Headlamp – Sullivan pushes royalties from revenue and newsflash: tax policy matters!

Sullivan seeks royalties from ANWR as revenue raiser. Alaska Senator Dan Sullivan said he’s pushing for budget language that would make it easier for Congress to allow oil and gas drilling in part of the Arctic National Wildlife Preserve. “You’re damn right I am,” Sullivan, a Republican, said in an interview Wednesday. He said the Senate Budget Committee is considering adding a provision to the budget resolution that would allow the chamber to pass such a measure with a simple majority vote without needing Democratic support. Republicans plan to use the budget resolution to allow fast-track consideration of a tax overhaul plan. Royalties from oil and gas production in the wildlife reserve would be a revenue-raiser that could help offset some of the tax cuts the GOP is proposing. Sullivan and fellow Alaska Republican Lisa Murkowski have backed legislation that would allow oil and gas development in as much as 2,000 acres of the refuge. Democrats are largely opposed, and some Republicans have had reservations in the past.

Russians using social media for anti-fracking campaigns? A U.S. House committee investigating whether Russia has tried to influence U.S. public opinion on fossil fuels asked Facebook (FB.O), Twitter (TWTR.N) and Alphabet (GOOGL.O) on Wednesday to turn over information about Russian entities that may have bought anti-fracking advertisements. House Science and Technology Committee Chairman Lamar Smith, a Texas Republican and climate change denier, asked the CEOs of the technology companies to turn over documents by Oct. 10 that detail the involvement of Russian-based or funded entities detected on their platforms, information on ads they purchased, and any communications concerning ads advocating for “so-called green initiatives.” Smith and the Republicans on the committee that oversees U.S. scientific agencies have targeted mainstream climate change scientists, questioning their integrity and calling for eliminating federal funding for climate research. They have also accused environmental groups of colluding with Russians to push for regulations to curb fossil fuel extraction.

Dear Alaska: Tax Policy Matters. This summer, observers across the nation watched as lawmakers in the state of Alaska pulled together a buzzer-beating compromise that prevented a potentially catastrophic budget shutdown and kept the government funded through the coming fiscal year. For countless Alaskans who simply wanted their government to continue to operate, the compromise is a win. The alternative — an unprecedented shutdown — would have been untenable, resulting in significant upheaval for Alaskans seeking to utilize programs ranging from fishery permitting to cruise ship oversight to early education and Head Start services. For political and policy junkies, it was a budget showdown that checked nearly every box, complete with flaring tempers, bruised egos, high stakes, and the discussion of policy shifts that could send ripples through the economic landscape for years to come. This is particularly true in the case of the oil and gas industry, a sector that is looking at increased taxes in the eye in Alaska while simultaneously facing extremely challenging market conditions across the nation and around the world.

Tick. Tock. The clock is running out fast on the latest of countless efforts to commercialize Alaska’s massive natural gas reserves: the state-owned Alaska Gasline Development Corporation will be out of cash next year unless a large buyer is identified first, and policymakers grappling with a $2.5 billion budget gap are unlikely to throw more cash at the Alaska LNG Project (“AKLNG”) without visible progress. Gov. Bill Walker championed the effort long before he assumed office three years ago and throughout his term has done his best to woo the biggest potential buyers.

One step closer? Help is on the way for Fairbanks residents caught in the struggle between affordable heat and clean air. Last week, the Alaska Industrial Development and Export Authority Board approved a plan advancing the state’s effort to increase availability of natural gas in the Interior. It is secured by a newly inked Cook Inlet gas supply contract with Hilcorp, a key plan component required by the enabling legislation. The Alaska State Legislature provided $300 million in financing to create components like the Cook Inlet LNG processing plant expansion and additional gas storage in Fairbanks. The Interior Energy Project targets a consumer gas price equivalent to $2 a gallon heating oil, and the most recent AIDEA projections indicate it’s achievable as new customers sign up for service. Next steps for moving the project forward include incorporating infrastructure into a single public utility to serve Fairbanks and North Pole. It is expected that the Fairbanks North Star Borough’s Interior Gas Utility will buy and merge operation with AIDEA-owned Fairbanks Natural Gas.

First Reads:

Alaska Senator Seeks Arctic Drilling Measure in Budget
Bloomberg, Eric Wasson, September 27, 2017

U.S. lawmakers ask Facebook, Twitter for information on anti-fracking ads
Reuters, Valerie Volcovici, September 27, 2017

GUEST COMMENTARY: Amid low crude prices, tax policy matters more than ever
Alaska Journal of Commerce, Dr. Margo Thorning, September 27, 2017

Governor pitches Alaska natural gas to Chinese sovereign wealth fund
KTUU, Austin Baird, September 27, 2017

Affordable Energy For Interior One Big Step Closer
KSRM, Dorene Lorenz, September 27, 2017