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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ICYMI: Alaska’s government is not Alaska’s economy

May 11, 2017 | Posted in : News

Tomorrow the Alaska State Senate will vote on HB 115, legislation proposed by the House majority to implement an income tax. On the eve of what Headlamp would consider one of the most important votes of the session, we wanted to share Senator Cathy Giessel’s recent Guest Commentary from the Alaska Journal of Commerce.

You won’t read an opinion piece like this in the ADN or the Juneau Empire. No, a pro-business, pro-jobs, pro-private sector piece is found in a publication who has commerce as part of its name. And we’re thankful, because Senator Giessel makes some excellent points that Alaskans need to hear and the House would do well to remember.

  • “Jobs aren’t created because we want them. People who own businesses create jobs, through investment and taking risks: the small neighborhood eatery, the niche shoe store, the mine in rural Alaska, the commercial fishing boat, and the family-owned sports lodge.”
  • “Some legislators propose an income tax, raising existing taxes, and continued growth in government spending.
    Their proposals conflicts with reality: Alaska’s government is not Alaska’s economy, but bad government policies can and do harm the economy.”
  • “Alaskan families and businesses made hard choices these last two years, cutting wherever possible, and putting themselves under a hard spending cap. The Senate supports a spending cap for government budgets.”
  • “With a stable and sustainable government budget in place, Alaskan businesses can invest in their communities. Families can rest assured that the plan is focused on them and their future. Investments creating family supporting jobs can be made with confidence.”

Click here to read Senator Giessel’s entire Guest Commentary.

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Morning Headlamp – More oil, more internet, more methane restrictions. 

May 11, 2017 | Posted in : News

Arctic Council Meets in Fairbanks. Alaska Sens. Lisa Murkowski and Dan Sullivan flew to Fairbanks Wednesday with Secretary of State Rex Tillerson for an Arctic ministerial conference. Sen. Murkowski pushed for Alaska to host the 2017 ministerial meeting, including language in a 2015 spending bill directing the secretary of state to hold the meeting as close to the U.S. Arctic as is feasible. Given high numbers of international guests and their security needs, Fairbanks best fit the bill. Sullivan said in a statement Wednesday that Tillerson’s attendance to chair the meeting shows that “the Arctic is a priority for him and the new administration.” And the meeting would also “bring the world’s attention to the strong and generous people who live in the Arctic, whose culture and way of life is a priority in any discussion on the future of the Arctic,” he said.

Jones Act As Is.  US Customs and Border Protection has rescinded a proposal to modify the Jones Act to require offshore drillers to prioritize hiring American ships and crews over international ones. “By rescinding the proposal, CBP has decided not to impose potentially serious limitations to the industry’s ability to safely, effectively, and economically operate,” the American Petroleum Institute’s Erik Milito said.

Submersible Skimmer for Spill Response. The Bureau of Safety and Environmental Enforcement provided the latest details on its efforts to improve oil spill response technologies at the Arctic Oil Spill Response Research and Technology Workshop April 26. Bureau staff presented results of several BSEE-funded projects including the development of a submersible skimmer prototype for oil recovery in and around broken ice.

Up and Running. Hilcorp’s Anna Platform has resumed work after having been shut down since a suspected oil release April 1. An Alaska Department of Environmental Conservation (DEC) situation report released Saturday states that the platform’s crude oil pipeline to onshore facilities — the suspected source of sheens seen on the surface of Cook Inlet on which prompted the shutdown — was restarted May 2, watched by observers from DEC, U.S. Coast Guard, and the federal Pipeline and Hazardous Materials Safety Administration (PHMSA), who saw no oil releases.

400,000 More Barrels-A-Day Potential on the North Slope. In just the past year, Caelus Energy, ConocoPhillips and the Armstrong Energy-Repsol partnership have all announced oil discoveries capable of producing up to, or well in excess of, 100,000 barrels per day. And they’re all related through the formation of the Brooks Range about 150 million years ago. When the Arctic Coast was further south than it is today, layers of sediment were deposited known as the Torok and Nanushuk formations. Headlamp reminds leaders more production means more jobs for Alaskans and more revenue to the state. Both of which we applaud.

More internet for Remote Communities. Participants in the Arctic Broadband Forum held this week at the University of Alaska Fairbanks got an update on the progress of a project that promises to bring high-speed internet to remote northern Alaskan communities. And while residents of those towns and villages overwhelmingly support plans to bring broadband into the area, some worry about the flood of Western culture that will come with greater access to the internet.

