Andrew Jensen / Editorial

Slope oil giants set to prosper as veto fallout continues

The consequences continue to reverberate after Gov. Bill Walker’s veto of more than $600 million owed to independent explorers and producers in the last two years. A pair of stories in the last week detail one company trying to meet its loan obligations to the state even as the state refuses to make good on its obligations to the company, and the other reveals that the major North Slope producers are now buying up the vetoed credits for pennies on the dollar to reduce their future tax liabilities. We can begin with BlueCrest, the Cook Inlet company that is now drilling into the Cosmopolitan prospect from its onshore rig on the southern Kenai Peninsula. The State of Alaska currently owes BlueCrest about $17 million in credits, which are rebates for prior spending on exploration and development. BlueCrest intended to use the money owed by the state to fund a reserve account that was required to have $15 million in it as of this coming Dec. 31. Shifting IOUs from one pile to another is a fine example of what’s become a tangled web of state loans and subsidies to the independent players from the oil and gas industry that were successful in attracting them to Alaska but have now become financially unpalatable in the throes of a budget crisis and radioactive when it comes to support from the Legislature. Walker believes he had no choice but to veto $430 million in the payments from the current fiscal year budget based on the state’s burn rate through its savings and he does correctly note that his original budget submitted last year intended to get right with our bills to the independents. But when the Legislature failed to enact any part of the long-term budget plan proposed by Walker that included the use of Permanent Fund earnings and new taxes, he slashed the PFD by half and the credit appropriation by 93 percent to its statutory minimum of $30 million. Penny wise and pound foolish pretty much sums it up. While Walker feels justified in the short term for stiffing companies on money owed because of the budget deficit — and will gladly point out that interest does not accrue on the state’s debts even as it continues to accrue for BlueCrest’s and other companies’ loans — he is sabotaging Alaska in the long term. Roughly every $1 the state agreed to reimburse companies for exploring and developing in Alaska was being matched by $2 in financing from the private sector. In some parts of that sector the state is now known as “Alaskanistan.” Walker can aim his pique at the Legislature for failing to act until the sun shines all day again in Utqiagvik, but the fact is he himself and his administration officials assured the financial world that his 2015 veto was a one-off. So he saved the Constitutional Budget Reserve a few hundred million dollars, but the result is that many of the financiers he’s depending on to invest 100 times that in the Alaska LNG Project now don’t believe the governor of a sovereign state can be taken at his word. (About this point the zealous defenders of the PFD will probably come around arguing that veto is worse for the Alaska economy. From this perspective it’s more likely that the 5,300 people who lost their jobs in the year before the PFD was vetoed would probably rather have a paycheck than an extra $1,000. The combination of depressed oil prices and the state’s new lack of creditworthiness is going to be far worse for long term growth and investment than a reduced PFD.) To the second consequence of vetoing the credit appropriation, Walker has now, probably unintentionally, given the major North Slope producers a cheap way to reduce their future tax bills by snapping up the certificates from the suddenly distressed independents that need cash. Tax Division Director Ken Alper told the Resource Development Council that future credit obligations have been reduced in the last month by more than $100 million because of such transactions. Now, this may get the Legislature off the hook for actually appropriating the money at some point, but it will be absorbed through reduced tax revenue from the majors who are already paying billions less as the price per barrel hovers around the breakeven point. Walker has not only damaged Alaska’s reputation in financial circles through his credit veto, but he has also sharply titled the state playing field to the majors’ advantage at the expense of the independent companies he once said he wanted to see 50 of on the North Slope. Had Walker made good on the state’s debts, that money would have circulated back into the Alaska economy as projects continued to develop and attract investment from the private sector while the Legislature pursued a more sustainable solution that wouldn’t harm potentially large discoveries on the Slope by Caelus and Armstrong. Instead, the legacy producers got an inexpensive windfall of a tax break that won’t benefit Alaska at all. Andrew Jensen can be reached at [email protected]    

New House Resource co-chairs sound right notes

To quote Slim Pickens’ Taggart from Blazing Saddles, “What in the wide world of sports is a-goin’ on here?” In the decades since before and after Alaska statehood, the universal refrain among citizens and politicians is that the biggest hurdle to developing our vast natural resources is Washington, D.C. Federal overreach. DC bureaucrats. Broken promises. Treehuggers. After Donald Trump’s victory in the Nov. 8 election that carried several endangered blue state Republican senators to new terms, the GOP now holds unified control over Congress and the White House. Sen. Lisa Murkowski, who along with junior Alaska Sen. Dan Sullivan renounced their support of Trump in October, will retain her powerful chairmanship of the Energy and Natural Resources Committee. While we don’t yet know who the new secretaries of the Interior and EPA will be, it is safe to believe that the last eight years of federal agencies actively working against Alaska’s interests are over for at least the next four. As the results became apparent at Murkowski’s victory party at the 49th State Brewing Co. in Anchorage, the wish lists started forming. ANWR. NPR-A. Arctic OCS. The King Cove Road. There was an almost giddiness as supporters brought these topics up with her, but she did sound a hint of caution. “This isn’t Christmas,” she said. “We still have to govern.” As a member of the Senate the last time the GOP held Congress and the White House, Murkowski saw firsthand how Republicans blew it and ended up turning over both houses to Democrats in 2006 and losing the presidency two years later. Not even 15 hours later, however, we learned that three Alaska House Republicans were joining up with the Democrats to form a new majority whose membership on resource development is mixed at best. It seems an amazing position for Alaska to be: with D.C. removed as an obstacle the biggest problem for resource development in the state could end up being our own legislators and Gov. Bill Walker, who has rattled the oil industry by vetoing more than $600 million worth of tax credits owed in the last two years and introducing proposals to raise production taxes that are supported by many in the new majority. His close friend Robin Brena, who bought Walker’s law firm and office and has penned opinion columns claiming there’s $1 billion to $3 billion being left on the North Slope table, led an effort spending hundreds of thousands of dollars to unseat Walker’s opponents that was unsuccessful in the Senate but did succeed in flipping the House by knocking off two rural Democrats and Anchorage Republican Rep. Liz Vazquez. That’s the pessimistic take. The optimistic take is the words of new House Resources co-chairs Geran Tarr and Andy Josephson of Anchorage to be found here. The pair, who also served on the committee last session, are sounding the absolute right notes on how the 30th Legislature must approach both tax credits and the Alaska LNG Project. It is refreshing, to say the least, to hear Democrat leaders recognize that the state cannot damage the prospects for discoveries by independents Armstrong and Caelus on the North Slope that have the potential to produce hundreds of thousands of new barrels for the Trans-Alaska Pipeline System. No less refreshing is Tarr’s statement that the state is looking like an “unreliable” partner to industry and that has to be fixed in short order. The co-chairs are also rightly skeptical about what is going on with AK LNG, how state leadership is going to take shape in the coming year and whether the Legislature is going to keep funding the effort without tangible progress. So, in the spirit of what few cool-headed opponents of Trump there are, the new House majority needs to be given a chance to lead as well. On resource development, the early signals are positive.

Democrats play by the Lombardi rule

“Winning isn’t everything, it’s the only thing.” The well-known motto of the late great Green Bay Packers coach Vince Lombardi is a philosophy Democrats understand and practice ruthlessly. The GOP, on the other hand, is content to play the Chicago Cubs’ role of lovable losers, but without the lovable part. If that wasn’t apparent before, it should be obvious now as we lurch toward the end of a presidential campaign pitting the Worst Candidates of All Time. In a matchup of the crude versus the criminal — and depending on the day you can decide which is which — there is only one side that is determined to win no matter how horrible, awful and downright terrible their candidate is. There’s no other way to explain anti-Wall Street crusader Elizabeth Warren rallying with Hillary Clinton, the candidate who’s taken more money from Wall Street than anyone in history. How else to figure the once-revolutionary Bernie Sanders telling his supporters to forget about Clinton’s coordination with the Democratic National Committee to ensure his loss in the primary or ignore the revelations about what she’s said behind closed doors for millions of dollars in “speaking fees” that would be known as bribes in a quainter time. Women by the thousands still gather to cheer wildly for Bill Clinton despite his 40 years of history abusing them while his wife quarterbacked the destruction of his victims. Republicans, meanwhile, are falling over themselves in a stampede to the microphones to express their distaste for Donald Trump and assert their sacred honor that amounts to little more than a naïve and ultimately futile belief that doing so will ensure they can retain some entrée into the cool kids club of the D.C. establishment. Fighting on your opponents’ terms and their ground is the surest way to lose, but the GOP is incapable of even holding the high ground it possesses when Trump alleges that the election is rigged. The faux fainting spells of the Democrats over this supposed threat to our system would be laughable were it not for every Republican politician on the planet lining up with their opponents to denounce their own candidate. This is the party who claimed for eight years that George W. Bush was an illegitimate president who was “selected not elected” by his daddy’s appointees to the Supreme Court and his brother’s administration in Florida. This is the same party that floated conspiracy theories about Diebold voting machines in Ohio being no doubt manipulated from Dick Cheney’s underground lair to defeat John Kerry in 2004. For years the likes of Sanders and Warren have been shouting about a system being “rigged” in favor of the so-called 1 percenters. Yet rather than throw all this back in the Democrats’ faces as shameless hypocrisy, the Republicans play along with their game. Let’s get real. The IRS is rigged. The Department of Justice is rigged. The EPA is rigged. The VA is rigged. The FBI, in making the most political decision in its history to not forward a case against Hillary Clinton for her multiple and years-long violations of basic record-keeping and national security laws, is rigged. Oh, but Trump is dangerous? What’s dangerous is that electing Clinton is a complete abdication of the idea that we have a rule of law that’s applied equally. What’s dangerous is the weaponization of the federal bureaucracy against the political out-party that has permeated the Obama administration and will no doubt expand under a woman who will stop at nothing to win power and use anything at her disposal to silence, threaten and punish her enemies. What’s dangerous is that what’s left of the opposition party has thrown their lot in with her in the name of preserving some kind of integrity or status they never had. Ask John McCain, who was once a favorite of the media and Democrats (but I repeat myself) as long as he was a thorn in the side of Republican leadership. By the time they were done with him in 2008 he was a doddering old fool who couldn’t work email or even remember how many houses he had. Ask Mitt Romney, quite possibly the nicest and most decent human to ever run for president, who by the end of 2012 was an Ebenezer Scrooge caricature of a robber baron intending to ship every job out of the U.S., give the newly unemployed cancer and strap Hispanics to the top of his car as he drove them back into Mexico. We don’t even need to get into the Democrats’ portrayal of George H. W. Bush and his son as evil incarnate. Now all these Republicans are suddenly the Democrats’ favorites because they’ll throw shade on Trump. The fact is it doesn’t matter who the GOP nominates, this year or ever. The Democrats and media are going to destroy them. It’s better to go down swinging than to try to curry favor with an approved opinion in the false hope you’ll be the last to swing. Trump at least understands this. The GOP would rather lose with honor, but they’re still going to be losers. Andrew Jensen can be reached at [email protected]

