Opinion

Slope oil giants set to prosper as veto fallout continues

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

New House Resource co-chairs sound right notes

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

Thoughts after the election

It should not have happened, if the opinion polls were to be believed. Yet Trump performed an amazing triple-play. He tarnished the legacies of the Bushes, the Clintons, and President Obama in one swoop. The pollsters had it wrong, big time. Data gathering and statistical analysis is an art as well as a science and it is fraught with subtle biases. To be good at it, one must be able to distinguish between information and noise, have a solid sense of history, and an imagination for the future courses of events. Not an easy task because we are a nation which relishes our biases. We can self-select cable news stations and social media which slant one way or the other. And our internet search engines can pick up on our biases and feed us webpages which make us happy. Our biases can stay satisfied within this cyber-bubble. After a while, any opposing view we might come across can sound like heresy; a shattering of faith. Despite the heated rhetoric and all the mudslinging of both campaigns, the election of Donald J. Trump as the 45th President of the United States of America is actually a moderating factor for the country. To paraphrase conservative icon William F. Buckley, much of the electorate looked at the course of history and yelled “Stop!” What was quite shocking to many was how Trump was able to re-write the rules of the election season. Relatively speaking, his campaign was run on a shoe-string, with very few high-powered surrogates to pinch-hit for him or deflect criticism from the media. He was considered coarse and vulgar, and constantly erupting with antics that his opposition assumed would sink him. But what made it work was an entrepreneur’s sense of vision and just a few simple ideas - on immigration, foreign wars, foreign trade, and the Affordable Care Act- and a “feel good” delivery about making America great again. The campaign had a core concept for what was wrong and for what was right about the country, and the messenger was a comet because of his celebrity and his entrepreneurial spirit, a combination in politics to probably not be repeated in our lifetime. An entrepreneur fights hard for his vision and never wavers (or as it’s known in the political world: flip-flop). With this, Trump took on and roundly beat 16 Republican challengers, Hillary Clinton and all her high-powered surrogates, and much of the overly biased news media which failed to remain objective or notice the rising tide. Usually to be a winner one has to start out looking like a winner. Agree or disagree, Trump’s simple vision and stubborn determination were two important ingredients when an electorate is looking for change. So, Trump is president-elect, and currently some Blue-color cities are seeing violent protests. Recall the worry by Clinton’s supporters that Trump would not accept the election results? An economics professor at Yale even made the midterm exam optional for any students too “distraught” in the wake of the election. To me this is symptomatic of living in that bubble which never breaks and when it does, the student is ill equipped to become a productive member of society. To take a phrase popularized by Obama, this could have been a “teachable moment” for those students supposedly too traumatized to take the midterm. (Technically, the phrase is attributed to Professor Robert Havighurst, a physicist who became an educator and emphasized the importance of timing and learning.) In other words, it’s time for learning and not mourning. In solidarity with all the working people who don’t have the luxury to take time off for political mourning I suggest all students take their tests when scheduled. After all, test-taking is not “working.” It’s “learning” - and we all benefit when someone takes the time to learn.    The bigger question now is how to bind the nation’s wounds and bring the country together. It won’t be easy when cities are violently erupting, and professors can’t keep a classroom in order. What does it mean for Alaska specifically? If you asked me today, the answer would be a platitude. What will Trump do for the energy sector for example? What will he do in regards to federal overreach? He may open up the North Slope and ANWR. He may not. We have no idea who will be in his administration yet, so conjecture is just that. In effect, the Trump comet could very well burn out, just as the Obama coalition could not transfer completely to Hillary Clinton. Of course, this is the danger when presidential candidates become so attached to the very brand they create; i.e., Obama’s “hope and change” and Trump’s “make America great again.” One thing is sure, celebrity was a key ingredient in the rocket fuel both gentlemen used to power their rise. Time will soon tell if Trump will be able to transfer his entrepreneurial skills from campaigning to governing. If he can, he may be a very successful president. If not, the American electorate will vote for the next who promises change. Darren J. Prokop is a professor of logistics in the College of Business and Public Policy at the University of Alaska Anchorage.

Trump win predictable, but not to pollsters

When people tell me that Donald Trump’s election as the nation’s 45th president shocked them, I reply that they must not be paying attention to what goes on around them. The nation is a mess — the economy is in the doldrums, most of the few available jobs are part-time and low-paying, the infrastructure is crumbling, the massive $20 trillion national debt is getting bigger, the $531 billion trade deficit is poised to go higher — and these are merely the most glaring problems that have festered under President Obama. And since Democratic candidate, former First Lady, former New York senator, and former Secretary of State Hillary Clinton is inexorably associated with Obama, she started out with two strikes against her, even though the mainstream media led Americans to believe she was a lead pipe cinch to be elected. Clinton’s third strike came in multiple forms — her personal server, deleted e-mails, lies she told to Congress, to the FBI and to the public in her campaign ads did her in. Fed up voters distrusted the political status quo that Clinton is an ingrained part of. But Trump deserves credit for aggressively campaigning on an issue that has resonated with Americans for years. That is, enforcing immigration laws, and developing immigration levels that work for instead of against citizens. Clinton has a diametrically different view about immigration than Trump. She’s on record as favoring open borders, vastly expanded refugee resettlement, and a path to citizenship for illegal aliens. For more than five decades, American voters have urged federal and state candidates to formulate sustainable immigration policies. And for each of those 50 years, voters have been rebuffed with empty, unfulfilled candidates’ promises that, if elected, the border will be secured. Gallup polls have shown for decades that a substantial portion of the public, often large majorities, favor reduced immigration. In 1965, Gallup first asked the question: “Should immigration be kept at its present level, increased or decreased?” Yet both the Republican and Democratic parties ignored the public’s desire for less immigration, but for different reasons. The GOP’s Chamber of Commerce wing has relentlessly pushed for more guest worker visas and the cheap laborers to whom they’re are issued. Democrats, on the other hand, have aligned themselves with illegal immigrants, possibly envisioning them as future voters. New York Times’ David Brooks recently wrote that the federal government has asked a lot of suffering Americans to accept “extremely, radically high immigration levels.” Brooks wrote his op-ed before the election, but under-skilled, non-college graduate voters turned out in big numbers to vote for Trump. Then, on Election Day, the Los Angeles Times interviewed Trump voter and Cuban immigrant Helen Hernandez who expressed her opinion that many Americans share. Hernandez said that immigration “has gotten out of hand,” and that “...Everybody can come. It’s too much. There has to be some kind of restrictions, even for us, for Cubans, for everybody.” Hernandez sees what Presidents Bush 41, Clinton, Bush 43, and Obama didn’t — that too much immigration is bad for everyone especially the most recently arrived immigrants. In 2008, and again in 2012, Americans voted for change, but got Obama’s version which they hadn’t bargained for. Consequently, in the Mahoning Valley between Ohio and Pennsylvania, an energized voter erected a homemade sign with a message directed to the elites and that summed up Trump’s victory: “You had your chance. It’s our turn now.” Joe Guzzardi is a Californians for Population Stabilization Senior Writing Fellow whose columns have been syndicated since 1987. Contact him at [email protected]

