Posted Wednesday, September 28, 2016 - 2:22 pm
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]
Posted Wednesday, September 14, 2016 - 1:55 pm
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.
Posted Wednesday, September 07, 2016 - 12:40 pm
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]
Posted Wednesday, August 24, 2016 - 12:18 pm
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.
Posted Wednesday, August 17, 2016 - 11:55 am
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]
Posted Wednesday, August 03, 2016 - 12:58 pm
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.
Posted Wednesday, July 27, 2016 - 1:14 pm
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]
Posted Wednesday, July 06, 2016 - 6:42 pm
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
Posted Wednesday, June 29, 2016 - 8:17 pm
The 29th session of the Alaska Legislature is starting to resemble the final scene of Reservoir Dogs when everyone ends up dead.
Gov. Bill Walker dropped the veto hammer on $1.3 billion worth of state spending on June 29 after the House Finance Committee refused to even allow a floor vote on using part of the Permanent Fund earnings to bridge a budget deficit of almost $4 billion.
Democrats and Republicans alike howled at the $666 million cut to the Permanent Fund Dividend appropriation — setting it at $1,000 this year versus a projected $2,000 — and the House Finance co-chairs Mark Neuman and Steve Thompson issued a whiny press release about Walker vetoing $430 million in oil tax credit payments that no one disputes are fully owed to companies who’ve already spent that money in the state.
What, exactly, did these people think was going to happen?
It is rich that Rep. Chris Tuck, leader of the House Democrats, would put out a statement that Walker is “playing politics” with the budget after his caucus has done nothing but play politics over oil tax credits this entire session.
To read their press release that contains Tuck’s statement, you’d think the oil tax credits are a discretionary expense. They aren’t, and the Democrats know it.
To celebrate the state sticking it to companies that invested in the state in good faith tells you all you need to know about how seriously they take their responsibility to create a stable financial climate for the companies they expect to pay for everything.
The state cannot get out of paying this money. Period. Full stop. We can pay it now or we can pay it later, but the amount isn’t going to change.
It’s a rash and destructive action by Walker as well, who is trotting out his new CEO of the Alaska Gasline Development Corp. to attempt to convince legislators the state can go into the private markets and finance a $45 billion LNG export project.
Really? How does the state convince investors that Alaska is a good place to put their money when for two years running the state has failed to make good on what it owes?
Some of that money is no doubt owed to Furie and to BlueCrest, who began producing gas and oil, respectively, within the last year. Surely the state isn’t collecting its royalty share of that production while it is reneging on paying tax credits. That would only be fair.
The guess here is that Furie and BlueCrest wouldn’t be operating for very long if they refused to make their royalty payments to the state, but it’s becoming crystal clear that Walker and his fellow Democrats think this is a one-way street.
Absent from Walker’s vetoes were the automatic “merit” pay raises for state employees. The absence becomes conspicuous when considering that the amount due for raises next fiscal year is larger than what Walker vetoed from K-12 funding and the University of Alaska System.
Neither the governor or the Legislature comes off well here, and like the end of Reservoir Dogs, it doesn’t matter who shot first or who killed Nice Guy Eddie.
Nobody walks out alive.
Andrew Jensen can be reached at [email protected]
Posted Wednesday, June 22, 2016 - 4:31 pm
Gov. Bill Walker has said repeatedly he’s willing to take the hit for reducing the Permanent Fund Dividend as a partial solution to the state’s budget deficit, and it looks like he’s going to get that chance.
The Alaska House of Representatives adjourned the latest special session on June 18 one day after the Finance Committee failed to advance Senate Bill 128 for a floor vote.
SB 128, which passed the Senate 14-5, would have ensured a $1,000 dividend for the next three years and contributed about $1.8 billion toward reducing the fiscal year 2017 deficit.
The version that failed in House Finance would have guaranteed a $1,500 dividend the next two years and $1,000 in the third, but even that sweetener wasn’t enough to get six votes.
So Walker has called the Legislature back once again for a fifth special session to begin July 11, but it is hard to see anything that will change attitudes toward a reduced PFD in the House between now and then.
Walker doesn’t have a lot of good options, but he’s not up for reelection until 2018. That gives him a chance to put his veto pen where his mouth is.
If the governor wished to leverage funding that is important to the House minority Democrats, he could begin by line-item vetoing budget items dear to their hearts such as increases in the Base Student Allocation, pay raises for state employees, the University of Alaska System and the like.
“We can’t afford x, y and z if we’re going to spend $1.4 billion on dividends every year,” Walker could say, and put it on them to explain why they would rather keep the PFD at an unsustainable level than support education or health care or their union constituency.
Walker has said, though, that he’s not interested in those kind of games and his lack of acuity for deal-making has already become self-evident during his first two years as governor.
A simpler fix, one that would allow the House to become the heroes of the dividend and allow Walker to make the fiscally responsible call, would be for the governor to veto the PFD appropriation down to a level that would pay his preferred amount of $1,000.
With the Senate on his side, the House could not override the veto on its own even if the members could muster 30 votes. Walker wouldn’t get his plan, but at least he’d be saving about $750 million the state is going to need sooner or later.
That would leave the House with a choice.
Pass the House Finance version with the $1,500 PFD for two years while incorporating the annual draw from the Earnings Reserve, or go home and campaign against a governor who isn’t up for election for cutting the PFD.
The problem with the latter choice is House members would have to explain why they didn’t vote to increase the PFD when they had a chance and let the mean ol’ governor take their hard-earned money instead.