Walker went Bulworth at Alaska Chamber

“Going Bulworth,” if you don’t know, is an expression for politicians who say what they actually think. It comes from the 1998 movie starring Warren Beatty about a disillusioned U.S. senator who starts drinking at campaign events and rapping about single-payer healthcare. Gov. Bill Walker went Bulworth in front of the Alaska Chamber. At its annual meeting in Kenai on Oct. 12, Walker took the podium unshackled from any need to impress a group that was among those who gave him a grade of “D” on its business report card from the 2016 legislative session. “Don’t give me grades,” Walker said at one point. Minus the inebriation and the rapping, that was Walker, who angrily told people not to criticize his cabinet officials, said he doesn’t care about approval ratings, promised to introduce tax increases next year that will be bigger than those he proposed this year, and then cried poor about the pay cuts he and his appointees have taken to enter public service. Walker, who sold his law firm to Robin Brena upon taking office, said he’s taken a “90 percent” pay cut to be governor. He said he’s convinced people to take less pay to leave the private sector to join his administration. Yes, Walker said this in front of a room full of people from the oil industry that has shed 3,000 jobs over the past two years while state government payrolls haven’t been cut by a tenth of that. We don’t know exactly what Brena paid Walker and his wife Donna for the firm, but financial disclosures put the number between $200,000 and $400,000 for the firm and that they sold the downtown office for between $400,000 and $1 million. We do know that Brena, who was the chair of Walker’s oil and gas transition committee, is working to defeat pro-business candidates in the Nov. 8 election and recently wrote a newspaper column claiming that there’s an additional $1 billion to $3 billion to be wrung out of the North Slope oil producers who’ve been bleeding cash all year. Walker had to be prompted through questions to simply acknowledge the Oct. 4 announcement by Caelus Energy executives that believe they’ve discovered a huge oil reservoir at Smith Bay that could produce 200,000 barrels per day. The governor downplayed the find, saying it’s at least 10 years away from production and located far from the trans-Alaska Pipeline System. From the governor’s perspective, a project that needs a 125-mile pipeline to reach existing infrastructure to deliver to established markets is a longshot but his $45 billion-dream of an 800-mile gas pipeline with no existing market has been “ignited” and is full steam ahead now that the state is in charge. It’s clear Walker hates talking about Caelus, or the Armstrong Energy project at Nunashuk that could produce 120,000 barrels per day. The two projects combined represent more than 60 percent of current TAPS throughput, so why could this be? The answer isn’t difficult to figure. When Walker is forced to talk about the recent discoveries, not only is it a rebuke to his desire to repeal the law that brought Caelus to Alaska in the first place, but it shines a light on his policies of raising taxes on production and shafting businesses out of hundreds of millions in tax credits owed by the state through his irresponsible budget vetoes in the last two years. Regarding the tax credits, Walker said the state has to “balance our checkbook” and therefore vetoing the appropriation was the right decision. He said potential investors in Alaska want to see its fiscal house in order before putting money in the state. How Walker is going to convince anyone that refusing to pay money owed is a sign the state is a safe place to invest is one thing, but more immediately it is oblivious to how companies who are owed money by the state — for Caelus, that’s $200 million — are supposed to balance their checkbooks. Want more proof that Walker doesn’t want to talk about the positives in the oil business? Since Aug. 24, his office has issued at least nine press releases with 2,267 words about the Alaska LNG Project that amount to little more than hope and a hill of beans. When Caelus made its Oct. 4 announcement about Smith Bay, Walker issued a three-sentence statement totaling 65 words. Two days later when ConocoPhillips announced it has ordered a new extended-reach drilling rig from Doyon Ltd., Walker managed a whopping 63 words. Walker opened his remarks to the chamber by saying he’s happy to take all the blame for unpopular decisions while giving all the credit to others. He then proceeded to say how many people are thanking him for what he’s doing and went on to blame the Legislature for not enacting his fiscal plan. No matter what Walker says about not caring about getting credit, the press releases from his office reveal he’s desperate to show how much progress he’s making on AK LNG. The lack of enthusiasm for projects he can take no credit for — and is in fact actively working to undermine through his tax policies — also speaks volumes. On Oct. 12 in Kenai, he delivered the message loud and clear. Andrew Jensen can be reached at [email protected]

Separation of powers question must be answered

Gov. Bill Walker thinks he did the right thing by vetoing half of this year’s Permanent Fund Dividend appropriation. There can be no definitive answer to that question, but there will have to be one as to whether what he did was legal. The legal question is obvious when Walker not only crossed out the $1.3 billion that was to be transferred from the Permanent Fund Earnings Reserve into the Dividend Fund, but also struck through the statutory language authorizing the payment. Clearly Walker received legal advice that he had to cross out the statute as well as the appropriation to make the veto, which means someone at the Department of Law recognized there is a potential conflict with the law and his constitutional line item veto authority. Although the case is in Superior Court now, the Alaska Supreme Court will ultimately have to decide the matter. It’s a worthy issue to determine, and even though there has been plenty of criticism directed at Sen. Bill Wielechowski from this page, in this case he and his fellow plaintiffs are doing the state a service by refusing to allow Walker’s action to go unchallenged. Wielechowski, the runaway winner for least media-shy member of the Legislature, is no stranger to grandstanding but Walker is way off base to allege the motivations here are about reelection. Walker and his Department of Law believe his constitutional line item veto authority applies to every appropriation and therefore trumps any statute that may conflict with it. The plaintiffs argue it only applies to appropriations from general budget funds, and because the PFD transfer never touches the general fund it is off limits to Walker’s power to veto. In Walker’s column justifying his action in our current issue, the governor writes that, “it is clear we can’t continue to use the current dividend formula.” That formula is set in statute, and if Walker wants the formula changed he has to get the Legislature to approve it. The governor hurts his constitutional case by excusing his action with a reference to the statute that determines the dividend. Around this time last year there was another lawsuit filed based on a separation of powers question when Walker — again, after failing to convince the Legislature to go along with him — unilaterally expanded Medicaid by accepting federal dollars to cover a new group of enrollees. Speaking of grandstanding, Walker and Wielechowski were lined up on that one accusing Republicans of not wanting poor people to have health care and all but die in the streets instead. It wasn’t in dispute that Walker could accept federal dollars. What was in dispute was a very legitimate constitutional question as to whether Walker could add a new class of people to the Medicaid program without legislative approval. Walker had proposed legislation to do just that earlier in 2015 but had no success dealing with the Legislature, just as he has failed to work constructively on a host of other issues. That raised the question: if Walker thought he needed a bill to expand Medicaid at one point, what changed that he could add the new class unilaterally simply by virtue of taking the federal money? The answer is nothing, and it should have been adjudicated all the way to the Supreme Court after the case was initially dismissed in Superior Court by a judge with past professional ties to the governor that weren’t disclosed at the time. But the Senate Majority weaseled out of the case and left the House Majority holding the bag. Unable to present a unified front, the case died with the question unanswered. The Legislature then made it moot by funding the expanded class, which we learned in a report in this paper in August have exceeded initial cost estimates by more than $30 million just in the first 11 months of the program of which the state will eventually be responsible for 10 percent. Both Wielechowski’s and the Republican majorities’ challenge of Walker’s unilateral actions are and were worth pursuing. It would have been nice if both were treated with equal respect. Andrew Jensen can be reached at [email protected]

