy, adult outcomes.

And, on this side, you have a proud, imperfect father who does not seek the kingdom of heaven, scorns it and thereby neglects the time honored rules of the spirit and of living.  Can he with that lack of foundation care for, protect and guide his children to healthy adult outcomes?  

If a president consorts with those who would deprive his children of freedom and the opportunity of free enterprise can that be called protection?

If a president demonizes opponents to win an argument, can that lead citizens to healthy outcomes? 

If a president seeks luxury while his citizens suffer in war or other depravations, can he be said to nobly guide them?

Enough of the Father analogies.  They might just as well have been "mother" analogies or "cousin" analogies.  

The point is this.  We don't have much choice about the family into which we are born.  We do get to have the leadership we elect.  If the majority of Americans supports the kind of leadership we have, it will continue and its goals will change the culture and nature of the nation.  

If the majority comes to believe that the traditional values of founding Fathers are critical to America's future, America might prosper, survive and enjoy a continuing mantle of protection.

For one, I am for good father and mother figures as defined above and reject the alternative.

It remains to be seen if the majority of my fellow citizens agree or prefer the new direction upon which we are now embarked.

One way leads to historically proven, laudable, protected and peaceful outcomes.  The other way, history shows, leads to dictatorship, misery and loss of freedom.

It's time to make a choice and act upon it.

Categories:

1-25-2015 REPORT ALERT: Federal Government Makes Economic War On Alaska and All American Consumers

25 January 2015 11:18am

Alaska Governor Bill Walker, Federal War on Alaska, overreach, Dave Harbour PhotoSenator Lisa Murkowski, Federal War on Alaska, overreach, Dave Harbour PhotoSenator Dan Sullivan, Federal War on Alaska, overreach, Dave Harbour PhotoCongressman Don Young, Federal War on Alaska, overreach, Dave Harbour Photo

 

 

 

(NGP Photos, Left to right: Governor Bill Walker, Senator Lisa Murkowski, Senator Dan Sullivan, Congressman Don Young)


REPORT ALERT: Federal Government Makes Economic War On Alaska and All American Consumers

BY

Dave Harbour

While Alaskans have a right to be outraged that their statehood birthright and economic future are now threatened, AMERICAN CONSUMERS EVERYWHERE will feel the pain as this Administration continues to violate the spirit and fact of due process and threatens the very rule of law protecting every citizen.

 

Today, Robert Dillon of Senator Lisa Murkowski's Energy Committee office dispatched a somewhat unprecedented weekend news release reflecting an immediate and unified response to an imperial, federal action.  

Signed by Governor Bill Walker and the entire Alaska Congressional Delegation, the SUNDAY announcement read: "Obama, Jewell Declaring War on Alaska’s Future!"

Read the entire release here....

​It should be called, "Obama's Sunday War On Alaska".  

Today, the President took took careful aim then leveled a surprise, Sunday punch on the state of Alaska, the Congress and all American consumers -- while announcing more attacks are coming.

According to a Sunday press release, the Obama administration plans to manage a strip of land on Alaska's already protected northern coast Refuge as wilderness while recommending to Congress that the designation become law.

Long managed as a restricted use Wildlife Range, in 1980 Congress enacted the Alaska National Interest Lands Conservation Act  (ANILCA) which converted the Arctic National Wildlife Range into the more restricted "Refuge" status.

James Halloran, Obama's War On Alaska EconomyOur friend and senior energy analyst, James Halloran (NGP Photo), was moved this weekend as well to comment on the President's Sunday Alaska announcement.  He is one American that most Alaskans would agree, "knows what he is talking about".  Read more....

That law then went on to include a "no more" clause requiring that the federal government not ever again by administrative action designate Alaska wilderness without an act of Congress.

ANILCA also expressed the clear will of Congress that the approximately 5% of the 19 million acre ANWR, called the "coastal plain", be specifically available for oil and gas development upon further action by Congress.

Thus, the intent of Congress could not have been clearer that 1) no future administration could outlaw coastal plain energy development and 2) that the administration was not free to establish more Alaskan wilderness areas by fiat.

This matter of reasonable access to federal as well as state lands is critical for a couple reasons dealing with the Alaska Statehood Act passed by Congress in 1958 and signed into law by President Eisenhower in 1959.  The Act was created by what is commonly thought of as a 'compact' involving a 1) plebiscite of Alaska's citizens, 2) approval of Alaska's constitution and 3) approval by Congress and the President. The Statehood Act narrowly passed based on the conviction  that Alaska could make a living from its natural resources.  The state constitution was based on the economic expectation of resource development.  Finally, the vote of citizens could not have occurred without the expectation of access to state lands in addition to state sharing of revenue derived from resource development of federal lands.  

Adding more insult too injury, last week the President issued an executive order affecting the Arctic, knowing that Alaska is America's only Arctic state.  Alaska is adjacent to perhaps as much as 20% of the world's remaining oil and gas reserves.  While Canada and Russia along with the half-dozen other Arctic nations are seeking to establish and hold jurisdiction over this wealth, the US executive order focuses mainly on the administration's key, domestic pre-occupation: global warming.  Thus, Alaskans are afraid of a federal government that created this new executive order:

Alaska Governor, Walter J Hickel, Federal abuse, Dave Harbour Photo

Our readers can therefore understand why Alaskans now feel deeply betrayed by the federal government (Hear the late Governor and former Interior Secretary Walter Hickel describe federal abuses, NGP Photo).  Alaskans' livelihoods were dependent on resource development from the very birth of their state.  Since 1959, thousands of additional federal laws, regulations and rulings have deeply diluted the ability of the state to financially survive.  We have documented in this webpage a litany of federal abuses that even erode due process protections of the U.S. Constitution, the underpinning of the Alaska statehood compact and the very concept of America's reliance on, "Rule of Law".  We feel like the bystander watching a sly cook slowly raising the temperature of a pot of water containing hapless citizens of a former, pioneering state.

It should not also be forgotten that a state 1/5th the size of the nation is not only full of natural beauty, but also with energy, strategic minerals, rare earth elements, fish, timber, and tourism related resources that have and could continue to provide untold wealth to the citizens of the country without materially affecting the natural wonders.  

So here we are on this lovely weekend, after church and expecting a quiet walk, when we and the world hear that the White House, without warning, has declared economic war on Alaska by violating the will of Congress imbedded in ANILCA on top of the continuing pattern of abusive authoritarianism.

Alaska's Governor, two U.S. Senators and lone member of the House of Representatives all reacted bitterly to the administrative action today. 

We can certainly expect more announcements and news conferences from Alaska officials in the days ahead.