If the House finally passes the modified SB 128, they would be able to at least campaign on standing up for the PFD, and achieving a smaller cut than the governor and the Senate proposed.
They’d still be free to rail against oil tax credits and megaprojects and all the other Democrat bogeymen lurking under your bed, which is all they really care about, but at least the state would have done something to get its fiscal house in order.
And in the end, cutting the PFD to $1,000 or $1,500 isn’t going to hurt the state economy very much, if at all. Consider that in 2015 the PFD appropriation of $1.2 billion represented 2.2 percent of the Gross State Product of $52.8 billion.
If the GSP is relatively similar this year, cutting the PFD by either $375 million or $750 million would represent 0.7 percent to 1.4 percent of the total state economy.
The only peaceful solution to this standoff is one that lets everyone save a little face. Allowing the House to vote to increase the PFD after a veto may give both sides what they want.
Andrew Jensen can be reached at [email protected]
Posted Wednesday, June 15, 2016 - 4:20 pm
President Barack Obama was unsure of the motivations of a man who yelled “Allahu akbar” as he opened fire on hundreds of defenseless people at an Orlando nightclub, but he was certain what the real problem is.
“This massacre is therefore a further reminder of how easy it is for someone to get their hands on a weapon that lets them shoot people in a school, or in a house of worship, or a movie theater, or in a nightclub,” he said. “And we have to decide if that’s the kind of country we want to be. And to actively do nothing is a decision as well.”
After presiding over, in succession, the worst terrorist attacks on U.S. soil since 9/11 from Fort Hood to the Boston Marathon to San Bernadino and now Orlando, Obama still believes the problem is guns and not the ideology of the people who pull the triggers.
Rather than blaming the radical Islamic terrorists who are wantonly slaughtering civilians on a daily basis around the globe, Obama’s statement effectively blames Americans — “if that’s the kind of country we want to be” — for allowing the sale of semi-automatic rifles.
Democrats were following Obama’s lead as bodies were still being identified at Pulse, pointing the finger at Republicans in Congress, Christian bakers, Donald Trump, the National Rifle Association, and just about anyone else other than the killer and the Islamic State that has flourished under Obama’s watch for the last four years.
Obama and Democrat nominee Hillary Clinton are happily pushing the idea that Trump is “doing the work” for the Islamic State with his inflammatory rhetoric about Muslim immigration.
It should take a new definition of chutzpah to blame Trump for the Islamic State when he was nowhere near the national stage in 2014 when Obama scoffed at the group as “the JV team” as it steamrolled across Iraq and Syria accumulating hundreds of millions of dollars in cash and American military equipment along the way.
At that time, Obama made the decision to “actively do nothing” until the horrific images of American citizens being beheaded by the Islamic State that August forced him to interrupt his golf game momentarily and at least appear to be doing something.
Three days after Orlando, the reliably left-wing New York Times came straight out and blamed “Republican politicians” for bigotry against minorities while claiming that the terrorist’s motivation “remains unclear.”
For Obama, his fellow Democrats and his praetorian guards in the media, it’s all too simple. Their enemies aren’t the enemies of America who have demonstrated they will kill citizens of the West of all political persuasions and colors.
Their enemies are their fellow Americans.
Whether it’s Sarah Palin, Trump or the Dukes of Hazzard, Democrats are quite willing to assign the fault for every gun crime or terrorist attack to someone other than the perpetrator, unless that fault can be traced to radical Islam.
It takes sick kind of mental gymnastics to witness a clear cut case of Islamic terrorism committed by a registered Democrat and turn around and blame Republicans.
As this column is being written a Connecticut senator is filibustering a budget bill demanding some kind of action on gun control.
Never mind that the FBI had every red flag it needed to deny a weapon to the Orlando terrorist, or that it was a clerical screwup that allowed the Charleston church killer to buy a .45 caliber handgun that isn’t even covered by the Democrats’ renewed calls for a ban on “assault weapons.”
The FBI had warnings from the Russian government about the Boston Marathon bombers. Immigration officials had warnings about the female half of the San Bernadino terrorists. The Fort Hood terrorist had the acronym for “Soldier of Allah” on his business card for goodness’ sake.
Yet for Democrats the Golden Calf of government is always the answer despite its repeated cases of butterfingers when it comes to carrying the ball in the fight against radical Islamic terrorism.
Looking inward at whether their strategy — to the extent one exists at all — to combat the Islamic State is working, or what federal law enforcement could do better to prevent terrorists from acquiring weapons in the first place would be too hard.
Blaming Republicans, on the other hand, takes no work at all no matter how high the body counts grow.
As we’ve seen after Orlando, it gets easier every time.
Andrew Jensen can be reached at [email protected]
Posted Wednesday, June 08, 2016 - 3:24 pm
Only in Alaska could a guaranteed $1,000 to every man, woman and child be considered a rip-off.
Only in Alaska could such an unrealistic attitude take hold fueled by widespread expectations that everything should be paid for by the federal government funded by U.S. taxpayers and the state government funded almost entirely by a single industry.
Those who have opined that the Permanent Fund Dividend has created an unhealthy sense of entitlement among Alaskans have been proven more right than wrong over the past couple days as the howls of “raids” on the Fund and claims of outright stealing from people’s back pockets emanate from internet cowboys’ (and girls’) keyboards and legislators from both parties.
For a state filled with people who endlessly espouse the refrain of “it’s our oil!” it’s a small wonder that in the 39 years of oil flowing through the Trans-Alaska Pipeline System many have not bothered to think about what being an owner state means.