U.S. Senate Fails to Reverse Obama Methane Restrictions. The Senate on May 10 failed in a bid to reverse an Obama-era regulation restricting methane emissions that escape from oil and gas wells on federal land. The vote was 51-49 in the Republican-led Senate with three GOP lawmakers — Maine’s Susan Collins, Lindsey Graham of South Carolina and John McCain of Arizona — joining forces with the Democrats to block efforts to overturn the rule. Sen. Murkowski released a statement of her disappointment, saying in part “BLM’s rule is not necessary, not part of its core mission, and it will create higher economic costs, reduce jobs and revenues, and weaken our energy security.”

 

First Reads

New life for North Slope 100 million years in the making

Alaska Journal of Commerce, Elwood Brehmer, May 10, 2017

Senate blocks move to overturn Obama-era rule on drilling

Alaska Journal of Commerce, Mathew Daly, May 10, 2017

Arctic nations to set target for reducing climate-warming soot pollution

Alaska Dispatch News, Yereth Rosen, May 10, 2017

Arctic Council public events

Alaska Dispatch News, ADN, May 10, 2017

Murkowski, Sullivan, Tillerson head to Fairbanks for Arctic Council

Alaska Dispatch News, Erica Martinson, May 10, 2017

Hilcorp’s Anna Platform restarted
Alaska Journal of Commerce, Ben Boettger, May 10, 2017

Trump administration withdraws Jones Act review

Fuel Fix, James Osborne, May 10, 2017

BSEE highlights Arctic collaborations on response technology possibilities
World Oil, May 10, 2017

Experts outline benefits of boosting Arctic broadband; but some cite cultural ‘concern’
Alaska Public Media, Tim Ellis, May 10, 2017

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Morning Headlamp – AK Senate Majority makes move to pay debt owed; Russia in the lead for race to the Arctic?

May 10, 2017 | Posted in : News

BP Submits Details On LNG Studies. BP’s 2017 Prudhoe Bay Plan of Development includes additional information on the company’s oil field work to support the AlaskaLNG Project. The 2017 Prudhoe Plan of Development, or POD, outlines four “subsurface studies” BP conducted last year on the potential interplay between continued oil production from the giant mature field and once-and-for-all producing and selling the massive natural gas resource it also holds. The plan was submitted to the Division of Oil and Gas March 30. The Division has until June 5 to approve or deny the development plan, or 60 days from when it was deemed complete on April 5. In January, BP and the Alaska Gasline Development Corp. also signed a one-year agreement under which the producer will assist the state corporation in securing financing and customer contracts to support the roughly $40 billion Alaska LNG Project.

Russia the lead dog?   On Wednesday, U.S. Secretary of State Rex Tillerson will join representatives from each of the eight nations with territory inside the Arctic Circle for a meeting of the Arctic Council, an organization focused on the sustainable development and environmental protection of the Arctic region. At this meeting, representatives are expected to sign a binding agreement that would increase scientific cooperation in the Arctic, according to the State Department. But the meeting belies the true race to militarize and exploit an untouched region of increased strategic importance.

Sweeney passes the torch to Finland. The chairmanship of the Arctic Economic Council passed from the United States to Finland on Tuesday, with Tara Sweeney of Arctic Slope Regional Corp., an Alaska Native corporation, passing the chair to Tero Vauraste, who heads Arctia, a Finnish government-owned shipping company that specializes in icebreaking.

Alaska’s competition for Asian investment? A report published Monday from analysis group Wood Mackenzie finds Asian companies geared toward exploration and production, known as the upstream sector of the energy business, are migrating toward North America. In the three years ending in 2013, more than $20 billion in Asian capital targeted U.S. shale oil, though that investment stream dwindled as the market declined. With Asian players looking to diversify their portfolios, Adrian Pooh, a senior upstream analyst, said U.S. shale is drawing interest again.

A debt owed. Under the Senate Finance version of SB 23, the capital budget, oil companies could receive payments for tax credits they are owed that were vetoed by Governor Walker. The Senate added $288 million in an effort to begin paying off some of the debt. SB23 also includes a $4 million renovation of the Permanent Fund’s Juneau headquarters, plus $10 million for the proposed road from King Cove to Cold Bay through Izembek National Wildlife Refuge on the Alaska Peninsula. The Senate Finance Committee, which wrote the substitute version of SB 23 originally proposed by Gov. Bill Walker, inserted cash for the road at the request of Walker’s administration, according to an aide to Eagle River Republican Sen. Anna MacKinnon, co-chair of the committee.

