Diane Francis Compares Alaska-Canada-Norway Policies - Chancellor Ulmer Listened To GOM Advice Last Night

We valued Diane Francis' Mackenzie Valley Pipeline 'Must Do' observations earlier this week.  The Financial Post columnist is among Canada's wisest observers of Arctic energy policy; if you read her blog, you'll likely conclude with us that her analytical powers extend to many other critical North American issues.  (Scroll down for today's story.) -dh

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Last night Chancellor Fran Ulmer (NGP Photo) 'listened' to Alaskan observations about her new oil and gas industry oversight role that could change the destiny of Alaska.  President Obama's Executive Order of May 22 created a "National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling", gave it a six month life which begins next week with the Commission's first gathering, and empowered it to recommend new oil and gas policies that could affect Alaska and the rest of America for decades to come.  

The Commission's mission is two fold: 1) to, "examine the relevant facts and circumstances concerning the root causes of the Deepwater Horizon oil disaster"; and, 2) to "develop options for guarding against, and mitigating the impact of, oil spills associated with offshore drilling, taking into consideration the environmental, public health, and economic effects of such options...."  

The latter part of that mission is noteworthy for the country in general but especially for Alaska: the Commission's work could be pretext for further action taken by the President and/or Congress to expand or contract offshore oil and gas exploration and development.  With that in mind, we marvel that every elected official and business leader in Alaska didn't turn out and wax eloquent.  Why do we marvel?  Well, virtually every speech or debate or news release issued by incumbents and candidates for public office these days highlights the professed importance they place on gas pipeline and other energy policies.  All government and private leaders know that with a state that is almost 90% dependent on petroleum tax and royalty revenue critical importance accrues to the health of the oil and gas industry and of federal rules applying to it.  Furthermore, all business and government leaders know that with Alaska's budget increasing at double digits, our oil production decreasing in the mid single digits and with the overall throughput of the oil pipeline down by 2/3, the end of the gravy train is in sight.  Without OCS production with revenue sharing to the state and/or without ANWR and/or absent another big oil discovery, Alaska's oil pipeline lifeline will likely shut down before the end of the next decade.  Thus, we marvel that no elected official or senior business leader that we know of attended last night's session, also video conferenced from Fairbanks, Kodiak, Seward, Valdez and Juneau.

Moderator, Steve Lindbeck (NGP Photo-l), provided a description of Ulmer's long and accomplished career, gave ground rules for testimony and emphasized the 'listening' role she would play.  Ulmer said she would serve as a bridge of communication between Alaskans and gulf coast residents and would seek to, "gather important ideas" that could support her commission's role.

In addition to reporting, we did offer a written comment to Chancellor Ulmer.  We saw no one else submitting a written comment, no business leaders, no elected officials.  A number of folks in the room were taking notes and did not rise to speak.  After our comments, we were followed by several other journalists, a professor, a couple of students, some very professional oil spill prevention public advocates, and several other interested persons.  

Radio newsman, Steve Heimel (NGP Photo), reminded Chancellor Ulmer of his reporting during the Valdez oil spill tribulation and urged that in her new role she, "take a skeptical view of what's going on in the gulf."  He said that reporters sometimes "run in packs" and the pack frequently misses key information.

Appearing by video conference display from Seward, John French spoke from long experience with the Exxon Valdez incident and his vantage point as a member of the Prince William Sound Regional Citizens Advisory Council.  In his first five-minute segment he inventoried a number of 'lessons learned' from Alaska's experiences.  He counselled that it is wrong sometimes to assume that, "doing something is better than doing nothing."  Case in point is the unintended consequences of deploying in situ burning and dispersents without thoroughly understanding the effect of burning on air quality and the effect of depersents on the ocean food chain.  When time remained at the end, Steve Lindbeck allowed speakers another five-minute segment.  In French's closing, he urged the Commission to keep its record open to receive more research and data is it occurs over the years.

Tom Lakosh (NGP Photo), a "public interest advocate for oil spill prevention and mitigation", was critical of current oil spill statutes, regulations, regulators and of industry.  "There is no incentive for regulators," he said, "to do as they are required to effectively remove oil pollution as it occurs."  He said that citizens are, "...not even getting enforcement of the bad regulations that are now in place."

University of Alaska Newspaper reporter Jerzy Shedlock (NGP Photo-r) worked on a story for the University newspaper, The Northern Light, as others continued speaking.

Reporter Joanna Urick (NGP Photo) spoke of her earlier life on the shores of the Gulf of Mexico, her love of the sand dollars and other beach critters, the tragedy befalling us all as a result of the Gulf oil spill.  She spoke of 'underestimation of the public resource', and urged decision makers to more realistically value such ("and get real numbers applying to")  public resources. 