Other references: Washington Post; KTUU.com: Walker 'angry, very angry' over planned ANWR wilderness designation; Alaska Dispatch News; Fairbanks News Miner; Wall Street JournalNew York Times 

____________________________________________


FOR IMMEDIATE RELEASE         JANUARY 25, 2015 

ROBERT DILLON (202) 224 6977 (MURKOWSKI)                MIKE ANDERSON (202) 223 7132 (SULLIVAN)               MATT SHUCKEROW (202) 412 8533 (YOUNG)                     GRACE JANG (907) 957 9451 (WALKER)

    Obama, Jewell Declaring War on Alaska’s Future

WASHINGTON, D.C. – Alaska’s Congressional Delegation and Gov. Bill Walker today denounced President Obama and Interior Secretary Sally Jewell for launching an unprecedented assault on Alaska that will have long-lasting effects on the state’s economy and the nation’s energy security.

In coordination with the White House, Secretary Jewell will announce this week – starting today – that she will lock up millions of acres of the nation’s richest oil and natural gas prospects on the Arctic coastal plain and move to block development of Alaska’s offshore resources. The administration is also weighing additional actions in the near future that would prevent new production in the National Petroleum Reserve-Alaska.

“What’s coming is a stunning attack on our sovereignty and our ability to develop a strong economy that allows us, our children and our grandchildren to thrive,” Sen. Murkowski said. “It’s clear this administration does not care about us, and sees us as nothing but a territory. The promises made to us at statehood, and since then, mean absolutely nothing to them. I cannot understand why this administration is willing to negotiate with Iran, but not Alaska. But we will not be run over like this. We will fight back with every resource at our disposal.”

“This outrageous action confirms what most Alaskans have feared – that the Obama administration’s war against Alaska families and the middle class would only intensify under the final two years of President Obama’s tenure. But Alaskans have been in tough battles before. We will defeat their lawless attempt to designate ANWR as a wilderness, as well as their ultimate goal of making Alaska one big national park. This decision disregards the rule of law and our constitution and specifically ignores many promises made to Alaska in ANICLA. It is just one more example of President Obama thumbing his nose at the citizens of a sovereign state – and will put Alaska and America’s energy security in serious jeopardy,” Sen. Sullivan said. “I stand united with Sen. Murkowski, Congressman Young, Governor Walker and the members of the Alaska State Legislature to vigilantly safeguard and defend our fellow Alaskans’ interests, and I pledge to do everything in my power to fight back against this assault on Alaska’s economic future.”

“This callously planned and politically motivated attack on Alaska by the Obama administration is akin to spitting in our faces and telling us it’s raining outside. As if on command from the most extreme environmentalist elements, this president and his team of D.C. bureaucrats believe they alone know what’s best for Alaska, but this brazen assault on our state and our people will do the complete opposite,” Rep. Young said. “Every time the president undermines the law of the land, he breaks his oath of office and weakens the nation we love. This latest move, in clear violation of ANILCA’s 'no more' clause, and despite the fierce opposition of every Alaska statewide elected official and the vast majority of our people, demonstrates that the Imperial Presidency of Barack Obama knows no bounds. Simply put, this wholesale land grab, this widespread attack on our people and our way of life, is disgusting.”

The Interior Department plans to immediately begin managing the 1.5 million acre coastal plain of the Arctic National Wildlife Refuge (ANWR) as wilderness – adding to the 18 million acres of ANWR already designated wilderness. This management status will prohibit even motorized access to the coastal plain.

Gov. Walker was outraged by the Obama administration’s actions at a time when the state is drawing down more than $10 million from savings every day due to low oil prices and declining production despite having more than 40 billion barrels of untapped resources, mostly in federal areas where oil and gas activity is blocked or restricted.

“Having just given to Alaskans the State of the State and State of the Budget addresses, it’s clear that our fiscal challenges in both the short and long term would benefit significantly from increased oil production,” Gov. Walker said. “This action by the federal government is a major setback toward reaching that goal. Therefore, I will consider accelerating the options available to us to increase oil exploration and production on state-owned lands. This further underscores the need for Alaska to become a participant in the infrastructure development for the benefit of all North Slope participants and the residents of Alaska.”

Wilderness status would permanently place off-limits the United States’ most promising onshore oil prospect and severely restrict access for subsistence hunters and other uses of the area. Under the terms of the 1980 Alaska National Interest Lands Conservation Act (ANILCA), additional wilderness designations are barred in Alaska without the express approval of Congress.

Secretary Jewell also said that President Obama plans to indefinitely withdraw areas in the offshore Arctic from oil and gas leasing in the new five-year plan being released later this week, which will effectively ban development in large swaths of the Chukchi and Beaufort seas. It is unclear how these new restrictions will affect areas already under lease by Shell, ConocoPhillips and Statoil.

Sen. Murkowski is chairman of the Senate Energy and Natural Resources Committee and the Interior and Environment Appropriations Subcommittee, which together have oversight of the Interior Department’s underlying legislative authority, nominations, and budget.

“These decisions simply cannot be allowed to stand,” Sen. Murkowski said. “I have tried to work with this administration – even though they’ve made it extremely difficult every step of the way – but those days are officially over. We are left with no choice but to hit back as hard as we can.”

###

For further information, please contact Robert Dillon at 202.224.6977 or robert_dillon@energy.senate.gov.

 

Visit our website at http://energy.senate.gov/public/


 

James Haloran.  We try to stay away from political commentary in this corner, as there are a huge number of political blogs and news sources that cover that front ad nauseum. Also, the points at which politics falls tangentially against the Energy world can usually be dealt with generically; one does not have to name specific entities or given parties, since neither party holds the copyright on stupidity when it comes to Energy matters.

Occasionally, however, some politician or party requires some comment. Today the Narcissist-in Chief  has proposed to extend further designation of major parts of the Alaska Natural Wildlife Refuge as wilderness area. He will need congressional approval to do this, which is unlikely to happen with a Republican congress. But he is also planning to rework the rules of the Interior Department in such a way that future development will be almost impossible. This will include offshore drilling in Alaska.

We could spend a lot of words analyzing this move, but let us try to do it an few bullet points.

