Andrew Jensen / Editorial

Walker is shocked to find politics going on in Juneau

There was a lot of Louis Renault going around Juneau last week. The Casablanca police captain unforgettably pronounced himself shocked — shocked! — to find out gambling was going on in Rick Blaine’s club. Renault’s supposed ignorance of the routine business in Blaine’s club is of course belied a moment later when an employee hands him a stack of cash: “Your winnings, sir.” “Oh, thank you very much,” Renault says as he pockets the money, “now everybody out!” On March 2, Gov. Bill Walker took his turn as Renault first, proclaiming himself shocked the House leadership introduced a bill to prioritize the ongoing Alaska LNG Project over Walker’s nebulous plan announced Feb. 18 to create a competing project by upsizing the Alaska Stand Alone Pipeline. A couple hours later, it was Rep. Mike Hawker, R-Anchorage, who declared he was shocked that the impulsive new governor would fly off the handle in the manner he did at a hastily called press conference by insulting the bill sponsors, declaring House Bill 132 unconstitutional and vowing a veto. While the House sponsors no doubt expected a reaction from Walker, whose administration has not been forthcoming with the details of his new plan, it is possible they were surprised he would dispense with any modicum of decorum by calling their bill “un-Alaskan” and asserting they were working for someone besides their constituents. In Walker’s case, the more disturbing conclusion than a feigned ignorance of politics going on in Juneau is that of a willful ignorance. Did he really think the Legislature and its leadership that spent years crafting the structure of the Alaska LNG Project was going to roll over as he blew it up? Does he not realize that anything he wants — whether it is Medicaid expansion or funding for his new gas plan — will require that he work with legislators rather than vilify them? He can line item veto, but he can’t line item appropriate. It is probably also worth noting here that the legislation creating the Alaska LNG Project passed by veto-proof majorities in both houses. In their press conference following Walker, the House members including Speaker Mike Chenault, R-Nikiski, were calm yet firm in their reaction to Walker’s personal attacks and easily defended the merits of the bill they’d just introduced. Walker, in contrast, was full of emotional bluster, disjointedly jumping from metaphor to metaphor about buying cars and leasing commercial office space, grasping at hearsay from a meeting with ExxonMobil to paint the House leaders as the only ones opposed to his idea to create a competing project to AK LNG. Repeatedly pressed by reporters about why he believes it is better to align with customers who want the lowest price possible than to align with the producers who not only have the gas but want the best price possible, Walker had no good answers. Instead, he kept going back to an example of a commercial office building that requires tenants signed up to lease space to finance construction That is all well and good, but the problem with Walker’s example is that he’s trying to finance a project and line up tenants when he doesn’t own the lot where he wants to build, or, in this case, the gas. Walker needs the suppliers of the gas — aka the big three producers — to be on board with any plan or he has nothing to market to customers. There is no way he can attempt to market 2 billion cubic feet of gas per day of which the state currently has no access. Going back to his real estate example, given that he doesn’t own the lot where he wants to build, Walker’s plan appears to be to seize it through eminent domain. If he really intends to invoke the “duty to produce” concept, North Slope gas will be tied up in court for decades. That would be a moot outcome, though, as the state will go bankrupt long before such a case is resolved. What is becoming clear is that Walker did not level with the Alaska voters during his campaign when he said he would continue the Alaska LNG Project as conceived and in fact always intended to chart his own course even if his haphazard style of governance alienates legislators and throws uncertainty at markets that were finally starting to take a North Slope gas project seriously. Not even Captain Renault could fake shock at this outcome. Andrew Jensen can be reached at [email protected]

Judge puts brakes on the EPA

In a remarkable twist to the decade-long saga over the Pebble mine, a federal judge ordered the Environmental Protection Agency to halt its work on the effort to preemptively veto the project before any plans have been submitted. It is a ruling that should be cheered by everyone in the resource development community — in Alaska and around the nation — as the beleaguered company carries on its legal challenges against the EPA’s attempt to establish precedential powers under the Clean Water Act that will no doubt eventually go beyond Pebble and chill investment across the country. The heart of this case — and why Judge H. Russel Holland’s ruling is significant — is the routine behind-the-scenes collaboration between government agencies such as the EPA and anti-development interest groups to fix the outcome of decisions. The Freedom of Information Act responses obtained by the Pebble Limited Partnership and relied upon by Holland in issuing his injunction Nov. 24 reveal an EPA process that dates back to at least 2008 when Phillip North of Region 10 began laying out a roadmap for how to stop the project. One of the major arguments the EPA has advanced over the years since it announced in 2011 it would conduct an assessment of mining impacts in the Bristol Bay watershed is that the agency was compelled to undertake the process because it had been asked to by Alaska Native groups in the region. However, the emails by and among EPA officials and anti-Pebble groups reveal that the idea for having Native groups ask for the assessment originated because the agency knew it could not independently begin the process without a permit application and so the plan was hatched to have stakeholders in the region make the request. What is abundantly clear from the emails and records obtained by Pebble is that the EPA was never committed to an unbiased evaluation of mining in the region and in fact was seeking evidence to support its predetermined outcome. Reaching a conclusion before conducting the research is in fact the opposite of science, and the anti-Pebble groups and EPA officials who state the Bristol Bay assessment is a scientific document should rethink that claim. It has been written in this space that Pebble may very well be the wrong mine in the wrong place, and without discussing the merits of the project it is apparent that the overzealous and potentially unlawful effort to preemptively stop the mine may very well end up doing more harm than good to its opponents. If Holland eventually rules in Pebble’s favor and against the EPA, the entire multi-year assessment process and millions of taxpayer dollars will have been wasted leaving the leaders of that effort with no one but themselves to blame. When a judge issues an injunction, the key pillar of the decision is whether the party seeking it is likely to prevail on the merits of the underlying claim. Holland’s issuance of an injunction against the EPA reveals that he believes this to be case. It is also important to note that the same Judge Holland in September dismissed another case brought by Pebble against the EPA challenging the Bristol Bay assessment as not ripe for consideration. Holland’s decisions reaching opposite outcomes in the two Pebble cases reveal he is considering each case on the merits according to the law, which is the sort of unbiased demeanor that federal agencies such as the EPA are also obligated to bring to bear on issues such as Pebble. His injunction against the EPA and its process for producing the Bristol Bay assessment is a sign that the agency failed to meet that neutral obligation and may finally be held to account for it. Andrew Jensen can be reached at [email protected]

Obama makes a sucker's deal with China

There is a simple way to tell if the deal on carbon emissions between the United States and China announced Nov. 12 is good for them and bad for us: the Chinese agreed to it. Unlike our “citizen of the world” president, China always acts in its best national interests while Barack Obama has made it his practice for six years to lower American standing and influence around the world. On its face the deal is a joke. China agreed to begin lowering its emissions — in 2030. At the same time, Obama agreed to cut U.S. emissions by as much as 28 percent before 2025. What that means is that China’s growth in emissions — and it is already the world leader at 25 percent of carbon emissions compared to America’s 15 percent — between now and 2030 will entirely offset any cuts made in the U.S. and then some. That makes the whole agreement pointless and entirely detrimental to the American economy in return for exactly nothing in terms of reduced carbon emissions. Brilliant! It is discouraging to see the American president pushed around so easily by the world’s dictators in China and Russia, who flaunted their new close ties throughout Obama’s visit and put a lie to the idea that Vladimir Putin has in any remote way been isolated as a consequence of his invasion of Ukraine that has led to thousands killed and his military’s role in the downing of a commercial airliner that killed 298 people. China’s state-run media ridiculed Obama in advance of his visit, and during the visit the Chinese unveiled their new stealth jet fighter based on technology they stole from the United States via hacks into military subcontractors. Meanwhile the Chinese military continues an unrelenting series of cyberattacks on everything from the Post Office to the White House. The Chinese are squashing dissent in Hong Kong and flexing muscles against their neighbors in the South China Sea where they are stirring up conflicts with Japan, Vietnam and the Philippines. Throw in their role as the escape route for NSA leaker Edward Snowden as he made his way to safe haven in Russia and it is clear that Obama is neither feared nor even respected by the likes of Xi and Putin. And how does Obama respond to the repeated Chinese provocations, which when targeted at our military are direct threats to our national security? He chomps gum and talks unironically about “taking our relationship to the next level.” If only Xi and Putin were Republicans, or maybe the prime minister of Israel. Then Obama would have no trouble playing hardball. Unfortunately in his permanent state of belief that America is no more than just one of 200 or so nations around the world, he only appears comfortable when he is directing the force of his office and his bully pulpit against his domestic political rivals rather than America’s foreign adversaries. As much as Obama refuses to come to terms with the Nov. 4 election results, the American people are putting the brakes on his administration and when the new Republican-led Senate takes over in January one of the first orders of business should be to kill this sucker’s deal. Andrew Jensen can be reached at [email protected]

Sullivan survives hostile environment on The Rock

About the best thing you could say about Republican Senate candidate Dan Sullivan’s performance at the traditional Kodiak Chamber of Commerce Fisheries Debate is that he survived. Sullivan faced a hostile crowd that applauded most of Democrat incumbent Sen. Mark Begich’s answers as well as rough questions from two of the media panelists Laine Welch and Margie Bauman (Journal fisheries reporter Molly Dischner was the third). In one question, Welch referred to House Bill 77 advanced by the Department of Natural Resources while Sullivan was commissioner of the agency as the “Silencing Alaskans Act” and Bauman asked Sullivan about his brother’s wholesale business purchasing farmed salmon. Sullivan — who answered Bauman by pointing out his brother buys Alaska seafood as well and comes to the state every summer to make purchases — wryly noted at one point that he was, “feeling the love.” While the issue of fisheries is clearly not Sullivan’s area of expertise, he at least showed a consistency in his answers that science should guide resource development for all industries and did score points by pointing out that Begich has not been an effective member of the Senate when it comes to securing an exemption for small vessels from onerous EPA discharge regulations or aiding the community of King Cove in its quest to get an 11-mile road connection built to Cold Bay. The reason the EPA exemption for vessel discharge has not been made permanent but instead simply had the deadline moved back repeatedly is that Begich’s boss, Senate Majority Leader Harry Reid, runs the body with an iron fist and hasn’t given Begich a vote on an amendment in more than five years. Reid acts at the behest of the uncompromising groups who oppose Pebble and the road to King Cove equally despite the vast differences in their possible environmental impacts. The national environmental groups Reid and by extension Begich are beholden to dislike the commercial fishing industry as much as they dislike mining. For that look no further than their claims to oppose the King Cove road because they believe it could eventually be used to transport seafood to Cold Bay, as if that would actually be such a terrible thing even if it did happen. Commercial fishermen would do well to remember that asking the federal government to shortcut the process to preemptively veto Pebble or attempting to stop it through the ballot process is no different than the similar ongoing attempts to shut them down all across the state whether in the Bering Sea or Cook Inlet setnet sites. Pebble may very well be the “wrong mine in the wrong place” as Begich asserted, but allowing a federal agency to cook up a decision to support a predetermined outcome in collaboration with a select group of interest groups while violating state sovereignty is a shortsighted position that will not stop there. My fellow columnist Welch may find Sullivan’s response on the Pebble mine to let the established process work to be “tiresome,” but that makes it no less correct. Andrew Jensen can be reached at [email protected]

Is Begich this afraid of Dan Sullivan?

