Headlamp Is Off For Memorial Day

May 25, 2017 | Posted in : News

Headlamp will be back on Tuesday, May 30th.

Over this long weekend we remember, and give thanks for those who made the ultimate sacrifice in service of our country.

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Morning Headlamp – California dreamin’ and apocalypse now.

May 24, 2017 | Posted in : News

California dreamin’. A California-based transportation company has spent more than $700 million to enter the Alaska market over two years by buying up freight companies and upgrading facilities. Officials with Matson on Tuesday said they are taking a long view and are ready to jump at new opportunities in Alaska, including a rebound in oil patch activity if prices rise or, more remotely, if Alaska’s giant gas-export project enters construction. Matson, headquartered in Oakland, California, acquired Horizon Lines’ Alaska operations in 2015 and cargo hauler Span Alaska in 2016. The purchases totaled $669 million. The company slightly boosted its workforce at its Alaska operations following the acquisitions. It now employs more than 300 in the state, officials said.

Lawmakers Look to Energy Industry to Solve Budget Issues. David Williams, president of the Taxpayers Protection Alliance, wrote a piece in the Juneau Empire highlighting the irresponsible spending of the legislature while continuing to place the fiscal burden on the energy industry. Oil and gas is responsible for nearly one out of every three jobs in the state. Ninety percent of the state’s revenues are tied to energy production. House Bill 111, which passed the house in April and was adopted in an amended form last week in the state senate, is now poised to put those jobs and the state’s economy in peril. The tax hike in the House version of the bill is projected to skyrocket from $130 million in 2019 to an astounding $485 million by 2026. A tax increase on energy production would be the seventh change to the state’s energy tax structure in the past 12 years.

Buy low, sell high. President Trump’s plan to sell oil from the US strategic reserve to raise funds could help OPEC rebalance global petroleum markets. Sales could start with $500 million in 2018 and get as high as $3.9 billion in 2027.

Working hard? Or hardly working. While the special session isn’t over yet, the majority of our legislators are headed home in an effort to save the state money. With estimates that special session in Juneau costs around $30,000 per day, Headlamp applauds what should be the first step in practicing what they preach: government efficiency. When conference committees finish their work and all legislators are needed to vote the compromise bills up or down, Headlamp suggests they take their fiscal restraint one step further and hold the meetings on the road system.

Apocalypse Now! The abundance of shale gas in the Marcellus basin has resulted in the construction of dozens of power plants in the region. The problem: not enough electricity demand. “Everything in fossil fuels is for sale,” said Ted Brandt, chief executive officer at Marathon Capital LLC, a mergers-and-acquisitions adviser in Chicago. “People are bleeding.”

First Reads

Alaska acquisitions, upgrades exceed $700 million for shipper Matson

Alaska Dispatch News, Alex DeMarban, May 24, 2017

Raiding energy industry to solve budget crisis will create more problems

Juneau Empire, David Williams, May 23, 2017

Proposed U.S. oil reserve sales could boost, not hurt, OPEC’s plan

Reuters, Catherine Ngai, May 23, 2017

Special session isn’t over, but lawmakers are headed home
KTVA, Liz Raines, May 23, 2017

`Gas Apocalypse’ Looms Amid Power Plant Construction Boom

Bloomberg, Naureen S. Malik & Brian Eckhouse, May 23, 2017

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Morning Headlamp – Breaking News: More taxes on a struggling economy won’t work

May 23, 2017 | Posted in : News

ANWR Drilling as a means of raising revenues. The Trump administration’s budget document includes a plan to open up Alaska’s Arctic National Wildlife Refuge (ANWR) for oil drilling, and proposes drawing down the nation’s oil reserve — two strategies for raising new federal revenues. According to budget documents proposals to lease drilling sites in ANWR by 2022, something long opposed by Democrats and environmentalists would raise $1.8 billion by 2027. Headlamp is pleased to see the President recognizes the value to the nation of more drilling in ANWR. 

