With Senate Passage, How Will the House Vote on TransCanada Buyout?

November 3, 2015 | Posted in : News

The state Senate faced a critical vote today on the TransCanada buy-out, voting in favor 16-3. But many questions still remain; is AGDC up to the task to join the project management team? Who’s making the final decisions for AGDC? Will there be more state signatories of confidentiality agreements with the producer partners? How do we assure that these uncertainties won’t cause project delays?

Our officials in Juneau have heard a parade of experts and hours of testimony covering every pro and con of spending the $157 million necessary to buy out TransCanada’s share of the AKLNG pipe and gas treatment plant and provide additional funds to the state as they take on a new role in the project.    The buyout portion of the legislation is estimated to be $68 million.  The House and Senate Finance and Natural Resources committees heard from Vincent Lee, director of major projects development for TransCanada, Nikos Tsafos and Janek Mayer of enalytica, as well as the Alaska Gasline Development Corporation (AGDC), the Attorney General’s Office, and Departments of Natural Resources and Revenue.

Senate Finance committee member  Peter Micciche, R-Soldotna, said he doesn’t have qualms about voting for the bill, but it became clear during questioning that state agencies and AGDC need to become organized. Sen. Micciche said, “This is an opportunity to evaluate where any gaps might be and to put the right organization forward to manage this project for the state.”

The Governor is intent on making this happen.  “Alaska needs to lead this project,” he said in an interview just before the special session. “We should be the head of the team. We should be driving this effort.” Headlamp hopes that the Governor will heed Senator Micciche’s words and make sure the state is putting their best foot forward.

So how will the House view the legislation the Senate just endorsed?

We take a look back at other landmark decisions, SB138 – the framework for developing Alaska’s natural gas, and the Alaska Gasline Inducement Act (AGIA), the previous legislation that formalized the current agreement with TransCanada to develop a gasline.

The legislature appears to be ready to end the state’s relationship with TransCanada – but where did our leaders vote on this before?  Headlamp looks at the Senate and House Finance Committees:



All eligible senators previously supported the now defunct AGIA, and all eligible who currently serve on the finance committee also supported the framework outlined in SB138.

While the TC buyout seems an inevitable conclusion, it’s clear there are lingering questions.

As the session appears to be winding down as the buyout is resolved, Headlamp will keep focusing on the issues that matter most

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The Morning Headlamp, Special Session Day 11: Who can answer questions…a ray of fiscal hope? … and no one ever is TRULY gone…

November 3, 2015 | Posted in : News

Who knew transparency could be so opaque and messy? Another day of this special session, and both the Alaska Dispatch News and the Juneau Empire covered recent special session committee hearings in which the Walker administration  via AG Richards and AGDC  attempted to convince  lawmakers to make public more details of contracts for the state’s natural gas pipeline project. In what may be the first time in history that a partner in a project tried to significantly undercut its ability to get the best price for its gas on the open market, the administration wants to take the unprecedented step of making every part of ADGC’s negotiations open to the public.  Headlamp wonders why the administration is only interested in this level of transparency for the AKLNG project and not with any of the other state-owned corporations, including AIDEA and the Permanent Fund Corporation.  Headlamp notes that legislators again expressed frustration with the repeated “I can’t speak for the governor…” statement instead of an answer to their questions.

These unorthodox limitations on confidentiality concerned several Alaskan lawmakers, including Wasilla Rep. Lynn Gattis who said, “If we’re going to be in business and participate with business, why wouldn’t we act like business? Are we going to make money? Are we looking for profits? Or are we going to be this big bureaucracy that stalls and stymies something that we have looked for 40-plus years?

