10-23-10 - LNG and State Spending
Alaska Dispatchby Scott Woodam. At the end of September, the major North Slope gas producers notified Gov. Sean Parnell (NGP Photo) of their new agreement toward an Alaska liquefied natural gas project. Depending whom one asks, the new agreement pertained to either hijacking the state-subsidized Alaska Gasline Inducement Act (AGIA) and using it as a lever to pry oil tax reductions out of the Alaska Legislature, or to finally building a long-discussed liquefied natural gas transportation project leading from Alaska's North Slope to tidewater somewhere in Southcentral.
Thoughts on Alaska Oil and Gas, Op-Ed by Brian Hove. Brad Keithley’s (NGP Photo) September 19th blog entry poses the question “What is Alaska’s fiscal plan…” for which he offers a good working definition: “an outline of the government’s long term revenue and expense projections, designed to achieve balance.” The term “projections” is key, for if we truly intend to create a useful budgeting tool we will have to get better at forecasting three critical inputs: (1) State expenditures; (2) ANS crude oil prices, and; (3) ANS crude oil production. With the possible exception of Oil Industry execs, who could have predicted State spending would take the aggressive trajectory it has over the last five years? Maybe Representative Mike Hawker’s efforts to implement long-term budgeting within the State’s various cost-centers will prove beneficial. Time will tell.