Higher taxes aren’t the answer for Alaska. Peter Sepp, President of the National Taxpayers Union, highlighted the budget issues facing the state. Alaska wants to fill a budget deficit created in part by challenging economic conditions for the oil and gas industry by making them more challenging via higher taxes. The revenue windfall for the state would not be huge: around $200 million. But the long-term impact on elements of the industry with poor cash would be, in the words of those who offered the plan, “massively significant.” According to Sepp, this is perversely inefficient and ill-advised tax policy. Effective tax policy drives growth and creates opportunity across all sectors. That leads to a more robust economy, which then leads to more revenue. Headlamp couldn’t agree more. High taxes aren’t effective taxes. 

Superior Court Hears Claims of Legislative Building Ownership. The owners of the former Downtown Anchorage Legislative Information Office building contended in a Friday morning state Superior Court hearing that legislators did not afford them appropriate recourse on a $37-million contract claim after the Legislature decided to leave the six-story building last year. Legislators moved out of the Downtown Anchorage building late last September and into Midtown office space purchased for $11.8 million from Wells Fargo via the state capital budget.

 

First Reads

Trump budget slashes EPA funding, opens Alaska refuge to drilling

The Hill, Devin Henry and Timothy Cama, May 22, 2017

A right and a wrong way to reform tax policy

Juneau Empire, Peter Sepp, May 21, 2017

$37 million claim against Legislature gets day in court

Alaska Journal of Commerce, Elwood Brehmer, May 22, 2017

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Morning Headlamp – EPA Exaggerations and more smoke restrictions.

May 22, 2017 | Posted in : News

EPA exaggerating emissions? As millions march for “science,” suggesting that the Trump administration will make decisions not based on “science,” the EPA uses faulty methodology to calculate oil and gas emissions.

Permanent Fund grows infrastructure investments. The Alaska Permanent Fund continues to pursue what has proven a winning strategy so far, directly investing in companies in hopes of generating big returns as they grow. The $59 billion fund also hopes to increasingly capitalize on U.S. infrastructure investments, investing over $1.8 billion in private infrastructure projects. The fund had already been planning to increase investments in the United States while reducing its emphasis on infrastructure in other countries, she said. But fund managers are watching developments in Washington, D.C., in case opportunities spring up as Trump emphasizes increased spending. Like many other large investors, the fund has already seen some benefit since Trump was elected on Nov. 8. Expectations that he will ease regulations and corporate tax have sent stocks soaring, helping the fund grow about $4 billion in value since the election, or about 7.5 percent.

Alaskans lead on Arctic Policy. The Alaska Legislature has found a new cause in promoting safety of ships sailing through the Bering Strait to the Arctic. A resolution passed on Tuesday by the state House urges the state and federal governments to enact some binding agreements to better regulate increased vessel traffic in that region.

More state wood smoke restrictions. The Environmental Protection Agency on May 1 said it was bringing new restrictions to the notorious anti-regulation region to try to clean its dirty air. Commercial wood sellers will be required to register with the state if they sell firewood in the regulated area that includes Fairbanks and North Pole. The federal agency said it would downgrade the Fairbanks region’s status for continuing to violate pollution limits for fine-particle emissions, taking it from a “moderate” non-attainment area to “serious,” a designation that carries more urgency. The Alaska Department of Environmental Conservation will require the removal or replacement of old, inefficient wood-fired stoves before a property is sold, leased or transferred. The stoves can be replaced with ones that meet current emission standards, such as EPA-certified stoves.

 

First Reads

As Fairbanks battles its dirty air problem, state boosts restrictions on wood sellers

Alaska Dispatch News, Alex DeMarban, May 22, 2017

With Trump administration intentions unclear, Alaskans might have to fill the void on Arctic policy

Alaska Dispatch News, Yereth Rosen, May 22, 2017

Permanent Fund grows direct investments into companies, infrastructure

Alaska Dispatch News, Alex DeMarban, May 22, 2017

New EPA Study Indicates Agency Is Greatly Exaggerating Methane Emissions

Energy in Depth, Seth Whitehead, May 8, 2017

CH2M Hill subsidiary to cut 147 jobs after losing North Slope contract

Alaska Dispatch News, Alex DeMarban, May 21, 2017

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Morning Headlamp – Who will be left to pay an income tax?