Asia is nice, but the best bet is closer to home

Let’s just get it out of the way that there’s nothing inherently wrong with Gov. Bill Walker heading off on a 10-day sales junket to pitch the Alaska LNG Project to Asian markets. This is the kind of thing governors are supposed to do. Sure, it’s going to cost money to send an eight-person delegation overseas, but that’s miniscule in the overall budget deficit. The big question is what is he going to say? As the Alaska Gasline Development Corp. moves to take over AK LNG from our producer partners, there is still nothing close to a firm outline of how the project will take shape, how it will be financed and whether it can be cost competitive. Walker, who desperately wants to put a happy face on the project despite its enormous challenges, is already issuing press releases about meetings that don’t do much if anything to advance the effort. The governor still believes the market that existed four or five years ago is still there, despite the fact that the Japanese came to their senses and restarted the 20 or so nuclear power plants it took offline after the 2011 earthquake, tsunami and Fukushima disaster. Just ask Walker, and he’ll point to 2012 when he continues to assert that he brought “twice” the market to a possible Alaska LNG export project. That claim didn’t hold up then, and it doesn’t hold up now. Read the letters of intention that Walker submitted to the Federal Energy Regulatory Commission in search of an export permit for the Alaska Gasline Port Authority he led in an effort to bring a pipeline to Valdez and it’s clear why the application was dismissed not once, but twice. First off, one of the “letters” is an email, and another is actually an article from this newspaper published in 2012 about Resources Energy Inc. opening an office in Anchorage and seeking as much as 2.7 billion cubic feet per day from a gasline. As an interesting aside, REI actually submitted its own letter to FERC saying it had nothing to do with Walker’s export application and for the agency not to consider it a letter of interest. The other letters of interest have another thing in common: they all demanded some kind of break or discount from the prices they were currently paying. So even if the market is there, and it still is to a lesser degree than five years ago, it is conditioned on a competitive price that Alaska LNG was going to struggle to achieve under the best of circumstances. Walker is also encouraged by the report from Wood Mackenzie that determined AK LNG could possibly break even $45 per barrel, but only if financing could be achieved in the range of 8 percent. Well, you can put any low number in the financial model and it is going to make it look better. The issue remains whether there is a pool of capital out there that would take 8 percent on the risks of a $45 billion project. Indeed, AK LNG, should it ever come to fruition, would be a game-changer for Alaska. But Walker would be well served to pay more mind to the game-changer that’s happening right now at the Pikka Unit on the North Slope where Armstrong Energy is advancing a $5 billion project in partnership with Repsol that could produce 120,000 barrels per day by 2021. Armstrong should be Walker’s dream come true: an independent wildcatter who’s made the most significant discovery since Alpine and is the only company planning to explore this winter. At a time of layoffs and drilling reductions at Prudhoe, Armstrong is currently employing about 750 people between his staff and contractors. Yet Walker’s official policy is to render Armstrong’s project less economic by raising his taxes. Walker wants to raise the minimum tax, and make it kick in as prices climb. A worse policy is hard to imagine for a state facing multi-billion deficits for years and an uncertain outlook at best for an LNG export project. Beyond the desperately needed revenue, the implications for Armstrong’s project are enormous. It would add 25 percent or more to the trans-Alaska Pipeline System throughput by the time it is online. Each new barrel brings down the transportation costs for every barrel, not to mention alleviating the nightmare scenarios Alyeska Pipeline Services Co. has been trying to avoid as production has declined and more and more engineering feats are needed to keep the oil moving. Most heartening of all is that Armstrong thinks the discovery he’s made is repeatable. Walker likes to say that the best way to get more oil into TAPS is to build a gasline. Not to put too fine a point on it, but the best way to get more oil into TAPS is to, you know, drill for oil. That’s what Armstrong did, and that’s what a lot of other people are going to do if he proves successful. Nobody is going to go exploring for gas when there’s 35 trillion cubic feet of proven reserves on the North Slope. Continuing to pitch the gasline is fine, but there is something terribly wrong with making it more difficult for the state’s best prospects for jobs, oil production and revenue.  

Walker starts over on AK LNG

 “I’ll follow the process in place now, you bet I will. But at the first sign of delay, or someone says ‘we’re going to slow this down,’ that’s when the state needs to have a governor who understands what to do and has the guts to say, ‘we’re going to finish this project as Alaskans.’” Candidate Bill Walker, Oct. 28, 2014, Anchorage Dowtown Rotary Club debate. “What I’ve said is that I will finish the project. I will not start over. I’m not interested in another start-over effort.” —Walker to Associated Press, Sept. 13, 2014. “In the 30+ years I have worked on gasline development no entity has been more of an impediment to a gasline project than Exxon. Not only has Exxon refused to engage in the process, it has directly blocked efforts to advance it.” — Walker, op-ed, July 31, 2014. “SB 138 begins yet another pre-election 18 month study and is an example of Alaska being taken advantage of and shortchanged.” — Walker statement on Alaska LNG Project, May 8, 2014. Now that Gov. Bill Walker has upended virtually the entire structure of the Alaska LNG Project, it is worth revisiting his commitment during the 2014 gubernatorial campaign that he would not start over. As is clearly apparent now — after he’s replaced six of the seven members of the Alaska Gasline Development Corp. board of directors and orchestrated the ouster of its President and CEO Dan Fauske — Walker had every intention all along of starting over. What Walker has done is move the Alaska Gasline Port Authority he started in 1999 from Valdez to Juneau and into the offices of the governor and the attorney general, who happens to be his former law partner. It started barely a month after taking office when he unceremoniously fired three members of the AGDC board, including two with decades of major project experience that is one of the legal criteria for serving under the legislation that created the state-owned entity. Walker said he didn’t care about the loss of expertise and favored Alaskans who understand the state’s needs. At the same time, Walker told his new appointments to the board not to sign confidentiality agreements and his AG Craig Richards said Jan. 14 that new regulations would be developed within two months. (It turned out to be August before the first draft was released.) A month later, Walker surprised legislators and members of his own administration when he announced in a newspaper column that he wanted to pursue a gas pipeline fully owned by the state as a competing back-up plan to AK LNG. That idea went nowhere fast as the Legislature reappropriated more than $100 million from AGDC coffers into funding an increase for education to prevent Walker from spending money on his competing project. Over the summer, Walker put additional demands on the project producers. He said he wanted a 48-inch pipeline studied instead of the more standard 42 inches that had already been chosen based largely on its availability and well-established engineering specifications. That decision alone has added $30 million to the preliminary work. Walker further began seeking the producers to help pay for in-state gas offtake infrastructure that was always intended to be Alaska’s responsibility to deliver gas to its citizens. We’ve also learned that Walker wants the producers to sell some of their gas in-state in order to relieve the political pressure that will be inevitable when Alaskans demand cheap energy should AK LNG ever go into production. Finally, in the biggest obstacle Walker has thrown up to progressing the project, he is demanding withdrawal agreements from the companies that would require them to sell their gas to the project in the event they decide to exit the endeavor. In the meantime he’s changed the lead negotiator on commercial agreements three times, tossing away more than a million dollars of scarce state funds on an old buddy, Rigdon Boykin, who brought the state no closer to staying on schedule than when he started his high-priced gig. Now with the canning of Fauske — and the clock is likely ticking on interim AGDC president and board chair Dave Cruz, the last holdover from the Parnell administration — another search begins for another high-priced position that will surely demand a more lucrative salary than the $360,000 per year for Fauske that Walker found so offensive during his campaign. What was more offensive to Walker than Fauske’s salary was his public criticism of the confidentially regs that emerged from Richards’ office that led the three producer partners to state unequivocally that AGDC would be shut out of project meetings if its staff signed them. It is quite ironic that after Walker has spent so much time demanding a seat at the table — or alternately, to be in the “driver’s seat” — that his own office would produce regulations that would allow the companies to effectively pull AGDC’s chair. The producers don’t have to agree to the rules, and they don’t have to allow AGDC into project meetings if they don’t believe its staff members are sufficiently bound by confidentiality agreements, plus their stated refusal to publicize commercial agreements they believe will put AK LNG at a competitive disadvantage. It’s also worth revisiting how Walker has missed the mark over the 15 years since he formed the Alaska Gasline Port Authority. For one thing, if a gasline had been constructed 20 years ago, Prudhoe Bay would have produced a billion fewer barrels of oil. Had it been built in the 1980s, the field would already be tapped out as an oil realm. So while Walker claims routinely that the companies have been warehousing gas or deliberately stalling a gasline, it turns out they knew what they were doing and have produced billions of barrels of oil and billions more in revenue to the state through gas reinjection. Those methods will be reaching a point of diminishing returns by the mid-2020s, which is why the producers are ready to build AK LNG. As noted above, Walker also opposed the bill that created the Alaska LNG Project. Despite his election year critique, it turns out that SB 138 was a heck of a lot more than “just a study.” Had Walker had his way when he sued to overturn the Point Thomson settlement reached under Gov. Sean Parnell, it wouldn’t be set to begin production next year or be poised to supply 25 percent of the gas to AK LNG, to say nothing of the hundreds of Alaskans hired and billions of dollars that ExxonMobil and BP have spent in the state to build it. Had Walker had his way to overturn the oil tax reform in SB 21, we wouldn’t have ConocoPhillips building (and now producing at) Drillsite 2S in Kuparuk or sanctioning Greater Moose’s Tooth-1. In fact, there was no decline in the first year of SB 21, drilling reached an all-time high, and production will increase this year over last despite the crash in oil prices. In short, Walker has been wrong nearly every step of the way on oil and gas policy: from the timing of gasline construction, to the right oil tax regime, to the very legislation and settlements reached under Parnell that have progressed this effort further than it ever has before. He’s betting Alaska’s future on finally being right. We’ll know before too long if he is. Andrew Jensen can be reached at [email protected]

Why is the Attorney General making budget proposals?