Andre McLeod (NGP Photo-below) asked Chancellor Ulmer (NGP Photo-r) what Alaska lessons she would be taking to the Commission.  Ulmer and Lindbeck agreed that the question was a fair one and Ulmer noted that she hadn't even been to the Gulf coast since the spill nor had she shared a meeting with fellow commissioners.  "It's way too early for me to be saying what I think or how I will apply Alaska lessons to a circumstance with which I am not yet familiar.  However, is is very appropriate for me to listen to the concerns and suggestions of Alaskans now to help me in that process of understanding."

An unidentified lady rose to say that the spill 'frightened' her due to the lack of valid and reliable information emanating from the Coast area.  An unidentified student said that there appeared to be an intentional effort to conceal information.  An unidentified research professor encouraged his Chancellor to understand the entire Gulf ecosystem and determine how oil moved through the entire food chain, how its presence would change what certain organisms ate, what they rejected, how much they ate and similar suggestions.  Long-time natural resources professional Terry Brady (NGP Photo-r) attended the meeting after just returning from work in the Gulf area.  He made personal but not public observations after the meeting about the organizational challenges encountered by those in charge of GOM clean up activity.

ADN story by Elizabeth Bluemink (NGP Photo).  Longtime oil-industry and government critic Tom Lakosh told Ulmer during the meeting that she should push for more effective spill-cleanup regulation. ... "There's no incentive for the industry to put in more (cleanup) measures because the regulators are derelict in their duty," he said.  Geoff Merrell, a long-time Alaskan spill responder, disagreed.  "There's always a natural tendency to heap on more regulation," Merrell told Ulmer.  He said it would be better to give oil responders as many tools as they can use without having to deal with a lot of bureaucracy.  Merrell, who now works with Shell Oil, which is seeking to explore offshore leases it purchased in the Beaufort and Chukchi seas, said he thinks the federal Oil Pollution Act passed in response to the Exxon Valdez spill was poorly written and it took years for oil responders to "make heads or tails of what (the act) was telling us to do and how to comply with it."  ... John French, a retired University of Alaska Fairbanks aquatic toxicologist who worked on the natural resource damage assessment of the 1989 Exxon spill and assessed the impacts of the spill on subsistence food, told Ulmer he is worried that ongoing spill response efforts in the Gulf, including burning the oil and using chemical dispersants to dilute it, will also have damaging consequences.  "We have this knee jerk reaction -- do something -- even if it is going to do more harm," French said.  Dave Harbour, a former state utility regulator, told Ulmer that the commission should not recommend changes that lead to "unnecessary delay" of drilling projects. He said that only the "total expulsion" of the oil industry from U.S. waters would eliminate all of the risks from offshore drilling, but the impact of that on American jobs would be "too horrible" to contemplate.

Financial Post by Diane Francis (Web Photo).  Canada has dithered and delayed resource development in its high Arctic for more than a generation while other jurisdictions, namely Norway and Alaska, have moved quickly from discovery wells to oil and gas production.  Both Norway and Alaska have had to juggle competing jurisdictions, overlapping agencies and issues stemming from land claims from ab-originals and brought resources on stream. ... Spokesmen from Norway and Alaska described their sector and strategies at the recent 10th Inuvik Petroleum Show. ... "All our petroleum exploration and production is offshore, in the North Sea and Bering Sea in the high Arctic, as far north as the Beaufort Sea," said Espen Myhra, energy counselor at the Royal Norwegian Embassy in Washington. "The future development of Norway is petroleum activity in these regions, which is most challenging."  Norway's Statoil is also a major player in Alberta's oil sands despite political pressure from environmental groups to disinvest there. Roughly 23% of Norway's GDP, 33% of government revenues and half its exports are petroleum-related. Norway is the second-largest exporter of natural gas in the world, shipping to Europe nearly as much gas as Canada ships to the United States.  "Petroleum offshore has made Norway what we are today -- a welfare state and top UN-ranked country in terms of living standards and quality of life," Mr. Myhra said.  (Canada's petroleum sector is about 3.5% of its GDP, but roughly 20% of exports. Norway as of June 2009 was the world's third-largest oil exporter and Canada the world's 15th.)  ... Washington's Federal Co-coordinator for the Alaska Natural Gas Transportation Project, Larry Persily (NGP Photo), said that U.S. President Barack Obama is committed to Arctic gas from Alaska. ... The Alaska pipe would cost US$35-billion to transport the gas to Edmonton while Mackenzie would cost US$16.2-billion.  "It is not a race between Alaska and the Mackenzie Valley Pipeline. It is a race against those who think obstacles in the Arctic are insurmountable and those who do not," he said. "He [President Obama] knows that natural gas is part of the solution. He knows Arctic gas is part of the solution and we are expediting the Alaska pipeline. It's a challenge because we have two dozen agencies to deal with in the U.S./Canada."  He does not believe that huge shale gas discoveries in the United States and Canada nearer to markets will make Arctic gas uneconomic.  "Shale gas will reduce the cost of gas so that it can be used for power generation, which will create more demand for gas in the marketplace," he said.