May 19, 2017 | Posted in : News

Cook Inlet Lease Sale Set For June. The Trump Administration announced it will hold a federal oil and gas lease sale for the Cook Inlet in June despite ongoing protests from environmental interests. The announcement comes less than a month after President Donald Trump signed an executive order to reverse restrictions for offshore leasing put in place by President Barack Obama in the Arctic Ocean, more than 700 miles north of the Inlet lease area. The sale area has drawn little attention from industry for more than a decade. The agency received no bids for a lease sale in 2004. Lease sales were canceled in 2006, 2008 and 2010 following a lack of industry interest. The deadline for bids in the new federal sale is June 20.

“Scientific Integrity Official” lacks integrity. An official inside the EPA invited an activist group currently locked in a lawsuit with the Trump administration to the agency’s office for a discussion about scientific integrity, according to documents obtained by the Washington Examiner. Francesca Grifo,  EPA’s scientific integrity official, sent an invitation earlier this month to the Natural Resources Defense Council (NRDC) for a meeting to discuss the direction President Donald Trump plans on taking the agency. The NRDC has filed several lawsuits against Trump, most of which target the president’s climate policies.

Expanding Stakeholder Engagement. The Pebble Partnership announced Thursday that is has officially formed a new advisory committee. Members of the committee are Willie Hensley, Kimberly Williams, Jim Maddy, General Joseph Ralston and Terrence “Rock” Salt. Mike Heatwole, spokesman for Pebble Project said  “We’re putting together an Advisory Committee to help advise us on a range of issues regarding Pebble, everything from engineering to environmental design to community benefits and concerns.”

Who will be left to pay an income tax? This just in from the Alaska Department of Labor – “Alaska’s seasonally adjusted unemployment rate was 6.6 percent in April, two-tenths of a percentage point higher than March. The comparable national rate in April was 4.4 percent. Alaska’s rate has been the highest or second-highest among states for more than a year. Preliminary estimates show April employment was down by 6,600 jobs, or 2.0 percent, compared to April 2016. The biggest losses were in oil and gas, which was down by 1,800 jobs, a 15 percent drop. As legislators and the Governor debate over how much money to take from the private sector to give to government, Headlamp hopes they remember we are in a recession, hemorrhaging jobs. 

Walker – No New Ideas for Special Session. Following a late-Wednesday call for a Special Legislative Session, Gov. Walker has asked lawmakers to consider the state’s operating budget, its capital construction budget, a hike in the state’s gasoline tax, cuts to the state oil and gas drilling incentives, spending from the earnings of the Alaska Permanent Fund, and “an act or acts to increase an existing tax or to establish a new broad-based tax.” Minutes after the House and Senate adjourned, Gov. Bill Walker called lawmakers into a special session which began at 11 a.m. Thursday. In a press conference yesterday, the Governor refused to give any direction as to what he would or would not support and indicated he wouldn’t provide any ideas on possible new broad based taxes. 

 

First Reads

Alaska lawmakers set to end cash subsidies for oil companies

Alaska Dispatch News, Nathaniel Herz, May 17, 2017

Walker calls special session

Alaska Journal of Commerce, James Brooks, May 18, 2017

EPA Official Invites Left-Wing Enviro Group To Agency For Talk On Science
The Daily Caller, Chris White, May 18, 2017

Pebble forms advisory committee to help with range of issues
Alaska Public Media, David Bendinger, May 18, 2017

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Morning Headlamp – Ballot Measure Mania Begins with SOS

