Miss a day
Miss a lot

Northern Gas Pipelines is your public service 1-stop-shop for Alaska and Canadian Arctic energy commentary, news, history, projects and people. It is informal and rich with new information, updated daily. Here is the most timely and complete Arctic gas pipeline and northern energy archive available anywhere—used by media, academia, government and industry officials throughout the world. Northern Gas Pipelines may be the oldest Alaska blog; we invite readers to suggest others existing before 2001.

 

ConocoPhillips ad, Northern Gas Pipelines, Logo

1-22-15 White House Issues Arctic Executive Order

22 January 2015 2:19am

This afternoon, Alaska's newest US Senator spoke out on yesterday's Presidential Executive Order.

On Thursday — just three weeks into the new year — the U.S. Senate chamber is set to surpass last year’s total of 15 amendment votes, thanks to a flurry of voting centered almost entirely on the Keystone XL pipeline.   Read more....


What happened to Alaska? Saudi....

CBC.  Irving Oil Ltd. is facing more questions about its use of a pipeline that was built on the property designated for the Canaport LNG facility.  Saint John struck a 25-year property tax deal in 2005 that was intended to encourage the development of the Canaport LNG facility.  The deal slashed the property tax bill for the LNG terminal ...  Read more.


Radio Interview

Yesterday, we were interviewed on the Dan Fagan - Glen Biegel (NGP Photo) Radio Program.  On your right is the podcast if you want to watch the action.  (Glen yawns from time to time, gets up to stretch, etc.)  He introduces me and begins his monolog on energy at 2:21:50 (That's two hours, twenty-one minutes and fifty seconds into the program.)  Then the interview Glen Biegel, Alaska, Radio, Air Personality, Dave Harbour Photoactually starts at 2:29:35, with a break at 2:59:10 and the conclusion at 2:41:40.  Biegel is a gifted air personality.  He does his homework, has a prodigious memory and can think and speak circles around a fellow like me.  But I do hope our readers get a little entertainment if not information out of that experience.  And, ya gotta hear the whacky music/sound effects played during the breaks; sounds like little brass instruments singing, "Have to be happy!"   And, you will be, just as I was.  (Link)


White House Executive Order On Arctic: Heaviest Focus On 'Climate Change' And More Executive Overreach'

In our opinion this is another end run around Congress but our Senior Senator, while somewhat critical, seems unaware of true ramifications, the ultimate strategy of an overreaching White House.  This is especially dangerous in view of her powerful position as Chair of a key, Senate jurisdictional committee.  WE URGE YOU TO REVIEW OUR CONCERNS HERE.      -dh

KTUU by Austin Baird.  The White House on Wednesday issued an executive order described as an attempt to coordinate federal Arctic-related activities, and to promote collaboration between other groups including local and state governments, academia and the private sector.

“The Arctic region provides critical ecological, cultural, and economic services to our nation,” Tamara Dickinson and Patricia Falcone wrote for the White House’s Office of Science and Technology Policy. “But we know based on decades of rigorous scientific research that climate change is causing the Alaskan Arctic to warm twice as rapidly as the rest of the United States – and that climate change will continue to transform the Arctic.”

Sen. Lisa Murkowski, R-Alaska, who chairs the Energy and Natural Resources Committee, called the announcement “a good step forward” but criticized the president’s overall approach to Arctic policy.

“Once again, the president remains focused on climate change,” she wrote in a release. ” I agree that climate change is an issue facing our nation and my state, but for President Obama and many of his ideological allies, the plan for the Arctic boils down to two words: Hands Off.”

Lisa Murkowski, Alaska, U.S. Senate, Crude Oil Export Ban, Photo by Dave HarboutAlaska's Senior U.S. Senator, Lisa Murkowski (NGP Photo) has long advocated for relaxation of the ban on exporting domestically produced oil--created during the so called Arab Oil Embargo of the 1970s.  Reader Eric Dompling kindly refers us to an important analysis of the benefits to U.S. consumers of exporting our resources in an article written by Tessa Sandstrom, "America’s Once-in-a-Generation Opportunity Starts With Exports​".  An era of low oil prices is the perfect time to lift the ban, for having access to world markets can assists U.S. producers in being able to compete for sales in a bigger marketplace--and keep supporting jobs, federal taxes, state taxes, local taxes and an abundance of oil and gas for our own citizens.  -dh


Business Insider by Rob Wile.  

You may have noticed we haven't heard much talk about opening the Alaska National Wildlife Refuge recently.

For decades, America debated whether to open up federally protected land that is said to contain lots and lots of oil (though exact estimates are plagued by uncertainty).

What happened? "Saudi" America.


ADN by Alex DeMarban.  ...in Washington, D.C., an aide to Sen. Lisa Murkowski said that as the new chair of the Senate Energy and Natural Resources Committee, Murkowski is strategizing on the best way to convince Congress to open the 1.5-million-acre coastal stretch of the refuge, set aside by Congress in 1980 for hydrocarbon evaluation.


