Fiscal crises affect national and local governments — and the oil patch! -dh
Last week in Anchorage, Caelus Energy Alaska's Executive Vice President, Alaska Operations, Pat Foley (NGP Photo), told members of the Alaska Support Industry Alliance that a stable investment climate had helped encourage his company to make big investments in the state's future. He then added that because of increased talk about oil taxes and the instability of the state's economy, the company's investment decisions are slowing. "As we look around today," Foley said, "we are starting to become a little bit nervous…." (Review Foley's slide pack here)
| Anchorage Daily Planet. If there is one consistency in Alaska education it is this: We pay more than most and get less. |
News Miner/AP re: Harris Poll (i.e. related to story below): …California and New York also topped the list of where those surveyed would least like to live. They were followed on that list by Alaska, Mississippi and Texas.
Comment On Fraser Institute Report. Alaska and Quebec are among the least economically free states/provinces. Alaska's greatest North American oil and gas/LNG competitors (i.e. Alberta, B.C. and Saskatchewan seem to be far more economically free than Alaska.)
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At today's Resource Development Council for Alaska (RDC) meeting, House Speaker Mike Chenault and State Senate President Kevin Meyer alerted citizens to Alaska's fiscal crisis. (NGP Photo, L-R: Meyer, Marleanna Hall, Chenault, Ralph Samuels. (See full video here, including question by your publisher at the end.)
Chenault expressed a hope that the "bloodletting" at the Alaska Gasline Development Corporation is over. He cited illogical actions of the Administration to fire well qualified board experts because they live out of state, then hire consultants who live out of state, then fire a long-time Alaskan AGDC CEO while conducting a worldwide search for a replacement. He suggested — rightly, in our opinion — that such lack of consistency and certainty sends a negative signal to investors. Both speakers indicated a priority on "right sizing" state government before considering tax increases on Alaskan citizens and businesses. MORE COMIING…. |
Without significant and sustaining action, Alaska's available savings will be gone in two years, Meyers said. He said a major goal of the legislature in the coming session will be to engage in "smart spending and strategic planning", among other priorities.This analysis may be of interest to those who believe the government should 1) be 90 % dependent on one industry; and 2) demonize and overtax that industry; and 3) host America's most indebted and highest per capita spending government; and 4) own equity positions in otherwise private energy projects, while continuously dictating "must haves" to industry "partners".
We would ask this of our readers: "What happened to the 'pioneering state'? What happened to the pioneering spirit that enabled passage by one vote of the Trans Alaska Pipeline System (TAPS)? What happened to the Alaska pioneering spirit motivating private citizens to convince Congress to enter into the statehood compact, BY ONE VOTE? Finally, what significant, new wealth producing endeavors have Alaskans accomplished since TAPS was approved and built four decades ago? -dh
Fraser Institute Report. Economic Freedom of North America 2015 is the 11th edition of our annual report, in which we measure the extent to which policies of individual provinces and states are supportive of economic freedom—the ability of individuals to act in the economic sphere free of undue restrictions. For researchers, this report has become the most widely used of the North American indexes. That literature includes more than 130 articles; it has tended to find a positive relationship between economic freedom and a variety of measures such as economic growth, income levels, and entrepreneurial activity.
Last year’s report, Economic Freedom of North America 2014, included Mexico in the integrated index for the first time. In previous editions, Mexico was rated separately from the US states and Canadian provinces due to lack of data and data incompatibility. A strenuous research effort in Mexico overcame this limitation and the 2015 report again includes Mexico.
All states and provinces were rated on a 10-point scale at two levels, the subnational and the all-government.
The subnational index captures the impact of restrictions by state or provincial and local governments; the all-government index also includes restrictions by the federal government. The former is the more appropriate measure for comparisons of individual jurisdictions within the same country. The latter facilitates comparisons of jurisdictions in different countries.
Canadian Provinces in a North American Context
In the world-adjusted all-government index, the top three jurisdictions are Canadian, with Alberta at 8.1 in first place and British Columbia at 7.9 in second and Saskatchewan at 7.8, tied for third with New Hampshire.
It is important to note that when measuring economic freedom, both nationally and sub-nationally, the data is most often lagged at least two years. Our latest Economic Freedom of North America report uses data from 2013, the most recent year of available, cross-country data.
Of course, much has changed since 2013, particularly in Alberta. Specifically, in 2015 the Alberta government has announced a slew of policy and regulatory changes which, collectively, have made Albertans much less economically free. While the policy changes are too recent to have informed this year’s comparative report, it is clear that once they are integrated into future rankings, they will profoundly impact Alberta’s economic freedom.
| We thank Rebecca Logan of the Alaska Support Industry Alliance for reminding us of the Fraser Institute Annual Report, and for her organization's constant focus on the importance of creating a stable investment climate. -dh |
The lowest-ranked Canadian provinces are Prince Edward Island and Quebec at 7.4, tied for 57th with New York.
– See more at: http://www.fraserinstitute.org/studies/economic-freedom-of-north-america-2015-annual-report#sthash.qjuWgJ7E.dpuf
Alliance, December 17 Meeting: Caelus
“Poster child” for Alaska exploration. In early February, a stretch of Arctic coastline will come alive with industrial activity asCaelus Energy LLC begins drilling its first exploration well on Alaska state lands in Smith Bay, a remote inlet located 60 miles southeast of Barrow. The company has owned the Smith Bay lands only since June, when it acquired a 75 percent working interest in the 117,000 acres from NordAq Energy Inc. The company’s top officials formed Caelus in 2011 after successful careers in oil exploration and development around the globe. “Our owner, Jim Musselman, likes to say that we’re the poster child for S.B. 21,” said Casey Sullivan, state public affairs director for Caelus. Sullivan asserted that the company has “invested a great deal of energy and capital in the state, and now the rug is being tugged underneath our feet a little bit.” The governor’s budget plan, he said, “causes a lot of uncertainty for our investor group. When you try to make plans for next year and thereafter and you just don’t know what the state program will look like, it’s a problem.”
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