Morning Headlamp — Alaska can’t keep up with Russia without some help

June 21, 2016 | Posted in : News

Not done yet. According to a commentary from Rep. Mark Neuman in the Alaska Dispatch News, the legislature has in fact reduced the scope of state spending despite what many believe. According to Neuman, “The total operating budget was reduced more than 21 percent from two years ago — Alaskans told us to reduce the budget and we listened, to the tune of $1.16 billion. The operating budget comes in below the University of Alaska Anchorage’s Institute of Social and Economic Research model, which called for $4.5 billion. We’re investing $4.26 billion in the operating budget this year and will continue to work toward further reductions without sacrificing critical services Headlamp thinks the legislature protest too much. If the operating budget has truly been reduced by the amounts (all of them different) that the legislature and the administration are claiming, an itemized list of those reductions should be made public. Instead there are only convoluted budget documents used  by the state.Headlamp would like to see a simple list of each of the cuts that add up to the total being claimed. 

According to KBBI around 60 people attended an information session with BlueCrest Energy’s plans for oil production off of Anchor Point. Larry Burgess gave an overview of the company’s plans. From BlueCrest’s pad overlooking Cook Inlet, at Mile 151 of the Sterling Highway, it will directionally drill oil wells located 3.5 miles offshore in Cook Inlet and about 7,000 feet below the surface. First oil was produced from an existing well March 31, and BlueCrest is now sending 250 to 300 barrels a day in tanker trucks up the highway to the Tesoro refinery in Nikiski. Burgess, the Health, Safety and Environment manager for BlueCrest Energy, told the crowd the company wants to be a good neighbor.  Headlamp applauds BlueCrest for their efforts, and for sticking with the project in such an unstable fiscal environment. 

Keeping up with the Joneses. The Russian government has earmarked $20 million to build new vessels and technology for exploring Arctic shelf deposits. According to Deputy Prime Minister Dmitri Rogozin, Russia’s goal is to reduce dependence on foreign equipment, including in the field of seismic studies. The country will need heat preservation technologies, new construction materials, and communication resources. Headlamp is honestly a little jealous that there are places that incentivize Arctic exploration. We only hope that our own government can see the value the Arctic presents.

If they only knew. On this day in 39 years ago, oil began to flow down the Trans-Alaska Pipeline System. Headlamp wonders if they could’ve imagined the anti-industry policies they would encounter four decades later that would jeopardize the ability to keep  the TAPS filled with oil

 

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First Reads

Lawmakers have indeed cut the budget; here are the numbers
Alaska Dispatch News, Rep. Mark Neuman, June 20, 2016

Ninilchik Residents Present Fracking Questions
KBBI, Jenny Meyman, June 20, 2016

Russia earmarks $20 million to develop Arctic exploration technologies
Russia Beyond the Headlines, Victoria Zavayalova, June 20, 2016

39 years of oil flowing through Alaska
KTUU, Blake Essig, June 20, 2016

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Morning Headlamp — Walker calls for fifth special session

June 20, 2016 | Posted in : News

“Professionally embarrassing.” Alaska Dispatch News reported that Governor Bill Walker called a fifth legislative special session after failing to reach consensus on a deficit-reduction package. The July 11 start date is smack in the middle of election season, giving lawmakers little incentive to work for the full 30 days allotted — which would end just a week before the Aug. 16 primary. But at a Sunday afternoon news conference in his Juneau office, Walker suggested he’d create that incentive by vetoing key pieces of the state budget, like Alaskans’ Permanent Fund dividend checks, which would force lawmakers to either pass new legislation to restore them or vote to override him. Walker’s Permanent Fund legislation is the biggest piece of his deficit-reduction package; it would close more than half of next year’s $3.2 billion deficit by converting the fund into an endowment. It would also produce smaller dividends than last year’s. “I support the governor. I think he’s right to force us to make tough votes. It’s our job,” Rep. Andy Josephson, D-Anchorage, said in a statement Sunday. He added: “What’s happened this session, thus far, is professionally embarrassing.” While Headlamp agrees that lawmakers still have work to do, repeated special sessions cost Alaskan taxpayers. It’s time for legislators to finish their job. Rep. Josephson is right; his behavior is professionally embarrassing as he continues to support big budgets, more taxes on the private sector and fewer private sector jobs. 

