Posted Wednesday, April 03, 2019 - 9:33 am
In March I joined Republicans and Democrats from the House and Senate at the White House with President Donald Trump for the signing of major lands and conservation legislation.
The “John D. Dingell, Jr. Conservation, Management, and Recreation Act” is now law after years of effort. As chairman of the Energy and Natural Resources Committee, I worked to combine more than 120 lands, resources, and water measures — including many that will help resolve long-standing issues for Alaskans.
One of the provisions of which I am most proud will provide equity to Alaska Natives who served during the Vietnam War to finally receive their land allotments. Sponsored in the last Congress by Sen. Dan Sullivan, this provision will provide an estimated 2,800 veterans with a chance to receive the lands promised to them decades ago by the federal government.
Due to their service, many missed the application deadline imposed by the Alaska Native Claims Settlement Act. Previous programs have had a rejection rate of up to 75 percent, which led us to create a new program that will work better for everyone.
Other provisions within my lands package will provide new opportunities for economic development. For example, the new law will provide routing flexibility for the gasline project in Denali National Park and Preserve.
A separate provision repeals a prohibition that prevents the Kake Tribal Corp. from exporting unprocessed logs harvested from its lands. Another requires the Department of the Interior to convey sand and gravel resources within and contiguous to the Barrow Gas Field to the Ukpeagvik Inupiat Corp.
In a state with 224 million acres of federal lands, we encounter more than our fair share of land management issues. To address one in the Southcentral region, we require the Department of the Interior and the U.S. Forest Service to conduct a study to identify the effects that federal land acquisitions have had on Chugach Alaska Corp.’s ability to develop its subsurface estate and identify options for possible land exchanges.
We also restore the claims of four Alaskans who wrongly had their placer mining operations taken by the government over a decade ago due to bureaucratic discrepancies. Now that this bill has been signed into law, those miners will finally have relief. Their claims will be reinstated and they will able to go back to business.
My lands package also includes national policies that will benefit Alaska. We extended a geologic mapping program for five years, which will help us understand our world-class mineral base and highlight new opportunities for mining in our state.
By modernizing and expanding our nation’s volcano early warning and monitoring capabilities, we will keep communities and travelers in Alaska safe.
The permanent reauthorization of the Land and Water Conservation Fund is a significant national conservation achievement that also now includes a requirement that at least 40 percent of its annual funding go to the popular state-side program, which supports the Alaska park system and local recreation sites.
I am also proud of the provisions we included that relate to access to federal lands for sportsmen and women. We direct federal agencies to expand and enhance opportunities for hunting, fishing, and recreational shooting on public lands, in accordance with applicable laws and regulations. “Open unless closed” will now be the standard for Bureau of Land Management and Forest Service lands to ensure that closures are justified and provide for public notice and comment.
We also agreed to include a number of conservation-related provisions specific to the Lower 48. Our lands package designates new federal wilderness in states such as New Mexico and Utah. We created new wild and scenic river segments in Oregon, Massachusetts, and Connecticut. And we established five National Monuments the right way — with Congress in the lead — in California, Kentucky, Mississippi, and Utah.
Our lands package is the result of good process and extensive negotiations. It took us years of regular order in the committees of jurisdiction to process its components. Following that, we spent months engaged in bipartisan, bicameral negotiations to reach agreement on its exact scope.
We struck a careful balance between the need to provide for economic development and the desire to protect treasured landscapes. And we ensured that every provision — especially those related to conservation — enjoyed strong state and local support.
The result is a sweeping package that drew 92 votes in the Senate, 363 votes in the House, and the support of hundreds of stakeholder groups all across the country. That’s a rare occurrence in an era where partisan division and gridlock often prevail. And while much work remains, our lands package will deliver real benefits for Alaskans and all Americans.
Lisa Murkowski is the senior U.S. senator from Alaska.
Posted Wednesday, March 27, 2019 - 11:16 am
There’s been no shortage of sturm and drang over Gov. Michael J. Dunleavy’s proposal to radically overhaul the state budget with deep cuts to K-12 and university education, Medicaid and the state ferry system.
What there has been very little of from the defenders of the status quo are alternatives to achieve better outcomes and reform the state’s unsustainable spending habits.
After avoiding it for more than a decade thanks to triple-digit oil prices followed by spending down state savings and dipping into the Permanent Fund Earnings Reserve and dividend appropriations to cover the deficit since multi-billion dollar shortfalls hit four years ago when prices bottomed at $26 per barrel, the time of reckoning has finally arrived.
Competing roadshows from the governor and the House Finance Committee are now traversing the state with diametrically opposed goals: one by the Republican governor that favors cutting services to match revenues, capturing local property taxes on oil properties and leaving the PFD untouched and the other that has been organized by the Democrat-led House in order to give vent to public outcry over the drastic proposed reductions and a venue for PFD cuts and new or increased taxes to fund government.
Neither solution is achievable in the reality of a divided government in Juneau, but only one recognizes the old axiom known as Stein’s Law: “if something cannot go on forever, it will stop.”
The simple fact is the state is spending more than it can afford, and until appropriations are brought in line with reality the PFD will continue to be reduced until it either goes away to fund the budget or a statewide tax regime will have to be imposed to balance the books.
Raising taxes on the oil industry won’t do the trick, and driving out investment for the short-term objective of plucking the golden goose will only accelerate the revenue shortfall.
Dunleavy has been accused of being heartless or amoral for his proposed budget, but is it any less heartless to continue to accept failure as the best we can do while spending our way into oblivion?
The governor isn’t wrong to point to Alaska’s dead-last ranking in reading as a failure of our education system. That doesn’t mean he hates kids.
The governor isn’t wrong to point out ferry ridership is falling as costs are rising. That doesn’t mean he hates Southeast Alaska.
University of Alaska President Jim Johnsen can claim the UA system is “more vital than ever” but that doesn’t change the fact that its largest campus can’t graduate teachers after losing its accreditation.
Hundreds of millions in “free” federal Medicaid dollars have no doubt boosted the health care sector of the economy during the three-year recession, but the governor is not wrong to point out that outcomes aren’t improving.
The last thing a state should be proud of is having nearly 1 out of every 4 residents on Medicaid. The goal of state policy should be to get as many of these people to work and off assistance.
There are no doubt flaws with the governor’s proposed budget, from the abrupt rollout that shocked many if not most observers around the state and the resulting failure to get any buy-in from stakeholders, not to mention falling far behind in the messaging battle, to the sheer scale of cuts this large in one year.
Restoring a full PFD according to the statutory formula was the centerpiece of Dunleavy’s campaign and a sudden reversal of that pledge would be political suicide. That doesn’t mean, however, that $1.9 billion in dividends amid the biggest budget cuts in history is the wisest long-term plan, either.
That means a compromise is going to have to be in order. But in order for there to be a compromise, both sides need a vision and a plan as starting points. So far only Dunleavy is checking those two boxes while the Legislature appears to be choosing the same can-kicking path of the past decade in a dangerous game of chicken with the veto pen.
One way or another, that which can’t continue, won’t. What takes its place will decide our future and the great question of the day is whether our elected officials are up to the challenge.
Andrew Jensen can be reached at [email protected]
Posted Wednesday, March 20, 2019 - 10:41 am
Recently, several public opinion messages and campaigns have voiced concerns about the mining industry here in Alaska.
It seems that much of the angst is based on either a perceived favorable bias of the regulatory system towards industry, a bias against natural resource extraction in general, or a zero-sum game view that says you must “trade one resource for another,” which precludes the possibility of success for more than one resource.
I am grateful this attitude has not defined Alaska’s journey, and I pray it will not define our path forward. I believe Alaska is on the verge of the greatest resource production renaissance in the history of our state and it will only be realized if we come together as one.
All resource extraction industries have struggled to overcome enormous obstacles in this last frontier and have evolved into more accountable and effective stewards of our environment, providing excellent jobs for our people.
Alaska is a paragon for the world because of our long history of the mining and oil and gas industries co-existing with fisheries, wildlife and other habitat users. In Cook Inlet, oil and gas exploration, development and production has existed alongside a significant commercial and sport fishing industry for nearly 70 years.
Mining and commercial salmon fishing have co-existed in the waters of Southeast Alaska for generations. And the North Slope oil and gas industry has demonstrated to the world that polar bears, caribou and other wildlife can thrive alongside one of the world’s largest oil producing basins. We understand that the land and the sea make up one Alaska.
There is no question that the mining practices of the late 1800s and early 1900s were hard on the laborers and the environment. The commercial fishing industry certainly had its dark moments in the history of our state and was one of the prime motivators for statehood. And certainly, the oil and gas industry has made mistakes.
Yet we all know that much has changed with these modern industries. Today, you can’t find better regulated, higher performing resource extraction industries anywhere in the world. Alaskans decided to move forward.