May 18, 2017 | Posted in : News

They’re baaaaack. Under the battle cry of “Save our Salmon” a petition to stop responsible resource development anywhere at any time has been filed with the Lite Gov. A stated goal of the initiative to “Create a presumption that all tributaries and upstream reaches of a water body listed in the AWC, as well as, any unlisted water body that is connected to marine waters is presumed anadromous unless proven otherwise,” is in reality a “guilty until proven innocent presumption that will do anything but update and streamline a permitting system. The reverse is true – the burden of proof will be on a developer and folks who are opposed will spend years, as they do now, litigating and delaying any development effort,” according to Rebecca Logan, CEO of the Alaska Support Industry Alliance. Headlamp couldn’t agree more with Ms. Logan’s assessment.
Mack on track. According to Department of Natural Resources Commissioner Andy Mack, the State will push new U.S. Interior Secretary Ryan Zinke to rewrite rules restricting oil and gas development in the National Petroleum Reserve – Alaska. “We will be submitting a specific proposal within the next couple of weeks to Secretary Zinke. This grows out of meetings our governor had with the secretary earlier this year in which he seemed receptive,” Mack said in an interview. “We believe we can help BLM (Bureau of Land Management) in developing a new plan that is balanced,” between resource development and environmental protection, said Mack. Responsible resource development: Alaskans do it best.

A simple request. A speedier permit process and simpler environmental rules top the wish list of associations representing the drilling, refining, mining, and building industries.  The groups have submitted hundreds of pages of documents to the Commerce Department and Environmental Protection Agency in recent weeks, outlining regulations they want to see eliminated or modified.

Time is Money   With more than 3,000 outstanding bids to drill on public land, The Bureau of Land Management is feeling the pressure. “The backlog of applications for permits to drill is still a very real issue that our member companies are facing,” said Neal Kirby, spokesman for the Independent Petroleum Association of America (IPAA). “Every day that goes by while independent producers — companies with an average of 12 employees — wait for their permits to be approved means more money out of their own pockets, more business uncertainty as it relates to long-term planning, and less royalties flowing back to the federal and state treasuries…”

Special session called on state budget. Governor Walker has called for a special session, again, as the legislature failed to finalize several key pieces of legislation, including a budget. Governor Walker’s special session call includes the following items:

  • Opioids prescription and monitoring
  • Operating budget
  • Mental health budget
  • Capital budget
  • Oil and gas tax credit reform
  • Permanent Fund Protection Act
  • Motor fuel tax
  • Broad-based tax

Headlamp would encourage the Governor to provide leadership by declaring his policy goals – does he support high taxes and big government? Or does he support a smaller government and low taxes? Sitting on the fence doesn’t help anyone – it leads to special sessions ad nauseum where nothing is accomplished. And if you’d really like to get your blood pressure up this morning, check out KTUU’s overtime clock that gives you a real time estimate of what this dog and pony show is costing Alaskans.

Rocky Mountain High. The state of Colorado is looking for workers; workers who can pass a drug test.  Failed drug tests are on the rise locally, and nationally. The state’s unemployment rate is already low – 3 percent, compared to 4.7 percent for the entire nation. Job applicants are testing positive for marijuana, cocaine, amphetamine and heroin at the highest rate in 12 years, according to a new report from Quest Diagnostics, a clinical lab that follows national employment trends.

Alaska take note: prior to the legalization of marijuana, Alaskan employers were reporting that 30% of job applicants failed a drug test. 

Are all jobs equal?  Coal state lawmakers will be looking to another source of jobs for Appalachia on Thursday by promoting a bill to remake the region into a hub for the chemical ethane. West Virginia Sens. Shelley Moore Capito, a Republican, and Joe Manchin, a Democrat, introduced a bill last week to study the prospects for developing their state into a hub for ethane storage and production. Ethane is a highly sought after chemical derived from natural gas production, and used in everything from making chemicals that cause fruit to ripen faster to manufacturing plastics and polymers.

 

First Reads

Gov. Walker orders special session after legislature fails to reach budget deal
Alaska Dispatch News, Nathaniel Herz, May 18, 2017

Mirror, mirror on the wall, who’s the most Arctic of them all?
Alaska Dispatch News, Jeannette Lee Falsey, May 18, 2017

U.S. industry seeks faster permits, simpler rules in Trump regulation reset
Reuters, Valerie Volcovici and Timothy Gardner, May 17, 2017

3K drilling permit applications await BLM approval
EE News, Pamela King, May 17, 2017

State will pursue revised rules for NPR-A with Interior Dept.
Alaska Journal of Commerce, Tim Bradner, May 17, 2017

