Juneau Empire by James Brooks. The state’s budget crisis...
Here is our position on what adults owe the coming generations.
We mention it here, because all policies of oil producing U.S. States and Canadian Provinces revolve around energy production and consumption.
...and, because we detest intergenerational enequity! -dh
... isn’t a laughing matter, but a new group is trying to inject a little humor into the issue. For Our Alaska, which launched a Kickstarter fundraiser Monday, the goal is to reach younger Alaskans who might not initially care about arcane financial matters in Juneau.
The group is hoping to raise $10,000 to produce videos and a “Budget Balancing Game” to be distributed across the state. The project can be seen online at https://www.kickstarter.com/projects/ouralaska/funding-alaska
Juneau Empire by Elizabeth Earl. With the annual lease sale approaching and the Alaska LNG Project proposed to enter Cook Inlet, some groups are asking what oil and gas development may do to beluga whale habitat in the inlet.
|Today, our Washington / Alaska friend, Joe Balash (NGP Photo) posted this very current Supreme Court report on his personal FB page, for which we are grateful: "Joe Balash. I didn't make it in until half way through the arguments .... the feedback I received, though, was that Matt Findley did a great job. Nearly the entire time was spent on the word "solely". When the NPS lawyer stepped up, it was pretty brutal. I think it is pretty clear that the court will strike the 9th Circuit's reasoning but it is unclear whether they will recognize any of the other arguments offered."|
The U.S. Supreme Court is hearing a case Wednesday questioning whether the federal government has authority over navigable waters in Alaska's national parks -- a case brought by a moose hunter barred from using his hovercraft by the National Park Service.
The case is largely specific to Alaska, where the moose hunter in question -- John Sturgeon (NGP Photo) -- argues that a provision the 1980 Alaska National Interest Lands Conservation Act gives authority to the state to set the rules for waters in national parks.
Sturgeon used his hovercraft on annual moose hunts in the Yukon-Charley Rivers National Preserve for more than 15 years before he was stopped by three National Park Service employees in 2007 and told ....
At one time (circa. 2001), we wrote this about Tussing:
Educator, author, lecturer & consultant: Arlon R. Tussing, PhD. is an economic and policy analyst in the fields of energy, public utilities, the environment, natural resources, national and regional economic development, and corporate and government finance. You will see from his extensive bibliography that he is a prolific economic advisor, whose counsel--it may be easily presumed--has significantly affected history. Click here for the bibliography, which we asked him to prepare for our original Northern Gas Pipelines website. Send Northern Gas Pipelines a request here, for his resume and several important papers on northern gas pipeline issues.
John Sturgeon (NGP Photo), Alaska patriot, seeks justice from the Supreme Court of the United States.
Of course, the price of oil and gas directly affects our energy constituencies in Alaska and Western Canada. Here, our anonymous mid Atlantic energy consultant comments on yesterday's WSJ story
Anchorage Daily Planet/News Miner, by Max Buxton.
Today is the first of what is expected to be at the very least 90 days of legislative action focused almost singularly on improving Alaska’s financial situation.
It can be near-impossible to stay up-to-date on the many twists and turns of the Legislature — even in a normal session — but with taxes, fundamental changes to the Permanent Fund and cuts to state operations, it’ll be more important than ever.
With the Senate set to gavel in at 11 a.m. and the House set to gavel in at 1 p.m., here’s a guide to keeping up with Juneau.
Straight from the source
Short of booking a constituent ticket to Juneau to see it in person, one of the best ways to keep up with the session is to watch Gavel Alaska’s exhaustive video coverage of the session. (Full story here....)
Here is commentary, by our anonymous, Mid Atlantic energy consultant friend on this WSJ article by Mark Mills: After the Carnage, Shale Will Rise Again
BIO: Mark P. Mills is CEO of the Digital Power Group, an energy-tech consultancy and capital advisory. He is a Senior Fellow at the Manhattan Institute, and a Faculty Fellow at the McCormick School of Engineering and Applied Science at Northwestern University. He is as well a member of the Advisory Board of the Notre Dame Reilly Center for Science, Technology and Values. He was formerly the co-founder and chief tech strategist for Digital Power Capital, a boutique venture fund, where co-founded and served as Chairman and CTO of ICx Technologies helping take it public in a 2007 IPO (later purchased by FLIR), and in addition served on numerous Boards, including as Chairman (and an interim CEO) of a lithium battery start-up.
