Headlamp – King of the Road; Dunleavy leaves Senate to campaign full time

The end of the road to build a road. The city of King Cove says it has reached a deal with the Trump administration to build a road through the Izembek National Wildlife Refuge. King Cove residents argue they need the road to access the all-weather airport in Cold Bay. But environmental groups believe it will ruin critical wildlife habitat. Now, city administrator Gary Hennigh says they have reached an agreement with the Interior Department for a land swap — between the King Cove Corporation and the federal government. He expects the deal to be signed January 22nd in Washington D.C. “The whole community is excited because after 30 years we do believe this can now happen,” Hennigh said. King Cove residents say they need the road because bad weather can leave people stranded during medical emergencies. But the 12 mile gravel road would pass through what now is designated wilderness — the highest level of conservation given to federal lands.

No budget fix in 2018. Gov. Bill Walker is an optimist, but even he thinks Alaska’s multibillion-dollar budget deficit won’t be resolved this year. Walker spoke to the Empire in an interview Friday, a little over one week before the start of the 2018 Alaska Legislature. “I don’t anticipate we’ll completely close the gap this year,” Walker said. In the budget proposal he released to lawmakers in December, Walker plans to use a portion of the Alaska Permanent Fund’s investment earnings to pay for government services and reduce the deficit. Accountants from the Legislature and the state Office of Management and Budget each expect the deficit to stand at $2.7 billion when the state’s new fiscal year starts July 1. That could be reduced to about $700 million, if lawmakers pass a law tapping the Permanent Fund.

Governor’s race getting real – Dunleavy steps down from Senate. Mike Dunleavy, R-Wasilla, plans to announce Monday that he will resign from the Senate to run for governor, according to Republican Party Chairman Tuckerman Babcock. The senator, who represents a large district that stretches from Talkeetna to Valdez and Whittier, informed his local districts early Saturday and told his colleagues Saturday night at a fundraiser in Anchorage, Babcock said. “He let people know that he would like to focus entirely on the race for governor,” Babcock said. It makes strategic sense for Dunleavy to resign now, because legislators are prohibited from fundraising during the legislative session that begins Jan. 16, Babcock said. Walker has also been apt to call special sessions, which would further limit Dunleavy’s fundraising opportunities if he didn’t step down.

Three-year high for oil prices. Oil prices rose on Monday, coming close to three-year highs on a slight decline in the number of U.S. rigs drilling for new production and sustained OPEC output cuts. U.S. West Texas Intermediate (WTI) crude futures had risen to $61.67 a barrel by midday in London, 23 cents above their last settlement. WTI last week reached $62.21, the highest since May 2015. Brent crude futures were at $67.78 a barrel, 16 cents above their last close. Brent hit $68.27 last week, the highest since May 2015. Traders said the gains were due to a slight decline in the number of U.S. rigs drilling for new production. The rig count eased by five in the week to Jan. 5 to 742, according to data from oil services firm Baker Hughes. Despite this, U.S. production is expected soon to rise above 10 million barrels per day, largely thanks to soaring output from shale drillers. Only Russia and Saudi Arabia produce more. “The U.S. oil price is now into a range that is anticipated to attract increased shale oil production,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.

From today’s Washington Examiner Daily on Energy:

SUPREME COURT WON’T HEAR CASE FOR COAL JOBS: The high court on Monday refused to hear a case brought by Trump supporter and coal magnate Bob Murray of Murray Energy. Murray had petitioned the Supreme Court last year to take up a lower court ruling that the Environmental Protection Agency did not need to report how its regulations would affect coal jobs and the industry. Monday’s decision means the 4th Circuit Court’s decision stands.

Pebble proceeds. The U.S. Army Corps of Engineers (USACE) has published a notification that the permit application submitted by the Pebble Limited Partnership (PLP) has been accepted. This formally begins the permitting process under the rigorous National Environmental Policy Act (NEPA) review process and other permitting efforts associated with the project. PLP’s application incorporates more than a decade of extensive third-party environmental research. The application and supporting documentation can be viewed via the USACE website. To read the press release in its entirety, click here.

First Reads:

Interior Department reaches deal with King Cove for controversial road
Alaska Public Media, Zoe Sobel, January 7, 2018

Governor says Alaska’s deficit will not be fixed in 2018
Juneau Empire, James Brooks, January 7, 2018

Wasilla state Sen. Mike Dunleavy to resign from Senate and run for governor
Anchorage Daily News, Julia O’Malley, January 7, 2018

Price of crude oil rebounds to near 2015 highs, but can it stay there?
Anchorage Daily News/Reuters, January 8, 2018