Alaska Housing Prices Have Yet To Rebound From Recession. In 2016 Alaska’s average single-family home price was about $3,000 short of the 2006 prerecession high of $327,000, according to the report by state economist Karinne Wiebold. The Lower 48 housing market was hit much harder than Alaska’s and has more ground to make up, with the nationwide average price of $234,000 still $31,000 lower than the market peak in 2006. According to a report from the Department of Labor and Workforce Development average single-family home prices in all the larger markets along the Railbelt, from Fairbanks to Anchorage and the Kenai Peninsula, were up in 2016 compared to 2015. Prices in Juneau were also higher.

 

First Reads

BP submits details on AK LNG studies in 2017 plan

Alaska Journal of Commerce, Elwood Brehmer, May 9, 2017

New report shows Alaska home prices haven’t quite bounced back from the global recession

Alaska Dispatch News, Jeanette Lee Falsey, May 9, 2017

Alaska Senate proposes $288 million for oil company subsidies, plus cash for King Cove road

Alaska Dispatch News, Nathaniel Herz, May 9, 2017

The race for the Arctic: as new frontier opens, Russia leaves US in its wake

ABC News, Elizabeth McLaughlin, May 10, 2017

ASRC’s Tara Sweeney steps down as head of Arctic Economic Council
Alaska Dispatch News, Jeannette Lee Falsey, May 9, 2017

Asian investments may target U.S. shale
UPI, Daniel Graeber, May 8, 2017

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Morning Headlamp – House Majority tries to hide their behavior. KABATA is dead?

May 9, 2017 | Posted in : News

How low can we go? Job loss and a veto of the Permanent Fund Dividend led to the first drop in personal income in 10 years. Alaska still ranks 8th in its national standing for per capita income. If the House Majority has their way, that ranking won’t last for long. HB 115, their income tax legislation which seems to have the support of the Governor, plans to tax everything that moves or works. 

House Majority blames others for their bad behavior. With 12 days remaining until the Alaska Legislature’s 121-day constitutional limit, the House Majority is attempting, once again, to blame oil and gas tax credits for all of our budget woes. The House’s deficit plan includes spending from the Alaska Permanent Fund’s investments, capping the PFD, INCREASING THE BUDGET,  and an “income tax” bill that includes many other taxes on Alaskans.   The Senate has proposed its own deficit-fighting plan. The Senate Majority’s proposal includes spending from the Alaska Permanent Fund’s investments, capping the PFD and steeper cuts to the budget. The Senate Majority has eliminated all of the oil and gas tax credits – going further than the House did. Headlamp is disappointed in the House Majority’s attempts to mislead the public into believing they have made budget reductions and that the oil and gas tax credit debate still exists. The Governor, the Senate and the House all declared their intent to eliminate the oil and gas tax credits. That goal has been achieved – but the House’s inability to cut one penny from the budget and their desire to get more revenue to support their spending habits forces them to look for someone else to blame for their mistakes. 

A bridge to nowhere. The Knik Arm Bridge and Toll Authority is closing down after more than 10 years of work and millions of dollars in state money spent. Grace Jang, a spokesperson for Governor Walker claims it will free up about $40 million in earmarked federal funds to be used for other projects. The money isn’t in the bank. The funds must be reallocated to transportation project that benefit Mat-Su residents commuting to and from Anchorage.

Omnibus Appropriations Bill includes Alaska priorities. The U.S. Senate passed an omnibus appropriations bill May 4 in a vote of 79-18 that funds major Alaska programs for the remainder of fiscal year 2017 including the Essential Air Service, the Denali Commission and energy assistance grants. Because Alaska is in the midst of a fiscal crisis, Sen. Lisa Murkowski believes the fiscal year 2017 budget infusion will provide a much-needed boost to the economy. “The bill provides new investments for our military, increased funding for fighting wildfires, and it will help Alaskans who grapple with some of the highest heating costs in the nation,” Murkowski said. “This bill empowers Alaskans to strengthen our economy and create safe and healthy communities at a time when we need it most.” Included in the bill is $10.6 million of funding for the Port of Anchorage and nine other Alaska harbors, including $2.4 million for evaluation of a deep draft port at Nome.