I have been commercial salmon fishing in the waters of Bristol Bay and Cook Inlet for nearly 50 years. I remember listening to my father and others from his generation talk with pride about the honor of being able to participate in the rhythm and cycle of this harvest. It was a family business.
We were focused and “all-in” physically and emotionally. We enjoyed success and failure, exhaustion and exhilaration — together.
I was never a miner, but I have dear friends who have devoted their whole lives to this industry. One recently told me a story of his late father emerging from a mine at the end of a hard day, his face dark with dirt and sweat, a hard hat with an attached light on his head.
He said, “the grimace on my dad’s face would break into a smile when he would see us. We were always waiting for him at day’s end. Mining was our family, our life.”
The roustabout crews from the oil derricks in Cook Inlet to the drill pads of the Slope are no different. They live, work, and die as a family. These vocations all have inherent risks, and we Alaskans accept and learn from them. We keep moving forward, no matter what.
Today our state university has powerfully connected education to jobs through robust fisheries, mining, and petroleum engineering programs because these industries have a great future in Alaska and need a highly skilled workforce.
The incorporation of strong public input into our industry permitting processes and considerable regulatory oversight is a good thing. It is true we have well-founded concerns about local impacts and the need for safe, responsible development of our resources.
But I think it is fair to say that most Alaskans want to see mining, fishing and other resource extraction industries be well-regulated and flourish in our state.
Alaska has consistently had a higher unemployment rate than the national average since 2013. Within Alaska, unemployment is highest in rural areas, which have limited economic opportunities and year-round employment is almost non-existent.
Mines produce high paying jobs without question and a sense of self-sufficiency in areas long deprived of careers that can offer multi-generational prosperity.
No one industry could have brought us to the point where we have the capacity to energize, feed and enrich far more than just our own people.
If we each are willing to support opportunity, self-sufficiency and purpose’s expansion outside of our own interest, there is no limit to how bright our future will be. Our families and future generations will be the beneficiaries.
Chuck Kopp is serving his second term as state House representative for District 24 in Anchorage and is chair of the House Rules Committee.
Posted Wednesday, March 20, 2019 - 10:40 am
It seems as though we are constantly beating back the regressive ideas that development of our abundant resources is bad, businesses are bad, people who work for businesses are bad, and on and on.
Generally, our response to these views has something to do with revenue to the State of Alaska, jobs and the state’s gross domestic product. While true, these cold, dry facts draw little interest.
To my surprise, an article published last May in the Journal of the American Medical Association caught my eye and put new and brighter light on what resource development means for Alaskans.
It drew me in. I thumbed through the pages and came to Figure 2, “Change in Life Expectancy at Birth by County, 1980 to 2014.” It was a map of the U.S., Alaska and Hawaii showing that the average life expectancy of Alaskans had increased in every area of the state during those years.
But the most dramatic increase could be seen in the North Slope Borough, Northwest Arctic Borough, Aleutians-East Borough, Kodiak and the Southeast coast of Alaska; these areas saw an 8- to 13-year increase in life expectancy, at birth, between 1980 and 2014. Nearly 80 percent of the state saw an increase of more than six years over that 35-year time period.
That stopped me. I had to ask, what caused this dramatic increase, larger than most of the rest of the U.S.? The researchers’ discussion was interesting. Socioeconomic and race/ethnicity, behavioral and metabolic risk factors, and healthcare factors combined to explain 82 percent of the contributing factors to change in life expectancy.
This begged the question: What was happening in Alaska during the years 1980 to 2014?
Well, that’s not hard to answer for those of us who were here in those years. The Trans-Alaska Pipeline System began flowing oil in 1977. Red Dog Mine began production in 1990. The Magnusson-Stevens Act pushed out the foreign fishing fleets, leading to important development of Alaska fisheries. These resource developments, along with others around the state, changed Alaska from a struggling new state, to an economically thriving place.
These resources became jobs and opportunity for work close to traditional homes, something previously unavailable. And boroughs were formed in these areas, enabling the ability to levy taxes that funded community infrastructure.
Healthcare, education, clean water, wastewater treatment and good-paying local jobs transformed rural and urban Alaska. The Alaskan people benefited.
After the 1957 discovery of oil on the Kenai, Congress finally decided, in 1958, that Alaska had a chance of supporting herself on her rich resources. Alaskan voters, all 46,000 of them, voted six-to-one to become a state.
As a territorial kid growing up in Fairbanks, I remember those days. I had the delightful chance to frequently go to work with my dad, a Wien Airlines captain. That meant riding along on an F-27 as he made rounds to rural communities around our state. They were referred to as “villages” then and they were isolated, poor and small.
Then came resource development. As a nurse practitioner, I had the wonderful privilege of providing healthcare services in those same rural areas, now thriving communities with schools, clinics, roads and jobs.
In one very remote community, I was on the same flight with a young man, going to his job at Prudhoe Bay. His wife and little son bid him goodbye at the airport. The airline agent told me that the young man was the pride of the community, bringing his paycheck back home, helping his parents and grandparents out with fuel costs in the winter and supporting his family.
That is what resource development means for Alaska’s families. It’s all about our people.
Yes, we love the state government revenue and services that it pays for. We have all prospered during these years since oil and mining production. But the most important benefit of resource development is to our people, our families and our local businesses.
As a healthcare professional, it still brings tears of pride to my eyes to contemplate the change in our state. We still have challenges. But we met challenges before and have demonstrated an ability to solve them.
The caribou, polar bears and fish all coexist with our industries. The important thing is our lands are precious for the resources they contain, and our people can and will thrive by utilizing and stewarding them. Alaska’s resource development continues to bring health and happiness to our people.
Senate President Cathy Giessel, a Republican, represents District N, which covers parts of Anchorage and communities along Turnagain Arm.
Posted Wednesday, March 20, 2019 - 10:16 am
Based on their latest effort to mislead the public about oil tax policy, Democrats should be cheering the fact that North Slope production will miss its forecast by about 20,000 barrels per day in the 2019 fiscal year.
After all, according to former one-term Fairbanks state Sen. Joe Paskvan, the state is “paying” a credit of $8 per barrel for each one produced on the North Slope under Senate Bill 21, the production tax reform passed in 2013 that took effect and was upheld by voter referendum in 2014.
According to their current talking point, the state should now “save” $42.6 million in credits thanks to 14,600 fewer taxable barrels flowing through the Trans-Alaska Pipeline System each day.
The only problem with that is the most recent Spring Revenue Forecast released March 15 now projects that the miss on production for the fiscal year will actually reduce total unrestricted petroleum revenue by $75.6 million and require a larger draw on state savings to balance the budget.
Math, how does it work?
The reason for this disparity is because the state doesn’t actually “pay” the credit Paskvan is claiming. It is a reduction in tax liability, which is a vital distinction the Democrats are counting on the public not making.
No legislative session would be complete without Democrats trying to jack up oil taxes, and this one is no different with Sen. Bill Wielechowski, D-Anchorage, banging his Twitter drum in an effort to raise rates on the oil industry by $1.2 billion per year by repealing the per-barrel credit and raising the production severance tax to one of the highest in the world at 35 percent of net income.
Wielechowski’s bill will go nowhere in the Republican-controlled Senate and wouldn’t survive a veto by Gov. Michael J. Dunleavy even if it were to make it to his desk, but this latest campaign is yet another example of how Democrats appear to be fundamentally incapable of speaking honestly about how SB 21 works and the unquestionable success it has been in stemming the decline of Alaska oil production.
Wielechowski loves pointing to the production forecast as proof that SB 21 hasn’t worked based on five and 10 years from now.
Because he is so fond of forecasts to the point he quotes them as if they came down from a mountain on stone tablets, let’s rewind to the 2013 production forecast that was completed in the final year of his preferred policy known as ACES that was repealed under SB 21.
The 2013 forecast for production in the current 2019 fiscal year was for just 429,100 barrels per day. Even with this year’s miss relative to forecast, production should still be about 511,000 barrels per day, or nearly 82,000 better than the 2013 forecast.
In fact, when you add up the North Slope’s actual production since SB 21 took effect, the cumulative production greater than the 2013 forecast is almost 90 million more barrels of oil.
Even more remarkable than that is to consider the price environment during the 2014-19 period when prices crashed from more than $100 per barrel in the summer of 2014 to a low of $26 per barrel in January 2016. (The price forecast in 2013 was for $121 oil in the current fiscal year.)
The net effect of the majors maintaining production, and even growing it in two straight years from 2015 to 2016, is that while production tax revenue (a function of price) declined by 93 percent from 2014 to 2016, royalty income declined by only 50 percent in comparison.