Owning the oil means owning the risk. If some Alaskans don’t want to ever feel the brunt of commodity price cycles then they should quit saying “it’s our oil!” and say what they really mean about the treasuries of the companies who produce it: “it’s our money!”
That’s what it looks like when the state constantly moves the tax levers to take in more at high prices and then take in more at low prices as if the oil companies are nothing more than a money printing press for the government.
The attitude of these Alaskans, reflected by a majority of the House and Gov. Bill Walker, are downright Venezuelan.
To put things in perspective, ExxonMobil finished 2015 with $3.7 billion in cash on hand. Even if the state could seize it all Hugo Chavez-style, it wouldn’t cover this year’s deficit. ConocoPhillips, the state’s largest oil producer, finished 2015 with $2.3 billion in cash on hand. That would cover a little more than half of next year’s deficit.
The state, meanwhile, has nearly $54 billion in the Permanent Fund and nearly another $8 billion in the Constitutional Budget Reserve. It will take in more than $1.1 billion this fiscal year from the oil industry despite the fact the producers spent a good chunk of this year losing money on every barrel.
Since the Swanson River discovery in 1957, the state has taken in nearly $116 billion in unrestricted petroleum income and has paid out more than $21 billion in dividends since 1982. But to hear the loudest voices tell it, we’re getting hosed by the oil companies.
You’ll never hear them talk about the 10 Democrats who controlled the Senate from 2006-12 and passed bloated budget after bloated budget and approved ever-escalating government union contracts that have raised the state payroll to some $1.4 billion.
Yes, Republicans controlled the House back then as they do now, but maybe someday the Democrats will be called to account for their spending habits as well, which included billions of dollars in tax credits under ACES that dwarfed PFD distributions in several years while production continued declining by 6 percent per year.
And what has the state done with that money? Alaska still has some of the worst education and health outcomes in the nation.Its state employees get generous raises every year for achieving nothing more than an “acceptable” review on their performance, if they’re evaluated at all.
The damage that will be done to the state from loss of oil production and loss of jobs will far outweigh the damage from distributing the historical average from the Permanent Fund as the Senate voted to do.
Media reports and Democrat talking points are that the PFD has been “halved” under this bill. Cutting it to $1,000 from a projected $2,000 is indeed cutting it by half.
It would also be accurate to say that the PFD has been capped for the next three years near the historic average of $1,089 per Alaskan. The average total distribution since 1982 has been $621 million compared to the $700 million that will be sent out this year.
To put it bluntly, the idea of spending $1.4 billion on PFD checks in the midst of a $4 billion deficit is insane, and those who advocate for the PFD being the No. 1 spending priority for the state are irresponsible.
The PFD was less than $1,000 in 2004, 2005, 2012 and 2013. It was less than $1,200 in 2003, 2006 and 2011.
In other words, the 2016 dividend will still be roughly equal to seven of the last 13 years even after being “cut in half.”
The sky didn’t fall then, and it’s not going to fall now from a PFD reduced from an all-time high to its historic average at a time of historic deficits. Anyone saying different is probably trying to get elected.
Andrew Jensen can be reached at [email protected]
Posted Wednesday, June 08, 2016 - 3:17 pm
The childhood experience of setting up a lemonade stand and engaging with customers brings back memories for many of us; perhaps it was your very first business transaction, customer service experience, or the first time you learned the correct lemon-to-water ratio for that perfect batch of lemonade.
The lessons gained from an early introduction to business can provide young people with an enthusiasm for entrepreneurship that has the potential to grow with them, developing into a passion for business that could spark a dream.
Now, more than ever, we need to help plant these dreams of entrepreneurship within our children. As most Alaskans are aware by now, our state is in an economic downturn, spurred by the plunge in the price of oil.
We’re seeing the growing impact of this across industries. But as we move forward, addressing the economic challenges that our state faces, we must continue to advocate for programs that instill financial literacy and business skills that prepare Alaska’s future leaders.
By making a long-term investment in Alaska’s future entrepreneurs, we are in turn creating new business opportunities, generating employment and a more diversified economy.
Lemonade Day Alaska is an example of one such investment. On Saturday, June 11, more than 3,400 youth in urban and rural communities across the state will participate in Lemonade Day Alaska — a record number for our state.
Children from all socio-economic backgrounds are currently learning how to build a stand, operate it and then determine what to do with the money they make. Lemonade Day — a free, experiential program with participants nationwide — encourages students to save a little, spend a little and share a little, giving a portion to the charity of their choice. An average of 80 percent of participants deposit a share of their earnings in a savings account while 60 percent also donate to a nonprofit.
This year, the community of Bethel will join more than 30 other participating communities across Alaska, when it holds its Lemonade Day on July 4. I am encouraged and excited to see this program grow, especially among the state’s remote and rural communities.
Inspiring entrepreneurship among our youth in rural areas of the state is known to foster economic development and healthy, sustained communities. Entrepreneurship can generate employment and can help encourage residents to remain in Alaska.
Lemonade Day also instills community and civic mindedness — characteristics that are crucial for the next generation of business, local and state government leaders, and ultimately, all citizens.
A 2007 study of businesses in rural Alaska, conducted by the University of Alaska Anchorage’s Institute of Social and Economic Research, found that many successful entrepreneurs learned about business as children, whether from commercial fishing or stocking shelves at their local store.
