Morning Headlamp – Alaska Open for Business; Hope on the Horizon

June 1, 2017 | Posted in : News

Hope on the Horizon. Expressing greater hope in the future, Kevin Durling, president of Petroleum Equipment and Services, said the number of drilling rigs operating statewide has more than doubled, from a low of four in mid-2016 to nine currently, in part because oil prices have improved. “We’re right in the middle” between the economic downturn and better times, Durling said. His company is a specialty tool provider that relies on rig work. Durling and other industry executives said they are hopeful that potentially large new projects on the horizon, such as discoveries within or near the National Petroleum Reserve-Alaska, would result in new work.

Cleaning up Obama’s EPA Mess.  In August 2015, the Environmental Protection Agency was in charge at the abandoned Gold King Mine near Silverton, Colo., when a 3-million gallon flood of dangerous mine waste, including 880,000 pounds of toxic chemicals (lead and arsenic), blasted through the mine’s exit, through a creek, into the river and downstream. Despite then-EPA Administrator McCarthy’s statement that the “EPA is taking responsibility” for the “tragic and unfortunate incident,” it refused to pay the $1.2 billion in claims stating federal law made it immune from liability. Lawyers for the slowly-developing Trump administration made the same argument in filings in February; the issue is now before EPA Administrator Pruitt.

Obama EPA Mess Part 2. The Environmental Protection Agency (EPA) has halted an Obama administration rule to cut down on pollution of methane, a greenhouse gas produced at oil and natural gas drilling wells. The EPA on Wednesday said it had issued a 90-day stay of agency rules designed to limit methane leaks at drilling sites, as well as rules setting standards for equipment and employee certification. President Trump ordered the EPA to reconsider the methane standards in March when he signed an executive order to repeal several Obama administration climate regulations that added cost without adding value.

Zinke declares Alaska “Open for Business.” An order issued by the U.S. Department of the Interior calls for “the clean and safe development of our Nation’s vast energy resources, while at the same time avoiding regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent job creation. The prudent development of these natural resources in Alaska and beyond is essential to ensuring the Nation’s geopolitical security.” Interior will review the possibility of increasing oil production in the National Petroleum Reserve-Alaska and begin to assess how much oil and gas could be extracted from part of the Arctic National Wildlife Refuge. The order seeks to revise BLM’s Integrated Activity Plan to evaluate “efficiently and effectively maximizing the tracts offered for sale during the next NPR-A lease sale.” It also tells officials to come up with a plan to measure undiscovered, technically recoverable oil and natural gas resources of Alaska’s North Slope, focusing in part on Section 1002 of the ANWR. Headlamp can’t think of a better place for the Secretary to have signed the order than the Alaska Oil & Gas Association’s annual conference. Alaska needed a win, and yesterday Secretary Zinke delivered.

First Reads

Energy industry contractors see hope in rising Alaska rig count, new prospects
Alaska Dispatch News, Alex DeMarban, June 1, 2017

The EPA wrecked a Colorado river, then wreaked legal havoc on the affected landowners
The Washington Examiner, William Perry Pendley, June 1, 2017

EPA halts Obama-era rule on methane pollution
The Hill, Devin Henry, May 31, 2017

Order Number 3352U.S. Department of the Interior May 31, 2017

Zinke signs order to promote oil drilling in Alaska

Politico Pro, May, 31, 2017

Zinke orders new looks at Arctic oil development

Alaska Journal of Commerce, Elwood Brehmer, May 31, 2017

State regulators hit Ahtna with $380K fine for gas well violations

Alaska Journal of Commerce, Elwood Brehmer, May 31, 2017

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Morning Headlamp: Alaska gets a champion; Hilcorp securing Alaska’s future.

May 31, 2017 | Posted in : News

Headlamp congratulates Wackowski! Great news yesterday for Alaskans – Interior Secretary Zinke announced that longtime Alaskan Steve Wackowski will serve as senior adviser for Alaskan affairs.  Wackowski worked for the Senate Commerce, Science and Transportation committee and worked for Senator Ted Stevens as well as Senator Murkowski.

OPEC in Deepwater? According to Wood Mackenzie, deepwater oil projects are declining in cost and will become more competitive with shale and could become a challenge to OPEC’s market share. The average breakeven price is expected to fall to $50 by next year, down from $62 in the first quarter.

Let the games begin. Alaska Gov. Bill Walker’s administration emailed nearly 20,000 state workers Tuesday warning they could be temporarily laid off if the Legislature fails to pass a budget before July 1st. State lawmakers, divided over how to fix Alaska’s $2.5 billion deficit, have already missed two other deadlines: the flexible 90-day limit on the regular session imposed by voters, which came and went in mid-April, and the 121-day limit set by the state constitution. The layoff warnings — to be followed with contractually required paper mailings Thursday — are the latest milestone in the Legislature’s march toward the June 30 deadline.

Interior Aims To Put Native-Corps In The Driver’s Seat. Ryan Zinke said the Interior Department needs to look at more opportunities to “get government out of the way” and give Alaska Native villages more input into federal decisions affecting their communities. On Tuesday, Zinke also expressed support for streamlining permitting decisions to put more oil in the 800-mile trans-Alaska pipeline, without relaxing government accountability.

