Morning Headlamp –Australians on the North Slope; Planes, Trains and Automobiles

March 24, 2017 | Posted in : News

AK Licenses About To Expire. After June 6, Alaskans’ driver’s licenses won’t be enough to access military bases and other federal facilities — with the same restrictions kicking in at airports Jan. 18. Alaskans would have to use another form of ID instead, like a passport. Gov. Bill Walker has been pushing lawmakers to advance a bill bringing the state in line with Real ID’s standards. But Alaska lawmakers from both parties have balked at it, arguing the bill’s record-keeping and collection requirements enable the growth of the “surveillance state.” Legislative inaction could have far-reaching impacts — on travelers, teachers who work on bases and contractors expecting to do some of the $635 million in military construction forecast for Alaska this year.

Ridesharing. Yesterday, the Alaska Senate approved a bill to open the state to car and driver companies like Uber and Lyft, which use cellphone software to link vehicles with passengers. The 14-5 vote on Senate Bill 14, sponsored by Anchorage Republican Mia Costello, was along caucus lines, with Costello’s Senate majority in favor and the minority opposed.

Town Hall on Healthcare. Senator Murkowski held a Facebook Live “town hall” on health care yesterday, taking questions from constituents online. The Senator detailed an array of concerns with the current repeal and replace healthcare bill, but said she remained “committed to repealing the Affordable Care Act.” Murkowski cited three main problems specific to Alaska: There’s only one provider left on the state’s market; the state had to infuse the market with major funding to stabilize it; and premiums nevertheless continue to rise.

Alaska Divided. A poll funded by the Alaska Chamber found Alaskans deeply divided on proposals to fix the state’s $2.7 billion annual deficit. The poll, conducted by Dittman Research between Feb. 21 and March 1, found 51 percent of Alaskans opposed to using the investment earnings of the Alaska Permanent Fund. The Alaska Senate has approved such a plan, Senate Bill 26. Forty-eight percent of Alaskans support the idea; the margin was within the range of error. Headlamp has seen the Alaska Chamber’s poll results and also notes that 58% of Alaskans oppose an income tax. Let’s hope the House Majority understands polling.

Howdy, Gday. A Texan-Australian partnership picked up hundreds of thousands more acres on the North Slope to pursue Project Icewine – a shale play. Unlike conventional discoveries like Prudhoe Bay, shale oil is harder to recover, requiring technology like hydraulic fracturing to get it out of the ground. But improvements to horizontal drilling and fracking techniques led to the recent oil and gas boom in the lower 48. Now, Burgundy Xploration in partnership with 88 Energy hopes to bring the shale revolution to Alaska. According to the Alaska Department of Natural Resources, only one other company holds leases to pursue shale oil on the North Slope, Great Bear Petroleum.

 

First Reads

Murkowski doesn’t like much about the House health care bill

Alaska Dispatch News, Erica Martinson, March 24, 2017

Legislative inaction on Real ID could be a real problem for Alaskans who travel or work on military bases

Alaska Dispatch News, Nathaniel Herz, March 24, 2017

Alaska Senate passes bill paving way for Uber, Lyft; House vote comes next

Alaska Dispatch News, Nathaniel Herz, March 24, 2017

Poll finds Alaskans deeply divided on fixes to state’s deficit

Juneau Empire, James Brooks, March 24, 2017

Will a Texan-Australian partnership bring the ‘shale revolution’ to the North Slope?

Alaska Public Media, Elizabeth Harball, March 24, 2017

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Morning Headlamp – New House Minority Plan Reduces Government & Keeps Money in Private Sector

March 23, 2017 | Posted in : News

House Minority rolls out big plan. A new deficit-reduction plan from the Alaska House Republican Minority would maintain Alaskan’s Permanent Fund dividend checks at current levels, rely on structured  withdrawals from state savings and implement further budget cuts. House Bill 192 is largely aligned with the Permanent Fund restructuring bill approved by the Senate Majority last week, with one major distinction: the plan would pay dividends of nearly $2,000 this year, compared to $1,000 under the Senate plan. Legislation sponsored by Anchorage Republican Rep. Lance Pruitt, would preserve the dividend payments by relying on bigger withdrawals from state savings and a proposed $600 million cut in state spending over four years — a 14 percent reduction.

