Morning Headlamp — Sturgeon wins & deficit increases

March 22, 2016 | Posted in : News

Sturgeon triumphs over federal government. In a landmark case for Alaska, that many political observers thought was doomed after the passing of Justice Antonin Scalia, the U.S. Supreme Court handed down a unanimous decision in favor of Alaskan moose hunter John Sturgeon. The court, in an 8-0 decision written by Chief Justice John Roberts, handed a narrow victory to John Sturgeon in his legal challenge to the U.S. government’s power to prevent him from riding his hovercraft on a river through a federal preserve to reach remote moose-hunting grounds. The Supreme Court threw out a lower court ruling favoring government, but did not decide the bigger question of whether the government can regulate hovercraft use on a waterway within park service property in Alaska. The answer to that question could have had implications for other park service regulations, including on oil and gas extraction. The state of Alaska supported Sturgeon, noting that Congress in 1980 specifically limited park service jurisdiction over land within a conservation area that is not federally owned. In his opinion reversing that decision, Roberts said federal law governing park service authority contains several Alaska-specific provisions, reflecting “the simple truth that Alaska is often the exception, not the rule.”  The Alliance is proud to have participated, with other Alaskan trade associations, in an amicus brief in support of Sturgeon. 

Headlamp, like thousands of Alaskans this morning, is celebrating this monumental victory for our state. John Sturgeon took on the U.S. Park Service and won. Today marks a victory for Alaskan sovereignty, and for those who hunt, fish, and enjoy our great outdoors.

What’s the real story in the spring revenue forecast? According to a new preliminary forecast by the revenue department released Monday morning, the current budget deficit has jumped another $300 million. Governor Bill Walker’s administration blames low oil prices. The revised forecast means the expected deficit for the state’s $5.4 billion budget is now $4.1 billion, up from a previously projected $3.8 billion. That means current revenue can cover only about 25 percent of the existing state budget. Walker, in a news conference at the Capitol on Monday, said the diminished flow of oil revenue underscores the need for lawmakers to pass his financial plan. It’s no surprise to Headlamp  that the Governor chose to ignore the most important detail of the the new forecast – INCREASED PRODUCTION. The fall forecast was revised from 500,200 barrels per day to 517,500 barrels per day, acknowledging that the change reflects eight months of ACTUAL daily production levels. The tax incentives in SB 21 are working to increase production. Headlamp wonders how raising taxes on the industry, as the Walker administration has proposed, will continue this trend of increased production?

Successful edits. The House has submitted a substitute bill to Gov. Walker’s proposal to increase the oil production tax and reduce tax credits paid to the oil and gas industry. The governor had hoped to increase the minimum production tax from 4 percent to 5 percent, claiming that such an increase would  raise $100 million.  The committee bill would create a legislative working group to propose changes to the Cook Inlet tax regime that will be considered by the Legislature next spring. Headlamp thanks lawmakers who helped remove this blatant money grab from the Governor’s proposal. Raising taxes will only chase away the industry; leading to less production and fewer jobs. Attacking Alaska’s primary industry while its cash flow negative is not the answer to the state’s spending problem. 

According to the Associated Press, Alaska Gov. Bill Walker said he is willing to call the Legislature into a special session if lawmakers don’t pass any revenue proposals to help close a multibillion-dollar budget deficit. “It’s important that we have legislation passed this session or a special session to make sure that we have taken away the uncertainty,” Walker said during a news conference on the forecast. For 2016, the forecast shows the state’s budget deficit is now at $4.1 billion.  Headlamp would suggest that the Governor take a few moments to review the operating budget and try to convince Alaskans that state government has done their fair share in addressing the budget gap before he attempts to take money from them to support big government.