This reinforces that entrepreneurship is a learned behavior; risk-taking as well as falling and getting back up again, in the business sense, are difficult behaviors to learn as an adult.
The University of Alaska Center for Economic Development, which coordinates the statewide effort every year, not only encourages participation in Lemonade Day, but also assists children through all aspects of managing a small business. With the help of Wells Fargo, a Lemonade Day Alaska sponsor, the program offers financial literacy workshops that provide participants with a guide for managing their money—from pricing out raw materials to paying back investors to saving for the future.
We all can agree that diversifying Alaska’s economy will require creativity, long-term thinking and action right now. The creation of new businesses, with the potential to grow quickly and create in-state jobs, must be part of our plan for a healthy state economy. And the entrepreneurial efforts of Alaska’s young residents could turn out to be the major employers in our state in the years to come.
From small villages to the state’s capital, lemonade stands will pop up for one day, June 11, in most participating communities across Alaska. To see a map of locations in your area or to “Brand your Stand,” visit https://alaska.lemonadeday.org/stands-on-the-map.
Not only should we encourage our youth to get involved, but all of us can support the program as Lemonade Day consumers, helping Alaska’s youth gain valuable life skills and experience in entrepreneurship that can set our children up for success and perhaps even spark a dream.
And with the fiscal challenges our state faces today, that’s more important now than ever.
Nolan Klouda is the executive director for the University of Alaska Center for Economic Development.
Posted Wednesday, June 01, 2016 - 5:09 pm
For 75 years, Matanuska Electric Association has provided our members with electricity as a platform for economic growth and community vitality. This year we have a new milestone to celebrate: May 1 marked one full year of producing, transmitting and distributing our own power thanks to MEA’s new Eklutna Generation Station power plant.
For MEA, moving from a small distribution-only utility to a full-scale, integrated utility so that it was seamless to our members took significant teamwork, dedication and hard work from our staff and partners. I am proud of what we accomplished together.
Similar to MEA, over the past decade, Chugach, Homer and ML&P all decided it was cheaper to build new efficient power plants than continue generating power from the older, inefficient power plants that used to provide power to almost a third of what we call “the Railbelt” stretching 500 miles from Homer to Fairbanks.
This new generation allows us to produce power more efficiently. That means every kilowatt-hour produced burns fewer fossil fuels. When the cost of fuel is 50 percent of your annual utility expenses, the ability to reduce that by 30 percent pencils out pretty quickly for our members.
The new generation mix also means the Railbelt has more options to serve our consumers. That flexibility has been the key driver of a new power market among the Railbelt utilities that is already achieving operational savings for our members.
MEA’s unique power plant design with 10 smaller engines provides a new product to the Railbelt market — small increments of power. When it is cheaper to buy our power rather than starting up a less efficient, larger generator, other utilities have bought power from MEA.
This results in direct savings to our members so much so that we reduced the Cost of Power component of our rates for the last two quarters. It also results in savings to the purchasing utility’s members. As ML&P’s new Plant 2A comes online later this year, we look forward to the potential for cheaper baseload power, which will add even more opportunity for savings to the market.
Over the past year, the collaboration has grown into an impressive number of power transactions — each one resulting in cost savings for our members. It has also ushered in a new era of transparency and trust and provides a mix of hope and certainty for future collaboration.
I’ve worked in the Alaska utility industry for over 15 years and am fortunate enough to have been handed the reins of MEA just a few months ago. From what I’ve seen first-hand, the Railbelt is moving to a new era of cooperation.
Yes, like any family we’ve had our share of disagreements in the past, but what most folks don’t get to see is that we have also been working together with our sleeves rolled up to keep the Railbelt electrical system humming for the better part of statehood with pretty impressive reliability numbers.
The improvement in technology, efficiency, and partnerships between the Railbelt utilities in just one year is simply remarkable and unexpected as the entrance of new players shifted the economics.
The Railbelt we were trying to fix a year ago is not the Railbelt that exists today — that old model of utilities working independently or against each other is now largely a product of a bygone era. I have been pleasantly surprised by the shift.
More progress is on the way. The utilities have been working together over the past year to analyze other potential solutions. The right solution will be determined by the economics and the timing must reflect the economic reality of our state.
Benefits are clear, but the question everyone is asking is “are the costs of the solution worth the benefits?” For example, the initial estimate of $900 million in transmission infrastructure upgrades is over-exaggerated and fiscally irresponsible.
It is essential to determine a more realistic number that balances the need and value of the upgrades with the capacity of our consumers who will ultimately pay the cost.
We want solutions that will benefit Railbelt consumers for decades to come so it is important to take the time to check the facts and do the numbers to ensure one group isn’t harmed to benefit another and any unintended consequences are mitigated.
Some of the best minds I’ve met in this state are currently sitting around the table with each other trying to figure this out and I have no doubt they’ll do it. While I wish the annual benefits were going to be anywhere close to the $50 million to $150 million dollars that was initially stated, we’re optimistic there are more savings out there for our members.
We look forward to working closely with our colleagues to evolve the Railbelt into something that can meet the needs of Alaska well into the future.
Tony Izzo is the general manager of Matanuska Electric Association.
Posted Wednesday, June 01, 2016 - 5:08 pm
Three recent stories regarding three government agencies — the IRS, the Transportation Security Administration, and the Department of Veterans Affairs — show why we should oppose big government for practical, as well as philosophical, reasons.
In recent months, many Americans have missed their flights because of longer-than-usual TSA security lines. In typical DC fashion, the TSA claims the delays are because of budget cuts, even though Congress regularly increases the TSA’s funding!