Fuel Fix by Ryan Holeywell. Halliburton officials say they’re bracing for a tough year as falling oil prices are prompting their customers to slash their budgets.  

As oil prices have fallen more than 50 percent from their summer peaks, Halliburton’s customers have cut their budgets by an average of 25 percent to 30 percent, putting pressure on the oil field services company to reduce its rates, company officials said Tuesday.

“The long-term fundamentals of our business are still strong,” Halliburton president Jeff Miller said on....  Read more.


 

 

*     *     *

Commentary (Please at least take a glance at this .pdf we prepared for our readers so that you will know what it is for future reference):

Our concerns about yesterday's Executive Order On the Arctic are here, for the record, and we hope Members of Congress and Alaska's Administration are paying attention as the temperature in the pot containing the complacent frog, increases.

U.S. Senator Dan Sullivan, Arctic Executive Order, Federal Overreach, Dave Harbour PhotoWe can closely associate our own thinking with a statement released this afternoon by Alaska's new U.S. Senator, Dan Sullivan (NGP photo):

“While I am encouraged to see that the federal government is taking steps to coordinate itself in the Arctic arena – I see this as merely a piece of paper,” said Sullivan.  “With regard to the Arctic, the State of Alaska is not just another stakeholder as this executive order indicates, we are the other sovereign.  Indeed, the sovereign that makes the U.S. an Arctic nation.” 

“What is troubling about this executive order is the White House's continual focus on large, abstract concepts such as climate change.  But what is most troubling is that this executive order fails to acknowledge the need to develop our Arctic resources in a responsible manner – which is such a critical issue for Alaska’s future.”

-dh


 

 

 

The White House

Office of the Press Secretary

For Immediate Release
January 21, 2015
 

Executive Order --- Enhancing Coordination of National Efforts in the Arctic

 

EXECUTIVE ORDER

- - - - - - -

ENHANCING COORDINATION OF NATIONAL EFFORTS IN THE ARCTIC

By the authority vested in me as President by the Constitution and the laws of the United States of America, and to prepare the Nation for a changing Arctic and enhance coordination of national efforts in the Arctic, it is hereby ordered as follows:

Section 1Policy. The Arctic has critical long-term strategic, ecological, cultural, and economic value, and it is imperative that we continue to protect our national interests in the region, which include: national defense; sovereign rights and responsibilities; maritime safety; energy and economic benefits; environmental stewardship; promotion of science and research; and preservation of the rights, freedoms, and uses of the sea as reflected in international law.

Over the past 60 years, climate change has caused the Alaskan Arctic to warm twice as rapidly as the rest of the United States, and will continue to transform the Arctic as its consequences grow more severe. Over the past several decades, higher atmospheric temperatures have led to a steady and dramatic reduction in Arctic sea ice, widespread glacier retreat, increasing coastal erosion, more acidic oceans, earlier spring snowmelt, thawing permafrost, drier landscapes, and more extensive insect outbreaks and wildfires, thus changing the accessibility and natural features of this remote region. As a global leader, the United States has the responsibility to strengthen international cooperation to mitigate the greenhouse gas emissions driving climate change, understand more fully and manage more effectively the adverse effects of climate change, protect life and property, develop and manage resources responsibly, enhance the quality of life of Arctic inhabitants, and serve as stewards for valuable and vulnerable ecosystems. In doing so, we must rely on science-based decisionmaking and respect the value and utility of the traditional knowledge of Alaska Native peoples. As the United States assumes the Chairmanship of the Arctic Council, it is more important than ever that we have a coordinated national effort that takes advantage of our combined expertise and efforts in the Arctic region to promote our shared values and priorities.

As the Arctic has changed, the number of Federal working groups created to address the growing strategic importance and accessibility of this critical region has increased. Although these groups have made significant progress and achieved important milestones, managing the broad range of interagency activity in the Arctic requires coordinated planning by the Federal Government, with input by partners and stakeholders, to facilitate Federal, State, local, and Alaska Native tribal government and similar Alaska Native organization, as well as private and nonprofit sector, efforts in the Arctic.

Sec. 2Arctic Executive Steering Committee. (a) Establishment. There is established an Arctic Executive Steering Committee (Steering Committee), which shall provide guidance to executive departments and agencies (agencies) and enhance coordination of Federal Arctic policies across agencies and offices, and, where applicable, with State, local, and Alaska Native tribal governments and similar Alaska Native organizations, academic and research institutions, and the private and nonprofit sectors.