  • As for the danger to wildlife in northernmost Alaska, the caribou herd size has fluctuated in recent years, but none of the fluctuation has had anything to do with oil and gas production in Prudhoe Bay. The herd size actually rose dramatically in the first few years after oil began flowing in 1974, and is still much larger than it was at that time. The threat to wildlife argument is just smoke.
  • There are already sizeable roadblocks to production from ANWR. It is estimated that it could take as long as 13-15 years to develop a major amount of ANWR production, counting permitting, exploration, development, and especially litigation from such groups as the NRDCThe only reason Prudhoe Bay got developed when it did was the Native Claims Settlement Act (1973) precluded environmental litigation; all claims were to arbitrated through the Interior Department. No surprise that almost no claims appeared, since the lawyers could not figure out a way to profit from arbitration. Such a preclusion is unlikely to happen again, since the Democratic Party is a majority-owned subsidiary of the tort lawyers.
  • If it becomes designated a wilderness area, there is no way congress could ever find the backbone to reverse it. As we noted, such a designation is unlikely, but Obama’s minions will set up such a rule-making process as to make it de facto a wilderness region.
  • To save this is for “future generations” is also baloney. Besides the fact that the region gets almost no visitors, it would get no more (or fewer) if it were a wilderness area, given the severe restrictions on even using a chain saw in such a designated area. As one site about travel there says: ANWR isn’t like a national park: Visitors will not find hiking trails, facilities or visitor centers. Snow covers the refuge nine months of the year and air travel is the only way in or out, making the remote refuge seem like the last frontier. Visiting the park requires advance planning and understanding of survival techniques.” Also, the Alaska North Slope is notorious for a massive quantity of large, voracious mosquitoes.

Few people understand the size and nature of the area involved. To put in perspective, we generally describe it this way in presentations:

  • ANWR is about the size of the State of Ohio (see the maps below), most of which is glorious mountains and river-filled valleys. None of this mountain area is conducive to drilling, nor is it likely to have much oil and gas that would be commercial. In any event, it is essentially already off limits.
  • Following this analogy, the ANWR Coastal Plain bordering the Beaufort Sea is roughly akin to the six counties in Ohio that border on Lake Erie, in terms of location and size. It is a fairly small part of ANWR, just as these are six counties in Ohio out of 88 in total,  and not terribly scenic. It is roughly akin to a desert on which millions (billions?) of huge mosquitoes swarm every summer.
  • Diving down one step further, the foot print of the infrastructure needed to develop oil in the Coastal Plain area would probably fit into the area from Public Square in Cleveland out to E. 55th Street, although it would be spread out over a larger area. Thus we are talking of a footprint of perhaps 30 square miles (very much on the high side), counting pipelines if all the equipment is pushed together, out of 30,136 square miles total for ANWRThis is 1/10 of 1% of the space, below inconsequential.

In the meantime, throughput through the Alaska Pipeline continues to dwindle. From its high of 2 million bpd, it is now operating at about 550,000 bpd. The pipeline is uneconomic below 350,000 bpd, and at some point more oil will have to be sourced, or the US will lose a major source of its daily oil. Given the lead time it will take to develop alternative sources, the proposed benching of any consideration of ANWR by the Socialist-in-Chief is particularly curious. This is akin to the curious timing of the lifeline Obama extended to Cuba at the time just when it became apparent Venezuela could no longer give aid to the communist island.  

This occurs at the same time Obama tries to take credit for the growth of oil production in the US during his reign, even as access to federal lands has been cut, and regulations have gotten more onerous. When confronted about this contradiction on one of the talk shows this morning, one of Obama’s minions, Chief of Staff Denis McDonough, said that the administration takes the hit for things that do not work even if (it believes) it had nothing to do with it, why not take credit when something works?

Of course this proposal is just part of a process to gin up the base for the 2016 election, but the American public is being used as the juniper berries.

There are 726 days left.  God help the United States of America


The Hill.  Obama proposes more protections against drilling in Alaska refuge

By Timothy Cama - 01/25/15 12:01 PM EST

President Obama will ask Congress to enact further protection’s for the remote wilderness area in Alaska’s northern reaches in an effort to stop any potential oil or natural gas drilling there.

...

Alaska’s all-Republican congressional delegation immediate lambasted the plan as a “war on Alaska’s future.”

Obama announced the proposal in a video from Air Force One on his trip to India.  More....http://thehill.com/policy/energy-environment/230664-obama-proposes-more-protections-against-drilling-in-alaska-refuge

https://encrypted-tbn2.gstatic.com/images?q=tbn:ANd9GcQXfA3uEMcPAVDPCXIko2jxMjcB8DqtOHQEZsuzmXRC5RJ482lh

 

https://encrypted-tbn1.gstatic.com/images?q=tbn:ANd9GcQudpgqHIm8bNisMIBNbWiOalVzZFdybsY_MBh7vw9pKHkA8qwcKQ

 

 

 

1.   https://encrypted-tbn2.gstatic.com/images?q=tbn:ANd9GcQF5gonRDJemA7ghBl2o4o0WJ7gpZVV5OONCfTAo-rlvllm3Ofp7g

James R. Halloran

(c)440-823-8664 | (h)440-423-4424 

jamesrhalloran@hotmail.com

Any opinion or viewpoint expressed in this email is solely that of the author and in no way reflects the opinion(s) of any affiliated company, employer or other organization.

Categories:

1-22-15 White House Issues Arctic Executive Order

22 January 2015 2:19am

This afternoon, Alaska's newest US Senator spoke out on yesterday's Presidential Executive Order.

On Thursday — just three weeks into the new year — the U.S. Senate chamber is set to surpass last year’s total of 15 amendment votes, thanks to a flurry of voting centered almost entirely on the Keystone XL pipeline.   Read more....


What happened to Alaska? Saudi....

CBC.  Irving Oil Ltd. is facing more questions about its use of a pipeline that was built on the property designated for the Canaport LNG facility.  Saint John struck a 25-year property tax deal in 2005 that was intended to encourage the development of the Canaport LNG facility.  The deal slashed the property tax bill for the LNG terminal ...  Read more.


Radio Interview

Yesterday, we were interviewed on the Dan Fagan - Glen Biegel (NGP Photo) Radio Program.  On your right is the podcast if you want to watch the action.  (Glen yawns from time to time, gets up to stretch, etc.)  He introduces me and begins his monolog on energy at 2:21:50 (That's two hours, twenty-one minutes and fifty seconds into the program.)  Then the interview Glen Biegel, Alaska, Radio, Air Personality, Dave Harbour Photoactually starts at 2:29:35, with a break at 2:59:10 and the conclusion at 2:41:40.  Biegel is a gifted air personality.  He does his homework, has a prodigious memory and can think and speak circles around a fellow like me.  But I do hope our readers get a little entertainment if not information out of that experience.  And, ya gotta hear the whacky music/sound effects played during the breaks; sounds like little brass instruments singing, "Have to be happy!"   And, you will be, just as I was.  (Link)


White House Executive Order On Arctic: Heaviest Focus On 'Climate Change' And More Executive Overreach'

In our opinion this is another end run around Congress but our Senior Senator, while somewhat critical, seems unaware of true ramifications, the ultimate strategy of an overreaching White House.  This is especially dangerous in view of her powerful position as Chair of a key, Senate jurisdictional committee.  WE URGE YOU TO REVIEW OUR CONCERNS HERE.      -dh

KTUU by Austin Baird.  The White House on Wednesday issued an executive order described as an attempt to coordinate federal Arctic-related activities, and to promote collaboration between other groups including local and state governments, academia and the private sector.