It sure didn’t take long for the Alaska U.S. Senate race to turn ugly. The charges traded so far between incumbent Sen. Mark Begich and former Attorney General and Natural Resources Commissioner Dan Sullivan over carbon taxes, Alaska residency and the permitting process look like love taps compared to the downright awful attack ad the Begich campaign briefly ran and was forced to pull on Sept. 1. Perhaps stung by recent Sullivan press releases noting increases in violent crime in Anchorage during Begich’s tenure as mayor, the campaign unleashed a shot against Sullivan blaming him for the early release of felon Jerry Active and the eventual heinous crimes he will stand trial for this fall. Active is accused in the 2013 sexual assault of a two-year-old and the murder of the child’s grandparents in Anchorage. But rather than hit his target, Begich shot himself in the foot. The ad wasn’t rooted in anything resembling the truth but was born out of apparent desperation. Sullivan was able to easily counter the attack by noting he wasn’t even attorney general when the error that led to Active’s release was made. Begich stood by the ad until an irate letter from the victims’ family attorney stated Begich’s ad “shocked them,” was “tearing the family apart” and made them want to leave the state forever. The Democrat Senatorial Campaign Committee response to Begich pulling the ad rated “Pants on Fire” by Poltifact was to laughably attack Sullivan for pulling his own response ad that obliterated the baseless charge. All of this begs the question: Is Mark Begich really this scared of Dan Sullivan? Is this how low he is willing to go to save his Senate seat? Unfortunately we now know the answer. An ad like this one based on lies and exploiting the victims of horrific acts produced by any candidate, especially by an incumbent, can only be seen as a sign of weakness. Mark Begich may not like it that ads against him note that he votes with President Barack Obama 97 percent of the time, but that’s true. He may not like it that he’s been attacked for signing a letter supporting a price on emissions and for voting against an amendment that would have required a 60-vote threshold to approve a carbon tax, but that’s also true. A carbon tax that is “revenue neutral” by redistributing the revenue to American households — as Begich defended it — is still a tax. Whether he agreed with “100 percent” of the letter he signed is irrelevant. The fact is he signed it. He may not like it being pointed out that his mere presence in the Senate enables the leadership of the equally truth-ambivalent Harry Reid and the Democratic agenda that is destructive to Alaska, but that’s true, too. He may not like it that Sullivan is attacking him for not signing an agreement to attempt to limit Outside spending in their race, but the fact is he won’t while he reaps the benefits of millions from Reid’s SuperPAC and its attacks on Sullivan. We haven’t even gotten to Begich’s refusal to admit where he stood on Ballot Measure 1 to repeal the oil tax reform passed in 2013 that was defeated in the Aug. 19 primary. We can be forgiven for noting the hypocrisy of refusing to take a stand on the biggest issue of the year even after he was perfectly willing to come out against the Pebble mine in January. The attacks on Begich to date have been well within the realm of political hardball even if they can be argued on the margins. Politics is not, as they say, beanbag. It’s also not supposed to be a no-holds barred death match featuring low blows and eye gouging. Maybe Begich does have reason to be afraid of losing if the worst of the true things he can find to say about Sullivan are that he’s supported by pro-economic growth, small government organizations and that he hasn’t been in Alaska as long as Mead Treadwell’s mayonnaise. That’s still no excuse for making honesty the first casualty of his campaign. Andrew Jensen can be reached at [email protected]

AJOC EDITORIAL: Wielechowski keeps digging

Democrat Sen. Bill Wielechowski has a response to my editorial from last issue. It’s at this link, so go ahead and read it first. I’ll wait. OK, you’re back. A week after his misleading characterization of the ConocoPhillips second quarter earnings report was exposed here, he wastes no time repeating his faulty grip on the facts in the very first sentence. Sen. Wielechowski alleges that an “entire column” was spent “trying to dispute that Alaska is a very profitable place to do business for the oil industry.” As usual, Wielechowski has it wrong. It was never disputed that Alaska is profitable for the oil industry. Nor was it disputed that ConocoPhillips makes $34 per barrel in Alaska. What was disputed was Wielechowski’s declaration that Alaska is a more profitable place to produce oil than the Lower 48. He conveniently fails to acknowledge in his response that it was pointed out ConocoPhillips makes more than $40 per barrel in the Lower 48. North Slope oil sells for $109 per barrel and Lower 48 oil sells for $94 per barrel, so that means ConocoPhillips has a 31.1 percent margin in Alaska and a 42.5 percent margin or better in the Lower 48. The bottom line is ConocoPhillips makes more per barrel of oil in the Lower 48 than it does in Alaska even at a lower price. On oil. I emphasize “on oil” because Wielechowski cannot credibly cite references such as chairing the Resources Committee or reading a lot of financial reports while continuing to wrongly conflate barrels of oil with barrels of oil equivalent. I won’t use the space again to explain why this is all kinds of wrong, but I have to flag Wielechowski’s assertion regarding the Lower 48 that ConocoPhillips “made the poor choice to invest in a place where oil sells for a lower price and where they find more gas than oil.” He then wonders, if he were a shareholder, why ConocoPhillips “keeps investing in a place where oil sells for much less and where they keeping finding less profitable natural gas while looking for oil, such that it drags down their total profits by so much.” For someone who says he admires what the oil industry does, he sure has a low opinion of how ConocoPhillips grosses more than $2.5 billion and spends more than $1.3 billion per quarter in the Lower 48. His implication is that the company is spending billions per year drilling holes without knowing whether gas or oil is going to come out. That $1.3 billion figure cited here last week — the spending Wielechowski claims is dragging down profits — is for capital expenditures. Those are different from operating expenses. Capital expenditures are investments in increased future capacity as compared to operating expenses that sustain existing production. How does Wielechowski imagine that CP is spending this much money per quarter on cap-ex? Where does he think the “skyrocketing production” in the future is going to come from? Unlike the federal government, ConocoPhillips doesn’t have a printing press. It seems strange to have to state the obvious to someone who says he has a degree in finance, but the company is reinvesting its revenue. Reinvesting revenue reduces taxable income. Reducing taxable income reduces net income, or profits. In Wielechowski’s bizarro financial world, though, a company that has $1.3 billion in revenue to reinvest every quarter isn’t profitable. In the real world, that is how companies grow. It’s how real people have jobs. It is certainly a strange take for someone who claims he wants ConocoPhillips to reinvest its revenue in Alaska. By his logic, it would be a “poor choice” for ConocoPhillips to invest in an Alaska natural gas pipeline. Speaking of cap-ex and future production, Wielechowski claims I didn’t address his statement about ConocoPhillips telling investors production was going to keep declining in Alaska. I actually quoted that paragraph, like his entire Aug. 1 press release, word for word. He can go back and read it. Maybe he was mad and didn’t finish the entire column, but his response doesn’t address the fact that ConocoPhillips capital expenditures have increased 47.7 percent in Alaska so far this year, from $545 million in 2013 to $805 million in 2014. He does however claim that the 10-year production forecast accounts for “all of the supposed new production from SB 21.” I’ve avoided calling anything else of Wielechowski’s a lie, but this statement is, and he knows it. The note accompanying the forecast explicitly states that a full year of SB 21 won’t be accounted for until December. There is almost nothing in the state’s April forecast that includes production from SB 21, as it had been in effect for only four months. Meanwhile, as Wielechowski points to a hypothetical number 10 years away, we have an actual number this year that shows the production decline was 0 for the first time in more than a decade. Talk about sticking your head in the sand. Andrew Jensen can be reached at [email protected]