Looking in all the wrong places. According to the Alaska Dispatch News, Aurora Gas and Miller Energy recently filed for Chapter 11 bankruptcy protection, the latest in a string of such filings involving Alaska businesses. Jennifer Holland, an attorney and owner of the Alaska Bankruptcy Center in Anchorage, said she’s starting to hear from oilfield workers and others who have lost work or had paychecks reduced. They are suddenly unable to pay off credit cards and loans on cars, boats and houses. This is the reality of anti-industry policies—bankruptcies and the inability to pay bills. Policies that hamper Alaska’s oil and gas industry directly belabor the thousands of Alaskan families that rely on the industry for a livelihood.

California dreamin’. A Fairbanks Daily News Miner letter to the editor raised several good points in drawing parallels between Alaska and the Golden State. The letter highlights the fact that, “In 2014, California had about 452,000 employees servicing a population of about 39 million and a budget of $252 billion. Alaska in 2014 had about 16,000 employees, about 735,000 people and a budget of $12 billion. California had one employee for every 85 residents, spent $557,000 per employee and $6,494 per person…Meanwhile, Alaska in 2014 had one employee per 45 residents, spent $750,000 per employee and $16,325 per state resident.  Almost twice as many employees per resident, a third more cost per employee and two and a half times the expenditure per person.” A leaner and more effective budget IS possible, just talk to our southern neighbors.

 

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First Reads

With a threat of PFD cuts, governor calls Legislature back for another special session
Alaska Dispatch News, Nathaniel Herz, June 19, 2016

2 more bankruptcies hit Alaska energy sector, and more employees may be seeking protection too
Alaska Dispatch News, Alex DeMarban, June 19, 2016

Alaska legislature adjourns, narrowly passes new oil, gas tax bill
Platts, Tim Bradner, June 20, 2016

Is The End In Sight For Alaska’s Oil Based Economy?
Oilprice, Michael McDonald, June 19, 2016

‘Battleground Alaska’ explores long conflict between feds, state leaders
Alaska Dispatch News, Nancy Lord, June 19, 2016

Letter to the editor: More than one good budget option
Fairbanks Daily News Miner, June 16, 2016

 

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Friday’s Fast Five

June 17, 2016 | Posted in : News

Headlamp wants our followers to always be up to date with the developments in Alaska’s economy, politics, and industry. Check out this week’s rundown of the stories affecting you.

Top Story of the Week

This week, the comment period on the Bureau of Ocean Energy Management’s proposed Outer Continental Shelf drilling leases for 2017-2022’s Program ended. Lawmakers, national security officials, and the general public submitted comments expressing their support or concern. The Alliance, along with several other Alaskan groups, submitted a letter in support of future Arctic leases.

Top Reads of the Week

Alaska, producers in talks on new commercial terms for LNG project
Platts, Tim Bradner, June 14, 2016
Alaska and North Slope producers are discussing possible new ownership structures for the large Alaska LNG project, a state official acknowledged in an interview Tuesday.

Permanent Fund bill faces test in House Finance Committee
Alaska Public Radio News, Andrew Kitchenman, June 13, 2016
The bill that would cut Alaskans’ Permanent Fund dividend checks in half this fall faces a tough legislative test this week.

Is $100 oil on the horizon?
Fuel Fix, June 10, 2016
Oil investors are buying contracts that will only pay out if crude rises well above $100 a barrel over the next four years — a clear sign some believe today’s bust is sowing the seeds of the next boom.

Quote of the Week

“And now in the current special session, we have not seen the full Legislature enact sufficient measures to stem the tide”Marcy Block, Fitch Ratings Analyst

 

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Morning Headlamp – Speaker Chenault asks for patience on budget work & $1,500 for PFD this year

June 17, 2016 | Posted in : News

The waiting game. Alaska Dispatch News reported on the flurry of comments submitted to the Department of the Interior concerning Arctic OCS leases. Yesterday marked the final day for public submissions commenting on the draft plan. No lease sales can be added to the final plan, but the three planned sales could be dropped. In a flurry of public input this week, high-profile figures urged Interior officials to either keep the Arctic sales in place, or drop them altogether. In one letter, 16 high-ranking military veterans pointed to the strategic significance of the Arctic, urging the Obama administration to consider the region’s security needs and how private infrastructure investments could aid the White House, Defense Department and Coast Guard in terms of “cost, resources and expertise.” That echoes what Alaska’s congressional delegation said last month, as they urged the administration to keep the three lease sales in the program. “A renewed emphasis on offshore leasing can and must serve as the first step towards a workable regulatory regime for the Alaska OCS (outer continental shelf,” they wrote in a letter. A coalition of Alaska organizations that wrote to Interior officials Thursday, including AFL-CIO Alaska, the Alaska Oil and Gas Association, Arctic Slope Regional Corp. and other pro-development groups also weighed in. Headlamp applauds all parties and Alaskans who submitted comments  in favor of Arctic leases. Now we play the waiting game the Department of the Interior evaluates the comments.