“The Arctic region provides critical ecological, cultural, and economic services to our nation,” Tamara Dickinson and Patricia Falcone wrote for the White House’s Office of Science and Technology Policy. “But we know based on decades of rigorous scientific research that climate change is causing the Alaskan Arctic to warm twice as rapidly as the rest of the United States – and that climate change will continue to transform the Arctic.”

Sen. Lisa Murkowski, R-Alaska, who chairs the Energy and Natural Resources Committee, called the announcement “a good step forward” but criticized the president’s overall approach to Arctic policy.

“Once again, the president remains focused on climate change,” she wrote in a release. ” I agree that climate change is an issue facing our nation and my state, but for President Obama and many of his ideological allies, the plan for the Arctic boils down to two words: Hands Off.”

Lisa Murkowski, Alaska, U.S. Senate, Crude Oil Export Ban, Photo by Dave HarboutAlaska's Senior U.S. Senator, Lisa Murkowski (NGP Photo) has long advocated for relaxation of the ban on exporting domestically produced oil--created during the so called Arab Oil Embargo of the 1970s.  Reader Eric Dompling kindly refers us to an important analysis of the benefits to U.S. consumers of exporting our resources in an article written by Tessa Sandstrom, "America’s Once-in-a-Generation Opportunity Starts With Exports​".  An era of low oil prices is the perfect time to lift the ban, for having access to world markets can assists U.S. producers in being able to compete for sales in a bigger marketplace--and keep supporting jobs, federal taxes, state taxes, local taxes and an abundance of oil and gas for our own citizens.  -dh


Business Insider by Rob Wile.  

You may have noticed we haven't heard much talk about opening the Alaska National Wildlife Refuge recently.

For decades, America debated whether to open up federally protected land that is said to contain lots and lots of oil (though exact estimates are plagued by uncertainty).

What happened? "Saudi" America.


ADN by Alex DeMarban.  ...in Washington, D.C., an aide to Sen. Lisa Murkowski said that as the new chair of the Senate Energy and Natural Resources Committee, Murkowski is strategizing on the best way to convince Congress to open the 1.5-million-acre coastal stretch of the refuge, set aside by Congress in 1980 for hydrocarbon evaluation.


Fuel Fix by Ryan Holeywell. Halliburton officials say they’re bracing for a tough year as falling oil prices are prompting their customers to slash their budgets.  

As oil prices have fallen more than 50 percent from their summer peaks, Halliburton’s customers have cut their budgets by an average of 25 percent to 30 percent, putting pressure on the oil field services company to reduce its rates, company officials said Tuesday.

“The long-term fundamentals of our business are still strong,” Halliburton president Jeff Miller said on....  Read more.


 

 

*     *     *

Commentary (Please at least take a glance at this .pdf we prepared for our readers so that you will know what it is for future reference):

Our concerns about yesterday's Executive Order On the Arctic are here, for the record, and we hope Members of Congress and Alaska's Administration are paying attention as the temperature in the pot containing the complacent frog, increases.

U.S. Senator Dan Sullivan, Arctic Executive Order, Federal Overreach, Dave Harbour PhotoWe can closely associate our own thinking with a statement released this afternoon by Alaska's new U.S. Senator, Dan Sullivan (NGP photo):

“While I am encouraged to see that the federal government is taking steps to coordinate itself in the Arctic arena – I see this as merely a piece of paper,” said Sullivan.  “With regard to the Arctic, the State of Alaska is not just another stakeholder as this executive order indicates, we are the other sovereign.  Indeed, the sovereign that makes the U.S. an Arctic nation.” 

“What is troubling about this executive order is the White House's continual focus on large, abstract concepts such as climate change.  But what is most troubling is that this executive order fails to acknowledge the need to develop our Arctic resources in a responsible manner – which is such a critical issue for Alaska’s future.”

-dh


 

 

 

The White House

Office of the Press Secretary

For Immediate Release
January 21, 2015
 

Executive Order --- Enhancing Coordination of National Efforts in the Arctic

 

EXECUTIVE ORDER

- - - - - - -

ENHANCING COORDINATION OF NATIONAL EFFORTS IN THE ARCTIC

By the authority vested in me as President by the Constitution and the laws of the United States of America, and to prepare the Nation for a changing Arctic and enhance coordination of national efforts in the Arctic, it is hereby ordered as follows:

Section 1Policy. The Arctic has critical long-term strategic, ecological, cultural, and economic value, and it is imperative that we continue to protect our national interests in the region, which include: national defense; sovereign rights and responsibilities; maritime safety; energy and economic benefits; environmental stewardship; promotion of science and research; and preservation of the rights, freedoms, and uses of the sea as reflected in international law.

Over the past 60 years, climate change has caused the Alaskan Arctic to warm twice as rapidly as the rest of the United States, and will continue to transform the Arctic as its consequences grow more severe. Over the past several decades, higher atmospheric temperatures have led to a steady and dramatic reduction in Arctic sea ice, widespread glacier retreat, increasing coastal erosion, more acidic oceans, earlier spring snowmelt, thawing permafrost, drier landscapes, and more extensive insect outbreaks and wildfires, thus changing the accessibility and natural features of this remote region. As a global leader, the United States has the responsibility to strengthen international cooperation to mitigate the greenhouse gas emissions driving climate change, understand more fully and manage more effectively the adverse effects of climate change, protect life and property, develop and manage resources responsibly, enhance the quality of life of Arctic inhabitants, and serve as stewards for valuable and vulnerable ecosystems. In doing so, we must rely on science-based decisionmaking and respect the value and utility of the traditional knowledge of Alaska Native peoples. As the United States assumes the Chairmanship of the Arctic Council, it is more important than ever that we have a coordinated national effort that takes advantage of our combined expertise and efforts in the Arctic region to promote our shared values and priorities.

As the Arctic has changed, the number of Federal working groups created to address the growing strategic importance and accessibility of this critical region has increased. Although these groups have made significant progress and achieved important milestones, managing the broad range of interagency activity in the Arctic requires coordinated planning by the Federal Government, with input by partners and stakeholders, to facilitate Federal, State, local, and Alaska Native tribal government and similar Alaska Native organization, as well as private and nonprofit sector, efforts in the Arctic.

