Morning Headlamp – No income tax; 6 billion pounds of fish and China in the driver’s seat

For all the tea in China. America’s shale gas could soon head to China under long-term contracts for the first time, bolstered by a new trade deal that may not even change existing rules. Cheniere Energy Inc., the first exporter of natural gas from the lower 48 states, sees the agreement as “amplifying and accelerating conversations about new long-term contracts” with China, said Eben Burnham-Snyder, a spokesman for the Houston-based company. While the deal announced Thursday by President Donald Trump’s administration doesn’t appear to alter access for Chinese companies to U.S. gas cargoes, it welcomes China to receive shipments and engage in long-term contracts with American suppliers. This announcement causes Headlamp to look at AGDC’s President Keith Meyer’s recent trip to China in a different light.

Where the rubber meets the road – Regulatory Reform. President Trump’s executive order on energy independence reached a crucial first deadline over the weekend for all agencies to report regulations that could hurt energy production from fossil fuels, marking the opening salvo of what is expected to become the Trump energy agenda.

Anchorage Economic Confidence Falls to Lowest Levels Yet. According to an Anchorage consumer optimism index, a quarterly measure put together by consulting firm Northern Economics in the first quarter of this year, respondents’ confidence in the Anchorage economy “reached uncharted territory.” This is the lowest level in the life of the index, which began in 2010. Combining the three factors in the survey — confidence in the local Anchorage economy, personal financial confidence and expectations for the future — resulted overall in a small drop in consumer optimism compared to the previous quarter. Headlamp wonders how the burden of the income tax the House is pushing would affect the confidence of Anchoragites?

Alaska Acts to Meet REAL ID Requirements. The Alaska House passed a bill Saturday to allow Gov. Bill Walker’s administration to meet the requirements of the federal Real ID Act, as the Senate advanced its own legislation to meet a Wednesday deadline. The vote, on House Bill 74, was 25-9, with the largely Democratic majority in favor of the bill except for Democratic Reps. Scott Kawasaki of Fairbanks and Chris Tuck of Anchorage. In committee hearings, the legislation faced bipartisan opposition from lawmakers worried about the risk of disclosure of Alaskans’ personal data. But there were also powerful political interests pushing for the bill like organized labor and business groups, which want to maintain access to federal military bases during the summer construction season.

Pebble Plans To Scale Back Proposal. After settlement with the EPA, Pebble mine developers say they plan to scale back their proposal for the Bristol Bay watershed. However, the EPA has already considered a smaller mine when it started its process to block Pebble several years ago. The agency claims because of the low-grade quality of the massive deposit, even a small mine would require huge amounts of earth and rock moving, disturbing large swaths of the Bristol Bay region’s salmon habitat. In prepared statements issued on Friday, the EPA and the state said they will listen to all sides if Pebble launches the permitting process with a new proposal. Andy Mack, Alaska Department of Natural Resources commissioner, said mining is important to the state’s economy. But he said the recently reached settlement between Pebble and the EPA does not greenlight the development. Headlamp wants to believe the new administration will consider the project on its merit. Responsibly developing our resources is what Alaskans do best and mining and fish coexist throughout the state.

House Clashes Senate Over Gas Line Funds. A late move by the state Senate to slash $50 million dedicated to the Alaska LNG Project and spend it on other state services will be reversed in the House Finance Committee, according to committee co-chair Rep. Paul Seaton. An amendment by Sen. Mike Dunleavy, R-Wasilla, to the capital budget bill that passed the Senate Thursday reappropriated half of the $50 million from the Alaska LNG Project Fund to hire district attorneys, state troopers and support road maintenance. The other $25 million was redirected to the state Public School Trust Fund. AGDC President Keith Meyer has said the state-owned corporation plans to operate on its previously appropriated funds — about $102 million at the beginning of the year — through the end of fiscal year 2018, which is June 30, 2018, in recognition of the state’s major budget problems. When the AGDC board of directors approved the spending plan in early February, the corporation had about $76 million in the Alaska LNG Project Fund and another $26 million in the In-State Natural Gas Pipeline Fund. Meyer and Gov. Bill Walker have repeatedly said AGDC will spend 2017 initiating the project’s voluminous environmental impact statement, or EIS, with the Federal Energy Regulatory Commission, determining if there is a global appetite for Alaska’s North Slope natural gas, and securing customers and financing to pay for the estimated $40 billion gas pipeline and LNG export project.

Senate Rejects Income Tax Plan. Despite months together in Juneau, the House and Senate remain worlds apart on bridging the state budget gap as the Senate rejected the house proposal for a state income tax. With the rejection, the House and Senate still haven’t reached agreement on a budget, a restructuring of the Permanent Fund or any extra revenue measures to help fill the state’s $2.5 billion deficit. The constitutional deadline for the end of the session is Wednesday.

Fisheries Report Shows Alaska Volume Up. The Fisheries Economics Report shows that, including imports, U.S. commercial fishing and the seafood industry generated $144 billion in sales in 2015, a 6 percent decline from the previous year, and supported 1.2 million jobs, a 15 percent decline. Alaska commercial fishermen landed more than 6 billion pounds of fish and shellfish in 2015, up 6 percent from the prior year — even though the value held steady at nearly $1.7 billion. Fishing and processing in Alaska generated $4.4 billion in sales and 53,400 jobs, including 38,000 fishermen.


First Reads

Survey: Economic confidence in Anchorage dips into ‘uncharted territory’

Alaska Dispatch News, Annie Zak, May 15, 2017

Under pressure and against a deadline, Alaska Legislature acts on Real ID

Alaska Dispatch News, Nathaniel Herz, May 15, 2017

Even a smaller Pebble mine, as developer now plans, could face high development hurdles

Alaska Dispatch News, Alex DeMarban, May 15, 2017

Alaska House member signals plan to undo Senate’s bid to cut gas line funds

Alaska Journal of Commerce, Elwood Brehmer, May 15, 2017

Alaska Senate rejects income tax, leaving questions about what comes next

Alaska Dispatch News, Nathaniel Herz, May 15, 2017

Anticipated fish report shows Alaska volume up, prices flat

Alaska Dispatch News, Laine Welch, May 15, 2017

Trump’s China Deal Boosts U.S. LNG Without Rule Change
Bloomberg, Christine Buurma, Naureen Malik and Ryan Collins, May 12, 2017

Trump’s energy plan coming one deadline at a time

Washington, Examiner, John Siciliano, May 15, 2017