Ballot Measure 2 will allow students to access lower rates on loans

Voting “Yes” on Ballot Measure 2 is a no-cost option to the State that will save Alaskans their hard earned money by providing a tool to reduce interest rates for students. Currently, the Alaska Student Loan Corp., or ASLC, issues revenue bonds that are solely backed by the loan repayment revenue from those who are borrowing. Ballot Measure 2 will change the Alaska Constitution to allow for general obligation, or GO, bonding for the purpose of postsecondary education. If passed, it will be the most viable option available to Alaskans to obtain lower interest rates by allowing the State to access bonds using its good credit. These lower rates will then be passed on to Alaskan borrowers who are preparing to enter the workforce and contribute to a healthy Alaska economy. In addition to achieving lower interest rates, the state’s backing can make the loans available to a broader population of student borrowers. Each year many Alaskans contact me regarding their student loan debt — the high interest rates and their struggle or even inability to repay the debt. In late 2013, I contacted and began working with the Alaska Commission on Postsecondary Education, the state agency responsible for funding and servicing state education loans, to address these concerns. My goal was to identify fiscally responsible ways to make postsecondary education more affordable for Alaskans, and provide relief to those who are currently in repayment. Over the course of the next few days many of you will enter the voting booth, cast your ballot and make your voice heard. I’d like to provide an outline of the benefits of Ballot Measure 2. The language of the ballot measure states the amendment would “expand the State’s authority to incur debt…” which I believe may lead to misconceptions about what this measure does. As the co-chair of the Senate Finance Committee, I firmly believe the state must look closely at any additional debt we take on as we face a multi-billion dollar budget deficit. However, while the State would be guaranteeing this debt, it would be repaid by students from the revenue of the ASLC. The ASLC has been issuing bonds and repaying them for almost three decades and in that time, has never had to come to the State for financial assistance to repay its debt. I was able to support this proposal without reservation based on the fact it is anticipated to have zero impact on the state budget.  Passage of Ballot Measure 2 is simply accessing a financing option available to the ASLC that will reduce the cost of student loan interest rates. By law, there are safeguards that place limitations on the bonding process and Ballot Measure 2 does not approve any new debt for the State of Alaska. I urge my fellow Alaskans to join me in voting Yes on Ballot Measure 2. Sen. Anna MacKinnon represents District G and serves as co-chair of the Senate Finance Committee.

Want something done? Raise your expectations...

Alaskans have always risen to a challenge and raised expectations of what we can accomplish. Without high expectations, efforts often fall short of the mark. Without the support of the community, goals remain unfulfilled. High expectations and community support can also enable our children to reach their full potential. That is why I support the 90% by 2020 community effort to improve high school graduation rates in Anchorage and why I am proud to be its co-chair. 90% by 2020 is a unique collaboration to improve high school graduation rates to 90% or above by 2020, and then continue to improve. We do that through a data driven effort to drive improvement in graduation rates. We are a partner, not a substitute for the Anchorage School District and support a common mission of providing our children with a strong foundation from which to successfully move into a next phase of their lives. To support this, 90% by 2020 coordinates community efforts to improve student performance at four points, 1) kindergarten readiness, 2) 3rd grade reading, 3) 8th grade math and 4) high school credit completion. Our data tells us that these four points have the strongest impact on high school graduation rates.  When people learn that I represent BP in 90% many are surprised that 90% includes not just many great non-profit and education organizations, but private industry as well. It is in BP’s interest to hire Alaskans.  It is also in our own best interest to ensure we have a source of qualified talent for years to come. Next year Prudhoe Bay and the Trans-Alaska Pipeline will celebrate their 40th anniversaries, and there are many years to come of oil production, and hopefully soon, gas sales. That can only happen if we have an educated work force.  That is why BP has agreed to support the Back On Track component of 90% by 2020 by donating $30,000. Back On Track is a partnership between United Way Of Anchorage, Covenant House Alaska and the Anchorage School District to provide credit completion options and wraparound services to 185 homeless and at risk youth to earn their high school diploma. Alaska is my home. My wife and I have three children who attend public schools in Anchorage. We want them to be part of a generation of future Alaskans that is prepared to overcome challenges in the decades to come, some similar to those that this state has faced before and others that may be different and more complex. That is only possible if we all commit ourselves to doing two things: 1) Raise our own expectations of what we expect from ourselves and our children, and 2) Provide students with the tools required to fulfill those expectations, starting with an earned high school diploma. A young adult without a high school diploma will struggle to take a next step in their life, whatever that next step might be: a job, the armed services, trade school or college. We must all raise our expectations of our community, our children and ourselves. Please consider what you can do to support our community by taking action. Tutor a fifth grader in math or reading. Donate to an organization that helps to prepare children for kindergarten (did you know that is one of the strongest indicators of high school graduation?). Visit bethechange907.org and find out how you can volunteer in the community, and connect with an organization that could use your help. Above all else, let’s raise our expectations of ourselves, our friends, our co-workers and be part of an effort to improve our community, our Alaska. Damian Bilbao is the Alaska LNG Business Development Manager for BP Inc.