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First Reads

U.S. top court backs moose hunter in Alaska hovercraft case
Reuters U.S., Lawrence Hurley, March 22, 2016

Alaska budget deficit just jumped $300M because of low oil prices, Walker administration says
Alaska Dispatch News, Nathaniel Herz, March 21, 2016

Alaska’s budget gap officially just got a little bigger
Fairbanks Daily News Miner, Matt Buxton, March 21, 2016

House committee guts governor’s attempt to tax oil industry, end secrecy
Alaska Dispatch News, Alex DeMarban, March 21, 2016

Governor may call special legislative session over budget
The Washington Times, Rashah McChesney, March 21, 2016


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Morning Headlamp — Edits to Walker’s tax plan have arrived

March 21, 2016 | Posted in : News

Gov. Walker, please see edits. After much anticipation, the House Resources Committee finally rolled out a new version of Gov. Bill Walker’s oil and gas tax credit.  Substantial changes were made to the most critical components.  Most of the reforms in the committee substitute (CS) do not take effect until January 1, meaning they will have little to no impact on the FY 2017 deficit because January is in the middle of the fiscal year. “These are difficult times for Alaska and for the oil and gas industry,” said Gary Zepp, an aide to House Resources Co-chair Ben Nageak. “The oil and gas industry is operating at losses in Alaska. It costs more to get barrels of oil out of the ground than they’re getting for the oil. The co-chairs recognize Alaska’s budget problems and want to support a balanced resource policy that protects investment, maintains production, and provides State revenues over the short term and into the future.” The CS increases the limit on repurchased credits to $200 million per company per year.

A fiscal note was not available on Saturday, but is expected today when the administration presents their response to the bill. Headlamp will provide details as they emerge.

Income tax not looking likely. According to the Fairbanks Daily News Miner, it appears the plan for new revenue almost entirely relies on a change to the earnings from the permanent fund. The specific account is called the Permanent Fund Earnings Reserve Account and it’s filled with earnings from permanent fund investments. “I don’t think taxes are going to get a lot of support. I think doing something with the earnings reserve will,” said Fairbanks Sen. Pete Kelly, a Republican who co-chairs the committee. “It is not anticipated at this point that we’re going to have any taxes.”

In a statement, Crowley Marine is no longer in the bidding for the prized contract to deliver oil-spill prevention and response services in Prince William Sound, the maritime company said that Alyeska Pipeline Service Co. decided not to extend its full, multi-year contract. “Despite bidding aggressively for the SERVS contract extension, Crowley was not chosen by Alyeska to retain the entire scope of the current contract,” according to a statement from Crowley. Crowley has provided tanker docking services in Valdez since 1977, when the 800-mile trans-Alaska pipeline began transporting oil to Valdez. It has contracted with Alyeska for marine services since 1990, officials said.

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First Reads

House Committee Reveals Scaled Back Oil and Tax Credit Reform Rewrite
Alaska Commons, Craig Tuten, March 20, 2016

Walker administration plans to sell much of state’s royalty oil to Tesoro
Alaska Dispatch News, Alex DeMarban, March 18, 2016

Alyeska Pipeline chose not to renew Crowley contract
Alaska Dispatch News, Alex DeMarban, March 18, 2016

Report: State saves $7.5M if lawmakers leave new Anchorage offices
Alaska Dispatch News, Nathaniel Herz, March 18, 2016

Despite Challenges, Efforts to Develop U.S. Arctic Offshore Energy Exploration Continue
The Energy Voice, Consumer Energy Alliance, August 10, 2015

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Friday’s Fast Five

March 18, 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 effecting you.

Top Story of the Week

On Monday, BP said it will reduce a larger portion of its Alaska workforce than it had announced in January as a result of new plans by the Prudhoe Bay owners to idle three of five drilling rigs. The planned reduction has increased to approximately 17 percent, roughly 355 jobs, as a result of the recently announced decision to reduce operating rigs at Prudhoe Bay, said Dawn Patience, a spokesperson with BP Alaska. That decision was made by ExxonMobil, ConocoPhillips and BP.

