3-28-13
Calgary Herald. In a decision that concluded tolls cannot increase every year to offset lower volumes moving through a pipeline, the National Energy Board has rejected sweeping changes put forward by pipeline giant TransCanada on its fee structure to move natural gas in Canada.
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Our Friends at Resource Development Council for Alaska (RDC) Alert Us About Tomorrow's Deadline:
The U.S. Army Corps of Engineers has begun the scoping process for the Donlin Gold LLC project Environmental Impact Statement (EIS). The Corps is accepting comments, questions, and suggestions to be considered and used to help identify concerns and benefits of the project in the draft EIS. Comments will be accepted through this Friday, March 29. Action requested: RDC encourages citizens to submit written comments urging the Corps to include social and economic benefits, and other potential opportunities that development of Donlin Gold may create, in the EIS. Please consider personalizing your comments by using your perspective and including specific examples of the potential benefits resulting from development of the project. For more information and talking points, please visit: http://www.akrdc.org/alerts/
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Inquire Herald (AP) -- Alaska's credit
rating could take a hit if the group behind an in-state natural gas line can't meet its obligations. So says Joe Dubler (NGP Photo-L), vice president and chief financial officer for the Alaska Gasline Development Corp. He told House Finance it would be a "big problem" for Alaska's credit rating if the state failed to recapitalize a proposed reserve fund to help AGDC meet its debt obligations. An aide to Rep. Mike Hawker (NGP Photo) said the bill's sponsors were prepared to offer an amendment to address concerns surrounding that. It's not clear to what extent, or whether, the fund might be used..jpg)
(Former gov stumps for gas pipeline - Kenai Peninsula Online. Bill Shieffield (NGP Photo) voices support for an in-state natural gas pipeline during a ... has appropriated $72 million for AGDC's Alaska Stand Alone Pipeline, ...)
Today's energy news courtesy of Consumer Energy Alliance:
Houston Chronicle: Busted theory - As for environmental impacts, the EPA credits increased use of natural gas for reducing air pollution across the country. Carbon dioxide emissions are also at a 20-year low thanks to natural gas. State and federal regulators, meanwhile, have been nearly unanimous in stating that hysterical claims about hydraulic fracturing - including water contamination, air emissions, and health threats - are pure invention. The only bubble that's about to burst - if it has not already - is the nationwide campaign against hydraulic fracturing, of which Owen's op-ed was an unfortunate part.
Florida Voices: Florida, U.S. Making Big Gains in Renewable Energy - The national conversation on energy production over the past few years has focused -- rightly so -- on the boom in oil and natural gas. U.S. oil production is at a 15-year high and last year saw the greatest jump in production since the industry began in 1859. This energy boom is not limited to oil. Due to breakthrough technologies in hydraulic fracturing and horizontal drilling, U.S. natural gas production is also at an all-time high. This combined activity drove a whopping $138 billion in capital investment in 2011. It’s hard not to focus on these numbers. But the United States has another energy story to tell. The country’s renewable energy resources have grown steadily over the last several years as federal investments have helped the emerging wind and solar industries come into their own.
3-27-13
Message from Governor Sean Parnell:
Alaskans are one step closer to realizing more economic opportunity through increased oil production.
Last week, the Alaska Senate passed Senate Bill 21, legislation to increase our competitiveness and grow our economy. This is welcome news for Alaskans, especially those who care about the long-term prospects for our state.Although oil production in Alaska has been declining over the past decade, SB 21 offers an Alaska comeback in oil production. The Senate-passed measure will put us on a path to reclaiming our standing as America’s greatest oil-producing state.
As Senator Cathy Giessel (NGP Photo archive with Governor Parnell) said on the Senate floor, "This is about the progress of Alaska, our private-sector economy, and its potential growth.”
I commend her and her colleagues in the Senate who voted for Alaska’s future, not status quo decline.
3-26-13
Tax Panel Reviews Impact On Coming Generations
By
Mary Barr
The Political Science Association of Alaska and Alaska College Republicans presented a panel last Wednesday (i.e. 3-20-13) at the University of Alaska-Anchorage campus, targeting the impact of today’s tax policy on future prosperity.
