We have a special treat for Alaskans and their Legislature today — and, our Canadian readers. Scroll down for two commentaries, Christmas 2001, re: gas pipeline and fiscal crisis issues. “Lest We Forget” -dh
Is our quotation from 2001 — in response to Senator Dave Donley — still applicable today? Comment: “Such is the nature of political struggle as governments become highly dependent on resource revenue or government grants, when resource prices fall and/or when rates of production and/or national revenues diminish. In such situations, political leaders should beware of becoming too tax-dependent on a few resource industries or other governments. Industries should, in turn, be cautious about–and must discount– investment into an economy that could become too dependent on them. With the stroke of a tax pen, project economics can change overnight, and even retroactively, after investment dollars have been locked and frozen into a gas pipeline permafrost trench.” -dh
In Alberta: Does the combination of royalty incentives and taxes benefit exploration and development…or not?
Calgary Herald, by Reid Southwick. The Alberta government’s new financial incentives to attract more oil and gas drilling drew support from industry Monday, but there were fears the royalty changes may not offset dismal economic conditions and higher taxes to improve production. (Read More)
12-24 (Christmas Eve): Gas pipeline news this week is light as all gas pipeline stakeholder thoughts turn to home. Before news afresh begins breaking after the holidays, perhaps it would be well to spend a quality moment or two reflecting on where we’ve been this year and where we wish to be in 2002. After all, our millions of individual decisions in the coming year will produce some grand, cosmic formula revealing the future of northern gas pipelines. -dh
“All I Want for Christmas”
I’d like an Alaska gas pipeline for Christmas. It should be in place, producing money by 2004, please, in time to supply 1/4 of Alaska’s $1 billion+ budget deficit; and let our politicians balance the rest without increasingmy taxes or reducing my services. I’d like the pipeline to be ‘diversified’, too. It should go to a Fairbanks ‘HUB’ (where I’d like a new petrochemical industry established by someone for some market). I’d also like someone to put an inexpensive gas distribution line to every home in Fairbanks. To be fair, I’d like someone to take propane from the HUB and ship it to 230 Alaska villages at a reasonable cost, somehow. Then, I’d like someone to build a line from the HUB on down to Valdez and arrange for Tokyo Gas to sign a 20 year, “take or pay” contract at a price high enough to pay for the pipeline as well as another petrochemical facility in Valdez. To take care of my friends in Southeast Alaska, I’d like propane and maybe LNG to be provided by barges or small cryogenic tankers to all our coastal citizens at a reasonable price, by someone. Since Southcentral Alaska may be running short of Cook Inlet gas, I’d like someone to build a branch of the pipeline from the Fairbanks HUB down to Anchorage. See, that would displace enough gas that the Kenai Peninsula would retain adequate supplies for its residential / industrial users for another 20 years. Lastly, I would like for most of the gas to move from the HUB on down the Alaska Highway to make sure that the folks in the Lower 48 have plenty, but I’d want to make sure there were enough liquid gasses in the high pressure line that we could profitably supply Alberta with some of the petrochemical feedstock she needs to be supportive. Oh, and I almost forgot, please make the price of gas high enough so we can afford subsidies, generous rights-of-way payments to 10,000 landowners, and still have plenty of money for our state government and please build a separate Mackenzie Valley Pipeline for Canada.
And, I’d rather not have the gas produced at all unless it’s done my way.
P.S. If you have money left over, could we have some to invest as equity in the gas pipeline and would you please make sure we get at least a 12-15% return on our investment?
All fathers, including Father Santa, instinctively want their children to have all that they wish for. However, one responsibility a father has is to lovingly tell his children that we don’t always get everything we wish for at Christmas. Sometimes, you get a present you think you’d rather not have and it turns out the be the best one after all. (See P.S., below.) I don’t know if that will be the case this year, but on this Christmas Eve, I can now divulge your gifts.
1. You will be blessed–more than most–with another year of freedom and life in the wondrous North.
2. You will be given intelligence, courage, friends, armaments and vast resources.
3. You will be given the freedom to break your own trail, to direct your own future path in the wonderful frontier before you.
