We have mixed reactions to Governor Walker’s latest decision!

John Hendrix - 9-19-12 - by Dave Harbour

John Hendrix, NGP stock photo by Dave Harbour

Yesterday, Alaska Governor Bill Walker appointed former Alaska manager for Apache Oil to a newly created position, chief oil and gas advisor.  That assignment is a cabinet level position that invades traditional turf of the Commissioner of Natural Resources, his Director of Oil & Gas and the governor’s special assistant for natural resources (i.e. that has traditionally included oil and gas policy issues).

At first glance, this looks like an important improvement in the Governor’s ability to work through energy challenges that seem much too complex for his current team to successfully handle.  One notes that much of his inner circle is made up of ”yes men” associated with his many failed efforts over the years to create for himself and his clients a successful Alaska LNG export project.

Yesterday’s news release announces the retention of a man in whom we have much respect and high confidence.  John Hendrix is an oil patch veteran with acumen, management expertise and an unusual but laudale, “tell it like it is” integrity.  He is charismatic, dedicated and the exact opposite of deceptive.

At first glance, the job also looks good for John, in view of his company’s recent exit from the state and in view of his love for and long time attachment to Alaska.

That would be “win-win”, wouldn’t it?

It would except for a couple of problems.

First, good energy advice is based on wisdom, expertise, scientific analysis of complex technical and regulatory issues — and logic.  While John has these qualities in abundance, he may find it distasteful to work for an administration that tries to make the facts fit a socialist and predetermined oil and gas agenda.

Second.  Alaska is in the middle of a financial crisis.  Governor Walker’s approach to financial challenge is to make few significant, “permanent” reductions in personnel costs.  In fact, his hired consultants and current cabinet, along with gas pipeline bureaucrats, are pulling in more cash than in the history of state employment.

The governor just hired his second Commissioner of Natural Resources — touted for his extensive oil and gas experience — who should be his top oil and gas advisor.

Please, Legislators, note this: The governor’s cabinet should be the best and brightest and most competent Alaskans in their various areas of responsibility.  Accordingly, why in tight financial or any other times should you be funding a whole cadre of “special assistants” and “advisors” to the governor when you should be able to expect him to rely on commissioners themselves to be his best advisors– while streamlining the operating budget?

Each commissioner, appointed for competence, should be the governor’s very best advisor in that department’s area of responsibility!  Instead, do we have cabinet members appointed more as custodians of department bureaucracies when the real department decisions may seem to originate in the governor’s office with his chief of staff and the special assistants for each department…and now, a “chief oil and gas advisor with the rank of commissioner?”

Commissioners must at times feel really useless when their main connection to the office of the governor appointing them may well be a special assistant running back and forth telling the commissioner what the governor wants him/her to do.

In summary, Hendrix is a good man but we’d have been much happier had Walker appointed him as Chief of Staff or Commissioner of Natural Resources.  As it is, we can envision more conflict arising, personnel costs rising, inter-departmental frustration increasing and Hendrix himself becoming disillusioned in working for a man who would rather give orders than take objective, professional, science-based advice.

Yes, Walker was smart to get Hendrix.  We hope that Hendrix is able to give the strong, wise counsel that has distinguished his career.  We hope our agenda-driven governor will pay more attention to his new ” cabinet level, chief oil and gas advisor” than he has to the experts at the producing companies, the Alaska Oil & Gas Association, the Resource Development Council for Alaska and the Alaska Support Industry Alliance.

But we’ll be prudent and reserve judgment on that.

Below is the Governor’s announcement, including a review of Hendrix’s impressive resume:

Governor Walker Appoints Oil and Gas Advisor

John Hendrix Brings 36 Years of Industry Experience to Administration

July 18, 2016 ANCHORAGE—Governor Bill Walker today announced the appointment of John Hendrix as his chief oil and gas advisor, a newly created Cabinet-level position. Prior to this appointment, Mr. Hendrix worked as General Manager of Apache Alaska. His extensive oil and gas background includes work as a consultant to industry managing directors, oil ministers and the World Bank.

“As Alaska navigates this new reality of low oil prices and production, the industry itself is grappling with ways to innovate amidst this economic downturn,” Governor Walker said. “I am pleased that John Hendrix will join my team to help steer the conversation between the State and the industry so the relationship is mutually beneficial. Given John’s nearly four decades of oil and gas experience, his insight is much needed and respected.”

Mr. Hendrix began his oilfield career in 1980 with Schlumberger Oilfield Services on Alaska’s North Slope. He later joined BP, where he held several engineering and managerial positions within the North Slope, Anchorage, Russia and the UK. He was also part of BP’s first Russian operation, “Tarasov,” in 1991. During Mr. Hendrix’s 18-year career with BP, he founded production technical limits and base management practices, which BP currently uses.

In 2005, Mr. Hendrix joined Apache Corporation as production engineering manager for the Gulf Coast region. Before moving back to Alaska in 2011, Mr. Hendrix served for five years as the general manager and managing director of Apache’s Qarun Petroleum Company joint venture in Egypt, where the company doubled production.  He also served as a Board member and vice-president of the Alaska Oil and Gas Association (AOGA).

Mr. Hendrix  graduated from Homer High School as a state wrestling champion and Homer’s first Eagle Scout. He holds a bachelor’s degree in civil engineering from the University of Tennessee, which he attended on a wrestling scholarship.

Short commentary below video.  Tune in THURSDAY for commentary on Governor Bill Walker’s major Chamber address this week on gas pipeline issues and how his faulty logic is delusional and attempts to lead the Alaska economy into an even more precarious financial condition.  -dh

Commentary: The Governor of Alaska seeks a “Venezuela North” solution for taking over a $40-60 billion, private sector LNG project, with 1) unproven feasibility, 2) in a low price environment, 3) in a state downgraded by the rating agencies, 4) with depleting savings accounts, and 5) a $3-5 billion annual operating budget deficit, while 6) rejecting collaboration with three of the most knowledgeable energy producers in the world and all of this, 7) without legislative approval.   In Alaska we have both a federal and a state administration overreaching their authority, acting under ‘executive’ authority, dictatorially end-running legislative bodies and putting the long term fiscal security of the nation and state at great risk.  -dh

KTVA by Liz Raines.  Gov. Bill Walker is switching gears to the state’s gasline project after lawmakers ended a special session in Juneau without passing any long-term financial plan. But many lawmakers don’t like where he’s going.

At a luncheon hosted by the Anchorage Chamber of Commerce, Walker told business leaders it is appropriate for the state to take the lead on building the pipeline for the project, known as AKLNG.

“This is creating the infrastructure for commerce to work,” Walker said. “If we had not built any roads in Alaska, and waited, and said, ‘Well, that’s up to the trucking industry to build the roads,’ we wouldn’t have any roads.”