In yesterday’s House Finance committee meeting, industry expert Dave Harbour shed more light on the confidentiality agreement complications. When addressing potential problems with confidentiality regulations, Harbour stressed that if a decision is not reached, lingering regulatory uncertainty could negatively impact AKLNG’s success. In his closing statements, Harbour emphasized the need for implementing a “curtain of separation” between AGDC and elected officials to avoid the temptation to further politicize the project under the guise of “transparency”. Headlamp hopes that the Walker administration will act as a mature business partner in future negotiations

Ray of hope? Rating service Standard and Poor’s released a statement yesterday saying the governor’s budgetary proposal could help stave off a downgrade in the state’s credit rating. This is a positive development given how dire the situation has looked to many outside the state in recent weeks. Take this poignant analysis by TheStreet.com columnist John Burnett who said last month, “the state’s financial situation has become grave enough that Moody’s recently downgraded its creditworthiness and gave the state’s political leadership one year to clean up its fiscal act or face further downgrades. In the process, Wall Street investors who once saw the state as a reliable play have good reason to be concerned.” Headlamp needs more details of the governor’s fiscal plans.

 Just when you think you’re out, you (may someday) get pulled back in. As Headlamp readers recall, Shell cited an “unpredictable regulatory environment” as a leading reason for pulling back from Alaska last month after spending nearly $4 billion exploring resource development activities in the Artic. While the one lease didn’t make sense for the company, there are “other potential prospects” in Alaska that could make sense, according to Shell CEO Ben van Beurden in this Alaska Dispatch News story. Headlamp’s of the mindset that the more companies in Alaska, employing Alaskans in the pursuit of resource development is a good thing for our state.


First Reads

Walker’s campaign promise of transparency sets up clash with industry, Legislature on pipeline project

Alaska Dispatch News, Nathaniel Herz, November 2, 2015

Secrecy rules create angry conflict in Legislature

Juneau Empire, James Brooks, November 3, 2015

My Turn: Moving toward a true owner state

Juneau Empire, Win Gruening, November 3, 2015


Alaska Legislature News

Proposal to buy out TransCanada clears its first big hurdle

KTUU, Austin Baird, November 2, 2015

Agency says Walker’s fiscal proposal for Alaska may leave top credit rating intact

Alaska Dispatch News, Nathaniel Herz, November 2, 2015

House minority objects to Arctic drilling complaint

Juneau Empire, James Brooks, November 3, 2015


Alaska Energy News

Shell leaves door open for future exploration in Alaska’s Arctic

Houston Chronicle, Jennifer A. Dlouhy, November 2, 2015


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The Morning Headlamp, Special Session Day 10: The other shoe drops-Governor Walker’s fiscal plan includes the elimination of oil and gas tax credits…AOGCC says timing is perfect for gas development in AKLNG…and a looming decision on options for trucking gas to Fairbanks

November 2, 2015 | Posted in : News

Heard this one before? Governor Walker’s fiscal plan part two: oil taxes. The Wall Street Journal reported over the weekend that Governor Walker and his team plan to scale back oil tax credits given to the industry as part of his larger fiscal plan he will present later this year.  Governor Walker’s administration is rolling out the tax proposal with other major policy proposals, including a change to the Permanent Fund and a plan for oil tax revenues to fund the Permanent Fund dividend directly.  Governor Walker on the oil tax credit program currently in the books: “[It] began for all the right reasons, and it’s reached a point beyond our fiscal appetite. We can no longer subsidize exploration.” Headlamp awaits the details and hopes that any change in oil tax credits does not weaken our oil industry. Remember, a “healthy oil industry” is a key aspect of the AKLNG framework.

Mark your calendar for 2025. The Alaska Dispatch News’ opinion columnist  Dermot Cole wrote that Alaska Oil and Gas Conservation Commission commissioners Cathy Foerster and Dan Seamount’s explanation that in 10 years, the potential for reduced oil recovery at Prudhoe Bay will be more than offset by the energy value of the natural gas that would flow to world markets through a pipeline.  Reports suggest Prudhoe Bay could hold 22 trillion cubic feet of gas in its reservoir.  Rushing gas development could undermine ongoing oil production by reducing pressure in the Prudhoe reservoir.  But waiting too long could make infrastructure upkeep too expensive for gas development. Prudhoe Bay has been the lifeblood of Alaska for decades, but it’s time to set a timer for 10 years.