He writes the Energy Intelligence column for Forbes and is co-author of the book, “The Bottomless Well: The Twilight of Fuel, the Virtue of Waste, and Why We Will Never Run Out of Energy”
Note that the last book, ”The Bottomless Well” includes the notion “Why We Will Never Run Out of Energy” as its title. It is a maddening book, because one can read without ever knowing the logic that Mills was following. That is because the assumptions were included in the Foreword to the book (whoever reads the Foreword?).
In any event, Mills is very much an outside-the-box thinker, and usually very good at it. Few people will agree with everything he writes. However, he will make the reader think, and many people can be persuaded to agree with much of his analysis.
So it is with this piece. He is on a roll, in our mind, with his thoughts until the last two paragraphs. He gives a positive message for the domestic oil production business. We will leave it to you to read his suggestion, and decide whether Washington is really ready to take a courageous, forward-thinking, long-term approach to Energy Policy for the first time in history. And we wonder why we really need the government to get involved, in any event.
Probably the best thought we took from the article is the realization that as the shale properties strive to reduce the cost of crude oil production (well under way, to use a slight pun), the OPEC countries will slide toward the other end of the scale of marginal cost. This is not because the direct costs for the are so high, but because their economies are resolutely dependent upon a price in excess of $80/barrel to function as intended. It is this change of position that will set OPEC on its path to either changing their economies or cutting production significantly.
Bottom Line: We concur with the notion that crude oil will likely find its new “balancing point” in the $38-$48 range. The next struggle to watch is how OPEC adapts to this price range. BTW, much of the recent discussion has involved Iranian oil being released on to the market. The Iranians suffer as much as any OPEC country at this new level. Their oil fields are old, they need lots of work, and they have higher than average decline rates for Middle East fields. In addition, Iran has to import a significant amount of its refined products.
Alaska Headlamp comments on the Juneau Empire survey (column left), then goes on to tackle related subjects, like how to control government spending.
For further reference, we draw reader attention to our earlier commentary dealing with how the parents of this generation should be treating their children, of the next generation. (We think this will be welcome reading for young people determined to have a voice in decisions that will affect them--represented by groups such as, Our Alaska.)
ALASKA'S FISCAL CRISIS
The Juneau Empire asked legislators for their views on this year's legislative session.
Here's what they said:
Everyone wants to know what the second session of the 29th Alaska Legislature will bring, but no one knows the answer. Well, no one outside the 60 members of the Legislature, that is. To get the best insight into what this session will bring, the Empire e-mailed a simple three-question survey to all 60 legislators on a Monday during the interim. Fifteen lawmakers — 25 percent of the Legislature — responded by our deadline. Their full answers are reprinted below.
Sen. Cathy Giessel...
Q: How should the state fix its budget problems?
A: First step — stop looking for magic bullets. We can’t tax people and business or cut services enough to bridge the gap. We have to remind ourselves .... (Read the balance of the Empire article here.)
ADN by Erica Martinson. Admiral Paul Zukunft, the commandant of the Coast Guard, announced Wednesday that the military was beginning discussions with ship architects and builders to advance early stages of acquiring a new icebreaker to supplement the nation’s dwindling fleet. The Coast Guard also released a draft wish list of sorts, detailing its hopes for.... (More)
Petroleum News by Kristen Nelson. The Alaska Support Industry Alliance’s “Meet Alaska” conference heard a ConocoPhillips perspective on the Alaska LNG Project Jan. 8 from Al Hirshberg, the company’s executive vice president for technology and projects.
Hirshberg listed mega project critical success factors and said they fell into three buckets: alignment among all the players; a strong effort to identify project risks and putting together a plan to manage risk; and economics - driving down the cost of supply enough that the project can be successful in the marketplace.
Challenges for the Alaska LNG Project, prior to final investment decision, include commercial agreements between all co-venturers, including the state; certainty around fiscal terms; FERC/state permitting issues; and global LNG project competition, he said.
With smaller projects commercial agreements could be pushed out in time, Hirshberg said, but with a project the size of AKLNG those agreements need to be locked down in the pre-front-end engineering and design phase.
Commentary: Does anyone still doubt that Alaska -- and its BC competitor friends -- face daunting worldwide, LNG competition?
LNG demand will be filled by the projects and their government supporters presenting the best economics to potential customers.
Governments desiring world-class LNG projects might also be well advised to treat their petroleum industry investors with good will and fair dealing.
Hostility and unstable fiscal regimes do not stimulate investment interest in a highly competitive world, if they ever did. -dh
Hirshberg also reviewed the global LNG market. The total world demand in 2014 was 200 million tons per year, he said, with the demand through about 2025 projected at another 200 million tons per annum.
Of that 200 million, about 140 million is already spoken for, he said, leaving about 60 million tons, of which Alaska is about 20 million tons.
