11-10-16 Supporters Demand That Elected Officials Act Responsibly

Important Advice To Alaska Legislators Facing A Fiscal Crisis

“Promoting a Favorable Business Climate” has been the number one goal of the Alliance for more than 30 years, and for good reason.

Every Alaskan reaps the rewards of a favorable business climate:

Solid private sector jobs
More tax revenue for the state
A catalyst for diversifying our economy

These are just some of the benefits.

So today, we ask ourselves not who will do what, but rather, who has the courage to do what is necessary to get Alaska back on track?

Who will have the courage to lead legislators through the process of reducing the size and scope of government?
Who will have the courage to lead legislators in identifying new revenue sources?
Who will have the courage to lead legislators to enact policy that encourages the private sector to invest in Alaska?

Alaskans have the right to expect that the people they elected are focused on making Alaska successful. In order for that to happen, elected officials must:

Reduce the size and scope of government.

Identify new revenue sources. (We would only add that this category should be regarded as a last resort and should include incentives — not predatory new and increased taxes — to increase natural resource related revenue. -dh)

Enact policies, based on principles, that attract investment.

We will soon know who has been chosen by their peers to be leaders in the legislature. What should we demand from the people we just hired?

Disciplined People.
Disciplined Thought.
Disciplined Action.

There are 69 days before the session begins. A tremendous amount of time to set a goal, develop a plan and begin to work. We hope to see what leadership plans to do. Soon. If 69 days pass with no clear path forward, Alaska may need an intervention.

Success requires disciplined people who engage in disciplined thought and who take disciplined action.

Reader suggestions for studying Alaska North Slope gas monetization alternatives

Alaskans have a long history of exploring alternatives for commercialization of the vast, 35 Tcf of proven Alaska North Slope gas reserves. But there’s a big hurdle between that resource wealth and the market: an expensive 800 mile, high pressure, buried, refrigerated pipeline to move the costly, conditioned gas from the Arctic to a liquefaction facility at an ice-free sub-Arctic port .

Investors must then calculate how to make this horrendiously expensive Alaska gas project compeititve with nearly a hundred other world-wide LNG export projects, both recently completed or in the planning stage. Most of those projects compare favorably with Alaska’s transportation scheme: lower labor costs; gas reserves close to tidewater ports; more favorable climates; much more reasonable logistical costs.

As a 45-year veteran of Alaska oil & gas company and state regulatory experience I’ve learned that the best way to monetize state natural resources is not for a clumbsy, politically confused, regulatory-bound government entity to manage a private enterprize project with its bureaucratic constraints.

Rather, the most efficient way to manage commercialization of state-owned resources is to allow private sector lessees to develop competitive commercialization systems. The state and its citizens must then accept that commercialization cannot be forced into reality when politicians desire — only when the market and resource investors desire.

Here are this week’s reader comments regarding the commercialization of Alaska gas reserves:

To economize and make the Alaska project more competitive, our reader, James C. Lewis, PE, urges consideration of a North Slope based LNG transportation project — but he doesn’t neglect the intrastate considerations, either. He says, “A project of the type proposed at ATC would provide for commercialization of the stranded gas on the Slope at half the cost of the present project. We can discuss this further if you are interested. I look forward to a continued conversation on this topic.” (Read his full proposal here, with contact information. -dh)
An LNG industry CEO wrote us yesterday, “From the LNG Journal. Japan said the average price of spot liquefied natural gas imported into Japan that was contracted in October was $6.10 per million British thermal units, a rise of $0.40 per MMBtu from the previous month. So, with the price increase mentioned above, the price for LNG in Japan is still cheaper than plain old natural gas in Cook Inlet. Yea, let’s build an LNG plant in CI. Best not to be in all that competition for ANS gas. (He’s being ironic, folks. 🙂 -dh)

Here are are other historical concepts to monetize Alaska gas reserves:

1970s Projects: Arctic Gas Consortium, El Paso Natural Gas, AlCan Project

1980s forward: Yukon Pacific, Alaska Gasline Port Authority, Alaska Natural Gas Transportation Authority

About the Author: wpnorthern

Dave Harbour, publisher of Northern Gas Pipelines, is a former Chairman of the Regulatory Commission of Alaska, a Commissioner Emeritus of NARUC, NARUC's Official Representative to IOGCC and Vice Chairman of NARUC's Gas Committee. He served as Gas Committee Chairman of the Western Conference of Public Service Commissioners. He also served as commissioner of the Anchorage Bicentennial Commission and the Anchorage Heritage Land Bank Commission. He earned a Bachelor of Arts Degree: English, at Colorado State University, a Master of Science Degree: Communications-Journalism at Murray State University and graduated from Utility Regulatory School for Commissioners at Michigan State University. He served as a Vice President for Communications and Public Affairs at Alaska Pacific University, taught bank marketing classes at the University of Alaska and was an English teacher at Los Alamos High School. Harbour served in ranks of Private - Captain during a 4-year assignment with the Army in Korea, Idaho, Georgia and Fort Meade and received the Meritorious Service Medal among other commendations. Harbour is also a past Chairman of the Alaska Council on Economic Education, the Alaska Oil & Gas Association Government Affairs Committee, the Anchorage Chamber of Commerce, the Export Council of Alaska and the Department of Commerce's District Export Council. He is a past President of the Alaska Press Club, American Bald Eagle Foundation, Consumer Energy Alliance-Alaska and Common Sense for Alaska. Harbour was instrumental in founding the American Bald Eagle Research Institute (UAS), the Alaska Support Industry Alliance, the Downtown Anchorage Business Partnership, and Arctic Power. He also served as CEO of several small Alaska organizations, including the Anchorage Parking Authority and Action Security, Inc. Harbour is also Chairman Emeritus of the Alaska Oil & Gas Congress. Harbour's wife, Nancy, is a professional, performing arts administrator and his three boys, Todd, Benjamin and William work in the fields of environmental management, energy marketing and medicine.