Dear Readers: We have documented excesses in policy and deficiencies in decision making owing to the 'global warming' faith crowd.
Still, we must prize facts and science over politics in our search for 'Endless Progress'. In this spirit, we ask our more knowledgeable friends to help us with a response or rebuttal to this reaction to Ferrara's commentary. -dh
(Our Comment: The Obama Administration departments -- including DOD -- base many changing policies on a bureaucratic faith in the siren calls of global warming.
Upon the "environmental protection/global warming" assumptions are based programs causing vast damage to American employment, economic health and national security--while building big government bureaucracies and political dependencies on the Executive branch.
This explains why the Administration and its allies will fight to the death to impugn the reputation of global warming critics. After all, if the climate is actually growing cooler or simply cycling through another historic period of 'cooling/warming', how can government justify its damaging policies?
Ferrara's Forbes column may represent an inconvenient truth to disciples of global warming--but integrity demands that we hear a response to the challenge laid out in the box above. After all, even if it can be shown that warming is a long term trend, we would still demand -- in the name of science -- proof that mankind (and not the oceans, etc.) were the major contributor of greenhouse gasses.
Then, if man is proved to be the principle cause, is America wisely adopting policies that are reasonable and do not threaten to bankrupt the country while major carbon producers in the developing world are making little to no effort to contain carbon output?
Lastly, even if the United States (i.e. with over $17 trillion dollars in short term debt and over $90 trillion in unfunded liabilities) bankrupts itself in search of the holy climate grail, will the end result of global domination by powerful green house gas emitters produce a more sustainable world?
We do not advocate one political position over another or one extreme view over another (i.e. except that as our dear readers know, we do not deny that we are dedicated to the intent and protections of the Constitution of the Unites States and its precedent, Declaration of Independence). And we do not seek compromise for the sake of 'getting along'. Instead, we search for reason, a place between excess of bureaucracy and deficiency of precaution -- which which Aristotle might still today characterize as the "Golden Mean". -dh)
Ferrara's words, continued: "...future generations of scientists will look back and say this is the moment when we took the political out of the political science of "climate change," and this is how we did it. Real scientists know that these 50 co-authors are real scientists. That is transparent from the tenor of the report itself.
"The publication is "double peer reviewed," in that it discusses thousands of peer reviewed articles published in scientific journals, and is itself peer reviewed. That is in sharp contrast to President Obama's own EPA, which issued its "endangerment finding" legally authorizing regulation of carbon dioxide (CO2) emissions, without submitting the finding to its own peer review board, as required by federal law. What were they so afraid of if 97% of scientists supposedly agree with them?
"The conclusion of the report is that the U.N.'s IPCC has exaggerated the amount of global warming likely to occur due to mankind's emissions of CO2, and the warming that human civilization will cause as a result "is likely to be modest and cause no net harm to the global environment or to human well-being." The primary, dominant cause of global climate change is natural causes, not human effects, the report concludes."
Clearly, Russia has leverage over Ukraine. Depriving Ukraine of energy supplies or reasonably priced energy could deal a devastating economic blow to the struggling country.
The map also illustrates the importance of the United States and Canada reasonably developing their own energy resources. Energy is the building block of an economy and all economic activity in modern societies is totally dependent on both the supply and the reasonable pricing of energy supplies--as we learned with the Arab Oil Embargo in the 1970s.
With continuing delay of the Keystone XL pipeline and continuous stalling of other energy and mining projects, America's leaders are preventing their citizens not only from having massive new employment, but from enjoying the energy independence and national security which they deserve and could so easily enjoy but for an obstinate Administration.
The map was created from data provided from National Gas Union of Ukraine by RIA Novosti. We display the map with appreciation, subject to permission requested from the owner. This and other similar maps are available to public viewing on Google. -dh
Early Thursday News:
|This morning, we board our favorite airline, Alaska (NGP Photo, "Rockey Mountain High"), heading to Miami then on a wonderful partner airline (American) bound for writing and photography in Ecuador for a few weeks. Never fear, dear reader: every day we keep close in touch with goings on in the energy scene through our friends and associates from Inuvik to Calgary, Toronto, Washington, Houston, Williston, Juneau, Anchorage, Faribanks and Barrow...and beyond. You are our priority, and we'll keep you informed! -dh|
Juneau Empire by Matt Woolbright. Leaders from the private partners in the proposed Alaska LNG project urged lawmakers Tuesday to support the plan that they call a good business venture for everyone involved. ...
