What does a “yes” vote mean for state departments working on AKLNG?

December 4, 2015 | Posted in : News

During the special session, the legislature appropriated money in the following manner:

  • $68 455,000 to acquire the interest held by TransCanada in AKLNG
  • $75,600,000 for the state’s share of preliminary front-end engineering and design work for AKLNG
  • $10,100,00 to the Department of Law for law firms to assist the Department of natural Resources draft and review contracts related to AKLNG
  • $1,849,500 to the Department of Natural Resources for a marketing lead position, a marketing analyst position, work related to FERC, facilities review, commercial analysis and audits associated with the termination of Trans Canada.
  • $1,045,500 to the Department of Revenue for work on financial analysis, project financing, governance, the revenue aspects of marketing and taxes, travel, contractual review and other costs related to AKLNG.

These appropriations were made, contingent on adoption of a work program and budget for AKLNG**, for calendar year 2016.

 

**The money to acquire the Trans Canada interest was not contingent on the work plan approval. 

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The Morning Headlamp, 46 days until Juneau: AGDC vote on AKLNG today at 1pm

December 3, 2015 | Posted in : News

A piece of Alaska light up DC’s holiday season. After a long journey, the 74-foot Lutz spruce tree from the Chugach National Forest was finally lit on the steps of the U.S. Capitol building. The ceremony included lawmakers from across the country such as Governor Bill Walker, Senators Dan Sullivan and Lisa Murkowski, and Speaker of the House Paul Ryan. True to form, the event drew a solid crowd of Alaskans, easily identifiable by a shortage of umbrellas in the misty rain, with a temperature in the 50s that more than one person noted is a bit closer to an Alaska summer day.

The day has arrived. The long-awaited AGDC board meeting to vote on progressing with the AKLNG work plan has finally arrived. The board of the state-owned corporation is scheduled to meet this afternoon with an agenda that includes whether to authorize paying the state’s quarter share of next year’s $225 million project budget. If the project continues in 2016, the full budget would be split with ExxonMobil, BP and ConocoPhillips, the three oil company partners of the state in the pipeline. The AGDC meeting will be followed by a Thursday afternoon closed-door session of all four partners in which each will have to approve the project budget.

In a prepared statement Wednesday, Walker’s spokeswoman, Katie Marquette, said negotiations over those guarantees were “still ongoing.” But in an interview Wednesday, Dave Cruz, AGDC’s acting chair, said the budget would be approved in Thursday morning’s board meeting. “We are moving forward with that,” Cruz said. He said he couldn’t, however, confirm whether Walker’s administration had received the written commitments of gas. None of the three oil companies would, either.

Meanwhile, Arctic Slope Regional Corp., which is doing some preliminary environmental work on the pipeline, has been running a radio ad since Monday. It urges listeners to call Walker and his board appointees to ask them to approve the project’s budget “for our economic future.” Asked how confident the corporation was that the budget would be approved, a spokesman, Ty Hardt, responded in an email: “The word is ‘hopeful’…But I’m not sure it’s close to unanimous at this stage.”

Headlamp would like to thank ASRC for their radio campaign encouraging a “yes” vote! 

 

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First Reads

State gas line official says project will continue, despite uncertainty
Alaska Dispatch News, Nathaniel Herz, December 2, 2015

Alaskan Christmas tree lights up the lawn of the U.S. Capitol building
Alaska Dispatch News, Erica Martinson, December 2, 2015

 

Alaska Legislature News

Senate group recommends prudence on tax credits
Alaska Journal of Commerce, Elwood Brehmer, December 2, 2015

 

Alaska Energy News

Senate Democrats renew battle lines over drilling on ANWR coastal plain
Alaska Dispatch News, Erica Martinson, December 2, 2015

Citing new projects, explorers urge preservation of tax credits
Alaska Journal of Commerce, Tim Bradner, December 2, 2015

 

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The Morning Headlamp, 47 days until Juneau: AK Lawmaker prioritizes energy investment and AGDC board meeting only 24 hours away

