Editorials

EDITORIAL: US withdrawal doesn't define victory in Afghanistan

A flag-lowering ceremony in Kabul this past weekend signaled the official end of Operation Enduring Freedom — America’s 13-year war on terror in Afghanistan. But the reality is that the war is not over, and Americans shouldn’t act like it is. Though al-Qaida, the architects of the 9/11 attacks and other terrorist plots, has been partly dismantled and the Taliban is a shadow of its former self, extremism still has a foothold in the war-torn nation. Barbarians hoping to keep the nation stuck in the Dark Ages already have been emboldened by America’s drawdown. Taliban spokesman Zabihullah Mujahid referred to the weekend flag-lowering event as a “defeat ceremony” and vowed the insurgents’ fight would continue. Afghanistan, as a nation, is not yet in a position to stand on its own. The country’s fledgling government remains mired in corruption, and its national economy is almost entirely dependent on foreign aid and illegal drug exports. Unless the United States wants to see the country go the way of Iraq — overrun by extremists after a full U.S. withdrawal — the American people and their leaders should steel themselves for a long-term commitment to establishing peace and stability. And, really, shouldn’t that be the ultimate sign of victory? Anything less would practically guarantee Afghanistan’s return to a robust terrorist haven within a decade. Recall that it took less than five years for the Taliban to fill the vacuum left by the Soviet Union’s withdrawal from Afghanistan in 1989. A complete withdrawal by U.S. and NATO forces would create a similar opportunity for extremists to exploit. What a dreadful end to a war that cost 2,200 American lives and $750 billion. That’s why the United States isn’t cutting out of Afghanistan, just cutting back. The task of stabilizing the country — part of Enduring Freedom’s transition to Operation Resolute Support — may prove to be every bit as difficult as the decade long struggle to root out terrorists and push back insurgents. About 11,000 U.S. forces and 2,000 NATO personnel will remain in the country to advise Afghan forces, a substantial amount but far fewer than 140,000 troops in country at the operation’s peak in 2010. The Status of Forces Agreement between Afghanistan and the United States gives the Afghan army the option to enlist the help of coalition forces when needed, so combat and counterterrorism missions are still on the table for American troops when times get tough. President Obama, who vowed to end America’s wars in Iraq and Afghanistan, told U.S. troops stationed at the Marine Corps Base in Kaneohe Bay, Hawaii, over the weekend that their service had given Afghanistan a chance “to rebuild its own country. “We are safer,” Obama said. “It’s not going to be a source of terrorist attacks again.” Really? That’s a lofty promise, and one that’s profoundly difficult to fulfill. If America truly is going to finish the job in Afghanistan, it will involve helping Afghanistan undertake the herculean task of healing its many, many wounds.

EDITORIAL: Oil price drop not without benefits for Alaska residents

As unlikely as it seems, there are a few benefits to Alaska residents that come with lower oil prices. The slump, in which prices have dropped to levels between $60 and $80 per barrel in recent months, has left the state budget in a world of hurt, and there’s no question residents will feel a host of negative effects of that lost production tax revenue. But there’s a silver lining for residents that takes a bit of the sting out of the market downturn. The first and most obvious boon of low oil prices comes for Alaska drivers at the gas pump. The drop in oil prices from more than $100 per barrel to about $60 per barrel has resulted in gas prices dipping from the $4-per-gallon range in summer down to just more than $3 per gallon at present in Fairbanks. Heating fuel prices have experienced a similar drop, with fuel now at about $3.05 per gallon and giving residents some relief when paying home heating bills. Unfortunately, Interior villages haven’t seen much, if any, benefit of the drop in gas prices yet, as they tend to purchase gas and heating fuel in bulk orders delivered by barge, at a price set at the time of initial purchase. That means residents in outlying areas — who already pay some of the highest fuel costs on the continent — are stuck paying high prices for petroleum products until they deplete existing supply and make a new order to fill village tanks. There are also secondary benefits likely to matriculate to state residents, as prices on many commodities are governed by the cost of transportation. Everything shipped into the state from Outside, whether furniture, building material or groceries, passes the cost of fuel to transport it to the state along to the consumer. Retail prices do tend to lag, as retailers are less sensitive to downward cost trends than upward ones, but the longer transportation costs stay low, the more likely it is competition between suppliers will force prices downward. Though the cost of airfare has yet to show impacts from the reduced cost of fuel, that may well take place as oil prices remain low. Fuel costs represent about 30 percent of total operating costs for airlines, and while ticket prices aren’t yet dropping — a fact that led to pointed questions from Congress to airlines in mid-December — strong competition between airlines for coveted routes are likely to lead to lower ticket prices before long. We’ve seen that in Alaska recently with the summer fare wars between Delta and Alaska Airlines — with luck, perhaps 2015 will bring round two. The continued decline of oil prices will hit the state hard, leading to a host of impacts to state services like education, health and social services and public safety. But in addition to the aforementioned benefits to consumers, the downturn in state revenue has one major plus for Alaska: reining in the budget, which had been given lip service by the Legislature as spending swelled in recent years, is now not only a priority but a mandate. It’s time Alaska returned to living within its means.

EDITORIAL: Alaska needs budget leadership

Alaska’s political leaders once again will be reaching for the antacids as the state confronts a colossal loss of revenue because of the tumbling price of oil. The Alaska Department of Revenue, in its annual fall forecast released Dec. 9, expects the price of oil to average $76 per barrel for the present fiscal year, which ends June 30. That’s down about 40 percent from the department’s spring projection. The department expects a further decline in the following fiscal year. What this means is the state government is facing a $3.5 billion deficit for the current fiscal year, an increase of about $2 billion more than the deficit projection made in April. So what to do, both for the present and for the future? The suggestions will be many, and some of them may come tinged with panic. Alaska doesn’t need to panic, however, because of the reserve accounts that will help deal with the current shortfall. But those accounts have an ever-waning lifespan, meaning our state needs to take prompt and forward-thinking action now to avoid or minimize deficits in the coming years. One such idea came to the fore 10 years ago, proposed by then-Gov. Frank Murkowski and endorsed eagerly by the Alaska Permanent Fund Corp. board of directors. The idea was known as the Percent of Market Value plan — the “POMV” in discussions. It would allow the Legislature to withdraw annually from the Alaska Permanent Fund an amount equivalent to a maximum of 5 percent of the fund’s total market value from the first five of the six preceding fiscal years. The permanent fund would serve as an endowment, a time-tested and fiscally responsible device. The POMV differs from existing practice in that all investment earnings would go into the fund’s principal, which is protected by the Alaska Constitution. Earnings presently go into a separate account from which the Legislature provides the annual dividend. Lawmakers also, though they are not required to, place some earnings into the principal. Once withdrawn from the fund’s principal, half of the amount would go to the dividend and the other half to government operations, though this aspect of the plan would be left to the Legislature to decide each year. A change to the POMV concept would require voter approval of a constitutional amendment. Amending the Constitution had the backing of the 55 members of the Conference of Alaskans, the group convened by Murkowski in 2004 to answer four questions relating to the budget crisis. The POMV was pitched as a way for the state to avoid its continual budget deficits by providing a stable and source of funds for government, if needed. It also was pitched as a way to reduce the year-to-year volatility in the dividend amount by basing the calculation on total fund value rather than on realized earnings. The issue of continual budget deficits is one Alaska again finds itself confronting. The projection released by the Department of Revenue last week is bleak: Nowhere in the next 10 years does annual general fund revenue come close to the level of this year, a year in which we already face a mammoth deficit. In short, it will only get worse. The Permanent Fund had a value of about $27 billion in 2004, when the Legislature was seriously considering the POMV. The plan would give legislators access to about $1.35 billion using that fund valuation, to be split between dividends and government operations. The Permanent Fund’s value has nearly doubled since then, to just less than $51 billion as of Dec. 11. Assuming that as a year-end value, the Percent of Market Value plan, were it in place today, would make $2.55 billion available to legislators for dividends and government. The Percent of Market Value plan wouldn’t, by itself, prevent the projected budget gap of $3.5 billion that awaits new Gov. Bill Walker and the next Legislature. But it would most likely have made the budget gap smaller. The Alaska House of Representatives approved the Percent of Market Value plan in 2004, but the Senate rejected it. It failed in part because of hysteria. Not enough of our leaders stood up to those in the public who characterized the plan as a “raid” on the Permanent Fund. It is no such thing. The Percent of Market Value plan is but one idea, but it is one that should be considered again, along with others. What Alaska needs today are leaders who will be candid with Alaskans about the budget situation, who will offer equitable and sensible solutions — as the Percent of Market Value plan was 10 years ago — and who will have the courage to argue forcefully for their adoption.

