Gov. Bill Walker

GUEST COMMENTARY: Time for conversation on climate change and resource development

For too long, there has been an awkwardness in the way Alaskans talk about climate change and resource development in the same conversation. But there is no question on the very real impacts of climate change on Alaskans, nor in the continued need for resource development in this state. This administration voices our commitment to not only deal with the impacts of climate change on the health and safety of our citizens and our environment, but also to provide our people a meaningful future with safe communities, quality education, a strong economy and good jobs. To make progress, we must recognize that both resource development and climate action are key parts of Alaska’s future. Climate change is affecting Alaskans right now. From erosion forcing entire villages to relocate to infrastructure damage from thawing permafrost, the physical and economic impacts of climate change are hitting Alaska faster and with more severity than most other areas of the world. To underestimate the risks or rate of climate change is to gamble with our children’s futures, and that is not a bet that we are willing to make. According to a 2017 poll, the majority of Alaskans are with me on this, recognizing that the effects of climate change have already begun and require action. On Oct. 31, 2017, the Governor signed Administrative Order 289, Alaska’s Climate Change Strategy, creating the Climate Action for Alaska Leadership Team. This team is charged with developing a range of climate solutions that help make wise use of our resources, provide for the health and welfare of Alaskans, preserve the social and cultural fabric of our communities, and meet our responsibilities to future generations. Creating these solutions will push us to build on past successes, using the same ingenuity and teamwork that has defined Alaska’s leadership in energy production. The question in front of us is not whether we can remain an oil and gas producing state or strengthen our commitment to addressing climate change — we must do both. The state will continue to be an energy producer for as long as there is a market for fossil fuels, and the revenue that comes from our resources will continue to spur economic growth and support essential public services. However, we will not ignore the fact that resource development contributes to climate change through greenhouse gas emissions. We should not use our role as an energy producer to justify inaction or complacency in our response to the complex challenge of climate change. Instead, we must leverage our expertise and resources gained as an industrial leader, creating solutions that empower individuals, communities, and businesses. A responsible energy transition will help us to envision and create a future for Alaska that is prosperous, just, and competitive in a global marketplace that is increasingly shifting towards renewables and energy efficient technologies. A 2017 report estimated that jobs in the solar and wind energy sectors are growing 12 times as fast as the rest of the U.S. economy. Not only will this energy transition create jobs and investment opportunities, it will also enable communities and regions to take control of their energy systems, reducing costs and increasing local energy security. Alaska has incredible renewable energy resource potential — our economic future must reflect that. We are confident that together we can have robust discussions, implement meaningful action, and make significant progress in our collective response to climate change. The Governor’s Climate Action Leadership Team has a lot of work ahead, and they will depend on engagement and partnerships with companies, communities, and philanthropic organizations, to ensure that their recommendations reflect a diversity of needs and interests. Let’s bring this important conversation about Alaska’s unique situation into our work places, our communities and our homes. Our future depends on it. ^ Bill Walker is a former oil and gas attorney, and the 11th governor of Alaska. Byron Mallott is the Lt. Governor of Alaska, and chair of the Climate Action for Alaska Leadership Team. For more information see climatechange.gov.

