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Our Instinct: Conservatives Must Seize Opportunity To Save Alaska's Economy
by
Dave Harbour
 We admire Senator Lisa Murkowski's vigilance on Arctic exploration issues — and the initiative of her committee's Communication Director, Robert Dillon. See TODAY'S COMMUNICATION AND VIDEO HERE. |
Many moons will come before Shell Oil and other producers, under the most agreeable circumstances, can find and commercially produce oil and natural gas from Alaska's Arctic reservoirs in the Chukchi and Beaufort Seas.
Any Arctic discovery and production may not likely come in time to ameliorate diminishing Alaska production that funds 90% of state government and over 1/3 of the state economy.
The impressive but modestly increased production within the onshore National Petroleum Reserve-Alaska (NPR-A) is clouded by the Bureau of Land Management's decision to lock up half of its remaining potential and continuous/agenda driven EPA and Corps of Engineers efforts to deny and/or delay permits.
The federal bureaucracy opposes the 1980 intent of Congress and is acting illegally to manage a Refuge like a Wilderness. The Alaska National Interest Lands Conservation Act (ANILCA) re-categorized the Arctic National Wildlife Range (into a more restrictive "refuge"), but allowed a future Congress to approve oil exploration and production in a small sliver of the coastal plain of ANWR.
We know that even existing, high cost projects can be lost overnight with imposition of new or increased taxes.
Meanwhile, Alaska's North Slope oil production continues its slide downward exacerbating negative impact on Alaska state government revenue during this low oil price era.
This week we observe that (below) the Governor's reaction to an austere budget is not using his bully pulpit to convince democrats to join the republicans in voting to access billions stored in the 'Constitutional Budget Reserve' (CBR) savings account to balance the budget.
Instead, he is joining the democrats, browbeating the republican leadership to agree to increasing democrat-desired government spending as a quid pro quo to democrats agreeing on a super majority CBR vote.
Together, the Governor and democrats are pressing for more spending, not less, in today's austere fiscal environment.
And, they know exactly what they are doing. They are together trying to assemble popular support for increasing oil taxes during next year's legislative session, because 1) that would minimize the need for large spending cuts, and 2) THAT IS WHERE THE MONEY IS.
The problem with increasing the already high Alaska oil tax burden, is that it would discourage if not devastate oil industry investment that could otherwise produce a sustainable amount of future production and financial support for a moderate spending taxing authority.
Our instincts all point to the need for more effective communication.
Conservatives better become better communicators if they hope to explain why their tough approach on the budget is best for Alaska now and for future generations.
They could start by requesting editorial board meetings and giving reporters their personal cell phone numbers.
If they don't quit dodging reporters and don't become superior communicators quickly they will find that the current name calling will escalate. The Governor and democrats will likely initiate a summer program of constituent meetings around the state. They will probably ask folks how they think Alaska will solve its fiscal shortfalls.
Renewed demonization of industry and the legislature's republican leadership can easily be reignited; as could a new voters referendum.
And community organizers can produce crowds for constituent meetings and listening sessions that will demand, "Increase oil taxes"!!!!
Compelling conservative spokesmen need to articulate — soon and often — the wiser, approach to dealing with:
- budget shortfalls
- falling oil production
- bloated, unaffordable state budgets
- Federal government overreaching authority
- The future of Alaska's children.
But making silk purses out of sows ears requires a miracle. Our instinct further advises us that it is unlikely the republicans will successfully make the case for tax stability and fiscal restraint. If they wanted to or had the ability to, they would have been doing so every day and twice on Sunday for the last month.
While there are several very noteworthy exceptions, as a group the republican legislators are uncharismatic, unenergetic, unimaginative, uncompetive and rely on demographic majorities for reelection and support.
While there are many noteworthy exceptions, their democrat opponents are aggressive, young, seek out the media, and have fire in the belly.
As a group, democrats have the further advantage, as we've said, of believing and acting on the precept that, "The end justifies the means".
Political instinct teaches that democrats see a day ahead, when with aggressive and effective communications, they can seduce the entitlement generation into putting them into power throughout Alaska…and, indeed, the country. They've already done so within Anchorage city government.
And, for republicans with memory, that will have been an opportunity mis-handled THIS YEAR and countless opportunities lost for the remnants of future generations.