Wielechowski blows it again on ConocoPhillips

If there is one thing Anchorage Democrat Sen. Bill Wielechowski is good for, it is providing column material with his reactions to ConocoPhillips earnings reports. This quarter is no different, and he definitely isn’t making the task any more difficult. • “Yesterday ConocoPhillips announced $627 million in 2nd quarter profits from their Alaska operations or nearly $7 million per day from Alaska alone. On an hourly basis that equates to almost $300,000 in profits each and every hour.” So? Here Wielechowski is simply trying to appeal to the dark impulse of envy in his audience. According to the report, the company paid an effective tax rate of 50.3 percent in Alaska for the quarter, so the government also made about $7 million per day and $300,000 per hour. Unlike ConocoPhillips, however, it didn’t have to do anything to make that money other than sit back and collect the checks. • “At the same time, they announced Lower 48 profits of only $265 million from a greater volume of crude oil production – 191,000 barrels per day in the Lower 48 compared to 170,000 in Alaska. “This proves beyond a shadow of a doubt that Alaska remains one of the most profitable places in the world. Oil profits in Alaska are more than double what they are in the Lower 48.” It’s difficult to know where to begin with all the wrong here. The $265 million in profits for the Lower 48 does not just count profits from crude oil production; it also includes less profitable natural gas and natural gas liquids that account for nearly two-thirds of ConocoPhillips’ global production. More on this to come as Wielechowski erroneously compares per barrel oil profits versus per barrel of oil equivalent profits. Wielechowski also doesn’t tell you that Alaska North Slope crude fetched about $109 per barrel in the second quarter compared to about $94 per barrel in the Lower 48. You don’t have to be much of a financial guru to understand that a greater price can bring more revenue even at a lower production level. On a gross revenue level, ConocoPhillips made about $1.63 billion from oil in the Lower 48 and about $1.68 billion in Alaska. It will not take much of an increase in Lower 48 crude oil production before the gross revenue exceeds Alaska even with the North Slope price premium. Add in that the effective tax rate for Lower 48 operations is 38.7 percent compared to 50.3 percent in Alaska and it isn’t difficult to figure which jurisdiction is more profitable for oil production, as you’ll see below. • “Conoco’s Alaska profits per barrel rose from $29 in 2012 to $31 in 2013 to $34 so far in 2014. ‘While Alaskans face growing deficits and cuts to essential public services, the industry’s profits swell,’ said Senator Bill Wielechowski. ‘In the Lower 48 and Latin America, they make about $6 per barrel of oil equivalent. In Canada, they make about $10.50 per barrel. In Alaska this year, they are making $34 per barrel.’” Wielechowski continues to ignore the price for natural gas and liquids on a barrel of oil equivalent basis as if “equivalent” means gas and crude oil sell for the same price or have the same margins. There are 6,000 cubic feet, of 6 mcf, in one barrel of oil equivalent. At a price of $4.43 per mcf for the Lower 48 in the second quarter, ConocoPhillips received $26.58 per barrel of oil equivalent for natural gas sales. The only true comparison is the profit per barrel in Alaska versus the profit per barrel of oil in the Lower 48. According to a ConocoPhillips presentation to investors May 27, the company makes more than $40 per barrel from Lower 48 production. So, no, Alaska is not more profitable. He is also ignoring the capital expenses and the depreciation, depletion and amortization, or DD&A, that reduce ConocoPhillips’ Lower 48 taxable income. Out of ConocoPhillips’ daily global production of nearly 1.6 million BOE, 605,000 barrels per day was from crude oil and about 6 billion cubic feet per day was from natural gas products. Boosted by more than $1.6 billion in oil revenue, the company spent more than $1.3 billion on capital expenditures in the second quarter and took DD&A of $939 million in the Lower 48, where it produced about 1.5 billion cubic feet of natural gas per day. Those deductions based on large capital expenditures reduced its Lower 48 taxable income to about $434 million. Again, you don’t have to be an accountant to see that ConocoPhillips mostly a gas company, so comparing oil profits in Alaska with natural gas profits in the Lower 48 is nonsensical. • “Wielechowski noted that Conoco’s Alaska profits rose even as their Alaska production fell.  ConocoPhillips produced six thousand barrels per day more in the same quarter last year, but made $42 million more this 2nd quarter than last.” Wielechowski must have really, really hoped nobody else read the earnings report. In fact, ConocoPhillips’ income in the second quarter last year was $682 million compared to the $627 million this year. It is only after a one-time settlement writedown of $97 million in that same quarter last year that net income decreases relative to this quarter. One-time expenditures are irrelevant to a year-to-year income comparison, so he is just full of it on this one. • “’They call it the More Alaska Production Act, but really it should be called the Make Alaska Poor Act,’ he said.  Had Senate Bill 21 been in effect for the past six years, Alaskans would have lost $8.5 billion, according to the Parnell Administration.” Alaska lost a cumulative 80 million barrels of production in the past six years, also according to the Parnell Administration. • “Despite television commercials ConocoPhillips and others have been running trying to convince Alaskans they plan to increase oil production in Alaska, ConocoPhillips recently told a group of investors it actually plans on continued decreasing production in Alaska. In that same presentation, ConocoPhillips touted plans for skyrocketing production in the Lower 48, Latin America, Canada and Europe. (see attached slide)” Yet again, Wielechowski was really hoping nobody fact-checked him. On Page 2 (yes, Page 2), of the ConocoPhillips earnings release it states relative to Alaska: “In an effort to increase production and as part of the increasing investment in Alaska, we signed a contract to build a new rotary drilling rig for the Kuparuk River Unit with drilling expected to commence in early 2016.” Even in the slide he cites, it shows ConocoPhillips planning to add about 40,000 barrels per day in new projects in Alaska to keep production close to 200,000 barrels of oil equivalent per day (this includes the resumption of LNG exports from Nikiski, which accounts for about 23,000 BOE per day in its earnings in the second quarter). • “Meanwhile, as Alaska’s savings accounts are being rapidly depleted, Wielechowski noted that ConocoPhillips just this month announced a 6% increase in its quarterly dividend to shareholders. ‘It would appear that instead of reinvesting in Alaska to increase oil production, the windfall profits are simply going back to ConocoPhillips’ shareholders,’ Senator Wielechowski lamented.” Aww, he lamented. Sad face. If he’d bothered to do any math whatsoever, he could have calculated that the dividend increase amounts to an additional $50 million per quarter. Meanwhile, ConocoPhillips’ capital spending in Alaska has increased by $260 million in the first half of 2014 compared to the first half of 2013. What that means is that even if ConocoPhillips made an extra $42 million this quarter compared to last (which it didn’t), the company has invested more than six times that much into Alaska projects this year versus what it spent last year. And they didn’t even need a law telling them to do it. The only thing worth lamenting is that Wielechowski and his ilk are trying to sway an election with this kind of garbage. Andrew Jensen can be reached at [email protected]

Production is the only number that matters

Those driving the effort to repeal oil tax reform on the Aug. 19 primary ballot like to talk numbers, but the only one that matters is the one they can’t talk about: production. They will point to state revenues under ACES, or jobs or corporate profits during a time of record-high oil prices. What they won’t talk about is the 6 percent annual production decline under ACES that was zeroed out this past fiscal year after just six months of oil tax reform being in effect. What they won’t talk about is the steep decline in drilling in the first year after ACES and an eventual bottoming out in the average number of working rigs from about 10 before ACES to just 6 in 2011. They won’t talk about an all-time high of 17 rigs working during February this year, or that an average of 11 were working throughout this winter season when Slope activity traditionally spikes because of the ability to move heavy equipment around the frozen tundra. The most rigs working during any single week last winter was just 10, and the weekly average was 8. Of course, the repeal supporters will claim that all this new Slope activity was planned under ACES and is somehow proof Sarah Palin’s plan worked. What nonsense. ACES was in effect from 2008 to 2013 and if producers were in any way incentivized to stem the annual decline we would have seen them do it long before the first six months of this year. It may take years of planning to develop a new field in the NPR-A, but it certainly doesn’t take six years to mobilize a rig for a well workover or to drill a new one in a producing field such as Kuparuk. Oil that isn’t produced doesn’t benefit anyone in Alaska. Reverting to a policy that keeps oil in the ground certainly doesn’t satisfy the Alaska Constitution requirement that resources be developed for the maximum benefit of its people. The only time the repeal supporters want to talk about production is when they point to the Revenue Department forecast for 10 years from now. What they never mention is that the forecast is based in no small part on the production decline that took place under ACES and barely accounts for the current tax policy at all. They are shamelessly trying to convince voters that the projected decline is based on oil tax reform instead of what it is actually based on: their preferred, and failed, policy called ACES. They know this is dishonest, but they are doing it anyway. When the proponents of repealing tax reform aren’t spinning numbers or ignoring the inconvenient ones such as production or drilling, they just make them up. A July 28 press release from Vic Fisher claimed that “125,000 jobs were created” under ACES. Twisting facts and personal attacks have been central to the repeal effort as they attempt to gin up anger as a motive to vote “yes,” but this claim is so far out it may as well have come from Pluto. According to the Alaska Department of Labor, the state had 316,900 jobs at the end of 2007, the last year before ACES took effect. At the end of 2013, the final year of ACES, the state had 335,800 jobs. That’s a difference of fewer than 19,000 jobs gained and certainly nowhere close to Fisher’s claim of 125,000 jobs created under ACES. Among those gains, more than twice as many jobs were created in health care (6,200) than were created in the oil and gas sector (2,600). Even conceding the point that jobs and Slope spending increased under ACES, the key question that repeal supporters cannot answer is this: Why didn’t production keep pace? The repeal supporters want voters to believe that the Slope decline is inevitable and that we should tax what’s left of “our oil” to the maximum level possible. It is a sad but unsurprising position from the believers in Big Government that they interpret the state Constitution’s “maximum benefit” clause only in terms of tax revenue and PFDs instead of measuring it by production growth and paychecks. We have seen a conclusive demonstration in the last year that the decline is not inevitable. In fact, far from it. The first step toward growing production is stopping the decline. That has now been achieved, and there is no shortage of new projects and legacy field expansions underway that have finally put the state in a position to see annual increases in production instead of the decline that accelerated under ACES. The people who want you to vote “yes” on 1 are running a cynical campaign based on emotion and falsehoods because that’s all they have. The cold, hard, indisputable evidence that matters — increased production and drilling — is what they don’t want you to consider because it makes the case clear to vote “no” on 1. Andrew Jensen can be reached [email protected]

What's the revenue on a barrel of nothing?

The problem with starting a political campaign with a deception is that eventually it unravels and has to be abandoned or it has to be defended to the point of inanity. Such is the case with the ongoing effort to repeal the oil tax reform passed in April 2013 as Senate Bill 21. The proponents of repeal and reversion to the previous regime known as ACES kicked off their petition drive and campaign asserting that SB 21 was a “$2 billion giveaway” to industry — a figure that was roughly based on the projected budget deficit for fiscal year 2014 that will end this June 30. Of course they knew that was a bogus claim. Alaska was projected for near-term budget deficits while ACES was in effect and, in fact, the state ended the 2013 fiscal year with a deficit of more than $300 million before SB 21 took effect this past Jan. 1. It is worth noting that the same people who tout and were responsible for passing ACES are the same ones who were in charge of the Alaska Senate and passed the capital and operating budgets that led to the 2013 deficit. These same people have also begun to shift their tune about the “$2 billion giveaway” since University of Alaska economist Scott Goldsmith released a report that showed ACES and SB 21 bring in roughly the same revenue for the current fiscal year and Alaska would be in a deficit under either system. That’s because while SB 21 removed the aggressive progressivity formula under ACES that kicked in at high prices, it did raise the base tax rate from 25 percent to 35 percent. That means the state takes in more revenue at lower prices under SB 21 than it does under ACES. In response, the ACES proponents have shifted their spin after witnessing the cratering of their claim that the current budget deficit is the fault of SB 21. Now, they will grudgingly acknowledge that in fact there is no “$2 billion giveaway” this year under SB 21 but argue that when prices rise the state won’t make its windfall share of the gain that it would have under ACES. They also point to Goldsmith’s report that the state would have made $8 billion less under SB 21 that it did under ACES. That is indeed true. But it raises the larger question: At what cost? In the last year before ACES, 2007, the annual production decline on the North Slope was 1.86 percent. In the succeeding years under ACES, the annual decline was 5.3 percent, 5.7 percent, 7.2 percent, 5.7 percent and 5.5 percent. The total annual production on the Slope declined by 28.5 percent from 280.5 million barrels in calendar year 2007 to 200.3 million barrels in 2013. The annual decline for the 2013 calendar year was 2.4 percent, and the estimated annual decline for the 2014 fiscal year ending June 30 is 1.8 percent based on production that is exceeding the Revenue Department forecast by more than 13,000 barrels per day (resulting in about $374 million in additional state take). No matter how you slice it, the production decline was smaller and drilling activity was better in the last year before ACES and in the first year after it was repealed. So let’s return to the question of the cost to the state for beefing up its savings accounts and spending more than $3 billion per year on capital budgets under ACES. While it’s true that the state would have made less under SB 21 than it did under ACES from 2008-13, what if production had not declined at an average rate of about 5.3 percent at that same time? What if production had instead declined by 2 or 3 percent or less annually under a more favorable tax regime during a climate of high prices that should have encouraged additional investment? Based on the cumulative 80-million barrel drop from 2007 to 2013, the state would have been able to tax an additional 40 million to 60 million barrels of oil if the total production decline had ranged from 7 percent to 14 percent instead of the 28.5 percent we saw under ACES. Not only would that considerably change the calculus in comparing SB 21 and ACES, the state would be on a much firmer financial footing looking forward with greater production than it is now after enacting a growth-stunting tax formula that left Alaska behind while the rest of North America boomed. Andrew Jensen can be reached at [email protected]