Time is now for OCS. In a guest commentary, Robert Dillon of the American Council for Capital Formation, argued strongly for the U.S. to seize the day on Arctic OCS. After eight years of retreat, it’s time for America to charge back into the energy-rich waters of the outer continental shelf and secure once and for all its rightful place as an energy superpower. Responsible development of our offshore resources has long been a major contributor to the economic health and security of our country. Taxes, royalties, and rents from offshore production are the treasury’s second-highest source of revenue — right after the annual contributions of the millions of Americans who pay income taxes. The U.S. offshore holds an estimated 90 billion barrels of oil and 327 cubic feet of natural gas. Of the nation’s 1.7 billion offshore acres, though, less than 1 percent — or 17 million acres — are currently under lease. When Obama left the White House in January, he’d succeeded in barring oil and gas activity in almost every corner of the OCS, including nearly all waters off the coast of Alaska. Today, roughly 90 percent of federal offshore areas are off-limits. After years of falling production and government neglect, our strategic offshore resources are ready for the kind of renaissance that has made our onshore oil and gas activity the envy of the world.

Home stretch, budget and oil taxes. The major budget bills are moving in the Legislature and the state House may have the most controversial bill of the legislative session, a bill raising oil taxes, ready for floor action the week of March 27. With lawmakers more than two-thirds of the way through their scheduled 90-day session, the pace of activity is picking up. Few expect the session to really end on the 90th day, or April 16, however. The Senate will sharply disagree with the House proposal for a personal income tax now in HB 115 and the House does not like the Senate’s spending cap formula that is in SB 26. The House Finance Committee dove head first into the Democrat-led majority’s oil tax and credit bill with several lengthy hearings March 20 to 22 reviewing the history of the state’s oil tax and getting detailed analysis from Tax Director Ken Alper in multiple hearings per day. The Department of Revenue projects HB 111 would garner between $60 million and $75 million per year in additional near-term tax revenue while also saving the state more than $100 million per year in tax credit payments and deductions.

Furie ramping up. Furie Operating Alaska is gearing up for a busy season in Cook Inlet with plans to complete a gas production well drilled last year and drill two more wells including a deep test to assess potential oil resources in Jurassic-age rocks, according to Vice President Bruce Webb. Webb said Furie’s first order of business this spring is to move a small workover rig to its platform to do some work on the KLU-3 well. As soon as the Inlet is clear of ice, the Randoph Yost jack-up rig will move out from winter storage at the OSK dock in Kenai to complete Furie’s A-1 well that was started last year but not finished. “We see a large oil potential there. We know there is gas, based on our earlier drilling of the KLU-2 well,” Webb said. Dan Seamount, a member of the Alaska Oil and Gas Conservation Commission, said Cook Inlet has produced 1.3 billion barrels since production began in the region in 1958, and U.S. Geological Survey studies show there could still be 34 billion barrels of oil-in-place in the Inlet’s deep source rocks, mainly the Jurassic. There are billions of barrels of oil that are unaccounted, and many of us believe it’s still down there,” said Seamount, who said he spoke from his experience as a geologist and for the commission, which is a regulatory body. “We’ve barely skimmed the surface,” of the Inlet’s potential, he said. “We’ve only tapped some of the oil that was trapped in the shallow conventional traps.”

