BREAKING NEWS….ADN by Rashah McChesney. Alaska Governor Bill Walker (NGP Photo) had a press conference today. It seems to have been much ado about? Please enlighten us on what this report means aside from some consolidation and a little elimination of duplication, maybe. Pardon us if we are confusing "political optics that something is being done to courageously face 'Alaska's Fiscal Crisis'," with something important that is, indeed, being accomplished — like eliminating one or more of these agencies. Of course, any action will have to be delayed until a year from now, when the state has descended further into its big clay jar of fermenting, economic kimchi. Here is a link (currently unavailable) to the Governor's news release describing his executive action. -dh
To our Canadian readers: Is the U.S. Secretary of State ignorant, deviously joined at the hip with global warming activists, or stone dead stupid? This is only our third time in over a decade to ask this question of a public official. Responses. -dh
Please review yesterday's commentary and links for a more thorough understanding of the issues raised by Joe Beedle in his Op-led, below. We believe that our commentary today (below) is also worthy of your review, as is Alaska Headlamp's. Also see, "Political Will Crisis", by Tim Bradner (NGP Photo); and, Beedle's ALASKANOMICS column. -dh
ADN Op-ed by Joe Beedle (NGP Photo). Most everyone agrees that now is the time for action by the Legislature to help bridge the fiscal crisis that our state government faces. What started as a politically difficult conversation is quickly becoming an outright battle to ensure fiscal certainty for basic public services while retaining an investment climate for core business in Alaska. Read more….
In recognition in her supporting role that contributed so greatly to the accomplishments of President Ronald Reagan, we have posted several photos of the Presidential library where Nancy Reagan (Photo, June 2014, at the Presidents grave site) will be laid to rest today, with her husband. dh
Our Washington Friend, Dan Kish, alerts us to a story below that counterbalances the hope for "Blue Skies Ahead" (see column-right.)
The Saudis are obviously intent on obtaining market dominance by continuing to increase crude and LNG supply. Because of the country's low cost of production, it can afford to depress world supply by increasing the pressure of predatory pricing on their higher cost competitors.
Those working toward a Final Investment decision for Alaska's LNG project — and elected officials currently wrestling with the state's overpriced and unsustainable state and local governments — will be paying close attention to the news item below.
It is one factor, amid a sea of investment variables, that adds to the risk and not the attractiveness of an Alaska LNG project. -dh
HOUSTON, Mar. 9
Having already increased its gas output to more than 12 bcfd from 3.5 billion bcfd during the early 1980s, Aramco has set a production goal for the coming decade.
“Work is under way to execute an ambitious plan to implement this,” Nasser said, stopping short of elaborating on details. He did say Aramco is exploring and developing unconventional gas.
The company is working to boost gas output for electricity and petrochemical production by developing gas fields not associated with oil production.
He also said Aramco plans to boost its refining capacity to 8-10 million b/d from its current capacity of 5.4 million b/d.
Blue skies ahead? Whether it will prove lasting or not remains to be seen, oil futures traded in New York rose 5.5 percent on Monday to $37.90 a barrel, after rising nearly 4 percent on Friday. Amid slowdowns and industry pullback, some experts are cautiously optimistic that macroeconomic forces could be taking hold and oil prices could stabilize more quickly than expected. According to industry experts, global drilling rigs have declined by 130—including the most recent 3 at Prudhoe Bay—to 1,761, the lowest since 2002.
Quite the "adjustment." Gov. Bill Walker says BP's decision to reduce the size of its Prudhoe Bay rig fleet from five to two is part of a global response to low oil prices. "We've seen this in the past with low oil prices. They do this because it's what they have to do. They have to make adjustments and I certainly understand that," Walker told KTUU. Sarah Erkmann, external affairs manager for the Alaska Oil and Gas Association, said BP's announcement about "shutting down rigs is more evidence of how dire the situation is for the oil and gas industry in Alaska." In reference to Gov. Walker's proposed tax hike on Alaska's oil and gas industry, Renee Limoge Reeve, Alaska Support Industry Alliance Deputy Director said "When you're talking about taxing companies that are already cash-flow negative, that doesn't make economic sense to me." The laying down of three rigs is a desperate attempt to keep their heads above water in a low price environment, on top of challenging policies being proposed by the state. Raising taxes on the industry in this environment seems likely to only further accelerate the job losses Alaska's core industry has already seen.
In a Fairbanks Daily News Miner commentary, professor emeritus at the University of Alaska Fairbanks Geophysical Institute, Carl Benson, opines that SB 21 is to blame for our state's multibillion dollar deficit. Headlamp fundamentally disagrees with this assertion, as the facts simply don't back up Benson's claim. SB 21 has not caused two-thirds of Alaska's income to disappear since 2014, record low oil prices and unsustainable state budgets are truly at fault. As a professor, who's salary, premium benefits, and generous retirement package is paid for in large part by oil taxes and royalties collected by the state, Mr. Benson should know better than to throw around false information. At these low oil prices, SB 21 is bringing in more revenue to the state than would ACES (Alaska's previous oil regime that failed to increase production). Instead of looking to the oil and gas industry, which is cash flow negative at these prices, to bail out the state's budget as Mr. Benson suggests, policy makers should look at reducing the operating costs of state government, including the University, given the fact that our state's budget has increased over 100 percent since 2006.