Event Chair, Portia Watson, introduced the event moderator, Dave Harbour, publisher of Northern Gas Pipelines. He opened the evening with a question of “intergenerational equity”. Do we want the next generation to have the opportunities we now have, and how can we achieve that goal? How should we proceed with the allocation of 
our resources to assure future prosperity for our children?
our resources to assure future prosperity for our children?Dr. Scott Goldsmith (NGP Photo), Professor Emeritus of Economics, contrasted the methods of financing Alaska’s operating budget with techniques used by other state governments. Where other states support themselves with a diversified variety of taxes and fees, Alaska derives 95% of its state revenue from one source: the petroleum industry. As production has fallen, state spending has soared creating an unsustainable model. The question becomes how to find a balance to allow a viable economic future for coming generations.
Andrew Halcro, former legislator and current chairman of the Anchorage Chamber of Commerce, reviewed the politics of the relationship between the state and the petroleum industry over the last 40 years. Oil company revenue includes a corporate income tax, property tax, royalty payment, and a severance (i.e. or, production) tax. Progressivity of the production tax discourages investment, and Alaska’s tax structure has become punitive. Halcro said that Alaska has become a state that pays people to live here. Alaskans seem to have no apparent interest in reining in government spending but are highly focused on continuance of Permanent Fund dividend checks for themselves..
Dr. Forest Nabors, Professor of Political science reviewed the lack of diversification in the economy and how the federal tax structure disrupts upward mobility. The current federal tax code actually creates an assigned strata of “class” that discourages upward mobility. He said that entrepreneurs create wealth when they’re successful, but that as a business succeeds, taxes become more punitive creating a barrier to obtaining true wealth. The inheritance tax, he said, makes passing a successful small business to the next generation very difficult. He noted that Alaska has few if any entrepreneurs due to such political barriers.
Harbour wound up the evening with comments on the Norway model of managing taxation and regulation. “In Norway,” Harbour said, “a deal is a deal”, with tax, regulatory and environmental issues agreed to in advance of an oil company’s investment. “In Alaska”, he said, “a deal is not necessarily a deal”. He said that while a company’s bonus bid and lease sale royalty payments provide revenue certainty to Alaska, the rate paid on each of Alaska’s three oil taxes can increase – even retroactively and with little notice -- upon a vote of the legislature and the signature of a governor.
“Some legislators demand guarantees from the oil industry in return for tax reform”, Harbour said, “but when government acts to increase taxes, no one asks “where is the industry’s guarantee from the state that higher taxes will produce improved state services?”
“If the state provides investors with a predictable investment climate,” Harbour said, “the coming generation can have more certainty that their way of life will be filled with as much opportunity as their parents experienced.”
Harbour also asked the audience to define the word, "people", as it is used in Alaska's constitution: "Article 8, Section 2. says, 'The Legislature shall provide for the utilization, development, and conservation of all natural resources belonging to the State, inclucing land and waters, for the maximum benefit of its people.'"
"Here's the question I would leave you with," Harbour said. "Did the founders intend to define 'people' as limited to today's generation, or does the definition include all present and future generations of Alaskan people?
"If the definition includes only today's adults and kids," he said, " then their elected representatives would be right in taxing all productive businesses to the hilt, to benefit the contractors, public employees, entitlement programs and today's other beneficiaries--even if those taxed businesses were not in business a generation from now.
"But," he said, "if the definition of 'people' also includes future generations of Alaskans -- you and your kids -- then today's policies should be designed to make Alaska a good place to invest, both now and into the future."
(Note: NGP always invites participants and knowledgeable readers to provide additions/corrections to our work. Accuracy is one of our goals. -ed)
3-25-13
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* Senator Click Bishop
* Senator John Coghill
* Senator Mike Dunleavy
* Senator Fred Dyson
* Senator Anna Fairclough
* Senator Cathy Giessel
* Senator Charlie Huggins
* Senator Pete Kelly
* Senator Lesil McGuire
* Senator Kevin Meyer
* Senator Peter Micciche
The Alaska Support Industry Alliance
...linking Alaska’s jobs to Alaska’s Resources…
500 member companies & 30,000 Alaska employees strong!