 

First Reads

GOP bill would pay bigger PFDs, pull more cash from state savings

Alaska Dispatch News, Nathaniel Herz, March 23, 2017

Explorers ready to spud Slope shale well

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

GUEST COMMENTARY: Time is now to regain US edge on OCS

Alaska Journal of Commerce, Robert Dillon, March 22, 2017

Budget bills on the move; oil tax hike heard in House Finance

Alaska Journal of Commerce, Tim Bradner & Elwood Brehmer, March 22, 2017

Agency wants review of second Hilcorp pipeline

Associated Press, Dan Joling, March 22, 2017

Pebble, EPA pushing to settle lawsuit

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

Furie gears up for busy 2017, plans deep test for oil in Inlet

Alaska Journal of Commerce, Tim Bradner, March 22, 2017

Word of new oil is encouraging but Alaska shouldn’t bank on it

Alaska Dispatch News, Tim Bradner, March 23, 2017

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Morning Headlamp – Trump Undoing Job Killing Regulations while Anti-Development Groups Find New Enemy: pipelines

March 22, 2017 | Posted in : News

Trump rolling back harmful regulations. President Donald Trump is poised in the coming days to announce his plans to dismantle the centerpiece of President Barack Obama’s climate change legacy. The executive actions will follow the White House’s release last week of a proposed budget that would eliminate climate change research and prevention programs across the federal government and slash the Environmental Protection Agency’s budget by 31 percent, more than any other agency. Trump will order EPA Administrator Scott Pruitt to withdraw and rewrite a set of Obama-era regulations known as the Clean Power Plan. The Obama rule would have shut down hundreds of coal-fired power plants and freeze construction of new coal plants, while replacing them with vast wind and solar farms. At a campaign-style rally Monday in the coal-mining state of Kentucky, Trump told a cheering audience that he is preparing an executive action that would “save our wonderful coal miners from continuing to be put out of work.”

City hiking utility rates. Anchorage Municipal Power & Light customers are seeing a 19 percent spike on average as the utility seeks to pay off a new plant in East Anchorage. The Regulatory Commission of Alaska set the refundable, interim rate increase on Feb. 13 while it considers long-term rate increases requested by ML&P. The new rate means the average ML&P bill for $91.31 jumps to $108.78. The RCA has until March 25 to make a final order. The interim increase could be in effect for up to a year, the utility said in an insert that will soon be arriving with electric bills.

Senate seeks broad education reform. A new bill from Alaska Senate leaders would create a virtual education center for the state, among other provisions aimed at reducing the state’s $1.3 billion in annual schools spending. Senate Bill 96 is sponsored by the Senate Education Committee, chaired by Shelley Hughes, R-Palmer. Bill provisions include the establishment of a “virtual education consortium,” which would create a database of online courses and help train teachers in virtual instruction. The bill has several other measures aimed at cutting costs, including one that would increase the size of one-time grants that can be given to school districts joining a state-sponsored plan for health insurance — a major cost driver for schools.

Close, but no cigar. Forbes contributor David Blackmon points out that environmentalists, recently encouraged by the temporary victory given them by the Obama Administration related to the Keystone XL pipeline project, have become engaged in protests related to numerous midstream projects in the Northeast, in North Dakota (the Dakota Access Pipeline) and in West Texas (the Trans-Pecos Pipeline). As their decade-long effort to demonize hydraulic fracturing – or “fracking” as they like to call it – lost its previous steam over the last couple of years, anti-fossil fuel conflict groups who raise money by stoking public fears related to the oil and gas industry have gradually shifted their main focus over to the pipeline segment of the business.  But their high-profile “wins” to date have been either temporary or, as with the Dakota Access Pipeline, illusory, the conflict industry obviously sees this coordinated attack on the midstream segment as a money-maker nevertheless.  Thus, they have chosen to engage in a constantly-increasing number of pipeline-related construction projects and incidents, making pipelines a new favorite target of these fringe groups.

 

First Reads

Spike in ML&P electric bills draws opposition

Alaska Dispatch News, Alex DeMarban, March 22, 2017

Trump lays plans to reverse Obama’s climate change legacy

The New York Times, Coral Davenport, March 22, 2017

New education bill from Senate would create virtual education hub, push for schools consolidation

Alaska Dispatch News, Nathaniel Herz, March 22, 2017

Conflict Groups Find A New Boogeyman – Pipelines

Forbes, David Blackmon, March 21, 2017

Japanese company withdraws plans for $1 billion LNG plant at Port MacKenzie

KTVA, Shannon Ballard, March 21, 2017

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Morning Headlamp – House Passes Budget

