See National Ocean Policy Council Alert Here!

(Readers will understand the importance of this alert after reading today's commentary, below.  -dh)

See Part 4, Alaska Economic Report Below

Related Commentary: "The Sting"

Last Friday, former Alaska Legislator Beth Kerttula, posted this NEW OCEAN POLICY announcement: 

"Today, we are releasing the first Report on the Implementation of the National Ocean Policy, which highlights the progress we’ve made since we released an action plan last year. From supporting the ocean economy to ensuring the security of our ports and waterways, and from improving coastal and ocean resilience to providing local communities with tools to plan for a better future, we’ve made tremendous strides in undertaking our role as responsible stewards of this Nation’s great oceans.

"Among the activities described are a host of steps to promote sustainable energy development and aquaculture practices—including ensuring that permitting processes for these activities are…."

Here is a report from the private sector's "National Ocean Policy Coalition".  See Action Alert Here!

This massive undertaking — which will ultimately affect all waterways feeding the Great Lakes and Oceans — is a regulatory monster created by President Obama early in his first term.  See our original, 2009 report here.  See strategy of NOAA support here.

The oceans, Great Lakes, and all waterways and lands surrounding them are destined to be regulated under a new regime called, ecosystem-based management (EBM).

Our astute, NGP readers can just imagine the havoc that Obama, Kerttula and their massive grass roots constituencies can bring to America's traditional use of our waters.  

Not only does this effort threaten any natural resource activity in Alaska (i.e. which has 3/4 of America's coastline and over 3 million lakes, rivers and streams), but can severely affect every single American.  

The direct effects will be felt by commercial fishermen and others who make a maritime living–and even farmers whose activity on private land can be deemed to affect waters leading into lakes and oceans.  

Indirect effects will descend upon every American who will ultimately pay for the cost of this regulation and with more jobs exported to countries which do not have such regulatory obstacles.

The final insult to our way of life is that this whole, massive effort is unapproved and unfunded by Congress.  

Obama has done it all by Executive Order and memorandum.  It is run under the cover of the White House's Council on Environmental Quality and by his order, dozens of government agencies are indirectly funding the effort — redirecting their own congressionally approved funds and people to this dangerous activity.

We believe that this is one of the greatest examples to date of Obama's unconstitutional usurpation of Congressional powers.

We also wonder why more Governors and Congressional Delegations are not literally handcuffing themselves to the White House fences until this sort of illegal activity ceases.

Until and unless relief from such usurpation comes from some as yet unidentified champion, we can only conclude that America's rule of law is finished and that we have entered a new era of elected fascists who create law out of thin air by the memorada edicts and Executive Orders.  

Oh, and about DOI's affirmation of Lease Sale 193 yesterday, good luck.

Yes, we have been set up and stung again and again; and this is the latest sting by this administration.

American citizens have, indeed, been played for fools by those they elected.

-dh

Commentary: "The Set Up".

Yesterday, the Department of the Interior issued a Record of Decision affirming Chukchi Sea OCS Oil and Gas Lease Sale 193 and the remaining oil and gas leases issued in 2008 as a result of the sale. Press release  (Comment: Now that DOI has finally validated its own lease sale  (i.e. and long ago accepted payment by industry), observers will now watch carefully to see if the regulators deny access through the permitting process.  We hope the outcome is not a statement months or even weeks from now to the effect that, "Our policy is that exploration and development should occur in these areas, but only under responsible conditions.  To date, those applying for permits have not demonstrated that exploration — much less development — can occur responsibly in these areas.  Accordingly, the applications for permits are denied."  -dh)

Fox Business News.  

The Alaska Senate passed a bill Tuesday that would temporarily restrict participation by a state-sponsored corporation in an alternate gas pipeline project proposed by Gov. Bill Walker.

The vote followed a failed attempt by legislative leaders and Walker to reach an agreement.

The vote was 13-7, but notice of reconsideration was given, meaning the bill could be voted on again before advancing. It passed the House last week.

Walker has said he would veto the bill. A legislative override would require the support of at least 40 legislators.

Our Quick Takes On Current Alaska Journal of Commerce Headlines:

Hilcorp Energy keeps up spending despite oil price slide  –  More respect and kudos to one of Alaska's great new companies.  -dh

From Brent Greenfield, National Ocean Policy Coalition (Mentioned in commentary, right column.  Please act today.  Note that our preference would be to defund the entire, ocean policy process completely and surgically remove all funding from all agencies devoted to supporting this unfunded government program.  You can support the NOPC letter but we would recommend separate letters to your Congressional delegations recommending total defunding.  -dh)

Our readers:

With Congress set to soon begin drafting bills to fund the federal government for FY 2016, and with National Ocean Policy implementation continuing and very potentially impactful actions currently slated for FY 2016, NOPC has drafted a letter to House and Senate Appropriations Committee leadership in support of language that would achieve a 1-year pause in implementation of two of the policy's most concerning components.  Many of you have signed on to similar letters in the past, and your support is greatly appreciated. 
 