Sec. 2Arctic Executive Steering Committee. (a) Establishment. There is established an Arctic Executive Steering Committee (Steering Committee), which shall provide guidance to executive departments and agencies (agencies) and enhance coordination of Federal Arctic policies across agencies and offices, and, where applicable, with State, local, and Alaska Native tribal governments and similar Alaska Native organizations, academic and research institutions, and the private and nonprofit sectors.

(b) Membership. The Steering Committee shall consist of:

(i) the heads, or their designees, of the Office of Science and Technology Policy, the Council on Environmental Quality, the Domestic Policy Council, and the National Security Council;

(ii) the Executive Officer of the Steering Committee, who shall be designated by the Chair of the Steering Committee (Chair); and

(iii) the Deputy Secretary or equivalent officer from the Departments of State, Defense, Justice, the Interior, Agriculture, Commerce, Labor, Health and Human Services, Transportation, Energy, and Homeland Security; the Office of the Director of National Intelligence; the Environmental Protection Agency; the National Aeronautics and Space Administration; the National Science Foundation; the Arctic Research Commission; and the Office of Management and Budget; the Assistant to the President for Public Engagement and Intergovernmental Affairs, or his or her designee; and other agencies or offices as determined appropriate by the Chair.

(c) Administration.

(i) The Director of the Office of Science and Technology Policy, or his or her designee, shall be the Chair of the Executive Steering Committee. The Assistant to the President for National Security Affairs, or his or her designee, shall be the Vice Chair. Under the leadership of the Chair, the Steering Committee will meet quarterly, or as appropriate, to shape priorities, establish strategic direction, oversee implementation, and ensure coordination of Federal activities in the Arctic.

(ii) The Steering Committee shall coordinate with existing working groups established by Executive Order or statute.

(iii) As appropriate, the Chair of the Steering Committee may establish subcommittees and working groups, consisting of representatives from relevant agencies, to focus on specific key issues and assist in carrying out its responsibilities.

(iv) Agencies shall provide administrative support and additional resources, as appropriate, to support their participation in the Steering Committee to the extent permitted by law and within existing appropriations. Each agency shall bear its own expenses for supporting its participation in the Steering Committee and associated working groups.

(v) Each member of the Steering Committee shall provide the Executive Officer with a single point of contact for coordinating efforts with interagency partners, collaborating with State, local, and Alaska Native tribal governments and similar Alaska Native organizations, and assisting in carrying out the functions and duties assigned by the Steering Committee.

Sec3Responsibilities of the Arctic Executive Steering Committee. The Steering Committee, in coordination with the heads of relevant agencies and under the direction of the Chair, shall:

(a) provide guidance and coordinate efforts to implement the priorities, objectives, activities, and responsibilities identified in National Security Presidential Directive 66/Homeland Security Presidential Directive 25, Arctic Region Policy, the National Strategy for the Arctic Region and its Implementation Plan, and related agency plans;

(b) provide guidance on prioritizing Federal activities, consistent with agency authorities, while the United States is Chair of the Arctic Council, including, where appropriate, recommendations for resources to use in carrying out those activities; and

(c) establish a working group to provide a report to the Steering Committee by May 1, 2015, that:

(i) identifies potential areas of overlap between and within agencies with respect to implementation of Arctic policy and strategic priorities and provides recommendations to increase coordination and reduce any duplication of effort, which may include ways to increase the effectiveness of existing groups; and

(ii) provides recommendations to address any potential gaps in implementation.

Sec4Duties of the Executive Officer. The Executive Officer shall be responsible for facilitating interagency coordination efforts related to implementing the guidance and strategic priorities developed by the Steering Committee. The Executive Officer shall coordinate with the Chair and the Special Advisor on Arctic Science and Policy at the Department of State to provide regular reports to the Steering Committee on agency implementation and planning efforts for the Arctic region.

Sec5Engagement with the State of Alaska, Alaska Native Tribal Governments, as well as other United States Stakeholders. It is in the best interest of the Nation for the Federal Government to maximize transparency and promote collaboration where possible with the State of Alaska, Alaska Native tribal governments and similar Alaska Native organizations, and local, private-sector, and nonprofit-sector stakeholders. To facilitate consultation and partnerships with the State of Alaska and Alaska Native tribal governments and similar Alaska Native organizations, the Steering Committee shall:

(a) develop a process to improve coordination and the sharing of information and knowledge among Federal, State, local, and Alaska Native tribal governments and similar Alaska Native organizations, and private-sector and nonprofit-sector groups on Arctic issues;

(b) establish a process to ensure tribal consultation and collaboration, consistent with my memorandum of November 5, 2009 (Tribal Consultation). This process shall ensure meaningful consultation and collaboration with Alaska Native tribal governments and similar Alaska Native organizations in the development of Federal policies that have Alaska Native implications, as applicable, and provide feedback and recommendations to the Steering Committee;

(c) identify an appropriate Federal entity to be the point of contact for Arctic matters with the State of Alaska and with Alaska Native tribal governments and similar Alaska Native organizations to support collaboration and communication; and

(d) invite members of State, local, and Alaska Native tribal governments and similar Alaska Native organizations, and academic and research institutions to consult on issues or participate in discussions, as appropriate and consistent with applicable law.

Sec6General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department, agency, or the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

BARACK OBAMA


 

Our friend, Robert Dillon, of U.S. Senator Lisa Murkowski's Energy and Natural Resources Committee writes that, "The Senate is poised today to vote on the 15th amendment on the floor just three weeks into the new session. That’s the same number of amendment votes that Sen. Reid allowed in all of 2014. Sen. Lisa Murkowski last night praised the return of regular order in the Senate and the open processing of amendments. As she said on the Senate floor at the close of business last night, “While some may suggest these are hard votes to take, nobody ever said that voting should be easy here in the United States Senate. The issues that come before us are issues that the nation considers and that we as their representatives should take seriously. And so sometimes there are hard votes and we will argue and debate over the wording… and that is appropriate.”  -dh


Senate to shatter 2014’s amendment milestone (Politico)

The Senate held just 15 votes on amendments in 2014. This year, it’s set to surpass that mark after just three weeks.

By Burgess Everett

1/22/15 12:36 PM EST

The Senate is about to reach a milestone: By the end of this week, it will have held more amendment votes than it did in all of 2014.

On Thursday — just three weeks into the new year — the chamber is set to surpass last year’s total of 15 amendment votes, thanks to a flurry of voting centered almost entirely on the Keystone XL pipeline. The only non-Keystone vote so far this year came on an amendment by Sen. Elizabeth Warren (D-Mass.) on changes to the Dodd-Frank financial law.

Thursday’s milestone followed a raucous two-day period of votes in the Senate on multiple proposals regarding climate change, including the adoption of an amendment that says climate change is real — but doesn’t pin the blame on humans.