Courting Fairbanks. Alaska Dispatch News covered continuing reports that a decision is close to being reached on which project could provide affordable energy to Fairbanks and the surrounding Alaska Interior. AIDEA anticipates merging the two current Fairbanks gas utilities, Fairbanks Natural Gas and the Interior Gas Utility which would be spun off to some third party business that would minimize the delivery cost of gas in Fairbank. The board will be able to decide whether to approve the selected finalist by December 17. Headlamp wonders where the state is on plans for AKLNG gas offtakes for in-state energy needs – to Fairbanks and elsewhere.


First Reads

Oil Subsidies Mean Alaska Is Losing Hundreds of Millions of Dollars

The Wall Street Journal, Timothy Puko, November 1, 2015

As gas line inches forward, experts say the timing is perfect

Alaska Dispatch News, Dermot Cole, November 1, 2015

Plan to supply gas to Fairbanks moves toward best, final offers

Alaska Dispatch News, Alan Bailey, November 1, 2015


 Alaska Energy News

Bringing LNG to the CBJ

Juneau Empire, Sam DeGrave, November 2, 2015

Sen. Murkowski draws national attention to Alaska’s energy priorities

World Oil, November 2, 2015


Lawmakers hear pipeline buyout timeline

Juneau Empire, James Brooks, November 2, 2015


Arctic Drilling News

Legislature readies complaint after Arctic drilling nixed

Juneau Empire, James Brooks, November 2, 2015


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Sunday Headlamp: Special Session Day 9…Spotlight on the TransCanada buyout: agreement, disagreement, risks, and lingering questions

November 1, 2015 | Posted in : News

Sunday Headlamp: Special Session Day 8…Spotlight on the TransCanada buyout: agreement, disagreement, risks, and lingering questions

Big Questions Remain.  Saturday’s Senate Finance hearing, featuring the state legislative consultants of Janak Mayer and Nikos Tsafos of enalytica, demonstrated that there are some key areas of disagreement between the consultants hired by Governor Bill Walker’s administration and enalytica on issues related to the TransCanada buy out.

Where they agree: TransCanada is going to be paid whether or not the current buyout legislation is passed.  Other areas of agreement: if AKLNG falls apart, terminating the relationship with TC now is cheaper than later…the State’s currently high credit ratings are going to take a hit either way… and the state has a few different financing options to pay for the buyout.  The bottom line is that a buy-out now is the only clean way the state has to sever its relationship with TC.

Where they disagree: The financial case for a buyout is not as compelling as the administration’s consultants have claimed.  According to enalytica, the state is only “slightly better off – not massively better off by severing relationship with TransCanada.” The Walker administration has argued that the state could rake in up to $400 million more in annual cash flows.  More likely: the state would get up to $360 million in additional annual cashflows… as a result of a $2 billion additional outlay in the short-term.  The biggest area of disagreement was whether the financial question was the core to the buy-out.  enalytica encouraged lawmakers to consider the strategic considerations of a buy-out: what does it mean for the current framework for AKLNG?  What would a buyout mean for any expansion plans?

While lawmakers and enalytica agreed on many aspects of the proposed buyout, such as the state’s payment requirements, credit rating concerns, and other financial issues, there is no escaping the fact that a disconnect remains between all the parties involved in the Governor’s plan. Headlamp wonders…

Could the state better protect its interest in Alaska LNG? Out of the 135 member AKLNG project management team, not one is an Alaska Gas Development Corporation employee.  Moreover, the decision-making process is unclear to everyone involved and has Alaskan lawmakers nervous.

How will the state ensure a full pipeline? AGDC’s expansion plans are unclear, but does the body have the technical expertise to manage a pipeline in addition to the commercial expertise to keep a pipeline full for buyers?

What is the state’s vision for AKLNG? A withdrawal agreement would raise the risk for Alaska—gas prices could sour and expose Alaska to a number of financial risks.  If partners withdraw, gas could cost the state some $1.4-1.7 billion each year alone.

The hearing ended with a focus on a withdrawal agreement – a key priority for the Governor and his team.  enalytica warned that seeking such an agreement, before PRE-FEED or FEED work is complete, is premature.  Focusing now on such an agreement could carry major risks for the state.  It isn’t necessary to make that agreement now, and better information will be available later if it is necessary to have such an agreement.