Top Reads of the Week

Revenue boss doubts income tax this year
Juneau Empire, James Brooks, March 17, 2016

On Thursday, Alaska Revenue Commissioner Randall Hoffbeck delivered to the Juneau Chamber of Commerce the same address he’s given more than 90 times to community groups and business groups across Alaska: The state is in fiscal trouble, and a spread of taxes and spending cuts is the best way to fix the problem.

New Obama offshore plan eyes further Arctic protections
Alaska Dispatch News, Erica Martinson, March 15, 2016
The Obama administration released its proposed five-year offshore drilling plan for federal waters Tuesday, leaning toward allowing three lease sales in Alaska, but leaving the option to close some Arctic waters to oil and gas activity.

Ahtna cites tax credits as it prepares to spud gas well
Alaska Journal of Commerce, Elwood Brehmer, March 16, 2016
Ahtna Inc. is preparing a drill site near Glennallen to further its hunt for natural gas in the Copper River basin.

Quote of the Week

“I’m not getting into the tax business”— Sen. Pete Kelly, R-Fairbanks


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Morning Headlamp — Alaska waits on rewrite of Gov. Walker’s oil and gas tax plan

March 18, 2016 | Posted in : News

Edits coming soon. House Republicans are set to release their changes to Gov. Bill Walker’s HB247—a proposal to scale back Alaska’s tax credit program for the oil and gas industry. “Where are we going to take that next hit from?” asked Kara Moriarty, the president of the Alaska Oil and Gas Association, in a phone interview Thursday. “We don’t have any money to give.” Rep. Ben Nageak, is the co-chair of the resources committee responsible for oil and gas issues, and he’s responsible for the rewrite of Walker’s bill.

Headlamp eagerly awaits the revision. The potential for further job loss and industry retreat will be inherently tied to the rewrite. Stick with Headlamp as we analyze any changes for their impact. 

The two main electric utilities serving Anchorage are asking state regulators to approve their plans to purchase a portion of a Cook Inlet gas field, and they want that decision made quickly so Chugach Electric can qualify for a state oil and gas tax credit that could be worth $10 million. However, last week’s approval from the Regulatory Commission has some asking questions. ML&P and Chugach Electric asked the commission to approve their deal with ConocoPhillips, announced in February, to buy the oil giant’s one-third stake in the Beluga River Gas Unit for $152 million—but now the state is revisiting the deal. “We want to review the agreement (with ConocoPhillips) to make sure the terms are in the public interest,Ed Sniffen, supervisor of the state’s Regulatory Affairs and Public Advocacy division in the Department of Law said. “One thing to look at is the price of gas under this agreement versus what they could get for gas under the open market.”

Income tax unlikely. Alaska Revenue Commissioner Randall Hoffbeck delivered to the Juneau Chamber of Commerce the same address he’s given more than 90 times to community groups and business groups across Alaska. However, in a change, Hoffbeck no longer believes a state income tax, one of the cornerstones of Gov. Bill Walker’s fiscal plan, will be implemented in 2016. Walker has proposed a measure that would use the Permanent Fund to generate state revenue through its investments. According to state projections, $3.3 billion per year could be generated for state services under the governor’s plan. Headlamp is happy to hear that Hoffbeck—and hopefully Walker—realize that Alaskans will not support new taxes until the state makes meaningful reform to its budget.  


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First Reads

AK HEADLAMP, March 17, 2016

House prepares to advance Walker’s oil tax credit package, but contents remain a mystery
Alaska Dispatch News, Nathaniel Herz, March 17, 2016

Revenue boss doubts income tax this year
Juneau Empire, James Brooks, March 17, 2016

Battle brewing over Anchorage utilities’ deal for gas field
Alaska Dispatch News, Alex DeMarban, March 17, 2016

Russia weighs cuts to icebreaker funding
Alaska Dispatch News, Atle Staalesen, March 17, 2016

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Reality Check: If it’s too big, it’s impossible? And other state promoted fallacies

March 17, 2016 | Posted in : News

In recent days, Headlamp has highlighted the issues of layoffs in the oil and gas industry and the need for good reporting. Unfortunately, here we are again having to address both topics.