Time for Walker to change course

In the past few years, some of our state leaders, particularly when discussing the state's fiscal challenges, have been trying to convince the public that the days of oil pumping billions of dollars into the state's economy and coffers is over. This notion seems to have taken root in the current administration, as evidenced by the fact that Gov. Bill Walker has failed to discuss, as part of a broader fiscal plan, how we can get more oil running through the Trans-Alaska Pipeline System. Walker's inability to develop policies that will result in additional production is odd given that more oil through TAPs means more funding for our schools, first responders and social service agencies. More oil would also bolster the Permanent Fund, provide good paying jobs, and pump billions of dollars into the Alaska economy. Conversely, the continuing decline of oil production almost certainly guarantees that the state will never be able to balance its books, businesses will shutter, and economic opportunities will be lost. But declining oil production, a contracting economy and a government unable to pay its bills do not have to be our fate. Alaska's oil and gas endowment remains staggering. New discoveries on the North Slope, led largely by independent companies, demonstrate that oil production can continue to play a vital role in solving our fiscal crisis and reviving our economy. In particular, Caelus Energy, one of the handful of independents risking hundreds of millions of dollars in Alaska to find new oil, announced a tremendous discovery holding more than 2 billion to 3 billion barrels of recoverable oil on the North Slope, which would make this field the second largest discovery in Alaska's history. This follows the announcement that Armstrong Energy's Pikka Unit may hold over a billion barrels of recoverable oil and could be, according to the Department of Natural Resources, the third largest field ever discovered in Alaska. These discoveries, coupled with the considerable amount of reserves in existing legacy fields and the new developments being pursued by ConocoPhillips, Hilcorp Energy and Brooks Range Petroleum Corporation could result in an additional 300,000 to 500,000 barrels of new oil production per day within the next five to 10 years. Those kinds of numbers translate into billions of dollars for our state's economy, general fund, and Permanent Fund, thousands of jobs for Alaska workers, and a bright future for our children. While the potential benefits associated with these new discoveries are huge, the challenges are daunting. To get the oil developed requires tens of billions of dollars in investment, thousands of trained Alaskans, permits from federal and state agencies, and fending off the inevitable litigation from environmental groups. Perhaps the biggest challenge Alaska faces is attracting the capital required to develop these projects. Anyone who has ever tried to get projects developed in Alaska knows that investors are reluctant to spend money here because of high costs and long timelines and because projects become imperiled by permitting delays, litigation, and shifting state tax policies that make it impossible to determine the economics of a particular development. Unfortunately, Walker is not rising to the challenge to develop credible policies that will ensure these new fields move into production in a timely manner.  Instead, Walker has been spending all of his time on a liquefied natural gas project and issuing statements about how he is going to convince the Obama administration to open up the Arctic National Wildlife Refuge. Although most Alaskans can agree that both of those would be a good thing, none of this will happen anytime soon, if ever. Further, his erratic attempt over the past two years at tax reform has spooked investors who have frozen lines of credit to the companies exploring and developing our state's resources. This in turn has resulted in hundreds of millions of dollars that were poised to be invested in Alaska fleeing the state with lenders blackballing Alaska and, as they leave, swearing never to invest here again. Most troubling of all, the Walker administration has proposed additional changes to the tax regime that would destroy the economics of many new oil developments and would force the new independents to delay investment decisions, or leave the state, because they cannot find investors willing to risk money in Alaska. Walker's proposed tax reforms, unfortunately, suggest an unfamiliarity with a fundamental law of economics: Companies are not going to be able to raise the capital necessary to pursue risky projects that our tax laws have made unprofitable. This is not to say that we cannot change our tax laws — it is apparent that changes need to be made to create a more balanced system at all price levels. But we must be careful that any changes do not drive away investment and delay the development of projects that will rejuvenate the state's economy and help pay for essential services. The bottom line is that in recent years independent companies have made significant oil discoveries on the North Slope that could keep oil flowing into TAPS for years to come. The development of these fields will also ensure that the state has a vibrant economy, a competitive North Slope, and the money to help close the deficit. Walker's actions, however, indicate an indifference to whether these discoveries move into development in a timely fashion. Worse, he has embraced tax policies that kill the economics of these projects and that will result in returning control of the North Slope to the three legacy producers. Moving forward, the choices facing Walker are simple. He can either continue on the present unproductive course of discouraging investment and keeping our resources buried in the ground or he can advocate for tax policies that create a positive investment climate and promote responsible development of our natural resources. Walker's legacy will largely be determined by which option he chooses. Jonathan Katchen works at a law firm in Anchorage that represents independent oil and gas companies operating in Alaska.

Democrats play by the Lombardi rule

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

What’s to gain for those funding political attack ads?

Wow! You can’t turn on the radio or TV these days without hearing a negative campaign ad. The election races this year are more heated and hateful than we have seen in years. It’s easy to recognize that much of what is being said in the ads is nonsense, but nonetheless, people and political action committees are spending a huge amount of money to get us to believe things that just aren’t true. So I have to ask, what’s in it for them? What do they get in return for the “free” advertising supporting certain candidates, and how is any of this good for Alaska? This is an incredible period in our young state’s history. Budget deficits are high and state cash flow is at the lowest level in decades. The near-term outlook isn’t rosy either, as oil prices are predicted to stay lower for longer. If you believe the barrage of campaign ads, the problems that Alaska faces today were caused by a handful of current Legislators in Juneau, rather than being the result of sudden price collapse in the largest sector of Alaska’s economy – oil and gas development – which generates nearly 90 percent of the state’s income. Those paying for all the campaign attack pieces don’t want you and I to think rationally and try to solve the state’s problems with common sense solutions and good business practice. Instead, they want us to react emotionally and behave like school kids circled around the playground bully chanting “fight, fight” while he kicks dirt in the face of the class nerd. That makes great theatre, but it doesn’t solve Alaska’s budget problem and it doesn’t make the state a better place to do business or raise a family. What does make Alaska better is having strong leaders and elected officials who aren’t afraid to look past the drama and do the hard work necessary to find real solutions and fix the problems we face. There is no magic bullet or quick fix here. Alaska has got to reduce the size of government, especially in those areas that do not generate revenue for the state or serve a core government function like education or public safety. And Alaska has got to have a stable, balanced tax policy that lets the oil industry know that we very much want them to be here, but that we have got to mind our own checkbook, too. Yet it seems those behind the campaign attack ads want us to believe that no one in Juneau has been working to find solutions, and that simply is not true. During the last Legislative session, members of the House and Senate took action to reduce the size of government and cut reimbursable oil and gas tax credits that had simply gotten to be too much for the state to bear. Sen. Cathy Giessel and Sen. John Coghill both worked to find a comprehensive bill that overhauled the oil and gas tax credit system, yet retained incentives critical to advancing new oil developments on the North Slope. This approach also allowed Alaska to maintain its reputation and credit worthiness. Strong, resourceful leaders like Giessel and Coghill are just the people we need to keep in Juneau. People who aren’t afraid to take some heat doing what is right for Alaska, even if it means facing a firestorm of political ads aimed at twisting the truth and scaring us into believing that new taxes and changing the Permanent Fund are the only solutions. So, the next time you hear another attack ad on the radio, stop and ask yourself what those who paid for that ad stand to gain from unseating someone like Sen. Giessel. Do they really have your interests and the interest of a thriving Alaska at heart, or are they just trying to load our Legislature with people they can manipulate? Corri Feige is a geophysicist and former Director of the Division of Oil and Gas for the State of Alaska.