And we cannot forget that under Wielechowski’s beloved ACES, the state would have collected exactly $0 in production taxes at all prices less than $63 per barrel. Under SB 21, the state always collects a production tax thanks to the gross tax minimum.
Wielechowski and Paskvan also continue to lie about former Gov. Sean Parnell by claiming he “promised” that 1 million barrels of oil could flow through TAPS in 10 years if SB 21 passed.
The truth is that the 1 million barrels per day statement was a goal. Just look at the transcript from his 2012 State of the State address: “Let’s meet my goal of one million barrels a day.”
Even still, by 2024 the state should be seeing production from Pikka, Willow and Mooses Tooth that could collectively add more than 300,000 barrels per day. In fact, ConocoPhillips has continued to invest more than $1 billion per year in capital projects in Alaska and its fellow owners at Prudhoe Bay are spending millions this year on seismic work to identify more pools of oil.
While Wielechowski loves harping on distant forecasts and statements from seven years ago, he hates being brought face-to-face with his own touting of ACES in 2013 in which he exalted over its credit system that under his own talking points had the state covering more than 65 percent of dry holes and citing the benefits of major producers reducing their tax liability by buying those cashable credits from small explorers.
When he was a member of the Senate majority in 2012 he voted for a budget that appropriated nearly a $1 billion in cashable credits — that were actually “paid” in the truest sense of the word — compared to just more than half of that amount in Permanent Fund dividends. ACES also contained provisions for 20 percent credits for capital expenditures that did nothing to increase production, which dropped by an average of 5 percent per year despite sky high prices while it was in place.
SB 21 replaced that 20 percent credit with a credit that is only earned when a barrel of oil is produced. Based on production since 2014 — the thing that matters most when evaluating the policy — it worked.
That leaves lying about it the only option the Democrats have, which just goes to show how little respect they have for the media who cover them and the people of Alaska in general.
Andrew Jensen can be reached at [email protected]
Posted Wednesday, March 13, 2019 - 9:44 am
On Sept. 12, 2018, then-candidate Mike Dunleavy delivered a speech to the Southeast Conference in Ketchikan, in which he committed to protecting the Alaska Marine Highway System’s 2019-20 budget.
On Feb. 13, Gov. Dunleavy reversed himself and presented the Legislature with a budget that gutted the ferries. If enacted, it will will shut the system down Oct. 1 of this year and call for another study of the system.
From the first meeting of the committee to its final report and the introduction of legislation last session it was apparent to the committee that reforms were needed if the system was going to meet the transportation needs of Alaska in a sustainable manner.
Since the first ferries were commissioned in the 1960s, there have been numerous economic reports that document the economic benefit the AMHS brings to Alaska. For more than two years, a group of committed Alaskans has reviewed the management and economics of the AMHS and developed a set of recommendations that would reform the current ferry system.
The AMHS Reform Committee engaged Alaska’s leading economic consultants, the McDowell Group, and one of the world’s leading marine engineering and consulting firms, Elliott Bay Design, to lead the effort.
From the first meeting of the committee to its final report and the introduction of legislation last session, it was apparent to the committee that reforms were needed if the system was going to meet the transportation needs of Alaska in a sustainable manner.
The committee studied other ferry systems. It looked at the finance, management and employee relations of these systems. The committee looked at the ferry system, fleet age, fleet configuration, route structure, management and Coast Guard policies and rules.
After two years of study, public hearings and meetings, the committee recommended moving the AMHS out of direct control of the Department of Transportation and Public Facilities and setting up a state-owned public corporation to manage it.
The committee made its case for this type of structure in order to isolate the AMHS from political wars and turf battles while stabilizing its finances. The public corporation model is similar to other Alaska public corporations, specifically the Alaska Railroad.
The mission of the proposed public corporation is threefold: manage the Alaska Marine Highway and its assets in a safe and efficient manner; provide essential marine transportation services, connecting rural communities with economic and service hubs while supporting the overall transportation needs of the state; and provide for continuity of operations and public accountability.
Alaskans know that the ferry system needs reform, but the governor’s “beach the boats” budget is not the way to do it. We cannot eliminate the AMHS just because the Office of Management and Budget doesn’t understand that it is a critical part of our transportation network.
Shutting down the AMHS would have the same economic impact on coastal communities as shutting down the Glenn Highway at the Palmer interchange would have on communities from Palmer to Tok.
It is the responsibility of the administration to support a transportation plan that will keep communities connected and businesses open, not just one that eliminates our transportation infrastructure and devastates our rural and coastal Alaska communities.
A plan to do this has been presented to the state. It deserves special consideration before more studies are undertaken.
If that means we need to use Permanent Fund earnings for what they were set up to provide, we need to use them. One way or the other, education, health care, senior services and transportation have to be paid for. One way or another, the citizens of Alaska will pay for services cut by the proposed budget.
It is time to stop using smokescreens and studies on services that have been studied to death. We do not need another study. The governor should start with the plan presented last fall to reform the AMHS and build from it.
For those interested in the AMHS Reform Study, go to www.AMHSreform.com.
Greg Wakefield is a member of the Marine Transportation Advisory Board, AMHS Reform Committee and a business owner. He lives in Anchorage. Dave Kensinger is a member of the AMHS Reform Committee, former chairman of the MTAB and a business owner. He lives in Petersburg. Michael Anderson is a member of AMHS Reform Committee and an artist. He lives in Cordova.
Posted Monday, March 04, 2019 - 5:49 pm
Some may find it easy to pile on to the Pebble mine just because it has the perception of controversy. However, just because a project is perceived as controversial does not make it OK to change the norms of review and process.
This causes all within the regulated resource community alarm and concern because a well-established process demonstrates stability and stability is the lifeblood of investment. Organizations that want to see Alaska’s economy grow have long been on record in support of fair, stable, consistent and due process for all projects in Alaska.
Sen. Dan Sullivan and President Donald Trump have made permitting reform top priorities, calling the current permitting process “broken” and reform “long overdue.” Sen. Sullivan has taken a lead on this by speaking out against delay tactics that abuse the National Environmental Policy Act and by pushing legislation to establish time limits on federal permit reviews.
Recently, several groups have called upon the U.S. Army Corps of Engineers to slow down the review process for the Pebble Project’s “lengthy” draft Environmental Impact Statement.
This is a classic delay tactic deployed whenever a government agency is following the normal regulatory path for a project.
It is called “slow rolling,” and in Alaska, this has traditionally been used by environmental organizations to slow down progress being made on resource development projects. As many in the business community understand, delay costs projects time and money.
Prior to the release of the Pebble Project draft EIS, some were saying the document would not be comprehensive enough. Well, that argument went out the window the moment the document was published. The draft EIS for Pebble is about 1,400 pages, with an 80-page executive summary and another 1,600 pages of appendices. This places it at just a little above the norm for a draft EIS review document for a resource project in Alaska.
Then there is the question of whether a 90-day review is an adequate amount of time for the public to review 1,400 pages, with the caveat that most members of the public tend to read through the executive summary. In the case of the Pebble DEIS, that is about 80 pages. To put this in perspective, here are some recent public comment windows:
• ANWR Coastal Plain Leasing (2018): 45 days, extended by 30 days, 392 pages.
• Tongass Timber Sale on Prince of Wales Island (2018): 45 days, no extension, 408 pages.
• Oil Search Nanushuk Project: 45 days, extended by 30 days, 1,191 pages.
• Alaska Stand Alone Pipeline Project (2017): 45 days, extended by 15 days, 1,822 pages.
• Chukchi Sea OCS Oil and Gas Lease Sale 193 (2014): 45 days, no extension, 694 pages.
• Point Thomson (2011): 45 days, extended by 15 days, 1,506 pages.
• Red Dog Aqqaluk Expansion (2008): 60 days, no extension, 464 pages.
In looking at the projects noted, the Pebble draft EIS 90-day comment window is actually longer than all of them. Three months to read, review and comment on the Pebble draft EIS is more than adequate.
Surprisingly, some groups are pushing for a 270-day comment window for the Pebble draft EIS. Those of us in the resource development community know nine months will not improve the public’s opportunity for comment; rather, this will slow down Pebble’s progress and let national environmental groups like the Natural Resource Defense Council continue to flood the comment ballot box via electronic post cards.
Comment window extensions beyond the norm only serve to further Alaska’s reputation as a state with great resource potential challenged by regulatory instability.
If Alaska wants the resource investment community to know it is open for business, holding firm on reasonable regulatory actions is a good place to start.
Rebecca Logan is the CEO of the Alaska Support Industry Alliance.
Posted Wednesday, February 27, 2019 - 10:47 am
Because we are relentlessly assured that there is no such thing as media bias, it is surely unnecessary to compare the treatment of Sarah Palin and Alexandria Ocasio-Cortez by the national press corps.