(b) Membership. The Steering Committee shall consist of:

(i) the heads, or their designees, of the Office of Science and Technology Policy, the Council on Environmental Quality, the Domestic Policy Council, and the National Security Council;

(ii) the Executive Officer of the Steering Committee, who shall be designated by the Chair of the Steering Committee (Chair); and

(iii) the Deputy Secretary or equivalent officer from the Departments of State, Defense, Justice, the Interior, Agriculture, Commerce, Labor, Health and Human Services, Transportation, Energy, and Homeland Security; the Office of the Director of National Intelligence; the Environmental Protection Agency; the National Aeronautics and Space Administration; the National Science Foundation; the Arctic Research Commission; and the Office of Management and Budget; the Assistant to the President for Public Engagement and Intergovernmental Affairs, or his or her designee; and other agencies or offices as determined appropriate by the Chair.

(c) Administration.

(i) The Director of the Office of Science and Technology Policy, or his or her designee, shall be the Chair of the Executive Steering Committee. The Assistant to the President for National Security Affairs, or his or her designee, shall be the Vice Chair. Under the leadership of the Chair, the Steering Committee will meet quarterly, or as appropriate, to shape priorities, establish strategic direction, oversee implementation, and ensure coordination of Federal activities in the Arctic.

(ii) The Steering Committee shall coordinate with existing working groups established by Executive Order or statute.

(iii) As appropriate, the Chair of the Steering Committee may establish subcommittees and working groups, consisting of representatives from relevant agencies, to focus on specific key issues and assist in carrying out its responsibilities.

(iv) Agencies shall provide administrative support and additional resources, as appropriate, to support their participation in the Steering Committee to the extent permitted by law and within existing appropriations. Each agency shall bear its own expenses for supporting its participation in the Steering Committee and associated working groups.

(v) Each member of the Steering Committee shall provide the Executive Officer with a single point of contact for coordinating efforts with interagency partners, collaborating with State, local, and Alaska Native tribal governments and similar Alaska Native organizations, and assisting in carrying out the functions and duties assigned by the Steering Committee.

Sec3Responsibilities of the Arctic Executive Steering Committee. The Steering Committee, in coordination with the heads of relevant agencies and under the direction of the Chair, shall:

(a) provide guidance and coordinate efforts to implement the priorities, objectives, activities, and responsibilities identified in National Security Presidential Directive 66/Homeland Security Presidential Directive 25, Arctic Region Policy, the National Strategy for the Arctic Region and its Implementation Plan, and related agency plans;

(b) provide guidance on prioritizing Federal activities, consistent with agency authorities, while the United States is Chair of the Arctic Council, including, where appropriate, recommendations for resources to use in carrying out those activities; and

(c) establish a working group to provide a report to the Steering Committee by May 1, 2015, that:

(i) identifies potential areas of overlap between and within agencies with respect to implementation of Arctic policy and strategic priorities and provides recommendations to increase coordination and reduce any duplication of effort, which may include ways to increase the effectiveness of existing groups; and

(ii) provides recommendations to address any potential gaps in implementation.

Sec4Duties of the Executive Officer. The Executive Officer shall be responsible for facilitating interagency coordination efforts related to implementing the guidance and strategic priorities developed by the Steering Committee. The Executive Officer shall coordinate with the Chair and the Special Advisor on Arctic Science and Policy at the Department of State to provide regular reports to the Steering Committee on agency implementation and planning efforts for the Arctic region.

Sec5Engagement with the State of Alaska, Alaska Native Tribal Governments, as well as other United States Stakeholders. It is in the best interest of the Nation for the Federal Government to maximize transparency and promote collaboration where possible with the State of Alaska, Alaska Native tribal governments and similar Alaska Native organizations, and local, private-sector, and nonprofit-sector stakeholders. To facilitate consultation and partnerships with the State of Alaska and Alaska Native tribal governments and similar Alaska Native organizations, the Steering Committee shall:

(a) develop a process to improve coordination and the sharing of information and knowledge among Federal, State, local, and Alaska Native tribal governments and similar Alaska Native organizations, and private-sector and nonprofit-sector groups on Arctic issues;

(b) establish a process to ensure tribal consultation and collaboration, consistent with my memorandum of November 5, 2009 (Tribal Consultation). This process shall ensure meaningful consultation and collaboration with Alaska Native tribal governments and similar Alaska Native organizations in the development of Federal policies that have Alaska Native implications, as applicable, and provide feedback and recommendations to the Steering Committee;

(c) identify an appropriate Federal entity to be the point of contact for Arctic matters with the State of Alaska and with Alaska Native tribal governments and similar Alaska Native organizations to support collaboration and communication; and

(d) invite members of State, local, and Alaska Native tribal governments and similar Alaska Native organizations, and academic and research institutions to consult on issues or participate in discussions, as appropriate and consistent with applicable law.