Walker went Bulworth at Alaska Chamber

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

Vote and get others to vote too

There’s a saying that goes “Get involved in politics or get out of business.” That doesn’t mean you need to run for office, though many of you reading this would be good, no-nonsense politicians. What it means to “get involved in politics” is to learn about the issues. It means getting to know who your elected representatives are and what they stand for. If you agree fundamentally with them, then support them any way you can. That support can include contacting them and donating time to their campaign, a sign in your yard and attending a fundraiser or getting online to donate. Most of all, vote for them. If you don’t vote for your own interests, who will? The Nov. 8 election may be the most important election in recent years. You hear that every election, but this one is different. It is important because we have the opportunity to change the direction of the country for at least the next four years, and hopefully beyond. The national press will be calling the election long before the polls in Alaska have closed. But just because the presidential election will have been decided before our polls close, don’t let that stop you from voting. Alaska has a lot at stake as we elect a U.S. senator, a congressman and 50 legislators. For the past few months, candidates have been spending afternoons, evenings and weekends walking, going door to door, knocking and talking, being received warmly or getting a door slammed in their face. When they’re not walking, they’re home stuffing mailers in envelopes, studying precinct maps, answering the countless surveys sent out by as many special interest groups. They’re making phone calls when they can’t walk and they are having fundraisers to help support their campaign. They’re going to so many events and meetings; they start thinking about joining Meetings Anonymous. The Aug. 16 Primary Election had one of the largest slates of candidates we’ve seen in years. In 11 of the races, there was no opponent in either the primary or general election. Just filing for office in May made them a winner. After the August primary, six others are unopposed on Nov. 8. Seventeen of the races are already decided, but that leaves 33 races that will be decided on Tuesday, Nov. 8. Some of these are hotly contested and will be close. The August primary also had an unimpressive voter turnout. It’s not unusual to have less than a third of registered voters take the time to vote in an election. History, especially recent history, is full of examples in which an election was decided by very few votes — even a coin toss in the case of a tie. Voting is a right, a privilege and one of the most important freedoms we have. Unfortunately for many, it is more important to exercise the TV remote than the right to vote. Why does it matter? In the 2012 Presidential election, there were 218 million eligible voters in the United States. Only 124 million voted in the general election that year. Fifty-one percent voted for Barak Obama. Doing the math, the direction of our country was decided by less than 30 percent of the eligible voters. Look at a few key states where the electoral votes swung the election: a handful of additional voters in every precinct could turn the district which could turn the state, which could turn the election. To paraphrase Edmund Burke: “All that is necessary for evil to triumph is for good men and women to do nothing.” There’s a lot of truth to that. Get involved! Get informed on the issues and the candidates. Talk to your family, your friends, your co-workers. And all of you vote on Nov. 8. The rest of us are depending on you. John MacKinnon is the executive director of the Associated General Contractors of Alaska.  

Defending the PFD reduction as painful but prudent

Alaskans will soon receive our annual dividend checks. This year’s $1,022 check for every qualified resident will help Alaska families with things like winter fuel, food and clothes, holiday gifts, and saving for college. These checks will boost local businesses and increase local tax revenues. At the same time, I am keenly aware that many Alaskans are disappointed — and some are angry — about the size of this year’s dividend. While the average dividend since the inception of the program has been $1,150, many were counting on a larger amount this year. Indeed, this year’s checks would have been $2,052 without my vetoes. How did we get here? Why did I veto roughly half the dividend? The answer requires some context.  When I filed for office, state unrestricted general fund revenues were $7.5 billion. This year, they’re $1.2 billion. That’s an 83 percent drop. Please consider that for a moment. Imagine your family’s income fell more than 80 percent. Or that your business lost 80 percent of its revenue. You would probably start spending less. We have done that. Over the past four years, unrestricted general fund spending has dropped 44 percent — nearly in half. That’s according to the Legislature’s nonpartisan budget analyst David Teal. The budget is now down to $4.4 billion. That’s below the spending level called for by the Alaska State Chamber of Commerce and others calling for big spending cuts. And we still have a massive deficit. We could close every school and every prison, and we still wouldn’t have enough money to pay for state services. We simply can’t cut our way down to a $1.2 billion budget. I come from a family of homebuilders. I’ve never built anything without a plan. And we can’t build Alaska back to prosperity without a plan. In December I proposed a plan to balance the budget in a sustainable way. The plan called for a combination of budget cuts — including cuts to oil tax credits — along with modest tax increases and sustainable use of permanent fund earnings. The idea was balance. We can’t do it with cuts alone. We can’t do it with taxes alone. For example, it would take a statewide sales tax of 19 percent to raise enough revenue to balance the budget. That’s a nonstarter. And I am not willing to balance the budget using permanent fund earnings alone. That would jeopardize our dividends and the fund itself. Unfortunately, lawmakers failed to pass my plan or any other, leaving a nearly $4 billion budget gap. In the past four years we’ve drawn down our savings from $16.3 billion to an expected $3.6 billion at the end of this fiscal year. We’re burning through our savings at an alarming rate. I therefore took action to extend the life of our fast-shrinking savings. In June I vetoed $1.3 billion, including $430 million in oil tax credits. My vetoes also included roughly half of the money for this year’s permanent fund dividends. The vetoed dividend money is not being spent. It remains in the permanent fund earnings reserve, prolonging the state’s ability to pay dividends in the future. I labored long and hard over the decision. It was by far the most difficult decision I have made to date as Governor. However, it is clear we can’t continue to use the current dividend formula. In the past few years, revenues have plummeted while Permanent Fund investment earnings have grown. The current dividend formula would have us spending more on dividends than any other state service — including education. It’s not a sustainable path. If we do nothing, the permanent fund earnings reserve will likely be depleted within four years. Then dividends will be zero. I don’t want that to happen. My commitment to Alaska and Alaskans has never wavered. I believe we must find a balance between the wants of today and the needs of tomorrow. If we don’t make changes, we’re on a course to economic disaster. It’s a 100 percent preventable disaster, and I will do everything I can to prevent it.  Gov. Bill Walker, an independent, is the eleventh governor of the State of Alaska.