The TSA is also blaming the delays on the fact that few Americans have signed up for its “PreCheck” program. Under PreCheck, the TSA considers excusing some Americans from some of the screening process.
Those who wish to be considered must first submit personal information to the TSA and pay a fee. Only a bureaucrat would think Americans would be eager to give the TSA more information and money on the chance that they may be approved for PreCheck.
The TSA is much better at harassing airline passengers than at providing security. TSA agents regularly fail to catch weapons hidden by federal agents testing the screening process.
Sadly, Congress will likely reward the TSA’s failures with continued funding increases. Rewarding the TSA’s incompetence shouldn’t surprise us since the TSA owes its existence to the failure of government to protect airline passengers on 9/11.
If Congress truly wanted to protect airline passengers, it would shut down the TSA and let airlines determine how best to protect their passengers.
Private businesses have a greater incentive than government bureaucrats to protect their customers and their property without stripping their customers of their dignity.
The head of the VA also made headlines last week when he said it is unfair to judge the VA by how long veterans have to wait for medical care, since no one judges Disney World by how long people have to wait in line.
Perhaps he is unaware that no one has ever died because he waited too long to go on an amusement park ride.
For years socialized medicine supporters pointed to the VA as proof that a government bureaucracy could deliver quality health care. The stories of veterans being denied care or receiving substandard care demolish those claims.
If Congress truly wanted to ensure that veterans receive quality health care, it would stop forcing veterans to seek health care from a federal bureaucracy.
Instead, government would give veterans healthcare vouchers or health savings accounts and allow them to manage their own health care. Congress should also dramatically reduce the costs of providing veterans care by ending our militaristic foreign policy.
Another story last week highlights the one thing government does do well: violate our rights. The House Judiciary Committee held a hearing on impeaching IRS Commissioner John Koskinen over his role in the IRS’s persecution of conservative organizations.
Those who value liberty and constitutional government should support impeach-ing Koskinen. However, truly protecting Americans from IRS tyranny requires eliminat-ing the income tax. Despite the claims of some, a flat tax system would still require a federal bureaucracy to ensure Americans are accurately reporting their income.
Since the income tax is one of the foundations of the welfare-warfare state, it is folly to think we can eliminate the income tax without first dramatically reducing the size and scope of government.
The TSA, VA, and IRS are just three examples of how government cannot effectively provide any good or service except authoritarianism. Individuals acting in the free market are more than capable of providing for their own needs, including the need to protect themselves, their families, and their property, if the government gets out of the way.
Copyright 2016 Ron Paul, distributed by Cagle Cartoons newspaper syndicate. Ron Paul is a former Congressman and Presidential candidate. He can be reached at the RonPaulInstitute.org.
Posted Thursday, May 26, 2016 - 9:15 am
When, exactly, should concerns about Alaska’s fiscal and economic future give way to fear? When the general fund fiscal shortfall hits $5 billion each year?
When the failure of the Legislature to adopt a sustainable budget or address the fiscal situation reduces Alaska’s bond rating to junk status?
Most Alaskans increasingly identify with the statement of the Apollo 13 astronauts: “Houston, we have a problem.” But instead of being stranded deep in space with a failing return vehicle, Alaskans face declining government revenue, a budget perceived as unsustainable and an economy poised to tank.
The average citizen knows our state has a significant fiscal problem. Based on their conduct, the same cannot be said about the Legislature.
Alaska, we have a problem. But you wouldn’t know it from the lack of concerted action on the part of many of our state politicians.
The lack of genuine adult leadership in the Legislature has been painfully exposed by the failure to meaningfully address Alaska’s looming fiscal crisis. What was once “a problem” is now a crisis.
The Legislature’s failure to adopt a budget for Alaska within 90 days (or even 120 days), reform gargantuan oil tax giveaways and pass meaningful taxation measures that would put Alaska on a sustainable fiscal footing is to blame.
Instead of dealing with the obvious threat to Alaska’s fiscal integrity and the possibility of causing catastrophic economic harm, the Legislature has fooled around with legislation pertaining to pot, daylight saving time, dallied with sex education matters and engaged in meaningless matters suggesting that Alaska has the right to overturn federal law.
With the notable exception of passing a comprehensive criminal justice reform package, the Legislature has failed to conduct the business of our state in a responsible manner.
To us, it seems clear that our Legislature is missing a sufficient number of adults and is failing to deal with the obvious issue.
Gov. Bill Walker and his administration don’t get a total pass here either.
While Walker assembled a disparate package of measures that would have put Alaska’s public finances on a sustainable path, if enacted, the administration’s proposal was largely a lash up of ideas that were never integrated into an ascertainable package diligently presented to the Legislature or the public.
The governor’s worthwhile proposals were scattered like seeds on untilled ground. Left untended, most of his ideas have languished or died.
Has Alaska really come to the point where our elected officials are unable to act in concert for the greater good?
Is our Legislature so beholden to narrow interests that we cannot achieve a balanced and sustainable budget?
Is the administration incapable of advancing and then working with the Legislature to provide for a sound fiscal future? Right now, these questions are unresolved, much as the issue of getting the astronauts on the Apollo 13 mission home was when that crisis hit.
Whether or not we have enough adult leadership in the Legislature and administration to adequately address our fiscal problem is very much an open question. Based on what we’ve seen so far, Alaska’s fiscal future doesn’t appear to be headed to an ending where everyone makes it home safely.