GUEST COMMENTARY: Time is now for AK LNG

Mid-June 1970: one of the most important days in my life. It rained, as I waited in-line outside a trailer in Johnson’s Trailer Court in Valdez to receive my first dispatch. That day, I received my first dispatch ticket from Laborer’s 341 business agent Jim Robinson to begin work on the Trans-Alaska Pipeline System. At 19, I knew that beginning that day my life would never be the same. That dispatch, and others as a Teamster and a Journeyman Carpenter in Local 1281, to work on the oil pipeline opened educational opportunities I never would have dreamed of, and later brought into my world, the woman of my dreams. At that time, I had just finished my first year at community college in Oregon, made possible by a $400 basketball scholarship and housing with the family of a former elementary school teacher. However, after that first summer working on TAPS, with my oil pipeline paychecks in hand, I transferred to a full four-year college. That pipeline construction also drew a young woman named Donna Pyle to Alaska, who is now Alaska’s First Lady. I now have another important date to remember: November 9, 2017. The day that all the entities needed to build the Alaska LNG Project signed the Joint Development Agreement, or JDA. The U.S. and Chinese governments, at the highest level, vetted and deemed qualified the JDA. All five signers of the JDA have formally committed to work to monetize Alaska’s stranded natural gas. This unique agreement differs from the past attempts to monetize Alaska’s vast resources of stranded North Slope gas. Let me be clear, this is a non-binding agreement, as are all such agreements for projects of this size at this stage of its development and there is more work to be done to get to binding agreements by the end of 2018. However, for the first time we have the state (as owner and builder), as well as the buyer, the investor and lender signing the agreement. President Donald Trump and President Xi Jinping —heads of the world’s two most powerful economies — witnessed and approved the signing of the JDA. Never in the prior efforts to build an Alaska gasline have the interests been aligned like this: • We have a federal administration focused on infrastructure and resource development; an administration that views Alaska as playing a crucial role in securing the nation’s energy dominance and in offsetting the trade deficit. • For the first time, Alaska has a customer: China — which will be the largest consumer of liquefied natural gas LNG in the world. Cleaner air is a top priority for the Chinese government, as for Alaskans, and Alaska’s natural gas will play an important role in that effort by reducing the emissions by 80 million tons per year. The buyer, the investor and the lender who have signed on to the Joint Development Agreement are big players. • Sinopec, the buyer, world’s largest integrated oil and gas company and ranked the third-highest revenue-generating company by Fortune Global, which ranked Apple ninth and ExxonMobil 10th. • China Investment Corp., the investor, ranks as the largest sovereign wealth fund at $813 billion behind Norway and Abu Dhabi respectively. • Bank of China, the lender, as the fourth-largest bank in the world it has financed many LNG projects worldwide. Once construction begins, the Alaska gasline will be one of the largest infrastructure projects on the continent, and it will be the biggest economic boost to the state since construction of TAPS. It will generate between 10,000 to 12,000 construction jobs for Alaskans and up to 70,000 total jobs. It will bring $2 billion into the state economy each year over the life of the project (40-plus years). Payment for the project will come from the long-term sales of the gas. But, more than just another boom in Alaska’s economy, it will open the door to Alaska for many underdeveloped opportunities between Alaska and Asia: direct flights to bring thousands of tourists from Asia; increased agriculture, mineral, and timber export markets as well as continued growth in seafood exports to Asia. Finally, Alaska can go from having the highest cost of energy in the nation to the lowest. It will help other industries become economical, like mining, because it will help to lower the cost to do business. The gasline will bring clean burning affordable energy to Alaskan homes and businesses. This gasline will mean cleaner air in the Interior. It will mean families will not have to choose between heating their homes or paying for groceries. The gasline means thousands of jobs within 10 years; jobs that bring purpose, change lives, provide for a healthy future and fuel generations. Under the state law, 20 percent of the revenue to the state will be directed to alternative, affordable energy projects for rural Alaska. While this is Alaska’s gasline, it has become a project of national and international significance. A big project with big players and big benefits to Alaskans. The time is now. Bill Walker is the 10th governor of Alaska. He is running for reelection in 2018 as an independent.