An article in the Alaska Dispatch News Tuesday addresses preliminary job loss numbers in the oil and gas sector, putting those losses at 1,700 jobs from January 2015 to January 2016.  An economist with the Alaska Department of Labor and Workforce Development (AKDOL), Caroline Shultz is quoted as saying:

“The thing is, it looks like the losses in oil and gas are a bit too big…It’s too quick. I mean, it’s possible. But it’s too big.”

I’m sorry, what? Did a state official really just say because it was a big number, in a short period of time, it isn’t possible? Now you may understand why this piece is titled “Reality Check.” Headlamp isn’t even sure where to begin to describe all that’s wrong with Shutlz’s comments, but we’ll try.

The ADN’s own reporting on job loss numbers during the period in question for Shell, BP and ConocoPhillips totals 790 lost jobs. This number does not include the support industry jobs lost as a result of these companies reducing their exploring and producing activities.

In surveying a handful of support industry contractors in Alaska, something the AKDOL claims to do in order to get better information, Headlamp was able to account for an additional 1000 layoffs in the period discussed. One company alone recently testified to the Legislature they were down 305 people from last year. To put that in perspective, the current state budget estimates a reduction of just 224 positions this year. Add the 1000 support industry jobs with the 790 at the exploring and producing companies and we have easily surpassed the 1700 number that Shultz said is “too big.”

Which brings us to our next point: why didn’t Zak do any real legwork on this piece?

Had she searched her own newspaper’s archives, she’d have found the 790 jobs with the producers (at minimum). Had she actually worked to get another perspective in her story, she’d have learned about the hundreds of jobs from a handful of Alaska contractors that make the number Shultz found so unbelievable to be a reality for the support industry.

Once again back to the jobs issue, Headlamp feels compelled to remind readers that in many cases, the job losses came after reductions in wages. Private sector companies chose to implement wage reductions in an effort to ride-out the low price environment prior to being forced to let workers go. While smaller paychecks are certainly preferable to losing a job, they both result in less money in Alaska’s economy.

Maybe we shouldn’t be surprised the State has such little understanding of job data, given the Walker Administration has repeatedly failed to clarify the number of jobs lost versus positions eliminated. Maybe we shouldn’t be surprised that it’s easier to regurgitate quotes rather than dig deeper into an issue to provide both sides of a story. So maybe we aren’t surprised; we are disappointed.

Both Shultz and Zak are responsible for a shoddy work product. For the State of Alaska and the media to continue to deny and marginalize what the private sector is experiencing every day, based on data the article itself calls “informal predictions,” is offensive. And for the ADN to publish one-sided information without consulting those affected daily is unacceptable journalism.


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Morning Headlamp — AJOC and Ahtna weigh in on Walker’s taxes and Alaska’s future

March 17, 2016 | Posted in : News

According to an Alaska Journal of Commerce editorial, with operating budgets passed in the House and Senate but not yet funded, at least one thing is now clear: Gov. Bill Walker’s proposals to raise taxes on individuals and businesses by nearly $460 million in the next fiscal year aren’t going anywhere. The editorial agrees that the refusal to raise taxes during an economic downturn is the right call from the Legislature.

Headlamp agrees with the editorial’s take on the situation. Continuing to belabor an economy that is already hurting doesn’t make any sense especially since the budget has not been reduced to a sustainable level. 