4. You will be blessed with the politicians that you, yourself, choose to help lead the quest.
5. The above, basic gifts will enable you through your own wisdom, ingenuity and integrity to successfully confront your challenges. Success, the greatest gift, will be highly savored for you will have earned it and you will pass this knowledge to your heirs. Your failure, also shouldered by your children, will only come with misuse of the gifts.
My greatest hope for you is that you embrace the true spirit of Christmas, use well what you have been given, make good decisions, treat everyone with respect, teach your own children well, and endeavor toward ‘endless progress’. Obtained as you have so presumptuously wished, the presents you requested would not delight you, would not eliminate the fundamental budget problems you have created, would shackle free enterprise and deliver the generations following you into debt and misery. They represent a child’s irrational thinking, depending as they do on the imprudent acts of others and requiring no effort or risk on your part.
P.S. One Christmas long, long ago, I asked for a new bicycle and a 410 shotgun. Being a poor 11-year-old did not prevent the dreaming. After a humble family service around our Nativity scene, wise Father gave me a snow shovel and a box of shotgun shells, my only presents. I did not appreciate these gifts at the time, but by spring I had earned enough from the neighbors to buy a new bike and a used shotgun. To this day, I love my Father as much as I respect him; and, he has never worried that I would ever confront a reasonable challenge I could not overcome. That year I emerged into the real world, began absorbing the true Christmas message and took the first small steps toward a lifelong appreciation for free enterprise. (Additional reference: Voice of the Times, by William J. Tobin)
(See related news of last week. Photos: Sharing Christmas and Summer outside author’s Anchorage office.)
In 2001 fiscal crisis was Alaska’s greatest concern. The twin concern then, as now, was monetization of Alaska North Slope Gas. While realities of the day have changed, the principle remains the same. Should Alaska become more socialized and own the means of oil/gas production/transportation/distribution? Should Alaska curb its enormous spending appetite? Finally, we ask our gentle readers: has this generation learned anything from the generation in charge 15 years ago when this web page was founded? -dh
12-22/23 (Weekend): Regarding the ominous fiscal reports from Alaska in last week’s/weekend’s news (which must impact gas pipeline investor opinions), here is the Kenai Peninsula Clarion’s view: “The longer Alaskans avoid the difficult choices involved in a long-range financial plan, the worse the pain is going to be. The longer we wait, the fewer options we will have.” There is also this Clarion letter-to-the-editor: “It’s time for Alaskans to realize that if we want a “future” some tough decisions have to be made now!” * Fairbanks Daily News-Miner (Re: Rep. Jim Whitaker)- Whitaker will also keep pushing his proposal from last year to make the companies that hold state leases for the gas on the North Slope pay a combined total of at least a billion dollars a year (Underline added) to state coffers if they do not soon bring the gas to market. … He is reviving his 2-year-old proposal to create a state-owned corporation to finance and own a pipeline to bring Alaska natural gas to market if it is economically feasible, which Whitaker insists it is.
Northern Gas Pipelines wonders so many things as 2001 makes way for a new year of opportunity.. We wonder how rational state leaders on the edge of fiscal crisis could even take time to consider investment in a multi-billion dollar pipeline. If the money were available, would there be a budget crisis? If investment money magically appeared, why would politicians rush to invest it in a pipeline when the experts say the feasibility is unproven? We’ve also stood in amazement over the last year as several political leaders competed for attention in criticizing the very producers who provide the majority of state revenue and have the ability to invest in a pipeline and other projects. We wonder what politicians hope to gain by again pushing for a new, $1 billion/year tax on the gas producers if it is not feasible to produce the gas. We wonder, in the face of fiscal crisis, why Alaskan politicians are not talking about “incentives”, “improving Alaska’s investment climate”, “tax stability”, “regulatory clarity”, “public/private partnership”. Lacking budget discipline and free-market creativity, Alaska’s elected leaders at all levels seem fixed on bluffing companies right up to the edge of the 2004 fiscal cliff, hoping to earn more general fund revenues or a favored pipeline route–before it’s too late–with intimidation. We wonder why we’ve seen so many sticks and not one carrot. We wonder if free enterprise is still alive and well on the Last Frontier. We wonder if elected leaders have any idea of the negative seeds they might be planting now, as companies forecast multi-year spending priorities in Alaska and elsewhere. Finally, we don’t wonder that Alaska’s reputation is at risk. -dh
(Please review the news items last week and weekend, if you haven’t. It is factual, not alarmist, to say that the fiscal crisis looming in the State’s future soon threatens to overshadow and impact virtually all other issues).