No crude leak; corrective order withdrawn. Only three gallons of liquid escaped from one of Hilcorp’s platforms into Cook Inlet in early April. A liquid called natural gas condensate had formed in the line. The federal Pipeline Hazardous Materials Safety Administration has withdrawn a corrective order they issued to Hilcorp after the incident.

 

First Reads

Oil issues stall Legislature

Alaska Journal of Commerce, James Brooks, May 8, 2017

Murkowski: Spending bill funds ‘Alaska priorities’

Alaska Journal of Commerce, James Brooks, May 8, 2017

Only 3 gallons spilled from Hilcorp platform in April…and it wasn’t crude
Alaska Public Media, Elizabeth Harball, May 8, 2017

Personal income in Alaska drops after decade of solid growth
Alaska Dispatch News, Alex DeMarban, May 8, 2017

Walker puts final kibosh on KABATA project
KTVA, Liz Raines, May 8, 2017

Jones Act tanker used to transport oil from Alaska’s North Slope to retire: operator
Reuters, Liz Hampton, May 8, 2017

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Morning Headlamp – More government jobs; more inaccurate information from the state; checkmate, Russia.

May 8, 2017 | Posted in : News

Alaska Employment Shrinks – Local Government Grows. The latest employment statistics released by the Alaska Department of Labor and Workforce Development indicated Alaska shed thousands of jobs over the past year, largely in oil, construction, state government and professional and business services. Three bright spots in their report included job growth in hospitality, healthcare, and local government.

Headlamp anticipates that local property owners in Anchorage who just saw a significant increase in their property taxes will wonder why the city added more than 100 jobs. 

We’re Back!  After several years of decline, Alaska’s mining industry seems to be clawing its way back. With a host of new mining exploration announcements in recent months as many commodity prices recover from a years-long tailspin, industry experts in the state say more companies are eyeing Alaska as a place to spend money prospecting and developing projects. Great news!  Headlamp would point out that mining jobs average over $100,000 in annual salary. 

Hand off to Finland.  The Week of the Arctic gets underway today as more than 1,000 people from around the world arrive in Fairbanks for a meeting that caps off the United States’ chairmanship of the Arctic Council. Fairbanks will host everything from high-level diplomatic talks and detailed policy workshops to public celebrations of culture, science and entrepreneurship in the Arctic. The Arctic Council is an international forum focused on all things Arctic, formed by the United States, Russia, Canada, Iceland, Norway, Denmark, Sweden and Finland. The council has been chaired by the U.S. for the past two years and the chairmanship will be handed to Finland at the ministerial meeting set to take place Thursday.

Inlet Efficiency. Hilcorp Alaska is pushing for a new pipeline project in Cook Inlet to bypass its controversial Drift River Terminal Facility. The proposed plan, which was announced on Thursday, still needs to be approved by regulatory authorities. If approved, it would allow Hilcorp to close down its Drift River Terminal Facility located near the base of Mount Redoubt, an active volcano, and deliver oil straight to the Tesoro refinery in Nikiski.

Better, Faster, Safer.  At the Offshore Technology Conference, the industry’s annual gathering of floating rig and subsea well suppliers, sales pitches this year are all about cost savings and faster time to first production. With U.S. crude priced under $50 a barrel, offshore projects with their typically high costs and long-lead times are now borrowing from leaner shale in the competition for oil company investment.

New Production Estimates Predict State Windfall.new oil production estimate from Alaska Gov. Bill Walker’s administration estimated the state will have an extra $111 million in unrestricted revenue next year. The spring forecast called for a 12 percent decline in oil production in the state’s next fiscal year, even though that figure actually is expected to rise slightly between 2016 and the current fiscal year. Some lawmakers said they were frustrated by the discrepancy, since they’re debating how much in new revenue and spending cuts they need to cover the state’s deficit. The new projections — which the state revenue department was clear to distinguish from an “official forecast” — assume a 4 percent decline, which the state revenue department said is “intended to account more realistically for recent increases in oil production.” The $100 million extra would close a fraction of the state deficit of roughly $2.5 billion. But it could affect the debate over deficit-reduction measures between the Republican-led Senate majority and the largely Democratic House majority coalition. Headlamp shares the frustration of lawmakers. The state’s inability to provide good data leaves a bad taste in everyone’s mouth. 

Get it while you can. The Congressional Review Act gives lawmakers 60 legislative days to undo regulations enacted by the executive branch. Congress had used the obscure law just once before Trump’s tenure. Lawmakers succeeded in putting 13 bills on Trump’s desk to overrule Obama administration rules this year.