“Just 15 roll call amendments, that was in all of 2014,” said Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski (R-Alaska). “My hope is that we’re going to exceed last year’s total, hopefully here today.”

Majority Leader Mitch McConnell (R-Ky.) has made opening up the Senate’s amendment process a key mark of his new reign. Thus far, he’s been amenable to allowing votes on Democratic messaging amendments on climate change on the Keystone bill, a measure that’s still headed toward a presidential veto.

“It’s great to see a real debate on the floor of the Senate again,” McConnell said Thursday. “I saw some action in the chamber yesterday, even some unpredictability.”

But Democrats are expressing happiness about the trend too: With seven Republicans up for reelection next year in blue states that President Barack Obama won in 2008 and 2012, Democrats hope to pile up the votes as ammunition on the campaign trail. As one example of potential attack-ad fodder for 2016, aides mentioned Republican votes that torpedoed an amendment aimed at requiring U.S. steel to be used to build the Keystone pipeline.

“We would love nothing better than for Senator McConnell to make his members take as many amendment votes on as many bills as possible, and his caucus members would love nothing less,” said one Democratic aide.

Aside from a bill preventing cuts to the U.S. Postal Service, Democratic leaders have mostly focused on environmental and energy amendments to Keystone. Sen. Chuck Schumer of New York, the Democrats’ top message man, said the focus for now is on relevant amendments but, eventually, they may turn to non-germane amendments.

Asked recently about whether Democrats may offer amendments on proposals like raising the minimum wage and encouraging pay equity between men and women, Schumer responded: “You will see those.”

“There will certainly be times when we do non-relevant amendments, since we believe almost everything can be seen through the prism: We’re helping average Americans,” Schumer said.

Democratic leader Harry Reid of Nevada has taken most of the blame for producing last year’s dearth of amendments by using Senate procedure to protect bills from alteration. But the Senate’s byzantine procedural rules also make things more complicated given that any senator can reject an agreement to vote on amendments.

Last year, red state Democrats up for reelection balked at votes on divisive energy, health-care and social issues that Republicans were pushing in a rash of unrelated amendments to bills. A number of bills also never advanced past initial filibusters into the amendment stage.

Robert Dillon | Communications Director

Senate Energy and Natural Resources Committee

Categories:

1-21-15 US News Commentator Worries Walker Will Create Uncertainty

21 January 2015 5:00am

 

Calgary Herald by Dan Healing.  Oil services company Baker Hughes Inc. will lay off about 7,000 workers — likely including hundreds in Canada — as it prepares for a downturn in orders because of the plunge in crude prices, the company said Tuesday.  The layoffs represent about an 11 per cent cut to the 62,000-plus workers Baker Hughes says it employs worldwide.  Company spokeswoman Melanie Kania said....  Read more.

Is Governor Walker Creating An Uncertain Investment Climate?

US News by John Burnett.  In recent weeks, the state’s newly elected governor, Bill Walker, has said and done things that have put him at odds with energy companies seeking to invest in Alaska, and thus prompted concerns among politicians, business leaders and ordinary Alaskans about his commitment to projects like the one in the North Slope.

Most notably, Walker raised strong objections to a newly enacted tax structure on oil production that was intended to encourage investment in the state. It was an abrupt – and alarming – shift on his part, as he pledged during his campaign last year that he would not undo the tax law that Alaskan voters upheld in a referendum this past summer.

Bill Walker, Point Thomson, Exxon, Governor, LNG, lawsuit, Alaska LNGIf that were not enough, Gov. Walker (NGP Photo)​ contradicted Candidate Walker on another matter that has implications for the Alaska project: a private lawsuit he filed against a deal the state reached with ExxonMobil that paved the way for construction of a natural gas facility at Point Thomson on the North Slope.

As a candidate, Walker pledged to drop that suit if elected. Now that he is governor, Walker has not only refused to drop the suit, but ....

Now is not the time to be creating any kind of uncertainty.  Read more....


Tomorrow, if you are in Anchorage, plan to attend the Alaska Support Industry Alliance breakfast briefing by the Alaska Deputy Commissioner of Revenue Marcia Davis.  That will coincide with the Governor's legislative budget speech to the Legislature.  If you are concerned about Alaska's economy but are looking for specific issues and facts upon which to base questions, you might want to review the last two days of commentary.  -dh

We will continue to add more photos, here, to our archives from the Alaska Support industry Alliance's Meet Alaska 2015 Conference earlier this month.


House Natural Resources Chairman Rob Bishop (UT-01) last night issued the following statement in response to President Obama’s State of the Union Address:

“President Obama tonight spoke about expanding our economy and attaining energy security, but time and again, he has actively blocked the responsible development of our domestic energy resources. He reiterated his commitment to investing in education, yet failed to acknowledge that his administration’s restrictive land use policies are denying local communities the tax revenue that is necessary to make these investments.

“While the President’s rhetoric suggests that he is inclined to change course, his administration’s punitive regulatory agenda speaks with greater authority. Look no further than the 600 new rules and regulatory notices that have been issued by federal agencies since the start of the New Year. In the coming weeks and months, the House Natural Resources Committee will conduct thorough and aggressive oversight to hold the Obama Administration to account for its actions.”

Categories:

1-19-15 Optimism Amid Challenges

19 January 2015 3:16am

Essay: Maintaining Optimism In A Challenging Environment

An essay to assist both Alaska citizens and our thousands of readers abroad in understanding the critical circumstances now confronting the 49th state.

By

Dave Harbour

(Send us your comments, and scroll up for tomorrow's related commentary!)

America invented the term, “Keep a stiff upper lip”, exactly two hundred years ago in a book entitled, "Massachusetts Spy".  The Brits adopted the term and now oil producers throughout the world are repeating it to stay calm in the face of what may be a prolonged period of low oil prices.

Alberta Premier Jim Prentice, Minister, Pipeline, Oil Sands, Pipeline, Photo by Dave HarbourWe will first sympathize with Alberta’s new Premier, one of the best and brightest elected officials in North America.  Jim Prentice (NGP Photo) inherited a southern neighbor whose president is guided more by political debts to environmental extremists than the public interest.  

Prentice also entered office just as oil prices began to plummet, putting his Province in a similar but much less severe fiscal crisis than Alaska faces (See box, lower left).

Alaska's situation is more critical than Alberta's,  because its budget is over 90% dependent on its declining oil production vs. Alberta's 10% dependency on oil sands royalties.  Note in the link above the decisive steps Premier Prentice is considering.  With a much more dire fiscal challenge, will Alaska undertake decisive measures this legislative session, as Alberta seems to be doing, or will Alaska fund deficits with the remaining state savings?