March 21, 2017 | Posted in : News

Budget clears the House. The Alaska House on Monday passed a budget for the state’s next fiscal year, approving the $4.25 billion unrestricted general fund spending plan in a 22-17 vote. The split was along caucus lines, with all the members of the predominantly Democratic Majority coalition in favor, and the Republican minority opposed. Rep. Mark Neuman, R-Big Lake, was excused. The vote came after a week of debate, with more than 100 amendments proposed mostly by Republican Minority members. The budget, including the payout for Permanent Fund dividends, is nearly $126 million higher than the preliminary budget offered by Gov. Bill Walker. The Senate is expected to propose significant reductions and has already introduced proposals for cuts.

Private sector tries to make due. Private construction efforts in Anchorage may offset the repercussions for businesses that are expressing doubt about Alaska’s economy and the failure, so far, of the Legislature to patch the state’s huge deficit. Building permits approved through early March by the Municipality of Anchorage totaled $85 million, 52 percent higher than the $56 million permitted during the same period in 2016. One of Alaska’s largest private employers, telecommunications company GCI, said earlier this month it will slash spending on Alaska projects this year, to $165 million from $209 million in 2016. The company will focus on capital improvements to its networks in rural Alaska and the North Slope oil fields, officials said.

The recession spreads. Ongoing economic struggles have spelled trouble for traditionally strong engineering positions throughout Alaska. The architecture and engineering industry through the first three quarters of 2016 was down about 600 jobs from the previous year, according to the latest numbers from the state labor department, a drop of about 12 percent from 2015. Ken Ayers, President of civil engineering firm Lounsbury and Associates, had to lay off 12 employees in 2016 and cut hours for others. “I think it will get worse. I think business is going to drop another 25 to 30 percent this year,” said Ayers. “And I think we will see firms that are on shaky financial ground probably fold.”

 

First Reads

Engineering jobs fall prey to Alaska’s recession

Alaska Dispatch News, Jeanette Lee Falsey, March 18, 2017

Capital investment picture mixed as businesses press Legislature for fiscal plan

Alaska Dispatch News, Alex DeMarban, March 21, 2017

After a marathon on amendments, Alaska House passes budget 22-17

Alaska Dispatch News, Nathaniel Herz, March 21, 2017

White House delays climate order’s release

The Hill, Timothy Cama & Devin Henry, March 20, 2017

88 Energy gets ready for Icewine drilling

Upstream Online, Anamaria Deduleasa, March 21, 2017

Pebble, EPA seek more time to try to resolve lawsuit

Associated Press, March 20, 2017

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Extra Edition: Budget Observations

March 20, 2017 | Posted in : News

Alaskans are skeptical of administrative and legislative actions on the budget for good reason:

Exhibit Number 1: $600,000 for training in the construction industry was added back into the budget by Representative Neal Foster with the following logic:

With regard to the cut, Rep. Neal Foster wrote, “this is shortsighted given there are already not enough trained Alaskans to meet workforce needs…Restoring this funding is necessary to meet demand for a trained Alaskan workforce.”

Headlamp finds two problems with this “logic.”

  • Employment in Alaska’s construction industry in 2016 was down about 1500 jobs from 2015 and the industry is on track to lose another 1200 jobs to do the same in FY 2017. The only “demand” from the industry is for more work to actually maintain an Alaskan workforce.
  • The private sector runs apprenticeship programs to train construction workers, basing the level of programs offered on actual demand. An apprentice is hired when an actual job is AVAILABLE. The private sector’s ability to ramp training up and down according to market conditions is exactly the type of behavior needed to stop the growth of government.

Exhibit Number 2: State Employee Count

Legislators and the public have expressed frustration over lack of clarity regarding the number of state employees, state positions eliminated, funded positions, unfilled positions, etc…

A January 2016 report titled “Positions, Vacancy Factors and Legislative Control,” provides good information on the topic. It helps explain why it’s important for legislators, like Representative Tammie Wilson did in House Finance, to pay attention to how agencies are using funds.