But if an attempt was made to prove bias by the media against conservatives, and conservative women in particular, a better case study would be tough to find than the coverage of the former Alaska governor and 2008 vice presidential candidate versus the representative-from-the-block.
Palin, like Ocasio-Cortez, hit the national stage out of nowhere with the former tapped by the late Sen. John McCain to attract the conservative base wary of his mavericky tendencies and the latter pulling a stunning upset of 10-term congressman Joe Crowley this past August.
After McCain had treated the half-term senator Barack Obama with kid gloves throughout the campaign, Palin came out swinging and bloodied his nose in a rousing nomination speech that mocked his community organizer background and in later stump speeches drew attention to his history with domestic terrorist Bill Ayers.
The McCain-Palin ticket briefly took the lead in national polling and sent panic through the press that already had their stories written for the election of the first African-American president of the United States.
For that, Palin had to be destroyed.
She was immediately and relentlessly mocked for her appearance, her folksy twang and even for her family that included a young special needs son. Dubbed “Caribou Barbie,” she was so effectively lampooned by Saturday Night Live’s Tina Fey that wide swaths of the American public believe to this day that Palin said, “I can see Russia from my house.”
In particular, she was dunked on for her signature “drill, baby, drill” catchphrase that gained traction as gas prices had topped $4 per gallon across the country in 2008.
Obama, for his part, threw shade at the idea of drilling our way into energy independence throughout his presidency even as the United States was marching in exactly that direction in spite of his best efforts to hamstring the industry with regulatory hurdles and slow-walking development of federal lands.
“You had a lot of slogans and gimmicks and outraged politicians waving three-point-plans for two-dollar gas — when none of it would really do anything to solve the problem,” Obama said at Georgetown University in 2011. “You remember, ‘drill baby drill.’”
In another speech, Obama described the GOP’s “three-point plan for $2 gas: Step one is drill, step two is drill, and step three is keeping drilling.”
He went on to say that “the American people aren’t stupid. They know that’s not a plan.”
According to AAA, the average price for a gallon of gas on Feb. 26 was $2.40.
As of 2018, the United States is the world’s largest energy producer for oil and natural gas.
Just recently, imports from Venezuela and Saudi Arabia that once topped one million barrels per day each hit record lows of just more than a half-million barrels between them.
The ability of the OPEC cartel to set prices on a whim through production cuts is no more thanks to the U.S. shale drillers who have shown the innovation to cut costs and fill up the market share fruitlessly abandoned by the one-time leaders in global oil production from Riyadh and Moscow.
In sum, that sledneck Wasillbilly was right, and virtually the entire Democrat Party from Obama on down and their press stenographers were wildly, incontrovertibly wrong.
Now let’s turn to the coverage of Ocasio-Cortez, whose Willy Wonka-esque Green New Deal has already been championed by multiple Democrat candidates for president and attracted scores of co-sponsors in Congress despite its goals of ending fossil fuel use, air travel and “farting cows.”
The same national press that attacked Palin with gusto is now filled with pieces from the likes of Vox, Salon and New York Magazine lamenting the disparate treatment of female politicians compared to men for silly things such as a consistent butchering of math and the truth.
Even Dictionary.com ran a 1,000-word piece explaining away Ocasio-Cortez’s use of the phrase “run train” that had attracted raised eyebrows from conservative commentators for its off-color meaning.
There is no doubt that Palin was hardly a seasoned politician ready for the big-time when McCain swooped her out of Alaska in a vain attempt to rescue his flagging campaign, but as a former mayor and one of only 50 governors she was still far more qualified to hold office than the Democrat rock star who’s gone from mixologist to Marxologist in the blink of an eye.
Yet while Palin was smeared, Ocasio-Cortez is cheered.
While every Palin malapropism was noted and exploited with glee, no one seems to notice that Ocasio-Cortez constantly uses the word “like” as if it is a comma.
But trust us, the media say, bias is a myth.
Based on the above, this statement has been rated false.
Posted Wednesday, February 20, 2019 - 10:11 am
As we head into another local election season, it’s incredible to look back at all that has happened in the past year. One year ago, Anchorage voters overwhelmingly supported the consolidation of Chugach Electric Association and Municipal Light &Power with more than 65 percent voting in favor of what was Proposition 10.
The vote came after more than three decades of community discussion and innumerable conversations with the public and the business community about how to create a more efficient system, reduce redundancy, and provide lower long-term electric rates for Southcentral Alaska.
As we get ready to file the case before the Regulatory Commission of Alaska, the Chugach board of directors is grateful for the numerous people and organizations who have supported this consolidation.
After voters approved the ballot initiative authorizing the Municipality of Anchorage to sell ML&P for a competitive value of approximately $1 billion, teams from Chugach, the MOA, and ML&P worked extensively to finalize the sales agreement and associated documents. A proposed term sheet was released in September 2018, giving the public an opportunity to see the progress and review the details of the proposal.
Over the summer, fall, and early winter of 2018, numerous meetings were held, and documents reviewed as we all worked toward the best deal for the community of Anchorage.
The Anchorage Assembly held multiple work sessions going over information and reviewing draft documents. The Chugach board spent hundreds of hours reviewing materials in preparation for meetings, and spent numerous meetings questioning, debating, and discussing many significant issues related to the transaction; all with the goal of ensuring our decisions were in the best interests of our members, not only for today but for years to come.
In December, the Assembly voted unanimously to authorize the MOA to sell ML&P to Chugach. The Chugach Board gave its final approval on Dec. 19, and all sales agreements were signed by the parties before year-end.
The RCA gets the final say on whether this sale is in the public interest, and we certainly believe that to be the case. Consolidation and elimination of duplication, while taking advantage of economies of scale, means significant savings can be realized over several decades. As a member-owned cooperative, those savings go back to ratepayers in the form of lower, long-term electric rates.
It has taken many individuals and groups working together to get us to this point. We appreciate the support of Anchorage voters who recognized the opportunity to do something that will have a positive impact for generations of Alaskans. The Chugach board is profoundly thankful to those who have worked with us and supported this effort.
As a not-for-profit cooperative, Chugach is focused on serving our more than 68,000 members with reliable, safe, affordable electricity. We look forward to providing that service to more individual Alaskans, families, and businesses, while supporting good jobs and a strong economy in the communities we serve.
Bettina Chastain is the chair of the Chugach Electric board of directors and Susan Reeves is the vice chair.
Posted Wednesday, February 20, 2019 - 10:11 am
On Feb. 11, I had the privilege of watching democracy in action, right here in Anchorage.
The draft environmental impact statement, or DEIS, for the Arctic National Wildlife Reserve was released, and public comments were taken at the Dena’ina Civic and Convention Center in Anchorage. The Bureau of Land Management furnished us with maps of the different development scenarios, impacts on the indigenous people and animal species, and a strong education on the process.
Hats off to the agency for sitting through six straight hours of public comment by stakeholders from both inside as well as outside of the protected region, with a wide spectrum of coherence.
Many of the comments were spot on, but many others diverged widely from the scope of the report. I was struck by a conspicuous lack of discourse on the specific threats that development poses to the Porcupine caribou herd, which is central to the controversy surrounding the development of ANWR. Despite its minimal appearance in the public comment period, the actual DEIS addressed this issue very well.
However, opponents of the leasing program did not allow a lack of education on the issue to stand in the way of holding the microphone hostage. They used the airwaves to discuss many issues, one common thread being the potential greenhouse gas emissions. One activist was bold enough to implore the BLM to consider the carbon created during the end use of the hydrocarbons.
Of course, had this activist read the DEIS, they would find that use-phase CO2 impacts were actually addressed very well. I thought it would be interesting to provide a bit of color and more technical detail around this hot subject.
The draft report recognizes (correctly) that additional upstream hydrocarbon development does not have a one-for-one impact on oil and gas demand. Developing ANWR to its full potential will not actually add 390,000 barrels per day to the world’s oil consumption.
It will almost displace that much oil already on the market, and then add a fraction of that as a result of bringing the price down.
Between the direct emissions generated by the development itself and the indirect emissions generated by the modest increase in global demand, the report ultimately arrives at the conclusion that ANWR development would increase global emissions by between 0.76 and 5.38 million metric tons of CO2 over the field life. This is 11,000 to 77,000 metric tons per year, or about 0.5 kilograms per barrel produced.
It’s hard to picture what this means in real life, so in context, the average barrel of North Slope crude oil produces 564 kilograms of CO2 throughout its life. Augmenting this by 0.5 kilograms for the barrels produced by the ANWR development is a 0.1 percent increase.
