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      This is your public service 1-stop-shop for Alaskan and Canadian Arctic energy commentary, news, history, projects and people. We update it daily for you. It is the most timely and complete northern energy archive 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 name others existing before 2001.  -dh


12-18-15 Alaska Gasline Development Corporation Leadership Changes

18 December 2015 4:18pm

(Scroll down or click here for yesterday's 12-17-15 editorial)

ADN by Nathaniel Herz.  ... the board of the Alaska Gasline Development Corp. made its acting chair, Dave Cruz, the permanent chair, with Hugh Short named vice chair.  The board also unanimously approved the appointment of Fritz Krusen, who was previously a vice president at the corporation, as interim president....

Bill Walker, Alaska Governor, Cook Inlet gas, LNG, Japan, Photo by Dave HarbourCourthouse News.  Alaska Gov. Bill Walker (NGP Photo) said Thursday his state extended its cooperation agreement with Japan-based consortium Resources Energy to develop natural gas fields in Cook Inlet.
     The state signed the original memorandum of agreement in September 2014. The extension with the Japanese consortium runs through 2017 and encourages the development of Cook Inlet natural gas ....

ADN by Pat Forgey.  Communities along the route of the pipeline from Prudhoe Bay to a liquefied natural gas export terminal at Nikiski have spent the fall negotiating with the state and other communities about how to divide up the estimated $15.7 billion in property tax revenues the project will produce over 25 years. The state has proposed a payment-in-lieu-of-taxes structure, hoping to avoid the contentious history of the trans-Alaska oil pipeline, and its associated lawsuits.

Julie Hasquet, BP Exploration Alaska, Photo by Dave Harbour, 2015 Alaska Hire ReportOur friend, Julie Hasquet (NGP Photo) at BP Exploration (Alaska) advises us that BP’s 2015 Alaska Hire report is out with some interesting stories and statistics.

"You’ll see that our Alaska Hire rate remains strong at 79 percent," she noted, "and our spending with Alaska companies is an impressive 72 percent  of total in-state spending - supporting 300 vendors."

She said that the company publishes Alaska Hire each year focusing on education, training and mentoring programs; designed to create more jobs for Alaskans in the oil and gas industry.

"In addition to the stories, spending and hiring data, there are also a number of great photos showing our BP Alaska business and people.

"A PDF of the publication is attached," she added, "and you can also find it on-line at  http://www.bp.com/en_us/bp-us/what-we-do/exploration-and-production/alaska.html."


12-17-15 Alaska: Among LOWEST THREE Economically Free States - Alberta, BC and Saskatchewan Did Better!

17 December 2015 11:14am

Fiscal crises affect national and local governments -- and the oil patch!  -dh

Pat Foley, Caelus Energy, Alaska North Slope, Alaska fiscal crisis, Alaska Support Industry Alliance, Photo by Dave HarbourLast 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.)  

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.)

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.

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.


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...  

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.”


12-15-15 Alaskanomics and Alaska's Budget Plan

15 December 2015 6:11pm

Today's page may be all about budget...but the budget is all about oil tax policy!  -dh


FROM ALASKANOMICS: Governor Walker's Fiscal Year 2017 Budget Plan

Last week, Department of Revenue Commissioner Randy Hoffbeck, and Tax Division Chief Economist, John Tichotsky, gave a presentation to the Energy Action Coalition about the State's 2015 Revenue Forecast.

The Alaska Department of Revenue this week released the first 2 chapters of the Fall Revenue Sources Book for 2015. It contains the annual forecast data that provides basic information about state revenue, as well as a forecast of state revenue over the next 10 years.  The full Revenue Sources Book will be available later this month.

Click here to download their PowerPoint presentation and Fall Revenue Sources Book.


Posted by Alaskanomics, 15 Dec 2015 04:52 PM PST

The Governor is required to present his budget to legislators by December 15 each year. This year had plenty of build-up to the release of the Governor’s plan. Groups of lawmakers, businessmen, and concerned citizens have been meeting for months in anticipation of how we will begin to solve the fiscal crisis occurring in Alaska. In a press release dated December 9, 2015, the Governor introduced “The New Sustainable Alaska Plan” as a way to power the state economy through a mix of spending cuts, wealth management, new revenue, and investments. The state is currently spending over $9 million a day in savings, or $4,900 per Alaskan this year. This is not a problem that will be solved with one measure.