After that sad event comes to pass, perhaps then, and only then, will the voters in our state elect enough adults to operate our government in a mature and measured manner.
Empire Readers’ Council editorials are written by members Joe Geldhof, Abby Lowell, Tom Rutecki and Alex Wertheimer.
Posted Wednesday, May 18, 2016 - 4:07 pm
I want my, I want my, I want my PFD.
With apologies to Dire Straits, the demagogues in the Democrat ranks are back in their comfort zone after dismantling oil and gas tax credits they once championed under ACES by winning over enough squishes among a Republican-led Majority that now exists in name only.
Alaska has a new House majority full of Garas and Guttenbergs that are apparently capable of coming up with an endless series of convoluted matrices of tax levers creeping ever upward but who can’t or won’t read the daily production report from the Department of Revenue.
Most of the public obviously doesn’t know it — and Gov. Bill Walker, his commissioners and his fellow Democrats sure aren’t going to point it out — but North Slope production increased this fiscal year for the first time since 2002.
With the fiscal year nearing its end June 30, production will be in the range of 520,000 barrels per day compared to 501,500 barrels per day in 2015.
Not only is that a 4 percent increase in the midst of a historic price collapse over the last 18 months, but it is only 2 percent less than the 531,100 barrels per day produced in fiscal year 2014 when the average price was $107 per barrel instead of the current $42.
In the last three years of ACES while the price averaged $105 per barrel, production declined by 11 percent from 600,000 barrels per day to 531,600 barrels per day.
In the first three years of Senate Bill 21, production has declined 2 percent while the price has averaged $74 in the same period.
To hear Walker and Sen. Bill Wielechowski tell it, though, we didn’t get anything out of Senate Bill 21 that passed in 2013.
One thing we didn’t get was the 5 percent annual decline that took place in six years of ACES.
Had the 5 percent ACES decline continued, production would have averaged 455,000 barrels per day this year instead of the current 520,000. That’s an additional 64,500 barrels per day, or 23.5 million barrels for the year that all generate a 12.5 percent to 16.6 percent royalty.
In calendar year 2015, the state collected $715.3 million in royalty payments (plus 5.1 million barrels of royalty oil) and for fiscal year 2016 will collect some $1.1 billion in petroleum income from an industry that is losing billions.
It is patently dishonest for Democrats and Walker (but I repeat myself) to continually assert that the state is losing money from oil tax credits when the state is taking in more than a billion dollars this fiscal year.
Wielechowski was at it on Twitter claiming everyone in Alaska is on the hook for $1,000 apiece to fund the oil tax credits already earned by companies and owed by the state. Never mind that nearly every penny in unrestricted general fund revenue, in savings accounts, and the Permanent Fund was generated by the North Slope producers who can never pay enough as far as the Democrats and the new Republican members of their cohort are concerned.
It’s funny, but Wielechowski did not have a problem in fiscal year 2012 when the credits under ACES totaled $716 million and the funds appropriated for the Permanent Fund Dividend were $564 million.
In fiscal year 2013, ACES credits totaled $918 million and the PFD appropriation was $576 million. In two years that’s a half-billion more in credits than PFD payments.
Where were the Democrats then? They were defending the credits as evidence ACES was working while ignoring the fact production declined by 7 percent or more in three of the previous four fiscal years.
Walker won’t stop his mantra that the dividend checks are going to go away without adopting his plan to tap the Permanent Fund Earnings Reserve, but that’s exactly what’s going to happen to the PFD if the Legislature elects to fund it according to his proposal with royalty income from a resource destined to decline more rapidly under their assault against the industry they demand pays the state’s way.
The message the House and Walker just delivered to the oil and gas industry is that the state is going to raise taxes now and then even further as soon as prices reach a level that would allow the companies to begin recouping the billions they’ve lost in the last two years and the billions they’ve invested since SB 21 passed.
No sane company would attempt to increase production or investment in such an environment.
That won’t matter to the anti-oil Democrats in the Legislature or the Governor’s Mansion. They’ll just keep singing the same tune.
That ain’t working; that’s the way you do it.
You get the money for nothing and the checks for free.
I want my, I want my, I want my PFD.
Andrew Jensen can be reached at [email protected]
Posted Wednesday, May 18, 2016 - 4:01 pm
In late April, the U.S. Senate overwhelmingly approved a major energy bill for the first time in almost a decade. The Energy Policy Modernization Act is a broad rewrite of our increasingly outdated policies in this area. As you might expect, it reflects extensive input from Alaskans, and contains dozens of provisions that will provide lasting benefits for our state.
The first thing to say about this bill is: it’s about time.
The last time the Senate passed a significant energy bill was in 2007. Since then, new technologies have emerged as seen by the fracking revolution that has brought dramatic changes to our energy landscape. But at the same time, the relentless federal regulatory state has overtaken Congressional policy and direction. And many of our most pressing challenges, from aging infrastructure to high costs in rural regions, have gone largely unaddressed.
Because our policies have not changed, we are in a situation where both opportunities and needs are being ignored. That is often the case right here in Alaska — where many of our residents still struggle to obtain affordable energy even while the federal government actively seeks to deny our most promising options for resource production.
My response, when I became Chairman of the Senate Energy and Natural Resources Committee last year, was to draft legislation that would bring our federal energy policies up to speed.
I committed to a bipartisan approach that followed the almost forgotten process of regular order. And I kept Alaska front and center, from start to finish.
The result? A broad, bipartisan bill that will increase production in Alaska, help our residents pay less for energy, and ensure continued access to our public lands.