If anything, the report was too fair. Alaska North Slope crude is typically refined in California, meaning that ANWR development is likely to offset declining California barrels as a refinery feedstock. California, despite its green image, produces the dirtiest crude in the nation at 725 kilograms of CO2 per barrel. With this in mind, we are likely offsetting dirtier crude with cleaner crude, should we develop ANWR.
The reality is that the North Slope has a legacy of environmental responsibility that shines among the prolific oilfields in the world. This great corporate citizenship is not being left behind in the age of climate change.
BP recently announced the purchase of 9.3 million metric tons of carbon offsets from Ahtna. My employer, ASRC Energy Services, has seen a strong trend of clients asking for greenhouse gas, or GHG, reduction solutions. It’s an exciting time to be a part of a changing industry.
The GHG impact of ANWR development pales in comparison with the potential in demand reduction. People who care about climate change should work to change their habits. Boeing 737s make an astonishing 11 metric tons of CO2 for a short 575-mile flight.
An electric vehicle can take 4.5 metric tons of CO2 per year out of the atmosphere. Tesla therefore sold enough cars in 2018 to solve the worst-case ANWR carbon emissions scenario 11 times over. People can truly impact GHG emissions on the demand side, by changes in their everyday life.
To conclude, carbon emissions may be the defining issue of the decade, but they are far from the most important issue related to ANWR development. We will continue to develop and produce oil on the North Slope with world-class corporate responsibility, and drive hard toward a low-carbon future.
Proponents of ANWR leasing are open to constructive input on responsible development scenarios. This should be seen as an unprecedented opportunity to collaborate between industry, regional stakeholders, and concerned Americans to reach a plan that benefits everyone. People engaging in the process would be advised to learn more about the issues, the proposal and the process itself. In this way, the discussion can be elevated and constructive outcomes achieved.
I want to again thank the BLM for a great presentation, an excellent report (which was delivered through a government shutdown), and for great patience shown throughout these hearings. I hope the conversation in the future can remain focused on the relevant elements, such as the impact on coastal plain wildlife.
Finally, I hope that the needs and wishes of the regional stakeholders are met, especially the Iñupiat people of the village of Kaktovik, as they have the greatest at stake.
Liam Zsolt is the Director of Technology at ASRC Energy Services. He is originally from Canada, obtaining his Bachelors of Chemical Engineering from McGill University in Montreal. Zsolt’s work in well interventions has been published four times by the Society of Petroleum Engineers, and was awarded one US Patent for innovations in the field of materials inspection by magnetic flux leakage.
Posted Wednesday, February 20, 2019 - 10:10 am
Despite a lot of handwringing from globalists, President Trump’s tariffs are working. One year after the first tariffs were imposed, U.S. manufacturing employment is up by 261,000 jobs. The U.S. is outperforming all other major economies. And new investments have been announced in key sectors covered by the tariffs, including steelmaking and solar panels.
There’s a clear justification for the tariffs. Countries like China have spent the past two decades flouting the rules of global trade in an effort to erode America’s economic, military and geopolitical strength. And Beijing’s use of massive subsidies, dumping, and cyber hacking has cost the United States millions of manufacturing jobs and more than 60,000 factories.
Finally, the United States is rethinking its support for unrestricted free trade. But it’s also time to rethink a “strong dollar” policy that has contributed to 40 years of U.S. trade deficits — all because it makes America’s goods, services, and labor too expensive in global markets.
How overvalued is this strong dollar? In 2017, former World Bank economist John Hansen estimated the dollar was 25 percent overvalued. And in the second half of 2018, Federal Reserve data showed the dollar jumping an additional 7.15 percent.
That keeps driving up America’s trade deficits. Despite President Trump’s aggressive trade intervention, the 2018 U.S. trade deficit with China is still projected to climb 11 percent above 2017’s record $375 billion. And the International Monetary Fund is warning that America’s trade deficits will get even worse.
The Coalition for a Prosperous America recently studied the effects of the dollar’s overvaluation on the U.S. economy. According to CPA’s research, if the dollar’s exchange value was gradually lowered by 27 percent over a six-year period, the United States could create as many as 6.7 million new jobs, including 1.4 million in manufacturing alone.
And the U.S. economy would grow by an extra 4.8 percent, meaning our economy would be nearly $1 trillion larger than currently projected by 2024.
Manufacturing exports would grow by 12 percent per year. And the availability of good full-time jobs for non-college educated workers would surge.
The Trump administration should pay particular attention. If the dollar keeps rising, it could simply negate much of the gains the president is now achieving from his tariff strategy.
The IMF certainly sees it that way. In a report last year, it said that America’s “persistent excess imbalances may become unsustainable, putting the global economy at risk and aggravating trade tensions.”
While Wall Street champions an overvalued dollar, Main Street suffers weaker exports, fewer jobs, and lower incomes. There’s a clear precedent for action, though. In 1985, the Reagan administration negotiated the Plaza Accord with Japan, West Germany, France, and the United Kingdom.
The agreement lowered the dollar’s exchange value, causing America’s annual trade deficits to disappear within a few years.
At present, the United States keeps absorbing other countries’ overproduction, and at a cost of hundreds of billions of dollars annually. This is unsustainable, and it’s time to get the nation’s economic house in order. Adjusting the dollar is an essential remedy that would create millions of new jobs along with almost a trillion dollars in added economic growth.
Washington needs to take action before the dollar causes America to lose its position as a global economic leader.
Michael Stumo is CEO of the Coalition for a Prosperous America.
Posted Wednesday, February 13, 2019 - 10:05 am
Rep. Gary Knopp’s fellow Republicans appealed to party loyalty and pragmatism as they attempted to convince him to break his month-long holdout that has prevented the state House from organizing. Democrats flattered his ego.
Knopp sided with his ego.
After telling Anchorage Daily News reporter James Brooks that he decided over this past weekend to end his pointless stunt of refusing to vote for Rep. Dave Talerico of Healy as Speaker of the House in a Quixotic quest to force the formation of a bipartisan coalition, Knopp reneged on his pledge a day later after Democrats put forth his name as their choice instead of former Speaker Rep. Bryce Edgmon of Dillingham.
Knopp then voted for himself and against Talerico on Feb. 12, resulting in another set of 20-20 stalemates that leave the House unorganized and unable to even receive the 25 bills Gov. Michael J. Dunleavy said he intended to introduce the following day in tandem with his “ground up” budget to address a projected $1.6 billion shortfall for the fiscal year that starts July 1.
In a ridiculous piece of semantics explaining his reversal, Knopp said he only pledged to vote for a Republican as Speaker and not which Republican that would be.
Calling his statement disingenuous would be polite. Or, as Rep. Mark Neuman of Big Lake put it more accurately, it’s “bullshit.”
Rather than dance with the people who brought him — his District 30 is so Republican that Democrats didn’t even field a candidate against him and its voters chose Dunleavy by a 68 percent to 27 percent margin of 3,214 — Knopp is determined to prove his original assertion that one person can blow up a caucus of 21.
At the time, Knopp specifically was referring to notorious gadfly Rep. David Eastman of Wasilla, who is looking more and more sensible every day in comparison.
Now, rather than organize with the Republicans as his voters intended for him to do, Knopp is single-handedly doing more damage to House business than Eastman could ever approach.
With per diem of more than $200 multiplied by 40 House members, it’s is a safe estimate to say Knopp’s grandstanding has cost the state about a quarter-million dollars for nothing so far.
Knopp can claim all he wants that he believes a bipartisan coalition is preferable, but in reality what he is doing is nothing more than the bidding of the Democrats who lost their majority in the last election.
Oh sure, Democratic caucus members Reps. Louise Stutes of Kodiak and Gabrielle LeDoux of Anchorage have an “R” next to their name, but that doesn’t make them Republicans any more than donning a paper crown makes someone the Burger King.
There is no understating how badly Knopp screwed up by siding with himself over the simple good of being able to organize and conduct business and then letting chips fall where they may as the session unfolds.
Knopp broke a very public pledge and as such can’t be trusted by any of his fellow Republicans going forward even if he eventually comes around to voting for Talerico.
He may well have further entrenched both sides, or it is possible his intransigence driven by his completely unjustified belief that he’s acting on principle will end up sending a couple wavering Republicans into the Democrat caucus to give them control that the people of Alaska — and especially those of his own district — clearly did not vote for.
Knopp can say whatever he wants about Eastman, but Eastman says what he means and acts accordingly. Knopp has demonstrated that he values loyalty to himself first and that his word means nothing.
There isn’t a soapbox big enough to look down on anybody from that perspective.
Andrew Jensen can be reached at [email protected]
Posted Wednesday, February 13, 2019 - 10:02 am
One promise I made to Alaskans was to present you with a permanent fiscal plan, one where we tackle our economic challenges and start bringing fiscal responsibility to Juneau. Combined with a series of legislative proposals and constitutional amendments, a major element of that commitment is addressing the state’s out-of-control spending.