Separation of powers question must be answered

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

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

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

State joins defense of a witch hunt

The home of the Salem witch trials has birthed another effort to hang the imagined heretics, and the State of Alaska is seeking to supply the judges with the rope. Massachusetts Attorney General Maura Healey, along with 19 other attorneys general from 17 states, the District of Columbia and the U.S. Virgin Islands, have mounted an inquest against ExxonMobil seeking as much as four decades worth of internal documents and communications with independent groups in an effort to prove the company “knew” its fossil-fuel based products were going to destroy the planet and hid the evidence. Under the guise of consumer protection backed by the threat of law enforcement, the thin veil on this masquerade was pierced almost immediately in April through uncovered emails obtained in a Freedom of Information Act request that showed climate change activists not only colluding with the AG offices from New York and Vermont about their strategy to bury ExxonMobil under a flurry of subpoenas but to also conceal their participation in the effort. Unbelievably, Alaska’s brand new Attorney General Jahna Lindemuth is siding with those undertaking this blatant abuse of government power. Lindemuth joined 16 other attorneys general — nearly all from the so-called “Green 20” group who launched this effort March 29 alongside carbon footprint hypocrite and former Vice President and Al Gore — in an amicus brief filed Aug. 17 in opposition to ExxonMobil’s complaint against Healey filed in federal court that seeks to quash her crusade against the company. ExxonMobil took its case to federal court in North Texas, where it is headquartered, alleging that the Massachusetts AG is leading an interstate effort against it rooted in no law but rather in a purely political shakedown aimed at putting the company out of business and silencing those who diverge from the Green 20’s dogmas.  Because make no mistake about it. These AGs and their supporters who sought to conceal their involvement in this case want to put ExxonMobil into the same place it drills for oil and gas: the ground. Also make no mistake about this: The same people who Lindemuth lined up with also want to put Alaska out of business. Oh, Lindemuth has tried to defend her action as a “states’ rights” issue in a pathetic attempt to separate the amicus brief from the underlying action against ExxonMobil, but there is no differentiating the two. While there is certainly a sound argument to be made that an entity subject to a state inquiry shouldn’t be able to go to federal court to halt the action, that is far from the case here. The brief cites the undisputed authority of state attorneys general to investigate “fraudulent, misleading, or deceptive practices” within their jurisdictions, but there is no squaring that circle against the bogus charges being leveled against ExxonMobil. Attorneys general do not have the authority to use the power of their offices to pursue political advocacy or to target people and organizations with differing perspectives. Yet that is the practice that Lindemuth is attempting to secure through her joining this case as a friend of the Massachusetts AG’s defense. The examples cited in the brief include 46 attorneys general who successfully litigated against the tobacco industry and the 50 who joined the investigation into fraudulent mortgage practices. Were this such an obvious states’ rights issue, it is more than a little telling that the amicus brief was joined by so few attorneys general. The refusal of more to sign on is a glaring indication that the vast majority of states’ chief law enforcement officers see this effort for the transparent sham that it is. Other cases cited included a Toyota recall, “four nationwide sham cancer charities,” and a telecommunications company based in New Jersey that was successfully sued by the State of Texas for fraudulent promises of service. “These joint efforts have greatly enhanced the ability of state Attorneys General to uncover and halt widespread practices that harm individuals and businesses across the nation,” according to the amicus brief. That’s all well and good, and rooted firmly in legal precedent. It also has absolutely nothing to do with what the Green 20 are doing to ExxonMobil. Considering that ExxonMobil is being targeted across multiple states with AGs and judges sympathetic to the Green 20 effort, it is laughable that Lindemuth would accuse the company of “forum shopping” in her letter to House Speaker Mike Chenault and House Judiciary Chair Gabrielle LeDoux. If ExxonMobil is to be forced to defend itself in as many as 20 courthouses around the country it is only fair play for the company to seek any advantage it can, including taking these rogue attorneys into federal court. Lindemuth told Chenault and LeDoux that “bad facts make bad law.” Bad lawyers make bad law, too, and allowing these AGs to debase the law for their political aims will do far more damage than stopping this injustice in its tracks. Andrew Jensen can be reached at [email protected]  

EDITORIAL: Walker gives up, reverses himself on land trust case

Gov. Bill Walker’s decision to not appeal a federal court’s ruling in an Alaska Native lands trust case is as disastrous as the ruling itself. It was a year ago that the state, in taking over a lawsuit against the federal government brought by Alaska tribes in Akiachak, Chalkyitsik and Tuluksak, made a compelling case that the Department of the Interior erred terribly when it changed its rules to allow Alaska Native land to be accepted into trust by the federal government. The department’s action came after a federal District Court judge in the District of Columbia in 2013 ruled that the Alaska Native Claims Settlement Act of 1971 didn’t bar land from being taken into trust. The Interior Department had been relying on its own interpretation of ANCSA, as seen through the department’s implementing regulations, as requiring that Alaska be exempted from provisions in the Indian Reorganization Act of 1934 that allowed for land to be held in trust by the government. Rather than appeal the court ruling, however, the department changed its regulations to comply with the lower court. Putting lands into trust appears as though it would benefit tribes greatly, but it also brings great risk and responsibility. There is no guarantee that the needs of residents on such lands would be improved. Allowing lands to be put into federal trust will come at a fundamental cost to state sovereignty. For example, tribes will gain greater authority to implement their own criminal and civil laws on the land, affecting any Alaskan who would venture onto the trust land and be accused of violating tribal law. Federal funds for a variety of functions, including law enforcement, will become available when the government essentially owns the land in the trust. That’s why the state entered the case a year ago, on Aug. 24, 2015. It was that important. The administration of Gov. Walker appealed the lower court ruling once the Interior Department opted not to. The state argued that the so-called “Alaska exception” was actually mandated by ANCSA itself, and not just through department regulation, and that the exemption therefore superseded the Indian Reorganization Act. The state made crisp, bold points in its appeal. Among them: “Alaska has a major stake in the issue of whether ANCSA remains viable and how millions of acres of land within its borders will be governed.” “Injury-in-fact has occurred here because the district court judgment prevents the state from getting what it bargained for in ANCSA.” “Trust land in Alaska would diminish the state’s authority by creating islands of land within its borders potentially controlled by 229 competing sovereigns, thus harming Alaska’s sovereign and proprietary interests.” “The state has no authority to tax trust land. Furthermore, the Secretary (of the Interior) has stated that trust land in Alaska would be considered Indian country, which means the state could also lose authority to impose on it land use restrictions, natural resource management requirements, and certain environmental regulations. Exercise of police powers and regulation of state resources are fundamental elements of state sovereignty.” “New trust land in Alaska thus harms the state by abrogating its authority over land within its borders and creating widespread uncertainty over governance. Trust land and Indian country could confuse Alaskans and nonresidents who could be subject to a patchwork quilt of legal and regulatory authorities, depending on where they are and whether they are a tribal member or nonmember.” The state’s tough position continued for many pages, and the point was clear: This decision was damaging to Alaska and must be overturned. A three-judge panel of the U.S. Court of Appeals for the District of Columbia sided with the tribes, however, though in a split 2-1 decision. The dissenting judge, Janice Rogers Brown, seemed to share the state’s view when she noted the lower court judge acknowledged that Alaska could be severely harmed. Judge Brown, in her dissenting opinion, wrote “Specifically, the district court enjoined the department from taking any Alaska lands into trust while this appeal was pending because such an action would cause ‘irreparable harm to state sovereignty and state management of land’ in Alaska.” Would the state ask for a hearing before the full appeals court so as to avoid this damage? Surely Gov. Walker would do so given the strong claims made a year ago when the state entered the case. No. Instead, the governor simply gave up and said the state would be attentive and comment as necessary as individual land trust applications were presented to the federal government. The governor stated in news release Aug. 22 that “it doesn’t make sense to use the state’s limited resources pursuing this litigation that has already dragged on for ten years.” Yes, governor, it does make sense — especially if you believe the points your administration raised just one year ago.  