Top News

Shifting leadership, interests complicate Legislature’s TransCanada decision

Alaska Dispatch News, Pat Forgey, October 31, 2015

TransCanada has been trying to bring Alaska’s vast natural gas reserves to market for decades, but now the pipeline company that was once viewed as Alaska’s savior is on the verge of ending a high-profile relationship with the state.

Legislator’s advisers also call for TransCanada buyout

Juneau Empire, James Brooks, November 1, 2015

The advisers hired by the Alaska Legislature to provide an independent view of the AKLNG natural gas project say they agree with the state in its call for a buyout of Canadian firm TransCanada.

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In the Morning Headlamp: Special Session Day 8, Halloween in Juneau… House lawmakers await details of state takeover of TC pipeline expertise while top TC official says no “longer commercially viable” for it to continue in AKLNG

October 31, 2015 | Posted in : News

Who’s the Boss? The Associated Press and Alaska Public Radio Network covered reports that lawmakers are waiting on Governor Bill Walker to produce details of how, and who, from the state would assume TransCanada’s role in the AKLNG pipeline and gas treatment plant. House Speaker Mike Chenault put it this way: “While I respect the governor, I don’t think that he has the time to be in charge of the state and also the gas pipeline project and do a good job with both…there needs to be somebody in the administration where the legislature or Alaskans can go to and say, ‘What’s going on? Where are we at? And, give us an answer!’” The Governor noted that while he is not involved in day to day negotiations, he speaks weekly with counterparts at the state’s three oil company partners and gets daily phone updates from officials.  There appears to be a common line of questioning this special session:

Can We Get a Straight Answer? Attorney General Craig Richards again cited attorney client privilege in front of yesterday’s Senate Finance Committee. Senator MacKinnon and the Attorney General were involved in more than a few testy exchanges as members of the Committee looked for more clarity in the leadership at AGDC.  Senator MacKinnon asked AG Richards if she could call AGDC President Dan Fauske and request he waive that privilege, to which Richards responded “I don’t know if he has the authority.”  Headlamp wonders if anyone other the Governor and his Attorney General have any authority on AKLNG anymore.

No longer “commercially reasonable”. KTUU covered reports that TransCanada supports the governor’s plan to buy its share of the Alaska LNG Project because “it is no longer commercially reasonable” to continue with the current arrangement, according to an official who testified Thursday in the Capitol. Lawmakers questioned whether the statement implies that Alaska LNG itself wasn’t viable, to which a TransCanada official responded, “The project, as far as we see it, still has a lot of potential.” Headlamp notes the difference between “reasonable” and “viable”.  The project is still viable at this stage – the arrangement with the state is no longer reasonable according to TC. 


First Reads

Senate majority wants exit plan for TransCanada; Walker says he’s got it

Alaska Public Radio Network, Rachel Waldholz, October 30, 2015


Alaska Legislature News

Endowment plan for Permanent Fund would add stability to chaotic budget

Alaska Dispatch News, October 31, 2015



TransCanada: Alaska LNG Project no longer ‘commercially reasonable’ for company

KTUU, Austin Baird, October 30, 2015 


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Morning Headlamp: October 30, Legislative Special Session Day 7

October 30, 2015 | Posted in : News

In the Morning Headlamp: Special Session Rolls Into Day 7 … Walker Releases Budget Plan … and TransCanada WANTS Out of AKLNG Regardless of Leg Action?

What Was That Again? Yesterday, Gov. Walker announced the most significant change to the state’s annual budgeting process since the creation of the Alaska Permanent Fund in 1976. The Alaska Journal of Commerce covered the roll out of the plan. The proposal won’t completely fill the state’s gap between revenue and expenses. According to an analysis provided by the state, the Permanent Fund would have to have “well over $100 billion to generate sufficient revenues to fully fund the state budget and allow for dividends at the current rate.” Grace Jang, a spokeswoman for the governor, said it’s important to remember that using the Permanent Fund “is the major underpinning of the plan” to balance the state budget. “We’re not saying this is the plan,” she said. Headlamp is looking forward to seeing the rest of the plan. 