From the Governor’s press release:

The New Sustainable Alaska Plan also calls for continued cuts and ongoing spending restraint. The Walker-Mallott administration worked with the Legislature to cut about $1 billion from state spending since taking office on Dec. 1, 2014, and eliminated 600 state jobs. Governor Walker’s fiscal year 2017 budget calls for $100 million in additional cuts from the operating budget and $425 million in cuts from oil exploration credits.

The plan will change the oil and gas tax credit system into a low-interest loan program, wherein the rates will be determined by the number of Alaskans the companies hire. To honor existing commitments for credits, the FY 17 budget allocates $1.2 billion for a transition fund and loan program. The minimum tax on the oil industry will increase by $100 million. The mining, fishing and tourism industries will also be taxed for projected revenue of about $47 million. The plan also calls for an income tax of 6 percent of federal tax liability, which is about 1.5 percent of income for the average Alaskan family, for projected revenue of about $200 million. Taxes will also be levied on alcohol, tobacco and motor fuel for projected revenue of $112 million.

The Governor’s plan is a multi-year approach that helps ease the sting of the cuts to state budget and introduction of new revenue. It is vital that we continue to move forward on this issue because Alaska cannot afford to wait any longer. Inaction will result in the depletion of the state’s savings by fiscal year 2018 if we continue to spend the way we are today. Once the savings is gone, the legislature will have to begin spending the earnings reserve of the Permanent Fund, which will be depleted in fiscal year 2022. A reduction in spending, broad based taxes and priority investments are the way that we will rise out of the ashes and return to a long term balanced and sustainable budget.

Alaskans must work with lawmakers so that the correct balance is found to have an Alaska that is spending within its means as well as serving the people.

For more information about the Governor’s plan, visit https://www.omb.alaska.gov/html/budget-report/fy2017-budget/proposed.html


Governor Walker Releases 2017 Budget Legislation

Reduces Overall State Spending By 21 Percent Since FY2015


December 15, 2015 ANCHORAGE – Governor Bill Walker released the FY2017 (July 1, 2016 – June 30, 2017) appropriation and revenue bills today as part of the Walker-Mallott Administration’s New Sustainable Alaska Plan. Rolled out last week in Anchorage, the plan addresses the state’s $3.5 billion budget deficit using a combination of spending cuts, new revenue, wealth management and investment.


Governor Walker also released the Alaska Permanent Fund Protection Act (APFPA) today, which re-plumbs funding for state services to stabilize the state’s budget. The Governor’s fiscal plan calls for continued cuts, implementing the APFPA, and adopting broad-based taxes and fees.


This year’s state operating budget is $4.8 billion, down from $6.1 billion when Governor Walker took office one year ago. Additionally, proposed FY2017 state funding for agencies is $140 million less than FY2016 and $544 million less than FY2015—a cut of 11 percent from state operating costs since FY2015. The budget also includes investments of $38.3 million for continued progress on the gasline project and $1.3 million for the Rural National Guard enhancement; leaving the administration with a net cut in agency operations of $100 million since last year and $500 million since FY2015.


·        Between FY2016 and FY2017, the Walker-Mallott administration has cut 6.7 percent from overall spending in the state’s operating, capital and oil tax credit budgets.


·        Since FY2015, the administration has cut 21 percent from the state’s operating and capital budgets—including an 11 percent cut in the operating budget between FY2015 and FY2017.


Governor Walker reiterated the importance of continued streamlining efforts, as well as program and service reductions. 


“Tackling our state’s budget problems is going to require a combination of continued spending cuts and new revenue,” said Governor Walker. “With the help of the legislature, we reduced state spending by nearly $1 billion last year, and eliminated 600 state positions. While we cannot balance the budget with cuts alone, it’s important that we continue to look for budget efficiencies throughout our state system.”


The administration also released legislation today that would generate new revenue for the state. Outlined in seven separate revenue bills, the legislation would generate approximately $360 million a year in new funding, including broad-based taxes and fees.


Governor Walker stressed the importance of shared responsibility.


“As Alaskans, we are all in this together, and it is very important that this plan is fair,” said Governor Walker. “The legislation package that we released today is the result of input from many industries and individual Alaskans. I appreciate the contributions that lawmakers and other Alaskan leaders have made to this important conversation, and I look forward to working with the legislature in the months ahead to chart a sustainable fiscal future for our state.”