EDITORIAL: Obama should remember who friends are around world

The Obama presidency was supposed to revive America’s image in the eyes of the world, but results on that score have been mixed at best. Recent blunders show the White House struggling to manage relationships with our closest allies. Speaking in the coal-producing Australian state of Queensland [in November] during the G-20 Brisbane economic summit, Obama made what Greg Sheriden, foreign editor of The Australian, called “a bizarre decision to attack and damage his closest ally in Asia, and one of the most committed supporters of U.S. foreign policy.” According to Sheriden, “the longest passage was an extraordinary riff on climate change that contained astonishing criticism — implied, but unmistakable — of the government led by Australian Prime Minister Tony Abbott.” Obama congratulated himself for signing a climate change agreement with China and urged Australia to take similar measures, repeatedly invoking the threat he says global warming poses to Australia’s Great Barrier Reef. Prime Minister Abbott is a moderate conservative who has been an unflagging supporter of American strategic interests in Asia and the Middle East. On environmental issues, Abbott believes that climate change is a problem, and he has maintained his more liberal predecessor’s commitment to cut Australia’s carbon emissions. But Abbot also kept a campaign promise to repeal an unpopular carbon tax. Apparently that deviation from environmentalist orthodoxy was enough to merit a swipe from America’s climate-warrior-in-chief. “Barack Obama was rude to an ally, hypocritical and wildly misinformed,” wrote Andrew Bolt, an influential Australian political columnist, during the resulting furor. Some Queensland leaders were so insulted by Obama’s remarks that they’ve threatened to lodge a formal complaint. Closer to home, the President insulted Canada recently while discussing the proposed Keystone XL pipeline: “Understand what this project is,” Obama said. “It is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else. It doesn’t have an impact on U.S. gas prices.” Not only was his characterization of Keystone incorrect — the Washington Post fact-checker gave it three Pinocchios — the statement was offensively dismissive of Canadian interests, and economically illiterate to boot. “Sometimes we wonder if President Obama has even the vaguest idea how a private economy works,” wrote the editors of the Wall Street Journal. The president has two years to get his foreign policy back on track. Perhaps he should start by remembering who America’s friends are, and treating them accordingly.

EDITORIAL: President choosing wrong path on immigration

President Obama must be tone deaf. His threat to go it alone on comprehensive immigration reform — bypassing Congress if necessary — sounds like man who didn’t hear the nation’s loud and clear rejection of his policies Nov. 4. Instead, he sounds like a president who’s determined to get his way — even if it condemns the country to two more years of gridlock. House Speaker John Boehner correctly warned Nov. 6 that the president will “poison the well” for the new Congress if he takes executive action to address the deportation of undocumented immigrants. “I’ve made clear to the president that if he acts unilaterally on his own outside of his authority, he will poison the well and there will be no chance for immigration reform moving in this Congress,” Boehner told reporters at his first news conference after huge GOP gains in this week’s midterm elections. The Republican speaker and the president are long-time political rivals. But on immigration, the two leaders have something in common — they agree it’s time to put something on the front burner at some point. Except the president’s way is the wrong way. As Boehner puts it, if the president acts on his own, then “there will be no chance for immigration reform moving in this Congress.” For his part, the president appears to be spoiling for fight, perhaps to recapture his lost mojo. He said while it was his “profound preference” that lawmakers act to deal with problems in the immigration system, including the millions of people who are in the country illegally, he said he’s not going to wait on Congress. That means issuing executive actions. But doing an end run around Congress on something as fundamental as immigration is a big mistake. This issue merits discussion and debate in the halls of Congress, not just inside the Oval Office. Even members of the president’s own party seem to agree. Prior to the midterms, Democratic candidates who were on the ballot asked the president to hold off on issuing executive orders on immigration. They knew it would be unpopular among many of their constituents. They didn’t want to be punished because of the president’s unilateral action. Boehner is right that America’s immigration process must be reformed. So is the president. But there’s a right way to do it, and a wrong way to do it. The proper way is one that respects the Constitution and the separation of powers between the lawmaking branch of the federal government and its executive branch. It would be good to see the new, Republican-controlled Congress and the president start out on more achievable goals first— eliminating the medical device tax that’s part of the Affordable Care Act and pushing forward with the Keystone pipeline. Teeing off on immigration reform is the wrong move at the wrong time. President Obama shouldn’t poison this well. During the next two years, he has to drink from it, too.

AJOC EDITORIAL: Turnout doesn't measure up to options on the ballot

I usually don’t buy into post-election hand-wringing over voter turnout for a simple reason: If you don’t care enough to vote then I really don’t want you having a hand in the outcome anyway. That said, however, the extremely low turnout for the 2014 general election is mystifying. After 100 percent of the precincts were counted by the wee hours of Nov. 5 and a lonely correspondent from CNN had the vacated Egan Center all to himself at 7 a.m. Eastern time blearily reporting on the Alaska results, only 44.8 percent of the state’s nearly 510,000 registered voters had cast a ballot. Even adding in the 20,000 or so outstanding absentees and questioned ballots only gets turnout to a bit less than 49 percent. Leading up to Tuesday, I’d mentioned more than once at my local watering hole — where talking politics is allowed — that given the smorgasbord of issues and diverse candidates on the ballot that it should be the highest turnout in Alaska history (of course that was before I looked up the numbers, which I’ll discuss below). After all, if you couldn’t find something on this year’s ballot that could get you out to the polls then I can’t imagine another set of choices that could. There was a governor’s race that suddenly became competitive in the last two months of the year through an unprecedented and opportunistic combination of a Republican and a Democrat ticket with Bill Walker and Byron Mallott. That alone was enough to change a yawner of a race into a nail-biter, but throw in the central issue of the emerging Alaska LNG Project between Walker and Gov. Sean Parnell and there was far more than a just four-year term on the line. While the governor’s race featured a contest between two Republicans, there was a U.S. Senate race featuring the highest spending ever in the state that offered as clear a choice as can be imagined. The stakes were no less than the control of the upper body of Congress, the demotion of Majority Leader Harry Reid and the ascendency of Sen. Lisa Murkowski to the most powerful position for Alaska since the late Sen. Ted Stevens chaired Appropriations. Even our eternal congressman Don Young made his challenge from Forrest Dunbar interesting with his increasingly rough and reckless pronouncements that were possibly once endearing but now are more than a little wearisome. Throw in not one, but three statewide ballot measures alternately known as “pot, pay and Pebble” or “weed, wages and watersheds” plus the hotly debated Anchorage labor union ordinance repeal for the state’s population hub and there really was something for everyone. But in the end it looks like turnout won’t crack 50 percent for this race, which would make it the lowest turnout in a nonpresidential/gubernatorial general election for any cycle going back to 1978. (Division of Elections records don’t break down turnout before 1976). The previous best was 74.9 percent in 1982 when nine bond issues were on the ballot, and the previous low was 50.1 percent in 1998. As I mentioned at the top, if you didn’t vote because you don’t care then I’m glad. But for the first time I’m actually curious why.