Sec6General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department, agency, or the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

BARACK OBAMA


 

Our friend, Robert Dillon, of U.S. Senator Lisa Murkowski's Energy and Natural Resources Committee writes that, "The Senate is poised today to vote on the 15th amendment on the floor just three weeks into the new session. That’s the same number of amendment votes that Sen. Reid allowed in all of 2014. Sen. Lisa Murkowski last night praised the return of regular order in the Senate and the open processing of amendments. As she said on the Senate floor at the close of business last night, “While some may suggest these are hard votes to take, nobody ever said that voting should be easy here in the United States Senate. The issues that come before us are issues that the nation considers and that we as their representatives should take seriously. And so sometimes there are hard votes and we will argue and debate over the wording… and that is appropriate.”  -dh


Senate to shatter 2014’s amendment milestone (Politico)

The Senate held just 15 votes on amendments in 2014. This year, it’s set to surpass that mark after just three weeks.

By Burgess Everett

1/22/15 12:36 PM EST

The Senate is about to reach a milestone: By the end of this week, it will have held more amendment votes than it did in all of 2014.

On Thursday — just three weeks into the new year — the chamber is set to surpass last year’s total of 15 amendment votes, thanks to a flurry of voting centered almost entirely on the Keystone XL pipeline. The only non-Keystone vote so far this year came on an amendment by Sen. Elizabeth Warren (D-Mass.) on changes to the Dodd-Frank financial law.

Thursday’s milestone followed a raucous two-day period of votes in the Senate on multiple proposals regarding climate change, including the adoption of an amendment that says climate change is real — but doesn’t pin the blame on humans.

“Just 15 roll call amendments, that was in all of 2014,” said Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski (R-Alaska). “My hope is that we’re going to exceed last year’s total, hopefully here today.”

Majority Leader Mitch McConnell (R-Ky.) has made opening up the Senate’s amendment process a key mark of his new reign. Thus far, he’s been amenable to allowing votes on Democratic messaging amendments on climate change on the Keystone bill, a measure that’s still headed toward a presidential veto.

“It’s great to see a real debate on the floor of the Senate again,” McConnell said Thursday. “I saw some action in the chamber yesterday, even some unpredictability.”

But Democrats are expressing happiness about the trend too: With seven Republicans up for reelection next year in blue states that President Barack Obama won in 2008 and 2012, Democrats hope to pile up the votes as ammunition on the campaign trail. As one example of potential attack-ad fodder for 2016, aides mentioned Republican votes that torpedoed an amendment aimed at requiring U.S. steel to be used to build the Keystone pipeline.

“We would love nothing better than for Senator McConnell to make his members take as many amendment votes on as many bills as possible, and his caucus members would love nothing less,” said one Democratic aide.

Aside from a bill preventing cuts to the U.S. Postal Service, Democratic leaders have mostly focused on environmental and energy amendments to Keystone. Sen. Chuck Schumer of New York, the Democrats’ top message man, said the focus for now is on relevant amendments but, eventually, they may turn to non-germane amendments.

Asked recently about whether Democrats may offer amendments on proposals like raising the minimum wage and encouraging pay equity between men and women, Schumer responded: “You will see those.”

“There will certainly be times when we do non-relevant amendments, since we believe almost everything can be seen through the prism: We’re helping average Americans,” Schumer said.

Democratic leader Harry Reid of Nevada has taken most of the blame for producing last year’s dearth of amendments by using Senate procedure to protect bills from alteration. But the Senate’s byzantine procedural rules also make things more complicated given that any senator can reject an agreement to vote on amendments.

Last year, red state Democrats up for reelection balked at votes on divisive energy, health-care and social issues that Republicans were pushing in a rash of unrelated amendments to bills. A number of bills also never advanced past initial filibusters into the amendment stage.

Robert Dillon | Communications Director

Senate Energy and Natural Resources Committee

Categories:

1-21-15 US News Commentator Worries Walker Will Create Uncertainty

21 January 2015 5:00am

 

Calgary Herald by Dan Healing.  Oil services company Baker Hughes Inc. will lay off about 7,000 workers — likely including hundreds in Canada — as it prepares for a downturn in orders because of the plunge in crude prices, the company said Tuesday.  The layoffs represent about an 11 per cent cut to the 62,000-plus workers Baker Hughes says it employs worldwide.  Company spokeswoman Melanie Kania said....  Read more.

Is Governor Walker Creating An Uncertain Investment Climate?

US News by John Burnett.  In recent weeks, the state’s newly elected governor, Bill Walker, has said and done things that have put him at odds with energy companies seeking to invest in Alaska, and thus prompted concerns among politicians, business leaders and ordinary Alaskans about his commitment to projects like the one in the North Slope.

Most notably, Walker raised strong objections to a newly enacted tax structure on oil production that was intended to encourage investment in the state. It was an abrupt – and alarming – shift on his part, as he pledged during his campaign last year that he would not undo the tax law that Alaskan voters upheld in a referendum this past summer.

Bill Walker, Point Thomson, Exxon, Governor, LNG, lawsuit, Alaska LNGIf that were not enough, Gov. Walker (NGP Photo)​ contradicted Candidate Walker on another matter that has implications for the Alaska project: a private lawsuit he filed against a deal the state reached with ExxonMobil that paved the way for construction of a natural gas facility at Point Thomson on the North Slope.