AJOC EDITORIAL: House heads for shakeup, but do Alaskans care?

Much like Usain Bolt in the 100-meter dash, contests for the state Legislature in November figure to be races in name only. What drama could be found took place on primary night and ended up decided by a tiny fraction of Alaskans even in the contested elections. Democrats succeeded in toppling one of their top targets within their party — Rep. Bob Herron of Bethel — and Republicans did the same by taking out one of their own as George Rauscher defeated Rep. Jim Colver in the Mat-Su Valley. The Democrats may go two-for-two in their efforts to knock off members of their party from Bush Alaska who caucus with the Republican-led Majority of the state House. Rep. Ben Nageak was leading by just nine votes against Dean Westlake with 87 percent of the vote counted as of this writing. GOP interests failed to take out Rep. Paul Seaton of Homer, another prime target from their ranks, and saw influential members of their House delegation fail in their bids to elevate to the Senate with the losses of Reps. Lynn Gattis of Wasilla and Craig Johnson of Anchorage. Seaton and Colver are members of the self-titled “Musk Ox” caucus that coalesced late in 2015 when the Republican leadership, frustrated with Democrats holding out votes to reach the magic 30 of 40 to draw from state savings in the Constitutional Budget Reserve, introduced a measure that would have emptied the Permanent Fund Earnings Reserve into the CBR in order to remove the requirement for a three-fourths vote to fund the budget. The Musk Ox caucus continued to draw party ire in 2016 as they joined with Democrats on bills sharply curtailing the state’s oil and gas tax credit program, creating an embarrassing situation for House Speaker Mike Chenault, R-Nikiski, who couldn’t wrangle his majority and had to pull bills from the floor once it became apparent he didn’t have the votes. Chenault, who served a record four terms as Speaker, is stepping down from that role although he is headed back to Juneau with no opposition either in the primary or general elections. With only half of the body up for reelection, the Republican-dominated Senate shouldn’t look much different in 2017. That can’t be said for the House after the primary shakeups and the entry of a yet undetermined Speaker. No matter what happens in Nageak’s race, there is a strong possibility for a bipartisan coalition of some kind that could end up controlled by Democrats, who already succeeded this year in determining votes by linking with the Musk Ox Republicans and a couple other stray members of the Majority. The Democrat minority had 13 members last year including independent-in-name-only Dan Ortiz of Ketchikan, who will face a Republican challenger in the general election. If Ortiz returns, Nageak loses, and other districts maintain the status quo, the Democrat caucus would number 15. The five remaining members of the Musk Ox group could create a caucus of 20, which still isn’t enough to control the House. That would leave the Musk Ox Republicans with a choice of being a minority within their own party, or a minority among their supposed opposition party. Seaton, who’s opposed the oil and gas tax credit program and proposed a state income tax, aligns well with the Democrats on their favorite means of closing the budget gap. Attacking the state’s No. 1 industry and going after the state’s federal taxpayers are bad policies but make for good politics, and they also happen to jive with Gov. Bill Walker’s revenue strategies even though they’ll diverge sharply on reducing the PFD to completely close the deficit. This is probably a good time to recall that when 10 Democrats and six Republicans formed the Bipartisan Senate Majority they passed the most bloated budgets in Alaska history from 2006-2012. In the end, it’s difficult to tell if Alaskans even care who goes to Juneau. The highest turnout in any district on primary night was 21 percent in Herron’s race vs. Zach Fansler, followed by 18 percent in Seaton’s race. While it’s understandable that uncontested primaries had pathetic turnout with no statewide ballot initiatives to draw attention, seeing turnout of 15 percent to 17 percent in supposedly competitive elections in the Valley, Eagle River and South Anchorage sends a pretty clear message to legislators: We don’t give a flying you-know-what. It’s bad enough that districts have been so gerrymandered as to render nearly every race uncompetitive. It’s worse when even in races that matter more than 8 in 10 Alaskans didn’t bother to register an opinion. An old axiom is that we get the government we deserve, and Alaskans’ nonchalance in the face of serious times means we’re going to get it good and hard. Andrew Jensen can be reached at [email protected]