The report noted: “Transfers to and from personal services can signal “vacancy games” in an allocation. Funding moved from the personal services line to the services line may indicate that the department

  • Is having difficulty recruiting and will contract for the services, or
  • Must use the funding to pay increased contractual costs for leases, IT services, outside vendor costs, etc.…

Some transfers, particularly those that are reversed before submitting the budget to the legislature, may indicate a lack of intent to follow the budget as submitted.”

To read the full report, click here.

Headlamp knows the public is smart enough to understand the details shrouding the budget debate. It is time for government to actually provide these details in a clear and concise manner.

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Morning Headlamp: ENI…Drill Baby Drill

March 20, 2017 | Posted in : News

Legislative per diem battle continues. The Alaska House’s proposal to reduce legislators’ expense checks appears to face opposition from the Senate President Pete Kelly (R-Fairbanks). Kelly dismissed the House’s plan, which would reduce lawmakers’ annual payments by roughly $14,000, when asked about it Friday. The House’s cut, a total of more than $800,000, was approved in a bipartisan 32-5 vote Thursday. It won’t take effect unless approved by the Senate.

ENI charging ahead! Italian energy company Eni has announced it has submitted an exploration plan to drill for oil in the federally controlled waters of the Beaufort Sea. Eni secured oil and gas leases for a term of five years prior to the Obama Administration’s decision to pull Arctic Ocean leases. Eni has already built a man-made gravel island four miles offshore in state waters. Drilling would extend from the island into federal waters. The Bureau of Ocean Energy Management is reviewing the exploration plan. If the federal agency deems the plan complete, it will begin a 30-day comment period before approving it.

With some 26 billion barrels of oil and 130+ tcf of natural gas, Arctic OCS represents over 1/3 of America’s energy reserves. Headlamp hopes, that for the benefit of Alaska’s economic future, the Trump Administration recognizes this potential and rapidly approves ENI’s plan.

Numbers show Obama Admin. heavily curtailed development. US onshore oil and gas leasing activity fell markedly on federally administered lands during US President Barack Obama’s presidency in several key respects, US Bureau of Land Management statistics indicate. From Sept. 30, 2008, just before Obama was elected to his first term, to Sept. 30, 2016, near the end of his second term, included declines of 83% in the number of new wells drilled, 78% in new leases, and 67% in permits approved. US House Natural Resources Committee Chairman Rob Bishop (R-Utah), meanwhile, said, “Production on federal lands was all but impossible under the Obama administration. Congressional Republicans will work with US President Donald J. Trump and his team to turn the page and develop a more robust, diverse, and affordable domestic energy supply from federal lands, Bishop said. Kathleen Sgamma, president at the Western Energy Alliance in Denver noted, “Who needs the ‘keep-it-in-the-ground’ movement when you have the federal government doing the job itself?”

 

First Reads

With one Cook Inlet pipeline leaking, feds want Hilcorp to inspect another

Alaska Dispatch News, Alex DeMarban, March 20, 2017

Alaska House’s expense cut gets cool reception from Senate president

Alaska Dispatch News, Nathaniel Herz, March 19, 2017

BLM Figures Show Steep Drop in Federal Onshore Oil and Gas Leasing

Oil and Gas Journal, Nick Snow, March 17, 2017

Italian company submits plan to drill for oil in the Arctic
Alaska Public Media, Elizabeth Harball, March 17, 2017

America’s Shale Gas Selling at Record Prices to Overseas Buyers

Bloomberg, Jonathan Crawford & Naureen Malik, March 18, 2017

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Legislative Week in Review: Week 9

March 20, 2017 | Posted in : News

Key Messages of the Week

➢ House Majority refuses reductions, prohibits the use of the words “slush fund” and “bureaucrat” on the floor, and puts forward a larger operating budget than Governor Walker originally introduced.

➢ The Senate passed SB 26, the Permanent Fund restructure/POMV bill, to close a significant portion of the state’s budget deficit.

➢ The Senate is sticking with its promise to focus cuts on the 4 largest agencies: DOT, the University system, DHSS and DEED.