We are at a pivotal juncture with respect to policy implementation, and demonstrating the maintenance and broadening of support for a time-out will be critical to securing effective congressional action.  To that end, please review the draft text below and let us know by COB Wednesday, April 8 if we can add your organization's name as a signatory.  Also, please let us know if there are other organizations in your network that might be interested in signing on.  Thank you again for all your support.
 
Best,
Brent
 
 
Brent Greenfield
National Ocean Policy Coalition
2211 Norfolk
Suite 410
Houston, Texas 77098
 
 
DRAFT
 
Dear Chairmen Rogers and Cochran and Ranking Member Lowey and Vice Chairwoman Mikulski:
 
In connection with the drafting of legislation to fund the federal government for Fiscal Year 2016, the undersigned groups request your support for including language in all appropriations bills that ensures commercial and recreational interests spanning nearly every sector of the U.S. economy are not saddled with additional uncertainty or new regulatory hurdles as a result of implementation of two particular components of the July 2010 Executive Order establishing the National Ocean Policy. 
 
Among other things, the Executive Order directs a multitude of federal entities to participate in “Coastal and Marine Spatial Planning” (CMSP) in all nine U.S. coastal regions.  CMSP is described as a process "to better determine how the ocean, coasts, and Great Lakes are sustainably used and protected," and the Interior Department has likened CMSP to a “national zoning plan” that “will serve as an overlay” in federal decisions.  Concerns are further heightened given that the geographic coverage of CMSP includes inland bays and estuaries and upland areas as new governmental “Regional Planning Bodies” deem appropriate, and since federal entities will “address priority…ocean management issues associated with marine planning as described in the Executive Order” regardless of whether all states in a region decide not to participate.
 
In addition to CMSP, the National Ocean Policy requires the federal government to implement “Ecosystem-Based Management” (EBM), which is described as a “fundamental shift” in how the U.S. manages ocean, coastal, and Great Lakes resources.  Among other things, federal entities are required to “
[i]ncorporate EBM into Federal agency environmental planning and review processes” by 2016.
 
Language adopted by the Executive Order states that effective National Ocean Policy implementation would “require clear and easily understood requirements and regulations, where appropriate, that include enforcement as a critical component,”and acknowledges that the policy “may create a level of uncertainty and anxiety among those who rely on these resources and may generate questions about how they align with existing processes, authorities, and budget challenges.”  In order to ensure that further implementation of some of the most concerning and potentially impactful aspects of an initiative that has not been authorized by Congress does not create additional regulatory uncertainty, result in new regulatory hurdles, or siphon away scarce federal dollars from critical and authorized activities, the undersigned groups respectfully request that all appropriations bills include language stating that "None of the funds made available by this Act may be used to further implementation of the coastal and marine spatial planning and ecosystem-based management components of the National Ocean Policy developed under Executive Order 13547."
 
Including this language will provide Congress with an important opportunity to more closely examine the National Ocean Policy and the full range of its potential impacts before it is fully implemented.  In closing, we appreciate your attention to this issue and respectfully request inclusion of the proposed language in all Fiscal Year 2016 appropriations bills. 
 
Sincerely,

Newsmax by Ken Mandel.  The Keystone pipeline project transports oil from Canada to refineries in Illinois and Texas via eight U.S. states. Completed in 2014, a shortcut known as the Keystone XL was approved by Congress the next year, but vetoed by President Barack Obama.

The debate continues to rage. Here are eight quotes from oil company executives, who stand to benefit from the pipeline's construction: 

1. "Anything could happen, we don't know, but we remain confident that when Keystone is ultimately built, it will be the safest pipeline that has ever been constructed in this country." — Andrew Craig, TransCanada's land manager for Keystone projects and development, told NBC News. 

Read More….

​Forbes (3/27/15) editorializes: “This Saturday marks the seventh annual observance of “Human Achievement Hour,” a celebration of technology and prosperity hosted by my organization, the Competitive Enterprise Institute. Originally created as an alternative to the World Wildlife Fund’s “Earth Hour” campaign (which urges people to turn off their lights in the name of environmental conservation), Human Achievement Hour counters widespread predictions of environmental and societal doom.”

Alaska Economic Update- Part 4  –  Parts 1-4 Here

Posted: 31 Mar 2015 11:21 AM PDT

By Mark Edwards

Today we wrap up our series on the Alaska Economic Update. Over the past three posts, we have looked at oil prices, jobs, and population. We wrap things up today with the housing marketing and the building environment. For the complete Alaska Economic Update as well as other important studies, visit our ‘Resources’ section.

Home lending activity flat – The Alaska Housing Finance Corporation (AHFC) released its third quarter report on Alaska housing indicators. It tracks new loan activity for single family homes and condominiums in Alaska.  The data is based on a survey representing approximately 95% of mortgage lenders in Alaska and also includes AHFC loans. The survey covered mortgage lending activity in the first nine months of 2014.