Ahtna, who recently announced their efforts to explore drilling opportunities near Glennallen, addressed their new project and the oil and gas tax system. Roy Tansy Jr., Ahtna’s executive vice president, testified to the House Resources Committee earlier this month that the company utilized the state’s Frontier Basin refundable tax credits for its seismic program and will do the same for drilling. “Ahtna would not be doing this exploration if the tax credits were not there,” he said. “We are optimistic of a resource discovery that will help address the rural energy crisis in the Ahtna region,” Ahtna President Michelle Anderson said. “A substantial discovery would benefit not only the Ahtna region but the state at large. It would provide a boost to the economy by putting Alaskans to work and help alleviate the high energy costs that many residents experience.” Headlamp supports Ahtna’s decision to explore a future in resource development and also stresses the need for a tax system that incentivizes such endeavors even with low commodity prices

Excess earnings from a fund set up to provide assistance to rural Alaskans faced with high electricity costs would go to the general fund for state expenses and a renewable energy program under a bill being considered in the Senate. In fiscal years 2013 and 2014, the fund saw earnings of $111 million and $171 million, respectively.  Those were great investment years, said Emily Ford, a spokeswoman for the Alaska Energy Authority, which administers the Power Cost Equalization program. The payout to communities in recent years has been close to $40 million. Electricity costs for customers in rural Alaska are generally three to five times higher than for customers in more urban areas.


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First Reads

Ahtna cites tax credits as it prepares to spud gas well
Alaska Journal of Commerce, Elwood Brehmer, March 16, 2016

AJOC EDITORIAL: Read their lips: No new taxes
Alaska Journal of Commerce, March 16, 2016

Northrim wary of Alaska economy’s impact on its business in 2017
Alaska Dispatch News, Annie Zak, March 16, 2016

State contemplates how it will pay for the budget
Alaska Public Radio News, Andrew Kitchenman, March 16, 2016


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Morning Headlamp — BP cuts deeper than expected & AK construction to see declines in 2016

March 16, 2016 | Posted in : News

BP cuts worsen. In reference to BP’s recently announced job cuts, Rep. Ben Nageak said it’s going to be tough to “stop the bleeding…It’s gonna have an effect that’s gonna trickle down to businesses all over the state.” BP said on Monday it will be cutting another four percent of its workforce in Alaska in addition to the 13 percent cut the oil giant announced in January. A BP spokesperson said the exact number of layoffs isn’t yet known. However, the previously announced 13 percent cut to its workforce of 2,100 employees and specialty contractors, which amounted to a loss of about 270 workers has increased to approximately 17 percent as a result of the recently announced decision to reduce operating rigs at Prudhoe Bay, according to BP Alaska spokesperson Dawn Patience.

With even more cuts than originally predicted, how can lawmakers think about raising taxes on an industry that is hemorrhaging Alaskan jobs?

UK Abolishes Oil Tax.  UK Chancellor of the Exchequer George Osborne said in his Wednesday speech announcing the 2016 budget that the UK’s “broad shoulders” will support the oil and gas industry. The UK is doing so by enacting a major overhaul of the North Sea tax regime in response to the plunge in oil prices that continues to imperil the oil and gas sector. Osborne said the Petroleum Revenue Tax (PRT) has been “effectively abolished.” The PRT was already cut last year from 50% to 35%. Wednesday’s change will be retroactively effective starting from January 1, 2016. Osborne said he was “cutting in half the supplementary charge on oil and gas from 20% to 10% and I am effectively abolishing Petroleum Revenue Tax too – backing this key Scottish industry and supporting jobs right across Britain.” Scottish secretary David Mundell was quoted as saying that Osborne’s budget announcement is “very good for Scotland” and “shows the UK government has listened and delivered.” Following the announcement of Osborne’s budget, BP shares rose 3.5% on the day, and Shell rose 3.13%. Earlier this year, the Scottish government introduced a new $17.2 million (12 million pound) fund to help those who have been laid off as a result of the downturn to find new employment and acquire new skills.

Headlamp firmly applauds the actions our friends across the pond are taking in response to record low oil prices. It is refreshing to see leaders of a government actually take job losses in the oil and gas industry seriously. The UK is responding in a favorable and responsible way to help an industry that employs thousands of their citizens. Maybe Alaskan policy makers should spend an afternoon sipping some Earl Grey, and learn how the UK is encouraging investment in these low oil prices.