Working hard or…Speaker of the House Rep. Mike Chenault penned a commentary in the Alaska Dispatch News asking for patience and understanding as the legislature does what it can with the budget. According to Chenault, “It’s hard work to compromise and lower costs in a system that’s only designed to incrementally grow. Yet, we’ve done so and will continue to do so, delivering on the trust Alaskans have placed in us in sending us to Juneau. Hard work isn’t always pretty, and it’s usually frustrating. I share in your frustrations. We’re listening. We’re working.”

$1,500. Governor Bill Walker’s permanent fund bill proposal is “hanging by a thread.” The new version of Senate Bill 128, crafted by House Finance Committee co-chair Steve Thompson of Fairbanks, promises $1,500 dividends for this year and next year, compared to a guaranteed $1,000 for three years under the legislation that passed the Senate 14-5 last week. “All I have is five. It takes six,” Thompson said, referring to the number of finance committee members he needs to get the legislation to the floor. “This is the bill that would have helped Alaskans into the future. I’m very disappointed.”  Headlamp is disappointed that the finance co-chair didn’t work harder on reducing the size and scope of government so that Alaskans wouldn’t be burdened with taxes – that would have helped Alaskans into the future. 

Happy trails. Former Anchorage Mayor Dan Sullivan released a statement Thursday, through the state Republican Party, saying he has reconsidered and won’t challenge Republican Sen. Lisa Murkowski in the August primary after all. The ex-mayor’s decision to withdraw remains a bit of a mystery, as he noted his two-week exploration uncovered “significant financial support available from individuals and organizations for conservative candidates like myself,” and polling showed “this primary could be extremely competitive.”

 

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First Reads

Interior Department hears conflicting cries over offshore Arctic drilling
Alaska Dispatch News, Erica Martinson, June 16, 2016

Speaker: Legislature has made cuts; sustainable budget is a work in progress
Alaska Dispatch News, Rep. Mike Chenault, June 16, 2016

Gov. Walker’s Permanent Fund bill faces defeat in House
Alaska Dispatch News, Nathaniel Herz, June 16, 2016

Ex-Anchorage Mayor Dan Sullivan drops out of Senate race
Alaska Dispatch News, Erica Martinson, June 16, 2016

 

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Morning Headlamp — Private Citizen attacked for beliefs on climate change

June 16, 2016 | Posted in : News

Alex Epstein, a recent speaker at AOGA’s 50th Anniversary event and a proud promoter of fossil fuels,  responded to the Massachusetts Attorney General, who had included him in her investigation into climate change fraud, with three words:  Buzz Off Fascist.  Only he didn’t say “buzz.”
Washington Times, Valerie Richardson, June 15, 2016

Alaska Oil and Gas Association CEO Kara Moriarty penned a column in The Hill calling for the inclusion of Arctic OCS leases in any future Programs. According to Moriarty, “Disregarding this flexibility is to ignore the energy realities that make our homes in Alaska and across the country, safe and warm.  Indeed, including the OCS Arctic region in the new leasing Plan lays a strong foundation for America’s energy future.”

According to a Forbes column from Brigham McCown, Alliance for Innovation and Infastructure Chairman, the federal government is poised to make decisions which could impact Alaska’s ability to access vast energy resources in the largely untapped Arctic, putting the state’s financial future at risk—referring to the Bureau of Ocean Energy Management’s proposed OCS Program. According to McGown Alaska’s economy is at a critical juncture and whether the state continues to move in harmony as it has done for decades depends on whether the government moves forward with the leases, or whether it moves to deprive Alaskans of their opportunity to ensure a stable and secure economy for themselves and future generations.