March 13, 2017

  • Both the House and Senate had floor sessions. The Senate brought forth SB 26,the Permanent Fund restructure bill, and then set it aside for debate on Wednesday. The House passed HB 23, providing insurance for the families of fallen public safety employees in Alaska, and began its first floor session on HB 57, the state’s operating budget.
  • House Resources got an overview of the new version of HB 111, the Majority’s oil tax legislation. Concerns were raised regarding the new ‘indeterminate’ fiscal note by DNR and the new policy established in the bill that would require DNR to pre-authorize expenditures on the North Slope if companies planned to use the new version of net operating loss “credits.”
  • Senate Finance sub-committees wrapped up their budget closeout work on the operating budget.

March 14, 2017

  • The House held three different floor sessions, all related to HB 57/operating budget.  Tensions between the Majority and Minority continued to escalate.
  • The House Finance committee continued its examination of HB 115,focusing mostly on amendments related to the Permanent Fund/POMV/dividend portion of the bill.
  • House Resources advanced HB 111out of committee on a caucus line vote of 5 to 4. This bill will raise taxes across the board on the oil and gas industry, and would represent the 7th change in 12 years to Alaska’s oil tax regime. The bill now goes to House Finance, and is scheduled every day next week.

March 15, 2017

  • The Senate passed SB 26, which creates a POMV draw from the Permanent Fund Earnings Reserve Account, a spending cap, $1000 dividends for three years, and revenue draw limit from the ERA. The vote was 12-8.  With some members of the Majority joining the Minority in voting against it.
  • Debate over the budget continued in the House. Multiple sessions were held throughout the day. One of the more contentious amendments dealt with arming state employees in the Department of Revenue and other agencies.
  • Senate Finance took public testimony on the operating budget, SB 22.

March 16, 2017

  • Another round of floor sessions in the House took place regarding the budget. Rep. Grenn introduced an amendment to cut legislative per diem by over half of its current rate. Over two hours was spent on this budget amendment. Rep. Wilson tried to eliminate per diem for Juneau legislators, though it failed. Rep. Saddler attempted to move the session to Anchorage to reduce costs (his amendment failed).
  • Senate Finance continued public testimony on the operating budget.

March 17, 2017

  • The final day of debate on the budget. Roughly 20-30 amendments were introduced by the House Minority to reduce the size of state government and all were shot down.
  • Senate Finance committee took hours of public testimony on the operating budget.
  • House Labor and Commerce listened to public testimony (most of which was in favor) on HB 132, which would allow companies like Uber/Lyft to finally operate in Alaska.
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Morning Headlamp – House Majority Ends Budget Debate & Silences Minority

March 17, 2017 | Posted in : News

Flip flop, flip flop. The Alaska House reversed itself Thursday and approved a sharp cut in its daily expense payments for next year, while one lawmaker introduced a new proposal to let a nonpartisan commission rather than the Legislature itself set future rates. By a 32-5 vote, the House on Thursday approved a budget amendment to cut more than half of each lawmaker’s per diem payments, now more than $200, for a total reduction of more than $14,000 per legislator over the course of a nominal 90-day legislative session. The per diem question has dogged the House budget process for the past month, with critics arguing the rate of the payments — set by the federal government — is far more than needed to cover legislators’ costs.

Headlamp must note that Rep. Jason Grenn, who proposed the budget amendment yesterday, apparently had a change of mind regarding the issue of per diem. Just a few days ago, he and other Majority members voted against cutting per diem during the House Finance Committee debate over the budget. Rep. Tammie Wilson had been pressing this issue in House Finance. Headlamp is happy with the outcome, but questions whether the Majority is playing games and posturing while trying to take credit for budget cuts the Minority has come up with.

End of debate. In a historic move on Thursday, the House Majority coalition abruptly cut off debate on the budget. The vote, initiated by House Rules Committee Chair Gabrielle LeDoux, gave members 24 hours to consider a towering pile of amendments offered primarily by the Minority, but also by LeDoux’s Majority coalition. House Coalition leaders said they reached their breaking point after spending three days to get through 50 amendments, with at least that many more expected. The House spent 2 1/2 hours Thursday morning on a single amendment to cut lawmakers’ daily expense checks — a stretch that saw minority Republicans submit three handwritten amendments to the amendment, one of which, from Eagle River Rep. Dan Saddler, aimed to move the Legislature out of Juneau.