As a candidate, Walker pledged to drop that suit if elected. Now that he is governor, Walker has not only refused to drop the suit, but ....

Now is not the time to be creating any kind of uncertainty.  Read more....


Tomorrow, if you are in Anchorage, plan to attend the Alaska Support Industry Alliance breakfast briefing by the Alaska Deputy Commissioner of Revenue Marcia Davis.  That will coincide with the Governor's legislative budget speech to the Legislature.  If you are concerned about Alaska's economy but are looking for specific issues and facts upon which to base questions, you might want to review the last two days of commentary.  -dh

We will continue to add more photos, here, to our archives from the Alaska Support industry Alliance's Meet Alaska 2015 Conference earlier this month.


House Natural Resources Chairman Rob Bishop (UT-01) last night issued the following statement in response to President Obama’s State of the Union Address:

“President Obama tonight spoke about expanding our economy and attaining energy security, but time and again, he has actively blocked the responsible development of our domestic energy resources. He reiterated his commitment to investing in education, yet failed to acknowledge that his administration’s restrictive land use policies are denying local communities the tax revenue that is necessary to make these investments.

“While the President’s rhetoric suggests that he is inclined to change course, his administration’s punitive regulatory agenda speaks with greater authority. Look no further than the 600 new rules and regulatory notices that have been issued by federal agencies since the start of the New Year. In the coming weeks and months, the House Natural Resources Committee will conduct thorough and aggressive oversight to hold the Obama Administration to account for its actions.”

Categories:

1-20-15 Highlights

20 January 2015 6:16am

Today we focus on northern energy highlights so that readers can join us in appreciating the bigger picture and how each of our own special interests is framed within it.  (Send us your comments and go here for yesterday's related commentary.   -dh 

Today, we would add these comments to the observations in yesterday's essay:

  • Scott Goldsmith, state budget model, Dave Harbour PhotoThanks to Dr. Scott Goldsmith (NGP Photo) and the diligent professionals at the institute of Social and Economic Research, we present this simple economic model/game.​  Our readers can change the assumptions to derive their own results and predictions.
  • ADN, by Pat Forgey. Gov. Bill Walker Bill Walker, Budget No Crisis, Dave Harbour Photo(NGP Photo) says Alaska will tap its savings and cut budgets to get through low oil prices, but ... he was unwilling to call the state’s multibillion-dollar deficits a “crisis.”
  • Note the results of a "budget crisis" study concerning states with, arguably, more options than Alaska has: "The State Budget Crisis Task Force outlined a troubling picture of the unsustainable and now perilous fiscal position of many states and their local governments across the country."

1.  We did our best, yesterday, to portray the major components of what we believe to be the most serious leadership challenge in Alaska's history--and made some observations about Canada's energy challenges.  We urge readers to scroll down and carefully review the object lessons that might be gleaned from yesterday's essay.  (We who fail to learn from history are condemned to repeat it.  -apologies to Edmund Burke, et. al.)    -dh

2.  Earlier this month, the Alaska Support Industry Alliance held its annual, Meet Alaska Conference.  While the overall tenor of the conference was positive and optimistic, that determination was, in part, the result of "keeping a stiff upper lip", as we discussed in yesterday's essay.  Below, we will be posting MEET ALASKA event photos.    

*     *     *     

Alaska Journal of Commerce writer Tim Bradner writes: There was an apprehensive mood among oil support contractors and service companies at the Alaska Support Industry Alliance’s annual “Meet Alaska” conference in Anchorage Jan. 9.  Activity is still bustling on the North Slope despite the steady slide of crude oil prices — Alaska crude oil slid to $50 per barrel last week — but contractors worry that the layoff of rigs, crews and budget cuts being seen in the Lower 48 will spread to Alaska.  

*   *   *  

Petroleum News' Alan Bailey reported that, "Likening the challenges in Alaska over oil price volatility to the challenges of driving a snow machine across rough terrain, John Minge John Minge, Alaska Support Industry Alliance, BP America, Dave Harbour Photo(NGP Photo), president of BP America, told the Alaska Support Industry Alliance’s Meet Alaska conference Jan. 9 that it is important to stay the course."​  

*   *   *  

Go to the Alliance webpage here to view several of the MEET ALASKA PowerPoint presentations.


3.  Thursday, if you are in Anchorage, plan to attend the Alaska Support Industry Alliance breakfast briefing by the Alaska Deputy Commissioner of Revenue Marcia Davis.  That will coincide with the Governor's legislative budget speech to the Legislature.  Important days upon us....