December 2, 2015 | Posted in : News

More Oil Tax Changes? Alaska Public Radio News, Fairbanks Daily Miner, and Alaska Dispatch News covered a report released by the Senate Oil and Gas Tax Credit Working Group lead by Anchorage Republican Sen. Cathy Giessel. Senator Giessel had a key conclusion: “Without the tax credits…I’m concerned that these smaller companies will pull back.” The report recommends that the state develop a “stronger path to repayment” for Alaskan contractors and vendors if a company receiving tax credits goes out of business. Though the report suggested some minor changes to the tax credits, the bottom line was clear: they have worked to bolster production in the Cook Inlet.  Headlamp suspects this report will not be the end of discussions around oil tax changes…

Amid the state’s projected fiscal deficit, a tax overhaul is expected.  Governor Walker will likely reveal his fiscal plans in the coming weeks.  With 47 days until the Regular Session, the debate around taxes looks likely to heat up.  Stay tuned for a coming piece by Headlamp that looks back at the last time the state raised oil taxes – and how those moves impacted Alaska’s economy.

New rules are needed. Covered by Alaska Dispatch News, Senator Lisa Murkowski argued at a Senate hearing on Tuesday to reiterate her call for Arctic-specific terms that are longer than the standard 10-year duration that applies to federal offshore oil and gas leases. Longer lease terms are justified because of the seasonal nature of Arctic outer continental shelf drilling, Murkowski said. “What many people don’t understand is the very, very, very limited season that we have within the Arctic,” she said at the hearing. In her opening remarks at the hearing. “I believe that a new paradigm is in order, one that recognizes the federal offshore areas in the Arctic are a frontier play worthy of a modern, adaptable leasing structure designed to help rather than to block exploration.”

Walker heads to Washington. Governor Bill Walker heads to Washington.  Gov. Walker will join Senator Coghill to testify before Senator Lisa Murkowski’s Senate Energy Committee on implementation of the Alaska National Interest Lands Conservation Act of 1980, including perspectives on the Act’s impacts in Alaska and suggestions for improvements to the Act. The hearing is scheduled for 10:00 AM in Dirksen Room 336.

 

Help us spread the word. AK Headlamp is growing quickly, but we need your help to spread the word.  Tell your friends, colleagues, family and more to sign up today for the latest in AK energy, politics and industry.  Subscribe now here: http://bit.ly/1OdpLVY

 

First Reads

Report recommends limited changes to oil tax credits
Alaska Public Radio News, Rachel Waldholz, December 1, 2015
Gov. Bill Walker is expected to release his budget in the next few weeks. One thing it will likely include? Cuts to tax credits for oil companies.

Legislative panel recommends closing oil tax loophole
Fairbanks Daily News Miner, Matt Buxton, December 2, 2015
A Senate working group’s report recommends closing a loophole that could allow North Slope oil producers to pay a tax rate below the minimum rate set in 2013.

Murkowski: Tough Arctic conditions, regulations justify more flexible offshore oil leasing
Alaska Dispatch News, Yereth Rosen, December 1, 2015
Decisions by Royal Dutch Shell and by Statoil to pull out of the U.S. Arctic offshore show that the federal government should change its oil and gas leasing program for that remote region, Senator Lisa Murkowski argued at a Senate hearing on Tuesday.

 

Alaska Energy News

State agency fines explorer Linc Energy for well violations
Alaska Dispatch News, Alex DeMarban, December 1, 2015
A stage agency has upheld a $20,000 fine for “multiple violations” associated with wells drilled by Linc Energy Operations in pursuit of a coal gasification prospect on the west side of Cook Inlet.

Interior Energy Project report due Thursday
Fairbanks Daily News Miner, December 1, 2015
The board for the state agency overseeing the public-private partnerships to bring additional natural gas to the Interior will hear an update on the next major step of the Interior Energy Project.