For more information on department cuts and information on the Governor’s budget and revenue bills, please visit the OMB website at https://www.omb.alaska.gov/html/budget-report/fy2017-budget/proposed.html.




12-14-15 LNG To Juneau?

14 December 2015 5:16pm

Juneau Empire by Rob Simpson.  I recently read the article about the possibility of bringing natural gas to Juneau in the form of liquefied natural gas (LNG). I was at first surprised because in this day and age, burning fossil fuels seems to be a political crime. I read it as objectively as I could and as someone who has invested 25-plus years in the HVAC business (oil, gas and electric systems) I thought I’d try to clarify a few things.

Converting a home heated with electric baseboard to gas is the most expensive conversion there is unless 



13 December 2015 7:57am

"Climate Change".  Rich countries will pay poor countries for UN 'concensus' that global warming is real, caused by carbon emission and that humans can eliminate the trend and that eliminatiing the trend is good.  Bottom line, UN goal of "destroying capitalism" has advanced and accumulation of power under UN has taken a giant leap forward.  Alaskan and Canadian oil, gas and coal production will be more costly and all North American consumers and taxpayers will be asked to pay more from family budgets.  Meanwhile, ISIS threat takes a back seat to the priority-du-jour: power accumulation.  -dh

The Hill by Timothy Cama.  World leaders Saturday adopted an historic international climate accord in Paris, the first-ever agreement to commit almost every country to fight climate change.

The 31-page pact does not have binding language or a mechanism to force countries to live up to the promises to cut greenhouse gases emissions or provide money for developing and poor nations to cope with the effects of global warming.

Nonetheless, leaders and the environmental community hailed the United Nations agreement has a historic turning point that has the potential to stave off the worst expected effects of global warming.

Adoption of the accord is a major win for President Obama. He has made it a central piece of his second-term climate agenda to get an international agreement, since domestic action can only make a small dent in the world’s greenhouse gases.

CBC.  Nearly 200 nations adopted the first global pact to fight climate change on Saturday, calling on the world to collectively cut and then eliminate greenhouse gas pollution but imposing no sanctions on countries that don't.

Loud applause erupted in the conference hall outside Paris after French Foreign Minister Laurent Fabius gavelled the agreement Saturday. Some delegates started crying. Others embraced.

The countries had been negotiating the pact for four years after earlier attempts to reach such a deal failed.



This accord marks the first time all countries are expected to pitch in — the previous emissions treaty, the 1997 Kyoto Protocol, only included rich countries.​ Canada signed on to Kyoto, but later backed out in 2011.

'Canadians can be proud'

Prime Minister Justin Trudeau released a statement calling the agreement "historic, ambitious and balanced."


From left to right, UN climate chief Christiana Figueres, UN Secretary General Ban Ki-Moon, French Foreign Affairs Minister Laurent Fabius and French President François Hollande react during the final plenary session at the World Climate Change Conference 2015. (Stephane Mahe/Reuters)


"Canadians can be proud of the strong and positive role we played during these very important international negotiations to address one of the biggest challenges of our generation," he said. "There is much tough work that still needs to be accomplished both at home and around the world to implement the agreement."

He promised to meet with the premiers within the next 90 days.

"We will move towards a climate resilient economy, and we will invest in public transit, green infrastructure and clean technologies to create new jobs and support our communities," he said. "Internationally, we will provide significant support to help developing countries reduce their emissions and deal with the impacts of climate change." 

'For our children'

U.S. President Barack Obama hailed the accord reached as strong and historic, calling it the best chance to save the planet from the effects of global climate change.
"Today the American people can be proud because this historic agreement is a tribute to American leadership. Over the past seven years, we've transformed the United States into the global leader in fighting climate change," Obama said.
He said the accord shows what is possible when the world stands as one, adding: "This agreement represents the best chance we have to save the one planet that we've got." 


Shortly after the deal was adopted, Canadian Environment Minister Catherine McKenna tweeted: "History is made. For our children."


UN Secretary General Ban Ki-moon called it "a monumental triumph for people and planet."

"History will remember this day," he said. 