Rep. Devin Nunes reminded the Obama administration not to backtrack from its plan to open the Arctic to drilling. “We won’t achieve energy independence by blocking development of our most promising energy resources…Canceling the Arctic lease sales would be a self-defeating action that would not have the slightest effect on global warming — it would merely surrender the development of Arctic energy to rival nations like Russia,” said Nunes. Headlamp applauds Rep. Nunes for highlighting the fact that Arctic leases pose a geopolitical advantage for the country.

Stars of the show. A 58-star letter, which includes former Secretary of Defense William Cohen and former Supreme Allied Commander and Vice Chairman of the Joint Chiefs of Staff General Joseph Ralston, as well as 14 former high-ranking military officers with firsthand experience overseeing Arctic operations, stresses that excluding the Arctic would jeopardize America’s ability to protect its interests. Noting that both Russia and China continue to expand their military footprints in the region, the comments emphasize that the strategic significance of the Arctic is growing and argue that private sector involvement plays an essential role in supporting military activity, “The White House, Defense Department and Coast Guard strategies for the Arctic depend on government and private sector cooperation, including private investments in Arctic infrastructure to provide presence and to share costs, resources and expertise.” Read the letter here.

Today is the day! Headlamp implores our readers to head the words from Moriarty and McGown and do something to protect Alaska’s future. The comment period on the Bureau of Ocean Energy Management (BOEM) outer continental shelf proposal closes on today! Tell the BOEM what you think here.

Native corporations leading the way. Doyon Ltd. is teaming up with Cook Inlet Region Inc. to fund its exploratory drilling in the Nenana basin this year.  “We are excited about this new partnership with a fellow Alaska Native corporation,” CIRI President and CEO Sophie Minich said in a joint release. “The Nenana basin offers a promising opportunity to meet the energy needs of Interior Alaska and provide additional benefits to our shareholders.” Doyon’s primary target is oil, but the desire for a natural gas supply in Interior Alaska would seemingly provide a suitable market in the event of a significant gas find. Headlamp applauds Doyon and CIRI for continuing to invest in Alaska despite a low-price environment.

Running hurdles. Alaska Dispatch News reported that Governor Bill Walker seeks support from the legislature as his PFD bill stalled yesterday in the house. “It doesn’t take a rocket scientist to figure out they haven’t come to an agreement,” said Rep. Lynn Gattis, R-Wasilla, a finance committee member whose firm stance against the Permanent Fund legislation has left her watching from the sidelines. Getting the bill out of the finance committee, Gattis said, remains a “hurdle,” and passing it on the House floor is an even “bigger hurdle.”

 

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First Reads

The Arctic is essential to Interior’s oil and gas program
The Hill, Kara Moriarty, June 16, 2016

Protecting Alaska’s Economic And Energy Future
Forbes, Brigham McCown, June 15, 2016

Permanent Fund legislation stalls in House as Walker asks for support
Alaska Dispatch News, Nathaniel Herz, June 15, 2016

CIRI partners with Doyon on Nenana drilling
Alaska Journal of Commerce, Elwood Brehmer, June 15, 2016

Exxon fights Mass. AG’s ‘political’ probe into climate change dissent
Washington Times, Valerie Richardson, June 15, 2016

 

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Permanent Fund Pandemonium

June 15, 2016 | Posted in : News

As the legislature considers restructuring the Permanent Fund and using some of the earnings reserves to pay for state government it is important for Alaskans to focus on some of the basics.

In 1976 a law establishing the Permanent Fund was created. The stated purpose of the fund was to:

  • Provide a means of conserving a portion of the state’s revenue from mineral resources to benefit all generations of Alaskans.
  • Maintain safety of principal while maximizing total return.
  • Be a savings device managed to allow maximum use of disposable income for purposes designated by law.

Last week, the Senate passed SB 128, their version of the Governor’s Permanent Fund Protection Act, which would restructure the Permanent Fund to:

  • Continue the annual dividend program ($1,000 for first three years);
  • Manage all state savings accounts through Permanent Fund Corporation to increase returns;
  • Provide revenue to fund state government.

The Senate version of SB 128 DOES NOT:

  • Affect the $2,000 per person PFD that is in the FY 17 operating budget;
  • Reduce the draw from the Constitutional Budget Reserve for FY 17;
  • Use Permanent Fund earnings to fund government in FY 17.

The House is now debating the bill, and has expressed the following concerns:

  • SB 128 was passed before meaningful reductions were made to the state budget;
  • SB 128 has not been modeled to show that it provides a more stable fiscal future;
  • SB 128 makes the PFD the highest priority of government spending instead of paying for essential public services.