 

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The Morning Headlamp, 48 days until Juneau: Canadian LNG into Juneau…AKLNG’s global potential…And a big week for AK…

December 1, 2015 | Posted in : News

Growing Supply and Demand for LNG. Pieces in LNG Industry and Natural Gas Intel highlighted the continued significance of the AKLNG project to the future of Alaska’s economy. Specifically, Alaska’s LNG export potential is in a perfect position to meet growing energy markets around the world. Strong economic growth in the Asia-Pacific region has stimulated high gas demand for the future. Growing demand, coupled with limited domestic supplies, has led to predictions that Asian countries will be reliant on gas as LNG for decades to come. However, it is worth noting that recent estimates indicate that Canada has discovered an “astronomical” surplus of natural gas. Both demand and supply for LNG is strong and predicted to grow for years to come.  AKLNG could be well positioned to compete globally, but it must work to keep costs low to be successful.

A Big Week for Alaska’s Future. Alaskans need to watch their state this week, there’s too much at stake not to pay attention. From tax credits and AGDC board votes on AKLNG to Governor Walker’s trip to Washington DC, let the Headlamp keep you up to date on what you need to know this week.

Canadian gas, not Alaskan.  The Alaska Dispatch News covered reports that Juneau’s electric utility, Alaska Electric Light and Power’s recent sale to Spokane-based Avista Corp., could have big implications for the city’s energy. Avista wants to use what it’s calling a “virtual pipeline” to ship liquefied natural gas to Juneau, where it would be restored to a gas and piped to homes and businesses through a new distribution system. What Avista is proposing, said spokesperson Jessie Wuerst, is to buy natural gas in Canada, having it converted to LNG, and then moving it to Puget Sound in large, trailer-size vacuum flasks. Though AKLNG is far from completion, this deal serves as a reminder that the Alaskan energy market is competitive and ongoing LNG projects deserve full respect and attention of partners.

Help us spread the word. AK Headlamp is growing quickly, but we need your help to spread the word.  Tell your friends, colleagues, family and more to sign up today for the latest in AK energy, politics and industry.  Subscribe now here: http://bit.ly/1OdpLVY

 

First Reads

Alaska Gov. Walker to attend tree-lighting in DC, testify before Senate committee
Alaska Dispatch News, November 30, 2015

Canada Has More Than Enough Gas For LNG Exports, Report Says
Natural Gas Intel, Gordon Jaremko, November 30, 2015

Juneau may look to Canadian natural gas to lower energy costs
Alaska Dispatch News, Pat Forgey, November 27, 2015

A maturing market
LNG Industry, November 30, 2015

Governor picks well for AGDC: Former mayor Hopkins brings wealth of municipal experience
Fairbanks Daily News Miner, November 30, 2015

 

Alaska Energy News

Encana to scale back drilling in 2016, focus on moving gas
Alaska Highway News, Jonny Wakefield, November 30, 2015

Alaska’s rocks keep drawing explorers searching for oil, gas: Fuel for Thought
The Barrel, Tim Bradner, November 30, 2015

Alaska’s Walker Announces Two Agreements
Bond Buyer, Kyle Glazer, November 30, 2015

Texas company eyeing new oil pool in Alaska’s Cook Inlet
Fuel Fix, November 30, 2015

Feds block oil companies from passing new pipeline taxes to state, independents
Alaska Dispatch News, Alex DeMarban, November 30, 2015

 

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A week to remember?

December 1, 2015 | Posted in : News

Alaskans should be watching this week:

  • Governor Walker says he will submit his budget to the legislature. New revenue sources and budget cuts will give us a window into this administration’s soul-and and an idea of how they plan to deal with budget shortfalls while maintaining a favorable business climate. 
  • Oil and gas tax credits? Will they stay or will they go? 
  • Energy Rates for interior Alaska….under government management. Will AEA and AIDEA deliver what they say the private sector couldn’t?
  • AKLNG – will the state vote “yes” to move the project forward?

With so much at stake, HEADLAMP will cover each of these issues as they occur.  Alaskans may look back on this week and be thankful that the state made the smart choice’s for it’s future or lament lost opportunity. 

