Morning Headlamp – Let’s deal in Reality; Trump’s shout out to Alaska

Actual results beat theory every day of the week. Andrew Jensen’s latest editorial hits the nail on the head: The oft-cited ISER study ties not a single direct job in the state to the payment of PFDs. Rather it relies on the economic multiplier effect for measuring impacts of using Fund earnings or collecting an income tax. The only scenario in which it can estimate job losses directly is from budget cuts to the state government. Everything else is theory, although it would be nice to know how many small business owners will be hit by the income tax and how that will affect their ability to hire and grow in the name of preserving an artificial PFD level.”

The sky is the limit. President Donald Trump plans to sign yet another executive order instructing Interior Department Secretary Ryan Zinke to review and in all likelihood throw out President Barack Obama‘s plans for federally administered waters. The reversal will not come overnight. Bureaucrats must grind through a multiyear process to overturn Obama’s plans, and the executive action tees up a widely anticipated legal battle over executive authority. There are three paths Trump can take — and challenges to each.

Undoing the damage that was done. As expected, President Donald Trump signed an executive order Wednesday directing Interior Secretary Zinke to review the designation of dozens of national monuments on federal lands, as he singled out “a massive federal land grab” by the Obama administration.

Headlamp loves the shout out to Alaska from the President! During the press conference President Trump turned to Senator Murkowski and said “we’re going to take care of Alaska…” 

ADN uses fear tactics instead of facts…again. Russian Arctic policy is often characterized as “threatening” to its neighbors and the regional status quo. This tone can be seen in commentary such as the Alaska Dispatch News feature on Feb. 3, “Putin’s call to arms,” in which Russia is “on the march” and making its “biggest Arctic military push” since the collapse of the Soviet Union. This military-centric theme also runs through a number of recent position papers which emphasize growing Russian “Arctic aggression.”  But this is tactical mirror-imagining of Russian intent which mischaracterizes and obscures Russia’s true geopolitical objectives. This is true for both U.S. strategic policy and Alaska’s own subset of issues.

Alaska Reveals Oil and Gas Credit Recipients. Alaska ended years of silence about its oil and gas tax credits this week by announcing the names of companies that collected $73 million in 2016 in state cash incentives designed to spur exploration and production. The 2016 payments to 12 companies and municipal governments generally covered work done in 2015. Large oil producers, such as BP, Exxon Mobil, ConocoPhillips and Hilcorp, were not on Tuesday’s list. Producing more than 50,000 barrels of oil equivalent daily, they are not eligible for the cash credits, though they receive other benefits under the state’s tax system. Also, they can purchase the cash-credit certificates to offset production taxes they pay to the state. Cornucopia Oil and Gas Co., owned by a German holding company, received the largest payout at $39.9 million. Cornucopia is the majority working interest owner in the Kitchen Lights field in Cook Inlet and owns Furie Operating Alaska. After Cornucopia, the second-largest recipient was Renaissance Umiat, at $11.2 million. Apache Alaska Corp. received $10.5 million from the state last year.

Repeal Effort For SB26 Underway. Senate President Clem Tillion is getting financial commitments now to back a petition to repeal Senate Bill 26 on the assumption it will eventually pass, he said in an interview. He declined to specify how much he has raised, or who has committed, but said the group will form a nonprofit to manage the funds and the petition movement shortly after the governor signs the bill. Tillion, who was in the state Senate in 1976 when the constitutional amendment establishing the Fund was approved, said Walker, current legislators and others who insist it was intended as a “rainy day” government fund are misguided in their view. “Taxes belong to the government,” said Tillion, who was the lone vote against repealing the state income tax in 1980. “The Permanent Fund is the people’s money. We set up a system where the Legislature was not involved. This is the people’s Permanent Fund.”

 

First Reads

An income tax would hurt most Alaskans less than a PFD cut. So why do most Republicans oppose a tax?

Alaska Dispatch News, Nathaniel Herz, April 27, 2017

For first time, state reveals recipients of cash credits for oil and gas activity

Alaska Dispatch News, Alex DeMarban, April 27, 2017

Referendum effort looms over plan to use Fund earnings

Alaska Journal of Commerce, Elwood Brehmer, April 27, 2017

The Russians are not coming, at least not to Alaska

Arctic Now, Jon Skinner, April 27, 2017

Trump aims to lift Obama’s offshore drilling limits. This is how he could do it

CNBC, Tom DiChristopher, April 26, 2017

Trump: National monuments a “massive federal land grab”

Associated Press, Darlene Superville & Jill Colvin, April 26, 2017

AJOC Editorial: Real jobs beat theoretical jobs

Alaska Journal of Commerce, Andrew Jensen, April 26, 2017