Alaskans have repeatedly, via polls, indicated they want the state to significantly reduce the size and scope of government. Yesterday, the Alliance conducted an informal poll on their Facebook page with the following results:

  • 73% of respondents did not believe the budget had been cut enough;
  • 55% of respondents supported using earnings reserves from the Permanent Fund to pay for state government;
  • 42% did not support using the earnings reserve to pay for state government.

Many Alaskans are asking “why now?” The response to that question from the Senate, the Governor and some business leaders has been, if we do nothing:

  • Our savings accounts will be depleted in five years;
  • PFD checks will decline and be eliminated within five years;
  • A significant tax burden will be imposed on Alaskans;
  • Critical state services will decline.

The chicken or the egg? Cut state spending significantly before restructuring the Permanent Fund or restructure the PF and hope that state spending will be reduced?

 

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Morning Headlamp — Alaska gets another credit downgrade

June 15, 2016 | Posted in : News

An inevitable step backwards. Alaska Dispatch News reported that credit ratings agency Fitch Ratings downgraded the state one notch from AAA to AA+. Fitch’s downgrade, the agency said in its own report, reflects Alaska’s substantial budget deficit combined with “modest reform efforts” taken by lawmakers to match state spending with its “stressed” revenue structure. “We had put them on rating-watch negative earlier this year in February, and we were waiting to see what the outcome would be in the budget session,” said Marcy Block, a Fitch analyst. “And now in the current special session, we have not seen the full Legislature enact sufficient measures to stem the tide. There will be another very large draw on reserves in the upcoming fiscal year.” We wish we were surprised.  Matching spending with revenue means you must make meaningful efforts to reduce spending.  Maybe next year…

A Senate Committee on Energy and Natural Resources hearing chaired by Sen. Lisa Murkowski focused on the important but often unrecognized benefits that oil and gas pipelines provide for our nation. Murkowski reiterated that strong infrastructure is essential to keeping energy abundant, affordable, clean, diverse, and secure. “Without infrastructure, we cannot move vital resources from Point A to Point B. And while some would contend otherwise, we know for a fact that pipelines are the safest and most efficient way to move those resources,” Murkowski said. Among the witnesses who testified in support of pipeline infrastructure was Mr. Sean McGarvey, the President of North America’s Building Trades Unions. Yet again, Headlamp must applaud Alaska’s Sen. Murkowski on her continued support of Alaskan, and American, energy security. Curious about what else Sen. Murkowski said? Check out her testimony here.

The science of job loss. According to the Associated Press,  Nearly 400 scientists have signed a letter urging President Obama to eliminate the possibility of Arctic offshore drilling in the near future by taking the Arctic Ocean out of the next federal offshore lease sale plan. The 388 signees include scientists from 13 countries and 25 current or emeritus professors at the University of Alaska. Their opinion runs counter to Alaska elected officials and the Alaska public, who strongly support opening Alaska waters to drilling as a new source of oil for the trans-Alaska pipeline. The letter was released by Pew Charitable Trusts. Pew’s Arctic science director, Henry Huntington, said the Obama administration has been clear that it wants decisions to be science-based. The letter is a chance for scientists to weigh in on decisions in the Arctic, a region that’s rapidly changing. The Alaska oil and gas industry prides itself on safe, sustainable resource development. Not including Arctic leases will economically marginalize a third of Alaskans.  

One day left! The comment period on the Bureau of Ocean Energy Management (BOEM) outer continental shelf proposal closes on Thursday! Tell the BOEM what you think here.

AKLNG chatter. According to Platts, BP, ConocoPhillips, ExxonMobil and the state of Alaska are discussing possible new ownership structures for the large Alaska LNG project, a state official acknowledged in an interview. Talks involve each company’s willingness to take an equity share in the project or to sell its gas, Natural Resources Commissioner Marty Rutherford said. “There are different perspectives [among the companies] on the best path forward, to bring the highest value for the gas, and what role in the project each company will feel most comfortable with,” Rutherford said. Rutherford said there is enough flexibility in the schedule that a delay in the FEED decision could still allow completion in 2024 or 2025. As we’ve repeatedly warned, private sector collaboration will be essential to AKLNG’s success. We hope that these ‘talks’ aren’t the start of a “go-it-alone” strategy.