On the lingering budget issue, members of the Republican-led Senate Finance Committee on Tuesday said they would rather spend down Alaska’s big savings accounts than “get into the taxing business and adopt Gov. Bill Walker’s financial plan. “There’s been some tendency on the part of the administration to start throwing around orders to the Legislature, and we just don’t respond to that,” said Sen. Pete Kelly. Headlamp hopes this sentiment continues into the next few weeks as lawmakers discuss Gov. Walker’s tax plans for the oil and gas industry.

The Interior Energy Project officials discussed the updated timeline as part of a progress report to the House Special Committee on Energy on Tuesday. The state recently announced it had selected Washington-based Avista Corp. subsidiary Salix to partner on a Cook Inlet-area gas liquefaction plant to source the gas. Interior Energy Project team lead Gene Therriault said the agreement with Salix should be finalized by June, allowing preliminary work to start at the Cook Inlet site this summer and fall. Residential customers are expected to start converting by the summer of 2017.

Building a bigger problem than we realize. The Alaska Association of General Contractors announced that the construction industry could lose as much as 18 percent of its jobs in 2016.  “18 percent is a sizable amount with a lot of it coming from the energy sector.” said Alaska AGC Executive Director John Mackinnon. “You take 18,000 construction workers in the state and 18 percent of them if there’s a decline, that could amount to over 3,000 jobs not being here next year.” State economist Neal Fried said the downturn in construction is not surprising given the industry’s close ties to the rest of the state’s economy. “Construction really is an accommodator for the rest of our economy. When the economy grows it means you build more facilities, and when it is slowing down the opposite occurs,” Freid said. As Headlamp has consistently said, policies that don’t incentivize growth in Alaska’s biggest industry—even during a low price environment—will cause a ripple effect across more than just industry jobs.


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First Reads

Fallout from BP job cut announcement ripples across Alaska
KTUU, Travis Khachatoorian, March 15, 2016

BP job cuts higher than previously announced
Alaska Dispatch News, Alex DeMarban, March 15, 2016

Senate leaders: We’re not getting into ‘the taxing business’
Alaska Dispatch News, Nathaniel Herz, March 15, 2016

New timeline set for Fairbanks liquefied natural gas delivery
Fairbanks Daily News Miner, Matt Buxton, March 16, 2016

New Obama offshore plan eyes possible new Arctic protections
Alaska Dispatch News, Erica Martinson, March 15, 2016

Alaska construction industry faces possible loss of more than 3,000 jobs in 2016
KTUU, Patrick Enslow, March 15, 2016


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FACT CHECK: A picture’s worth a thousand words. Or is it?

March 15, 2016 | Posted in : News

Lately it seems every day you open the paper or turn on the news and learn of more layoffs in the oil & gas industry. It’s a very tough time for industry employees and employers in Alaska.

Imagine our disappointment when Headlamp tuned in to KTUU Channel 2 News today to see the photo below. Not only is it disturbingly wrong, it’s also, at best, in poor taste.




Prolonged low oil prices have the producers and the service industry making tough decisions and we’re beginning to see layoffs we believe will continue in the months to come. Headlamp recognizes the impact losing a job can have on a family in Alaska. We also know those being forced to lay off employees feel a great deal of responsibility to the men and women they are losing.

Now is not the time for factually inaccurate “gotcha” headlines or inappropriate news coverage. Now is the time for factual coverage and empathy for those impacted.

KTUU would do well to remember we’re all Alaskans and we’re all in this together.