Note to: Elected Officials

Subject: Responsibility

We hope there is not one elected official in Alaska (i.e. Governor, Mayor, Assembly or Council or School Board member) who has had a conversation at home with a significant other, like this:

"Honey, you know the situation is dire.  We have had deficit budgets for some time now.  But with 50% lower oil prices, we'll burn through the savings in a couple years.  And still, we have almost a $10 billion unfunded PERS/TERS liability. (Though if worst comes to worst a bankruptcy court would order the permanent fund to keep our state pensions whole, I think).  Hopefully, we'll see another boom in discoveries or in prices...but if not, we have to make plans.  So I'm thinking we just stay in office through 2017, keep a low profile, then make our move.  Are you O.K. with that?"

Surely no elected official would swear an oath of office and decide to do nothing requiring courage or sacrifice to confront the fiscal shortfalls -- like cut capital projects, operational spending, even matching government programs and even entitlement programs.  

We realize that these challenges are not fun for politicians.  

But we hope we elected statesmen and not politicians, for the latter care too much about pleasing constituencies and guaranteeing reelection.

Statesmen will be willing to be vilified and defeated in order to make decisions that best serve the public interest.

So now, we suggest that all those who wanted to serve and are serving will meet their moments of truth in short order.

Will they take the easy road and keep all beneficiaries of state spending whole -- subsidized by remaining savings, then split...?

Or, will they lay it all on the line for their fellow citizens knowing that their 'thanks' may well be the disdain of thousands of constituents who wanted and did not receive money transfers from government.

We truly do sympathize, Honorable Elected Officials...just as we sympathize and respect military veterans who have served their country and been willing to give it all for the rest of us.  

Thank you, in advance, for your service.

-dh

Exacerbating President Obama’s delay and perhaps an ultimate blockade of TransCanada Corporation's Keystone XL oil pipeline --designed to move stranded oil sands oil in Northern Alberta to America’s gulf coast -- is a second negative development.  Environmental groups and utility interests in Quebec are trying to block the converting of an old gas pipeline into an oil pipeline, through which TransCanada could ship Alberta’s oil to European markets (See our commentary).

Then we have TransCanada’s effort (i.e. along with that of dozens of companies and governments) for a half century to move stranded Arctic gas from Alaska and the McKenzie Delta to Midwestern markets via a number of projects.  We could certainly sympathize with TransCanada shareholders and those paying tariffs on its existing pipelines, for they have been sporting stiff upper lips for a long time.

Surging oil and gas shale technology less than a decade ago, evolved into a true energy revolution.    The extended and expanded reach of shale production on mostly private lands touched almost everyone.  Consumers have experienced lower prices for gas fired electricity, home heating and gasoline.  Manufacturers depending on low cost energy began expanding North American operations.  Investors launched several dozen American and Canadian LNG export projects.   Job growth has been phenomenal.  European energy markets began to envision a day when Russian producers could not control their destinies through price and supply manipulation.  Finally, Asian markets used to paying premium prices for imported LNG began to see a softening of consumer prices.

The Canadian provincial and federal governments were supporting energy development in spite of significant environmental activism.  Oil prices supported the relatively expensive production of Northern Alberta bitumen.

In the US, the last few years saw production on private land cause economic rejuvenation in many pro-energy states, in spite of Federal government support of environment activism aimed at killing projects on both private and public lands.  Ironically, the Administration has gone on to claim credit for the economic improvements, even as it intensifies EPA opposition to energy specifically and job development generally.

As economic cycles would have it, all is not well in the world.  The shale revolution was not just good for consumers; it was GREAT.  So great that with supply increasing oil & gas prices began to retreat along with commodity values.  That, in turn, has brought many shale operational revenues beneath or close to the cost of production.  Combined with Canada’s inability to export necessary volumes of Alberta oil, North America’s two great economies are now facing giant economic challenges.

Federal, provincial, state and local governments throughout the US and Canada are now engaged in cutting or plans to cut government services in response to the diminishing production of energy wealth.

*     *     *

Alaska may be facing the single greatest economic challenge in the free world for many reasons that, together, compose a perfect storm of economic hurdles, including:

  • With its operating government budget over 90% dependent on oil income, along with over a third of its entire economy, Alaska is the most dependent of North America's state or provincial governments on oil revenue— now down by 50% over the last few months.
  • Alaska is the U.S. producing area most dependent on high prices.  High oil prices help compensate for some of the highest oil taxes, the harshest climate, the highest labor costs, its remoteness and distance to the markets and the additional cost liability of having to move its oil via an expensive, underused and ageing 800-mile pipeline to tidewater where it has to be loaded onto seagoing tankers capable of transporting it thousands of miles to markets.  In stark contrast, its biggest competitors produce oil mostly at tidewater, mostly in temperate zones, mostly in lower labor cost areas, with lower logistical costs and cheaper transport to their market areas.
  • Alaska’s nearly 40-year-old Trans Alaska Pipeline System (TAPS), has already moved the lion’s share of Prudhoe Bay oil.  It once transported the greatest share of America's domestic production (i.e. But has now fallen behind North Dakota, Texas and California) at the rate of about 2.1 million barrels per day.  That production rate has since sunk by over 70%.
  • Governor Sara Palin’s (NGP Photo) administration Alaska Governor Sarah Palin, Vice Presidential Candidate, lipstick, oil taxes, progressive production tax, IOGCC, Photo by Dave Harboursucceeded, nearly a decade ago, in attaching high, progressive production taxes on Alaskan oil in spite of what was then a pattern of annual 5-7% declines in TAPS throughput.   That economically suicidal action dried up new investment even though producers needed to hire more people and initiate more projects just to maintain the decades-old production and transportation facilities.  Two years ago, the Legislature saw the error of Alaska’s shortsighted ways and passed SB 21, modifying the production tax.  Talk quickly spread around the industry that new investment and exploration was now possible and being planned – hundreds of millions of dollars’ worth.  Unfortunately, opponents of SB 21 and environmental groups undertook a voters initiative to repeal SB 21, inserting dark clouds of caution over the investment climate.  After spending millions of dollars to combat the initiative Alaskan citizens and businesses defeated it last August.  Still, investors are left with the nagging knowledge that in Alaska, “A Deal May Not Be A Deal”, since a few guys and gals with a volunteer lawyer and dozens of activist organization volunteers could initiate a new voters initiative at any time.
  • "If"

    If Alaskan citizens and their leaders summon the faith, humility, wisdom, cooperation, sacrifice, initiative and diligence required by GREAT ACCOMPLISHMENT, the future can still be bright for this generation and those to follow.  

    This is where optimism is to be found.