Alaska Dispatch News’ Alice Rogoff penned a commentary calling for action on the budget. According to Rogoff, “postponing changes in the fiscal restructure and the Permanent Fund earnings will just make the size of the structural, long-term problem significantly larger and unmanageable.” Unfortunately for Rogoff, who is not an Alaskan, supporting the Governor in his demand for more revenue and his failed promise to reduce the budget is a message that doesn’t resonate with Alaskans.

 

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First Reads

3rd ratings agency downgrades Alaska credit as lawmakers debate budget proposals
Alaska Dispatch News, Nathaniel Herz, June 14, 2016

Murkowski: We Must Boost Alaska Pipeline Throughput
Senate Committee on Energy and Natural Resources, June 14, 2016

Senate’s Permanent Fund bill shortchanges schools and other services far into future
Alaska Dispatch News, Rep. Les Gara, June 14, 2016

Alaska, producers in talks on new commercial terms for LNG project
Platts, Tim Bradner, June 15, 2016

Alaska will pay dearly if we don’t act on budget now
Alaska Dispatch News, Alice Rogoff, June 15, 2016

Scientists: Drop Arctic from plans for offshore drilling
Associated Press, Dan Joling, June 15, 2016

 

 

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Morning Headlamp — 48 hours left for OCS comments

June 14, 2016 | Posted in : News

One-two punch. KBBI reported on the threat facing Cook Inlet tax credits, specifically on the principal recipients of the program attempting to reconcile with the shifting fiscal landscape. Furie Operating Alaska and BlueCrest Energy are currently the two biggest recipients of the Cook Inlet tax credits. Their projects are already in production, with the bulk of their investment already made. Agrium has indicated an interest in reopening its Nikiski plant, but would need a large-enough volume for a long-enough contract at a price it finds amenable. Changing tax policy after companies have made investment decisions makes Alaska less competitive.  When will we ever learn? 

According to an Alaska Dispatch News commentary penned by Democratic candidate for the Alaska State Senate Tom Begich, Governor Bill Walker should accept the proposed budget bill and shake up the legislature. According to Begich, “The answer is to replace the leaders of the Republican-led majorities in the Senate and House if they won’t make the tough decisions. We need to elect leaders who can sit down in good faith and negotiate a path forward that is fair to all Alaskans.”  As a brand new candidate – Begich obviously doesn’t understand that the minority he is attempting to join is responsible for the budget standoffs – demanding that more money be added to an already bloated budget in return for their vote to fund the budget.  If Begich believes that tapping the oil industry for 65-90% of the revenue for the budget is “holding them harmless” – we suggest an economics lesson.

 Alaska Public Radio News covered HB 245, the bill that would cut Alaskans’ Permanent Fund dividend checks in half, and its path through the House Finance Committee. The House Finance Committee is scheduled to hold a hearing on the bill Tuesday morning, with public testimony scheduled for 5 p.m. Some lawmakers believe the bill will not make it out of committee.

Arc-tech. According to the Arctic Economic Council, tech industry experts, policy leaders and pan-Arctic residents will assemble in Barrow, Alaska in mid-July to discuss the critical need for high-speed broadband across the circumpolar Arctic. Other partners include the Iñuit Arctic Business Alliance (IABA) and Arctic Slope Regional Corporation (ASRC). Headlamp applauds the three organizations seeking to bring much-needed private investment to the Arctic—we only wish it was easier for Alaska’s energy producing community to do the same.

48 hours left! The comment period on the Bureau of Ocean Energy Management (BOEM) outer continental shelf proposal closes on Thursday! Tell the BOEM what you think here.

 

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First Reads

Bill would remove Cook Inlet tax credits
Alaska Public Radio News, Jenny Neyman, June 13, 2016

Governor should accept budget bill, and Alaskans should change Legislature
Alaska Dispatch News, Tom Begich, June 13, 2016

Permanent Fund bill faces test in House Finance Committee
Alaska Public Radio News, Andrew Kitchenman, June 13, 2016

Ketchikan could see raise in sales tax cap
Associated Press, June 13, 2016

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Action Alert – Comment by June 16: Alaska Needs Your Help To Protect Energy Development

June 13, 2016 | Posted in : News

This is a big week for Alaska. On Thursday, June 16, the Bureau of Ocean Energy Management’s (BOEM) comment period on Outer Continental Shelf (OCS) Arctic leases ends and Alaska’s future will be out of its hands. The proposed program phase does not guarantee Arctic areas for leasing will be retained in the final program.