If any more proof was needed of the insular power structure that Gov. Bill Walker has created in Juneau, it was on display Oct. 28 when his proposal was rolled out to use Permanent Fund earnings and oil royalties to help bridge the gaping budget deficit. You’d think such an announcement would come from the governor himself or Revenue Department Commissioner Randall Hoffbeck. Instead it was Attorney General Craig Richards, Walker’s former law partner and protégé, who presented the plan to legislators and staff. Having the attorney general present a budget plan makes zero sense on its face, but is more understandable in the context of an Oct. 14 letter from Walker to his other agency commissioners that Richards would be screening and approving their correspondence with legislators regarding the Alaska LNG Project. A governor who trusts and respects the commissioners he has appointed wouldn’t have to issue such an order, but it has become crystal clear that the only opinions Walker listens to are the ones tied to his failed Alaska Gasline Port Authority, which only succeeded in making a lot of money for his law partners like Richards and the consultants he’s hired on at fat contracts since taking office. There’s former AGPA Executive Director Jim Whitaker, now Walker’s chief of staff; the aforementioned Richards; former authority consultants Rigdon Boykin and Radoslav Shipkoff; and former authority lobbyist Rick Halford, who Walker appointed to the Alaska Gasline Development Corp. board of directors earlier this year. Here’s a fun exercise: Let’s play “What if Sean Parnell did it?” Let’s imagine that former Gov. Parnell, who Walker defeated in the 2014 governor’s race, stacked his inner circle with former ConocoPhillips employees and lawyers from Patton Boggs, his two prior employers before becoming lieutenant governor in 2006, and inked a few of them to six-figure per month consulting contracts. Then let’s pretend he told his attorney general to approve all correspondence between state agencies and the Legislature that funds and oversees them. Finally, while doing all this, suppose Parnell was claiming to be transparent the whole time. The ensuing press releases from Rep. Les Gara and Sen. Bill Wielechowski would write themselves. Only a cohort whose members reside in an echo chamber could declare soberly they are dedicated to transparency while issuing what amounts to a gag order on commissioners subject to the messaging influence of the people’s attorney. Because that is what Richards is. He is not the governor’s attorney. He is Alaska’s attorney. We are his client, so repeatedly seeking refuge from legislators’ questions behind attorney-client privilege is fairly insulting. If Walker is so dedicated to transparency and against confidentiality when it comes to negotiating with the producers, then he should have no problem allowing free interaction between state agencies and legislators with questions. Twice this session, Richards and Walker have interfered with such exchanges. First, Richards told Alaska Gasline Development Corp. CEO Dan Fauske and other senior members of the AK LNG team not to show at a Senate Finance Committee hearing. Later, the governor refused to make Richards available to the House Judiciary Committee to discuss pending confidentiality regulations related to AK LNG now before the AGDC board for approval. When it comes to Walker and what he believes is transparency, it is confidentiality for me, but not for thee. There is no other way to explain this comment from Richards in response to legislators’ and oil producers’ concerns about the new confidentiality regulations they believe will slow down the project or actually damage the state’s interest because its team can’t sit at the table: “It’s been their (the producers) position from the very beginning of this process that they want as much confidential as possible — and I think from their position, any amount of sunshine is undesirable,” Richards told Alaska Dispatch News. “I don’t think it’s reasonable from the public’s perspective.” What also isn’t reasonable from the public perspective is that the Legislature — or any citizen, for that matter — can have no faith they are receiving unspun information from critical agencies like Revenue, Natural Resources and AGDC when it comes to the AK LNG Project. Walker and his authority crew have made very nice careers out of poor-mouthing the oil companies and claiming they have all the answers on how to build an Alaska gasline project, so it’s hard to blame them for the arrogant fashion they are conducting themselves with respect to the process they inherited and the Legislature that created it by a vote of 52-8. After all, their populism minus any accomplishments got them all the way into the governor’s office. But eventually they are going to have to deliver more than bumper stickers and rainbow-colored rhetoric. Or they can just keep blaming oil companies for everything. It’s worked for them so far — and only for them. At some point maybe more of the public will start to notice. Andrew Jensen can be reached at [email protected]

Producers let Walker save face in pulling gas tax

Starting with Shell’s announcement Sept. 28 it would be suspending its Arctic exploration program indefinitely, it’s been a rough couple months for resource development in Alaska by any standard. Having regulated Shell’s effort into uneconomic status, the Interior Department then canceled Arctic Outer Continental Shelf lease sales for 2016 and 2017 and refused to stop the clock on Shell’s leases in the Chukchi and Beaufort seas despite the fact that Shell lost a full year in 2010 because of a federal drilling moratorium following the Deepwater Horizon disaster. In between, Repsol and Armstrong announced they were deferring planned work for this winter at their Colville Delta prospect where they’ve spent the past four years proving out a substantial discovery. The result is that some 500 contract employees won’t be working there this year. Unlike the situation with Shell — which has no silver lining and ripple effects now include the suspension of work studying a deepwater port at Nome — there was at least some positive in the statement from Repsol and Armstrong. The companies announced that when developed, the Colville Delta prospect could produce 120,000 barrels per day. That would be a much-needed, huge boost to throughput in the Trans-Alaska Pipeline System although current prices and the prospect of years of permitting makes the timing of production impossible to guess. Just look at ConocoPhillips’ CD-5 project — a notable bright spot as oil is now flowing for the first time from the National Petroleum Reserve-Alaska. It took 12 years between the environmental impact statement and the first oil at CD-5, a testament to federal obstacles and the anti-development cabal of NGOs that are often indistinguishable. ConocoPhillips did receive a key permit for its Greater Moose’s Tooth-1 project, although whether its board of directors will sanction development in the current climate of oil layoffs and capital expenditure pullback is also an open question. Amid federal roadblocks in the OCS and the natural price cycle that the state cannot control, Gov. Bill Walker decided to monkey around further with the Alaska LNG Project by calling the Legislature into a special session with instructions to consider his threat of a gas reserves tax against producers who decide against participating. Setting himself up for another fight with the Legislature he surely knew he was destined to lose, the producers threw Walker a lifeline for  a way out of his ill-conceived, undefined and probably legally indefensible idea. ConocoPhillips and BP sent Walker one-page letters stating they would provide the gas they own at the Prudhoe Bay and Point Thomson fields even if they choose not to participate in AK LNG. Walker touted the letters as “written assurances” that gas would go to the project as he abruptly removed the gas reserves tax from the special session (although it has to be questioned whether his office even managed to draft a bill to introduce given the seat-of-his-pants way the governor first pitched the idea on Sept. 24). The letters from ConocoPhillips and BP, of course, are hardly binding as they include the caveat that gas would be provided on a “mutually agreeable” and “commercially reasonable” terms. The ConocoPhillips letter also stipulates that any such arrangement would be “subject to management approval.” So once again, Walker caused a huge fuss over nothing, much the way he announced he would pursue a competing project to AK LNG this past March until the Legislature stopped him by taking his money away from the Alaska Gasline Development Corp. While constantly raising fears of a producer pullout from AK LNG, it’s hard to see how Walker can look at the North Slope today and believe that ConocoPhillips, BP and ExxonMobil are not committed to Alaska. In the past month, CD-5 and Drillsite 2S in the Kuparuk field have begun producing for ConocoPhillips and will add some 24,000 barrels of new oil to TAPS in this fiscal year, representing billions of investment. To the east at Point Thomson, ExxonMobil and BP have spent some $4 billion with a “B” actually constructing the first phase of AK LNG. Point Thomson will supply 25 percent of the gas to the project, but for now will supply 10,000 barrels per day of natural gas liquids to TAPS starting the first quarter of next year. It is also the big three producers who have been buying up land in Nikiski for the future site of the LNG processing plant and applying for and receiving the necessary export permits, triggering the scoping process for the environmental impact statement. The producers’ AK LNG spending and permitting in addition to the billions of dollars invested resulting in 34,000 new barrels of liquids for TAPS in this fiscal year calls to mind the truism that money talks and you-know-what walks. The producers’ money is talking, and it’s time for the governor to start listening.

Producers want gas by 2025. Does Walker?