    -dh

    One must add to this mix the fact that Alaska’s huge resource potential has been slowed or stopped at almost every turn by a hostile and overreaching federal administration whose cheerleaders are activist environmental groups that in the last 3 decades have implanted some three dozen anti-development campaign offices around Alaska.

  • Alaska’s North Slope gas remains stranded.  Several projects over the years – all involving TransCanada – have endeavored to free that energy wealth since the early 1970s.  All of the projects have failed after having met the wrong end of unforeseen economic or technological forces.  When natural gas prices exploded at the turn of the century, producers again began eyeing the economic feasibility of “monetizing Alaska North Slope gas”.   After spending a hundred million dollars to update studies, they affirmed one of the critical requirements for investment to be, “fiscal certainty”.  This meant that investors couldn’t justify building the largest construction project in history with the chance a “sovereign” state government could enact massive new taxes after a multi-billion dollar, high pressure gas pipe was buried into the frozen tundra.  Then, just as feasibility was looking promising, came the Palin Progressive Production tax.  Today, following the passage of SB 21, producers and the State of Alaska have dramatically changed the gas project.  Because of shale, the gas is not needed in the Midwest.  So now, with falling revenue and fading economic hopes, the state, producers and TransCanada are endeavoring to prove out the feasibility of an Alaska LNG export project …targeting Asia…just as gas prices are falling and over a dozen LNG projects (i.e. see map) throughout the US and Canada are mostly vying for the same markets.
  • Map, Alaska overshadows Lower 48Alaska defends its high cost of government because of its enormous size (i.e. 20% the size of the entire US), its low population (i.e. less than a million), and logistical costs.  But excuses don’t matter in a world of competition and excuses cannot erase the facts:
    • Alaska spends more per capita than any other state.
    • Alaska’s debt is larger per capita than that of any other state or the federal government.
    • Its per capita education costs are the highest.
    • Alaska government and citizens fund the most non-profit organizations per capita.
  • Alaska’s anti-business legislators and activist groups normally seek higher taxes to meet the challenges rather than restrain government spending.  The republicans locally, as nationally, are generally in support of a sustainable economy.  But just as all democrats are not socialists, all republicans are not prudent guardians of other people’s money and often let spending/entitlement increases slide through in exchange for capital projects, constituent tax breaks, etc.
  • Alaska’s legislative session is now beginning and the previous governor’s budget under consideration is now several billion dollars short.  This requires a possible tapping into about $3 billion of nearly $10 billion in savings.   Any second grader knows that’s not sustainable for long.  But to make matters more interesting, rating agencies are noting that Alaska also has an unfunded liability to its retirement program of almost $10 billion.  The obvious way to fund that deficiency is to tap Alaska’s $50 billion permanent fund.  The permanent fund was created two decades after statehood to fund ‘rainy day’ budgets but has been traditionally used to pay citizens an annual allotment, last year approaching $2,000 for each man, woman and child.  It has become sacred income to voters.

Alaska Governor Bill Walker, oil taxes. sb 21, budget crisis, Photo by Dave HarbourLast November Alaskans elected a new governor whose primary constituencies were rural Alaskans, democrats, and labor.  So far, Governor Bill Walker (NGP Photo) has ordered a slowing of spending on capital projects but has not, at this writing, undertaken serious cuts to state government operations or entitlement programs.  We'll hear more this week as he delivers separate state of the state and budget speeches.

Some hope, through stiff upper lips and gritted teeth that another boom of some sort will appear just in time to facilitate continued high state spending.

Others believe that Alaska’s unparalleled rise in oil riches has come to an end and that serious, adult decisions must quickly be made.

Still others believe that Alaska’s 1959 Statehood Compact has been mortally wounded; they believe that federal regulation has so exacerbated the scenarios described above that only the most brilliant, persuasive, intelligent, savvy and charismatic leadership can now save the “Last Frontier” from federal hostility and its own tax and spend decisions.

So join us now in observing the tensions that will surely appear over the next four months of Alaska’s legislative session as, together, we witness leadership rising to the occasion, or not.

Meanwhile, keep a stiff upper lip!

_______________________________________________

Dave Harbour is Publisher of Northern Gas Pipelines.  A former Chairman of the Regulatory Commission of Alaska, he also served as Chairman of the Gas Committee, Western Conference of Regulatory Utility Commissioners.  Harbour is former Chairman of the Anchorage Chamber of Commerce and the Alaska Council on Economic Education.  He has served in executive positions with three producing/pipeline companies and as a board member and officer of a number of non-profit corporations.  His articles have appeared in hundreds of magazines, newspapers and on-line publications.  He has delivered hundreds of speeches throughout North America and chaired oil and gas programs and conferences from Houston to Calgary, Edmonton, Anchorage and Inuvik.  Contact the author.

Categories:

1-13-15 Why Is 'Climate Change/Global Warming' Important To Energy Producers?

13 January 2015 5:55am

Tim Bradner, ADN, Alaska Journal of Commerce, Photo by Dave Harbour, Budget shortfall, confidentiality agdcAlaska budget and gasline Comments, ADN by Tim Bradner (NGP Photo).   

I have sympathy for new Gov. Bill Walker walking into this.  So far — with one exception — Walker’s actions have been quite reasoned. He prudently ordered a stop to unobligated spending on several high-profile state development projects and put off submitting a revised state budget until January to allow his team to develop a plan.


Note to readers and public service advertisers:  the right hand column normally appearing here is being reconstructed.  Thank you for your patience.  -dh

Comment: 'Climate Change/Global Warming' Is Important To Energy Producers...and, transporters, refiners, distributors and consumers because when the government and its political allies use it as a foundational assumption for policy, the economy suffers upstream at the wealth producing level, all the way to consumers and defenders of national security.  -dh

Washington Post by George Will.   We know, because they often say so, that those who think catastrophic global warming is probable and perhaps imminent are exemplary empiricists. They say those who disagree with them are “climate change deniers” disrespectful of science.

Actually, however, something about which everyone can agree is that of course the climate is changing — it always is. And if climate Cassandras are as conscientious as they claim to be about weighing evidence, how do they accommodate historical evidence of enormously consequential episodes of climate change not produced by human activity?  Read more....


 

Senator Lisa Murkowski, Energy Plan, guardian, energy, Ed Felker, Dave Harbour PhotoEnergy Guardian by Edward Felker.  Sen. Lisa Murkowski (NGP Photo) of Alaska on Thursday laid out an ambitious vision for energy legislation she plans to pursue as the first Republican chair of the Energy and Natural Resources Committee since 2006, beyond the Keystone XL bill the panel approved mostly along party lines.

Her priorities include a measure by Sen. John Barrasso, R-Wyo., to speed up approvals of liquefied natural gas, which Murkowski said will get a hearing this month.


 

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