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Morning Headlamp — Walker’s bills to be put to the test & Obama wants out of the Arctic

March 15, 2016 | Posted in : News

Senate makes quick work of budget, Walker’s bills. Following approval in the House, the Senate followed suit—voting yesterday on the operating budget. All that remains now are Gov. Bill Walker’s 10 revenue-producing bills to be addressed this week. Republican legislative leaders like Sen. Pete Kelly, co-chair of the Senate Finance Committee, said they needed to “clear the decks” by passing a reduced operating budget before giving serious consideration to Walker’s 10 pieces of legislation, which include a personal income tax bill and tax increases on various industries. The Senate voted for $63 million dollars more in cuts than the House budget passed last week. The two chambers will resolve the differences between their versions of the budget in a conference committee. Headlamp will be reviewing the final documents to assess whether or not the two bodies actually reduced the operating expense of the state. Only two of the Governor’s bills will be addressed this week in conjunction with budget talks: SB128, restructuring of Alaska’s Permanent Fund and HB247, increased taxes on the oil and gas industry. Attention will be sharply focused once again on Gov. Walker’s misguided tax structure. Reducing the operating expenses of the state is the first step in closing the state’s budget gap, but not crippling Alaska’s chief industry will make the difference in coming years.

Lame duck indeed. According to the Guardian the Obama administration is expected to put virtually all of the Arctic and much of the Atlantic off limits for oil and gas drilling until 2022 in a decision that could be announced as early as today. The five-year drilling plan, which will be formally announced by the interior department, was expected to block immediate prospects of hunting for oil in the Arctic, according to those familiar with the proposals. Obama and Canadian Prime Minister Justin Trudeau addressed the Arctic last week, declaring that any future oil and gas exploration in the polar region “must align with science-based standards between the two nations that ensure appropriate preparation for operating in Arctic conditions, including robust and effective well control and emergency response measures.”

Headlamp is extremely disappointed, but not surprised. Without any consultation from Alaskan lawmakers, and during a low price environment, the Obama administration is planning to further cripple not only the Alaskan economy, but America’s as well for the next 6 years? Does the Obama administration know what the ramifications of such a move are? Is the outgoing President comfortable leaving the Alaskan economy in a significantly weaker position for private investment and fiscal rating than when he took office?

More job loss. According to the Associated Press, BP is planning to further reduce its workforce in Alaska. Dawn Patience, a spokeswoman for the oil company, told Anchorage news station KTUU-TV on Monday that about 84 jobs, or about 4 percent of the company’s workforce, will be cut. Most of the affected positions are based in Anchorage. Headlamp hopes Alaskan lawmakers are aware of yet another announcement of job loss especially this week as Gov. Walker’s regressive tax bill on the oil and gas industry is being discussed.

Native Corporation Ahtna Inc. has begun construction on a road and drilling pad for an exploratory well starting in April. The drilling will take place under a state exploration program designed to encourage wildcatting in little-explored areas of the state, outside the known oil and gas provinces of the North Slope and Cook Inlet. Ahtna is an Alliance member and Headlamp applauds continued exploration into responsible resource development despite a low price environment.  If passed, HB 247 would negatively impact their exploration plans. 

Congrats from Headlamp! As we’re sure our readers are aware, Dallas Seavey won the Iditarod for the fourth time in five years early this morning—in record time! Check out Dallas’ final push across the finish line here.


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First Reads

Alaska Gov. Walker’s tax bills languish as House, Senate lawmakers push budgets forward
Alaska Dispatch News, Nathaniel Herz, March 14, 2016

Obama to kill off Arctic oil drilling
The Guardian, Suzanne Goldenberg, March 15, 2016

Senate passes budget with more for university and a big ‘unallocated’ cut
Alaska Dispatch News, Suzanna Goldenberg, March 14, 2016

$63 million more in cuts voted by Alaska Senate
Alaska Public Radio News, Andrew Kitchenman, March 14, 2016

BP reveals plans for about 80 more job cuts in Alaska
Fairbanks Daily News Miner, March 15, 2016

Ahtna begins building drilling pad for exploration well
Alaska Dispatch News, Alex DeMarban, March 14, 2016