When it comes to the Alaska LNG Project, it appears Gov. Bill Walker is more interested in negotiating the pre-nup than he is in planning the wedding. With his latest shot from the hip directed at the project so critical to the future of Alaska, Walker is pitching the idea of some kind of natural gas reserves tax levied against producers who decide against participating in AK LNG. Walker called the Legislature into a special session beginning Oct. 24 to review gas reserves tax legislation in addition to appropriating funds from the Constitutional Budget Reserve to buy out TransCanada’s interest in the project. However, Walker has no bill for the Legislature to consider yet on the gas reserves tax and he was unable to explain how it would work at his press conference Sept. 25. There is no bill to review because Walker decided to push for the gas reserves tax sometime between his meeting with House and Senate leadership on Sept. 21 and his call to a special session Sept. 24. Responding to legislators who said they were blindsided by his tax proposal after he did not mention it in their Sept. 21 meeting, Walker claimed that he told them he was “working on” something for project certainty, as if they should have interpreted that as him planning to ask for a gas reserves tax. Walker said he was “hoping” to hear something from his negotiating team on terms of a withdrawal agreement he has been seeking since taking over the effort last December. When no accord was reached, Walker decided to seek a gas reserves tax instead. “This is in place of the withdrawal agreement,” Walker said Sept. 25. Much like his announcement through a newspaper column in March that he wanted to pursue a state-owned, competing gas project to AK LNG, Walker doesn’t have a plan beyond getting in front of a microphone and repeating a bunch of populist pablum about “Alaska first” and justifying his actions by raising the unfounded specter of a producer pulling out of the project. One of Rep. Don Young’s favorite expressions about government regulation is “a solution in search of a problem,” and that certainly applies to Walker’s threat to use a gas reserves tax against producers who have shown no indication they are walking away from AK LNG. This is all likely a moot point, though, as Walker has a better chance of convincing President Obama to open ANWR than he does of selling the Legislature on a bill he can’t even describe yet. Walker also said Sept. 25 that he spoke with each of the three North Slope partners the day before and, “I have not received a strong outcry from the producers on this. It’s only a problem if they’re not going to allow the gas they control to be used in a project. That would be an admission to me that they have no intention of doing a project. So let’s find that out now rather than 10 years from now.” It didn’t take 10 years, but about 10 minutes, before both ExxonMobil and BP issued statements against the idea of a gas reserves tax. Exxon said it would “undermine” the project and BP said it would make it “more difficult.” By Walker’s reasoning, their objections must mean BP and Exxon “have no intention” of doing the project. Of course, no such thing is true, and it illustrates how Walker’s words routinely outrun decorum when he talks about the state’s project partners or the legislators he described as “un-Alaskan” back in March when they introduced a bill to stop his competing gas project. Walker complains that the state has no leverage with the producers to keep the project on track for a mid-2020s startup for gas sales. He should read the filing BP and Exxon made with the Alaska Oil and Gas Conservation Commission on Sept. 8 in support of their request for additional gas offtake at Prudhoe Bay to supply the AK LNG Project. In the document, the companies state unequivocally that a 2025 startup for a major gas sale project results in a four-fold increase in total hydrocarbon recovery from the Prudhoe Bay pool compared to oil alone, and every year of delay reduces potential gas sales as it would continue to be used to fuel operations supporting oil recovery. Without a gas project, it becomes less and less economic to maintain the North Slope oil infrastructure that will have been in place for nearly 50 years by 2025. From the filing: “A later MGS (major gas sale) start-up also increases the uncertainty that the project can deliver a full 30-year project life due to declining oil production and revenues which underpin the project, and due to increasing project risk from aging facilities which could reduce project life and thus ultimate recovery, reducing the potential incremental recovery relative to a 2025 start-up.” According to the BP-Exxon filing, a 2040 startup compared to 2025 would result in a reduction of about 1.5 trillion cubic feet in gas sales versus an increase in oil production of only about 100 million barrels. Considering the billions of dollars the three producers have invested on the Slope, that sounds like a whole lot of motivation to make AK LNG happen on schedule. Although it was bad enough, the gas reserves tax floated by Walker on Sept. 25 wasn’t the only discomforting thing he said at his press conference. He dismissed as “absurd” a question about how the state would finance a quarter of a $60 billion project if it buys out TransCanada, or how it could finance even more if a producer pulled out. Before the state could try to finance $15 billion, it will cost the state at least $108 million to buy out TransCanada, plus cash calls for the remaining pre-front end engineering and design, or pre-FEED, and another $500 million for its share of the $2 billion FEED process that is supposed to begin next year if all parties agree. And if there’s no real budget reform passed in the 2016 session, credit rating agencies intend to rapidly downgrade the state’s credit status, which will only drive up any financing costs. Walker went on to suggest that the state could sell part of its 25 percent share in the project to some of the Asian customers he recently met with in Japan as a means to finance the project. He cannot be serious. It is an irreconcilable position to demand Alaska be in the driver’s seat of this project and also contemplate selling off pieces of the state ownership to Japanese customers who do not have the state’s best interests at heart. Surely there are some over there who would be glad to spend a few billion up front that they can write off against cheap gas over 20 years, but does that sort of deal maximize the value of the resource for Alaska? Walker said he wants “project certainty” from the producers, but at the same press conference he said, “the market is going to determine if it’s going to happen. The financial markets are going to determine if it’s viable.” In other words, there is no way for the producers to give him a guarantee of project certainty at present when by his own admission the consumer and financial markets will determine whether AK LNG advances. Finally, Walker once again cited the multiple LNG projects under consideration by ExxonMobil as reasons for the state to be ready to go it alone or without one of the current partners. “I can’t control when we’re competing with eight other projects for one company, how we’re going to stack up in that queue,” he said. For the leader of an “owner state,” Walker has plenty of control for how AK LNG stacks up, and his latest idea doesn’t do anything to move it ahead in line. Andrew Jensen can be reached at [email protected]

ExxonMobil doing heavy lifting on Alaska LNG Project

There was a bit of a flare-up in the ongoing negotiations over the Alaska LNG Project last week between Gov. Bill Walker and ExxonMobil CEO Rex Tillerson. In comments to Natural Gas Week, Tillerson said “Alaska is its own worst enemy” when it comes to building a natural gas pipeline and according to the article made no effort to hide his frustration with the current effort begun under former Gov. Sean Parnell and now being revised constantly by Walker. Tillerson said that Alaska’s frequent changes in direction coinciding with each new governor are the biggest obstacle to building a $50 billion-plus project. Walker — who has appointed three different lead negotiators for the project in barely nine months in office, proposed and then abandoned a competing state-owned project, wants to buy out TransCanada and finance the state’s entire 25 percent share and floated the idea of a “gas reserves tax” to legislators — brushed aside Tillerson’s critique by saying that companies are “uncomfortable with what we’re trying to do, in taking a much more aggressive role in moving the project along.” The trouble with Walker’s defense of his actions to date on the Alaska LNG Project is that his aggressiveness is actually not moving the project along. It is slowing it down. Since the end of the 2014 legislative session, it was always the goal to have a special session this fall to present agreements for approval to the Legislature. According to Walker’s gasline staff, that is looking increasingly unlikely. Further, if fiscal terms that both state and industry partners now agree will have to go before the people in the form of a constitutional amendment can’t be presented in the next session we will lose two years before it could go on the November 2018 ballot. Walker offered another dig at ExxonMobil by leaving it out of the companies he was pleased with on progress so far, mentioning BP and ConocoPhillips. Walker visited the North Slope earlier this year for the first time, but perhaps he should make another trip out to Point Thomson to see the — literal — heavy lifting ExxonMobil has been doing on the Alaska LNG Project. On Sept. 8, the company announced that gigantic gas processing modules had arrived via four barges at Point Thomson after a 4,000-mile voyage from Korea. The company remains on track for first production in the first quarter of 2016 when it will begin transporting 10,000 barrels per day of natural gas condensate via a 22-mile pipeline to the Trans-Alaska Pipeline System. ExxonMobil owns 62.2 percent of Point Thomson (BP is the other major owner at about 31 percent) and is shouldering a corresponding share of the $4 billion project cost. It’s important to remember that the Point Thomson settlement reached between the state and ExxonMobil in 2013 under Parnell was the first step in creating the Alaska LNG Project. Some 25 percent of the natural gas that will eventually feed the pipeline will come from Point Thomson. Were ExxonMobil really not that interested in pursuing the Alaska LNG Project it would have been far more cost effective to keep paying legal bills and string the issue out in court rather than commit about $3 billion in capital on this massive engineering and logistical challenge. It has spent 70 percent of that money in Alaska with 99 companies and achieved an Alaska-hire rate of about 90 percent. ExxonMobil, along with BP, has also applied for additional gas offtake at Prudhoe Bay in order to supply the Alaska LNG Project. Again, this is not the action of a company that isn’t interested in keeping this project moving. Every action they have taken in terms of permitting, engineering and actual expended capital indicates ExxonMobil is doing its part to advance the Alaska LNG Project. If the company is holding a tough line on fiscal terms it is only natural considering its level of investment to date and its status as the largest gas owner in the project. Nearly every action Walker has taken indicates he is more interested in putting his stamp on the project and deviating from the path he inherited at every point possible. The greatest enemy of this undertaking is uncertainty, and unfortunately it is Walker who is creating it. Andrew Jensen can be reached at [email protected]

Alaskans embrace executive 'overreach' on Denali

On the eve of President Barack Obama’s visit to Alaska, state residents and members of its congressional delegation finally found a bit of executive action they could support. Obama’s announcement Aug. 30 that Mt. McKinley would be officially renamed Denali drew cheers from Alaskans who have long used the Native Athabascan word meaning “the high one” or “the great one” rather than the name assigned by Congress to North America’s tallest peak in 1917. The reaction in President William McKinley’s home state of Ohio was predictable outrage with Republican presidential candidate Gov. John Kasich and House Speaker John Boehner assailing the act as yet another example of executive “overreach” by Obama. Taking out the subject matter, the assaults on overreach could have been issued by any member of Alaska’s all-Republican delegation whether it is new Environmental Protection Agency regulations or Obama’s unilateral decision earlier this year to begin managing the Arctic National Wildlife Refuge coastal plain under a wilderness designation. Changing the coastal plain to a wilderness designation requires an act of Congress, but then again, so does changing the immigration status of millions of illegal aliens, administratively amending the Affordable Care Act to ameliorate some of its most onerous features, or renaming a peak that was designated Mt. McKinley by law. Alaskan congressional efforts to change the name to Denali have been routinely stymied by the Ohio delegation ever since former Gov. Jay Hammond first petitioned to rename the mountain in 1975. Citing a 1947 law giving the Interior Secretary the power to resolve geographic naming disputes, Sally Jewell signed the paperwork making it official on Aug. 28. Lost in all the celebration, however, is the fact that the reason Mt. McKinley survived as the name for so long was because it was dubbed as such by Congress. Obama’s executive decision has no such durability, and the likes of Kasich and Donald Trump vowed to change it back should they win the Oval Office. It doesn’t seem likely that Kasich or Trump or whoever would find a one-day dustup over a mountain’s name more than a year before the 2016 election worth revisiting, but that doesn’t mean it’s impossible. The only good thing about most of Obama’s executive orders is that they can be rescinded by the next president, so it is more than a little strange to see some of his most vociferous critics enjoying this one simply because they agree with the outcome. And speaking of executive overreach justified by popular support, it would have been fun to be a fly on the cabin walls of Air Force One listening to the conversation between Obama and Gov. Bill Walker. “So, Gov. Walker, how were you able to expand Medicaid?” “I couldn’t get Republicans to do what I wanted, so I just did it anyway!” “That’s awesome! It’s what I do all the time. Stupid checks and balances.” On a more serious note, Obama’s trip was all about climate change as expected, and he found some useful backdrops of glaciers and coastal erosion to make his point. He certainly wasn’t going to be photographed anywhere near an oil rig or a producing mine even though he would have had a chance to visit Red Dog on his trip to Kotzebue and it would have been very educational for him to see how Prudhoe Bay operates in its delicate environment. That being said, amid a global economic slowdown and a collapse in oil prices, Obama’s record in Alaska isn’t all bad. Shell is drilling in the Chukchi Sea, ConocoPhillips is drilling in the National Petroleum Reserve-Alaska and will start new production there later this year, and the Federal Energy Regulatory Commission has approved export permits for the Alaska LNG Project to both free trade and non-free trade countries. Alaska is one of the few places on Earth where this level of investment and actual drilling is currently happening. Obama’s administration hasn’t necessarily made it easy, but it hasn’t stopped it, either. That’s an executive inaction worth appreciating. Andrew Jensen can be reached at [email protected]