This year we’re presenting the Legislature with an annual budget that takes an open and straightforward approach. Rather than starting with the bloated budgets of the past and asking ourselves “where do we cut,” we did exactly what Alaskan families and small businesses are forced to do when faced with financial hardship.
We started from the ground floor and built an annual budget where the amount we spend aligns with the amount we bring in; an approach that built a budget up, rather than reducing a budget down.
As we’ve all seen, for too long politicians haven’t been honest when it comes to the numbers and the seriousness of our fiscal woes. We’ve seen misleading figures, confusing budget tactics; we’ve relied on massive amounts of savings and Alaskans’ PFDs to grow the size and reach of government — all while never seriously tackling the issue of spending. Today I’m here to say: those days are over. We can no longer spend what we don’t have and we can’t pretend otherwise.
The economic outlook Alaska faces today is dire. After burning through nearly every dollar in the state’s savings account — more than $14 billion over the last four years — we are faced with another $1.5 billion deficit, and less than a year in reserves. The gradual glide path approach, which lawmakers called for repeatedly since the rapid decline in oil prices, never came to fruition. Oversized budgets and outmatched spending continued with little recourse.
In building this budget, my team and I worked across government to identify efficiencies, duplications, and cost savings to restore the core principles of government responsibility.
We built a balanced budget where expenditures do not exceed revenues; a budget that shows Alaskans the realities of where we are and the tough choices that have to be made. We looked for logical constraints on government and built a budget based on these core tenets:
Expenditures cannot exceed existing revenue;
The budget is built on core functions that impact a majority of Alaskans;
Maintaining and protecting our reserves;
The budget does not take additional funds from Alaskans through taxes or the PFD;
Sustainable, predictable and affordable.
The foundation to my budget is based on the principle that expenditures cannot exceed revenues. For the first time in decades, our budget will match the money we spend as a state with the revenues we bring in as a state. This year, based on the revenues we have identified and the dollars made available through previously enacted law, we built a budget based on $4.6 billion in revenues.
The differences in funding, the consolidation of core services, and the changes to programs take a serious approach to our financial situation, while reflecting a sincere commitment to put the full amount of the Permanent Fund Dividend back into the hands of Alaskans.
Our focus also prioritized the core functions of government, functions that impact a majority of Alaskans. This truth-in-budgeting-approach examined required state obligations, the size and scope of government, services and needs, and resulted in a budget that for the first time gets our fiscal house in order.
It includes a number of government-wide initiatives to improve effectiveness and refocus spending, including constraints on government travel, limits on top-tiered government wages, reforms to government procurement, and reorganization of staff and departments. While some will describe these and other reforms as drastic, I say to them: show me a proposal that stops our unsustainable spending trajectory and accounts for our current financial dilemma.
In order to protect what little savings remain, we have prioritized maintaining and protecting what little we have left in reserves. The days of spending everything we have and avoiding the tough decisions for our future must end. If this spend-at-all-cost mentality is allowed to persist, Alaska’s economic outlook will only grow darker and the future of the Permanent Fund Dividend will diminish by the day.
Based on the will of the people, and a sincere belief that we can’t tax our way out of these fiscal challenges, my budget proposes no new revenues from Alaskans. While some wish to ignore Alaskans and propose billion dollar taxes and PFD grabs to close our financial gap, I’ve made clear that this is out of line with the core beliefs of most Alaskans and the promises I made on the campaign trail.
And finally, our budget takes a sustainable, predictable and affordable approach. We must reset the spending clock and realign expenditures with the realities we face today. We must transform government at its core, right size spending, eliminate duplication and prioritize programs to match our realty. Though we’ve been blessed financially in the past, we must establish a government that can weather the storm of low oil prices and save for the next generation of Alaskans.
As your governor, I will always be honest with you. I will treat the people’s money with the care and respect it deserves. As the details of my budget proposal are unveiled over the coming days, I ask all Alaskans to consider the alternative. Continuing down the path of oversized budgets, outsized spending, and out-of-line priorities will only jeopardize the future of our state. For those demanding more spending, including those in the Legislature, we must respectfully insist: where will the money come from? We must be honest with ourselves and align our spending with our revenues in order to bring about a brighter future for the Alaskan people.
Posted Wednesday, February 06, 2019 - 9:56 am
We appreciate that University of Alaska Anchorage students choose to invest in us for their education and their futures. We are grateful to the extended UAA community that invests in us every day through valuable partnerships, the support of our programs and employment of our graduates.
To everyone who has put their trust in us, I am sorry. The loss of accreditation in the School of Education is unacceptable. It is my mission to do everything within my power to help each and every one of our students succeed.
I can’t change what happened, but I am committed to solving the problem so our students are confident in the high-quality education they receive at UAA.
Our first concern and highest priority is to address the needs of our students. UAA is working with the University of Alaska System and the Alaska Department of Education and Early Development, or DEED, to come up with solutions, and DEED announced on Jan. 15 that spring and summer 2019 graduates will still be recommended for licensure by the Alaska State Board of Education.
We will continue these efforts and work to obtain approval for teacher licensure for all affected students, no matter when they are scheduled to complete their program.
We are also assisting UAA students who choose to complete their education degrees at the University of Alaska Fairbanks or University of Alaska Southeast, both of which have accredited education programs. We hope students will choose to stay at UAA, but we will do everything we can to ensure that transfers can occur, and that students are informed throughout the entire process.
The UA Board of Regents is planning to meet with students, the education faculty and the public on Feb. 12 to hear concerns and to make sure they are supported through this difficult situation.
While we focus on addressing the immediate needs of affected students, we are also taking the necessary steps to ensure Alaskans who choose to become teachers will have high quality programs available to them here at UAA.
As those following the issue know, UAA did not lose accreditation because of a failure with the quality of our programs in the School of Education, but because we failed to demonstrate how we used the proper data to show what our programs have achieved.
The fact is that UAA teachers are among the very best in the state. The last two teachers of the year in Alaska are graduates of our programs. And as you may have seen in the news just last week, one of four finalists for teacher of the year for the entire nation is a UAA graduate.
To ensure our data collection, analysis and reporting meet the necessary standards going forward, all programs in the School of Education have adopted a nationally respected system called edTPA, a performance-based, subject-specific assessment and support system developed at the Stanford Center for Assessment, Learning and Equity.
To make sure this does not happen in other programs, UAA is investing to ensure that the additional data and reporting needs of programs with specialized accreditation are addressed. The first priority will be to focus on the education programs.
I know there’s a lot of work to be done. It’s one thing to restore confidence in UAA among those of you directly affected in the School of Education. But I’m also very conscious of a need to assure the rest of our students and our community that problems of this magnitude are not the norm.
The loss of the School of Education’s accreditation has no impact or bearing on the accreditation of any other programs at UAA.
UAA just successfully completed a rigorous, institutional-level accreditation process with the Northwest Commission on Colleges and Universities. That process forces us to be conscious of the need to continuously improve. When and where we can identify potential problems — particularly those that would impede any student’s ability to achieve his or her educational aspirations — we are committed to resolving them.
As the chancellor of UAA, I will do what needs to be done to make sure the educational experience we are providing is worthy of the hard work, time, money and faith each and every student invests in UAA.
Cathy Sandeen is the Chancellor of the University of Alaska Anchorage.
Posted Wednesday, January 09, 2019 - 10:49 am
Few would envy the position the Legislature and former Gov. Bill Walker found themselves over the past four years dealing with crashing oil prices and the ensuing multi-billion-dollar budget deficits.
Reducing the Permanent Fund dividend, virtually eliminating the capital budget and reversing past practice by not paying off oil and gas exploration tax credits in full each fiscal year easily lead the way on the least popular actions that have been taken.
Even with those moves, some $14 billion from the state’s savings accounts was still necessary to close the budget gaps for the fiscal years since 2015 to the present.
In the aftermath of Gov. Bill Walker’s veto of half the Permanent Fund dividend appropriation in 2016 — reducing it from a projected $2,044 per Alaskan to $1,022 — Sen. Bill Wielechowski, D-Anchorage, and a few former legislators took a lawsuit all the way to the Supreme Court challenging the action as contrary to the formula for paying the PFD currently in statute.
By the time the Supreme Court ruled in Walker’s favor, the Legislature had followed his lead in the 2017 session — and the Superior Court judge that ruled against Wielechowski, et al, on the same day the case was argued the prior November — by arbitrarily setting the PFD at $1,100 rather than following the statutory formula.
In a nutshell, the Supreme Court determined that the constitutional authority of the governor to veto appropriations and the similar vested authority of the Legislature to make appropriations took precedence over any law such as the one that calculates the annual amount of the dividend.