ALASKA SUPPORT INDUSTRY ALLIANCE, MEET ALASKA 2015, EVENT PHOTOS


Program Participants:

John Minge, Chairman and President-BP America at Alaska Support Industry Alliance MEET ALASKA 2015 with Alliance President Kevin Durling


 

John Minge, Margy Johnson, Meet Alaska, Alliance

John Minge and Margy Johnson, Meet Alaska 2015

 

 


 

 

 

Marianne Kah, ConocoPhillips, Chief Economist, Alaska Taxes, Dave Harbour PhotographyMarianne Kah, Chief Economist, ConocoPhillips

 


 

 

 

 


Alliance Trade Show Participants:

Eric Dompeling, SolstenXP, Alaska Support Industry Alliance, Meet Alaska 2015, Photo by Dave Harbour

 

Eric DompelingSolstenXP

 
 

Todd Jones, Alaska Glacier Water, Alaska Support Industry Alliance

 

Todd Jones, Alaska Glacier


 

 

 

 

 

Caroline Higgins - Consumer Energy Alliance Alaska, Dave Harbour Photo

Caroline Higgins, Consumer Energy Alliance - Alaska


 

 

 

 

 

 


Alliance and General Support Staff:

Johanna Pohland, Meet Alaska 2015Johanna Pohland


 

 

 

 

 

(More photos coming....)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dave Harbour, The Prince, Romeo & Juliet, Alaska Center for the Performing Arts, 2004

Throughback to 2004: 

Dave Harbour

​as

The Prince - Romeo & Juliet

Anchorage, Alaska

Categories:

1-19-15 Optimism Amid Challenges

19 January 2015 3:16am

Essay: Maintaining Optimism In A Challenging Environment

An essay to assist both Alaska citizens and our thousands of readers abroad in understanding the critical circumstances now confronting the 49th state.

By

Dave Harbour

(Send us your comments, and scroll up for tomorrow's related commentary!)

America invented the term, “Keep a stiff upper lip”, exactly two hundred years ago in a book entitled, "Massachusetts Spy".  The Brits adopted the term and now oil producers throughout the world are repeating it to stay calm in the face of what may be a prolonged period of low oil prices.

Alberta Premier Jim Prentice, Minister, Pipeline, Oil Sands, Pipeline, Photo by Dave HarbourWe will first sympathize with Alberta’s new Premier, one of the best and brightest elected officials in North America.  Jim Prentice (NGP Photo) inherited a southern neighbor whose president is guided more by political debts to environmental extremists than the public interest.  

Prentice also entered office just as oil prices began to plummet, putting his Province in a similar but much less severe fiscal crisis than Alaska faces (See box, lower left).

Alaska's situation is more critical than Alberta's,  because its budget is over 90% dependent on its declining oil production vs. Alberta's 10% dependency on oil sands royalties.  Note in the link above the decisive steps Premier Prentice is considering.  With a much more dire fiscal challenge, will Alaska undertake decisive measures this legislative session, as Alberta seems to be doing, or will Alaska fund deficits with the remaining state savings?


Note to: Elected Officials

Subject: Responsibility

We hope there is not one elected official in Alaska (i.e. Governor, Mayor, Assembly or Council or School Board member) who has had a conversation at home with a significant other, like this:

"Honey, you know the situation is dire.  We have had deficit budgets for some time now.  But with 50% lower oil prices, we'll burn through the savings in a couple years.  And still, we have almost a $10 billion unfunded PERS/TERS liability. (Though if worst comes to worst a bankruptcy court would order the permanent fund to keep our state pensions whole, I think).  Hopefully, we'll see another boom in discoveries or in prices...but if not, we have to make plans.  So I'm thinking we just stay in office through 2017, keep a low profile, then make our move.  Are you O.K. with that?"

Surely no elected official would swear an oath of office and decide to do nothing requiring courage or sacrifice to confront the fiscal shortfalls -- like cut capital projects, operational spending, even matching government programs and even entitlement programs.  

We realize that these challenges are not fun for politicians.  

But we hope we elected statesmen and not politicians, for the latter care too much about pleasing constituencies and guaranteeing reelection.

Statesmen will be willing to be vilified and defeated in order to make decisions that best serve the public interest.

So now, we suggest that all those who wanted to serve and are serving will meet their moments of truth in short order.

Will they take the easy road and keep all beneficiaries of state spending whole -- subsidized by remaining savings, then split...?

Or, will they lay it all on the line for their fellow citizens knowing that their 'thanks' may well be the disdain of thousands of constituents who wanted and did not receive money transfers from government.

We truly do sympathize, Honorable Elected Officials...just as we sympathize and respect military veterans who have served their country and been willing to give it all for the rest of us.  

Thank you, in advance, for your service.

-dh

Exacerbating President Obama’s delay and perhaps an ultimate blockade of TransCanada Corporation's Keystone XL oil pipeline --designed to move stranded oil sands oil in Northern Alberta to America’s gulf coast -- is a second negative development.  Environmental groups and utility interests in Quebec are trying to block the converting of an old gas pipeline into an oil pipeline, through which TransCanada could ship Alberta’s oil to European markets (See our commentary).