Leaving TransCanada. At yesterday’s House Finance Committee meeting, Vincent Lee, director of major projects development for TransCanada, said if the state doesn’t buy out his company’s stake they would “seriously consider” leaving  on their own, according to the Alaska Journal of Commerce, in which case the state would still be obligated to pay their costs. Lee also told lawmakers that yes, TransCanada has confidence in the AKLNG project, that it has confidence the state can proceed without TransCanada’s involvement, and that AGDC is capable of taking over. Alaska Public Radio Network  has more on the hearing. Headlamp thinks there’s still plenty to figure out about this potential deal, starting with whether the state can replace TransCanada on the Project Management Team without causing any more delay to the project. 

Calling Dan Fauske, Calling Dan Fauske. Things got testy at Tuesday’s Senate Finance Committee, according to the Alaska Journal of Commerce, when the state failed to make the head of the Alaska Gasline Development Corporation Dan Fauske available to take questions on the TransCanada buyout and other Alaska LNG issues. When AGDC representatives not named Fauske showed up to testify before the Senate Finance Committee, co-chair Anna MacKinnon (R-Eagle River) had one question: “Gentlemen, the first question out of the gate is, where is Dan Fauske?” she asked. Joe Dubler, AGDC’s vice president for commercial operations, said he “was asked not to” come and then said “the attorney general for the State of Alaska is the one that’s running the special session for the governor and he asked that Mr. Fauske not be in Juneau today.” In explaining the decision, AG Craig Richards said the administration wanted to have the people most technically knowledgeable about the subject on hand to answer questions.  After a 45 minute break, Fauske dialed in.

Attorney Client Privilege?  By then, lawmakers were peppering the AGDC head on reports that  AGDC had approved the creation of a new subsidiary corporation under AGDC for the purpose of acting as a “gas aggregator”.  Several Senators expressed concern that it appeared the state was attempting to act like a producer.  At one point in the hearing, AG Richards  invoked attorney client privilege.  Headlamp asks the question:  does the Attorney General work for the people of Alaska? 


Top News

Gov. Walker rolls out Permanent Fund budget proposal

Alaska Journal of Commerce, James Brooks, October 29, 2015

TransCanada exec: Company ready for buyout

Alaska Journal of Commerce, James Brooks, October 29, 2015

Lawmakers: TransCanada buyout likely, but is state ready?

Alaska Public Radio Network, Rachel Waldholz, October 29, 2015


Alaska Legislature News

Q&A: A Look at the Pipeline Project Being Pursued by Alaska

New York Times, AP, October 30, 2015


Alaska LNG News

Asian gas market slumps as Alaska policy makers voice support of LNG pipeline

KTUU, Austin Baird, October 29, 2015

Port MacKenzie director wants LNG pipeline project to use alternate route

KTVA, Daniella Rivera, October 29, 2015


Alaska Energy News

Oil and gas industry messaging effort reaches elementary students in Mat-Su

Alaska Dispatch News, Alex DeMarban, October 29, 2015

88 Energy on track at Icewine in Alaska

Energy Voice, Phil Allen, October 30, 2015


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Headlamp’s Common Sense Series: Megaprojects Deadly Mistakes

October 29, 2015 | Posted in : News

Alaskan’s Should – and Do – Know Better

With the special session of Alaska’s legislature in full swing and all the focus on a TransCanada buyout, and little focus on critical commercial terms for the gas project, AK Headlamp has been left wondering; don’t we know better?

Industrial megaprojects are vital to the economic futures of the cities, states, and individual people they touch, but don’t let the word “Mega” fool you. While these projects will generate thousands of jobs, generate millions in family wages and bring substantial revenues to our communities, their fragility cannot be overlooked. Building a project of the scale of Alaska’s $55 billion AKLNG megaproject is no easy task. And with so much on the line with the potential to shape the economic landscape of Alaska, there are some clear dos and don’ts that we must abide by if we wish to see this project come to fruition.