12-21: Anchorage Daily News, by Tony Hopfinger– … * Phillips Petroleum Company brought the Light to the United States for the first time last year and the company is again making it possible for the message of the Light to be shared with Americans. The Light is a 13-year tradition started by the Boy Scouts in Austria. Every year, Austrian Scouts travel to Bethlehem to light a lantern from the Eternal Flame near the spot where Jesus was born. The Light is kept in a special container to keep it burning continuously so that it may be shared with others as it travels from country to country. The Light has traveled to more than 36 countries since the tradition began. … The Scouts will present the Lights’ message of peace to New York MayorRudy Giuliani and New York City firefighters and police officers at the site of the World Trade Center at a ceremony TOMORROW. (Contact: Rich Johnson, 918-661-9326). * Calgarian John Myers urges investors to be aware of potential impacts of middle eastern activity on energy. If some version of the concepts he envisions occur, needless to say that the entire gas pipeline dynamics are subject to abrupt changes in timing and direction. While this reference is promotional, its contents probably contribute to our readers’ balanced library. * Whitehorse Star, Chuck Tobin–In a survey released by the Fraser Institute on Tuesday, the industry rates the territory as the second-worst jurisdiction in Canada as a place to invest. (NWT story and Fraser link in 12-19 report below) In a related CBC story: Whitehorse, Yukon – Yukon placer miners are worried about an upcoming review of regulations. * Other publications are picking up on the 12-18 report below re: “The Imperatives of Arctic Natural Gas Development“. See 12-19 Oil and Gas Journal Online. HOUSTON, Dec. 19 — The Mackenzie Valley corridor in Canada will almost certainly be the choice route for the proposed Arctic gas pipeline, not through Alaska, said two University of Houston professors. * A modest ‘reader recognition prize’ finally found our 36,666th reader….at 12:35 a.m. Friday, working late or early. Congratulations, Curtis Thayer, Alaska Gas Producers Pipeline Team. His prize: the two 30 year old Arctic Gas logo items in ‘new’ condition are a simple, paper coffee cup place mat with logo and logo description on reverse and an embroidered logo patch, given to Arctic Winter Games participants in the early 1970s. On 12-7 the 34,000th reader, Daniel Kish, won an original Arctic Gas coffee mug while working late in his Senate office in Washington.
TODAY’S EMAIL ALERT
Dear (Reader first name):
Today, we urge our friends to review this HISTORIC post as both Alaska and Alberta struggle with fiscal certainty and energy issues.
Today’s relevant links, courtesy Alaska Senate Majority. Compare with 2001 news and commentary above! -dh
Legislators return for fifth special session
Legislators returned to Juneau today for the fifth special session since last summer.
Alaskans begin to feel state budget cuts
Alaskans are already starting to feel the effects of state budget cuts, from shorter court hours to last minute local budget negotiations.
Anchorage LIO landlord begins effort to recover millions in damages
The landlord for the embattled Legislative Information Office in downtown Anchorage is taking the first step in what could be a lengthy process toward a lawsuit.
Lindbeck puts up high financial numbers in race for House
Democrat Steve Lindbeck is running a serious campaign against Alaska Congressman Don Young, to judge by the money anyway.
US Senate bill introduced that would prevent export of Native cultural and religious items
Tribes across the country would have new opportunities to reclaim lost artifacts under a new Senate bill.
GCI to expand internet service in rural Alaska
Telecommunications provider GCI said it aims to further access to high-speed internet in Western Alaska in the near future.
Alaska Gov. Walker signs crime reform bill into law
Alaska Gov. Bill Walker signed an extensively vetted crime reform bill into law Monday meant to reduce the state’s prison population and its associated costs.