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Today's Consumer Energy Alliance News Clips:
Reuters: Senate budget plan embraces Keystone XL approval - The Senate easily passed on Friday a symbolic measure approving the Canada to Texas Keystone XL oil pipeline, a move backers said showed strong support for a bill that would give Congress power to green light the project later in the year. The amendment to the budget plan, sponsored by Senator John Hoeven, a Republican from North Dakota, passed 62 to 37. It was symbolic because the budget is a blueprint that will not become law. But the measure was selected out of hundreds of others for a vote and was approved by a strong majority in the 100-seat chamber led by Democrats.
The Hill: Senate votes highlight Dem divisions over Keystone pipeline, carbon taxes - Senate votes on climate change and the Keystone XL pipeline laid bare divisions among Democrats – and underscored why the White House, not Congress, will be where the critical climate decisions reside in President Obama’s second term. Several votes during the freewheeling debate over a nonbinding budget plan provided a political barometer of where the chamber, including vulnerable Democrats, stand on the topics. Advocates of the proposed pipeline scored a symbolic victory Friday when 62 lawmakers voted for an amendment backing the project to bring oil from Canadian tar sands projects to Gulf Coast refineries. Seventeen Democrats supported Sen. John Hoeven’s (R-N.D.) amendment.
National Journal: Biofuels Mandate: Defend, Reform or Repeal? - The Renewable Fuels Standard, which requires increasingly large amounts of biofuels each year, was part of a comprehensive energy bill signed by President George W. Bush in 2005 and expanded two years later during a drive to make the country more energy-independent. Most of the mandate is currently met with corn-produced ethanol; advanced biofuels made from products other than corn are not coming to market as quickly as the law had originally envisioned. The mandate came under intense bipartisan scrutiny amid last summer's historic drought, which sent corn prices soaring. Should Congress try to fix the mandate? And, if so, what are the major areas lawmakers should focus on? Should lawmakers instead try to defend the policy as it stands? Or, should lawmakers just eliminate the mandate?
Houston Chronicle: Ethanol law has become a mandate to nowhere - We’re squabbling about legislation that clearly hasn’t worked. Last week, the oil and ethanol industries traded barbs over the future of a 2005 law that requires blending the corn-based additive in gasoline. The American Petroleum Institute, the mouthpiece of the energy industry, released a report that found the Renewable Fuels Standard will drive up gasoline prices and shave as much as $770 billion from the country’s gross domestic product in the next two years.
Washington Examiner (Column): Sunday Reflection: America's oil and gas revolution - To grasp the importance of the revolutionary change in oil and gas drilling sweeping across the United States -- and its significance for our economy -- just consider how far behind the rest of the world is lagging. America's innovative use of energy technology by "petropreneurs" is rejuvenating oil and gas production. Thanks to the combination of hydraulic fracturing and horizontal drilling in shale deposits, along with advances in seismic imaging that allow geologists to examine deposits more than a mile underground, energy resources long presumed to be beyond reach are now being tapped, or at least will be eventually. And it's happening as a result of something unique about America.
Houston Chronicle: Barriers bottle up refinery plans - New refineries could help ease the backup created by increasing U.S. crude production, but significant economic and political barriers discourage the industry from building the facilities. “The pure economics of trying to build a refinery just doesn’t make any sense,” said Bruce Bullock, director of Southern Methodist University’s Maguire Energy Institute, at a breakfast panel last week in Houston. “Refining has only returned its cost of capital three years out of the last 15,” Bullock said. He said refineries are considered profitable only when they earn enough to cover their cost of capital, typically about a 10 percent to 15 percent return, on top of operating costs.
3-24-13
Inquirer Herald/AP by Becky Bohrer. As the legislature enters its final three weeks, four major bills stand out amid a flurry of others vying for attention: the budgets, and bills dealing with oil taxes, a liquefied natural gas trucking plan and in-state gas pipeline. Gov. Sean Parnell said those "will probably have the most positive impact on Alaskans, and are the most significant pieces of legislation that are out there."
3-23-13
Online game depicting pipeline bombing sparks controversy - CBC - CBC.ca. Saturday, March 23, 2013 ... bombing sparks controversy. Ontario's premier is looking into an online game that shows the bombing of a gas pipeline.