The Alliance – and Headlamp – know these principles well. In 2011, Independent Project Analysis (IPA)’s Ed Merrow met with many members of the Alaska Legislature and later in 2012 hundreds of our Alliance members to map out these best practices for megaproject construction. IPA’s deep understanding of what drives the successful development of capital projects, in addition to their unparalleled database of actual project results collected over 25 years, makes them the experts on leveraging the right tactics to make megaprojects successful.

The Governor and some members of the legislature were not around in 2012 to listen to Merrow’s presentation, but the stakes for our AKLNG have never been higher.  In fact, IPA notes that projects the size of AKLNG are failing far too often, about twice the rate of smaller projects. And with the United States representing only a small fraction of the world’s megaprojects that are coming online, Alaska cannot afford to get the process wrong.

Therefore, we here at AK Headlamp have decided to provide a recap on the “Deadly Mistakes” made in the development of industrial megaprojects as our first blog series. Our members know firsthand what makes projects, and megaprojects, successful.  The Alliance represents more than 600 businesses in Alaska that have partnered with global players to build successful industrial projects – from Point Thomson to CD5.  In the upcoming posts we will provide analysis of what can cause these projects to fail and what we can do differently moving forward, including: 

  1. Fostering Alignment – Getting rid of the “I want it all” attitude
  2. Following the Right Timeline – Speed Kills
  3. Managing Costs and Accountability – Right Cost, Right People

Alaska’s leaders, we suggest you grab a pen.


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Morning Headlamp: October 29, Legislative Special Session Day 6

October 29, 2015 | Posted in : News

The TransCanada buyout may be a foregone conclusion, but lawmakers are focused on the longer-term financial implications of the deal according to the Alaska Journal of Commerce.  In the piece, reporter Tim Bradner notes that the next focus will be on a withdrawal agreement that Governor Walker has pushed for; Headlamp worries that the constant focus on a withdrawal agreement could be stalling progress on other key needs for AKLNG.

Tough words for the governor from the Alaska Journal of Commerce, which editorialized on his short-lived gas reserve tax proposal. Editor Andrew Jensen said of the tax gambit, “So once again, Walker caused a huge fuss over nothing, much the way he announced he would pursue a competing project to AK LNG this past March until the Legislature stopped him by taking his money away from the Alaska Gasline Development Corp.” Headlamp has been saying it’s going to take cooperation and coordination between all the partners to make that project happen; one of several rules of success for megaprojects such as Alaska LNG.

Permanent Fund changes on the way? Alaska Public Radio Network, KTUU, and KTOO covered reports that Governor Bill Walker and Attorney General Craig Richards will propose an overhaul of the way Alaska uses the Permanent Fund when he releases his budget later this year. The plan would turn the state’s various savings accounts into a kind of endowment, using their earnings to fund state operations. Speaking with reporters Wednesday morning, Attorney General Craig Richards said the goal is to stabilize state finances.  Not so fast, according to the Alaska Dispatch News which reported that lawmakers are saying it may take time for both them and the general public to digest Governor Bill Walker’s proposal to shift the focus of the Alaska Permanent Fund from paying dividends to using it to pay for some state operations.

The state economy continues to face headwinds. Alaska Dispatch News’ Pat Forgey covered the latest unemployment data, noting that through August and September, the state lost more than 1,000 jobs compared to the year before.  Of note – state economists admit that perceived state job losses might not be accurate and the only confirmed significant job losses are in the private sector.

First Reads of the Day

Gas tax shelved, buyout still on agenda

Alaska Journal of Commerce, Tim Bradner, October 28, 2015

Editorial: Producers let Walker save face in pulling gas tax
Alaska Journal of Commerce, Andrew Jensen, October 28, 2015

Alaska job losses continue, but unemployment drops as well

Alaska Dispatch News, Pat Forgey, October 28, 2015


Alaska Legislature News

Walker proposes Permanent Fund overhaul to cover deficit

Alaska Public Radio Network, Rachel Waldholz, October 28, 2015

Gas line officials endure tough questioning; Senate insists it’s not ‘torture’