The future’s so bright. Hilcorp is planning to significantly increase their investments in safety and infrastructure inspection. While Hilcorp’s business model in Alaska to-date has been to rejuvenate old fields cast aside by oil majors, the company is gearing up to spend approximately $75 million laying new pipelines on the Cook Inlet floor and converting some existing lines from gas to oil carriers to allow it to close the Drift River oil terminal. When the project is complete — which Hilcorp hopes will happen late next year — oil will flow from its West Inlet Granite Point facility under the inlet directly to Tesoro’s Nikiski refinery via what is now the Cook Inlet Gas Gathering System. On the North Slope, Hilcorp is expecting to see the first draft of an environmental impact statement for its offshore Liberty oil prospect in the next month or so from the federal Bureau of Ocean Energy Management. About six miles offshore in the Beaufort Sea, the company plans to build a gravel island in the shallow water similar to how other nearshore North Slope oil discoveries have been developed. Hilcorp, which bought into Liberty in 2014 as part of a $1.25 billion deal with BP, estimates the long-awaited project could produce up to 70,000 barrels of oil per day at its peak. Headlamp is excited to see this kind of activity and investment in Alaska. More oil. More jobs. More revenue!


First Reads

With Legislature gridlocked, Alaska state employees warned of potential shutdown — again

Alaska Dispatch News, Nathaniel Herz, May 31, 2017

New Interior secretary ready to work with Alaska Natives on sharing federal management duties

Alaska Dispatch News, Alex DeMarban, May 31, 2017

Hilcorp looks ahead after Inlet incidents

Alaska Journal of Commerce, Elwood Brehmer, May 31, 2017

Secretary Zinke supports more offshore drilling in Alaska

KTVA, Dave Leval, May 30, 2017

Zinke names Alaska adviser
E&E News, Brittany Patterson, May 31, 2017

Now There’s Another Source of Oil That’s Starting to Get Cheap
Bloomberg, Serene Cheong and Sharon Cho, May 30, 2017

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Morning Headlamp – House Majority Hypocrisy

May 30, 2017 | Posted in : News

Alaska Governor’s Race Re-Election Questions Loom. Gov. Bill Walker has not yet said whether or not he will seek a second term as Governor. Not only will he not say if he is considering a run, but he also has not declared whether he will register as a Republican or Democrat, and run in a partisan primary, or whether he will continue as an independent on a unity ticket – which propelled him to office in 2014. Three potential Republican candidates, Wasilla Sen. Mike Dunleavy, businessman Scott Hawkins and Rep. Mike Chenault, the former House speaker from Nikiski — said in interviews last week that they’re thinking about launching campaigns for Governor in 2018.

Alaska Considers Unique Oil And Gas Exploration Near Talkeetna and Willow. The state has received an application for an exclusive oil- and gas-exploration license in an area of the Susitna Basin mostly west of the Parks Highway near Talkeetna and Willow. The request for the Susitna Valley exploration license is unique because the area that might be opened lies far from Cook Inlet and the North Slope, where oil and gas companies have operated for decades. The 1.5 million acres of state-owned land that Alaska officials are considering making available to exploration falls under a state program designed to encourage prospecting in little-explored regions. State officials have not released the name of the applicant. Headlamp is excited at any new opportunity for responsible resource development and the jobs and revenue that come with the project! 

What goes up…May 30 U.S. crude oil prices rose towards $50 per barrel on Tuesday as a strong start to the summer driving season in the United States suggested strong fuel demand in months ahead. U.S. demand for transport fuels such as gasoline used in cars and diesel in buses tends to rise significantly as families visit friends and relatives or go on vacation during the summer months, with the so-called summer driving season officially kicking off on the Memorial Day holiday at the start of this week.

Money for nothing – Juneau-based Lawmakers Still Cashing Checks. Despite the fact the House held one floor session longer than four minutes and no committee hearings, Juneau Democratic Reps. Sam Kito III and Justin Parish both said in phone interviews Friday that they’ll be claiming their taxable $220 daily payments this week — meant to cover lodging and meals — in spite of a slow work schedule. Juneau’s third legislator, Democratic Sen. Dennis Egan, didn’t respond to requests for comment Friday. All three collected the payments during the Legislature’s 121-day regular session. Twenty of the 60 legislators in the House and Senate responded whether they plan to ask for the expense checks this week, with most saying they would only claim them for days they were in Juneau. Headlamp is disappointed to see members of the House Majority who are touting their “Fiscal Responsibility” take per diem for sleeping in their own beds — and not doing any work. 

Interior Secretary Visits The Last Frontier. Interior Secretary Ryan Zinke spent Memorial Day weekend on a tour organized by Senator Lisa Murkowski. After attending a rolling thunder ceremony at Byers Lake, he visited Denali National Park on Sunday and Monday. The Secretary’s schedule takes him to Anchorage on Tuesday and Wednesday where he will meet Interior department employees and the Alaska Federation of Natives, a keynote speech at the Alaska Oil and Gas Association’s annual conference and a hike at the Nike Site Summit in Arctic Valley. A joint press release from Alaska’s congressional delegation said stops would also be made later in Prudhoe Bay and Fairbanks.


First Reads

As some drop hints about running for Alaska governor in 2018, Walker remains a wild card

Alaska Dispatch News, Nathaniel Herz, May 29, 2017

State considers opening land near Talkeetna, Willow for oil and gas exploration

Alaska Dispatch News, Alex DeMarban, May 29, 2017

Even with Alaska Legislature in limbo, some lawmakers still getting more than $200 a day for expenses

Alaska Dispatch News, Nathaniel Herz, May 29, 2017

Interior Secretary Zinke will make Alaska stops from Arctic to Anchorage

Alaska Dispatch News, Erica Martinson, May 29, 2017

Strong start to summer driving season pushes US oil towards $50
Reuters, Henning Gloystein, May 30, 2017

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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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