EDITORIAL: For governor, Parnell is the right choice

Editor’s note: The Journal of Commerce, which is owned by the same company as the Empire, joins in its editorial board endorsement of Sean Parnell for governor. The road of Alaska politics is never a dull ride — there’s twists and turns, drama, success and defeat; there’s even some old-fashioned corruption every once in a while. When it comes to who the Juneau Empire will recommend for Alaska’s governor, the road led to Sean Parnell. For us, it comes down to one simple fact: This is a race between two Republicans, even though one will appear on the ballot as an independent. While much has been made of the Walker-Mallott “Unity Ticket,” it is Walker’s name that comes first and Walker’s views that will guide the state if he is elected. Byron Mallott will have only as much input as Walker allows. Walker, while a strong candidate, feels like a rogue. We’ve had enough of rogues. Parnell and Walker are almost identical in their views on social issues. Where they differ is in their fiscal and gas pipeline plans. Parnell has said he is focused on limiting the growth of health care and education spending. Walker has proposed cuts across the board — an approach that stands to hurt Juneau jobs more than Parnell’s approach. We don’t agree with Parnell’s belief that school privatization is the answer, but we do agree with his notion that simply giving more money to schools each year is not a sustainable approach. Fiscally speaking, Parnell made some smart decisions recently. He advocated paying down the unfunded liability in the state’s employee and teacher retirement system PERS and TERS. He has reduced state expenses, and we are forced to admit that — at this point, at least — he may have been right about SB 21. With oil around $80 per barrel, the state is expected to earn hundreds of millions of dollars more than if SB 21 had been repealed. We’ll see if he was right in the long run. When Walker met with the Empire’s editorial board after the Unity Ticket was announced, we were somewhat disappointed that he was unable to provide details for his plan to balance the state’s budget. We wrote an editorial saying we were optimistic about the Unity Ticket but that it had to flesh out its platform with details. In the weeks since, we have not seen him provide those details. Instead, at debates across the state, he has advocated across-the-board cuts to state departments and an end to “excessive planning” by state departments. You can tell your barber to take a little off the top, but doing the same to a government is risky. The scalp tends to get in the way. When it comes to natural gas, Parnell’s pipeline has brought the state closer than ever to construction of a trans-Alaska natural gas pipeline. Walker has said he could renegotiate or even scrap that deal, and that makes us nervous. Parnell has been criticized as of late for his actions addressing sexual misconduct and misconduct in general within the Alaska National Guard. Critics say enough wasn’t done — and done early — by the man who marches with a “Choose Respect” banner. That may be the case, but much of the criticism seems to be launched from the high ground of hindsight. We believe Parnell took the right steps once he knew of the problems: He launched investigations as soon as he was alerted, even elevating the issue to the Federal Bureau of Investigation, where it was ultimately hid from many involved, including the chaplains who raised the complaints. He asked for help from U.S. Sens. Lisa Murkowski and Mark Begich. He called on the right resources available. Unfortunately, the problems within the Guard were systemic. Only when outside investigators stepped in was the issue addressed. We may criticize Parnell for trusting too much in the ability of the Guard to solve its own problems or failing to see that Maj. Gen. Thomas Katkus, the Guard’s former head, was incapable of addressing the issue. We should not criticize him for failing to act. We trust that Parnell will resolve the National Guard scandal with the same effectiveness he’s shown the budget. In a second term, we hope Parnell will guide the state toward greater government transparency. Parnell supported House Bill 77, dubbed the “Silencing Alaskans Act,” which holds grave concerns for our editorial board. He oversaw the transfer of the state’s film tax credit into the Department of Revenue, an act that places the next “Bering Sea Gold” under the same security as oil company revenue. Parnell’s administration has repeatedly attempted to limit the public’s role in law-making, in establishing guidelines, permitting and voicing concerns for many of our most important areas and issues. Changes are happening right now to the way Alaska’s protected areas are managed, and those changes are happening behind closed doors because Parnell has adjusted how much involvement the public should have. With all these issues, why do we still support Parnell for governor? In debate after debate, Walker has given only the vaguest outline of what he would do in office. Because he is running as an official independent — with no party to guide his political background — we are concerned that Walker could move in almost any direction if elected. As we said before, we’ve had enough of rogues. Parnell has been a strong supporter of increasing tourism in Alaska, an industry that has supplanted logging as the third economic leg of Southeast. He’s proven to support oil development on the North Slope and while we may disagree with SB 21, we will give him the benefit of the doubt for its success so far. Our endorsement of Parnell does not come without a few caveats, but in a race against Bill Walker, Parnell is the preferred choice.

EDITORIAL: Data doesn't support Obama's claim economy is better off

President Barack Obama has always seen himself as an agent of change, a la Ronald Reagan. His goal was to do for progressive politics what Reagan had done for conservatism. Thus it was no surprise that he parroted a Reagan trope in recently asking the question of whether Americans are better off today than when he took office — and then answering his own question by concluding that “the country is definitely better off than we were when I came into office.” For Reagan, it was a campaign strategy drawn as a weapon against Jimmy Carter in 1980. Are you better off, he asked voters, than you were four years ago? Such comparisons aren’t unique to Reagan and Obama, of course, but Reagan put his own stamp on it — quite successfully as it turns out. “By every economic measure,” Obama told college students the other day, “we are better off than when I took office.” So not only has this president adopted the Reagan line (even crediting Reagan). He’s turned it into yet another example of repeated, robotic rhetoric in the endless campaign speeches made by a man “who is not running for anything except the exit,” in the words of Caroline Baum, a former Bloomberg News columnist. Baum correctly notes that Obama has set a low bar for economic measurements, as did Reagan in a sense. When the former took office in 2009, the longest recession since World War II was at its nadir. Reagan, inaugurated in 1981, took the reins at a time when Carter’s legacy had produced a terrible economy. Both Reagan and Obama inherited bad economies. How could people not be better off? The problem is that Obama’s stewardship set in motion a sluggish recovery. Unemployment has fallen, but the labor participation rate has dropped to a low not seen since 1978. Yes, that was during the Carter administration. Obama’s Department of Labor says nearly 100,000 jobless workers have given up. This pushed the [current] unemployment rate down to its lowest level since the last summer of the George W. Bush administration. Obama doesn’t mention this when he’s in his “Are you better off?” mode. To bolster a weak argument, the president repeatedly compares today’s numbers with those of January 2009. Therefore, writes Baum, “Almost anything appears better compared to the worst recession since the Great Depression.” What’s more, Baum adds, “he has a habit of taking credit for things he had nothing to do with: the energy renaissance, for example.” Neither Obama nor the federal government is in any way responsible for the energy boom. It was created and sustained by the private sector and has occurred despite the administration’s hostility to fossil fuels. So The Great Divider has found a way to brag about a meaningless comparison (the 2009 economy versus today), ignore a troubling statistic (the labor participation rate) and take credit for something he basically opposes. The man’s got skills. We’ll hand him that. But who’s really better off today? Not the jobless. Not those who are paying more for health insurance — which is most of us — or who’ve been forced to migrate from full-time to part-time status because of Obamacare. Not the middle class, for whom Obama casts himself as a champion. Baum notes that real median income was 4 percent lower in 2013 than when Obama took office. And the poverty rate is higher. Just what set of statistics supports Obama’s “better off” boasting? Agents of change are supposed to change things for the better. Reagan did. Obama has not only mismanaged the economy, he’s set it on a course that will plague this nation for years to come.

