Morning Headlamp — Budget to move to the Senate & Industry member bows out of future contracts

On to the Senate. The Alaska House debated the proposed state operating budget into early Friday before passing it about 3 a.m., 24-14. The contention that led to such an early hour was largely driven over a Democratic amendment to revoke money for an appeal to the Alaska Supreme Court regarding the Legislature’s Medicaid expansion lawsuit. The chaos came as the House debated its proposed $3.8 billion operating budget for next year, which would slice about $283 million, or 7 percent, from last year’s spending plans for the state’s 14 departments, the Legislature, the governor’s office, the court and university systems. The House’s proposed cuts to state agencies go $180 million beyond the $100 million in reductions already proposed by Walker — reductions to areas like heating assistance, public radio and state-paid defense lawyers. When it comes to state agencies, House lawmakers are proposing steep cuts to the natural resources and health departments, as well as to the university. But when the cuts to those three areas aren’t included, the reductions to the other dozen state agencies, as well as to the governor’s office, the justice system and the Legislature’s own budget, are 1.6 percent deeper than Walker’s proposal.

With Florida-based Crowley Marine bowing out, there is no longer any competition for tugboat contracts to escort loaded oil tankers out of Prince William Sound, causing alarm among observers who don’t want a repeat of the 1989 Exxon Valdez oil spill. The remaining candidate, is Edison Chouest, the company whose tug, the 360-foot Aiviq, towed Shell’s Kulluk drilling rig. Michelle Egan, director of corporate communications for Alyeska, would not say which companies bid on the contract. But she confirmed that longtime contractor Crowley, as of earlier this month, is no longer part of a bidding process that began in 2014. “This will be a huge burden on DEC,” said Donna Schantz, executive director of the Prince William Sound Regional Citizens’ Advisory Council. “A big concern is, will they have the staffing and people to oversee this change because all state departments are challenged with cutbacks? The Coast Guard will have a role as well, but the state statutes and regulations are really what drive the tug specifications that we’ve enjoyed in the past.” Headlamp is sorry to see decreased competition in any aspect of the Alaskan oil and gas industry. An unfortunate side effect of policies that don’t incentivize private sector investment, is that Alaska could unfortunately see more support industry companies follow Crowley’s path. Both Crowley Marine and Edison Chouest are long-time Alliance members. 

Alaska lawmakers need to hear from you. The Alaska House Resources Committee is offering two opportunities for the public to weigh in on Governor Bill Walker’s Oil Tax Bill HB247. Representative Ben Nageak says if people are still waiting in line to testify on Monday night, the public testimony will continue on Tuesday night as well from 6 PM to 8 PM. HB247 will have huge implications for Alaska’s economic future. The Alliance is on record as opposing this bill. 


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First Reads

House OKs budget in wee hours after ‘endless confusion’ over amendment
Alaska Dispatch News, Nathaniel Herz, March 11, 2016

Longtime provider of oil tanker escorts in Prince William Sound is stepping aside
Alaska Dispatch News, Alex DeMarban, March 11, 2016

Budget Heads to Alaska’s Senate Floor
Alaska Commons, Craig Tutuen, March 13, 2016

An oilman’s $7 billion lesson in the economics of climate change
Alaska Dispatch News, Steven Mufson, March 11, 2016

Public Testimony to be Taken on Governor Bill Walker’s Oil Tax Bill
Your Alaska Link, Marissa silver, March 12, 2016

Oil Collapse Drains Alaska’s Wide-Ranging Education System
New York Times, Kirk Johnson, March 14, 2016

Alaska doesn’t have to solve its entire budget problem at once
Alaska Dispatch News, Paul Jenkins, March 12, 2016