Then we have TransCanada’s effort (i.e. along with that of dozens of companies and governments) for a half century to move stranded Arctic gas from Alaska and the McKenzie Delta to Midwestern markets via a number of projects.  We could certainly sympathize with TransCanada shareholders and those paying tariffs on its existing pipelines, for they have been sporting stiff upper lips for a long time.

Surging oil and gas shale technology less than a decade ago, evolved into a true energy revolution.    The extended and expanded reach of shale production on mostly private lands touched almost everyone.  Consumers have experienced lower prices for gas fired electricity, home heating and gasoline.  Manufacturers depending on low cost energy began expanding North American operations.  Investors launched several dozen American and Canadian LNG export projects.   Job growth has been phenomenal.  European energy markets began to envision a day when Russian producers could not control their destinies through price and supply manipulation.  Finally, Asian markets used to paying premium prices for imported LNG began to see a softening of consumer prices.

The Canadian provincial and federal governments were supporting energy development in spite of significant environmental activism.  Oil prices supported the relatively expensive production of Northern Alberta bitumen.

In the US, the last few years saw production on private land cause economic rejuvenation in many pro-energy states, in spite of Federal government support of environment activism aimed at killing projects on both private and public lands.  Ironically, the Administration has gone on to claim credit for the economic improvements, even as it intensifies EPA opposition to energy specifically and job development generally.

As economic cycles would have it, all is not well in the world.  The shale revolution was not just good for consumers; it was GREAT.  So great that with supply increasing oil & gas prices began to retreat along with commodity values.  That, in turn, has brought many shale operational revenues beneath or close to the cost of production.  Combined with Canada’s inability to export necessary volumes of Alberta oil, North America’s two great economies are now facing giant economic challenges.

Federal, provincial, state and local governments throughout the US and Canada are now engaged in cutting or plans to cut government services in response to the diminishing production of energy wealth.

*     *     *

Alaska may be facing the single greatest economic challenge in the free world for many reasons that, together, compose a perfect storm of economic hurdles, including:

  • With its operating government budget over 90% dependent on oil income, along with over a third of its entire economy, Alaska is the most dependent of North America's state or provincial governments on oil revenue— now down by 50% over the last few months.
  • Alaska is the U.S. producing area most dependent on high prices.  High oil prices help compensate for some of the highest oil taxes, the harshest climate, the highest labor costs, its remoteness and distance to the markets and the additional cost liability of having to move its oil via an expensive, underused and ageing 800-mile pipeline to tidewater where it has to be loaded onto seagoing tankers capable of transporting it thousands of miles to markets.  In stark contrast, its biggest competitors produce oil mostly at tidewater, mostly in temperate zones, mostly in lower labor cost areas, with lower logistical costs and cheaper transport to their market areas.
  • Alaska’s nearly 40-year-old Trans Alaska Pipeline System (TAPS), has already moved the lion’s share of Prudhoe Bay oil.  It once transported the greatest share of America's domestic production (i.e. But has now fallen behind North Dakota, Texas and California) at the rate of about 2.1 million barrels per day.  That production rate has since sunk by over 70%.
  • Governor Sara Palin’s (NGP Photo) administration Alaska Governor Sarah Palin, Vice Presidential Candidate, lipstick, oil taxes, progressive production tax, IOGCC, Photo by Dave Harboursucceeded, nearly a decade ago, in attaching high, progressive production taxes on Alaskan oil in spite of what was then a pattern of annual 5-7% declines in TAPS throughput.   That economically suicidal action dried up new investment even though producers needed to hire more people and initiate more projects just to maintain the decades-old production and transportation facilities.  Two years ago, the Legislature saw the error of Alaska’s shortsighted ways and passed SB 21, modifying the production tax.  Talk quickly spread around the industry that new investment and exploration was now possible and being planned – hundreds of millions of dollars’ worth.  Unfortunately, opponents of SB 21 and environmental groups undertook a voters initiative to repeal SB 21, inserting dark clouds of caution over the investment climate.  After spending millions of dollars to combat the initiative Alaskan citizens and businesses defeated it last August.  Still, investors are left with the nagging knowledge that in Alaska, “A Deal May Not Be A Deal”, since a few guys and gals with a volunteer lawyer and dozens of activist organization volunteers could initiate a new voters initiative at any time.
  • "If"

    If Alaskan citizens and their leaders summon the faith, humility, wisdom, cooperation, sacrifice, initiative and diligence required by GREAT ACCOMPLISHMENT, the future can still be bright for this generation and those to follow.  

    This is where optimism is to be found.

    -dh

    One must add to this mix the fact that Alaska’s huge resource potential has been slowed or stopped at almost every turn by a hostile and overreaching federal administration whose cheerleaders are activist environmental groups that in the last 3 decades have implanted some three dozen anti-development campaign offices around Alaska.