After a historic year of industry pullback, with even more bad news coming just last week, Alaska simply cannot afford to further perpetuate an anti-industry climate when we have the means to tell Washington bureaucrats the actual harm the program would cause.

Any Alaskan as concerned with this trend as the Alliance is needs to weigh in and let your voice be heard. Comment by June 16 on the Bureau proposal here.

Key Points

  • The Alaskan OCS possesses enormous untapped oil and gas resources, with Department of Interior estimates for the Chukchi Sea alone to be approximately 27 billion barrels of oil and 132 trillion cubic feet of natural gas.
  • These untapped resources are of critical importance to both Alaska and the United States. Oil and gas development in the Arctic OCS is predicted to produce an annual average of 35,000 direct and indirect jobs over the next half century for Alaska alone.  Those jobs would represent a total payroll of over $70 billion.
  • Economic activity resulting from Arctic OCS development is also predicted to generate an annual average of nearly 55,000 jobs nationwide, with an estimated cumulative payroll amounting to $145 billion over the same time period.

OCS is too critical to Alaska’s future to risk.

Please comment by June 16 with the Bureau of Ocean Energy Management to make sure your voice is heard.

 

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Morning Headlamp — More calls for comments on Arctic leases

June 13, 2016 | Posted in : News

An Anchorage Daily Planet editorial called for Alaskans to submit their comments to the Bureau of Ocean Energy Management’s docket on OCS leases. The piece highlights the need to protect Alaska’s economy and energy security through telling BOEM that Arctic leases are an essential part of the 2017-2022 Program. According to the piece, if Arctic leases are dropped, “it might be – because of the long lead times necessary for drilling offshore reserves – 2038 before oil from Alaska’s outer continental shelf could flow into the trans-Alaska oil pipeline.”

Three days left! The comment period on the Bureau of Ocean Energy Management (BOEM) outer continental shelf proposal closes on Thursday! Tell the BOEM what you think here.

No matter what. The Associated Press reported that as time expires on the current special session, Gov. Bill Walker said realistically he won’t get the comprehensive fiscal plan he wanted this year to help pull the state out of a hole deepened by low oil prices. Economist Gunnar Knapp told lawmakers earlier this year that Alaska is probably facing a recession and no matter what lawmakers do, the economy will take a hit. He also urged that significant steps be taken this year.

LNG’s future sparking interest and investment. Energy giants like Royal Dutch Shell and Total have invested billions in plants to produce liquefied natural gas (LNG) in places such as Australia and the United States. “We are ready to go downstream as much as it takes to unlock gas demand,” said Laurent Vivier, president for the gas division at Total. Total aims to triple the number of its gas and power markets and raise its annual LNG output to 20 million tons and its trading to 15 million tons by 2020. The company is taking part in LNG infrastructure tenders, including several gas-fired power plants, in countries including Indonesia, Chile, Ivory Coast, Ghana and Morocco, Vivier said. Headlamp believes Alaska needs to capitalize on the billions of investment dollars AKLNG can bring the state. If companies are in the market for LNG, Alaska needs to get competitive.

The Fairbanks Daily News Miner reported that lawmakers in the Alaska House are opposing legislation that would use Alaska’s permanent Fund to help address the state’s bulging budget deficit. Last week the Senate passed the legislation, which would allow for draws from Alaska Permanent Fund earnings based on a percentage of the fund’s market value, but would also reduce annual dividend payments to $1,000 starting this year. The backlash against the Senate last week has House Members thinking a bit more carefully about giving state government more revenue when no real budget reform has been accomplished. 

Magic numbers. Some energy experts believe that oil prices over $100 are on the horizon. “The market faces a supply crunch in the next 24 months,” said Francisco Blanch, head of commodities research at Bank of America Merrill Lynch in New York. “Some hedge funds are betting that oil prices will need to rise sharply to bring demand down again — that’s why they are buying deep out-of-the-money call options.”

 

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First Reads

Comments, please
Anchorage Daily Planet, Editorial, June 12, 2016

Lawmakers oppose bill to use nest egg to close deficit
Associated Press, Becky Bohrer, June 12, 2016

Overdue Legislature trying to reach resolution
Associated Press, Becky Bohrer, June 12, 2016

Coming wave of gas puts focus on finding new shores
Reuters, Ron Bousso, June 12, 2016

Is $100 oil on the horizon?
FuelFix, June 10, 2016

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