EDITORIAL: Second option is good news for Interior gas needs

News in September that a Texas-based company is looking to ship natural gas north from Cook Inlet to the Interior likely came as a surprise to many Fairbanks residents. After all, the state and Interior municipal governments are already well down the path toward commitment to a natural gas trucking plan that would require a liquefaction plant on the North Slope and trucking to Fairbanks — plans and financing for the plant are already underway. Still, WesPac Midstream told residents Sept. 22 that they can deliver gas to the “city gate” — that is, to whatever storage and distribution that local utilities build as part of the Interior Energy Project — for an estimated $14.50 per thousand cubic feet. That’s only slightly more than the estimated delivered cost for gas via the trucking project, and considerable work and investment must be done to firm up those costs. If construction, trucking or distribution costs come in higher than expected, the trucking project’s estimated gas cost could well rise above that of WesPac. News that Cook Inlet gas may be available for the Interior might well be frustrating for those trying to figure out the best plan. On the one hand, why bother with the considerable expense of constructing the North Slope liquefaction plant and burning through a lot of state funds and loan guarantees if there’s an easier option with access by both a higher-quality road and the Alaska Railroad? On the other, if Cook Inlet really has so much extra gas that they’re looking to ship it to the Interior, how come no one approached local leaders to apprise them of that option before now? In fact, though, having competing proposals for gas is good news for the Interior, and the community would be wise to keep moving forward with eyes open toward either solution being the ultimate vehicle for gas delivery. After all, having two options means that if costs from the North Slope creep upward, or if Cook Inlet supply dwindles and WesPac can’t secure a contract for guaranteed gas, the Interior will still have the other proposal as a means to guarantee a lower-cost supply of natural gas for area-wide distribution. While construction efforts for distribution are already well underway, as evidenced by crews working at locations around town, there are still plenty of moving pieces left to be locked down in determining the best and most cost-effective solution for Interior energy relief. From financing for the plant construction, trucking options, as well as a program to help residents with the cost of changing over to gas heat, many factors could still influence the final cost of gas when it’s delivered to residents, now forecast for late 2016. For that reason, it’s good to have multiple supply options. There’s a reason why the old saying warns against having all your eggs in one basket.

GUEST COMMENTARY: Walker claims don't fit facts of Point Thomson settlement

Today hundreds of Alaskans are employed working towards first production at the largest undeveloped oil and gas field in Alaska — Point Thomson. This follows years of disputes, hearings, litigation, and an out of court settlement achieved in 2012. Now we have Bill Walker maligning those who worked selflessly on behalf of the state by claiming in a recent opinion piece that the settlement is the “worst, dirtiest backroom deal in the state’s history.” As one of the dozens of state employees representing the state in the litigation against ExxonMobil and negotiating that settlement, I am disappointed to see Walker claim that the settlement was the product of a crooked scheme to cheat the state. To the contrary, the settlement was a hard-fought compromise that forced Exxon to end its warehousing of Point Thomson’s massive gas reserves by spending billions of dollars in Alaska, which in turn has resulted in unprecedented progress at Point Thomson and in advancing the North Slope gas commercialization efforts. Walker defensively begins his hit piece by trying to justify his decision to sue the state over the Point Thomson settlement. Walker claims his lawsuit will not stop the billions in investment at Point Thomson. He is wrong. This lawsuit seeks to kill the development plan incorporated into the settlement agreement. This means that there will be no approved plan for the field. Without an approved plan, state law prohibits any activity from going forward. Walker is therefore trying to shut down operations at Point Thomson. Worse, a court victory for Walker will also jeopardize the ongoing efforts with the Alaska LNG Project to commercialize Alaska’s vast gas reserves; the only reason why the Alaska LNG Project is moving forward is because the state and Exxon settled the Point Thomson dispute. Thus, in the unlikely event that Walker wins, the hundreds of people working on the Alaska LNG Project and Point Thomson projects will know who to blame when their jobs are put at risk. Walker’s most inflammatory charge is that the Point Thomson settlement is the product of a “dirt(y), backroom deal” that had no public input or involvement. Nothing could be further from the truth. Far from being a “backroom deal,” more than 20 state employees from three state agencies played a critical role in the negotiations. The public and the legislature also influenced the settlement that we achieved. For example, the demands that we made in the negotiations were based on what we learned at public hearings held before the Legislature, the Alaska Oil and Gas Conservation Commission, and the Department of Natural Resources. At these hearings, the oral testimony and thousands of pages of written testimony covered geologic, geophysical, engineering, economic and legal issues. No development plan in the state’s history has ever been subjected to this level of scrutiny; nor has any development plan ever received this amount of public input. But the state was ultimately able to get a strong development plan for Point Thomson because Gov. Sean Parnell gave the settlement team the time (nearly three years) and support to reach a deal that advanced the public’s interest. I witnessed Gov. Parnell repeatedly get Exxon’s senior management to back off of unreasonable demands related to the pace of development and the amount of acreage Exxon should keep if it failed to perform. And on more than one occasion, I was relieved when Gov. Parnell rejected Exxon’s settlement offer after he concluded the offer was not in the state’s interests. Contrary to what Walker says, Alaskans should know that Gov. Parnell only agreed to settle once the parties arrived at a deal that gave the state what we demanded: a commitment to production, a path to full field development, progress on North Slope gas commercialization, and the automatic termination of leases if Exxon failed to perform. Finally, Walker claims credit for the state’s decision to terminate the Point Thomson unit in 2006. This is comical — Walker had next to nothing to do with the 2006 termination decision. Division of Oil and Gas Director Mark Myers and Commissioner Tom Irwin started the process in 2004 when they told Exxon that the failure to submit a development plan would put them in default. When Exxon refused to commit to drill a well, Director Myers followed through and placed the unit in default in 2005. When Exxon failed to cure the default, the unit was terminated in 2006. It is true that Walker spent the Port Authority’s money on a Houston attorney who filed a brief and testified in favor of termination during the 2006 hearing, but Walker and his Texas attorney had virtually no influence over DNR’s termination decision. If Bill Walker truly wants to put Alaskans first, he needs to take the time to understand the facts around these complicated issues. It is easy to write blustery op-eds defaming dedicated public servants and run ads with catchy slogans, but it takes sustained commitment, prudence, and a backbone to achieve real results for the people of Alaska. From 2006 until 2012, Katchen worked as an attorney in the Oil, Gas, and Mining Section at the Alaska Department of Law and as Dan Sullivan’s special assistant at the Department of Law and the Department of Natural Resources. He is currently an attorney in Anchorage and the views expressed here are solely those of the author.