Expanding a broken system

Now that Gov. Bill Walker has done an end-run around the legislative branch to expand Medicaid, it’s worth a look at how growing the program is going in other states. Here’s a roundup of Associated Press headlines from the last week: “Surge in Medicaid enrollment will squeeze Michigan budget” “Maryland Medicaid expansion much higher than forecast” “New Hampshire among states with surging Medicaid enrollment” “ND Medicaid expansion costs higher than previously forecast” “California’s Medicaid enrollment surpasses projections” “In Illinois, Medicaid expansion sign-ups double predictions” “New Mexico among states where Medicaid enrollment surges” “Nevada expects to spend more on Medicaid than planned” “Oregon underestimated Medicaid expansion price tag” As part of a special report, the AP found that more than a dozen states — nearly half of the 30 who have expanded Medicaid — have seen enrollment and costs swell beyond their original projections. To be sure, the idea of insuring those of lesser means is a noble one. The hard question that hasn’t been answered is how the state is going to pay for it. To hear Walker tell it, there is no downside. The experience of other states so far tells a different story. For a state facing billions in deficits that stand to erase our savings account within the next few fiscal years, it’s a heck of a coin flip to grow the largest cost in the budget without any reform outside of hiring a consultant or any spending offsets such as a provider tax as in Utah’s current Medicaid expansion proposal. Walker recently vetoed $200 million in oil exploration tax credits, capping this year’s expenditures at $500 million, declaring the current system “unsustainable” and vowing to start a discussion about reforming the program. The state Medicaid program — to say nothing of the total U.S. population on Medicaid that now encompasses 1 in 5 Americans, or about 70 million people, at a cost of some $450 billion per year — is the very definition of unsustainable. Just this year, Walker’s own budget proposal included a $20 million cut in Medicaid spending for existing enrollees; the Legislature added another $30 million in cuts. Those cuts generated a corresponding loss of federal matching funds for a total reduction of $100 million. In short, the state is already cutting a program that Walker has now expanded. Those cuts led the state to eliminate inflation-adjusted increases in Medicaid reimbursements to providers who have already been hammered by the malfunctioning payment system administered by Xerox. There is also an existing enrollment backlog of people eligible under the old criteria who will not be 100 percent paid for by the federal government. Well aware of the existing criticism about adding people to a broken payment system, Walker and his Health and Social Services Commissioner Valerie Davidson said Xerox is making improvements and now paying about 90 percent of claims correctly. Nine out of 10 may sound good, but in fact it’s pretty terrible for a system that pays out $1.5 billion per year. According an affidavit detailing the state’s complaint against Xerox filed by Director of Health Care Services Margaret Brodie in February, the error rate under the legacy Medicaid payment system was 0.47 percent in 2008 compared to a national average of 2.62 percent. In February, Brodie wrote that the state estimate for the Xerox error rate was somewhere between 6 percent and 12.4 percent. If the top end of the error rate was 12.4 percent, getting it to less than 10 is a somewhat marginal improvement at best. This matters because the state has to reimburse the federal government for erroneous Medicaid payments. Take 10 percent of $1.5 billion and we’re not talking chump change here. One thing in particular that stood out at Walker’s pep rally July 16 was the appearance of the Department of Corrections commissioner touting the savings to the system from Medicaid expansion. According to the University of Alaska Anchorage, the state prison population grew by 30 percent from 2004 to 2013 and now stands at more than 5,000 people. That’s compared to the state’s population growth of about 12 percent in the same time. As of 2013, only a tiny fraction of those under correctional supervision — just 295, or less than 6 percent — were on some form of electronic monitoring. Reducing the prison population and reforming sentencing to reduce recidivism and get more people out of the system and into the workforce would be a far better path than simply finding someone else to foot the bill. Frankly, this aspect of expansion is the most troubling in that it exemplifies the fundamental failure to choose reforms instead of more federal dollars. Andrew Jensen can be reached at [email protected]

An about face on exploration tax credits

Can you guess who said this? “We need to incentivize. We need to do on the North Slope what we did in Cook Inlet. We incentivized specifically for more companies to come in on the front end and created the credit program. “I worry about heavy oil. I worry that the biggest known resource on the North Slope is heavy oil. We have to incentivize that. I want to see 50 or 60 companies on the North Slope, as they do in Norway. “They have a much higher tax structure in Norway but they have 50 or 60 companies because they help on the front end, on the exploration credits. We need to level the playing field so smaller companies can come to Alaska. It’s very expensive to do business on the North Slope. “We’re fortunate to have the large companies we do have, but we need to look for ways we can reduce the costs so it’s more economic for the smaller companies to come to Alaska, create jobs, create opportunity and drill for oil. We need more wells drilled outside the legacy fields to get more oil for the pipe.” Followers of Alaska politics will recognize the reference to the idyllic oil regime of Norway is a giveaway that the speaker is Gov. Bill Walker, who is always pining for the fjords when it comes to measuring our tax policy against other resource states. Walker made those comments in one of the last debates against former Gov. Sean Parnell hosted by the Anchorage Rotary last Oct. 28. The answer was in response to a specific question asked of Walker about what he would do to increase production in the face of falling oil prices that at the time were $82 per barrel for North Slope crude and have since declined to less than $60. While the price picture has gotten uglier, the state budget situation was clear at the time with several years of multi-billion dollar deficits facing the next governor. In this issue we carry Walker’s defense of his $200 million veto of the exploration tax credit appropriation to cap this fiscal year’s spending on the program at $500 million. Walker asserts his move — which came with no warning to explorers who have earned the credits and made investment decisions based on them — is in response to Alaska’s “new” fiscal reality. Either Walker hasn’t been paying attention — which we know isn’t the case — or he’s hoping the public hasn’t. There’s nothing about Alaska’s fiscal situation that wasn’t known last October when he made his comments to the Rotary. Or when Walker submitted his budget to the Legislature in January. Or when Democrats were pitching this exact move in May while the first and second special legislative sessions were ongoing. Once again, Walker is winging it and in this instance his mouth is writing postdated checks that can’t be cashed. As he concedes in his column, the veto does nothing to change Alaska’s “new” fiscal picture, it simply kicks a $200 million can down the road one fiscal year. The about face on exploration tax credits that incentivize production is particularly ironic given Walker’s opposition to Senate Bill 21, passed in 2013 and upheld by voter referendum in 2014, which repealed the far more generous tax credits under the previous system known as ACES. Under ACES, which had a 20 percent capital expense credit, the state would have been on the hook to ExxonMobil for $800 million in credits based on the estimated $4-billion cost of the Point Thomson project set to begin production in 2016. That’s leaving out the fact the state took in more revenue under SB 21 than it would have under ACES at these depressed prices. If Walker had his way on SB 21, the state budget situation would be worse than it is today. Now that he has gotten his way with his veto pen, next year’s budget situation is worsened by his deferral of $200 million in tax credit payments that will have to be paid sooner or later. In exchange for these non-existent savings and weakening industry confidence in the state’s word, Walker gets to start another “discussion.” What a deal. Myopic doesn’t begin to describe it. Andrew Jensen can be reached at [email protected]