For starters, my bill boosts mineral development — without weakening environmental protections — by prioritizing resource assessments and tackling permitting reform.
It streamlines the regulatory process for hydropower, which can provide renewable electricity to dozens more communities across our state.
It provides routing flexibility for the Alaska gasline, to eliminate a federal hurdle that could have stood in the way of that must-build project.
And it requires timely decisions for LNG export applications, to prevent unnecessary bureaucratic delays, which will help Alaska market our stranded gas.
My energy bill is not only about policy reform. It also prioritizes innovation and efficiency, for everything from microgrids to commercial buildings.
It reauthorizes programs that provide vital funding to Alaska, including the Weatherization Assistance Program, the State Energy Program, and the Department of Energy’s Office of Indian Energy.
It promotes the development of our methane hydrate, marine hydrokinetic, and geothermal resources, all of which can be significant contributors to our supply.
And it allows states like Alaska to apply for federal energy loan guarantees, which will help us deploy new, lower-cost systems in communities across the state.
Equally noteworthy is the approach we took in crafting this bill. It rejects the model of government-knows-best in favor of policies that will empower individuals and communities to take control of their energy futures. There are no top-down federal mandates within it.
We similarly avoided tax increases and anything that would add to the federal deficit.
It is also more than just an energy bill. The night before it passed the Senate, I offered my Sportsmen’s Act as part of a larger amendment related to lands and water policy.
The Sportsmen’s Act will help ensure access to public lands for hunting, fishing, and other outdoor activities that are important to Alaskans — and I’m pleased to report that the Senate unanimously approved it.
Lands administered by the Bureau of Land Management and Forest Service will now be “open unless closed.” We clamp down on their ability to shut down access to our public spaces. And we require every agency to expand and enhance sportsmen’s opportunities in federal areas.
The Sportsmen’s Act will help ensure that places like Tiedeman Slough and Martin Lake Cabin remain open.
And they collectively represent a big step forward to allowing long-held traditions to be passed down from generation to generation – without the federal government getting in the way.
But it’s not just about keeping our public lands “open unless closed,” the sportsmen’s provisions in the energy bill included the reauthorization the North American Wetlands Conservation Act which is critical to hunters who go out for waterfowl, migratory birds, and other wildlife.
The Energy Policy Modernization Act was created by listening to Alaskans. It was written with the advice and expertise of a wide range of individuals across our state. It will help us produce more energy, it will help us save energy, it will reduce local energy costs, and it will keep our lands open. In the process it will allow us to create new jobs, generate new revenues, and continue our strong contributions to the nation’s energy supply.
This is a bill for Alaska — and a potential federal law that, for once, every Alaskan should welcome.
Lisa Murkowski is the senior U.S. senator from Alaska and the chairman of the Senate Energy and Natural Resources Committee.
Posted Wednesday, May 11, 2016 - 4:34 pm
Rep. Les Gara, D-Anchorage, and former Democrat Sen. Hollis French once boasted about spending $540 million on them in a single fiscal year.
As a candidate, Gov. Bill Walker said he wanted to use them on the North Slope the way they’ve been used in Cook Inlet.
Sen. Bill Wielechowski, D-Anchorage, touted them as a way for the major Slope producers to reduce their tax liability.
Revenue Commissioner Randall Hoffbeck called them investments in the future.
The Legislature’s consulting firm told them May 10 that eliminating them would be a “trade-off” between saving money and losing future private spending.
We’re talking, of course, about oil and gas tax credits offered by the state to incentivize development in one of the most expensive and challenging places on the planet to operate.
With the state in a $4.1 billion hole for the upcoming fiscal year beginning July 1, the Legislature has ground to a halt wrangling over the credit expenditures that are going to cost about $775 million no matter what changes are made going forward.
Republicans who fought through elections and a referendum defending their vision for tax policy and incentives have tucked tail and run over the issue as Democrats who supported these very incentives have been allowed to bank on the public’s amnesia over their past statements and ride on their tried-and-true playbook of demagoguing the oil companies.
In a 2010 op-ed, French and Gara wrote the following about their preferred tax policy known as ACES: “The credits reduce the tax a company owes, or, in the case of a company with no production, the credit can be sold. There is big money involved here: in fiscal year 2009 the oil industry made over $2 billion in capital investment in Alaska that resulted in $540 million of tax credits that lowered their overall tax burden.”
That’s right. Gara, who all but alleges oil executives are running around knocking bread out of Oliver Twist’s mouth, was bragging about the state laying out $540 million in credits, or about as much as would have been appropriated this year had Walker not vetoed $200 million in credit appropriations last June.
In 2011, Gara wrote another op-ed in which he stated that he proposed to “increase our tax credits for new exploration on the Slope, and for new processing facilities needed to put new oil in our pipeline.”
Under ACES, and before Senate Bill 21 repealed its overly generous 20 percent cap-ex credit, the state paid out $918 million in credits during fiscal year 2013 while French was a leader of the Bipartisan Senate Majority.
This is the law the Democrats fought to bring back in 2014 and the one they pine for to this day.
Here’s what Pat Forgey of the Juneau Empire reported in 2011 from Wielechowski’s defense of ACES: “The future of the North Slope is these smaller, wildcat companies, he said. Those incentives are available for any company, and the big producers such as ConocoPhillips Co., BP plc and ExxonMobil Corp. can lower their total tax rate by spending more on exploration, he said.”