EDITORIAL: Onerous tax code behind corporate flight

It’s not corporate greed or a lack of patriotism that is driving American corporations overseas, as President Barack Obama contends. It’s one of the worst corporate tax codes in the developed world. The cold, hard evidence of that is detailed in a new study ranking the tax competitiveness of 34 industrialized nations. The United States ranks 32nd, ahead of just Portugal and France, according to the Tax Foundation, a free market institute. It measured nations on 40 variables, including corporate and individual income taxes, sales taxes, property and estate taxes and international tax rules. That the country that taught the world the principles of capitalism and free markets now ranks so poorly should shame American policymakers. Instead, the president and Senate Democrats want to heap additional, punitive taxes on corporations that move their legal domicile overseas to avoid already confiscatory rates in the U.S. Estonia, a former Soviet satellite, is new to the free marketplace. And yet it ranks first in tax competitiveness because, the study says, it has a relatively low 21 percent corporate tax rate, no double taxation on dividend income, a nearly flat 21 percent income tax rate and property taxes only on land, not on buildings and other structures. Compare that to the United States, which has the highest corporate tax rate in the developed world at 39 percent and is one of only six industrialized nations that taxes the overseas earnings of corporations. The U.S. is also dinged for its estate tax and chaotic state and local property tax policies. The study faults the high U.S. top marginal income tax rate and a double taxation on capital gains and dividend income. Those all are things that can be fixed with the sort of smart tax reform proposed by Michigan’s Rep. Dave Camp, R-Midland, who is retiring. Other nations have proved they can change their rankings in a hurry if they adopt the right reforms. New Zealand, for example, was far down the competitiveness list in 2010. But it lowered its corporate tax rate, cut top marginal income tax rates and shifted a greater portion of its tax burden to a goods and service tax. This year, it ranked No. 2 on the list. By comparison, the last major change to the U.S. tax code was 28 years ago, when Congress and President Ronald Reagan dropped corporate income taxes to 34 percent from 46 percent. Since then, most other nations have leap-frogged the U.S. in making their tax climate more attractive to business. The average corporate tax rate among industrialized countries is now 25 percent, down from 47.5 percent in the 1980s. The Tax Foundation gives considerable weight to the neutrality of the tax code, meaning policies that seek to raise the most revenue with the fewest loopholes, credits and tax breaks, and without favoring consumption over saving. Tax competitiveness is a good indicator of economic competitiveness, and thus growth. The U.S. recovery has been sluggish, in no small part because of tax and regulatory policies that dampen growth. Rather than concocting a tax scheme to hold corporations hostage, the president should be crafting reforms to make them flock here.

AJOC EDITORIAL: First LNG steps, and a word on the First Amendment

A Chinese proverb states that the journey of a thousand miles begins with a single step, and so it goes with the Alaska LNG Project. More than a few of those important initial steps have been taken less than nine months after the major North Slope producers, pipeline company TransCanada and the State of Alaska signed a “heads of agreement” statement outlining a large-diameter pipeline and export plant project. The Legislature approved the state taking a 25 percent ownership in the Slope gas to be shipped through the pipeline, an export permit application has been filed, land is being acquired for the future LNG plant at Nikiski, the U.S. Department of Energy announced it will streamline the export permit, the partners have pre-filed with the Federal Energy Regulatory Commission for technical work and this past week Natural Resources Commissioner Joe Balash was in Japan with representatives of BP touting the Alaska LNG Project. While there, Balash also signed a cooperation agreement with the Japan Ministry of Economy, Trade and Industry, complementing an earlier agreement signed with the Japan Bank for International Cooperation that is facilitating LNG imports to the country. Not the least of the important steps taken along the way was the wise action of the Alaska voters to resoundingly defeat Ballot Measure 1 by 10,247 votes on Aug. 19 among nearly 190,000 ballots cast. The turnout was 39 percent, the second-best in the last 12 years only trailing the 41 percent turnout in 2008. Contrary to the day-after moans about the initial 31 percent turnout on Aug. 19, it does appear that a good many Alaskans were engaged enough in the issue of protecting the state’s economic future to get out and vote. Whether it portends to the outcome in November is unknown, but primary voters did reject the position of the new “unity” ticket of governor candidate Bill Walker and Democrat lieutenant governor candidate Byron Mallott, who both favored repealing oil tax reform. Walker has also been a steady critic of Gov. Sean Parnell’s approach to developing Alaska’s vast North Slope natural gas, and there can be little doubt that the progress we are seeing would not be continuing were voters to approve of the Walker-Mallott position on oil taxes. We are still at least five years from the actual “go or no-go” decision on building the Alaska LNG Project, which will include five off-take points to deliver gas to the state’s residents as it travels toward Nikiski. But we’ll never get there without the steps that are being taken now, and each one should be welcomed. Fumbling on the First Amendment  A funny thing happened along the way to national Democrats attempting to stage a show vote on a Constitutional amendment to restrict political speech now guarded by the First Amendment. Senate Majority Leader Harry Reid put the amendment up for a vote to advance debate Sept. 8, expecting Republicans to vote against it and have it fall short of the 60-vote threshold. Then the Democrats would be able to use that vote against the GOP in the upcoming midterms even as Reid’s SuperPAC pours tens of millions into contested races, including ours here in Alaska. But the GOP didn’t bite, and the measure was advanced for debate by a 79-18 tally. Hilariously, Reid called the move by Republicans to vote for debate a “stall tactic” because the Democrats well know the proposed amendment isn’t going anywhere and all they wanted was something they could stick in their campaign ads paid for by their own billionaire donors. This is what passes for politics in Washington, D.C., and of course there is our Sen. Mark Begich out there leading the charge for a measure that is nothing more than a waste of time created by his party even as he still refuses to sign a deal with Republican opponent Dan Sullivan to curb Outside spending. What makes Begich’s position even more untenable is the fact that it is his own campaign — not some shadowy Outside billionaires — that produced the ad that has been universally panned as the worst of this election cycle and that he was forced to pull from the air on Sept. 1. The Associated Press reported that Begich had to be convinced by national Democrats to pull the ad even after the victims’ family vigorously protested to his campaign through its attorney. One nugget from the victims’ family letter to the Begich campaign should also raise eyebrows. Apparently, State Rep. Geran Tarr, a Democrat who represents the Mountain View district where the horrific crimes exploited in the Begich ad occurred, was dispatched to the victims’ home in an effort to get them to tamp down their calls to remove it from the air. According to the Sept. 1 letter to Begich from family attorney Byron Collins, his client said of Tarr’s visit: “the reason why I want the ad down is because we do not want it to interfere with the trial. She told me it wasn’t going to and that it’s all political but I don’t see it that way. I told her it was all for votes and I do not want this or my family to be part of any campaign cause it’s all pointless for us.” As if dragging the victims’ family through the public eye wasn’t bad enough, the Democrats shamelessly pushed it further by attempting to convince them to drop their objections so Begich could score political points against Dan Sullivan. So when Begich talks about every Alaskan having a voice, remember whose voices he didn’t want to hear and what kind of speech he is willing to defend.