Press should defend Citizens United, 1st Amendment

In reading some of the coverage here in Alaska, it seems that some have a hard time figuring out how Republican Senate candidate Dan Sullivan can support the Citizens United decision while proposing he and Sen. Mark Begich make an agreement that worked to curb some Outside spending the only time it has been tried. Citizens United vs. the Federal Election Commission was decided 5-4 by the U.S. Supreme Court in 2010. It overturned the bans on corporate-funded political speech within 30 and 60 days of primary and general elections under the McCain-Feingold bill passed in 2002; it also overturned a 1990 case that allowed limits on corporate spending on political speech. Citizens United has been a rallying cry for the left ever since, kicked off by President Obama ragging on the Supreme Court justices to their faces at his State of the Union address a few days after the decision. I called Sullivan’s challenge to Begich a “silly” move in this space last week because I find such “pledges” silly on general principle. Secondarily, it is silly because even if Sullivan is on the high ground it will do no good when the media will predictably dismiss or diminish the idea based on his proper support for the Citizens United decision. The fact that many in the media (and certainly the whole Democratic party) cannot reconcile the two positions shows a fundamental lack of understanding about the superiority of agreements among private individuals and groups versus government mandates to address an issue such as Outside spending. Such mandates inevitably encroach ever further onto our freedoms to the point where a government attorney actually argued before the Supreme Court in favor of a Constitutional authority to ban a wide spectrum of political speech beyond the sort of ubiquitous television ads running in Alaska. That is where the Federal Election Commission came down on Citizens United. Back in 2008, the nonprofit corporation Citizens United intended to use its general funds, which included some donations from for-profit corporations, to offer a negative movie about Hillary Clinton — creatively titled “Hillary: The Movie” — for free through video on demand service. Therefore the political speech was deemed prohibited under McCain-Feingold by the FEC and upheld in the D.C. Circuit Court. On appeal to the Supreme Court, the government attorney, Deputy Solicitor General Malcolm Stewart, argued that the Constitution would allow for the prohibition of political speech across mediums including books if any of the funding came from corporations. The McCain-Feingold campaign finance law being challenged only banned corporate spending for electioneering activity on “broadcast, cable and satellite,” and Stewart was asked by Justice Samuel Alito to answer the Citizens United argument “that there isn’t any constitutional difference between the distribution of this movie on video [on] demand and providing access on the Internet, providing DVDs, either through a commercial service or maybe in a public library, providing the same thing in a book? Would the Constitution permit the restriction of all of those as well?” Stewart responded: “I think the Constitution would have permitted Congress to apply the electioneering communication[s] restrictions … to additional media as well.” Justice Anthony Kennedy, who would be swing vote in deciding Citizens United and wrote the majority opinion, asked whether a non-media advocacy corporation could publish a book (media corporations are exempt from McCain-Feingold). Stewart responded that, “Yes, [the government’s] position would be that [any] corporation could be required to use PAC funds rather than general treasury funds.” Chief Justice John Roberts then asked, “And if they didn’t, you could ban it?” to which Stewart said, “If they didn’t, we could prohibit the publication of the book.” Those who take it as conventional wisdom that the Citizens United decision is a bad thing should consider the chilling alternative argument advanced by the Obama Administration: that the Constitution allows the government to ban political speech in any medium based on the source of the funding. Corporate-owned media (that would be all of it) enjoyed the grace of an exemption under McCain-Feingold. Yet the biggest media companies with the greatest reach are often of the multi-national, corporate conglomerate variety that are just as capable of pursuing interests that don’t reflect the public will. The majority opinion in Citizens United rightly observed that, “the exemption would allow a conglomerate that owns both a media business and an unrelated business to influence or control the media in order to advance its overall business interest. At the same time, some other corporation, with an identical business interest but no media outlet in its ownership structure, would be forbidden to speak or inform the public about the same issue. This differential treatment cannot be squared with the First Amendment.” No matter what the source of the funding for making “Hillary” available on demand, banning political speech that requires an independent decision to consume it is a drastic expansion of government authority without a compelling interest and demanded to be struck down. The fact that corporate funding alone gave the government grounds to ban political speech demanded those rules be struck down as well. An administration that claims such authority and a Congress that would grant such power to the Executive should not find its advocates among an American press that is protected under the First Amendment for the purpose of holding the government accountable. The systematic and illegal targeting of conservative groups by Obama’s IRS in the wake of the Citizens United decision is proof of the lengths an administration can and will go to silence its political opponents through the force of government. And where have the supposed guardians of free speech been throughout this assault on the First Amendment? Largely, they have gone along with the distortion of the free speech issues at the heart of Citizens United and looked the other way as the Obama Administration stonewalls the IRS investigation and makes the absurd claim that it has lost years worth of emails for a half-dozen agency employees and ringleader Lois Lerner. Attacks by politicians on free speech are to be expected. It’s downright depressing when the people who claim to be the biggest fans of the First Amendment go along with it. Andrew Jensen can be reached at [email protected]

Politicians don't need Outside money to look silly

My dad used to call it “trickle-down stupidity.” As the third of six kids with 13 years separating us, he would often observe that the oldest children typically acted like the youngest and he had “six five-year-olds instead of six 18-year-olds.” (His other favorite one as we’d squabble around the dinner table was to compare it to a zoo, but always with the immediate correction that, “no, a zoo is a nice place to visit.”) I couldn’t help but think about my dad’s theory about trickle-down stupidity on June 10 as Republican U.S. Senate candidate Dan Sullivan and incumbent Sen. Mark Begich’s campaign traded more barbs about Outside money in their race. Sullivan is attempting to blunt the criticism he’s receiving based on the vast amount of Outside money coming into the state attacking Begich and some that is supporting his candidacy even before he faces his GOP opponents in the Aug. 19 primary. There is plenty of Outside money — largely from slimy Senate Majority Leader Harry Reid’s SuperPAC — supporting Begich and attacking Sullivan, but Democrats don’t have a problem with billionaires unless they spend their money in a fashion the nanny-staters don’t approve of. So Sullivan did one of those silly “challenge my opponent to sign a pledge” moves, asking Begich to agree to match him with charitable donations based on ad buys by Outside political groups against the other. Begich, naturally, didn’t take the bait. For one thing, agreeing to do something your opponent demands is not typically how to win a campaign, and the second, best reason, is that Begich isn’t going to hamstring his own campaign that in the first quarter was outraised by Sullivan. To be sure, the ads being run by Outside groups against Begich, and some claiming to be Alaskans supporting Begich, are nothing short of the worst political ads: misleading, off-base and insulting to intelligent people. The bobbleheading, cartoony ads of Begich, Reid and Nancy Pelosi are pretty terrible, as are those claiming Begich hasn’t addressed issues at the VA (he has, but only locally, where it matters for reelection) and the Inspector Gadget-worthy stretch that he supports a carbon tax. There is some basis to all the charges (Begich is a Democrat who votes with Reid 87 percent of the time after all), but all the ads share the common trait of being created by people who don’t have a clue about Alaska and who look stupid trying to tell us what Begich is doing wrong. The same is true of the ads attacking Sullivan, such as those claiming he’s not an Alaskan, or the truly awful one running now featuring Sam Cotten saying Sullivan wanted to take Alaskan voices out of the permitting process through House Bill 77. That’s a flat-out lie but Democrats don’t seem to have a problem with lies told on their behalf. When Anchorage Chamber of Commerce president Andrew Halcro told a reporter he was “mad as hell” about the U.S. Chamber of Commerce running ads in the state, the Begich campaign put out a press release that in the first sentence claimed the Anchorage Chamber was “refusing to endorse Dan Sullivan” after the U.S. Chamber ad buy. Of course, the Anchorage Chamber doesn’t endorse any candidates; it only takes positions on issues and Halcro explained that to Begich’s campaign the day before. That didn’t stop Begich’s people from putting out a blatantly dishonest press release implying the chamber wasn’t going to endorse Sullivan because of an Outside ad buy. It just goes to show you don’t need Outside money to look dumb, or to attempt to mislead Alaskans. Maybe we should call it “trickle-down dishonesty.” Andrew Jensen can be reached at [email protected]