Alaska Dispatch News, Nathaniel Herz, October 28, 2015

Legislators want to study Permanent Fund plan, but say it has merit

Alaska Dispatch News, Rachel Waldholz, October 28, 2015

AJOC EDITORIAL: Producers let Walker save face in pulling gas tax

Alaska Journal of Commerce, Andrew Jensen, October 28, 2015

TransCanada official expresses support for gas project

Washington Times, Becky Bohrer, October 28, 2015

Lawmakers scrutinize risks, rewards of TransCanada buyout

Alaska Public Radio Network, Rachel Waldholz, October 28, 2015


Alaska LNG News

Neighbors weigh-in on the impacts of the Alaska LNG project

Peninsula Clarion, Rashah McChesney, October 28, 2015


Alaska Energy News

TransCanada ready for buyout

Peninsula Clarion, James Brooks, October 28, 2015

Morris News Service-Alaska/Juneau Empire

Ambler road work resumes; state closes on utility purchase

Alaska Journal, Elwood Brehmer, October 28, 2015

Utilities advancing transmission co., AEA refining cost estimates

Alaska Journal, Elwood Brehmer, October 28, 2015


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Morning Headlamp: October 28, Legislative Special Session Day 5

October 28, 2015 | Posted in : News

The Weekly Standard published a piece by Ike Brannon questioning Governor Bill Walker’s desire to “alter the deal” of the AKLNG framework put in place before his election.  The piece notes that while the decision to pull the GRT was the right one, Alaska’s economy cannot afford having its leaders reopen negotiations again and again on the $45-65 billion proposed project.  Brannon warns that “many worry that Walker is receiving questionable advice on how to make the project work.”

In today’s Juneau Empire former Governor Frank Murkowski addressed the state’s efforts to secure a gas line.  Though the former Governor is absolutely right in stating that the special session would be better focused on “alignment and fiscal certainty” for AKLNG, he failed to address how the state would overcome its lack of technological know-how in assuming an ownership stake in the AKLNG pipeline and gas treatment plant.  Headlamp was encouraged that the former Governor agreed that a gas reserves tax was poor policy.  Many observers will remember that he supported such a policy near the end of his term as Governor in 2006.

The Alaska Dispatch News covered reports that a pair of Alaskan legislators said they expect to start hearing more questions about whether the project is truly feasible. The state is facing multibillion-dollar budget deficits, and market prices for natural gas have recently plunged along with oil. “I think you’re going to see us start talking about it,” said Rep. Lynn Gattis, R-Wasilla. “Can we afford it and should we? Who’s got the plan?”

The Alaska Dispatch News covered reports that Gov. Bill Walker has invited Alaska business leaders here Thursday for a discussion of his final fiscal plan and the unveiling of his budget, and lawmakers will get their own briefing Wednesday on a “sovereign wealth fund concept.” On Tuesday, Walker’s office emailed all 60 legislators to invite them and senior staffers to a Wednesday presentation from Attorney General Craig Richards “on the sovereign wealth fund concept.” Several copies of the invitation were provided to Alaska Dispatch News.

The Alaska Dispatch News covered reports that oil has begun flowing at its CD5 drill site, part of the Alpine field on the North Slope. The production is coming from Alaska Native lands within the boundaries of the Indiana-sized reserve, created as a naval petroleum reserve after World War I.


Alaska Legislature News

Bill Walker ‘Alters the Deal,’ and Threatens Alaska’s Prosperity in the Process

The Weekly Standard, Ike Brannon and Jared Whitley, October 27, 2015

My Turn: Can Alaska afford our state government?

The Juneau Empire, Gov. Frank Murkowski, October 28, 2015

As Alaska lawmakers debate how to build pipeline, some ask: ‘Should we?’

Alaska Dispatch News, Nathaniel Herz, October 27, 2015

Lawmakers: Why didn’t the governor just make a decision on TransCanada buyout?

KTUU, Austin Baird, October 27, 2015

My Turn: Can Alaska afford our state government?

The Juneau Empire, Gov. Frank Murkowski, October 28, 2015

Legislature Weighs Options on Proposal to Nix Deal with TransCanada

Alaska Commons, Craig Tuten, October 27, 2015

 Legislators: Is gasline corp ready?

