Morning Headlamp—Walker press conference on AKLNG & Saudis and Russians to slow oil production

Walker press conference on AKLNG today. Yesterday, State Revenue Commissioner Randall Hoffbeck said it doesn’t appear that gas line contracts will be in place in time for the legislature to be able to review them and get a constitutional amendment on the ballot this fall. Gov. Bill Walker has scheduled a press conference this morning about the gas line project. Stick with Headlamp as we cover any developments the Governor has on AKLNG.

Saudi Arabia and Russia look to stabilize oil prices. According to Bloomberg, large actors in the global energy market are actively addressing the internal fall in oil prices. Saudi Arabia and Russia agreed to freeze oil output at near-record levels, the first coordinated move by the world’s two largest producers to counter a slump that has pummeled economies, markets and companies. The deal to fix production at January levels, which includes Qatar and Venezuela, is the “beginning of a process” that could require “other steps to stabilize and improve the market,” Saudi Oil Minister Ali Al-Naimi said in Doha Tuesday after the talks with Russian Energy Minster Alexander Novak. Qatar and Venezuela also agreed to participate, he said. Strategies like these from oil-producing countries represent an encouraging sign that oil prices may rebound sooner than expected. That being said, it’s far too early to speculate that oil will rebound to anywhere near levels we saw from 2011 to 2013. Therefore, instead of praying that oil rebounds to $100 per barrel (the level needed to balance the budget) Alaska must take control of its own destiny this year by cutting spending and wisely using its savings to cover the fiscal deficit.

Mark Myers, commissioner of the Alaska Department of Natural Resources, announced his retirement Tuesday, which he said was for personal reasons. A spokeswoman said Myers wasn’t available for an interview Tuesday. But he did phone into a meeting of municipal officials and told them his retirement was for personal reasons that include aging parents and “a wife who actually wants to see me on the weekends.” In a prepared statement, Gov. Bill Walker added: “I hate to lose Mark from the team. He had told me back in October that he wanted to retire, but I wanted to give him time to reconsider. I’m grateful the administration and the state were able to benefit from his experience, knowledge and expertise for as long as we’ve been able.” Deputy Commissioner Marty Rutherford will head the department on an acting basis. Senate Resources Committee chair Sen. Cathy Giessel said “it’s nerve racking to have this change happen. You know, we’re in the middle of, of course, discussing taxes, but we’re also nearing the end of a pre-feed project on AKLNG, the largest project in the North American continent.” Headlamp wishes Myers well and thanks him for his service to the state but is also slightly concerned with the timing of Myers’ departure.

 

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First Reads

Hoffbeck: Gas line amendment may not make this year’s ballot
Associated Press, Becky Bohrer, February 16, 2016

Saudi Arabia, Russia to Freeze Oil Output Near Record Levels
Bloomberg, Mohammed Sergie, February 16, 2016

Low oil prices hit Alaska like an earthquake
CNBC, Gov. Bill Walker, February 16, 2016

Walker administration officials say gas line setback is all but certain
Alaska Dispatch News, Nathaniel Herz, February 16, 2016

Energy Department grants 2-year extension for Conoco’s Nikiski LNG exports
Alaska Dispatch News, Alan Bailey, February 16, 2016