Click here to find today's Alaska LNG project legislative activities and videos, archived and live streaming!

(Today's Email Alert Editorial: Link, text)

  • See this excellent comparison of Alaska's 1980s economic recession, compared to the current and projected economy and an ADN story by Jeannette Lee Falsey.
  • Juneau Empire by James Brooks
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    What is Alaska LNG? Part 2: Meet the liquifaction plant.  Alaska Public Radio Network…Oct. 25, lawmakers will gather in Juneau for the start of a special session on the Alaska LNG project, which would carry natural gas from the …  (See Part I, here.)

    Alliance Launches New Voice For Alaska Businesses

    … of importance to our members: the Alaska LNG project. So we came up with the idea of the Alaska Headlamp as something that could break through …

    … If the state borrows from the open market, it will be asking for money at a time when it has a multibillion-dollar gap between revenue and expenses.

    “We expect that, absent revenue, that’s going to put pressure on the state’s credit rating,” said Steven Kantor, managing director of First Southwest, which the state hired to analyze the financial aspects of the project. “The state’s credit rating may decline as we issue so much debt without corresponding revenue.”

    In addition, there’s no way to know whether the price of gas in 20 years — when AKLNG is operating — will be high enough to make the project pay off.

    Banks may decide that they’re willing to loan the state money, but the state’s credit rating might suffer just as yours would if you have too many loans. If that happens, the state will pay more to finance things like schools and port projects as well as AKLNG.  ….

ADN by Jeannette Lee Falsey.  Arts Community Braces For A Downturn.

Peninsula Clarion Editorial.  The Alaska Legislature is set to convene its third special session of the year, this time to take up Alaska LNG Project issues. Gov. Bill Walker has proposed that the state buy out TransCanada’s stake in the project, and pitched a gas reserves tax measure for lawmakers to consider.

Unfortunately, lawmakers aren’t yet sure what they will be considering as the administration had not yet released any bills on either subject. And on Wednesday, legislative leaders announced the session would start with committee hearings at the Capitol, rather than the hours-long briefing planned by the administration.

And here we go again.

For Whom The Bell Tolls

TODAY, our readers can link to the Alaska Legislature's streaming videos of hearings dealing with the Alaska LNG project.
Be sure to go to church first and pray, "for whom the bell tolls."  Here's why.
The U.S. could count on Alaska for hundreds of thousands of new jobs and an infusion of hundreds of billions of dollars throughout the entire country's manufacturing, transportation, and service sectors.
But hostile federal regulatory activity, coupled with environmental activism, is keeping critical resources of a state 20% the size of America, effectively off limits.
The federal actions are exacerbated by a governor whose free market and oil industry investment policies are both hostile and irrational.
Today, our readers will see a plot unveiled by video before their eyes: as the governor tries to convince legislators to invest billions into an LNG project's equity at a time when 1) the state can't afford it, and 2) the majority of the world's LNG projects — many, many of which seem more economically feasible — are in the process of being abandoned or delayed.
The governor may be panicking, for to observers the state looks functionally broke as the perfect economic storm gains force and momentum within the 49th state:
  • Alaska's government operates with a $3-4 billion annual deficit and its leaders display pitifully little determination to restrain spending; and
  • its accessible savings accounts will be dry, unable to support deficit spending within a couple years; and
  • it has not been able to pay down a nearly $10 billion unfunded liability of its state and local government employee and teacherunfunded pension liability; and
  • its $50 billion+ Permanent Fund (PF) corpus cannot be tapped by the Legislature without a Constitutional amendment, which its PF Dividend-addicted citizens are loathe to give; and
  • its deficit situation grows worse as the nearly 3/4 empty Trans Alaska Pipeline System (TAPS) continues to lose oil throughput at a 5-6% annual rate; and
  • its state budget is 90% dependent on that dwindling TAPS throughput; and
  • its entire economy is over 1/3 dependent on TAPS economic activity, and
  • the credit rating agencies are beginning to downgrade the credit worthiness of the state, thus compounding its troubles as the cost of borrowed money increases.  (Yesterday, if you were watching the Legislative video, you heard financial advisers warning that borrowing money now would be at the most favorable time, before further rating downgrades occur…but that if the state had to borrow later to support failing Alaska LNG project equity commitments, the whole world would know its financial problem and lenders would require still higher risk premiums in return for their investments.)  
In economic terms, to be frank and realistic, one realizes during these hearings that Alaska is facing the specter of an "economic death spiral" if major, difficult decisions are not made very soon.

We would wonder how a state in such circumstances would waste even a weekend discussing the possibility of providing  a multi-billion dollar 'deficit investment' in an project when 1) payback is not likely to occur for a decade, and 2) the depletion of deficit supporting savings accounts and perhaps the termination of TAPS operations could occur within just a few years, and 3) completion risk of an LNG project in today's world environment is sky high.

Meanwhile, caught in the quagmire of these circumstances amid a perfect economic storm, the Alaska governor is pressuring the Legislature to pass a contingent natural gas reserves tax on the very companies he hopes will build an LNG project.

The federal hostility against Alaska is cutting off sources of new TAPS-replenishing, Arctic oil income and a hostile state administration cannot help but have the effect of further discouraging, if not alienating, investors.

New readers might ask of us: "For whom does the bell toll?"

Without some kind of a born again experience, Alaska, we fear that, indeed, the bell "tolls for thee".

Don't forget to tune in after church.  This will be interesting.

Read more here….