Headlamp questions the strategy of the House Majority. Without a budget, the one thing the Legislature is constitutionally mandated to do, a fiscal plan cannot be completed. The building block of a solid fiscal plan is a well-crafted, well debated budget that deserves the utmost attention.

Thanks, but no thanks Armstrong signals House Majority. Our friend Andrew Jensen at the Alaska Journal of Commerce nailed it again with his most recent commentary on the Armstrong/Repsol announcement and the House Majority’s move to increase oil taxes.

Armstrong bought leases and drilled them this winter some 20 miles from his initial find, establishing that the Nanushuk play discovered at Pikka could easily hold more than 2 billion barrels of recoverable, high quality conventional oil. Repsol billed this winter’s results as the biggest onshore conventional discovery in 30 years in a press release March 9. Just five days later, and only four days after the bill was introduced, the House Resources Committee expressed its appreciation for the Armstrong-Repsol work by reducing the net present value of their discovery with legislation that would cut their deductions for development and raise their taxes across every range of prices once they reach production.

Here is a poll that Representative Cathy Tilton is running. She’s asking Alaskans whether or not the Legislative Session should be held on the road system. Click here to take the poll.

 

First Reads

Trump budget cuts deeply into Alaska’s federal funding

Alaska Dispatch News, Erica Martinson, March 17, 2017

Alaska House, reversing itself, again proposes slashing its own expense payments

Alaska Dispatch News, Nathaniel Herz, March 17, 2017

With budget mired in amendments, Alaska House majority cuts off debate

Alaska Dispatch News, Nathaniel Herz, March 17, 2017

A new runway in Aniak is in the works for $55 million. People who live there don’t see any need.

Alaska Dispatch News, Lisa Demer, March 17, 2017

AJOC EDITORIAL: House Resources tells Armstrong thanks for nothing

Alaska Journal of Commerce, Andrew Jensen, March 15, 2017

Trump Weighing Eni’s Arctic Drilling Bid in Post-Obama Pivot

Bloomberg News, Jennifer Dlouhy, March 16, 2017

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Bad Bill of the Week: Bad Things Come in Threes

March 17, 2017 | Posted in : News

When AK Headlamp first considered the idea of Bad Bill of the Week we worried that as session wore on and Legislators really buckled down, fewer pieces of legislation would be introduced and that we might run out of nominees for this weekly prize. Thankfully for us, it seems the only area the Legislature doesn’t fail to disappoint is in their ability to introduce bills that don’t solve our financial situation or strengthen the private sector.

Headlamp is offering up three Bad Bills of the Week today:

  • HB 169: An Act establishing a program for tours of the Arctic National Wildlife Refuge for certain members of the United States Congress.
  • HB 173: An Act establishing the Alaska Climate Change Response Commission.
  • HB 175: An Act ratifying an interstate compact to elect the President and Vice-President of the United States by national popular vote.

Let’s start at the top.

House Majority Leader Chris Tuck wants the Legislature to coordinate tours of ANWR. At face value, HB 169 is not a terrible idea, however, having the State pay for it is! Unfortunately, Rep. Tuck hasn’t released his sponsor statement which might give us more insight into his thinking behind the bill. We’ll give him the benefit of the doubt, and assume he wants these tours to take place to help encourage the responsible resource development of ANWR. Headlamp likewise believes in the responsible development of ANWR, but we’d rather see the private sector take the lead on this to show members of Congress the prospect of ANWR. If government is going to get involved in coordinating tours of ANWR, it would seem to make more sense, given that ANWR is on federal land, for Alaska’s federal delegation to take up this cause.