The Juneau Empire, James Brooks, October 28, 2015

Lawmakers weigh risks and rewards of TransCanada buyout

Alaska Public Radio Network, Rachel Waldholz, October 27, 2015


Alaska Fiscal News

Alaska Gov. Walker plans briefings on fiscal concepts and budget

Alaska Dispatch News, Nathaniel Herz, October 27, 2015


Alaska Energy News


Port MacKenzie gas project one step closer

Alaska Public Radio News, Ellen Lockyer, October 27, 2015

After a decade, oil begins flowing from National Petroleum Reserve-Alaska

Alaska Dispatch News, Alex DeMarban, October 27, 2015


Alaska Permanent Fund News

Walker names his Attorney General to Permanent Fund board

Alaska Dispatch News, Pat Forgey, October 27, 2015


Arctic Energy News

Shell Shelves Alberta Oil-Sands Project After Leaving Arctic

Bloomberg, Rebecca Penty, October 27, 2015


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Don’t Confuse Activity with Results

October 27, 2015 | Posted in : News

There’s been a lot of talk about moving forward as quickly as possible to get Alaska a gas line.  If you are watching any of the special session hearings, you’ll note that our legislators are continually asking about what the state has done to move the project forward.

They ask, because there is a road map to get the state to the next critical stage of AKLNG.  In 2014, Senate Bill 138 (SB138) was signed into law with a massive bi-partisan super majority: 36-4 in the House and 16-4 in the Senate.  This law provides a “checklist” of duties and milestones to be achieved in order to keep the project moving forward.

As the administration presents information about what they’ve been doing – legislators are attempting to clarify if their activity is indeed leading to results that will move the project forward.


A Flawed Roadmap?

Despite the overwhelming support in 2014, the Governor wrote in September that the process adopted by the bill “poses serious challenges.”  When Governor Walker called for a special session, he wrote:

The project process adopted by SB 138 poses serious challenges that make AKLNG very difficult to progress in a manner, and on a timeline, that can maximize benefits to Alaskans.

Flawed or not, the bill is the law of the land.  And it enjoyed overwhelming support in the Legislature and was signed into law little more than a year ago.  Back in 2014, our leaders in Juneau thought it provided the tool kit, funding, and oversight needed to get us to the next step of the project.

When pressed, the only “flaw” that administration officials could identify was the lack of a withdrawal clause.


What Is Senate Bill 138?

Actually, SB 138 is the road map or to-do list to get to a FEED decision.  Moving into FEED (Front-End-Engineering-and-Design) is the threshold moment to developing AKLNG.  If AKLNG is Alaska’s top priority, shouldn’t we have a serious conversation about what’s next on the to do list?

SB 138 allowed the administration to work on AKLNG as described in the heads of agreement (HOA) signed back in 2012.

There are 9 project critical elements laid out by the HOA: (http://dor.alaska.gov/Portals/5/Docs/LNGDOCS/HOA.pdf)

  1. Gas Production Tax
  2. State Gas Share
  3. Payment in lieu of property tax (PILT)
  4. Predictable and durable contractual terms
  5. Eminent domain rights
  6. DOE Export license
  7. Permitting for construction of in-state infrastructure
  8. “A healthy, long-term oil business”
  9. Legislation “in the 2015 legislative session to clarify State regulatory authority


2 of 9

 Of these 9 tasks before the state, two of these items have been addressed:

  1. A Department of Energy export license that was conditionally granted in May this year for the project to export LNG to countries with which the United States does not have a free trade agreement with.
  2. Eminent domain rights, allowing the project right of way powers on state land and through state park lands. These powers are necessary for the project to get access to land for building future pieces of the AKLNG project.

Good news, but what about the others?  As important as a TransCanada buy out is, not one of these steps are able to be skipped.  It seems like rather than checking things off the to-do list, we are adding more work to be done.

Right now there is a lot of talk about “leverage” and what’s best for Alaska.  Shouldn’t we also be doing what we can to actually move the project forward?


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