Alaska Gov. Walker proposes statewide sales tax, oil tax increases to kick off special session
Alaska Gov. Bill Walker unveiled proposals for a new 3 percent statewide sales tax and two oil-tax increases as part of his latest deficit-reduction package, released Monday…
Landlords for Legislature’s Anchorage office building file $37 million damages claim
The landlords for the Alaska lawmakers’ downtown Anchorage office building have filed a legal claim for $37 million, saying they’re owed the money because the Legislature failed…
Valley could go from zero to two new senior-care centers
The Matanuska-Susitna Borough, with one of the fastest growing senior populations in Alaska, has no skilled-nursing facilities for rehabilitation and other medically supervised services for seniors…
Reborn Sitka camp a parable for Alaska’s future
Roger Schmidt was a happy trombonist, teaching music and raising kids in this idyllic island town. He thought his life was set.
Legislature must override governor’s veto of oil tax credits
The governor’s recent veto of funds needed to pay oil tax credits will do tremendous long-term harm to the state of Alaska that goes far beyond the current fiscal deadlock.
Alaska crime bill is a big step forward but needs an adjustment
On Monday, I signed the criminal justice reform bill into law — but a portion of Senate Bill 91 needs to be fixed.
Readers write: Letters to the editor, July 12, 2016
Congratulations, NRA A hearty congratulations to the NRA on yet another stunning victory for their “well regulated militia.”
Alaska lawmakers begin another special session
Alaska lawmakers on Monday began a special session called by Gov. Bill Walker to address the state’s multibillion-dollar budget deficit.
Sen. Coghill’s criminal justice overhaul bill signed into law
At a Juneau reentry house for female inmates Gov. Bill Walker on Monday signed into law a sweeping overhaul of Alaska’s criminal justice system.
Legislators look to override Walker’s PFD veto
Legislators returned to Juneau on Monday for the second special session of the year — the fifth since the current slate of legislators took office —with the goal to address the state’s fiscal crisis.
City advances ordinance to raise pot tax by 1 percent
The Fairbanks City Council advanced an ordinance that could lead to a general election vote on a 1 percent rate increase on the tax levy of marijuana sales…
Special session starts with a whimper: Despite crisis point for state, little action in Legislature on budget
Anyone hoping for swift action on the state’s fiscal crisis was in for a disappointment on Monday.
In Haven House ceremony, Walker signs sweeping reform of Alaska’s criminal justice system
Gov. Bill Walker organized the signing ceremony for Senate Bill 91, but Kara Nelson and Kris Sell seized the moment.
Legislature starts fifth special session with no clear path forward
The 29th Alaska Legislature on Monday began its fifth special session since the gavel first sounded in January 2015…
Juneau rally urges lawmakers to ‘Do your jobs!’
Across the street from the Terry Miller Building where the Alaska Legislature held the first day of its fifth special session…
Anchorage LIO owners file $37M complaint against state
The owners of the controversial downtown Anchorage Legislative Information Office Building have filed a claim seeking $37 million from the state of Alaska.
Two-billionth salmon caught in Bristol Bay, delivered to gov
Since 1884, fish processors and biologists have kept intimate track of the number of salmon caught in Bristol Bay.
My Turn: Senate Bill 91 and sex trafficking
Today, I will sign the criminal justice reform bill into law — but a portion of Senate Bill 91 needs to be fixed.
Alaska Editorial: Time and Tongass
The U.S. Forest Service has released an amended Tongass Land Management Plan, along with a draft record of decision and a final environmental impact statement.
Gov. Walker signs criminal justice reform bill into law
At midnight tonight, sweeping new changes for Alaska’s justice system will go into effect.
Gov. Walker outlines new tax proposals as special session gets underway
As lawmakers in Juneau head back to work, Gov. Bill Walker is proposing alternatives to address the state’s fiscal situation.
Alaska Senate squashes motion to meet with House, override PFD veto
The Alaska Legislature met Monday for the first time since Gov. Bill Walker announced he’s reducing this year’s permanent fund dividend checks to $1,000.
Group collects signatures to recall Walker for PFD veto
Gov. Bill Walker’s line-item veto that capped this year’s Permanent Fund Dividend checks at $1,000 is unprecedented, and some people are even calling it illegal.
Governor approves overhaul of criminal justice system
Gov. Bill Walker has signed off on legislation aimed at reducing the number of inmates in Alaska’s jails and preventing criminals from repeatedly returning to prison.
Anchorage LIO owner files $37-million claim against Legislature
The owner of the Anchorage LIO building — 716 West Fourth Avenue LLC — is seeking $37 million in damages from the state, following a lease procurement by the Alaska Legislature in 2013…
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