You read that right. Wielechowski, who can’t finish a sentence without saying the word “giveaway” was advertising ACES credits as a way for the insidious big three producers to lower their tax obligations to the state.
Walker, who started this whole “conversation” with his veto last summer, said this at a Rotary Club debate on Oct. 28, 2014: “We need to level the playing field so smaller companies can come to Alaska. It’s very expensive to do business on the North Slope. We’re fortunate to have the large companies we do have, but we need to look for ways we can reduce the costs so it’s more economic for the smaller companies to come to Alaska, create jobs, create opportunity and drill for oil. We need more wells drilled outside the legacy fields to get more oil for the pipe.”
Holding diametrically opposed positions on a major policy issue within the space of a year or two is generally something the press finds newsworthy, but not many members of the media have bothered to hold Walker or Democrats accountable for their past statements — and votes — as they pound Republicans and the oil companies for supposedly trying to take away the Permanent Fund Dividend to line some fat cats’ pockets.
The credits under ACES were a way for Democrats to pretend they appreciate the mammoth contributions to the state economy from the oil and gas industry by claiming they supported small companies and incentivizing exploration with credits while bagging on the easy targets of the major multi-nationals who pay virtually every government salary in Alaska including the minority members of the Legislature and Walker’s anti-oil administration.
It’s no surprise politicians would cynically exploit the current fiscal state for their own gain, but it has been a useful exposure of the Democrats’ hypocrisy on the issue if anyone would bother to notice.
Andrew Jensen can be reached at [email protected]
Posted Wednesday, May 11, 2016 - 4:27 pm
During the course of my 11 years representing the Alaska Oil and Gas Association, I have been asked many times by media, elected officials and policy makers, as well as everyday Alaskans what my predictions are for the oil and gas industry in Alaska.
My standard answer, other than to say I wish I had a crystal ball, is that only one thing is for certain: oil prices will go up, and then go back down. It is, unfortunately, the one constant in this cyclical business with which Alaskans are so familiar.
In spite of that reality, the last 50 years have created some unique opportunities in this state we call home. Who would have thought the once struggling territory of Alaska would finally be welcomed as the 49th state largely because of the discovery of the Swanson River field on the Kenai Peninsula? Or that an economy once fueled almost solely by commercial fishing and timber would come to rely on oil and gas as its largest economic driver?
Regardless, since the time that the Alaska Oil and Gas Association has been in existence, we have experienced the glory days of huge new discoveries, first oil from the Trans-Alaska Pipeline, 2 million barrels of throughput per day, and the booming economy that came with it.
Of course, we have seen the downside, too, with price plunges that put Alaskans out of work, and what some would say is too much dependence on one industry to prop up the state economy.
Regardless, in the end, most Alaskans have come to appreciate and enjoy the positive impacts the oil and gas industry has brought to Alaska over the last 50 years, and most of us want to see that legacy continue for the next 50 years.
What is the vision for the industry, and, by extension, the state, for the next 50 years? In tough times like this, it is easy to get mired down in the bad news. And there has been bad news in 2016, no doubt about it.
An industry battered by unprecedented low oil prices has responded in ways that while expected, are no less difficult: rigs idled, projects on hold, jobs lost. Hard choices, and, yet, we still have reasons to be optimistic.
One thing low oil prices cannot change is the fact that Alaska has great geology. The State’s Department of Natural Resources confirms that plenty of oil and gas remains on Alaska’s North Slope, as well as in Cook Inlet, and places like “Middle Earth”, where Native corporations like Ahtna and Doyon are exploring.
One colorful oil and gas insider has even described the North Slope as “the oiliest place on earth.” With estimates for billions more barrels of oil, and massive reserves of natural gas, Alaska’s oil and gas industry can remain viable for years to come under the right conditions.
What do the right conditions look like? In our opinion, we feel strongly that state leaders must better articulate their vision of what they want the industry to look like in the next five, 10, and 20-plus years. Too often over the course of the last 50 years, state leaders have lost sight of ensuring the state’s dominant industry was healthy and growing in the long run, usually in order to make some kind of immediate financial gain.
When the state is strapped for cash, as it is now at low oil prices, it is always easy for leaders to look to industry for more. The problem with that approach is that a quick money grab has long-term consequences that hurt just as much if not worse: less oil production, less long-term revenues for state government, and fewer new projects and Alaskans working. It’s not a new problem for the industry in Alaska, but one that continually reappears.
Our advice to those in charge is to think strategically about where they want Alaska to be in 20 years, and what kind of industry they want to see here. Is more oil moving through the Trans-Alaska Pipeline the goal? Maybe it’s a focus on more companies coming to Alaska to explore for and develop oil. Or perhaps the focus is now on the long-awaited of goal of commercializing Alaska’s vast stores of natural gas.
Whatever the policy, it is wise to make clear what the objective is, and to pass laws and write regulations that support the goal. If the aim is simply to collect more revenue, then leaders should be transparent about it, and enter into such a policy with eyes wide open about what potential long-term consequences could look like.
Regardless of what policies and laws the State of Alaska enacts, one long-time truth cannot be disputed: Alaskans have for years, and still do, profess a deep and profound pride in our oil and gas industry. Those of us who have lived here for years know that no one does safe resource development better than Alaska.
Truly, we all seem to understand that Alaska has been blessed not only with incredible beauty, but natural resources that are the envy of the world. Our economy will continue to evolve, but our focus on safely and responsibly developing these resources for the benefit of all Alaskans remains, and will so for the next 50 years.