All those testifying pointed to the recently adopted Heads of Agreement document as an indicator that now is the time to press forward.
That document is “enabling unprecedented commercial alignment which is possible with the state’s participation” in the project, BP Exploration Alaska’s David Van Tuyl said.
Following up on Wednesday's report of the OCS Governors Coalition, here are other links:
The Washington Post
The Washington Post
Energy & Environment News
The News & Observer
Governor Sean Parnell (NGP Photo) is former Chairman of the OCS Governor's Coalition. This week we learned that Virginia's new governor, democrat Terry McAuliffe, has joined the coalition. The governors are urging Interior Secretary Sally Jewell to open OCS areas for oil and gas leasing that the Administration has, to date, kept closed.
Our friends at the Resource Development Council (RDC) for Alaska have asked Alaskans (and our Canadian readers, too; why not?) to make their voices heard in support of the Keystone XL Pipeline.
Because North American citizens in the US and Canada need to support proper development whether it be in our northernmost areas, or in the South.
A State Department evaluation of environmental impact of the Keystone XL Pipeline again finds the pipeline’s construction and operation will have minimal impact on the environment. Michael Whatley (NGP Photo), who has been following the Keystone XL Pipeline project for Consumer Energy Alliance, had this reaction:
If we expect support support from our friends in the South, we should support their projects as well. Enlightened self interest.
So, we urge our dear readers to join us in commenting on Keystone XL before the comment period ends and the opportunity fades into history.
Below is the RDC analysis. Please join us. Protect our nations' wealth and job producing energy sectors on both sides of the border! -dh
The U.S. Department of State is in the process of determining whether TransCanada’s proposed Keystone XL Pipeline (KXL) is in the national interest. The pipeline would run from the Canadian border to connect to a pipeline in Steele City, Nebraska. The Department’s determination involves consideration of many factors, including energy security, health, environmental, cultural, economic, and foreign policy concerns.
The public comment period on the national interest determination will close on Friday, March 7th. RDC encourages its members to send brief comments urging the Department of State to expeditiously approve KXL. There are two ways to submit comments. The public is encouraged to submit comments to regulations.gov. Comments may also be mailed directly to:
U.S. Department of State
Bureau of Energy Resources, Room 4843
Attn: Keystone XL Public Comments
2201 C Street, NW
Washington, DC 20520
For those who prefer to send in a prepared letter to the federal agency (which you can edit), please click on the following link:
Click here to view RDC's comments.
Point to consider in your comments:
• By supporting domestic production and oil imports from our close ally Canada instead of politically unstable countries, we will strengthen both our national and energy security.
• The 800-mile Trans-Alaska Pipeline is positive proof that a project the magnitude of KXL can be built and operated safely, putting tens of thousands of people to work and strengthening the economy.
• The Keystone XL Pipeline will have minimal impact on the environment. Studies have found KXL will be less invasive than if oil was transported by rail car or barge. The pipeline’s pumping stations are powered by electric motors which have little direct emissions.
• The U.S. Department of State found the KXL project would not cause “substantial impact on the rate of development in the oil sands, or on the amount of heavy crude oil refined in the Gulf coast area,” meaning the project would not have a direct effect on the greenhouse gas emissions from the production and consumption of oil.
• TransCanada has agreed to an additional 57 safety requirements and has routed the pipeline to avoid any potential environmentally-sensitive areas. In the U.S., over 170,000 miles of liquid pipelines transport 11.3 billion barrels of petroleum each year. American pipelines maintain the lowest spill rate per volume than any other transported method available.
• KXL will provide U.S. refineries with upwards of 830,000 barrels of crude each day, decreasing overseas imports by 43 percent and increasing the overall supply of oil.
• This stable long-term supply of energy from Canada would make the U.S. more energy self sufficient and help mitigate supply disruptions, which ultimately means greater price stability for American consumers.
• KXL is expected to create 42,000 manufacturing and construction jobs in the U.S., as well as provide billions of dollars in property tax revenue to Montana, North Dakota, South Dakota, Nebraska, Kansas, Oklahoma, and Texas. The project will add $3.4 billion to the U.S. economy, including over $2 billion in salaries.