Walker might have two more fish seats to fill

For those who follow fish politics, Gov. Bill Walker has had a rough time filling a single seat on the Alaska Board of Fisheries. Now he may have to start thinking about new names for the North Pacific Fishery Management Council. First, he told previous Board of Fisheries Chair Karl Johnstone in January that he would not be reappointed after his term ends this June 30; Johnstone resigned in response. Walker then made a snap decision to replace Johnstone with Roland Maw, who Johnstone and all his fellow board members had denied an interview for the Alaska Department of Fish and Game commissioner job. Maw withdrew Feb. 20 when it was about to come to light that he was under criminal investigation in Montana for illegally obtaining resident hunting and fishing privileges in that state while receiving the same in Alaska. That led Walker to nominate Soldota conservationist Robert Ruffner to replace Maw, and Ruffner was narrowly defeated in the Legislature 30-29 after sportfishing groups rallied against him based on his support from the commercial fishing industry. As if it couldn’t get more bizarre, Walker’s Boards and Commissions Director Karen Gillis resigned in protest May 13 when she was told the governor intended to nominate Roberta “Bobbi” Quintavell to replace Ruffner. Rumors of Quintavell’s selection began to spread before the official announcement, and commercial fishing groups protested to the governor’s office based on her being the preferred choice of the Kenai River Sportfishing Association that led the fight to sink Ruffner’s nomination. Walker changed his mind again, apparently, and picked outgoing Board of Game member Robert “Bob” Mumford on May 18. Now, as this issue of the Journal goes to press, the North Pacific council that governs Alaska’s federal fisheries 3 to 200 miles offshore is meeting in Sitka with more than half the agenda dedicated to a single action: cutting the amount of halibut bycatch allowed in the Bering Sea groundfish fisheries that include pollock, Pacific cod and flatfish. However, the council will take its final action without two members from Alaska who are being recused based on their interests in those same Bering Sea fisheries. Among the 11 members, this decision by the heads of the Department of Commerce legal division removes Alaska’s majority voting block on the council and essentially makes the federal designated rep from National Marine Fisheries Service the swing vote on any decision. By law, the appointees to the council must be drawn from industry stakeholders, putting them under a different set of conflict of interest guidelines than other federal bodies. However, no member may have greater than a 10 percent stake in the fisheries affected by his or her vote. This brings us to the Alaska members being recused: Simon Kinneen of the Norton Sound Economic Development Corp. and David Long of Glacier Fish Co. Commerce Department attorneys determined that NSEDC, which is the Community Development Quota group for the area, and its subsidiaries harvest more 13 percent of the nearly 2 million metric tons of fish allocated in the Bering Sea. Glacier Fish Co. is tied to NSEDC, and Long was also recused from voting based on a greater than 10 percent interest in the fisheries. On the one hand, the fact that NSEDC and its subsidiaries alone now harvest more than 10 percent of Bering Sea fish is a success for the CDQ program that began in 1992 and allocates 10 percent of the total Bering Sea harvest among 65 Western Alaska villages divided among six CDQ groups. On the other, it means that NSEDC has grown too big to have an employee on the council. Former Trident Seafoods executive Dave Benson tried to get around the 10 percent threshold in 2008 first by changing jobs to work for a Trident subsidiary, which led him to being recused from a vote in 2009; he subsequently formed a consulting company that allowed him to avoid the 10 percent rule and continue voting on Bering Sea issues. New financial disclosure rules and greater attention to the clients of consultants who work for their former employers means the Benson loophole is effectively closed, as it should be. Kinneen was also recused from a crucial vote in April related to lowering chinook salmon bycatch limits for the pollock fleet in the Bering Sea, based on NSEDC’s stakes in that fishery. Taken to a logical conclusion, if Kinneen and Long can’t vote on halibut bycatch based on the 10 percent threshold, they shouldn’t even be allowed to vote on the annual Bering Sea harvest quotas. If a council member from Alaska cannot vote on monumental issues such as salmon and halibut bycatch, they must step down to give the state its full voice on the federal level on issues of grave importance to our state. Walker has enough headaches right now and doesn’t need another one, but this is the job he asked for. Andrew Jensen can be reached at [email protected]

Sacrifices should be honored, not second-guessed

More than three years after the total U.S. withdrawal of forces from Iraq, the country has descended into chaos under the assault of ISIS and Republican presidential candidates are falling over themselves to declare the 2003 invasion a mistake they would not repeat knowing what we now do about the erroneous intelligence that convinced President George W. Bush and Congress to authorize it. As we approach Memorial Day, this Monday morning quarterbacking with the benefit of hindsight dishonors the ultimate sacrifice made by 4,425 American troops and the nearly 32,000 who were wounded in action. The Republicans who are trying to prove they are not President Bush, including his brother Jeb, are missing the obvious issue as they fall in line with a media narrative that prefers to blame the former president for what has gone wrong in Iraq rather than the current occupant of the Oval Office who has squandered the hard-fought victory in the name of fulfilling a campaign promise. It is possible to acknowledge that a series of mistakes were made both before and after the invasion of Iraq while at the same time praising our troops who paid the ultimate price and the fortitude of President Bush to not abandon the effort even after the 2006 elections that swept Republicans out of power in Congress. Republicans were running for the hills then, too, telling Bush he had to get out, but he refused to abandon the troops he’d sent into harm’s way and convinced a Democrat-led Congress to fund the surge that eventually and soundly defeated Al Qaeda in the cities of Anbar Province that are now falling one by one to ISIS. Even accepting that the decision to invade was wrong, our troops fought bravely and honorably and allowed Bush to hand a relatively stable situation off to Barack Obama when he took office in 2009. To dwell on the decision to invade Iraq as it now falls apart is to tell our troops they fought and died in vain, when what is truly rendering their sacrifice in vain is the abandonment of the ground they won alongside the Iraqis who joined up with U.S. forces in the “Anbar Awakening.” More than a year ago, as ISIS was advancing into Iraq from Syria, President Obama laughed them off as a “JV team” that was trying to be Kobe Bryant by “putting on Lakers jerseys.” That smug self-delusion has been exposed as such, and now hundreds of U.S. troops are back in Iraq although there is very little they can do at this point to stem the ISIS advances while serving under a Commander in Chief who’s shown no aptitude or even interest in developing a coherent military strategy outside of sucking up to the Iranian mullahs to the consternation of our longtime Sunni Arab allies. The story of Iraq remains unfinished, but the media still refuses to honor our troops’ victory against terrible odds in a terrible situation. To admit our troops achieved a victory in Iraq in 2008 would be to acknowledge that Obama then lost it. The media have been covering for Obama for more than a year as Iraq has crumbled as they’ve covered for him on so many other issues, but that doesn’t mean Republicans have to go along with it. They could start by honoring our soldiers instead of second-guessing their sacrifices. Andrew Jensen can be reached at [email protected]

Shell, Foss are right to stand up to Seattle socialists

We’re all going to die. The human race will go extinct. This will destroy us. That’s just a smattering of the hysterical Chicken Littling that fell on the ears of the Seattle Port Commission on May 12 as a parade of Arctic drilling opponents and avowed socialists urged the members to revoke the port’s contract with Foss Maritime and thereby prohibit Shell from parking the Polar Pioneer drill rig at Terminal 5 before it is towed to the Chukchi Sea this summer. Foss is appealing an interpretation by the Seattle Department of Planning and Development that declared the mooring of the Polar Pioneer and two associated tugs at Terminal 5 did not meet the criteria of a cargo use. The Port Commission voted to join Foss’ appeal, but also voted to urge the company not to move the Polar Pioneer from Port Angeles to Terminal 5 until the legal wrangling is resolved. To their credit, Shell and Foss have told the City of Seattle and the port that they will proceed with moving the rig and performing the scheduled work as planned. It’s a refreshing act of political will being shown by Shell and Foss in the face of a shrieking horde of opposition led by Seattle Mayor Ed Murray that is pursuing every means both legal and illegal to disrupt Shell’s efforts to conduct oil exploration in the Arctic. Timing is everything, and as this edition of the Journal goes to press an amazing flotilla of some 29 vessels is converging on the Pacific Northwest from around the globe in a remarkable feat of logistics years in the making. Murray, the “kayaktavists,” the “Shell no” socialists, Raging Grannies and the lawless bunch at Greenpeace that were recently ordered by a federal judge to stay away from Shell’s vessels all know that if they can slow down any part of Shell’s plans they can disrupt the entire summer exploration plan. Murray and the planning department are attempting to find a legal ground to stop Shell’s plans, but their effort is rendered incredible when the mayor has linked the legality of the port permit with his political views on Arctic drilling. Political grandstanding is not a legal strategy, and Shell and Foss at least for now won’t be bullied into going along with it. As the mayor’s office threatens possible fines, hopefully the legal teams at Shell and Foss are readying a case to enjoin the City of Seattle from enforcing its nakedly biased interpretation of the port’s land use permit. Calling the mayor’s bluff and transporting the Polar Pioneer to Terminal 5 is a bold move, but it is also the only choice for two companies who are being backed into a corner by a bunch of self-righteous zealots. Andrew Jensen can be reached at [email protected]