EDITORIAL: Legislators need to join real world to address deficits

A report from the U.S. Energy Information Administration earlier this month contained a small but — from the Alaska view — telling notation. The July 11 report, “EIA projects rise in U.S. crude oil and other liquid fuels production beyond 2017,” projected a continued decline in Alaska’s output. “Production in Alaska continues to decline through 2040, dropping to less than 0.2 million b/d (barrels per day) in 2040,” according to the report. This is not good news for anyone hoping that increased oil production or an increase in oil prices, or both, is going to help Alaska out of its precarious fiscal situation. To think either of those occurrences is going to materialize to help Alaska is folly. Alaskans, and especially those campaigning for a seat in the Legislature, are making a grave mistake if they choose to reject major deficit-reduction efforts in favor of such wishful thinking. Some people, unfortunately, do argue that our situation will be saved by an oil price and production renaissance. Alaska had a $3.1 billion deficit for the current fiscal year, a gap that was covered through Gov. Bill Walker’s $1.29 million in vetoes and by drawing on savings accounts. Those savings accounts are going to run dry in about two years unless the Legislature approves significant legislation to straighten out the state’s finances. Gov. Walker put forward solid ideas in December, but legislators repeatedly balked. Nothing got done. Once upon a time, not too long ago, revenue from Alaska’s oil fields accounted for about 90 percent of the state government’s general fund revenue. Now it’s a fraction of that amount. Massive and sudden change would be needed in the oil world to return to the good ol’ days. The Energy Information Administration report is but one of several that constantly come out about the global oil market, of which Alaska is but one of many players. Those reports have a variety of differing projections based on various price and production scenarios, adding to the uncertainty. Alaska’s own report, from the Alaska Department of Revenue — it issues two reports annually — gives a pretty grim near-term and medium-term outlook about the amount of oil income the state can expect. The cover letter from Revenue Commissioner Randall Hoffbeck spells it out: “The revenue forecast is based on a revised oil price forecast of about $40 per barrel versus $50 in the fall,” he wrote. “The forecast prices over the next 10 years have also been reduced to reflect anticipated future lower prices. The average price is now not forecast to reach $60 until FY 2021. However, with the global contraction on investment in production, and spare capacity that represents less than three percent of global demand — we also recognize the potential for significant price volatility over the next few years.” Oil revenue collapsed several years ago, and there’s little sign of improvement. The year-to-year change in the amount of the state’s oil income is staggering, from $1.69 billion in fiscal 2015 to $801 million in fiscal 2016 to a projected $705 million for fiscal 2017, the current fiscal year. And the fiscal 2015 number is down sharply from the days when oil exceeded $100 a barrel; it’s now about $40. That’s catastrophic. It isn’t going to change anytime soon. And what that means is Alaska urgently needs its residents and its elected officials to live in the real world and not in the world of fantasy.  

AJOC EDITORIAL: Walker completes transformation of AGDC to AGPA

Gov. Bill Walker likes to talk about his background in construction and how much he loves building things, but so far after a little more than 18 months in office his most successful project has been demolition. The effort to undermine and eventually dismantle the Alaska LNG Project that began within days of Walker taking office in December 2014 culminated July 22 with the official announcement that his former law partner and Attorney General Craig Richards had been signed to a $275-an-hour contract barely a month after he resigned citing personal reasons. With his man Keith Meyer heading up the Alaska Gasline Development Corp., a compliant board of directors and a contracted legal hit team in place, Walker is ready to go it alone on the project and to war with the producers. It is important to recall what Walker said while campaigning for the office about the Alaska LNG Project that was orchestrated under former Gov. Sean Parnell. “I’ll follow the process in place now, you bet I will,” Walker said on Oct. 28, 2014, at an Anchorage Dowtown Rotary Club debate. “But at the first sign of delay, or someone says ‘we’re going to slow this down,’ that’s when the state needs to have a governor who understands what to do and has the guts to say, ‘we’re going to finish this project as Alaskans.’” Having created the circumstances himself that threaten to delay the project, Walker now has what he planned for all along: a state takeover of AK LNG and a break with Alaska’s North Slope partners. The shadowy effort to execute this plan began with Walker’s hiring of Jim Whitaker, the former executive director of the Alaska Gasline Port Authority, as chief of staff and Richards as his AG. The AGPA was Walker’s effort to build a pipeline from the Slope to Valdez to export LNG, but it failed because the group never had access to any gas, which, ironically, is where the state finds itself once again. In early January 2015, Walker unceremoniously sacked two members of the Alaska Gasline Development Corp. board of directors on the eve of a regular meeting. One of the members didn’t find out he’d been dismissed from the board until he got off the airplane in Anchorage. Walker then instructed his new commissioners and new board appointments at AGDC to not sign confidentiality agreements, setting up his first of many unnecessary fights with the producer partners. A month later, Walker wrote an op-ed in which he put forth a plan to create a parallel pipeline effort to AK LNG as a backup in case one or more of the producers pulled out of the project despite no evidence such a decision was even under consideration. In June 2015, Walker sent a letter to the producers asking them to study a 48-inch pipeline rather than the standard 42-inch pipeline, which added additional time to the preliminary engineering process and cost $20 million. The study and expense ended up a total waste of time and money as the project team maintained the design at 42 inches. Around that same time, Richards hired Mark Cotham, a Houston-based attorney who’d done contract work for the Port Authority and penned an op-ed in the Juneau Empire in 2005 that advocated threatening producers’ leases as a means to spur development of the Slope gas resource. Also that month, Richards issued a legal opinion concluding that a constitutional amendment was needed to set fiscal terms for the state’s share of the gas over long-term contracts. As it turns out, this legal opinion requiring a general election vote in 2016 on a constitutional amendment to keep the project on schedule was the most clever of all Walker’s strategies to drive a wedge between the state and the Slope producers. But we’ll come back around to that. That September, Walker called a special session of the Legislature to buy out TransCanada’s share in the project and make the state responsible for 25 percent of the costs. Not only did Walker put the buyout on the call, but he also resurrected the gas reserves tax that his chief of staff Whitaker authored in 2005 that was voted down in 2006 by a 2-1 margin. Much like his idea for a parallel pipeline effort, the idea was panned roundly by legislators and the producers as counterproductive and Walker — after his usual, doe-eyed, “What’s the big deal?” routine — ended up not even introducing a bill. He did, however, later extort written statements from BP and ConocoPhillips that they would sell gas to the state if they chose to exit the project. The Legislature then, rather gullibly, voted to give Walker the keys to the state portion of the project. With the state’s 25 percent share acquired, Walker kept moving with his plan, declared that “We’re TransCanada now” and fired another two AGDC board members including chair John Burns and the CEO Dan Fauske. Of course he wasn’t even close to done. Two events then took place in January. Richards had Department of Natural Resources Commissioner Mark Myers send out a letter to all the unit operators in the state demanding detailed gas marketing information. Disguised by the apparent equal treatment of all operators was the true target: the Prudhoe Bay Unit operated by BP and the source for three-quarters of the gas for the AK LNG Project. Walker then sent a detailed demand letter to the producer partners laying out a heavy schedule of commercial and gas balancing agreements he said were necessary to be completed by April in order to meet a June deadline to place a constitutional amendment on the November general election ballot. Here is where the decision to require a constitutional amendment was the master stroke of the plan. In February, Myers resigned as commissioner at DNR about a week after his Deputy Commissioner Marty Rutherford told Journal reporter Elwood Brehmer that agreements would not be complete in time for a November vote. Securing fiscal terms is a critical component to moving to final engineering and design, and not getting it on the ballot — again, a situation created by Walker and Richards — achieved its purpose by throwing up a roadblock to the producers moving forward and gave Walker the opening to portray the companies as not committed to the project. On the same day Myers’ resignation was announced and a week after the Journal story was published, Walker called what can only be described as a hostage video of a press conference on Feb. 17 dragging up BP Alaska President Janet Weiss and ConocoPhillips Alaska President Joe Maruschak to announce that progress had stalled on AK LNG. By now, oil prices had dropped to less than $30 per barrel compared to the $80 range when Walker took office and started tearing down the project he inherited. With the bonus of collapsing prices along with the artificial timeline of a constitutional amendment working as intended to derail negotiations — there was no reason talks couldn’t have continued absent a need to seal all the deals in time for a November vote — Walker instructed his team to break off discussions with the producers. At this moment, Walker was pursuing Keith Meyer to take over AGDC, and he made his splash immediately after taking the job in mid-June by asserting the state could lead the project with or without producer participation, draw investors from around the world by selling off pieces of the project and do all of this with almost no risk to the state treasury. Part of selling this idea to legislators required creating the perception that the producer partners were “shelving” the project and had no desire to go forward. It didn’t take long for Meyer to keep putting words in their mouths before ExxonMobil fired back with a strongly worded response that Meyer was issuing “inaccuracies” and mischaracterizations about the company’s belief in AK LNG. So here we find ourselves with the state’s best hope for future petroleum revenue drenched in uncertainty and Walker’s legal team preparing to litigate with the producers over unreasonable demands for confidential information tied to a unit that supplies half of Alaska’s unrestricted general funds and is still the largest field in North America. Walker’s lack of transparency and honesty over his true intentions for the AK LNG Project have been borne out by his actions. He’s paid lip service to the project and our partners all the while taking every step possible to crater the effort. What Walker wants is clear. What makes him think he’ll be successful other than a circle of like-minded people rooting him on is impossible to decipher. This kind of litigation will take years upon years. Years the state doesn’t have to waste. Years that will extend well beyond one or two four-year terms for Walker. Walker’s attempt to divorce the state from its partners and lead the way on a project that will cost $45 billion or more is doomed to fail, and will cost Alaska dearly. The governor likes to say he ran to do the job, not to keep the job, but it’s questionable how many voters would give him the job again if they knew his ulterior motive was to blow up AK LNG and start a legal war with the Slope producers. Alaska has a few brick-and-mortar testaments around the state to the government’s inability to execute mega projects, or even simple ones. Walker’s Quixotic quest to build the gasline himself gives him a chance to be the state’s first living boondoggle. Andrew Jensen can be reached at [email protected]  