How we hope our instincts are wrong!
| ADN, by Dermot Cole.
A state plan aimed at speeding the transition to natural gas in Fairbanks reaches a key decision point Tuesday, with the Alaska Industrial Development and Export Authority scheduled to consider a $54 million investment to move the project forward. The AIDEA board, set to meet in Anchorage, is to hear a report recommending the agency buy Pentex Natural Gas Company LLC, the parent company of the Fairbanks Natural Gas utility, for $54 million, with a closing expected by the end of July. The sale price would be reduced by about $15 million through the spinoff of the company’s Point MacKenzie liquefaction plant and other assets to Hillcorp later this year. |
ADN by Dermot Cole. An annual multibillion-dollar debate between oil companies and local municipalities about differences in the taxable value of the trans-Alaska pipeline resumed in Anchorage Monday.
The oil companies argue the 38-year-old pipeline is worth $2.6 billion, while the municipal governments of the North Slope, Valdez and Fairbanks say it is worth about six times that much, in large part because billions of barrels of profitable oil remain to be pumped to Valdez in the decades ahead. The state is arguing for a value three times higher than that favored by the companies.
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News Miner. Gov. Bill Walker on Monday vetoed much of the underfunded operating budget sent to him by the Alaska Legislature and warned state employees that 15,000 of them could be without a job on July 1 if the Legislature can't come up a fully funded budget.
Peninsula Clarion by Phuong Le. (Note our extensive coverage by scrolling down through last week's postings. -dh)
Neither a protest by hundreds of demonstrators nor a permit violation notice from the city will halt Royal Dutch Shell's use of a Seattle seaport terminal as it prepares for exploratory oil drilling in the Arctic Ocean, spokesmen say.
The violation notice issued Monday by the Seattle Department of Planning and Development said use of Terminal 5 by a massive floating drill rig was in violation of the site's permitted use as a cargo terminal. The 400-foot Polar Pioneer and its support tug Aiviq must be removed from the terminal or Shell's host, Foss Maritime, must obtain an appropriate permit, the city indicated.
Today's Note From Robert Dillon (NGP Photo), Communication Director, U.S. Senate Committee on Energy and Natural Resources:
There’s been lots of misinformation out there about what the Bureau of Ocean Energy Management (BOEM) has said about the safety of offshore Arctic development in Alaska. Let the attached fact sheet from BOEM set the record straight – it is not accurate to say there is a 75 percent chance of an oil spill from Shell’s Arctic exploration. Period.
The fact is that Alaska has a long history of safe and responsible oil and natural gas production in the Arctic. Some 35 wells have been drilled in Alaska’s Arctic waters since the 1980s. But you wouldn’t know that by listening to the opponents of oil production who claim Arctic drilling can’t be done safely. Hogwash.
To date, Alaska has produced and shipped more than 17 billion barrels of Arctic oil through the trans-Alaska oil pipeline. We’re already producing oil from federal waters at the Northstar field, which was discovered in 1984 and has produced more than 150 million barrels of oil since 2001.
And our state – with an estimated 46 billion barrels of conventional oil reserves and 430 trillion cubic feet of natural gas reserves – has much more to offer the nation. Studies suggest that increased leasing and development in Alaska’s Beaufort and Chukchi seas and in Cook Inlet could, by 2035, create nearly 840,000 jobs, raise more than $200 billion in revenue for the government and increase U.S. energy production by 3.5 million barrels.
Even President Obama agrees that Alaska production is good for America: “I would rather us – with all the safeguards and standards that we have – be producing our oil and gas, rather than importing it, which is bad for our people, but is also potentially purchased from places that have much lower environmental standards than we do.” – President Obama, May 14, 2015.
Our friend, Julie Hasquet offers this heads up about the upcoming luncheon of the Alaska Oil & Gas Association (AOGA).
"This annual event is the best place to learn all of the latest information, facts & figures about what is happening in Alaska’s oil and gas industry. This year’s opening remarks are from U.S. Sen. Lisa Murkowski, and the keynote speaker is Adam Sierninski, Administrator of the U.S. Energy Information Administration.
The 2015 luncheon is Thursday, May 28 at 11:30 am at the Dena’ina Center in Anchorage. If you haven’t already, please take the opportunity to consider buying a table for you and clients…or individual tickets. You can register at www.aoga.org.
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