Playing chess with Russia? The commandant of the U.S. Coast Guard issued a stark warning on Wednesday that Russia was leagues ahead of Washington in the Arctic. And while the warming Arctic opens up, the United States could be caught flat-footed while other geopolitical rivals swiftly step in.

 

First Reads

Local government was a growth industry in Alaska in 2016. Wait, what?

Alaska Dispatch News, Devin Kelly, May 8, 2017

Cook Inlet oil producer delays planned exploration until tax dust settles

Alaska Dispatch News, Alex DeMarban, May 8, 2017

Updated oil tax numbers from Gov. Walker’s administration boost state accounts by $100 million

Alaska Dispatch News, Nathaniel Herz, May 7, 2017

After years of decline, mining appears to be on rebound in Alaska

Alaska Dispatch News, Annie Zak, May 8, 2017

Week of the Arctic kicks off today
Fairbanks Daily News-Miner, Matt Buxton, May 8, 2017

Hilcorp pushes for new pipeline project in Cook Inlet
KTUU, Blake Essig, May 5, 2017

RPT-Slumping oilfield services sector bets on new offshore technology
Reuters, Jessica Resnick-Ault and Liz Hampton, May 4, 2017

White House faces rough road to deregulation as its favorite tool, the Congressional Review Act, expires
Washington Examiner, Sarah Westwood, May 8, 2017

US COAST GUARD CHIEF: Russia has ‘got us at checkmate’ in the Arctic
Business Insider, Robbie Gramer, May 6, 2017

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Morning Headlamp – Legislative Log Jam in Juneau

May 5, 2017 | Posted in : News

House and Senate – Just Down the Hall But Miles Apart. As the end of the legislative session approaches the House and Senate have varied widely in their approach to the final pieces of legislation on the docket. Since last week, House committees have held hearings on more than 30 bills including bills on legalization of agricultural hemp and the creation of an invasive species response fund. Meanwhile, the Senate has held hearings on two bills since last week — House proposals to increase oil taxes and levy a statewide income tax. Senators have held just one hearing this week, on oil taxes.

Just the facts ma’am. Steven Candito, Board Member and former Chief Executive Officer of the National Response Corporation, set out to clarify some of the inaccurate rhetoric surrounding Alaska’s oil spill response capabilities in his testimony before the Committee on Transport and Infrastructure Subcommittee on Coast Guard and Maritime Transportation this week.

From North Dakota to Illinois. The Dakota Access Pipeline, filling with crude oil in preparation for going into service May 14, should rearrange some crude oil flows and give a boost to the profit margins of oil producers in North Dakota, analysts told Bloomberg BNA. After delays, politics, protests and litigation, the $3.78 billion 1,172-mile pipeline built by Energy Transfer Partners L.P. will move crude from the Bakken Shale region to a pipeline hub in Patoka, Ill.

No wires crossed here. New high speed internet infrastructure is online in the Arctic, with an Anchorage-based telecommunications company poised to connect a handful of coastal villages to fiber optic cables by the end of the year.

Keeping Alaska’s lifeline going. Alyeska Pipeline Service Company announced on Thursday that the trans-Alaska Pipeline System will be closed for 18 hours this weekend starting at 6 a.m. Saturday for major maintenance along the system’s 800-mile route.

Hilcorp Announces $75M investment in terminal closure. Hilcorp has announced plans to close an oil terminal located near the Mount Redoubt Volcano. In a move praised by watchdog groups, Hilcorp Alaska will eliminate both the terminal and the need for Inlet-crossing tankers. David Wilkins, senior vice president for Hilcorp Alaska, told business officials at a Resource Development Council meeting in Anchorage the company will begin seeking regulatory approval for its plan to shut down operations at the Drift River Terminal in the western Inlet. To complete the closure, Hilcorp will need to build about 10 miles of new pipelines, including a subsea section in the Inlet.

Native Corps Allege Payments For Pebble Support. Opponents of the Pebble Mine project allege that the company behind the project is attempting to influence local voices by offering jobs and money. Nunamta Aulukestai, a group of Alaska Native village corporations and tribes from the Bristol Bay region where the mine would be built, said Pebble Limited Partnership lured away its executive director, Kimberly Williams, to a post on an advisory committee the company is organizing.

