The Morning Headlamp — Lawmakers return to Juneau

A Moose Hunter and His Hovercraft. First ANILCA Case Reaches U.S. Supreme Court. John Sturgeon made the news this fall after he challenged officers’ assertion that the federal ban on hovercraft — the service says they are noisy and allow park visitors to go into areas where they don’t necessarily need to be — applied in the Alaskan preserve. Their challenge lies in the unique and complicated statutes that govern the federal government’s relationship with Alaska. As part of a 1971 settlement with Alaska’s Native peoples, the government guaranteed land to regional Native corporations and hundreds of Native village corporations. It also set aside more than 105 million acres as a protected federal reserve and in 1980 established rules for its use in the Alaska National Interest Lands Conservation Act (ANILCA). The courts disagreed. For one thing, the law includes “waters” in its definition of public lands, the appeals court said, so it doesn’t really matter which government owns the riverbed. At any rate, the court said, the correct reading of ANILCA is that land not owned by the federal government is exempt only from park regulations that apply “solely” to Alaska parks. Headlamp is thrilled to see the U.S. Supreme Court taking up Jon Sturgeon’s case against the U.S. Park Service. This case represents another example of egregious federal overreach and abuse of the law by federal officials against ordinary Alaskans. The implications of Mr. Sturgeon’s case go far beyond restoring Jon’s right to use a small hovercraft on one of Alaska’s many navigable waterways.  The outcome of this case will have serious implications regarding Alaskans ability to use and access state, private, and public lands within federal areas, engage in traditional hunting and fishing practices, and develop our natural resources responsibly. The appeals-court ruling against Sturgeon has already been cited in proposed new oil and gas regulations released in October. Headlamp agrees with Sen. Sullivan that “The [9th Circuit] decision gave the government more than it even asked for.” Like Sen. Sullivan, Headlamp hopes that through this case “[Sturgeon] is going to vindicate the rights of all Alaskans,” and fully secure the promises made by the federal government to our state in ANILCA.

Many of Sturgeon’s supporters, including Headlamp, argue that the appeals-court decision gave the National Park Service more than it asked for, ruling that the federal government has authority over not just waters, but also state and private land enclaves within national park boundaries in Alaska. As usual the 9th Circuit Court made a poor decision that harms Alaskans and erodes our sovereignty. Headlamp encourages readers to check out this great blog post by the Pacific Legal Foundation, which further explains the case in simple detail.

A fundamental change. Gov. Bill Walker says the state must change how it does business: he argues it’s time for Alaska to tap its enormous savings accounts. The governor’s plan would fundamentally reshape the state’s relationship with oil. In an interview with Alaska Public Radio News, Walker’s plan would, “dump most of the state’s oil and gas revenue into the Permanent Fund. (It would also pull about $3 billion from the Constitutional Budget Reserve, the state’s rainy day fund.) Oil prices could go up, they could go down, but the Fund would serve as a cushion — and act as an endowment, generating a steady stream of income for the state.” The governor’s plan would also raise about half a billion dollars from the oil industry. At this time Headlamp has no position on Gov. Walker’s comprehensive plan to fundamentally restructure the use of state oil and gas revenue. However, Headlamp is concerned with negative economic impacts that would result, should the legislature approve the governor’s proposals to raise taxes on individual Alaskans and productive industries. Taking $400 million from the private sector through taxes, while only cutting state government by $100 million (over two years) seems unfair and not balanced. All Alaskans want to solve the budget deficit so that we have a healthy economy for decades to come. Headlamp believes though that most Alaskans simply want their leaders to reform, reduce, and find greater efficiencies in state government before taxes are raised, or new taxes are imposed.

All eyes on the budget. As Gov. Bill Walker and the Alaska legislation arrives in in Juneau preparing for today’s start to the legislative session, the big challenge will be finding common ground over how to fix the state’s large and growing budget deficit. According to an Alaska Public Radio News interview, Gov. Walker believes “Being a nonpartisan governor is going to be an advantage to me because it’s not like [I’m] picking sides based on my party affiliation…trying to draw people over to my side of the line so to speak. I don’t have any lines…and I don’t have a party. So I think in some respects it will be easier, for me, in this session to deal with some of these issues. Because really they’re not partisan issues.” Headlamp recognizes that all Alaskans; Democrat, Republican, Independent or Non-Partisan want our state to overcome these difficult economic times. No one wants to see a repeat of the 1980s happen. That said, it is imperative for Alaskans to understand that the vast majority of state spending is on departments and agencies within the executive branch. Decisions to change how we fund state government may not be partisan per se, but they will be contentious. Further, additional cuts or implementing new ways to streamline state government will also be hotly contested. Headlamp knows that tremendous turf wars are likely to occur throughout the 90-day session. Headlamp hopes to see a greater level of cooperation between all members of the legislature, Governor Walker, and the public. It’s going to take an all hands on deck approach to solve these difficult issues pressing our state.

Oil Price Collapse Sees More Investment Strains for Industry; Will Alaska Make the Cut? Bloomberg highlighted the concerning trend that oil companies delayed making decisions on 68 major projects world-wide last year, accounting for some 27 billion barrels of oil and equivalent natural-gas volumes and bringing total 2015 deferred spending to $380 billion industry-wide, energy consultancy Wood Mackenzie said in a recent report. The developments account for about 27 billion barrels of oil equivalent and about 2.9 million barrels a day of production is being deferred to early next decade, according to the Jan. 12 report. Deepwater projects will be hit the hardest and account for more than half of new project deferrals, it said. Even before oil prices began falling from $100-per-barrel-plus heights in 2014, big oil companies like Royal Dutch Shell PLC were facing pressure to cut development costs that had soared when petroleum prices were high. Once it became clear last year that prices wouldn’t recover quickly, the companies began canceling planned developments like Shell’s Carmon Creek project in Canada’s oil sands. In October Shell said it would take a $2 billion write down to abandon the planned 80,000-barrel-per-day project. Headlamp again would like to stress that Alaska should be lucky that AKLNG is still on track and hasn’t snowballed like the $380 billion in deferred investments on other global industry projects. Alaska must work to keep costs down in order to make AKLNG competitive on a global scale in supply LNG, and for attracting the massive capital needed to move the megaproject forward. Headlamp has already addressed this industry trend and we’re hope more coverage helps lawmakers put into perspective the gravity of the megaproject. Finally, with oil sliding to below $28 yesterday, the ongoing cuts and scaling back by the industry that have dominated headlines so far in 2016 don’t appear to be slowing down any time soon. For a robust Alaska future, Headlamp hopes to see AKLNG continue progressing throughout 2016 without any politically caused delays.


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First Reads

Oil Slump Seen Delaying $380 Billion Worth of Developments
Bloomberg, Stephen Stapczynski, January 14, 2016

Gov’s plan aims to reshape state’s relationship with oil
Alaska Public Radio News, Rachel Waldholz, January 18, 2016

Gov hopes nonpartisan politics will help cross party lines
Alaska Public Radio News, Lori Townsend, January 18, 2016

A moose-hunter and his hovercraft tell the Supreme Court Alaska is different
Washington Post, Robert Barnes, January 18, 2016