Sign up to receive our daily emails – don’t miss the news you need to know. 

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The Morning Headlamp, 49 days until Juneau: AKLNG needs to clean up its act if it wants recognition…AKLNG vote on the horizon…and “Alaska will give no more”

November 30, 2015 | Posted in : News

“Alaska will give no more” The Senate Energy and Natural Resources Committee on Thursday will hold an oversight hearing on the Alaska National Interest Lands Conservation Act, a 1980 law that protected more than 100 million acres of federal lands in the Last Frontier State but that many Alaskans today feel has been flouted by the Obama administration. “Embedded was a promise,” he said. “A lot of Alaskans feel those promises have not been lived up to.” Sen. Lisa Murkowski, who chairs the committee, weighed in on the hearing emphasizing that “The Obama administration is breaking a legal commitment the federal government made to Alaska when it agreed to place over 100 million acres into conservation status. Alaska will give no more.” The hearing is scheduled for Thursday, Dec. 3, at 10 a.m. in 366 Dirksen. Reprinted from E&E Daily with permission from Environment & Energy Publishing, LLC www.eenews.net. 202/628-6500.

Can we get some help too? An Alaska Dispatch News commentary highlighted the fact that a federal agency is already subsidizing competing LNG projects in two foreign countries targeting the same potential buyers. Projects in Australia and Papua New Guinea have received aid from the Export-Import Bank of the United States in a sustained effort to promote American business interests abroad. Sen. Lisa Murkowski noted the potential for Alaska to capitalize on similar aid, remarking on the fact that Alaskan companies “have not taken advantage of the Export-Import bank.” The federal government sent nearly $6 billion – mostly in the form of direct loans – to each of the overseas projects and both projects combined would produce a FRACTION of what AKLNG will generate. While recent Congressional inaction has rendered the application of the loans moot, it highlights the importance of maintaining an appealing environment for investment.

Filling the Fiscal Gap with Silence. In an Alaska Dispatch News op-ed, Randy Hoffbeck and Dr. Scott Goldsmith continued to raise doubts with Gov. Walker’s likely overhaul of Alaska’s fiscal policy, specifically, that “doing nothing — continuing the status quo — will guarantee fiscal and economic disaster for the state.” The pair emphasize the point that cooperation will be crucial going forward. Like Hoffbeck and Goldsmith, Headlamp is paying close attention to how the governor plans to handle Alaska’s financial situation.

Friday is Go/No-Go Day. The December 4th AKLNG approval vote is approaching quickly. Stick with Headlamp to stay up to date on what’s important.

 

Help us spread the word. AK Headlamp is growing quickly, but we need your help to spread the word.  Tell your friends, colleagues, family and more to sign up today for the latest in AK energy, politics and industry.  Sign-up online now here: http://bit.ly/1OdpLVY

 

First Reads

After financing competing LNG projects, could the U.S. also help Alaska’s?
Alaska Dispatch News, Pat Forgey, November 26, 2015

We’ll have to work together to put Alaska’s fiscal house in order
Alaska Dispatch News, Randy Hoffbeck and Scott Goldsmith, November 26, 2015

 

Alaska Energy News

Company on verge of new Cook Inlet oil urges restraint on Alaska tax-credit changes
Alaska Dispatch News, Alex DeMarban, November 29, 2015

Exxon plans for initial gas production at Point Thomson facility
KTUU, Patrick Enslow, November 25, 2015

 

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Big Decisions Facing Alaska in the Coming Days

November 25, 2015 | Posted in : News

There are big changes on Alaska’s horizon.  Do you know what’s coming next?  Can you see them coming?

Governor Walker is required to provide the legislature with a budget by December 15th,he has indicated he would like to have it in their hands before the, perhaps as early as December 1st.  Alaskans will get  their first look at how this Governor plans to address our state’s deficit – Taxes? Budget Cuts? PFD Reductions?