There’s Gold In Them There Hills…Again. The Lucky Shot Mine is set to reopen in 2018. Alaska Gold Torrent LLC has announced plans to re-open the Hatcher Pass mine. Gold Torrent officials say they hope to hire 85 people at the mill and mine — including some experienced miners they’re bringing in — plus 10 managers for at least four to six years. Lucky Shot last operated at full speed at the start of World War II. Historic records from the Lucky Shot and neighboring War Baby mines indicate the gold “has a high-grade nature to it,” Alaska Gold Torrent CEO Daniel Kunz said. “We’re keying off of that.” Alaska Gold Torrent’s joint-venture partners are Boise-based Gold Torrent Inc. — 70 percent owner — and the Miranda Gold Corp., a Canadian firm.

 

First Reads

Alaska Senate shuts down committees as clock ticks toward Legislature’s next deadline

Alaska Dispatch News, Nathaniel Herz, May 5, 2017

Hilcorp plans $75M project to remove dangers of oil tanks located near Redoubt volcano

Alaska Dispatch News, Alex DeMarban, May 5, 2017

Groups allege Pebble mine developer tried to buy off members

Alaska Dispatch News, Alex DeMarban, May 5, 2017

Historic Hatcher Pass mine could become ground zero for new Willow gold rush

Alaska Dispatch News, Zac Hollander, May 5, 2017

Alaska’s Oil Spill Response Rhetoric Questioned

The Maritime Executive, May 4, 2017

Dakota Access Pipeline Ready to Open for Business
Bloomberg, Alan Kovski, May 4, 2017

TAPS to close over weekend for major maintenance
Fairbanks Daily News-Miner, May 5, 2017

New high speed internet infrastructure goes online in Arctic Alaska
KTUU, Travis Khachatoorian, May 4, 2017

 

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Morning Headlamp – Pipelines, Petro Star and Point Thomson

May 4, 2017 | Posted in : News

Pipeline Permitting Progress. Republicans in the US House of Representatives are dusting off energy bills that died last year as they make a fresh attempt to expedite a permitting process for natural gas and oil pipelines they say takes too long. The bills under consideration include similar language included in legislation the House passed last year but that never became law. President Donald Trump has pushed to accelerate pipeline approvals, but Republicans view their bills as a more permanent fix to what they consider to be a flawed permitting process and avoid the types of issues that delayed the 830,000 b/d Keystone XL pipeline.

Petro Star Comes to Anchorage. Petro Star Inc., a subsidiary of Arctic Slope Regional Corp., will acquire fuel storage Terminal 1 from Tesoro at the Port of Anchorage. Last year, the Alaska Department of Law required the sale of the terminal in order to prevent Tesoro from having a gasoline monopoly. The move by the state came after Tesoro gained more fuel storage in North Pole in a purchase from Flint Hills Resources. The Terminal 1 sale is expected to close in about a month.

What does it all mean? ConocoPhillips has confirmed it’s giving up its small stake in the Point Thomson field on the North Slope. The move has some observers wondering if it’s a bad sign for the state’s effort to build a massive natural gas line.

Alaskans sue the President.  Environmental and Alaska Native groups sued Wednesday to overturn an executive order by President Donald Trump that could lead to expanded petroleum drilling in the Arctic and Atlantic oceans. Trump last week ordered Interior Secretary Ryan Zinke to review an Obama-era plan to permanently ban new offshore oil and gas drilling in the regions.

Give credit(s) where credit(s) is due… Lawmakers in the majority parties in both the House and the Senate seem to agree that the state oil tax credit system needs a change, but exactly what will change is unclear. The House’s bill cut credits that went to legacy fields like Prudhoe Bay. It doesn’t allow companies to dip below the state’s 4 percent minimum tax. And, it axed a credit that companies could trade to the state for millions in cash payments.  The Senate version of the bill also hardens the state’s minimum tax, but it allows companies producing new oil to take credits that would dip them below that minimum. Both the Senate and House versions of the bill have drawn criticism from oil and gas producers who have repeatedly asked lawmakers not to raise taxes during a low oil price environment.

 

First Reads

Petro Star to buy fuel storage terminal at Anchorage port

Alaska Dispatch News, Annie Zak, May 4, 2017

Divisions deepen as lawmakers tinker with Alaska’s oil tax credits

KTOO, Rashah McChesney, May 3, 2017

US House looks to expedite pipeline permitting

Argus Media, May 3, 2017

Conoco gives up stake in North Slope project seen as precursor to gas line

Alaska Public Media, Elizabeth Harball, May 3, 2017

Groups sue to keep drilling ban in Arctic, Atlantic waters

KTVA/Associated Press, May 3, 2017

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