Coal state lawmakers look to new sources of jobs in infrastructure bill
Washington Examiner, John Siciliano, May 18, 2017

Companies need workers – but people keep getting high
Alaska Dispatch News, Danielle Paquette, May 17, 2017

New Alaska habitat protection initiative would turn tables on miners, development
Alaska Dispatch News, Nathanial Herz, May 17, 2017

 

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Morning Headlamp – Can Alaska’s word be trusted? Not if we don’t pay our debts…

May 17, 2017 | Posted in : News

Actions speak louder than words. Former state Senator Hollis French was approved by the legislature to serve as one of three commissioners on the Alaska Oil and Gas Conservation Commission (AOGCC) Tuesday. It pays six figures and requires teamwork and a strong commitment to the law. In the early days of his appointment (he has been working in the position for several months) the two other AOGCC commissioners were supportive of the appointment. That support waned as the rookie commissioner attempted to gain additional jurisdiction over a gas leak in Cook Inlet after promising legislators he would not allow his politics to get in the way of his duties. Rep. Les Gara said, “He’s served with honesty for much of the past year.” Eagle River Republican Sen. Anna MacKinnon saw things a bit differently. “He should not be advocating for additional jurisdiction from his position,” she said. “He should bring a concern to the Department of Law and let the administration move forward if they believe through the legislative process that there should be additional responsibilities given to AOGCC.”  MacKinnon also said French wrongly claimed that energy companies Hilcorp and Armstrong endorsed his appointment. French was confirmed in a 35 to 24 vote. Headlamp thanks the House Minority and Senators Wilson, Giessel, Hughes, Mackinnon, Meyer, Von Imhof and Kelly for voting against the confirmation. Actions do indeed speak louder than words.  Commissioner French is highly qualified and has the ability to do a great job for Alaska – if he can set his politics aside. 

ROI for EO is High. An executive order (EO) signed by President Trump last month in support of offshore energy development, including oil and gas, will have a negligible cost impact to the federal government, according to a statement Monday by OMB Director Mick Mulvaney. Mulvaney noted the Department of Interior and the Department of Commerce would be the only government agencies affected.

A fleet of two? This past spring the Coast Guard, which has not built a heavy polar vessel in four decades, took a preliminary but crucial step toward expanding its fleet by testing ship models at one of the world’s largest ice-tank facilities, located in Canada. It hopes to start building the first new heavy icebreaker in 2020, with completion scheduled for 2023. The Coast Guard now relies largely on just two vessels in the polar seas; the heavy ship Polar Star and Healy, a medium-size ship.

A debt owed. The Senate majority wants to spend $360 million to pay off some of the oil-company claims projected to exceed $1 billion by next year — with the majority of the cash coming from a state savings account, the Statutory Budget Reserve. The House majority is proposing to pay only $37 million, with members like Fairbanks Democratic Rep. Scott Kawasaki criticizing the Senate for “paying profiting oil companies during a time of austerity.” Gov. Bill Walker vetoed $430 million the Legislature set aside to pay credits last year, leaving just $30 million for companies. But even with the veto, the money was still obligated — it just wasn’t being paid. As the Governor and the House Majority talk about bringing stability to the Alaskan economy so businesses will have the confidence to invest, we suggest they heed their own words and honor contracts and commitments with businesses who already have invested. Financial lenders have repeatedly testified that the refusal to pay money owed has sent a message to the lending community that Alaska is NOT open for business. 

If Norway and Iceland Can Do It… At the Arctic Council meeting last week in Fairbanks, Alaskans seemed eager to tap the expertise of fellow northerners whose economies these days are highly successful. One talk, “Lessons from Norway: Developing a Dynamic Economy in the Far North,” drew a sold-out crowd. Similar to Alaska, the oil sector underpins a large part of the economy. Savings from taxation of the industry go into a sovereign wealth fund, like Alaska’s Permanent Fund. The climate is cold and part of the country is above the Arctic Circle. Unlike Alaska, though, Norway’s economy is reportedly on the mend after a two-year slump tied to low oil prices. Its oil savings account of $940 billion dwarfs Alaska’s Permanent Fund of $59 billion, both on an absolute and a per-capita basis. Headlamp would note that the Norwegians DON’T SPEND THEIR OIL WEALTH ON GOVERNMENT. 