On Thursday, December 3rd, the AGDC board is scheduled to vote on a resolution to support the 2016 work plan and budget for AKLNG.  A yes vote seemed  to be a foregone conclusion after the Governor was given everything he needed in the special session to strengthen Alaska’s position in the negotiations.

The Governor’s shake up of the AGDC board, however, as well as his statement that the state’s yes vote may depend on whether the project partners agree to the state’s terms for withdrawal agreements has left some people wondering if the Governor is serious about keeping the project on track.

Alaska’s legislature will convene again in Juneau on January 19th amid a massive fiscal deficit, continued private sector job losses, and in the wake of news that more major companies have pulled out of working in Alaska.

With economic development and state politics at a crucial point in their relationship, every day in Juneau could have a significant impact on how you live your life even a year from now.

Headlamp wants to help. Every day, Headlamp shines a light on what really matters to Alaskans—politics, the economy, the PFD, and more. With so much on the line, you and your family deserve to know as much as you can about your future.

Alaska’s future is your future. From Anchorage to Juneau, from the North Slop to Nikiski, the ways in which our state explores new opportunities and develops new policies for prosperity matter to each and every Alaskan household. Politics can get pretty complicated, let Headlamp shine a light on what’s important.

 

Subscribe to Morning Headlamp today – and be the first to know.

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The Morning Headlamp, 54 days until Juneau: Gov. Walker’s promises don’t match his actions …AKLNG project at risk…

November 25, 2015 | Posted in : News

“Wrong every step of the way.” In the wake of the latest self-inflicted challenge for the AKLNG project, the Alaska Journal of Commerce published an editorial chronicling Gov. Bill Walker’s failings and hypocrisies dating back to his time on the campaign trail.

I’ll follow the process in place now, you bet I will. But at the first sign of delay, or someone says ‘we’re going to slow this down,’ that’s when the state needs to have a governor who understands what to do.’”—Candidate Bill Walker. This statement was made on the campaign trail but apparently was quickly forgotten. During the summer, Gov. Walker put additional demands on the state’s partners in the AKLNG project. Rather than trust the producers who have significantly more experience and expertise in developing large-scale energy development projects, the governor inexplicably urged a 48-inch pipeline to be studied instead of the more standard 42 inch pipe that had already been chosen based largely on its availability and well-established engineering specifications. That decision alone has added $30 million to the preliminary work.

“What I’ve said is that I will finish the project. I will not start over. I’m not interested in another start-over effort.” —Gov. Walker. In the meantime he’s changed the lead negotiator on commercial agreements three times, and replaced 6 of 7 members of the AGDC board, directed AGDC staff not to work on critical commercial agreements and asked the management committee to go back to the drawing board on pipe size and route. 

Help us spread the word. AK Headlamp is growing quickly, but we need your help to spread the word.  Tell your friends, colleagues, family and more to sign up today for the latest in AK energy, politics and industry.  Sign-up online now here: http://bit.ly/1OdpLVY

 

First Reads

Walker starts over on AK LNG
Alaska Journal of Commerce, Andrew Jensen, November 24, 2015

When it comes to Alaska resources, president can’t see the forest for the tree
Alaska Dispatch News, Sen. Cathy Giessel, November 24, 2015

Alaska Buys TransCanada Stake in LNG Project — Energy Journal
Wall Street Journal, Christopher Harder, November 24, 2015

Alaska Energy News

Despite LNG, 2016 promises to be a grim year for B.C. oilpatch
Alaska Highway News, Johnny Wakefield, November 23, 2015

Oil companies lose pipeline case that could be worth hundreds of millions to Alaska
Alaska Dispatch  News, Alex DeMarban, November 24, 2015

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55 days until Juneau: Walker’s “consolidation” of leadership raises more questions for state gas team while Dec 4 vote approaches

November 24, 2015 | Posted in : News

Drama and Mega Projects-an odd couple. Coverage continues to focus on Walker’s leadership changes in the Alaska Gasline Development Corporation, as emphasized by the Alaska Public Radio News piece that focused on the Governor’s consolidation of the state’s gas team decision-making at AGDC. More and more lawmakers have begun to criticize the Walker administrations behavior, including State Sen. Anna MacKinnon (R-Eagle River) who confessed, “I have no idea who’s leading this project, absolutely not.”