It is a similar reasoning that allows the Legislature to stay in session for the 121 days written in the constitution rather than the 90-day limit approved by voters through an initiative in 2008.
While legally sound, the PFD ruling gave the Legislature the ability to ignore its own laws so long as whatever action it takes as an alternative does not conflict with the Constitution.
The anger over three straight years of Walker, and then the Legislature, disregarding the PFD formula was ridden by Mike Dunleavy all the way into the governor’s mansion with the central promise of his campaign being a pledge to follow the law.
Then on Jan. 2 a Superior Court judge handed down another ruling that, unlike the Supreme Court decision that allows the Legislature and the governor to disregard the law, allows them to violate the spirit but not the letter of the Constitution.
One year before Walker vetoed half the PFD appropriation in 2016, he without warning slashed $200 million from the budget earmarked to pay off earned oil and gas exploration credits.
A year later, despite assuring the financial institutions lending to small companies working in Alaska he wouldn’t do it again, Walker vetoed $430 million worth of the payments.
In the aftermath, those banks stopped lending money to the independent explorers and before the Legislature finally eliminated the programs on both the North Slope and Cook Inlet the total tab for tax credits owed swelled to more than $800 million.
Business arrangements the state had with BlueCrest in Cook Inlet and Brooks Range Petroleum Corp. on the Slope had to be reworked, while Caelus Energy, which is owed some $100 million for its work, has been forced to sell off acreage and assets as it appears ready to exit the state after buying Pioneer Natural Resources properties for $550 million in 2013.
With the state’s business reputation in tatters, Walker’s administration finally came up with a plan to pay off the credits without a lump sum appropriation from the Legislature by instead creating a state entity to sell up to $1 billion worth of bonds that would be paid for by the companies owed money taking a haircut of 10 percent in exchange for receiving most of what they’re due sooner rather than waiting years to be paid in full according to the statutory formula.
The only problem with the plan is that the Constitution has strict limits on how the state may issue debt such as for emergencies or through a vote of the people to approve general obligation bonds.
Walker and the Legislature worked around these limits by creating an “independent” entity that would sell the bonds and using “subject to appropriation” language that would not legally qualify as binding the State of Alaska to debt according to the Constitution.
A lawsuit ensued, and the workaround language was deemed sufficient by a Superior Court judge to not create the legal definition of debt and therefore “passes constitutional muster.”
To call this a troubling precedent would be an understatement, as it essentially gives the Legislature a blank check to get around putting debt issues to a vote of the citizens. Nothing would stop it from creating a “Transportation Bank” that could sell “subject to appropriation” bonds to pay for infrastructure projects without having to seek the approval of Alaskans.
That’s not to say that Judge Pate erred in his legal reasoning, but it is to say that it should not be so easy to get around the very plain intent of the constitutional framers to limit the ability to take on debt without a vote of the people.
The PFD ruling has allowed the Legislature to ignore the laws it has passed, and the bond ruling allows it to get around the intent and spirit of the Constitution through nothing more than a shell entity and the three words “subject to appropriation.”
In this respect, the solutions to the budget deficits that were crafted by Walker and the Legislature may turn out to be worse than the problems they were trying to solve.
Andrew Jensen can be reached at [email protected]
Posted Wednesday, January 09, 2019 - 10:49 am
Congress returns with a renewed focus on climate change and clean energy under the direction of a newly minted House Democratic majority. But with President Donald Trump still in control of the White House and a Republican majority in the Senate, prospects for major shifts in policy in the 116th Congress are slim.
Even in the House where a crush of new progressive freshmen are pushing the party further to the left, climate and energy issues may take a backseat to oversight and Democrats’ broader goal of serving as a check on the administration.
However, even if a divided 116th Congress is powerless to forge consensus on legislation, the refocusing of the public debate around energy and the environment is worth noting.
Unrequited priorities tend to pop up in other, unrelated debates as amendments or poison pills, infrastructure for example. Longshot policy proposals can also form the foundations of future law.
Look no further than criminal justice reform to see how, with enough time, a minority proposal can evolve into the majority consensus. Climate change policy certainly fits that bill.
Drawing the most headlines is a proposal championed by newly elected New York Democrat Rep. Alexandria Ocasio-Cortez known as the “Green New Deal.” While heavy on slogans and government spending, however, the Ocasio-Cortez plan is light on policy, other than calling for decarbonizing the economy by 2030.
The idea of putting a price on carbon has been around for more than a decade. The details have changes slightly depending on the political winds, but while it has yet to stick, it also hasn’t disappeared. Its very existence in the public discussion means it shouldn’t be dismissed, especially if the next election cycle brings a new wave of Democrats to Congress — or even the White House.
Later this month, House Democrats, who are resuscitating the defunct special committee on climate change under the leadership of Florida Democrat Rep. Cathy Castor are likely to begin to attempt to put meat on the bones of Ocasio-Cortez’s proposal.
Democrats are attempting to pull the national conversation back toward climate change amid the backdrop of America surpassing both Saudi Arabia and Russia to become the world’s largest oil and gas producer.
And output is expected to continue to grow for years, providing abundant and affordable fossil energy to consumers at home and abroad, with all the economic and political benefits that entails, including a boost to manufacturing that will play well in states Trump won in 2016.
It will be interesting to see whether the revived climate committee, which lacks legislative or subpoena powers, will play a constructive role in developing a consensus proposal or if it reverts to serving as a stage for media attention and aspirations of higher office, as it did under then-Chairman Ed Markey of Massachusetts.
The bigger question for Rep. Ocasio-Cortez and her followers is whether they will support more centrist proposals to improve the energy sector’s environmental performance and the market-based development of cost-competitive renewables. Historically, this has not been the case for progressives, who have typically labeled conservative support for innovation and market-driving proposals as insufficient.
That’s unfortunate as the core fundamentals that drove growth in the renewable energy sector in 2018 will persist. These included the declining cost of wind and solar, advances in battery storage technology and grid operators’ growing expertise and expanding toolset for integrating intermittent renewable power into the grid.
Continued growth in cost-competitive renewables is a good bet regardless the fate of federal tax credits.
The Trump administration has helped renewables developers with efforts to deregulate and streamline permitting, in addition to fossil fuels. In February 2018, the Federal Energy Regulatory Commission finalized order 841, which requires grid operators to remove barriers hindering participation of electric storage resources in the capacity, energy and ancillary services markets.
Much about energy policy in 2019 will be determined by the leadership changes of key energy panels in both chambers of Congress. In the House, the Energy and Commerce Committee under the leadership of Rep. Frank Pallone of New Jersey, has already said the panel’s first hearing will focus on climate change. Chairman Pallone is also unlikely to give much time to the permitting reforms previously championed by Republicans.
In the Senate, much has been made over the ascension of West Virginia Democrat Sen. Joe Manchin, a centrist from the nation’s second-largest coal-producing state, to serve as the top Democrat on the Senate Energy and Natural Resources Committee.
Environmentalists worry the move signals a shift away from clean energy as Sen. Manchin replaces Washington Sen. Maria Cantwell, a longtime champion of clean energy.
The Energy Committee’s chair, Sen. Lisa Murkowski, has long been an advocate for renewables, low-carbon nuclear energy, efficiency gains and other climate-friendly legislation, so the pair of fossil-fuel state senators may prove a good balance that can win over skeptics on both sides of the aisle to move legislation.
At least parts of the bipartisan energy package Sen. Murkowski has attempted to push uphill the last two congresses could also stand a better chance with Democrats in control of the House. Another potential beneficiary of a divided Congress could be the Nuclear Energy Leadership Act, which would extend the length of federal power purchase agreements for public utilities.
The bigger challenge for Republicans may be keeping President Trump’s energy dominance agenda on the rails under fire from Democrats. Administration officials could easily find themselves spending more time trudging up Independence Avenue to testify before House oversight committees than advancing the president’s agenda.
Trump’s efforts to make more federal areas available to oil and gas exploration and reform the regulatory rulebook won’t end completely — it is his agencies that are in charge of the changes, after all — but they will face stronger headwinds.
The administration is likely to focus on completing deregulatory initiatives and reforms already announced rather launching new efforts, that includes EPA’s new Affordable Clean Energy rule, fuel economy standards. It will also look to finalize a new offshore and onshore leasing programs.
Robert Dillon is Vice President of Communications for the American Council for Capital Formation, a pro-growth economic think tank based in Washington, D.C., and the former communications director of the U.S. Senate Energy and Natural Resources Committee.
Posted Wednesday, January 02, 2019 - 9:18 am
Following suit with larger cities in the Lower 48, the Anchorage Assembly passed a disposable grocery store bag ban for the Municipality of Anchorage, originally effective March 1, 2019.