EDITORIAL: Comey decides some animals are more equal than others

Editor’s note: On the day after celebrating the birth of a nation founded on the still-unperfected ideal that all are created equal, FBI Director James Comey declined to recommend charges against Democratic presidential candidate Hillary Clinton despite overwhelming evidence she violated numerous federal laws while Secretary of State regarding the preservation of official records and the protection of classified information. Begging pardon for the pun, it behooves us to publish the following passage from Chapter 10 of the novel “Animal Farm” by George Orwell. The Republic of the Animals which Major had foretold, when the green fields of England should be untrodden by human feet, was still believed in. Some day it was coming: it might not be soon, it might not be with in the lifetime of any animal now living, but still it was coming. Even the tune of Beasts of England was perhaps hummed secretly here and there: at any rate, it was a fact that every animal on the farm knew it, though no one would have dared to sing it aloud. It might be that their lives were hard and that not all of their hopes had been fulfilled; but they were conscious that they were not as other animals. If they went hungry, it was not from feeding tyrannical human beings; if they worked hard, at least they worked for themselves. No creature among them went upon two legs. No creature called any other creature “Master.” All animals were equal. One day in early summer Squealer ordered the sheep to follow him, and led them out to a piece of waste ground at the other end of the farm, which had become overgrown with birch saplings. The sheep spent the whole day there browsing at the leaves under Squealer’s supervision. In the evening he returned to the farmhouse himself, but, as it was warm weather, told the sheep to stay where they were. It ended by their remaining there for a whole week, during which time the other animals saw nothing of them. Squealer was with them for the greater part of every day. He was, he said, teaching them to sing a new song, for which privacy was needed. It was just after the sheep had returned, on a pleasant evening when the animals had finished work and were making their way back to the farm buildings, that the terrified neighing of a horse sounded from the yard. Startled, the animals stopped in their tracks. It was Clover’s voice. She neighed again, and all the animals broke into a gallop and rushed into the yard. Then they saw what Clover had seen. It was a pig walking on his hind legs. Yes, it was Squealer. A little awkwardly, as though not quite used to supporting his considerable bulk in that position, but with perfect balance, he was strolling across the yard. And a moment later, out from the door of the farmhouse came a long file of pigs, all walking on their hind legs. Some did it better than others, one or two were even a trifle unsteady and looked as though they would have liked the support of a stick, but every one of them made his way right round the yard successfully. And finally there was a tremendous baying of dogs and a shrill crowing from the black cockerel, and out came Napoleon himself, majestically upright, casting haughty glances from side to side, and with his dogs gambolling round him. He carried a whip in his trotter. There was a deadly silence. Amazed, terrified, huddling together, the animals watched the long line of pigs march slowly round the yard. It was as though the world had turned upside-down. Then there came a moment when the first shock had worn off and when, in spite of everything — in spite of their terror of the dogs, and of the habit, developed through long years, of never complaining, never criticising, no matter what happened — they might have uttered some word of protest. But just at that moment, as though at a signal, all the sheep burst out into a tremendous bleating of: “Four legs good, two legs better! Four legs good, two legs better! Four legs good, two legs better!” It went on for five minutes without stopping. And by the time the sheep had quieted down, the chance to utter any protest had passed, for the pigs had marched back into the farmhouse. Benjamin felt a nose nuzzling at his shoulder. He looked round. It was Clover. Her old eyes looked dimmer than ever. Without saying anything, she tugged gently at his mane and led him round to the end of the big barn, where the Seven Commandments were written. For a minute or two they stood gazing at the tatted wall with its white lettering. “My sight is failing,” she said finally. “Even when I was young I could not have read what was written there. But it appears to me that that wall looks different. Are the Seven Commandments the same as they used to be, Benjamin?” For once Benjamin consented to break his rule, and he read out to her what was written on the wall. There was nothing there now except a single Commandment. It ran: ALL ANIMALS ARE EQUAL BUT SOME ANIMALS ARE MORE EQUAL THAN OTHERS

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