U.S. Secretary of State John Kerry said the pact will "prevent the worst most devastating consequences of climate change from ever happening."

"It's a victory for all of the planet and for future generations," he said. 

Brazilian Environment Minister Izabella Teixeira added: "Today, we've proven that it's possible for every country to come together, hand in hand, to do its part to fight climate change."

The agreement, South African Environment Minister Edna Molewa said, "can map a turning point to a better and safer world."

The deal now needs to be ratified by individual governments — at least 55 countries representing at least 55 per cent of global emissions — before taking effect in 2020.


Under the deal, countries will have to publish greenhouse gas reduction targets and revise them upward every five years, while striving to drive down their carbon output "as soon as possible."


The final text of the agreement commits countries to keeping global warming "to well below 2 degrees C" and hopes to limit it to 1.5 C, with the goal of a carbon-neutral world sometime after 2050. 

In introducing the draft text earlier on Saturday, Fabius, flanked by French President François Hollande and Ban, called the pact "a historic turning point" and said it contained some key provisions. 

France Climate Countdown

French Foreign Minister and president of the COP21 Laurent Fabius uses to hammer to mark the adoption of the global climate agreement during the final conference at the COP21, the United Nations conference on climate change, in Le Bourget, France. (Francois Mori/Associated Press)

Those include terms making the accord legally binding, as well as the 1.5 C goal — below the 2 C standard scientists say is essential to limiting potentially catastrophic climate change.

That was a key demand of developing countries ravaged by the effects of climate change and rising sea levels.

Another major debate has been over a promise that developed countries should provide $100 billion annually to help poorer states deal with the consequences of climate change. The text sets that figure as a floor by 2020.

Elizabeth May, leader of Canada's Green Party, said the deal is ambitious but balanced, and she's proud of Canada's involvement in the negotiations. 

Media placeholder

Climate draft deal 'well-constructed'9:49



"We are not nearly where we need to be yet, but this is a very good moment for the world and Canada played a real role in getting us here," she told CBC News from Paris.

The Green Party later tweeted its congratulations to May, McKenna and Trudeau. 

Not far enough, critics say 

Not everyone is happy with the deal, however.

NDP Leader Tom Mulcair and World Wildlife Fund Canada say merely approving the agreement isn't enough and that the Canadian government must act to reduce fossil fuel emissions.

Canada should have already set "ambitious" federal emissions targets, said an NDP statement, which also called for Canada to move toward a low-carbon economy to develop new, cleaner technology.


Conservative environment critic Ed Fast said the climate deal means little without official emissions targets from the federal government.

He said the government should consult the country's "major emitters" before agreeing to targets.

Fast also expressed concern about job losses in the energy sector. He says tens of thousands of jobs have already been lost, and the new agreement sets the stage for even more cuts.

France Climate Countdown

United Nations climate chief Christiana Figueres, right, hugs France's Laurence Tubiana, special representative for the COP21, after nearly 200 countries adopted a historical global agreement on Saturday. (Francois Mori/Associated Press)

Paul Oquist, Nicaragua's U.S.-born climate envoy, told climate negotiators that his country is "not able to support the consensus."

He said the agreement does not go far enough and leads to twice as much global warming as the stated goals. His country is one of 10 nations that didn't submit plans to reduce emissions.

Oquist asked for a compensation fund that would pay poorer countries for damages caused by global warming and complained the accord as approved would not let victims sue for compensation.

Thousands of protesters in Paris, under the close watch of riot police,held hands beneath the Eiffel Tower and denounced the pact as too weak to save the planet.

Danielle Lefait, a retired deaf student teacher, said she was protesting because she is afraid of the environmental risks of proposed shale gas extraction in her town of Arras in northern France. Other protesters were angry the accord didn't do more to force governments to give up fossil fuels blamed for warming the planet.

France Climate Countdown

The slogan 'NO PLAN B' is projected on the Eiffel Tower at the COP21 conference near Paris. Thousands of activists gathered under the tower Saturday to urge further action to limit global warming. (Francois Mori/The Associated Press)

The pact doesn't have any mechanism to punish countries that don't or can't contribute toward its emissions-reduction goals.

The Pembina Institute, a Canadian environmental think-tank, said Canada will only be able to meet the emissions targets under the new Paris Agreement if it brings in a national minimum standard for carbon pricing.

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