• KXL will transport more than 830,000 barrels of oil per day from domestic and Canadian sources, resolving infrastructure constraints for Bakken oil in North Dakota.
|Today, we learned that the Board of Directors of Bristol Bay Native Corporation has urged shareholders to support Alaska's tax reform bill, SB21 and vote against repeal in the August primary election. (Website). -dh|
Globe & Mail. Spanish oil major Repsol SA says its board of directors has approved a definitive $5-billion (U.S.) settlement from Argentina. Repsol is a new Alaska North Slope company which, after the Argentina adventure, are seeking a more productive experience in the far North. As we wrote in October, the jury is still out on Repsol's Alaska venture, though we remain hopeful. -dh
|AP. A bill aimed at advancing a liquefied natural gas project in Alaska has moved from the Senate Resources Committee.|
Part II: Has Alaska Become A Place Where A Deal Is A Deal?
With a third of Alaska's economy based on oil, with oil production declining, and with the entire state economy over a third dependent on oil, repealing Alaska's new tax reform law poses a clear and present danger.
Earlier this month in Part I, we asked if "Alaska has become a place where a deal is a deal."
The most recent evidence that in Alaska, a "deal may not be a deal", can be found by reviewing this month's Alaska Supreme Court decision affirming a lower court's decision to uphold a new assessment methodology, thus increasng the property taxes applying to oil company property in Alaska.
We sympathize with the court about the difficulty of adjudicating property value among distinguished litigants--even when a taxing method is not at issue.
But when a court supports a change in the rules of the game, it makes investors less likely to be attracted to that jurisdiction.
The Journal of Legal Issues and Cases in Business, penned by one of Alaska's, most distinguished, retired Senior Economists, Roger Marks (NPG Photo) identifies this problem: "In 2005 the state changed the assessment method from an income approach to a cost approach.
"Under the income approach assessed value was based on production depreciation. Under the cost approach value was based on replacement cost new less straight-line depreciation.
"When the assessment means was changed there was no adjustment for past depreciation.
This inconsistency in depreciation treatment caused assets to be depreciated more than once over time, with the result being a double taxation of the property."
In fairness, we note that Marks was one of the oil companies' "expert witnesses".
Used to be that a handshake was sufficient between honorable Alaskans to confirm a deal.
Old timers tell us that in the 40s and 50s and even to the mid 60s, Alaska used to be a place where you didn't need to lock your doors at night--even in the cities.
If you trusted your house to be secure in the evening, you surely trusted the word of friends and other fellow Alaskans.
Then came the great Prudhoe Bay discovery in the winter of 1967-68. Our leaders then could have raised oil and gas taxes to a level they thought to be consistent with the Constitution's admonition to obtain the maximum benefit of resource development for citizens. The rule in place, they could then have reasonably conducted the 1969 lease sale. The oil company bidders could then have bid with the more reasonable certainty of knowing the rules would not likely change after investments had been made.
Instead, Alaska became greedy, we believe, having lived through those times. Folks started locking their doors. In the twelve years following the 1969 lease sale, the governor and legislature increased industry taxes dramatically, about a dozen times in that many years--after the lease sale had locked in company investment decisions. Then followed a period of dramatically increased cost estimates caused by increasing environmental, legal, political, labor and tax burdens.
Yes, Prudhoe Bay was big and could sustain a lot of abusive tax attacks. But when they bid, the companies did so contemplating the risks known at the time. Then they found in short order that the rules of the game would be changing before, during and after vast new investments in Alaska occurred.
This commentary does not quibble with whether or not any of the decisions made were 'right' or 'wrong'.
We do conclude without much fear of contradiction that by changing the rules of the game so often and so dramatically after it was too late for investors to reevaluate, Alaska was beginning to develop for itself a reputation with early signs of tarnish.
Then after a decade of changing rules, Governor Hammond and both the Republican and Democratic leadership of the House and Senate convened a press conference -- 33 years ago next month -- to signal that a landmark bill had passed which created for Alaska -- in general -- a "Fair Share" of resource development revenue.
A rather peaceful investment climate ensued for a generation -- until the early 2000s when Governor Frank Murkowski (NGP Photo) attempted with good intent to bargain to give gas pipeline investors fiscal certainty in return for increased oil company production taxes. The companies, in good faith agreed. The legislature honored part of the bargain by increasing their taxes but neglected to provide the necessary fiscal certainty to permit the creation of a viable gas pipeline project. The companies were rope-a-doped after two decades of improved relationships that even survived the desperate oil price drops of the late 1980s.