GUEST COMMENTARY: Alaskans deserve results: the time to act is now

I read with some satisfaction — and disappointment — Senate President Pete Kelly’s recent opinion piece “The sky is not falling.” While I share his optimism regarding North Slope oil production, I am sorely disappointed that he continues to issue statements that rationalize ignoring our fiscal crisis. I also object to President Kelly’s false claim that my administration manipulated oil revenue forecasts to justify new revenues. Nothing could be further from the truth, and I will not allow his fabrications to go unchallenged. The hard-working members of the Department of Revenue serve with integrity as they strive in good faith to solve Alaska’s fiscal crisis. Yes, recent technological advances by North Slope producers have slowed the decline in our older fields. Exciting new developments that have been talked about for years are now close enough to reality that a modest increase in throughput in the Trans-Alaska Pipeline System is possible. I applaud the splendid work of the producers on these fronts. The additional revenue from this production, compared to previous forecasts, could reach $500 million per year by 2026. As encouraging as this sounds, that additional revenue would only help our income keep pace with inflation. If the state continues to provide the same services it does now, when adjusted for modest inflation, we’ll continue to see annual budget deficits similar to what we have today. Sen. Kelly noted, “The Senate will support new revenues only when it is proven to be in the best interest of Alaskans as a whole, not just their government.” Here’s where President Kelly and I agree: We have now reached that point where it is in Alaska’s interest to diversify our revenue stream. The benefits Alaskans would gain from stable and sustainable state services outweigh the cost of a small additional tax. As President Kelly knows, nearly 50 percent of the state operating budget goes directly to local communities. In his community’s case, this includes a portion of education funding in the Fairbanks-North Star Borough, law enforcement and school debt reimbursement for the Fairbanks area, University of Alaska Fairbanks funding, health care for those in the Interior, safe roads in the area, and more. These are all critical services that support Alaskans, not their government. But they cannot be maintained with our current revenue. The legislature has already made significant reductions to state spending. These budget cuts — from $7.8 billion in 2013 to $4.3 billion this year — impact every department and every Alaskan. Smart cuts will continue and efficiencies will be found, but the truth is that the fat my administration inherited is largely gone: muscle and bone are now at risk. While denying our fiscal reality, those in the Legislature who oppose any new revenue have spent down $14 billion in savings, with nothing to show for it. We could have funded the state’s deferred maintenance many times over with that money, yet some still refuse to act. Nearly all legislators agree that a Permanent Fund restructuring that protects the fund and preserves a dividend is an essential part of the fiscal solution. But that alone won’t get us to a balanced budget. President Kelly acknowledges this deficit, yet feels additional revenues are unnecessary. His claims are based on overly optimistic assumptions of revenue growth and unrealistically static expenditures for years to come. Our savings are all but gone. Credit rating agencies continue to downgrade our borrowing ability. Billions of dollars in deferred maintenance are going unfunded. We simply can’t count on improbable outcomes; there’s too much at stake. My administration’s small revenue proposal is reasonable fiscal policy, and will still leave Alaskans as the lowest-taxed Americans. It also ties Alaska’s budget to the state’s economy, so that when growth occurs, we can collect the additional revenue needed to provide the roads, schools, troopers, and other services new jobs and people require. Moreover, for the first time, nonresidents — who make up about 20 percent of our workforce — will finally start contributing to the cost of essential services they use. No, the sky isn’t falling, not even close. Alaska is strong, and we have world-class resources and enviable assets set aside for just this moment. The combination of wise use of our Permanent Fund with a small and limited new revenue source can put us back on the path to prosperity. To those who propose to do nothing, I say that Alaskans deserve results, not rhetoric; solutions, not slogans. The time to act is now. Gov. Bill Walker, an independent, is the 11th governor of Alaska.

COMMENTARY: Legislators need encouragement to make unpopular choices

As we reach the halfway point of the 2017 legislative session, we wish to share some thoughts about this critical time that represents a truly defining moment in our state’s history. What we do or fail to do over the next few months will send ripples through the lives of Alaskans for generations. Alaska faces new realities and unfamiliar struggles. Navigating the uncomfortable concepts needed to overcome these challenges has pushed each of us to question what we really need or want from our government. After two years of public outreach and input, this difficult debate now rests with our legislators. Both the House and Senate have taken this seriously and filed legislation that, if passed, would begin to address this historic challenge. We therefore applaud both chambers for showing the courage to engage in these discussions. We are also pleased that things are progressing well, and we see no reason why this work cannot be completed within the regular 90 day legislative session. Compromise is certainly still required, and we have stated all along that these plans should be considered written in pencil — but the time is rapidly approaching to break out some ink. As we work toward a solution, we will evaluate all plans against two main criteria. The first is math: does it add up; are the assumptions associated with it valid; and can it realistically eliminate the entire deficit in a reasonable period of time? The second criterion is vision: do the mechanics of the plan remove uncertainty from our economy; will it preserve the quality of life Alaskans deserve; and does it have a long-term view that will put us back on a path to prosperity? It is essential that both math and vision be considered together as we move forward. Otherwise the easiest, most non-controversial math will gain traction at the expense of a severely tarnished vision. We must remain vigilant against such tendencies. Our children deserve better. We therefore encourage all participants to avoid the path of least resistance and to embrace the tough decisions required to reach a truly meaningful solution. One needs only look at the legislation we proposed last year to know what we consider to be an example of a fair and balanced approach. There are those who say we cannot solve our entire fiscal problem this year; that there are too many difficult lifts to do at once; or that implementation should be spread out to minimize impacts on the economy. While these may be reasonable concerns, there is simply no perfect solution. Continued delay results in even worse consequences. Without a comprehensive solution this year, we will see the recession deepen, state investments dry up, a further out-migration of Alaska’s best and brightest, and short-sighted decisions like shifting state expenditures to our local communities who are far less equipped to handle them. Partial solutions only extend the runway; they do not allow us to actually take off. It means continuing to rush down a runway at high speed for a longer time, but with no plan for how to clear the trees when we finally get to the end. And even if we got off the ground at the very last minute, the more time spent on the runway means less fuel to reach our ultimate destination — a bright future. Alaska has shining potential. If we can only get this fiscal challenge behind us, we can immediately devote all our attention to priorities like building a strong economy with safe and vibrant communities; ensuring healthy families; and pursuing responsible resource development. It is all within reach — if we solve the crisis. We must first fix Alaska to build Alaska. We just need to balance our checkbook, and then we can get to work on what’s really important. History is waiting. Posterity is watching. We have a sacred responsibility to honor both. So please let your legislators know that you support them as they do the difficult job we were all sent here to do. Tell them it is okay to make the tough decisions and that we need to tackle it all. Most importantly, be sure to let them know it all has to happen this year.