 

Alaska lawmakers set to end cash subsidies for oil companies

Alaska Dispatch News, Nathaniel Herz, May 17, 2017

After weeks of waiting, Alaska Legislature OKs most of Gov. Walker’s appointees

Alaska Dispatch News, Nathaniel Herz, May 17, 2017

Norwegians and Icelanders let Alaskans in on the secrets to economic prosperity

Alaska Dispatch News, Jeannette Lee Falsey, May 17, 2017

Legislature approves Hollis French for AOGCC spot
KTOO and Alaska Public Media, Andrew Kitchenman, May 16, 2017

White House Says Offshore Energy Order Poses Minimal Cost to Federal Government
Natural Gas Intel, Charles Passut, May 16, 2017

U.S. Icebreaker Fleet Is Overdue for an Upgrade
Scientific American, Jeremy Hsu, June Issue

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Morning Headlamp – Rides, Robots and Regulations

May 16, 2017 | Posted in : News

Wool for the Win. The House on Monday approved legislation that would permit companies like Uber and Lyft to operate throughout Alaska. House Bill 132 by Rep. Adam Wool, D-Fairbanks, would allow the transportation network companies broad latitude to operate throughout Alaska. Headlamp is happy to see this pro-private sector legislation move!

For Real. The Alaska House and Senate have both agreed to comply with the federal Real ID Act, passed by Congress in 2005, but the two legislative bodies passed different bills to do so. On Monday, the Senate approved provisions from Gov. Walker’s Real ID legislation with a vote of 14 to 5. But its fate was tied to House Bill 16 by Rep. Steve Thompson (R-Fairbanks). His measure requires law enforcement to undergo training to recognize people with disabilities and allows the Division of Motor Vehicles to provide a voluntary designation on an ID card or driver’s license indicating a person has a disability.

R2D2 in Valdez! Four crawling robots that can negotiate twists and turns in pipes will be working in Valdez this summer, providing the first internal peeks at 40-year-old sections of pipe branching off the trans-Alaska oil pipeline. Alice, Dee, Fiona and Gary — as the high-tech gizmos with retractable legs are nicknamed — will scout for corrosion inside pipes at the Valdez Marine Terminal, where crude oil from the North Slope flows into giant storage tanks and oceangoing tankers.

Conference Committee Attempts To Resolve Budget Dispute. The conference committee charged with resolving the difference between Alaska House and Senate budget proposals held its organization meeting Monday. House Speaker Bryce Edgmon, D-Dillingham, and Senate President Pete Kelly, R-Fairbanks, each appointed three members to the committee last week. Of the six members, four are the finance committee co-chairs in their respective chambers: Reps. Neal Foster, D-Nome, and Paul Seaton, R-Homer, and Sens. Anna MacKinnon, R-Eagle River, and Lyman Hoffman, D-Bethel. The two minority members on the conference committee are Rep. Lance Pruitt, R-Anchorage, and Sen. Donny Olson, D-Golovin.

Take a Deep Breath.  The State of Alaska is implementing two new regulations aimed at reducing wintertime fine particulate pollution in the Fairbanks-North Pole area. Department of Environmental Conservation program manager Cindy Heil said one of the measures effects the real estate transactions of properties with wood stoves or wood boilers.

Senate Passes Oil Tax Credit Reform. The Senate passed House Bill 111 by a vote of 14-5. The Senate version of the bill ends the cashable tax credit “experiment,” Anchorage Republican Sen. Cathy Giessel said in the floor debate, along with preventing companies producing oil in the state’s largest fields from using deductible credits to take their tax obligation below the 4 percent gross minimum tax. It is less of a tax increase than the version of HB 111 the Democrat-led House Majority sent to the Senate. Headlamp would note the Senate version is a tax increase. $1.24 BILLION over 10 years. 