EDITORIAL: Islamic State's threat to America is a real one

Call it ISIS, ISIL or the Islamic State. By any name it is deadly, and America is in its sights. The murder of James Foley was — or should have been — a wake-up call for those who have, despite the murders of thousands on Sept. 11, 2001, been lulled into a false sense of security. These fanatic, brutal killers have an equally false sense of grandeur, but they are dangerous to anyone who doesn’t kowtow to their perverted interpretation of their religion. One thing is for certain, whatever intelligence the United States acquired about this group that led President Obama to dismiss the Islamic State of Iraq and Levant as a “JV,” or junior varsity, terror group was as lacking as anything that allowed the sneak jetliner attacks on American soil nearly 13 years ago. People who think you can reason with ISIL leaders, come up with a compromise are showing ignorance of reality. The only compromise in their eyes is to acquiesce and convert religion and government to forms that they demand. Anyone who resists has committed a capital offense in their eyes. For more than a decade, al-Qaeda, which pulled off the attacks that killed more than 3,000 innocent people, has been seen as the worst of the terrorist organizations. U.S. officials now say ISIL has replaced them in that position.  “They are an imminent threat to every interest we have, whether it’s in Iraq or anywhere else,” Defense Secretary Chuck Hagel told reporters at the Pentagon last week. “They are beyond just a terrorist group. They marry ideology, a sophistication of … military prowess. They are tremendously well-funded. This is beyond anything we’ve seen.” ISIL is also proving itself adept at social media. There was no mistake that the murderer of Foley, who the U.S. military attempted to rescue along with other hostages being held by ISIL, spoke with a British accent. It was signal to those in the West who might share their hatred that they are already among them. One thing we know about terrorists is they have patience and make preparation. It would not be a surprise to learn that secret cells of ISIL already are in Europe, Britain and even here in the United States, waiting for orders in their unholy war against the West. So far, America’s involvement against ISIL has been restricted to airstrikes and limited efforts such as the failed hostage rescue this summer. A war-weary America, having lost thousands of lives and having spent billions of dollars in a decade of warfare in Iraq and Afghanistan, is resistant to any deeper involvement. Unfortunately, our enemies are banking on that, believing our freedoms have made us weak and soft. ISIL terrorists, we believe, truly feel they one day will waltz into Washington, D.C., beheading those that will not bow to them, and raise their flag symbolizing the enslavement of body and spirit over the White House. We cannot afford to continue to underestimate these killers, and we cannot afford to look the other way and pretend they do not exist. America must respond and it must respond in a way that will end the threat.

AJOC EDITORIAL: Alaskans not fooled by 'giveaway' campaign

No, Les Gara, Alaskans were not fooled. In a response to our veteran reporter Tim Bradner about the results of the Aug. 19 primary that saw the effort to repeal oil tax reform defeated, Rep. Gara took the four-percentage point loss as a moral victory.  “This shows the power of corporate money,” the Anchorage Democrat said, “but also that Alaskans are tough to fool.” Gara’s statement implies, as the repeal supporters have alleged explicitly all along, that those who opposed their efforts and won the day are hapless saps gullibly shilling for the big, bad oil companies. Along with personal attacks and charges of corruption and dishonesty against those who passed oil tax reform, the repeal supporters’ rhetoric drove the divisive tone of a campaign that has, at least for now, come to a merciful end. On the morning of Aug. 20, the Associated Press was still describing the outcome of Ballot Measure 1 as “too close to call,” but that is wishful thinking. The repeal supporters would have to get about 80 percent of the absentee ballots to reverse the current gap of nearly 6,800 votes. It would be nice to suggest we all come together now after a tough race and sing campfire songs, but there is certainly no indication that the opponents of tax reform and Gov. Sean Parnell are going to accept defeat. They didn’t accept it in 2012 when Alaska voters broke up the Senate majority after oil tax reform was a major campaign issue and every seat but one in the Legislature was up for grabs; they didn’t accept the outcome of the Legislature’s vote to repeal ACES in 2013; and Gara’s comments Aug. 20 indicate that they will also write off this outcome similarly as an illegitimate result bought and paid for by the oil companies who supply 90 percent of the state’s unrestricted revenue and a third of its jobs. If you think your opponents are stupid and/or corrupt and then build a campaign around that theme, it is difficult from this perspective to believe that it is being done in the service of what’s best for Alaska. Thankfully, a solid majority of Alaskans who turned out (a bit more than 31 percent), rejected the false claims of a “giveaway” and recognized the irrefutable truth that drilling increased, the production decline was halted and billions in potential investments were on the way after just a few months of oil tax reform being in place. In the Mat-Su Valley where Sarah Palin got her political start, voters rejected her endorsement of repeal by nearly 3,900 votes. In repeal ringleader Sen. Bill Wielechowski’s Senate District G, the “no” vote won by more than 2,000 votes in House Districts 13 and 14. [Correction: District G includes House Districts 15 and 16, where "no" won by 429 votes -Andrew Jensen] In rural Alaska, particularly the North Slope, the “yes” vote also fell short. The “yes” vote barely squeaked by in Bristol Bay, the Aleutians and the Kuskokwim Delta by a couple hundred votes. On the Slope and the Bering Straits/Yukon Delta districts, the “no” votes won by more than 900.  Turns out the only people fooling themselves were the repeal supporters who tried to sell a shady bill of goods to the voters of Alaska.

EDITORIAL: State must diversify economy or be bound to oil

During the past few months you’ve read a great deal about Ballot Measure 1 on these pages, and for the next month leading up to the primary election Aug. 19, you’ll continue to. The measure, which would repeal Gov. Sean Parnell’s recently-passed oil tax reforms, is hailed by supporters as a return to a fairer tax scheme. Opponents say that repealing the oil tax reforms would cripple the state’s economy and undo progress made in stemming the decline of oil production on the North Slope. The two sides disagree on nearly every major tenet of the measure’s effects. They disagree about whether Gov. Parnell’s reforms constitute a “giveaway” to oil producers. They disagree about whether new development on the North Slope was planned before the passage of Senate Bill 21 or came in response to the bill. They disagree about whether shaking up the state’s oil tax structure again so soon after the passage of a new regime will make companies skittish about investing in the state. But there’s one thing both sides agree on: oil tax revenues are the lifeblood of Alaska’s economy. And that’s why when state leaders propose altering the mechanisms that bring in those revenues, the fight is so bitter, widespread and loud. Even small tweaks to the oil tax formula can have outsized effects on budgets for state-funded services like education, transportation and public safety. Our state’s economic ship floats or sinks depending on the level of that oil and gas money — it comprises 92 percent of the state’s unrestricted revenues, and a third of the state’s jobs. Given that fact, it’s easy to understand the hue and cry when law changes are proposed that would affect that cash cow. Before the discovery of oil on the North Slope, Alaska wasn’t nearly so rich a state. Even with a state income tax (which Gov. Jay Hammond ditched in 1980 after the oil ship had come in), state revenues were far lower than modern levels, as were state services and population. The billions of dollars in oil wealth that came to the state after crude began flowing down the pipeline gave the state freedom to lower the tax burden on its citizens and greatly expand infrastructure and services. But as is often the case in states where one industry dominates the economy, the things you own can start to own you. We now depend on that revenue at least as much as — and likely a great deal more than — the producers need the oil that remains on the North Slope to maintain their profits. It’s not a comfortable position for the state. Whether or not Ballot Measure 1 passes in August, it’s a stipulated fact that the Prudhoe Bay oil patch — which provides the bulk of state oil and gas revenues — is a mature field. While Gov. Parnell’s oil tax reforms may provide a meaningful incentive for producers to develop more oil there, the end of the field’s useful life will come within the lifespan of many Alaskans alive today. Given the state’s revenue picture before the oil started flowing, that’s an existential threat to our state’s economy as it exists today, and a clear sign that we can’t depend on oil forever. Even a full-diameter natural gas line — the great white elephant that state leaders have chased since the trans-Alaska oil pipeline was under construction — wouldn’t provide the same kind of revenue that oil does. That means Alaska has to work as hard as possible to develop and sustainably maintain the renewable resources that currently contribute to the state’s bottom line, such as fish and timber. And it needs to develop industries and sectors of the economy that can begin to shift the balance of state revenues away from their current domination by oil and gas. And in the meantime, we need to make choices that will give the state as much time as possible to make that transition, because it’s not likely to be simple to find a solution or easy to adopt it.