In addition to Sen. MacKinnon, House Speaker Chenault said, “I’m worried the Governor’s recent moves and indecisiveness has jeopardized our relationships with our partners and is bringing a real cloudy outlook as to whether the project will continue after Dec. 4.” The project has always had resounding support from the legislature for obvious reasons, but recent leadership drama and the administration’s  distrust of  standard business practices,  has Alaska’s lawmakers growing increasingly more concerned with the project they once knew.

On December 4th, the state and its industry partners in AKLNG will vote on whether to approve funds for next year’s work on the project.  Until the recent shake-up at AGDC, it was thought that the state’s vote, in favor, was a foregone conclusion.  But at the press conference Saturday, Walker said the state isn’t yet ready to cast that yes vote. First, he says, he wants assurances from the state’s partners that if any company pulls out, it won’t then withhold gas it controls from the project. “By approving the work plan and budget today, there’s no incentive for us to receive those assurances or not,” Walker said. “We do have leverage. Leverage is not a bad thing.”

  Leverage:  increased means of accomplishing some purpose.  Headlamp hopes that the Governor’s purpose is to move the AKLNG project forward, as he promised to do in his campaign, and not to derail Alaska’s best opportunity for a strong economy.  Help us spread the word. AK Headlamp is growing quickly, but we need your help to spread the word.  Tell your friends, colleagues, family and more to sign up today for the latest in AK energy, politics and industry.  Tell them to sign-up online now here: http://bit.ly/1OdpLVY

 

First Reads

Tesoro buys some Flint Hills assets but not polluting North Pole refinery
Alaska Dispatch News, Alex DeMarban, November 23, 2015

With replacements and resignation, Walker consolidates control of gas line project
Alaska Public Radio News, Rachel Waldholz, November 20, 2015

Senate Majority Anticipates ‘Yes’ Vote Natural Gas Pipeline’s Future
Sit News, November 24, 2015

 

Alaska Energy News

Independent power producers praise regulatory decision they say gives broad access to power distribution
Alaska Dispatch News, Suzanna Caldwell, November 23, 2015

Energy Downturn Spreads Beyond the Oil Patch
Wall Street Journal, Chester Dawson, November 23, 2015

 

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Amicus Brief – Sturgeon  vs. Masica – U. S Supreme Court

November 23, 2015 | Posted in : News

Today, in the United States Supreme Court, nine Alaska organizations, representing thousands of Alaska businesses, filed an Amicus Brief in support of petitioner John Sturgeon.

At issue, for all Alaskans’ and the businesses represented by each of these trade organizations,  is  whether Section 103(c) of the Alaska National Interest Lands Conservation Act of 1980 prohibits the National Park Service from exercising regulatory control over State, Native Corporation, and private Alaska land physically located within the boundaries of the National Park System.

As noted in the brief, if the Ninth Circuits decision is upheld, consequences will be far-reaching, paving the way for federal agencies to curtail development on inholdings in all conservation system units in Alaska.

The following organizations are participating in the brief:  the Alaska Miners Association, the Alaska Chamber, the Alaska Conservation Trust, the Alaska Forest Association,  the Alaska Support Industry Alliance, Associated General Contractors of Alaska, the Alaska Oil and Gas Association, the Council of Alaska Producers, and the Resource Development Council for Alaska.

In addition, the following organizations have already provided amicus briefs in support of the petitioner:  Arctic Slope Regional Corporation,  Ahtna Corporation, Aleut Corporation, Bristol Bay Native Corporation, Calista Corporation, Doyon, NANA, Gana Yoo, Tihteet’ Aii, the State of Alaska, the Safari Club and the Pacific Legal Foundation.

 

To read the brief in its entirety, click here

 

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