Bob McLeod, Premier, NWT, McKenzie Valley Pipeline, oil export, Dave Harbour PhotoIn conspicuous contrast to President Obama and environmental extremists on both sides of the border, Northwest Territories Premier Bob Mcleod (NGP Photo) joins Alberta Premier Jim Prentice, as a longtime proponent of prudently constructed and managed pipelines.  

In fact, McLeod sees pipelines for oil and gas as being one way of increasing the wealth and stature of his people as well as the NWT's economic independence from Ottawa.  See story below.  -dh

Toronto Sun by , The Northwest Territories announced Thursday it will begin a feasibility study that could be the first step towards construction of an oil pipeline along the Mackenzie Valley to the Arctic Ocean.

The study will be done with the backing and co-operation of regional aboriginal governments, according to N.W.T Premier Bob McLeod in a speech, the text of which was provided to reporters ahead of the announcement.

"Our resources have been stranded for too long.

After reading the commentary below, be sure to review our 3 part series on the Interior Energy Project (IEP)

Alaska Governor Bill Walker, budget crisis, ten milllion per day deficit, Photo by Dave HarbourBelow: See our Friday Commentary regarding Dave Stieren's KFQD interview with Governor Bill Walker ​(NGP Photo) and today's Fairbanks News Miner story on the current, confused status of converting Fairbanks from fuel oil home heating to natural gas.   More here….  -dh

Globe and Mail by BILL CURRY AND SHAWN MCCARTHY.   New Brunswick Premier Brian Gallant is aiming to ease provincial concerns over the proposed Energy East pipeline during his first premiers’ summit at a time when other provinces are pushing for agreement around a national energy plan focused on climate change.  Even with the price of oil’s dramatic plunge, Mr. Gallant said there is still a strong business case for the pipeline that would deliver western crude to New Brunswick refineries and ports for shipping abroad.  

TransCanada Commentary


Dave Harbour

Both TransCanada's Energy East oil pipeline, converted from an underused gasline, and TransCanada's Keystone XL would move Oil sands production into the world market.  

To the extent that oil prices remain low, all transportation projects are fiscally strained.  But consensus is seeming to build in Canada — with notable exceptions of gas utility managers who perceive a loss of gas transport options through conversion of the existing gasline — for the Energy East project.  (Although, we are sure they would not like to ask their customers to reimburse TransCanada for maintaining surplus gas pipeline capacity.)

At the same time, President Obama seems intent on defying the will of the people, the will of Congress and the economic needs of America.  He seems also willing to sacrifice or dilute the friendship with our greatest trading partner and our formerly outstanding diplomatic, social, economic and military relationships, by continuing to block the Keystone XL project.

Apparently, the President's Keystone XL blockade is just fine with his environmental allies and middle eastern OPEC friends.   The one wants no US economic development and the other wants to minimize North American competition. 

If low oil prices remain and provide sufficient economic feasibility to support only one new exit conduit for oil sands crude, and if Obama does not relent on Keystone XL, the Canadian economy and TransCanada might still be still be winners with Energy East.  

The good news for the U.S.: America's greatest trading partner will benefit from another export project that also could supply its east coast refineries…and, unemployed U.S. workers with pipeline expertise might find a few job opportunities by leaving their homes and taking their expertise to Canada.  

This week we have reviewed the White House abuse of authority, overreaching jurisdiction and war on Alaska.

Actually, this, and the numerous other examples of executive overreach demonstrate a federal government assault on America, not just on the 49th state.  -dh

Fairbanks News Miner by Matt Buxton.  The state’s plan to buy Fairbanks Natural Gas and its parent company answered the question of “what’s next?” after a state bid to build a processing plant on the North Slope fell apart, but it’s also raised a whole new slew of questions.

Dave Stieren, KFQD Radio, Governor Bill Walker Interview, State Budget Crisis, Alaska, Photo by Dave HarbourFriday Commentary


Dave Harbour

Listen to Dave Stieren's (NGP Photo) recent Radio interview with Governor Bill Walker.  

In it, Walker places appropriate priority, we believe, on gaining control of state spending and a daily revenue drain of $10 million.  

Then, Dear Readers, consider the Governor's initiative to buy a privately owned utility in Fairbanks, within a Borough where his Chief of Staff once served as Mayor.  The Fairbanks North Star Borough was a paying partner in the Alaska Gasline Port Authority's (AGPA) proposed LNG project that paid attorney Bill Walker before he was governor to turn the project into reality.  Against "baseless" criticisms, Borough Mayor Jim Whitaker has defended walker.  Sadly for sponsors, no pipeline project appeared.  (i.e. 'Sadly for the sponsors since they would have reaped the reward of millions per year in gas pipeline property taxes.)

Then consider the misgivings noted in today's Fairbanks News Miner column.  Those misgivings include questions about why the state should be competing with private parties to buy a utility, what the State's $52.5 million purchase price would actually purchase, various misgivings of Legislative leaders, and at least a dozen 'unknowns' we could list if necessary.  

We give the Administration the benefit of the doubt, accepting that its motives are noble and that there really are no conflicts.  However, political figures need to be very careful about the optics, the 'perceptions of impropriety'.  A slip up of this nature so early in the life of a new Administration could injure the productivity and effectiveness of an entire four-year term.  

We know that Walker heavily courted Fairbanks and Interior Alaska during the campaign.  We know that energy for Interior Alaska was a major platform issue.  We just find it odd that now, when a nearly $10 billion public employee pension unfunded liability is being augmented by a $10 million dollar per day deficit, Walker's new austerity strategies would even permit considering the purchase of a gas utility to serve a market of unknown size, at an expansion cost of an unknown amount, in competition with the private sector.  Perhaps all this can be explained, but to some it could look shady without further transparency and explanation.

This is not to say that all government owned monopolies are inefficient.  It is to say that Alaska's financial position can hardly afford additional spending–even when that spending is funneled through a so-called 'independent public corporation of the state of Alaska'.  

Actually, if the corporation, the Alaska Industrial Development and Export Authority (AIDEA), has a surplus of $52.5 million available to pay cash for a city utility when the state is operating in the red, the Legislature might consider an AIDEA contribution of $52 million to the state treasury to be more prudent; after all, it could counterbalance 5 days of state deficit spending.

If, on the other hand, AIDEA, would finance the utility purchase by acquiring new debt for itself with revenue bonds, we believe the Legislature would have to consider whether or not adding debt to the state and its 'independent' corporations at this time is a good idea.  Even though an AIDEA revenue bond debt does not technically commit the full faith and credit of the state, any bond attorney will likely opine that a state corporation's revenue bond default could sure affect rating agencies' evaluation of a state's credit worthiness.

We hope above all that the Legislature and new Administration can be successful in avoiding the traps and snares that could compromise an otherwise successful effort to face Alaska's budget challenge.

To that end, we urge other citizens to join us in pointing out potential advantages and disadvantages of the various state policy decisions coming before us at a fairly rapid rate.  

We also encourage courteous and respectful exchanges of ideas and concerns, for our best chance of resolving tax and spending issues lies in cordial debates and interpersonal communication.

As Homer, Alaska's late Brother Isaiah would say, "Peace, Brothers and Sisters …."

*     *     *

Note: The author is publisher of this webpage, former Chairman of the Alaska Council on Economic Education and former Chairman of the Regulatory Commission of Alaska whose duties involved adjudication of city utility rate issues and pipelines.

Please email your thoughtful additions, corrections or observations to:  Through your feedback, we strive to preserve the most accurate possible archives.  Your comments will be considered for publication unless you request that they be regarded as personal communications.