Governor Sarah Palin (NGP Photo) replaced Murkowski in the next election of 2006 and, with legislative acquiescence, increased industry taxes which were applied with no real or feigned pretense of good intent. To add insult to injury Murkowski's tax increase was increased further and applied retroactively.
Last spring, the legislature and governor acted to more reasonably reform the state's production tax and immediately thereafter, legislative foes, environmental groups and others initiated a voters referendum designed to repeal the new law, (SB21). Now, as we said in Part I, investors await the outcome of Alaska's August 19 primary election. If SB21 is affirmed by a majority voting "NO" to repeal, Alaska will have improved its investment climate reputation.
Our astute readers will also note that a mid year primary election is often lightly attended, usually by those who are determined to support or oppose a particular candidate or ballot proposition. In this case, in addition to primary candidates, voters will be adopting or rejecting very controversial propositions to advance widespread marijuana use in Alaska, to increase and provide a cost of living increase for the minimum wage in the state and an environmental initiative to block mining development.
Mathematicians and odds makers among us agree on one thing: a determined voter base of those supporting drugs, labor increases and anti-development forces could, in general, be more likely to vote to repeal an improved corporate investment climate than to keep the new oil tax reform law in place.
Accordingly, those opposed to all the initiatives will need to mount a big and unusually creative campaign if they are to stimulate a turnout of pro-free enterprise supporters and have a hope of balancing the scales.
So picture this. In Alaska's late summer a great tug of war will occur with big stakes. In the middle, we have a great chasm. On the left is an army of environmentalist activists, labor union activists, and marijuana proponents and their supporters pulling, sweating, grunting, polling, going door-to-door, advertising, and writing letters to the editor for all they're worth. On the right side of the chasm, pulling the rope in the other direction are those opposed to drug use, anti-business tactics and policies that repel investment and natural resource development.
One set of policies will be pulled into the chasm.
If the left side is pulled down, Alaska's reputation as a good place to live, work and play might be on the way to repair--except that there would be always the threat of another, similar referendum, year after year.
If the business side goes down, we'll know that in Alaska, a deal is for sure not a deal--until further notice!
In that case, expect dramatic reductions in investment, significant out-migration, decreasing oil production, less employment, fewer government services, lower real estate prices and overall economic malaise. Alaska would, in this fix, be more likely to become a ward of the federal government than living up to its former reputation as the Last Frontier, the Pioneering State.
And, finally, just as natural-resource-rich Alaska retreats from resource development, Russia, Canada and other Arctic nations are aggressively seeking to develop their far North resources and exploit the Northwest Passage while protecting and expanding their Arctic sovereignty.
Reforming Alaska's tax policies that have put it behind California in production, therefore, is not a local issue, but an international event that affects the security and economies and people of both the United States and Canada.
Opinion Editorial: A Lifelong Fairbanksan Opposes Efforts To Repeal SB21
Leslie Wien Hajdukovich
Alaska’s oil and gas industry has been the biggest driver in our state’s economy for 50 years. Responsible development of our oil and gas reserves has fueled our schools, roads, airports, government, our grocery stores, coffee huts and car dealerships. As a fifth generation Alaskan, I am thankful for an industry that allows me, and my family the opportunity to live in Alaska.
As an active member of the Fairbanks community, I have served on the Fairbanks school board for six years, three as president, and in other volunteer capacities that have benefitted our youth. It is important to me that every child in Alaska receive a quality education – an education that prepares them for the work force, and for future employment in our great state. Upon being elected to the school board, I quickly learned that our school district’s funding is heavily dependent upon the success of the oil and gas industry in Alaska.
Last October, I was asked to be a statewide co-chair for the effort to defeat the oil tax referendum that is on the ballot this August. I felt it too important an issue to say no. Over the last three months, I have become informed and carefully studied the issues around new oil tax reform. I have a clear understanding of why oil tax reform is good for Alaska.
The state budget shortfall is not due to oil tax reform, but rather to declining oil production in our state and falling oil prices. Oil prices are not something we can control in Alaska, however we can influence decisions that affect production. That is exactly what new oil tax reform does. Because of provisions in the new law, the outlook for Alaska is much brighter in the long term. With oil tax reform, state revenues from oil will be more balanced, predictable and beneficial to our state.