Democrats never let good news go to waste

The news from the North Slope continues to trend in a positive direction with the latest announcement that production is 13,600 barrels per day better than the Revenue Department forecast in December, and that the annual production decline for the current fiscal year is projected to be just 1.8 percent. In a sane political world (we could imagine one, right? OK, never mind), that news would be greeted with cheer. But we live in a state where the Democrat party never lets good news go to waste and they held true to form April 7 by continuing to poo-poo the positives because real events don’t fit into their preferred political narrative. “I don’t know how you read these (numbers) and take anything good away from this,” said Sen. Bill Wielechowski, who never misses a chance to miss the mark when it comes to math. Democrats, you see, have every reason to be frustrated after spending years attacking Gov. Sean Parnell, legislators and oil companies and shrieking about an oil tax “giveaway” that they claimed offered no assurances of increased production or investment. Well too bad for them, because BP, ConocoPhillips and ExxonMobil are currently spending billions of new dollars on the Slope, and Democrats can’t deny that. They also can’t deny metered production from the Slope, which is better than expected just four months into the new tax regime and amounts to nearly $400 million in additional funds to the state treasury. They can’t deny the dollars are being spent. They can’t deny metered production from the Slope fields. So they keep screaming giveaway and pointing to the out years of the forecast as proof that a tax policy in place for exactly four months isn’t working. Some day they may realize how ridiculous they sound but I’m not buying any squares in that pool. The Revenue Department is, as it should be, conservative in the out years. After 2017, the forecast reverts to the long-term historical average decline beginning at 4.8 percent in 2018 and steepening to 8 percent by 2023 with a projection of just 315,000 barrels per day. “See! See!” the Democrats say, “that’s proof the policy isn’t working.” Good grief. One can only imagine if the Revenue Department released a rosier forecast. The time would be measured in milliseconds between such an announcement and the Democrat press release accusing Parnell’s administration of cooking the books to make his tax policy look better. That’s the box the Democrats have put themselves in. After years of touting the supposed benefits of ACES despite no increase in production, they now find themselves in the odd position of greeting a measurable gain in production with scorn because acknowledging it doesn’t help them politically. Yet they still have the gall to claim they are fighting for Alaska’s “fair share” when all they are really doing is playing games with the state’s future. Equal pay nonsense Sen. Mark Begich took part in the national Democrats’ April 8 stunt attempting to highlight disparities in the pay between men and women with a post on his Facebook page and the hashtag “equalpay” that claimed Alaska women are being shorted out of nearly $15,000 per year  because of some kind of unnamed discrimination. Obviously this was a national campaign by Democrats on this day — which was highlighted by White House flak Jay Carney (a man, by the way) stammering around about women in the administration making 88 cents on the dollar compared to men — but it is certainly disappointing to see Begich engaging in this kind of nonsense about Alaska. Begich well knows that the makeup of the workforce in Alaska includes thousands of six-figure salaries for mining and oil rig workers that are overwhelmingly if not entirely men. That just might skew the numbers a tad, but as we already know, math is not Democrats’ strong suit. It reminded me of a Bureau of Labor Statistics press release in December that was headlined “Alaska Women’s to Men’s Earnings Ratio Ranks 48th in Nation.” The release noted that a woman’s weekly wage in Alaska was 73.9 percent of that for men compared to a national average of 80.9 percent. The final bullet point, which could have just as easily headlined the release, was “Women’s weekly wages in Alaska ranked 8th nationwide.” Perhaps Begich would be better served touting the fact that his state pays some of the best wages in the nation to women rather than attempting to tear it down as part of a national party campaign cooked up in the depths of the D.C. swamp. Andrew Jensen can be reached at [email protected]

Gambling with lives in the name of green gospel

Cowboy humorist and vaudevillian Will Rogers was ahead of Jon Stewart by at least 70 years when he once said, “Everything is changing. People are taking the comedians seriously and the politicians as a joke.” Some of Rogers’ best barbs were aimed at the absurdity of government, among them, “I don’t make jokes. I just watch the government and report the facts,” and “There’s no trick to being a humorist when you have the whole government working for you.” Rogers, as many Alaskans know, died in a plane crash near Barrow in 1935. It was an event that shocked the nation as he was one of America’s most beloved celebrities and had just the prior year been named the most popular male actor in Hollywood. To this day, aviation accidents and fatalities are a grim reality for Alaskans, and there is nothing funny about that. Alaskans live in a state with the most pilots per capita and where more than 80 percent of its communities are not connected to the road system. We all know it is only a matter of when, and not if, the next tragedy will strike. Tragedy does not discriminate among the famous or the anonymous, as the deaths of Rogers, Alaska U.S. Rep. Nick Begich and House Speaker Hale Boggs in 1972, and former Sen. Ted Stevens in 2010 remind us. Nor does tragedy discriminate between experienced or inexperienced pilots. Last March 30, two Alaska State Troopers and the man they were rescuing were killed when their helicopter crashed near Talkeetna. The chopper was piloted by Trooper Mel Nading, who’d flown hundreds of rescue missions over the years and often flew federal officials to the scene of other aviation accidents. The risks of flying are far more immediate to us than those in the Lower 48, who can drive almost anywhere and if they fly will typically do so in robust jet aircraft capable of rising above bad weather. Such missions from King Cove are not unique to that area. The Alaska Air National Guard has flown more than 5,000 missions and saved more than 2,000 lives since 1994, and Alaskans are forever thankful for the Guardsmen and the U.S. Coast Guard who routinely risk their lives in the effort to save the lives of others. Alaskans are willing to accept risk, but we are not reckless. The same cannot be said, though, of the stubborn band of Washington, D.C., bureaucrats and dogmatic green groups who are stopping the construction of an 11-mile strip of gravel to complete a connection between the communities of King Cove and Cold Bay on the Alaska Peninsula. Personally, if I was current Interior Secretary Sally Jewell or former Interior Secretary and King Cove hatchet man Bruce Babbitt or any of the PR greenies pounding out press releases, I would live every day in fear that someone is going to die during one of these dangerous medical evacuations, either for lack of care as they await help or if the worst happens and an aircraft goes down. It must take a pretty hardened heart to be willing to roll the dice with human lives facing an actual, predictable risk in favor of the purely theoretical and in any case minimal threat that waterfowl might be disturbed by an occasional passing vehicle. A great irony is that the members of the so-called “science-based community,” as they so lovingly dub themselves, are in actuality no less of a slave to their ideologies than any of the opponents they so routinely and smugly dismiss. And just as organized religion is rife with its hypocrisies, so, too, is the environmental left and its puppets in this government who raise nary an eyebrow over thousands of bird kills at wind or solar farms because it fits their green energy gospel while at the same time preventing the construction of an ordinary one-lane road that won’t harm a feather. We should also be certain about this: The opposition to the King Cove road is not because Jewell or anybody else really believes it is going to destroy waterfowl habitat. It’s not about conservation; it’s about preservation of a precedent that no road has ever been built through a national wildlife refuge. Green groups have advanced their cause over the years by never giving an inch, and the Izembek road is one of those inches they are determined not to cede no matter how many people with broken pelvises or babies with breathing problems or our heroic “Coasties” they put in harm’s way. Will Rogers, who was 55 when he died near Barrow, had another one-liner worth remembering: “If you live life right, death is a joke as far as fear is concerned.” If living life right is the mark, then Jewell and the opponents of King Cove should have a lot to be afraid of. Andrew Jensen can be reached at [email protected]

Alaska LNG, Pebble and the Cook Inlet fish wars

With so much happening over the past couple weeks it’s time to clean out the editorial notebook. First up, there is welcome news on the Alaska LNG Project. State officials have signed a key deal with the big three North Slope producers and pipeline company TransCanada on the framework that can lead to the construction of a large diameter line from Prudhoe Bay to Nikiski. Apart from the prospect of $2 billion to $3 billion in new revenue to the state from LNG sales, primary among the positives is that the state will be an owner and a partner in this project, but is not obligated to finance its share of the pipeline or market its own gas. The chief state obligation is for the Legislature to enact durable fiscal terms and approve long-term contracts that will allow the producers and TransCanada to model the economics with certainty for a decades-long effort for construction and operations. Although there is a risk in any lengthy commitment, the willingness of the state to shoulder some of the risk on this project is essential to move it forward. Some may find this hard to accept, but the producers will not go out of business without Alaska, but Alaska will go out of business without the producers. That doesn’t give the state the strongest hand, but it appears Gov. Sean Parnell has played the cards we do have well. A true partnership is not about one party getting over on the other, but coming to an arrangement that is mutually beneficial. From this perspective, an agreement that gives the state a significant ownership stake, a seat at the table and no up-front costs for pipeline construction or marketing is a deal worth pursuing. The market for LNG around the globe is not going anywhere, but the longer Alaska dawdles the more opportunity slips away not only for new state revenues but to finally begin lowering energy costs for our residents. The sooner terms can be ironed out and the serious business of engineering and design can go forward, the better. Here’s hoping the Legislature does its part to keep the new momentum on this project going. EPA releases Pebble study Surprise, surprise, the Environmental Protection Agency declared its hypothetical mining scenario for the Bristol Bay watershed would pose risks to the world’s largest salmon run. To borrow (and clean up) a popular expression, “No kidding, Sherlock.” Were millions of dollars and years of work really necessary to figure out that a mine done wrong can damage the environment? Sen. Mark Begich went on the record shortly after the final assessment was released, saying Pebble is the wrong mine in the wrong place. Maybe he figures he won’t get the resource extraction industry support in the upcoming election anyway, but backing the EPA’s pseudo-science on Pebble makes his criticisms of this administration on a host of other issues ring hollow. The groups Begich is aligning with on Pebble are the same ones who say the road through Izembek Refuge is the wrong road in the wrong place. They say the coastal plain of ANWR is the wrong oil field in the wrong place. They say Aleutians Pacific cod is the wrong fishery in the wrong place. They kept Kensington from opening for 20 years until the case reached the Supreme Court. They tried to stop Red Dog mine from expanding in 2010. They are suing to stop ConocoPhillips from developing CD-5. They have sued and will no doubt sue again to challenge Shell’s efforts to drill in the Arctic.  Yes, Begich’s position of being in favor of resource development in general while being against Pebble is a common one and is held by many Alaskans, prominent and otherwise. The problem is his party keeps these BANANA types in power (Build Absolutely Nothing Anywhere Never Again) and gives them sway over a host of other issues that ultimately hurt Alaska. The problem is the EPA and other government agencies routinely use science influenced by politics to make decisions (see Keystone XL), and it’s pretty hard to criticize a bogus decision by Sally Jewell when it comes to the King Cove road while siding with equally bogus science from the EPA on Pebble. I searched the EPA final assessment looking for a citation to University of Alaska professor Bob Loeffler, who wrote a paper in 2012 for the Institute of Social and Economic Research analyzing whether pre-design risk assessments were valid. Loeffler compared post-design assessments conducted at Red Dog and Kensington with an assessment conducted by the Nature Conservancy regarding Pebble that, like the EPA, relied on preliminary design plans published by Northern Dynasty. After taking great pains to note that his paper was in no way intended to assess Pebble itself, Loeffler concluded: “Without data from individual mine design and site configurations, government agencies cannot determine whether mines meet permitting standards … This comparison of post- and pre-design risk assessment in this report shows that the detailed information, about a specific site and a specific mine design, and without knowing the specific prevention and mitigation strategies that will be applied, it is not possible to use ecological risk assessment methodology to evaluate the risks a proposed mine might pose to the environment. “Specifically, a pre-design ecological risk assessment is a failed methodology for evaluating ecological risks from hard-rock mines in Alaska.” Surprise, surprise, I did not find a citation to Loeffler’s paper anywhere in the EPA’s final assessment. Cook Inlet A more revealing juxtaposition of events Jan. 22 concerning the never-ending battles over salmon in Cook Inlet is hard to imagine. At noon, the Kenai Chamber of Commerce held a Cook Inlet Fisheries Forum attended by the groups representing processors, commercial drift fleet and setnet fishermen, private anglers and the Kenai River Sportfishing Association. In the announcement from the chamber, it stated that Joe Connors of the Alaska Fisheries Conservation Alliance was not able to attend. Connors was in Anchorage at 11 a.m. giving a press conference about his organization’s newly filed legal appeal to get a ban on Cook Inlet setnetters placed on the ballot after Lt. Gov. Mead Treadwell rejected the initiative on Jan. 6 as a prohibited allocation under the state Constitution. So while diverse and competing stakeholders got together in the city where many of them live and work, another skipped out to further its fish fight in court to eliminate one of those groups on the eve of the Board of Fisheries meeting that begins Jan. 31. When it comes to who is escalating the so-called fish wars, it doesn’t take recalling Sesame Street to realize one of these groups is not like the others. Andrew Jensen can be reached at [email protected]