Chasing that are announced discoveries of some 780 million tons per annum, of which about 210 million tons are in projects spending serious money on engineering, some three to four times the estimated need.
Calgary Herald by James Wood. Finance Minister Bill Morneau came to Calgary on Friday with pledges of help for Alberta, but few specific commitments on how the federal Liberal government will assist the province hit hardest by plunging oil prices.
ADN OpEd by Jim Crawford. The spending elite have determined that you need to be educated about the size of Alaska’s budget. If you think government is too big, too intrusive or ineffective, well, you need to be re-educated.
They say we cannot cut state funding. That we don’t spend enough on education, our homeless, on those less privileged or on environmental protection to save our land and forests. We’re offered special tools to “understand” our budget. Those tools don’t have an option of reducing state spending, but instead force us to pick between the elites’ alternatives for raising taxes.
Lost in the whole discussion is how much Alaska’s government has grown beyond the needs of our population, and how recklessly it has squandered our common wealth.
According to ProsperityAlaska.org, “Alaska state budgets have exploded. From fiscal (year) 2005 to 2012, general fund operating and capital expenditures (not including savings and Permanent Fund dividends) have grown from $5 billion to $8.5 billion -- an increase of 71 percent.” State government is simply out of control, doubling in size over the last decade. In the private sector, we must cut budgets to match available funds. Legislators should adopt this wisdom and emulate the policy.
I agree with those who demand (more here....)
|Commentary by Dave Harbour on the eternal struggle between wealth producers and wealth takers.|
Canada struggles with the need for oil revenue countered by the political pressure to subjugate everything, and everyone, to the concept of global warming (excuse us.... "climate change"). See the articles below.
Alaska struggles are also between those supporting jobs, good faith and fair dealing with antagonists like a state senator who believes that in a low crude oil price environment gasoline prices should be lower in Alaska than they are. (See today's robust, Alaska Headlamp editorial for commentary on this and much more....)
We wonder if some of our elected officials fully understand oil marketing economics. We certainly don't and are, therefore, slow to express opinions about oil and gas marketing economics.
We do know, however, that Alaska refiners compete with Lower 48 refiners who must add the cost of transportation north to Lower 48 prices. Counter-intuitively, that tends to set the general price ranges in Alaska. If Alaska refiners were to increase their prices too much above that range, outside refiners would sell even more product in the state than they now do.
(The free market works, if we'll let it; and, when we occasionally find a bad actor, there will be evidence and a trial and punishment.)
We also know that costs to operate in Alaska are higher than most Lower 48 refining areas. And we must not neglect the reality of a 3/4 empty Trans Alaska Pipeline System. The shippers transporting via the remaining 1/4 capacity of TAPS also have to pay the cost of the 3/4 spare capacity.
In recent years, populist legislators have called for audits of gasoline prices, proving that local Alaska fuel prices are not unreasonable.
It would be nice for a change if public officials would do a little homework, visit refineries, talk with economists and use a little judgment before "calling for an investigation".
This is typical behavior, however, of some. That hostility toward anyone connected with the state's largest benefactor-investors does nothing to encourage more investment in oil, or gas, pipelines, or LNG export projects.
In fact, hostility by elected leaders injects more uncertainty into Alaska as an investment destination.
Let's think twice before making the statement ring truer and truer, that "Alaska is sometimes its own worst enemy." -dh
Yeaaaa for the Calgary Herald Editorial Board! dh
It would be tempting to crack a smile at Environment Minister Shannon Phillips’ speech to a Calgary oil and gas summit if the remarks weren’t so sad.
The NDP minister told the crowd that the government’s controversial climate change plan is essential, but — wait — she hopes it won’t be permanent. People have heard this sort of thing before. One can only imagine the naivete of Canadians who were assured that the imposition of income tax in 1917, to fund the First World War effort, was also only a temporary measure.
Phillips underestimates the intelligence of Albertans if she thinks (more....)
CBC. Natural Resources Minister Jim Carr of Manitoba acknowledges there's considerable urgency to building new Canadian pipeline capacity to tidewater, even as new roadblocks continue to appear.
A B.C. Supreme Court ruling this week and discouraging signals from B.C.'s provincial government have further undermined the prospects of two proposed oil pipelines to the Pacific coast, just as Carr is taking part in intense briefings on his new portfolio in Justin Trudeau's Liberal government.
Carr's mandate includes expanding Canada's market access for oil and gas — a highly polarizing public policy debate — and his challenge comes amid a global oil glut that is cratering international prices and killing investment in Alberta's oilpatch.
The natural resources minister is also charged with re-tooling the National Energy Board (more....)