  • Alaska’s North Slope gas remains stranded.  Several projects over the years – all involving TransCanada – have endeavored to free that energy wealth since the early 1970s.  All of the projects have failed after having met the wrong end of unforeseen economic or technological forces.  When natural gas prices exploded at the turn of the century, producers again began eyeing the economic feasibility of “monetizing Alaska North Slope gas”.   After spending a hundred million dollars to update studies, they affirmed one of the critical requirements for investment to be, “fiscal certainty”.  This meant that investors couldn’t justify building the largest construction project in history with the chance a “sovereign” state government could enact massive new taxes after a multi-billion dollar, high pressure gas pipe was buried into the frozen tundra.  Then, just as feasibility was looking promising, came the Palin Progressive Production tax.  Today, following the passage of SB 21, producers and the State of Alaska have dramatically changed the gas project.  Because of shale, the gas is not needed in the Midwest.  So now, with falling revenue and fading economic hopes, the state, producers and TransCanada are endeavoring to prove out the feasibility of an Alaska LNG export project …targeting Asia…just as gas prices are falling and over a dozen LNG projects (i.e. see map) throughout the US and Canada are mostly vying for the same markets.
  • Map, Alaska overshadows Lower 48Alaska defends its high cost of government because of its enormous size (i.e. 20% the size of the entire US), its low population (i.e. less than a million), and logistical costs.  But excuses don’t matter in a world of competition and excuses cannot erase the facts:
    • Alaska spends more per capita than any other state.
    • Alaska’s debt is larger per capita than that of any other state or the federal government.
    • Its per capita education costs are the highest.
    • Alaska government and citizens fund the most non-profit organizations per capita.
  • Alaska’s anti-business legislators and activist groups normally seek higher taxes to meet the challenges rather than restrain government spending.  The republicans locally, as nationally, are generally in support of a sustainable economy.  But just as all democrats are not socialists, all republicans are not prudent guardians of other people’s money and often let spending/entitlement increases slide through in exchange for capital projects, constituent tax breaks, etc.
  • Alaska’s legislative session is now beginning and the previous governor’s budget under consideration is now several billion dollars short.  This requires a possible tapping into about $3 billion of nearly $10 billion in savings.   Any second grader knows that’s not sustainable for long.  But to make matters more interesting, rating agencies are noting that Alaska also has an unfunded liability to its retirement program of almost $10 billion.  The obvious way to fund that deficiency is to tap Alaska’s $50 billion permanent fund.  The permanent fund was created two decades after statehood to fund ‘rainy day’ budgets but has been traditionally used to pay citizens an annual allotment, last year approaching $2,000 for each man, woman and child.  It has become sacred income to voters.

Alaska Governor Bill Walker, oil taxes. sb 21, budget crisis, Photo by Dave HarbourLast November Alaskans elected a new governor whose primary constituencies were rural Alaskans, democrats, and labor.  So far, Governor Bill Walker (NGP Photo) has ordered a slowing of spending on capital projects but has not, at this writing, undertaken serious cuts to state government operations or entitlement programs.  We'll hear more this week as he delivers separate state of the state and budget speeches.

Some hope, through stiff upper lips and gritted teeth that another boom of some sort will appear just in time to facilitate continued high state spending.

Others believe that Alaska’s unparalleled rise in oil riches has come to an end and that serious, adult decisions must quickly be made.

Still others believe that Alaska’s 1959 Statehood Compact has been mortally wounded; they believe that federal regulation has so exacerbated the scenarios described above that only the most brilliant, persuasive, intelligent, savvy and charismatic leadership can now save the “Last Frontier” from federal hostility and its own tax and spend decisions.

So join us now in observing the tensions that will surely appear over the next four months of Alaska’s legislative session as, together, we witness leadership rising to the occasion, or not.

Meanwhile, keep a stiff upper lip!

_______________________________________________

Dave Harbour is Publisher of Northern Gas Pipelines.  A former Chairman of the Regulatory Commission of Alaska, he also served as Chairman of the Gas Committee, Western Conference of Regulatory Utility Commissioners.  Harbour is former Chairman of the Anchorage Chamber of Commerce and the Alaska Council on Economic Education.  He has served in executive positions with three producing/pipeline companies and as a board member and officer of a number of non-profit corporations.  His articles have appeared in hundreds of magazines, newspapers and on-line publications.  He has delivered hundreds of speeches throughout North America and chaired oil and gas programs and conferences from Houston to Calgary, Edmonton, Anchorage and Inuvik.  Contact the author.

Categories:

1-18-15 Advance Posting

17 January 2015 6:04am

Calgary Herald by Dan Healing.  A Calgary intermediate producer is vowing to leave its oil and gas from new northwest Alberta wells in the ground until commodity prices recover to profitable levels.

1-17-15

17 January 2015 6:01am

Wall Street Journal Opinion: Lifting the Oil Export Ban (i.e. as Alaska Senator Lisa Murkowski has long advocated) will improve US US Supply and Lower US Prices.  

Syndicate content