Since new oil tax reform passed, oil companies in Alaska have announced billions of dollars in new investment. In just one example, ConocoPhillips has announced a 54 percent increase in investment in Alaska over 2013, and most of that increase is due to the change in the tax structure. This investment is tied to new exploration and increasing oil production. The Trans-Alaska Pipeline has tremendous value to Alaskans, but only if it has oil flowing through it. Right now, it is flowing at one quarter of its peak capacity and still declining. Oil tax reform is about taking the steps necessary to add more oil to the pipeline.
As a Fairbanksan, I have high hopes that a gas line is in our future. We need the financial relief of heating our homes, businesses and institutions with cheaper and cleaner burning gas. Investment in North Slope oil actually increases our chances of gas exploration and a gas line. They go hand in hand.
One thing I’ve learned over the last few months is that new oil tax reform offers great opportunity for Alaskans, not only by boosting our economy, but offering a long-term, sustainable funding source for our state coffers. It promises our children and grandchildren a brighter future. This is the right tax reform at the right time. I encourage Alaskan voters to get informed, and to please Vote No on 1 this August.
BBNC Opposes Ballot Measure 1
- Published on Tuesday, February 25 2014 10:19
FOR IMMEDIATE RELEASE
February 25, 2014
Bristol Bay Native Corporation Opposes Ballot Measure 1
On Friday, Feb. 21, the Bristol Bay Native Corporation (BBNC) Board of Directors passed a resolution opposing Ballot Measure 1, which is a veto referendum seeking to repeal the Alaska Legislature’s oil tax bill passed during the 2013 session. Ballot Measure 1 seeks to repeal Senate Bill 21, also known as the Oil and Gas Production Tax, which modified the state’s oil tax regime in a manner designed to increase oil and gas exploration, development and production, and stimulate greater investment in Alaska. Ballot Measure 1 will appear on the August 19, 2014 primary ballot in Alaska.
BBNC has made significant investments in the Alaska oilfield services industry through its subsidiary companies Kakivik Asset Management, CCI Industrial Services and Peak Oilfield Service Company. These subsidiaries provide substantial benefits to BBNC shareholders in the form of employment, wages, and profits that contribute to dividends. The operations also provide over 1,000 high paying jobs primarily to Alaskans. The continued growth and success of these subsidiaries, as well as Alaska in general, is dependent upon a fiscal environment that encourages investment and economic growth in the Alaska oilfield services industry.
In the past year, under the current Oil and Gas Production Tax, BBNC has seen a dramatic increase in oilfield activity. BBNC is concerned that if Ballot Measure 1 were to pass, and Alaska returns to the prior tax structure, it will result in decreased oil and gas investment activity in the state; this would have an immediate and negative impact on BBNC’s subsidiaries and its shareholders, as well as the state of Alaska as a whole.
BBNC’s prudent support of Alaska’s oil and gas industry aligns with its balanced approach to the development of state resources. “Alaska’s oil and gas sector provides our shareholders with significant employment opportunities and makes major contributions to our ability to pay dividends,” said BBNC President and CEO Jason Metrokin. “BBNC strongly supports the industry that makes it possible to provide such benefits to its shareholders and opposes Ballot Measure 1.”
Bristol Bay Native Corporation (BBNC) is a responsible Alaska Native investment corporation dedicated to the mission of “Enriching Our Native Way of Life.” Established through the Alaska Native Claims Settlement Act of 1971, BBNC works to ensure the continuation of the life and culture of its over 9,400 shareholders – the Eskimo, Indian and Aleut Natives of Southwest Alaska’s Bristol Bay region.
|Related PNA Story. ConocoPhillips Alaska has added another project to those it has announced since passage of oil tax reform by the Alaska Legislature last spring.|
Petroleum News by Eric Lidji. The Institute of Social and Economic Research at the University of Alaska Anchorage expects oil and gas companies to spend some $4.255 billion this year in the state, almost half of the $9.1 billion in total construction spending the researchers expect this year.
EETV VIDEO. How are local hydraulic fracturing bans affecting natural-gas-intensive industries? During today's OnPoint, Jennifer Diggins (NGP Photo), chairwoman of the Consumer Energy Alliance and director of public affairs at Nucor Steel, explains how growth in infrastructure and manufacturing tied to shale development is helping the steel industry stay globally competitive. She also addresses how the natural gas industry can effectively engage consumers on the local level.