Continuing the debate over the halibut split

I didn’t think my commentary last week would go unnoticed by the halibut charter industry, and it certainly wasn’t. This week the debate continues with fresh submissions from both the Halibut Coalition, a consortium of various commercial fishing organizations, and the Alaska Charter Association, a group mainly representing Southcentral guides. We make our commentary pages available to all perspectives and I don’t mind taking a few shots like you’ll read from Rex Murphy of the ACA. If you can’t take it in this business, you better not dish it out. In any case, I like Rex, and I like Heath Hilyard of the Southeast Alaska Guides Organization who submitted a piece in our Aug. 4 issue. I like a good argument, too, so I’ll respond briefly to the most serious charge from Murphy about my Aug. 4 column. Murphy writes that I “falsely” claimed that when the charter sector goes over its guideline harvest level — as the Southeast sector did by 3.4 million pounds over seven years from 2004 to 2010 — that those pounds are deducted from following years’ harvests.  Murphy bases his charge on how the International Pacific Halibut Commission accounted for the overages after 2007 (you’ll have to read it to see how), but I stand by my original statement. The bottom line is that those overages were deducted from the exploitable biomass of halibut one way or another, which has the undeniable effect of reducing the available harvest. Splitting hairs over how the charter overages were accounted for hardly qualifies as a “false” claim from my perspective. But you don’t have to just believe me. The final rule implementing a one-halibut per day bag limit for Southeast in 2009 stated: “Charter removals should be close to the GHL or the methodology used by the IPHC to determine the Fishery CEY (Constant Exploitation Yield) is undermined and results in a de facto reallocation from the commercial sector in subsequent years.” So even if the IPHC changed how it accounted for overages in 2007, it was still the case in 2009 and today that charter overages reduce the commercial harvest. While we’re touching on the one-halibut rule for Southeast, Murphy blames the North Pacific Fishery Management Council for the charter overages because there were no controls in place to prevent it. However, after several years of charter overages, the council did try to implement a one-fish limit in Southeast to stop it, but the charter sector sued twice in 2008 and in 2009 to prevent the rule from taking effect. A regulatory technicality succeeded in stopping the rule in 2008, but a Washington, D.C., District Court judge tossed the charter challenge to the one-halibut limit in 2009. In response, the Southeast charter sector began targeting the largest fish and the average guided angler halibut jumped from 18 pounds in 2008 to 22 pounds in 2009 and to 26 pounds by 2010, again resulting in overages to the guideline harvest level. That led the IPHC to recommend, and the U.S. Secretary of Commerce to approve, the infamous 37-inch size limit in Southeast in 2011 that finally succeeded (along with the national recession) in holding the charter sector to less than its allocation. Speaking of that 2009 lawsuit, the judge found that the guideline harvest levels approved for Southeast and Southcentral in 2003 were “fair and equitable,” a point that Murphy makes in defense of the GHL that is to be replaced by the percentage split under the catch sharing plan if it takes effect in 2014. Ironically, the Southeast charter operators who sued to stop the one-fish limit argued the GHL was not fair and equitable, but that’s beside the point. What is interesting that if anything, the 2003 GHL was less fair and equitable than the halibut split being proposed today. Consider this language from the 2003 rule implementing GHL: “Setting the GHL at 125 percent of the 1995-99 harvest estimates would allow for limited growth of the guided recreational fishery, but would effectively limit further growth at this level.” (emphasis mine) In other words, the council intent in 2003 was to put a ceiling on the charter sector that does not exist under the proposed catch sharing plan. Murphy also alleges that the IPHC allowed the Southeast commercial fleet to “overharvest” across several years because of a management strategy called “Slow up, Fast down” that attempted to smooth out variances in the stock assessment by not raising the quota too fast, but also by splitting the difference if the surveys called for a decrease in the harvest. In 2011, the IPHC realized this was not effective enough given the continuous decline in 32-inch or greater halibut and went to “Slow up, Full Down,” which called for implementing the full decrease in the harvest indicated by the stock assessment. Murphy calls the original IPHC harvest strategy a gift to the commercial fleet, but if the “Full down” strategy had been in place sooner, the charter GHLs would have been reduced much sooner as well. In another ironic twist, the “Slow up, Fast down” strategy Murphy faults the IPHC for using is the exact same rationale used by the council to implement the tiered stepdowns in the GHL. This from the 2003 rule: “The stepwise incremental reduction was chosen by the council to provide some consideration for the natural variability of halibut stocks and not require the adoption of a new GHL every year.” Under the GHL, a 24 percent drop in the halibut stock would only result in a 15 percent reduction in the charter harvest. It is important to note what the Southcentral charter allocation would be under the catch sharing plan compared to the GHL. In 2012, the charter allocation under CSP would have been 2.6 million pounds. That’s not much different than the 2013 GHL of 2.7 million pounds. In 2011, the Southcentral allocation would have been 3.1 million pounds under the catch sharing plan. That’s exactly the same as the 2012 GHL of 3.1 million pounds. From 2008 to 2010, the Southcentral allocation would have been 3.5 million pounds under the catch sharing plan, nearly identical to the 3.65 million pounds under the GHL. In the end, the final rule does sum up the situation well and I’ll conclude with that: “… it is not possible for any allocation under the proposed CSP to make participants in both fisheries whole economically given the current halibut abundance levels.” If the definition of a good compromise is when nobody is happy, the halibut catch sharing plan qualifies. Andrew Jensen can be reached at [email protected]