 

First Reads

Conference committee set to start work resolving Alaska Legislature’s budget impasse

Alaska Dispatch News, Nathaniel Herz, May 16, 2017

Senate passes its version of oil tax credit reform

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

New regulations to reduce fine particle pollution in Interior Alaska
Alaska Public Media, Dan Bross, May 15, 2017

Bill allowing Uber, Lyft in Alaska clears House
Fairbanks Daily News-Miner, Matt Buxton, May 16, 2017

Alaska House, Senate agree to comply with Real ID Act, but pass different bills
KTVA, Liz Raines, May 15, 2017

Meet the robots that will be crawling inside Valdez pipelines this summer
Alaska Dispatch News, Alex DeMarban, May 15, 2017

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

May 15, 2017 | Posted in : News

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

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Morning Headlamp – Doublespeak from the Speaker of the House Bryce Edgmon

May 12, 2017 | Posted in : News

The Harder the Battle the Sweeter the Victory. The Environmental Protection Agency has settled an ongoing lawsuit with the Pebble Limited Partnership and says the company can apply for a federal permit for its proposed massive gold and copper mine in the Bristol Bay watershed. Key points of the settlement include:

  • PLP can proceed into normal course permitting under the Clean Water Act and National Environmental Policy Act
  • PLP will need to file permit applications within 30 months
  • EPA cannot seek to utilize its CWA 404c veto authority until an EIS has been completed – unless the EIS is not completed within 48 months of the date of this settlement
  • EPA has further agreed to initiate a process to consider withdrawing the Proposed Determination it issued in July 2014
  • PLP has agreed to terminate our legal actions against the EPAHeadlamp recognizes this isn’t just a victory for the Project, it’s a victory for the process!

Opponents of Pebble Call on EPA to Deny Development. On Thursday, nine officials from the Bristol Bay region, including Alaska House Speaker Bryce Edgmon, D-Dillingham, participated in a news teleconference in Dillingham as a show of unity against the gold and copper prospect, urging the EPA to halt development.

Headlamp is extremely disappointed to see the Speaker of the House, who is spending his time growing the size of state government and looking for new revenue to support the habit, attempt to stop a project that would bring jobs and revenue not only to the region, but the state. 

Proceed with Caution. Arctic nations have approved a document calling for global action to address climate change. But U.S. Secretary of State Rex Tillerson says the United States continues to review its own policies and will not rush a decision on climate change policy.

Stay Strong and Carry On. The Alaska Senate approved a capital budget that appropriates $35 million less than Gov. Bill Walker’s proposal and $44 million less than last year’s budget, according to a release from the Senate majority, who referred to it as “lean.”  Headlamp applauds the Senate for making a commitment to reduce the size and scope of government before taxing Alaskans. 

Bi-Partisan Bill Diverts Natural Gas Pipeline Funds For Schools, Attorneys, Snowplows. The Alaska Senate on Thursday moved to spend $50 million from an account used for the state’s natural gas pipeline project, diverting the cash to programs popular across the political spectrum. The amendment to the state capital budget — from Wasilla Republican Sen. Mike Dunleavy — was approved unanimously and without discussion. If the state House agrees, the pipeline cash would bolster programs supported by both the Senate’s Democratic minority and its Republican-led majority. The amendment would send $10 million to the Alaska Department of Public Safety to hire more state troopers.  Another $5 million would help the Department of Law hire more prosecutors, whose ranks have fallen by more than 20 in the past three years. $10 million would go to the transportation department for road maintenance. The remaining $25 million would go into a state account earmarked for education.

 

First Reads

EPA reaches deal with Pebble mine developer
Alaska Dispatch News, Erica Martinson, May 12, 2017

Tillerson: US reviewing climate change policy

KTUU/The Associated Press, May 11, 2017

Pebble opponents call on EPA to deny developer a deal

Alaska Dispatch News, Alex DeMarban, May 12, 2017

In bipartisan move, Alaska Senate diverts pipeline cash to schools, prosecutors, snowplows

Alaska Dispatch News, Nathaniel Herz, May 11, 2017

Science cooperation promised in newly signed Arctic Council agreement
Alaska Dispatch News, Yereth Rosen, May 11, 2017

Alaska Senate approves capital budget
KTVA, May 11, 2017

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