Morning Headlamp — Compromise reached on HB 247

Alaska Dispatch News and other outlets reported that both the House and the Senate reached a compromise on Governor Bill Walker’s embattled oil and gas tax credit bill, HB 247. The bill passed 13-6 in the Senate and by a tight 21-19 margin in the House. The bill could net the state an estimated $140 million by 2020, only half of previous projections. The legislation passed Monday also preserves a tax credit for the state’s four largest oil companies that the House compromise had proposed to repeal — credits that by 2020 would amount to $585 million, which the companies could claim as tax deductions, according to the state’s projections. Walker hasn’t indicated if he’ll sign the oil tax bill. His communications director, Grace Jang, said late Monday that Walker opposed the version that passed because he “felt the bill didn’t go far enough,” but she added that it was too soon to say if he’d veto it. Headlamp will never support anti-industry legislation but we can sleep easier knowing Governor Bill Walker’s original tax bill was not fully met.

The Maryland-based International Organization of Masters, Mates and Pilots and the Seattle-based Inland boatmen’s Union said on Monday they are launching an advertising campaign to stop Alyeska Pipeline Service Co. from canceling its ship-escort and spill-response contract with Crowley Marine and giving it to a nonunion company involved in the grounding of Shell’s Kulluk drilling rig in 2012. The unions’ minute-long TV ad, to run on major stations during news shows in Anchorage and Juneau, says workers with Edison Chouest are training people in Louisiana who will take Alaska jobs. Alyeska Pipeline on Monday publicly confirmed that it intends to sign a 10-year contract with Edison Chouest Offshore that should be finalized this summer.

Supply Meet Demand. Oil prices hit their highest price in eight months on Tuesday, buoyed by the dollar nearing one-month lows and by falling Nigerian oil output after a spate of attacks on infrastructure. U.S. crude oil futures rose 60 cents to $50.29 a barrel, having touched a fresh 2016 peak of $50.37, their highest since October last year. With OPEC promising not to flood the market and US inventory levels dropping, could we be nearing an environment of increased activity in the industry?  Headlamp wonders how HB 247 will impact the ability of Alaska to rebound from low oil prices. 

Bumpy road ahead. Alaska Senator Lisa Murkowski’s bipartisan energy bill has stalled amid partisan disputes over oil drilling, water for drought-stricken California and potential rollback of protections for the gray wolf and other wildlife. The bill’s prospects dimmed after the House approved a series of election-year amendments last month that promote Republican priorities, such as increased drilling for oil and gas and overriding protections for the gray wolf and other species under the Endangered Species Act. The House bill also would promote hunting and fishing on federal lands, shift more water to California farmers and cut the flow for threatened fish. The House proposal includes at least seven measures that the White House strongly opposes or has threatened to veto. Headlamp hopes lawmakers don’t politicize America’s energy future through stalling this monumental bill.

The comment period on the Bureau of Ocean Energy Management (BOEM) outer continental shelf proposal closes in 9 days! Are you like Headlamp and think Alaskans should have the right to pursue safe, sustainable resource development? Tell the BOEM what you think here.

Former Senator Mark Begich, who has been almost suspiciously quiet about the state of Alaska’s legislative affairs, lambasted the recent budget passed by the state legislature as “trying to dodge the tough decisions in an election year,” fueling speculation he may have an eye on the Gubernatorial election in 2018

*These quote comes from the following article reprinted from Energywire with Permission from Environment & Energy Publishing, LLC. www.eenews.net 202-628-6500

Ex-Sen. Begich re-emerges to blast lawmakers over fiscal crisis
Margaret Kriz Hobson, E&E reporter
Published: Tuesday, June 7, 2016

Former U.S. Sen. Mark Begich (D) yesterday jumped into Alaska’s contentious political debate concerning the state’s fiscal crisis, calling on Gov. Bill Walker (I) to veto the budget bill adopted last week by the Republican-led state Legislature.

In an opinion column in the Alaska Dispatch News, Begich criticized state legislators for failing to do enough to cut Alaska’s $4 billion deficit created by low oil prices. He accused lawmakers of “trying to dodge the tough decisions in an election year.”

Begich, who has maintained a low political profile in Alaska since losing his Senate seat to Republican Sen. Dan Sullivan in 2014, argued that the Legislature should make deeper cuts in state programs, raise fees and consider new taxes to help balance the budget.

He also suggested that lawmakers revise the way the state handles the Permanent Fund savings account, a $52.8 billion pool of money created with state oil revenues. Half the fund’s investment earnings are currently distributed to Alaska residents annually in the form of dividend checks.

However, Begich didn’t identify any specific budget cuts or new revenue proposals. And he asserted that the lawmakers should continue investing in the state’s education system.

Begich’ s re-emergence into Alaska’s policy scene is raising questions in state political circles about whether the former senator is interested in challenging Walker in the 2018 gubernatorial race. Begich currently heads the Northern Compass Group, an Anchorage-based consulting firm that focuses on business development and public policy.

The broad policy proposals mentioned by Begich are similar to those detailed in Walker’s comprehensive budget package, which state Republican legislators have largely opposed.

Last week’s Republican funding bill included budget cuts and a proposal to borrow $3.2 billion from Alaska’s Constitutional Budget Reserve. So far, the lawmakers have not embraced any new taxes or changes to the way the state uses oil tax revenues.

Walker has not said whether he’ll sign that bill, which he attacked for drawing money from Alaska’s dwindling savings account rather than cutting oil and gas industry credits or imposing new taxes to shrink the state’s multibillion-dollar deficit

 

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First Reads

House passes Senate version of tax bill after Rep. Hawker returns from cancer treatment
Alaska Dispatch News, Nathaniel Herz, June 6, 2016

Maritime unions launch ad campaign to stop Alyeska Pipeline from selecting Edison Chouest
Alaska Dispatch News, Alex DeMarban, June 6, 2016

Energy bill prospects dim in dispute over drilling, drought
Associated Press, June 6, 2016

Oil hits 2016 high on ebbing supply, softer dollar
Alaska Dispatch News, June 6, 2016