EDITORIAL: State is right to join suit over King Cove road

The long and perplexing dispute over the proposed one-lane gravel road through a portion of the Izembek National Wildlife Refuge on the Alaska Peninsula has just become a heavyweight fight. Gov. Sean Parnell on June 30 announced the state has filed a motion in federal court asking to join a lawsuit against Interior Secretary Sally Jewell over her December refusal to approve a congressionally sanctioned land exchange that would allow construction of the road between King Cove and the all-weather airport at Cold Bay. The lawsuit was brought by the city of King Cove, the Aleutians East Borough and three Alaska Native entities in early June. Gov. Parnell’s decision, which follows through on the intent he announced in April, is the right course of action. The road — 11 miles of which would go through the refuge — has been sought by King Cove residents for two decades as a means to have safe access to the Cold Bay airport. Volatile weather regularly makes King Cove’s airport unusable, leaving people in need of advance medical care shut in or needing to be flown out by the Coast Guard when the situation becomes an emergency. The Coast Guard has been summoned to King Cove five times this year to airlift people in need of medical aid. The governor’s action is proper not only because the health and safety of people are at risk but also because such disregard from Interior Department officials can potentially happen elsewhere in Alaska. Alaska is standing up for its rights. The state makes both points in its court filing requesting to intervene in the case on behalf of King Cove: “[T]he State has an interest in ensuring that its citizens and communities are provided reasonable access across the vast federal landholdings in the State. In this case, the health and safety purposes of such access over the Izembek Refuge are literally of life and death importance.” What’s puzzling about this whole situation is that the federal government would clearly benefit from the land exchange — and the secretary even acknowledged that fact in her December rejection of the idea. Under the swap, the federal government would receive 43,093 acres of state land and 13,300 acres of King Cove Corp. land, all to be added to the Izembek refuge. The refuge would give up 206 acres. Secretary Jewell, supported on the issue by several national environmental organizations, chose instead to agree with personnel from the Fish and Wildlife Service, who said the road would be too disruptive to the area’s habitat. Residents of King Cove make what should be a convincing argument to the contrary — that absence of the road has brought death and injury to their community. U.S. Sen. Lisa Murkowski, one of several Alaska leaders trying to sway distant Washington officials about the need for the road, notes that 19 people have died in plane crashes coming to or departing from King Cove or because they couldn’t get to medical care in a timely manner. Residents have to travel to Anchorage, 600 miles away, for many medical procedures. Secretary Jewell has been showing a certain aloofness to the situation and to the state. She hasn’t responded to several requests, including from the Alaska Legislature, to reconsider her decision, and she hasn’t even responded to a letter sent to her by King Cove residents in April. Let’s hope the weight of a legal filing from the state of Alaska will get her attention and prompt her to reconsider her denial of this road, which is so essential for the health and safety of the small community of King Cove and which is becoming increasingly indicative of how the federal government views Alaska.

EDITORIAL: Another election, another frivolous complaint

Apparently, defending your good name is an ethics violation — if you’re governor, that is. Following a misinformed opinion column penned by lieutenant governor-hopeful Craig Fleener, where he accused Gov. Sean Parnell of skipping a planned event at the National Congress of American Indians conference in Anchorage earlier this month, a state Democratic party officer has now filed an ethics complaint against Parnell. There’s not much of a story here, really, other than the state will now waste time, resources and money on a frivolous complaint that came about because the running mate to one of Parnell’s challengers thought he saw an opportunity to slam the governor but failed in knowing the facts first. An email provided to the Empire shows that Parnell’s scheduler declined the opportunity to speak at the NCAI conference on May 19 so he could attend his in-laws’ 60th wedding anniversary. NCAI event programs had Parnell listed as the opening speaker, and when rumors swirled that the governor was a no-show, Fleener saw an opportunity to help out running mate and Independent candidate Bill Walker by wagging his finger at the governor. Parnell released a statement accusing Fleener of spreading lies, but he did so through his press office and not his campaign office. Alaska Democratic Party member Lynda Zaugg saw another opportunity to poke Parnell in the eye and filed the ethics complaint. Calling the governor a no-show can be construed as an attack on Parnell’s character, not just as a candidate for governor but also as the governor. It’s bad for the state if the public is erroneously led to believe its highest elected official stood up a gathering of Alaska’s First People. Zaugg’s complaint of state resources being misused, in our opinion, will only lead to the misuse of state resources as the complaint is investigated. We’ll let you know how much it cost once the state is done investigating. An apology and correction from Fleener was published June 24 in the Anchorage Daily News, where his commentary first printed. “When (Parnell) did not take the stage after he was introduced and I was told by an organizer that he was delayed in traffic, the universal opinion was that Gov. Parnell was a no show. ... While I did check my sources all the way to the top of those in charge at the conference and made the statements I made in good faith, I apologize for stating Governor Parnell was an unexcused no-show.” Running mate Walker sent out his own release defending Fleener’s original column, placing blame on NCAI for the inaccurate program and on Parnell for not addressing the crowd by video. “It’s disappointing that Governor Parnell personally attacks Craig Fleener’s integrity, stepping over the true message raised by his article,” Walker said in the statement. “ ... Parnell’s absence from the candidate forum hosted by AFN was known in advance to all candidates and is not the absence mentioned in Fleener’s article.” It’s unfortunate that not only did Fleener step in “it,” but Walker refuses to acknowledge the smell. Regardless, state dollars will be used to clean up the mess it has caused.