Empire Editorial: Please, tax us
Juneau Empire, March 15, 2016

Alaska must cut spending by $800 million for sustainable budget and kids’ future
Alaska Dispatch News, Sen. Mike Dunleavy, March 14, 2016


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Morning Headlamp — Budget to move to the Senate & Industry member bows out of future contracts

March 14, 2016 | Posted in : News

On to the Senate. The Alaska House debated the proposed state operating budget into early Friday before passing it about 3 a.m., 24-14. The contention that led to such an early hour was largely driven over a Democratic amendment to revoke money for an appeal to the Alaska Supreme Court regarding the Legislature’s Medicaid expansion lawsuit. The chaos came as the House debated its proposed $3.8 billion operating budget for next year, which would slice about $283 million, or 7 percent, from last year’s spending plans for the state’s 14 departments, the Legislature, the governor’s office, the court and university systems. The House’s proposed cuts to state agencies go $180 million beyond the $100 million in reductions already proposed by Walker — reductions to areas like heating assistance, public radio and state-paid defense lawyers. When it comes to state agencies, House lawmakers are proposing steep cuts to the natural resources and health departments, as well as to the university. But when the cuts to those three areas aren’t included, the reductions to the other dozen state agencies, as well as to the governor’s office, the justice system and the Legislature’s own budget, are 1.6 percent deeper than Walker’s proposal.

With Florida-based Crowley Marine bowing out, there is no longer any competition for tugboat contracts to escort loaded oil tankers out of Prince William Sound, causing alarm among observers who don’t want a repeat of the 1989 Exxon Valdez oil spill. The remaining candidate, is Edison Chouest, the company whose tug, the 360-foot Aiviq, towed Shell’s Kulluk drilling rig. Michelle Egan, director of corporate communications for Alyeska, would not say which companies bid on the contract. But she confirmed that longtime contractor Crowley, as of earlier this month, is no longer part of a bidding process that began in 2014. “This will be a huge burden on DEC,” said Donna Schantz, executive director of the Prince William Sound Regional Citizens’ Advisory Council. “A big concern is, will they have the staffing and people to oversee this change because all state departments are challenged with cutbacks? The Coast Guard will have a role as well, but the state statutes and regulations are really what drive the tug specifications that we’ve enjoyed in the past.” Headlamp is sorry to see decreased competition in any aspect of the Alaskan oil and gas industry. An unfortunate side effect of policies that don’t incentivize private sector investment, is that Alaska could unfortunately see more support industry companies follow Crowley’s path. Both Crowley Marine and Edison Chouest are long-time Alliance members. 

Alaska lawmakers need to hear from you. The Alaska House Resources Committee is offering two opportunities for the public to weigh in on Governor Bill Walker’s Oil Tax Bill HB247. Representative Ben Nageak says if people are still waiting in line to testify on Monday night, the public testimony will continue on Tuesday night as well from 6 PM to 8 PM. HB247 will have huge implications for Alaska’s economic future. The Alliance is on record as opposing this bill. 


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First Reads

House OKs budget in wee hours after ‘endless confusion’ over amendment
Alaska Dispatch News, Nathaniel Herz, March 11, 2016

Longtime provider of oil tanker escorts in Prince William Sound is stepping aside
Alaska Dispatch News, Alex DeMarban, March 11, 2016

Budget Heads to Alaska’s Senate Floor
Alaska Commons, Craig Tutuen, March 13, 2016

An oilman’s $7 billion lesson in the economics of climate change
Alaska Dispatch News, Steven Mufson, March 11, 2016

Public Testimony to be Taken on Governor Bill Walker’s Oil Tax Bill
Your Alaska Link, Marissa silver, March 12, 2016

Oil Collapse Drains Alaska’s Wide-Ranging Education System
New York Times, Kirk Johnson, March 14, 2016

Alaska doesn’t have to solve its entire budget problem at once
Alaska Dispatch News, Paul Jenkins, March 12, 2016


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