Morning Headlamp — Oil Credits Debate and Alaska LNG Will Headline New Legislative Session

New Democratic Leadership Will Face Oil Credits – Future Credit Obligation Tug of War. Indications ahead of the new legislative session indicate that the oil credits debate, which dominated last years’ session, will again be front and center as Democrats take the gavel in Juneau. Any credit reform legislation that makes it out of the House will also have to appease at least a few Republicans in the Senate, which cut major changes to Slope credits out of last year’s bill, in order to make it to the governor’s desk. Rep. Geran Tarr (D-Anchorage) acknowledged that the Legislature has at times been fairly criticized for frequent oil tax changes — also noting some recent changes came at the request of industry — but added that the oil prices of today weren’t even considered when Senate Bill 21 and other oil tax laws were passed. Gov. Walker will face a tough test on Alaska LNG as well, new leadership indicated they want to see concrete information that the administration’s plan for the state to lead the $45 billion-plus project is progressing. Minus a revelation that the Alaska Gasline Development Corp. has lined up a major investor, or news on par with that, Rep. Andy Josephson (D-Anchorage) said it will be hard to support much more state spending on the project. Headlamp is not surprised, but disappointed, that without doing anything to reduce the size and scope of government the new Democrat majority is taking the easy way out and heading down the path to new taxes on the private sector. 

Walker Announces New Chief of Staff. Now halfway through his term, Gov. Walker announced he is replacing his chief of staff Jim Whitaker with Scott Kendall, an attorney fresh from U.S. Sen. Lisa Murkowski’s victorious re-election campaign. Kendall, 41, has never worked in Juneau. But he’s been part of Alaska’s Republican political circles for a decade, having worked with Murkowski, the late Republican U.S. Sen. Ted Stevens, and investor Bob Gillam. Kendall also worked with Walker’s gubernatorial campaign in 2014, though Walker, a Republican-turned-independent, was trying to unseat a GOP governor, Sean Parnell. Kendall has also worked with state-level politicians, including advising Walker’s election campaign, and working for Anchorage Republican Rep. Gabrielle LeDoux. Kendall said he works well across party lines. Jim Whitaker will remain involved in the Governor’s project to bring natural gas to the Interior. Headlamp applauds the choice of Scott Kendall! Thank you, Governor Walker.  

FERC Lines Up Questions On Alaska LNG. FERC has sent AlaskaLNG project officials 268 pages of comments and questions — a demand for information from several state and federal agencies that will keep the state busy when it takes the reins of the project. The request comes in response to information contained in only five of the 12 draft environmental reports that the project partners have submitted to the Federal Energy Regulatory Commission for review. The partnership, at the time of the submission, was led by ExxonMobil and included ConocoPhillips, BP and the state of Alaska. By the middle of 2017, Keith Meyer, Chief Executive of the Alaska Gasline Development Corporation, hopes to formally file the application with FERC, launching the process to create an environmental impact statement that would provide the public and permitting agencies with specific details about the project. A final impact statement would not greenlight the project, but would be a key step in helping agencies make permitting decisions. Larry Persily, oil and gas adviser to Kenai Peninsula Borough Mayor Mike Navarre, said the request from FERC is not unusually large given the scope of the Alaska LNG project.

Obama Plans to Block Arctic Drilling. In the coming days, President Obama will release an offshore oil and gas plan that blocks new drilling leases in the Arctic Ocean until 2022. The decision is part of the Interior Department’s five-year plan for offshore drilling, which lays out all of the proposed auctions for drilling rights on the outer continental shelf, it includes sales in the Beaufort and Chukchi Seas. As the decision comes late in the lame-duck President’s term, Congress could act early next year to overturn it through the Congressional Review Act, something President-elect Donald Trump would likely approve.

Alaska Environmentalists Ready for Trump De-Regulation Onslaught. Elisabeth Balster Dabney, executive director of the Northern Alaska Environmental Center, said the nonprofit group has seen an uptick in donations after Trump’s election last week. While environmental groups like the Northern Alaska Environmental Center are making preparations to battle the new Trump administration on his environmental policies, industry groups are forward to the potential of eased regulations. Where the deregulation fights will take place remains uncertain as policy proposals were often vague during the campaign. Nevertheless, the incoming Trump administration has made clear its decision to roll back regulations put into place under President Obama, especially where resource development is concerned. Headlamp is not surprised that environmental groups are using hysteria to raise more money to kill jobs in Alaska. It’s simply what they do…


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First Reads

New House Resource chairs ready to take on oil credits and the AK LNG

Alaska Journal of Commerce, Elwood Brehmer, November 16, 2016

Walker names Anchorage lawyer as new chief of staff

Alaska Public Media, Andrew Kitchenman, November 16, 2016

Gov. Walker shakes up executive office, announces new chief of staff

Alaska Dispatch News, Nathaniel Herz, November 17, 2016

Federal agency has long list of questions for state-led Alaska LNG project

Alaska Dispatch News, Alex DeMarban, November 17, 2016

Obama to block new Arctic drilling

The Hill, Timothy Cama, November 16, 2016

Alaska environmental groups readying for uncertain future under Trump

Fairbanks Daily News-Miner, Matt Buxton, November 17, 2016