EDITORIAL: 'Alaska Agreement' good theory, flawed practice

In 2008, Alaska’s usually low-profile Senate contests came to an end, as Sen. Ted Stevens saw his decades-long career in office come crashing down amidst a corruption trial that made national headlines. Two years later, the 49th state got heavy press again when Sen. Lisa Murkowski was toppled by challenger Joe Miller in an unexpected primary result, only to mount a successful and widely publicized write-in campaign. This year, the state’s Senate race is once again in the spotlight, as incumbent Democratic Sen. Mark Begich will face a strong challenge from whichever Republican candidate emerges from the August primary. (Last) week Dan Sullivan, the best-funded of Begich’s challengers, came forward with a pledge for which he’s seeking Begich’s support. Called the “Alaska Agreement,” the pledge’s stated purpose is to leave state residents in control of the race’s funding. Under its terms, candidates would have to donate half the value of any third-party attack ad buys to a charity of their opponent’s choice. Mr. Sullivan modeled the agreement on the “People’s Pledge” agreed to by Sen. Scott Brown and challenger Elizabeth Warren in their 2012 race in Massachusetts. At first glance, the agreement’s principle is well intentioned: why not cut out negative ads made with outside money? But the particulars of the race make it clear that this agreement is a political gambit rather than a true effort at campaign finance reform. One fact that makes this clear is the fact that both Sullivan and Begich will be able to raise ample money in their own campaign coffers to saturate media from here to the primary and — if Sullivan prevails there — the general election. Both candidates are already running ads heavily, some of which are already turning toward the negative. Even with the agreement in place, Alaskans would likely see little difference in the volume or tone of the ads they see and hear in the newspaper, online, and on the radio and TV airwaves. Furthermore, the agreement makes no mention of candidates in the race other than Sullivan and Begich, despite the fact that polling shows Lt. Gov. Mead Treadwell and the aforementioned Miller as credible candidates who have very realistic chances of emerging from the Republican primary. Treadwell, who isn’t known for making high-profile comments thus far in the race, called the agreement a “publicity stunt,” pointing to the fact that Mr. Sullivan has raised the majority of his campaign funds from donors outside Alaska. Also undercutting Sullivan’s intention of giving local voices more weight in political campaigns is his stance in support of the U.S. Supreme Court’s well-publicized decision in Citizens United v. Federal Election Commission, which prohibited the government from restricting campaign spending of the sort he would seek to limit in his current race. The disharmony between Sullivan’s stances on political campaigns in general and the specific race he is running this fall is peculiar, and doesn’t support his stated intentions in seeking the agreement. We agree that elections, especially recent ones, have become longer, more expensive, and dirtier affairs than is beneficial to healthy political discourse, and that the sentiment of Sullivan’s “Alaska Agreement” is worthwhile. We should seek to have more local voices and issues represented in political races at every level of government. But we can’t square that intention with the facts of how this year’s Senate race is being conducted — and with Mr. Sullivan’s unwillingness to support limits on campaign finance in races other than his own.

EDITORIAL: US foreign policy a drifting disappointment

Barack Obama reaffirmed his belief in American exceptionalism in a speech (last) week aimed at reframing his foreign policy. This was no small point coming from a President who won office partly by capitalizing on a decline in the U.S.’s global standing. When he accepted the Democratic nomination in August 2008, Obama made a bold promise. “I will restore our moral standing,” he declared, “so that America is once again that last, best hope for all who are called to the cause of freedom, who long for lives of peace, and who yearn for a better future.” Now that he is well into his second term it is difficult to offer a positive assessment against this mission statement. The U.S. under Obama has been slow, recoiling and tentative in international affairs. Because of the global leadership role the President accepts, this is a cause for concern. Make no mistake, Obama is himself an embodiment of the very exceptionalism he embraces. That a one-time slave-trading nation, not so long ago riven with state-sanctioned racial inequality, can elect an African-American to the White House shows the power of the ideas that form the Great Republic. His election, of itself, did much to revive US standing as the bastion of democracy and freedom. But looking for repercussions in American foreign policy achievements, we are bound to be disappointed. Unless he shows more resolve in his final two years, his presidency will be seen as a period of drift when global threats from Iran and Russia went unchecked, the Middle Eastern quagmires deepened and China ever so surely began to feel emboldened. To be sure, Obama points most proudly to scaling back and ending military engagements in Iraq and, in the coming two years, Afghanistan. But there is little evidence sufficient work has been done in either theatre to consolidate the gains. In his speech to graduating officers at West Point this week the President even promised to close Guantanamo Bay; the same turning point his predecessor aspired to and that Obama pledged in his 2008 campaign. In his reference to America’s age-old argument between isolationism and adventurism, at least the commander-in-chief seemed to comprehend that in this age of global threats the U.S. cannot realistically isolate itself from its role as an international force for order. But he placed great emphasis on multilateral approaches; a surprising priority when his current nemesis, Russia, has played such a spoiling role with its UN Security Council veto on issues such as Syria and Iran. In Obama’s own words: “A new century has brought no end to tyranny.” An end may have been too much to ask for, but we are entitled to question the lack of meaningful progress. Obama sounded dewy-eyed when holding out a “very real chance of achieving a breakthrough agreement” with Iran. He also boasted of how the American “ability to shape world opinion helped isolate Russia right away.” That is not much of an achievement, or deterrence, thus far. In our region, the U.S. pivot to Asia — somewhat forgotten with distractions in eastern Europe — has done little to stymie provocative actions by the Chinese navy. And North Korea remains unchastened. The President speaks of a world where “hopes and not just fears” govern. But for solutions he cannot afford to be fearful of U.S. power.  

AJOC EDITORIAL: Poo-pooing the news, part 2

It was noted in this space a few weeks ago that Democrats never let good news go to waste, and they remain nothing if not predictable. Barely an hour after BP announced it was selling some of its smaller North Slope assets to Hilcorp Energy on April 22, the reliable Sen. Hollis French was out with a press release accusing BP of fattening its bottom line by exiting Alaska after lobbying for the oil tax reform that passed the Legislature in 2013. Right, Senator, that was BP’s plan all along: Campaign for years for a fair tax regime, then sell its smallest producing assets just four months after it takes effect. Brilliant! French and his fellow Democrats have been telling us that Senate Bill 21 only favors the Big 3 producers ConocoPhillips, BP and ExxonMobil, yet, as usual, the facts give lie to their incessant babble. Since SB 21 passed, we have seen the privately-held independent Caelus, backed by billion-dollar private equity firm Apollo, buy into the Slope to the tune of $300 million for Pioneer Resources fields. BP revealed on an investor call that Hilcorp paid $1.25 billion for the Slope assets with a $250 million earn-in commitment to advance the Liberty field project. That is $1.8 billion in investments by new entrants to the Slope, and when combined with the new projects announced by the Big 3 over the past year, more than $7 billion worth of purchases and development decisions have been made after the passage of oil tax reform. The 1.8 percent annual decline for Slope production this fiscal year is easily the slowest rate in years, with production better than forecast by 13,600 barrels per day. Democrats should be celebrating Hilcorp’s entry to the Slope given its outstanding track record in Cook Inlet, where it has nearly doubled oil production and secured local utilities’ gas needs into 2018. Hilcorp’s remarkable performance in Cook Inlet has allowed the ConocoPhillips LNG plant at Nikiski to resume exports, providing markets for Hilcorp plus other producers and explorers in the region. Hilcorp turned around the Inlet situation by taking over neglected assets of Chevron and Marathon, and there should be little doubt that the company has done its due diligence on the Slope and believes it will be able to increase production from existing assets and produce new oil from Liberty in partnership with BP. A proven company like Hilcorp entering the Slope is a good thing, but the Democrats seem determined to make it a decision the company will regret as their party pushes its dishonest and destructive campaign to repeal oil tax reform.

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