It reported 6,889 loans were originated statewide for single family homes and condominiums for a total amount of $1.8 billion. This is nearly identical to the volume in the first 9 months of 2013. Loans were done with an average down payment of 11% for the last five years.  Single family homes accounted for 87% of statewide mortgage lending activity with 52% of those loans occurring in Anchorage. The Mat-Su contributed 18% of the volume, 10% in Fairbanks, 8% in Kenai, 5% Juneau, 2% Kodiak, and 1% in Ketchikan.

10% of total mortgage activity for the quarter was for condominiums and only 3% was multi-family.  91% of condominiums were financed in Anchorage. Juneau accounted for 5%, and the Mat-Su, Kenai and Fairbanks 1%. 

Refinance activity slowed rapidly in 2014, but may rise as interest rates are falling again – 30 year conventional fixed interest rate mortgage loans have been getting less expensive for three decades.  In 1981 they peaked at 16.6% and have undergone a slow and steady decline ever since.  In early 2009 rates dipped under 5% on average for the first time and a surge in refinance activity began. 

According to AHFC statistics, there was less than $200 million in refinance loans completed per quarter in Alaska in 2006 and 2007.  In 2008, the average rose to $400 million.  Then in the first quarter of 2009 the activity spiked to $1.4 billion, followed by $1.2 billion in the second quarter.  During this time, the average 30 year interest rate declined nearly 1.5% in six months. 

Graph 1

The refinance pace slowed somewhat in the last half of 2009, but still finished the year with $3.7 billion in refinanced mortgage loans according to AHFC statistics.  In 2010, the refinance volume declined to $2.4 billion, followed by $2.1 billion in 2011.  2012 saw an unexpected decrease in interest rates again to an all-time historic low of 3.3% by the end of the year.  This led to an increase to $3.1 billion in refinance activity. 

Rates increased throughout 2013 and you can see on the far right of the graph, the result has been a steep drop off in refinance activity.  Rates began declining again last year and finished 2014 at 3.86% on average.  AHFC data is only available through the third quarter of 2014 at this time, so we have not yet seen the year end results.  Rates continued lower in February to 3.71%.  This should be a positive trend for both home sales and refinance activity this year.

Housing statistics still good relative to the U.S. – The recently released survey by the Mortgage Bankers Association shows that Alaska continues to have some of the lowest levels of foreclosures and delinquencies on residential mortgage loans in the United States. Through the third quarter of 2014, Alaska ranked 5th and 7th best in the nation out of 50 states in foreclosures and delinquencies of all loan types.

The total inventory of foreclosures in process is 0.9% in Alaska, while the country has a much larger lingering foreclosure inventory at 2.4% due to higher rates during the recession and longer resolution times. These rates are an improvement from four years ago when Alaska’s rate was 1.4% and the U.S. foreclosure rate was 4.6%.

Delinquent loans are more than 30 days past due, but not yet in foreclosure. Alaska is fifth best behind North Dakota, South Dakota, Montana and Hawaii in the overall level of delinquent loans. Alaska’s delinquency rate is 3.6%, while the U.S. average is 6% for all loan types. This is an improvement for Alaska from 4.8% four years ago. The U.S. delinquency rate has also come down more dramatically from 9.4% at this time four years ago.

Graph 2

Subprime lending to traditionally non-qualified borrowers was a large contributing factor to the national mortgage problems. The survey covers 95,176 mortgages in Alaska. 6,110 or 6% were considered subprime, compared to 9% nationally. The rate of delinquencies and foreclosures on subprime loans is significantly higher. However, Alaska is in a far better position and again leads the nation as having the lowest level of foreclosures and is second in delinquencies for this important category. Subprime foreclosures in Alaska are at 2% while the national average is 9.8%. Alaska’s subprime delinquency rate is 9.4% compared to the national average of 19.3%.

Building permits up 430 units in 2014, but still historically low – According to the U.S. Census Bureau, the number of building permits for new, privately owned housing of 1 to 5 unit buildings remained low for the 8th straight year.  It had been under 1,000 units since 2007, but in 2013 it grew 9% to 1,081.  Last year saw a dramatic jump up to 1,509.  However, this is still half the level seen 10 years ago.

Growth in single family homes increased from 877 to 1,114 last year.  The number of duplexes permitted fell from 66 to 50.  The number of structures with three or four living units decreased slightly from 49 to 45.

The other major growth area beyond single family homes was in multi-family.  The number of structures with five or more units climbed from 10 in 2013 to 33 in 2014.  In terms of housing units that meant a growth from 87 to 300 last year.  The biggest challenge has been making new construction affordable enough to meet buyer’s income levels.  There is a shortage of low cost housing in Anchorage.  Vacancy factors are very low and the number of existing homes under $350,000 is in short supply.  It appears builders have started to take more risk in this market segment, likely aided to some extent by government subsidy programs.  Anchorage is expected to follow other growing cities by becoming denser, building vertical and redeveloping older properties.

Graph 3

Graph 4