Mythbusting the halibut split and the federal ANWR argument

Pick an acronym, CSP or ANWR, and it’s DVAOA. That’s Déjà Vu All Over Again. Opposition to the proposed halibut Catch Sharing Plan isn’t as old as the fight against oil and gas development on the coastal plain of the Arctic National Wildlife Refuge, but neither side has called a new play in years. I’ll start with the freshest debate over how the halibut harvest should be split between charter and commercial fishermen, even though it is really a thawed leftover from the 2011 campaign led by the recreational fishing industry that prevented the previous iteration of the Catch Sharing Plan from taking effect. The charter industry had several good arguments against the last version of the halibut split passed by the North Pacific Fishery Management Council in 2008 and scheduled to start in 2012. Chief among those concerns was a management “matrix” that automatically implemented certain daily bag limit restrictions based on abundance levels. Now, though, two years later with another rule out for the last round of comments before a 2014 implementation, the charter stakeholders are pushing the exact same talking points as they did in 2011 as if the council didn’t spend a year incorporating the majority of their concerns into a new plan and giving them more management flexibility along with an even greater share of the harvest. You’ve probably heard this one: If the CSP is implemented, anglers fishing out of Southcentral ports are going to be restricted to one fish per day compared to the current bag limit of two. What you probably haven’t heard is that the rigid management “matrix” that could have forced such a restriction was eliminated in favor of an annual selection of bag and size limits that first originate with a committee of charter stakeholders before being recommended by the council and ultimately approved by the International Pacific Halibut Commission. That means that the only way a one-fish bag limit will happen in Southcentral is either the charter sector suggests it or the exploitable amount of halibut declines to a point where the projected sport harvest will exceed their allocation and the council must recommend, or the IPHC must pass, something less than a two-fish limit. The first step down from a two-fish limit, though, as the charter sector well knows, would likely be a two-fish limit with a size restriction on the second fish. That’s a far cry from what we’re hearing now about it being a certainty Southcentral anglers will have their bag limit cut in half next year if this plan is implemented. Another one you may have heard is that this isn’t a conservation plan. That’s true; it isn’t. The problem with that argument is that it isn’t being billed as a conservation plan. It is a plan to equitably share the burden of conservation during times of low abundance, and provide greater opportunity for both sectors at times of high abundance. The conservation responsibility for halibut is coming from the harvest cuts by the IPHC, and to a much lesser degree from belated North Pacific council actions to finally curb bycatch of halibut by bottom trawlers in the Gulf of Alaska. Those conservation burdens to date have been absorbed almost entirely by the commercial halibut fleet that has seen quota cuts ranging from 50 percent to 80 percent since 2005 while the charter sector has simultaneously gained an ever-growing share of the overall harvest under the status quo guideline harvest levels that were set during a period of high abundance. According to the proposed rule, from 2008 to 2012, the Southeast commercial fishery declined from 60.2 percent of the yield to 43.1 percent as the charter harvest increased from 14.3 percent to 15.9 percent over the same period. In Southcentral, the commercial fishery declined from 76.8 percent of the yield to 60.3 percent while the charter harvest increased from 12.6 percent to 15.7 percent. That leads nicely into the other well-worn case against the proposed split between commercial and charter fishermen: that this is a reallocation of fish away from the charter fleet to the commercial fleet. Unfortunately for that argument, the reallocation has already happened, and it has gone entirely in the direction of the charter fleet for the past 20 years. In 1995, the charter take was 9 percent of the harvest in Southeast and 12 percent in Southcentral. Under the proposed CSP, the allocations range from 15.9 percent to 18.3 percent in Southeast and 14 percent to 19.9 percent in Southcentral. Given the documented history of a fishery that dates to the late 1800s, describing the proposed percentages as a reallocation is revisionist at best and disingenuous at worst. It is also important to remember how we got here. The reason momentum built to a more formal allocation of halibut between sectors based on abundance is because the charter fleet consistently demonstrated it can and will exceed its allocation with enough angler demand regardless of the stock status. From 2004 to 2010, the Southeast charter sector exceeded its annual allocations by a cumulative 3.4 million pounds. For what it’s worth, those pounds were deducted from the following year’s harvest and taken away from the commercial fleet at a time of the sharpest quota cuts in 30 years. To date, nobody from the charter fleet has reimbursed anyone for those fish, yet they complain now about the possibility of leasing pounds from commercial fishermen to stay within their limits. In Southcentral, the problem of exceeding the allocation was not as bad, but the charter sector did go over by about 270,000 pounds from 2004 to 2007. No other fisherman is allowed to exceed an allocation the way the charter sector has, thanks to the council decisions long ago to not change rules for management in-season to preserve consistent opportunity. Finally, the charter sector will point to economic impacts and to be sure, Alaska needs a vibrant sport fleet. But the sport industry acts like the commercial fishermen are not as vital to our coastal communities as they are. According to 2010 data, more than 75 percent of halibut permit holders are Alaskans and while the halibut fishery is less than 1 percent of the total volume of the Alaska catch, it represents 12 percent of the value. That’s a lot of fish taxes to communities, management fees and observer fees, crew and processing jobs, small businesses and families they are supporting. They deserve both sides of this story to be told with facts and not myths. ANWR It came as no surprise the Interior Department promptly denied the State of Alaska permit application to conduct 3-D seismic exploration on the coastal plain of ANWR submitted July 9. The July 26 letter to Gov. Sean Parnell clings to the weak assertion that authority to conduct exploration contained in the Alaska National Interest Land Conservation Act expired in 1987 with an Interior Department report to Congress. That argument rests with the interpretation of ANILCA that any exploration other than what culminated in the 1987 report would require Congressional authorization. In support of that position, Fish and Wildlife Service cites a 2001 Interior Solicitor General opinion issued two days before President Bill Clinton (who vetoed opening ANWR in 1995) left office. Although that Solicitor General opinion expressly notes that ANILCA contains neither a sunset date for exploration nor a sunset date for the updating of exploratory guidelines, it nevertheless concludes that such a plain reading of the statute must be incorrect. Rather, the 2001 opinion creates a convoluted view of the statute — well worthy of the Parser-in-Chief from whose administration it originated — based on the meaning of the word “further.” ANILCA called for the Interior Department to submit a report that contained, among other things: “the recommendations of the Secretary with respect to whether further exploration for, and the development and production of, oil and gas within the coastal plain should be permitted ...” The Solicitor General opinion goes on to cite Alternative C in that 1987 report to Congress, in which then-Secretary Donald Paul Hodel considered whether to recommend “further exploration only, including exploratory drilling.” The Interior Department would have us believe that the word “further” means simply “more” exploration in a temporal or numeric sense. Inspector Gadget would say that’s a stretch. While the feds bicker over what the meaning of the word “is” is, let me offer a more straightforward view: “further” means activities that go beyond the scope of what is authorized in ANILCA limiting exploration to seismic and geophysical work that does not disturb the surface. That would explain why the clause “including exploratory drilling” was part of Alternative C in Hodel’s 1987 report, and why “further exploration” was linked directly to “development and production” of oil and gas in that section of ANILCA. In both instances cited by the Solicitor General, “further exploration” is immediately supplemented or clarified by clauses beginning with “and” or “including.” In other words, different from ANILCA. In Hodel’s comments rejecting Alternative C, he noted that without a formal leasing and development program, private companies would have no economic incentive to conduct exploration on their own.He then notes, citing failures in the National Petroleum Reserve-Alaska, that the feds are inept at conducting their own, targeted exploration as part of a development program. Clearly, Congressional authorization is required for a development plan — either to direct federal agencies or to incentivize private companies — and for exploration activity such as drilling that is not allowed under ANILCA. But that isn’t what Parnell is proposing. He’s asking to do the exact kind of noninvasive exploration authorized in ANILCA and nothing more. The law requires Secretary Sally Jewell to approve it whether she likes it or not. It defies common sense to believe Congress wrangled over the coastal plain for years in the drafting of ANILCA with the intent that the government would never conduct another assessment of the oil and gas resources other than a couple years in the 1980s, or that if and when it decided to open it to development Congress would have to rely on that old data without an updated survey. This fight is far from over, and the hope here is the Parnell Administration can force this White House to follow the law for once. Andrew Jensen can be reached at [email protected]

Jewell response on ANWR laughably, provably dishonest

Can the Obama Administration tell the truth about anything? Barely into the second term, it has long been clear that the only time you don’t have to decide whether this administration is being dishonest or incompetent is when it is being incompetently dishonest. Such is the case with Interior Secretary Sally Jewell’s June 28 letter to Alaska Gov. Sean Parnell rebuffing his pledge of $50 million in state funding for 3-D seismic exploration of the coastal plain of the Arctic National Wildlife Refuge. “This Administration remains opposed to drilling in the Refuge and I support that position,” Jewell wrote. “We, nevertheless, have reviewed your offer and conclude that any new ‘exploratory activity,’ which would include seismic work by the statutory definition, is prohibited by the Alaska National Interest Lands Conservation Act (ANILCA) and would require Congressional authorization.” Not to put too fine a point on it, but that’s a straight-up lie. To figure that out, you need read no further than the “purpose” statement in the very section of ANILCA cited by Jewell (16 USC 3142b) in her letter to Parnell: “The purpose of this section is to provide for a comprehensive and continuing inventory and assessment of the fish and wildlife resources of the coastal plain of the Arctic National Wildlife Refuge; an analysis of the impacts of oil and gas exploration, development, and production, and to authorize exploratory activity within the coastal plain in a manner that avoids significant adverse effects on the fish and wildlife and other resources.” (emphasis mine) So while Jewell claims Congressional authorization is needed for exploratory activity, a plain reading of the purpose statement shows that approval has already been granted. Jewell wasn’t done, though. “The ANILCA’s time-limited authorization to conduct exploratory activity in the 1002 Area expired when the Department of Interior submitted its oil and gas report to Congress in 1987,” she wrote to Parnell.  I’ve already used the word “lie” once, so I’ll just have to call this claim by Jewell pure fantasy. There is nothing, nowhere, no-how in that section of ANILCA that puts a sunset date on exploratory activity. The only dates referenced in the section require the Interior Department to develop guidelines for exploration during the two years after Dec. 2, 1980 (when no exploration would be allowed), and that it would be required to submit a report to Congress within five years and nine months regarding the matters outlined in the purpose statement quoted above. In fact, the statue requires that after the guidelines for exploration are established, “The initial guidelines shall thereafter be revised to reflect changes made in the baseline study and other appropriate information made available to the Secretary.” That language cannot be interpreted as anything other than the intent of Congress for exploration of the coastal plain of ANWR to be an ongoing affair and that guidelines would be updated based on the initial study. The patently false justifications for denying the State of Alaska’s proposal for ANWR exploration are standard operating procedure for President Obama and his stooges like Jewell — who our Sens. Lisa Murkowski and Mark Begich dutifully voted to confirm — whenever the law isn’t on their side. In this case, the law clearly isn’t on Jewell’s side and she probably knows it but she and the rest of the Gang of Fools in D.C. are too inept to figure out a way to lie about in a way that couldn’t be disproven within a few minutes of web searching. Here’s where Parnell has got Jewell over a barrel under the ANILCA section she cited: the law allows “any person including the United States Geological Survey” to submit an exploration plan to the Interior Secretary, and as long as it meets the exploration guidelines, she is required to approve it within 120 days. “If the Secretary determines that the plan is so consistent, he shall approve the plan,” according to 16 USC 3142(e)2. That’s “shall.” Not “may.” No wonder they’re trying to run the okie-doke. Let’s skip back just a beat to something else Jewell invented out of thin air. In her letter to Parnell, she wrote that the ANWR exploration period ended with a 1987 Interior Department oil and gas report to Congress. This document was a little harder to find online than the ANILCA statute, but the ANWR report delivered to Congress in 1987 recommended opening up the coastal plain to oil and gas development. Then-Interior Secretary Donald Paul Hodel wrote the following in 1987: “Based on analyses conducted, public comment on the draft report, the national need for oil and gas, and the Nation’s ability to develop such resources in an environmentally sensitive manner as demonstrated by two decades of success at Prudhoe Bay and elsewhere, I have selected as my preferred alternative, making available for consideration the entire Arctic Refuge coastal plain for oil and gas leasing.” Recapping if you’re not scoring at home: Jewell lied to Parnell about Congressional authorization being required for exploration, she lied about a sunset date that doesn’t exist and she conveniently ignored the recommendation for development her predecessor made in the 1987 ANWR report that was submitted to Congress. Hodel noted Congress would have to authorize a leasing program to develop ANWR. Jewell and the White House appear to believe that any further exploration would take place under a leasing program, and because there is no leasing program there can be no further exploration. They must think we’re stupid. The coastal plain of ANWR was specifically not designated as wilderness under section 1002 of ANILCA to allow for the potential for oil and gas development. That’s why the USGS was authorized to conduct exploration in the so-called 1002 area. To imply that a leasing program must be in place before exploration can occur ignores the clear language and intent of ANILCA and continues this administration’s practice of disregarding the laws it finds inconvenient and inventing authorities when necessary, not to mention covering its tracks with unabashed and sloppy dishonesty.  But hey, at least our senators extracted a promise that Jewell would visit King Cove before giving her their confirmation vote. I’m sure that will make a huge difference before she goes back to D.C. and tells Alaskans to stick it again. Andrew Jensen can be reached at [email protected]