Legislature votes for factions over fish

The mantra “Fish come first” has been exposed as nothing more than a fish tale. Gov. Bill Walker’s second crack at a Board of Fisheries nominee was defeated April 19 in the Legislature by a 30-29 vote when Robert Ruffner of Soldotna became the latest trophy — though likely not the last — mounted by the Kenai River Sportfishing Association. Just as it did two years ago to oust board member Vince Webster by an identical 30-29 vote, KRSA engaged in a heavy-handed lobbying effort of distortions and character assassination, this time against a candidate who has devoted his professional career to conservation as the executive director of the Kenai Watershed Forum. While KRSA claims “Fish come first” in its slick propaganda to mask its true purpose as a guided fishing lobbying group, Ruffner has actually lived that motto. By engaging in a campaign to smear a man who does the work KRSA claims to believe in, the group revealed itself as representing a faction first — not the fish. For an organization that downplays the linkages between its members and the Alaska Fisheries Conservation Alliance trying to ban setnets in Cook Inlet via a ballot initiative, the guilt by association aspect of its attacks on Ruffner was particularly brazen. Because they had nothing to pin on Ruffner himself, KRSA cherry-picked the most controversial board proposals from anyone who supported Ruffner as if their own membership isn’t advocating for the most radical change in Cook Inlet by banning a gear group that has coexisted with sustainable salmon runs for more than a century. Then there was the laughable claim that Ruffner should be rejected because he doesn’t live in Anchorage. What a pile of fish guts. In its letter to legislators, KRSA argued that Ruffner would be less accessible to residents of Anchorage because he lives in Soldotna. It’s funny  they didn’t have that concern when the last board chairman spent half of every year living in Arizona more than 3,600 miles away from Anchorage and only came back to the state in the winter for board meetings. Nor should anybody believe KRSA would have made the residency argument about Anchorage had Walker nominated Joe Sportfishing Guide from Kenai for the seat. This residency argument against Ruffner — beyond the sheer hypocrisy of it given KRSA’s unequivocal past support for having a snowbird serve as chairman of the board — is ridiculous on its face. If Anchorage and Valley residents who enjoy dipnetting or angling on the Kenai River want to enjoy sustainable salmon harvests now and in the future, it is difficult to think of a better person to have on the board than someone who has dedicated his life to preserving the health of that river. Ultimately, Ruffner’s work to preserve and protect the Kenai River habitat from human impacts is what really scared KRSA. Commercial fishermen have long argued that in-river impacts must be considered to ensure sustainable salmon runs, and the last thing KRSA wanted on the board was someone who wouldn’t blithely dismiss such concerns about protecting spawning grounds and tearing up river banks with outboard motors. The KRSA and Mat-Su narrative is that commercial fishermen are to blame for anybody who strikes out with a dipnet or a pole and to hell with anyone who doesn’t toe that line no matter how many piscis pretzels they have to make out of twisting the truth. In the end, though, KRSA is just an advocacy group and the real blame lies with the legislators who bought into its cynical campaign that counts on a bipartisan group of bumblesticks to go along with it every time. Walker shouldn’t cave to the special interests or these selfish and short-sighted legislators in his next pick for the board, but who, after watching what has happened to the likes of good people like Webster and Ruffner, would subject themselves to such unfair attacks if they don’t fall into lackey lockstep with KRSA? The board process is broken, and what just happened to Ruffner is a perfect example why. Until the Legislature stops putting factions over fish it won’t be fixed anytime soon. Andrew Jensen can be reached at [email protected]

Short-term cuts may cause long-term damage

In what are well-intentioned efforts to do everything possible to narrow a $4-billion budget gap, the appropriators in the Alaska Legislature may end up doing more harm than good. There is simply no way to cut a way out of this deficit, which should have put the emphasis from the jump on structural reforms rather than nickel-and-dime reductions in the budget. So far, the only such attempts are the effort to reform Medicaid from its unsustainable path and an operating budget that rejects 2.5 percent pay raises for unionized state employees in the next fiscal year. Union officials may be grumbling about this, and Gov. Bill Walker expressed his concern over it to the Associated Press, but a pay freeze for state workers is hardly an unwarranted action, and is one they should still prefer over outright job cuts. Other than that, the Legislature has spent time on sideshows such as daylight savings time and resolutions to demand all federal land be transferred to the state along with budget cuts that add up to little more than a duck passing gas in the wind. The cuts won’t solve anything, but like the proverbial butterfly flapping its wings they threaten to cause damaging ripple effects. Consider the proposed $11 million in cuts to the state ferry system. That amounts to to 0.27 percent of the deficit. The effect of the cut, however, could displace more than 9,000 people who have already purchased tickets for travel this summer. More than two-thirds of them are tourists, which is the third-largest industry in Alaska. Is it worth saving $11 million to cause this much disruption to ferry customers and tour operators who rely on the system? The potential for souring people on their trip to Alaska, displacing state residents who have booked travel, creating a picture of unreliability for the ferry system and sticking tour operators with the problem is hardly worth the savings. Then there is Walker’s elimination of $5 million in funding for the Chinook Salmon Research Initiative, a multi-year effort to better understand the iconic state fish upon which an eons-old subsistence lifestyle is based and whose health — or lack of it — impacts every sector of the commercial and sport fishing industries. Given the stakes of achieving sustained and strong king salmon runs, refusing to fund this vital research is not a better outcome for the state compared to the good it can accomplish. Similarly, the slashing of the funding for Alaska Public Media from $5 million to $2.5 million to zero is also pointless and will disproportionately impact rural Alaskans who don’t have as many information sources. Walker’s decision to cut $8 million in funding for the Ambler Road environmental impact statement and ordering a halt to all work on the project also achieves nothing while setting back a vital long-term effort to open up a resource-rich area that will create hundreds if not thousands of well-paying jobs and help lower the cost of living in the area. The real pineapple on this upside-down cake of ill-conceived and ineffective cuts, though, is the effort to screw around with the Interior Energy Project by stripping $45 million in previously appropriated funds for the effort. While the Alaska Industrial Development and Export Authority explores the possibility of sourcing gas from Cook Inlet in an attempt to achieve the goal of first gas to Fairbanks by the end of 2016, Rep. Mike Hawker of Anchorage is throwing up amendments that will ensure it won’t happen. Interior stakeholders are right to compare the expense for the IEP to the cost of tax credits totaling $700 million in the last several years to subsidize the Cook Inlet gas resurgence. That’s more than a fair point; it is a convincing argument. Interior residents don’t deserve another year without a plan to lower their energy costs and improve air quality. Times like these are why we have savings accounts. It’s also the time when we need our legislators and governor to step up to the plate and deliver. As the session nears its close, we’ve seen a lot of small ball instead of home runs. Andrew Jensen can be reached at [email protected]

Rules over reality, and clouding Sunshine Week

A couple weeks ago, the House Majority offered a high-minded defense against an accusation by Gov. Bill Walker that it was working for someone other than Alaskans by trying to limit his expansion plans for a state-led gas pipeline. On March 2 in House Speaker Mike Chenault’s office, sponsors of legislation to prioritize the Alaska LNG Project over Walker’s new plan to create a competing project went one-by-one around the room emphasizing that they work for their 17,000 or so constituents in addition to all Alaskans. That respect for working for constituents came to an abrupt end just two weeks later when the same Majority caucus booted Eagle River Republican Rep. Lora Reinbold for the crime of voting against their operating budget. Reinbold believes cuts to the operating budget didn’t go far enough and said she was frustrated to see spending that was cut in subcommittees being reinserted into the final budget. The horror. In response, the caucus stripped Reinbold of key committee assignments, including as co-chair of the Joint Armed Services Committee. By punishing Reinbold for voting according to the wishes of her constituents — who include the heart of Alaska’s military population — the caucus is now also punishing them and looking petty in the process. Rules are rules, Chenault said, apparently unaware of the contradiction between what his members said about working for their constituents first on March 2 and punishing one who did just that two weeks later. In healthy budget times, perhaps some defense could be offered for a rule that demands caucus unity over personal differences, but we are hardly living in normal budget times facing $7 billion in deficits over the current and next fiscal years. It is the picture of tone deafness to put caucus rules over reality when the dispute revolves around the best way to get Alaska’s budget situation under control. While it is true that Alaska cannot cut its way out of a $3.5 billion hole this year or next, it is also true that the ever-swelling operating budget has been flagged as an issue to be addressed long before the bottom fell out of oil prices in the last eight months. Just a couple years ago, it was well-known that prices would eventually have to maintain levels of $120 per barrel or more just to balance the budget, and that was when prices were consistently hovering around the $100 mark instead of closer to $40 where they are now. The fact is, any simple, one-time cuts in the operating budget are insufficient to fix the unsustainable path we’re on. It is long past time to start figuring out ways to bend the cost curve down on the drivers of the operating budget, and perhaps Sen. Pete Kelly’s effort to reform Medicaid will be able to do that. It is surely not the time for Walker to jeopardize the state’s best hope for new revenue through commercializing North Slope gas just to fulfill his decades-old dream of being the guy who delivered a gasline to Alaskans. Nor is it the time to put a caucus rule over convictions. Hard choices must eventually be made, and kicking out a member who appears ready to make them only weakens the caucus rather than strengthening it.   Casting shadows during Sunshine Week Gov. Bill Walker ran on a platform of transparency, so an action by his communications office March 16 that came during the celebration of the Freedom of Information Act known as “Sunshine Week” was doubly ironic. Our reporter DJ Summers heard there had been a letter sent from a federal agency to Walker regarding upcoming North Pacific Fishery Management Council nominations. We asked Katie Moritz from our sister paper the Juneau Empire to stop by his office to get a copy. Moritz was told by Ty Keltner, the communications coordinator for Walker’s office, that there was a letter from the U.S. Commerce Department that had been received on Feb. 3. The only catch was that Summers would have to file a public records request if he wanted to see it. Summers dutifully filed the request March 16 at 4 p.m. We eventually got a response from Walker’s public records specialist Angela Hull that it had been received as we neared press deadline on March 18. In the meantime, however, we had already gone ahead and asked the ever-helpful Julie Speegle at the Alaska Region of National Marine Fisheries Service on March 17 if she could get us a copy from the Commerce Department. Less than a day later, Speegle had connected us with the Maryland headquarters and we had a copy of the letter signed Jan. 28 without any help from Walker’s administration. And, we’ll add, without having to fill out a Freedom of Information Act request. Turns out the letter Keltner withheld from a simple inquiry was essentially a form letter from NMFS outlining the process for nominating candidates and a deadline for when materials had to be received. A big nothingburger that contained little we didn’t already know about the nomination process. Having time to respond, search and retrieve a large amount of records is a reasonable provision in the Alaska Public Records Act. However, what the governor’s communications office pulled by withholding an innocuous letter they acknowledged existed and when it was received hardly lives up to Walker’s claimed commitment to transparency. The only thing transparent about this action is how trifling it was. Andrew Jensen can be reached at [email protected]  

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