HB 173 is another piece of legislation from Rep. Andy Josephson. With this newest bill, Headlamp wonders how Rep. Josephson can claim to be pro-industry/pro-resource development, while he continues to sponsor bills that hike taxes and increase regulations. HB 173 would establish the Alaska Climate Change Response Commission, impose a $0.02 per barrel tax on oil (that’s right, he’s authored ANOTHER oil tax bill!) and use 50 percent of the tax levied to fund a climate change response fund.

Headlamp opposes this bill on a number of fronts, most importantly because it increases taxes and creates more bureaucracy. And if you haven’t heard enough about legislative per diem, Rep. Josephson’s 15-member Commission would be entitled to per diem and travel expenses as well. Can you say: increased cost to the state, which the industry he wants to tax incessantly is supposed to cover?

Finally, we bring you HB 175. Rep. Fansler wants to change the way we vote for President of the United States. In essence he’d like to nullify the Electoral College and put the fate of the Presidency in the hands of large states like Texas, California and New York. Did we mention he wants to change how we elect the President by changing Alaska State Statute? We’re just going to leave you with that.

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Morning Headlamp: Same Story, Different Day – Permanent Fund Earnings Up for Spending

March 16, 2017 | Posted in : News

Permanent Fund POMV Clears Senate. The Alaska Senate approved a bill on Wednesday to utilize Permanent Fund earnings to fill most of the state’s deficit setting up another confrontation with the Alaska House. SB 26 would set dividends at $1,000 for the next three years, is similar to the measure the Senate passed last year in a 14-5 vote. On Wednesday, it passed 12-8.

Oil tax hike move forward. House Bill 111 moved forward on a party-line vote 5-4. The conversation preceding the vote was blunt but cordial. “This effort has been all about raising revenue and I think it’s at a point where we need to attract investment and as the good admiral from Alyeska Pipeline (President Tom Barrett) mentioned, it’s all about oil through the pipeline,” Anchorage Rep. Chris Birch said. “We need to be very wary of the uncertainty that we’re formulating here. I urge caution. We can do better.” Minority members also noted the preapproval provision was added to an amended version of the bill on March 10 and the Department of Natural Resources was not able to weigh in on the idea before the committee voted on it. Rep. Dean Westlake, D- Kotzebue, whose massive district includes the North Slope, voted in favor of HB 111 but is not keen on the expenditure preapproval requirement. He described it as the state “micromanaging” work plans already developed experts in their field.

Headlamp is disappointed by the House Majority’s action to push this tax through in the face of industry and public opposition. HB 111 does not move Alaska in the right direction. Hiking taxes, and changing the game again won’t increase production, investment or create more jobs. Remember those slides showing other oil regimes passing incentives or positive legislation that helped the industry during this downturn? If HB 111 should pass Alaska will be the only regime to have passed NEGATIVE/HARMFUL legislation two years in a row during this oil crash.

Frack baby, frack. The Trump administration says it is rolling back an Obama administration rule requiring companies that drill for oil and natural gas on federal lands to disclose chemicals used in hydraulic fracturing. The administration said in court papers filed Wednesday that it is withdrawing from a lawsuit challenging the Obama-era rule and will begin a new rule-making process later this year.

Under the sea. Siemens Corporation and ABB are working on designs for an underwater production platform which would allow power transformers to be located on the seafloor while control room operators are based onshore miles away. Subsea platforms would be cheaper, easier to build, and easier to dismantle in addition to being unmanned.

Headlamp applauds these companies for driving innovation and working on this exciting new technology that will drive growth in the industry!

 

First Reads

 State hopes environmental monitoring will clear up unknowns about Cook Inlet gas leak

Alaska Public Radio, Elizabeth Harball, March 16, 2017

Oil tax bill moves on party vote

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

Trump admin halts Obama-era rule on fracking on public land

Associated Press, March 15, 2017

Climate and ocean research could be sharply reduced under Trump budget proposal

Arctic Now, March 16, 2017

Operator Lowers Pressure, Slows Leak in Alaska Pipeline

Associated Press, Dan Joling March 16, 2017

The unmanned offshore production rig: A race to the bottom

FuelFix, David Hunn, March 15, 2017

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