Dems play race card in first attacks on Treadwell

It could be an ugly race for U.S. Senate in Alaska if the first attacks on Republican Lt. Gov. Mead Treadwell are any indication. Democrat incumbent Sen. Mark Begich, who will be challenged by Treadwell in 2014, straight up accused the Parnell administration and the Legislature of attempting to suppress the Alaska Native vote in a speech to the House and Senate this past March, and the state Democrat party immediately followed suit by charging the administration with “systematically” suppressing the Native vote. The June 25 decision from the U.S. Supreme Court that voided the methodology Congress approved in 2006 when it reauthorized the Voting Rights Act gave Begich and state Democrats another opportunity to demagogue the race issue and they didn’t miss their chance. “Treadwell praises Supreme Court attack on voting rights,” proclaimed the press release from the state Democrat party. In his statement, Begich said, “Times have changed since (1965) and Alaska has made some progress, but challenges remain. For example, the Alaska Legislature right now is considering measures to make it more difficult for rural Alaskans to exercise their right to vote through voter ID bills while the State is closing rural polling places.” The accusation from Begich and his fellow Democrats is clear: Republicans are bigots, and they are actively discriminating against Alaska Natives. You almost have to wonder why Begich would want to go back to Washington, D.C., to represent a state that would elect the likes of Gov. Sean Parnell, Treadwell and a majority of Republican legislators. If he really wants to protect Alaska Natives from being disenfranchised, perhaps he should run for Treadwell’s job instead. The fact that one of Treadwell’s only duties as lieutenant governor is to supervise elections makes the Democrats’ strategy against him obvious: Portray him and Parnell as racists and mobilize the Alaska Native vote against him much the way Sen. Lisa Murkowski succeeded in the general election as a write-in candidate against Joe Miller in 2010. Miller, you’ll recall, was campaigning against federal government spending and made the mistake of questioning the unlimited no-bid contracts awarded to Alaska Native Regional corporations under the Small Business Administration 8(a) program. Miller, who’s thrown his hat in the ring again for 2014, made no shortage of unforced screwups throughout his campaign after knocking off Murkowski in the primary, but none was bigger than making a comment that mobilized the Native corporations against him. Thanks to their massive get-out-the-vote effort in rural Alaska and a deluge of campaign ads, Murkowski won a historic reelection thanks entirely to her margin of victory in heavily Alaska Native districts. In the nine most heavily Alaska Native districts, Murkowski outperformed her statewide percentage in seven of them. In those seven districts from Southeast to the Slope, Murkowski racked up a margin of 10,594 votes more than Miller and won the election by 10,252 votes. So somehow, despite the (supposed) best efforts of Parnell and Treadwell to suppress their votes, Alaska Natives not only played a role in the 2010 outcome, they swung the election to Murkowski. Pardon me for noticing that kind of clout is hardly Bull Conner’s Birmingham. Democrats will argue that the Republican administration is determined not to see a repeat of the 2010 election in their drive to unseat Begich, and hence the effort to disenfranchise Alaska Natives. The thought here is that it is not Republicans who are afraid of Alaska Natives, it is the Democrats who fear Begich’s ability to hold onto this Senate seat without the help of a bogus conviction of the late Sen. Ted Stevens to carry him across the finish line this time. Dealing the race card against Treadwell this early in the campaign is hardly a sign of confidence from Democrats that Begich’s record of voting with President Barack Obama and Sen. Harry Reid 95 percent of the time is going to be his strongest selling point in Alaska. Andrew Jensen can be reached at [email protected]

Slumbering press finally wakes up to Obama's lies

From this view, watching the mainstream media finally discover the depth of the dishonesty emanating from the Obama White House calls to mind the second-most famous line in the American classic “Die Hard.” “Welcome to the party, pal.” (The most famous line, of course, begins, “Yippee ki-yay …”) Better late than never, I suppose, but it took the equivalent of a dead bad guy getting tossed out a window onto the hood of a police car to get the flatfooted, Twinkie-bloated members of the media to realize that just maybe there is something going on at the top of Nakatomi Tower besides some wacked-out conservative crank caller. The vast majority of the press spent the first four years of Barack Obama’s presidency dutifully cheerleading his agenda, attacking his critics and ignoring a host of scandals that far preceded the Benghazi talking points scrubbing, IRS targeting of conservative organizations and the sweeping grab of Associated Press phone records. Those stories erupted over consecutive days last week and exploded the media-created myth of the scandal-free “No drama Obama.” The press appears surprised to learn — after parroting the administration line on ignorance of events surrounding fiascos such as the Fast and Furious gun-running program or the sweetheart federal loan deal for an Obama bundler’s now-bankrupt Solyndra — that Obama claims to not have a clue what the heck his Executive Branch is up to and that he apparently doesn’t find out until he hears it on the news like the rest of us.  This writer, like my suddenly enlightened fellows, is rightly outraged about the Justice Department seizure of phone records from the AP. A more chilling act is hard to imagine on the press, which may soon be back in the days of parking garage meetings with Deep Throats now that it has been exposed that the federal government can and will secretly confiscate both work and personal cell phone records if it is unhappy with a story. Attorney General Eric Holder said he can’t remember how many such media record seizures he’s signed off on, which means this has happened more than once and perhaps so many times Holder can’t keep count anymore. It is an unmitigated assault on the First Amendment, but it is hardly the first such attack by this White House, which isn’t real keen on the Second, Fourth, Fifth or Tenth amendments, either. (In fact, the IRS criteria for singling out groups for scrutiny included “education on the Constitution and Bill of Rights” as a red flag.) It is quite difficult to work up a lot of sympathy for the Associated Press, though, or many others in the media, after they were uncritical of the arrest and jailing of the man behind the video Obama, Hillary Clinton, Susan Rice and Jay Carney blamed for the attack in Benghazi that killed four Americans including our Ambassador Chris Stevens along with Sean Smith, Glen Doherty and Tyrone Woods. Prosecutors sent Nikoula Nikoula to jail for a year on a trumped-up probation violation that never would have drawn a glance if not for the administration’s desperate attempt to blame his previously unknown video for the violence across the Middle East and North Africa on the anniversary of 9/11 that this White House was caught unprepared for. Despite all evidence to the contrary from their own real-time, ground-level intelligence about what happened in Benghazi, Obama and Clinton deprived Stevens, Smith, Doherty and Woods of the heroes’ honor they deserved by desecrating their memories and lying about why they died in front of their caskets and their families on Sept. 14. The press, until now, did nothing. Actually worse than nothing, they covered for the White House to insulate Obama in the homestretch of the 2012 election. Only after this overreaching, heretofore unaccountable and lying administration came for them have they rediscovered their atrophied awareness about the abuse of government power. For that, they are hypocrites of the lowest order, and from this view it is far from certain that the media will pursue the truth on these burgeoning scandals for long before falling back into their comfort zone of carrying the left-wing cause and calling Obama’s critics racists. But for now anyway, welcome to the party, pals. And yippie ki-yay. Andrew Jensen can be reached at [email protected]

Shame to share for scallop shenanigans

Alaska’s rural communities will lose out after a backdoor move to preserve the status quo in the state scallop fishery backfired in the closing days of the legislative session. The stage for the standoff between Rep. Paul Seaton of Homer and Sen. Donny Olson of Nome was set when Olson attempted to bypass Seaton’s Fisheries Committee by attaching an unrelated permit program onto an uncontroversial House bill to extend the 25-year-old Alaska Regional Development Organization. Known as ARDOR, the program consists of 12 regional organizations that received a total of $1.03 million from the state in the last fiscal year. That doesn’t sound like much, but it generated some $4.4 million in federal matching grants. That’s real money, so I’m still scratching my head over how Olson could refuse to heed the calls from Kawarek Inc., his home district ARDOR, to pass a clean bill and keep the program from sunsetting. There have already been layoffs around the state at ARDORs, who were to receive $859,000 in general funds for the next fiscal year. Based on typical matching rates, the gambit by Olson supported by the Washington-based Alaska Scallop Association and the state Commercial Fisheries Entry Commission, or CFEC, may end up costing Alaska another $3.5 million or so. None of this had to happen, and little of it makes any sense. The limited entry program for scallops and hair crab Olson was trying to protect doesn’t sunset until Dec. 30. There was plenty of time before the 2014 fishing season to work on it, which is what Seaton offered Olson. ARDOR, on the other hand, will sunset July 1. (In a sad twist, that is also the start of the next scallop season.) There is no hair crab season. It hasn’t been open for years and there’s no chance it will be open any time soon. Two of these hair crab permits are held by Coastal Villages Region Fund, the Community Development Quota group for the Kuskokwim Delta that isn’t even a part of Olson’s district. In a nutshell, Olson traded a bird in the hand for nothing in the Bush. The general funds and grants for ARDOR were real. The benefits to rural Alaska are nonexistent from a hair crab fishery that is closed and a scallop fishery that is almost entirely controlled by a Washington cooperative consisting of a few partners and American Seafoods. You may be wondering why Seaton refused to blink on this. The reason is the only thing that makes sense in this whole debacle. In a little more than a decade since state and federal limited access permits were required for the scallop fishery, a core group of partners has methodically consolidated licenses through a combination of regulatory loopholes, some as simple as forming separate LLCs to get around a federal two-license ownership cap. Jim Stone, Glenn and Egil Mikkelsen, and John Lemar, all of Washington, now hold a combined four federal permits and Stone holds a fifth. Kodiak skipper Tom Minio, who runs a scallop boat that operates solely in federal waters for the partners, also owns a share of one of those federal permits purchased in 2008. The corresponding state waters permit acquired by Minio has yet to be assigned to a vessel and is therefore in suspended status. None of this is illegal, at least on the federal side, even if it does tiptoe if not trample on the intent language of the two-license cap published in the Federal Register back in 1999. But on the state side, Seaton has a legitimate constitutional question of whether the consolidation of federal permits — which has naturally consolidated the parallel state permits — violates the prohibition on creating an exclusive right of fishery under the Limited Entry Act. The fact that few legislators are willing or able to understand such fisheries minutia or Alaska Supreme Court case law makes it no less legitimate. The scallop fishery has gone from nine vessels when the program was conceived to only two operating in state waters today. It has consolidated to such a point that fisheries tax and landings data can’t be reported. Such an obvious change in the fishery, almost entirely accruing to the benefit of out-of-state owners, makes it a little more than strange that the state CFEC would go to the mat so hard to extend the scallop entry program. If Chair Bruce Twomley and Commissioner Ben Brown of the CFEC really believe the scallop fishery operates best with just two vessels as it does now, they should say so. To treat the clear consolidation under this unique version of limited entry with a nothing-to-see-here attitude fails to meet their obligations to put the state and its constitution first. The state can’t do anything about liberal federal definitions of ownership, but it is under no obligation to preserve a program that has seen systematic relinquishment and leasing of permits as a means to control the fishery, especially when the Alaska Supreme Court has ruled in that active participation is central to the Limited Entry Act. It is not easy to get into the scallop business. Costs are high and 100 percent observer coverage is required to prevent exceeding crab bycatch limits or the harvest quota. That makes it unlikely much will change even if limited entry for scallops goes away. The federal scallop beds will still account for 75 percent to 80 percent of the total harvest, and the Alaska Scallop Association will still take all of that and most of the rest in state waters. Things are already changing, though, at ARDOR offices around the state where funds have been cut off and jobs lost. The people who made that happen should be ashamed of themselves for holding rural Alaskans hostage to a bill to benefit a few permit holders. Andrew Jensen can be reached at [email protected]


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