COMMENTARY: Legislators, please join fellow Alaskans on the rope

As governor, I enjoy shaking a lot of hands. But one handshake in particular stuck with me. At the Ted Stevens Anchorage International Airport last winter, as passengers streamed off the flight from Fairbanks, one man turned around and walked toward me. “I want to shake your hand,” he said. “When there’s a fire, most people run from it. I’m glad we have a governor who runs toward the fire.” With my announcement Wednesday to reduce this year’s Permanent Fund Dividend, I put every Alaskan on the frontline to fight the fire that threatens the future of our great state. I did not make a single veto decision lightly. I disliked them all. I especially struggled with the cuts to education spending, which Lt. Gov. Byron Mallott and I prioritized long before taking office. When lawmakers passed budget bills funded entirely out of savings, I had no choice but to exercise my veto authority. Paying for government with savings is like eating the seed corn for one last meal rather than planting it so it grows and feeds our family for generations. My team and I introduced in December a balanced plan to fairly distribute the burden across the state. The Senate demonstrated leadership in passing the Permanent Fund Protection Act, the cornerstone for a sustainable future. Aside from that, legislators did not pass a single revenue measure of the fiscal plan. During the 149 days legislators were in regular, extended and special sessions, they reduced $400 million of a $4 billion problem. Ninety percent of the work was left undone. The top three excuses: Some Republicans told me government needs to be cut more before the Permanent Fund is restructured. Some Democrats told me credits to oil companies need to be reduced before the Permanent Fund is restructured. Legislators on both sides of the aisle told me they did not want to take the political heat for reducing Permanent Fund Dividends. I have now done that work—by vetoing oil credits, stopping megaprojects and cutting more from department budgets (most have now taken at least 20 percent cuts). And by setting this year’s PFD at $1,000, the political heat is now all on me. What most Alaskans don’t understand is the PFD program will go away entirely in less than four years if the Permanent Fund is not restructured. Meanwhile, the state teeters on a fiscal cliff. Some House members have confessed to me in private meetings they know that voting for the fiscal plan is the right thing to do, but feared not getting re-elected if they voted to reduce PFD amounts. According to a Rasmuson Foundation poll, 68 percent of Alaskans find a $1,000 PFD acceptable. Many Alaskans have told me what they want more than a dividend is a sustainable future full of opportunities for their children and grandchildren. Each day that we wait to take action to enact a sustainable plan further extends the cloud of uncertainty as ratings agencies downgrade our credit, home values depreciate and investment dries up. Each year of delay means the amount needed from potential income taxes doubles. A 1-percent income tax would raise $200 million this year. But if legislators fail to take action this year, the rate doubles to 2 percent to make up for what we lose in investment returns by spending our savings. Just as the entire early community of Metlakatla would come together to pull on the rope to remove tree stumps that obstructed growth, we as Alaskans must all pull together to remove the obstacles for a sustainable future. With my veto pen, I made significant budget cuts — beyond what the Legislature cut. But cuts alone won’t solve the problem. The Legislature must pass the full fiscal plan for a sustainable future — and to avoid even deeper cuts next year. We cannot grow Alaska if we are not able to balance our checkbook. This year, we must fix Alaska so that next year we can build Alaska. The collective fate of more than 730,000 Alaskans’ future rests solely in the hands of 60 men and women, who were elected to lead the state in good times and bad. Legislators, Alaskans are counting on you to find your place on the rope. I urge you not to run from the fire.
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