The ban dictates retailers charge a 10-cent per bag fee for paper bags, up to a total of 50 cents per transaction. Plastic bags will no longer be available. Rather than put this proposition to a vote, the body passed the ordinance following a public hearing.
The Assembly’s unilateral decision has not been without reaction. As of last week, the ban was delayed to Sept. 15, 2019, due to protest from local businesses. Further, Anchorage resident David Nees is circulating a petition to repeal the bag ban; the petition must have 10,000 signatures by mid-January.
Aside from instituting what amounts to a regressive tax, and from forcing consumers to purchase reusable bags ahead of Sept. 15, the ban will likely not assist the Assembly with its purported goals — combatting climate change and environmental hazards.
Assembly member Christopher Constant described plastic bags as a “voluminous” “waste stream,” for which “we have an opportunity to break the cycle.”
Voluminous? As reported by National Geographic, plastic grocery store bags produce 70 percent fewer emissions, 80 percent less solid waste, 94 percent less waterborne waste, and consume 40 percent less energy than paper bag equivalents.
Per a 2007 study published by the Australian government on the environmental impact of disposable bags, paper bags have a higher carbon footprint than plastic bags. Similar findings were also published in The Journal of Fiber Bioengineering and Informatics.
Phys Org reports that, due to the higher environmental impacts of paper bags and heavier reusable bags, a paper bag must be reused 43 times in order to have the same environmental impact as a standard supermarket plastic bag.
A cotton bag must be reused 7,100 times. These numbers only increase if a supermarket bag is reused as a trash bag or bin liner.
Aside from seemingly incorrectly choosing paper over plastic, the Assembly’s bag ban does not consider more complex waste streams in its policy. Consider this: in 2012, professors from the University of Pennsylvania and George Mason University published a paper following San Francisco’s plastic bag ban.
The researchers documented a 46 percent increase in death due to foodborne illness, and a significant increase in emergency room visits due to E. Coli poisoning. The bacteria were traced back to reusable shopping bags; consumers were not washing their bags between grocery store visits.
If everyone in Anchorage begins washing reusable bags, shouldn’t the Assembly have accounted for the extra water, chemicals, heat, and electricity consumed per Anchorage resident for the increased laundry loads? What about the environmental, chemical, and health impacts of sanitizing the bags with single-use wipes, such as Clorox disinfecting wipes? The Assembly is silent on all of these matters.
The Assembly also assumes plastic bags go directly from the grocery store into the landfill. This is a questionable proposition. Following a plastic bag ban in Austin, Texas, in 2013, residents began purchasing heavier-grade plastic bags for use as garbage bags.
Perversely, these bags were less biodegradable than those which the local government opted to ban. Per NBC News, “Turns out that Austin’s residents were buying (and discarding) trash can liners now that they weren’t getting plastic bags for free.”
On a personal note, I was famous amongst friends for years for not owning a trash can. Rather, I hung grocery store bags from door handles in the bathrooms and kitchen. While visitors may have found me charmingly eccentric, I thought this only logical. Why spend extra money to purchase (and consume) other plastic trash bags?
The grocery store bag ban will merely drive consumption of other plastics, chemicals, water and heat. I realize the Anchorage Assembly feels good about its stance against climate change. But at the expense of Anchorage residents? That doesn’t feel good at all.
Sarah Brown was born and raised in Fairbanks and is a graduate of West Valley High School. She received her bachelor’s degree in economics from the Wharton School of Business (University of Pennsylvania) and her master’s degree from the University of Oxford (England). She can be reached at [email protected]
Posted Wednesday, December 19, 2018 - 10:36 am
When former Gov. Bill Walker swooped into the weekly Anchorage Chamber of Commerce luncheon on Nov. 26 the only thing he forgot was a “Mission Accomplished” banner.
A week before leaving office, Walker revealed the budget he planned to hand off to incoming Gov. Michael J. Dunleavy (who has traded Mike for Michael J. on official communications since taking office).
Walker and his budget director Pat Pitney, since replaced by Donna Arduin, declared the budget for the next fiscal year “balanced” and former Revenue Commissioner Sheldon Fisher promised a “surplus” for the current fiscal year.
That’s a stark change from the picture legislators faced last session when the projected deficit for the current year would be about $700 million at a price of $63 per barrel.
It also strains credulity.
To be sure, for the first three months of the fiscal year Alaska appeared to be heading that direction as prices rose to steadily hold at more than $70 per barrel and better — peaking at $85.36 on Oct. 3 — to hit what would be the break-even point for the $700 million deficit.
But prices have been on a rapid decent since, dropping more than $5 per barrel in the week after the Nov. 6 election and hitting a new low for the year of less than $60 on Dec. 17.
On Nov. 21, just days before Walker would present his “balanced” budget using $75 per barrel, Alaska North Slope crude was selling for $64.82.
The pace of the oil bear market has been so fast that the average price per barrel for the current year has dropped $3, from $75 to $72, in less than a month from Nov. 21 to Dec. 17.
OPEC has announced plans to cut production by 1.2 million barrels per day in January; and Saudi Arabia has told U.S. refiners to expect fewer cargoes as well as the petro kingdom attempts to force down stockpiles and raise prices that way.
Those actions may well force the price back up, but U.S. shale drillers have adapted since prices crashed in 2014-15 and won’t have to shut in nearly as many high-cost wells as they did last time.
There is also some evidence of softening global demand that may also offset whatever moves OPEC attempts to raise prices.
In any case, after four years of being overly conservative on price and production forecasts — which in turn widened projected deficits as Walker and allies in the Legislature from both parties pushed to use Permanent Fund earnings or institute an income tax or raise oil taxes — it seems a bit fishy that the former governor would declare a budget balanced based on a price per barrel that few believe is realistic.
There isn’t a lot an incoming administration can do to alter a budget inherited from the prior administration, but a simple calculation is changing the expected price per barrel.
That’s what Dunleavy did on Dec. 14, changing Walker’s number from $75 to $64 for the 2020 fiscal year that will begin next July 1.
The other simple change a new administration can make is the size of the Permanent Fund Dividend, which Dunleavy also did in accordance with his campaign promise to follow the statutory formula that has been disregarded for the past three years through Walker’s veto in 2016 and the Legislature’s ad hoc setting of amounts in 2017 and 2018.
The more realistic price per barrel and the statutory-funded dividend combined to shift Walker’s “balanced” budget to one with a $1.6 billion deficit.
Setting aside Dunleavy’s pledge to pay back the shorted amount from the past three years, or roughly $3,300 per person, his first budget is a cold dose of reality for the incoming Legislature that, unlike Walker’s claims, we are far from out of the woods fiscally.
The fact is prices are dropping and could very well bump along at $60 or less for the next couple years. It is also a fact that the statutory formula remains on the books and the PFD debate is not going away as long as there is a governor who is committed to following the law regardless of the Supreme Court decision that he or the Legislature can set it at any number they wish.
After ducking the issue for years, it is long past time for the Legislature to either follow the formula or change it. If its members don’t believe that $3,000 PFDs are sustainable while the state is in the red, then adopt a formula that is.
Hoping that oil prices go up or ignoring the law and hoping people forget is not a sustainable solution, either.
Andrew Jensen can be reached at [email protected]
Posted Wednesday, December 05, 2018 - 10:47 am
When the ground started shaking at 8:29 a.m. on Nov. 30, it did so beneath the feet of Republican and Democrat Alaskans alike.
Nobody on utility crews from Anchorage to the Valley thought about the political party of their fellow citizens they were restoring power to, nor did the firefighters, first responders or the Department of Transportation employees who immediately set to work rerouting traffic and preparing to rebuild our major road arteries within just days of a 7.0 magnitude quake and amid nearly 2,000 aftershocks.
Alaskans who offered up their homes or businesses for shelter or donations did not do so based on how you or they voted.
After a contentious race for governor won by Republican Mike Dunleavy and a recount settled by one vote in one House district that will determine control of that half of the Legislature, the Nov. 30 quake and its aftermath was a powerful reminder that in the end we are all Alaskans.
From the Department of Bad Timing, Nov. 30 was also the day that some 800 state employees ranging from commissioners to road engineers were to have tendered their resignations and reapplied for their jobs or faced termination.
We still don’t know how many employees were fired or retained, but we do know that last Friday was a day for all hands on deck and not for politics.
No matter how Dunleavy’s transition tries to slice it, the unprecedented move to ask for the resignations of every at-will employee in the state was a clumsy, ham-handed decision that did nothing to get the administration off on the right foot with the people he intends to lead.
There was plenty of time for Dunleavy’s commissioners to take office, read the lay of the land and determine who was on board with the direction he intends to take and who was not.
There was no need to make a big show of who’s the boss.
Dunleavy’s picks for commissioners so far have ranged from conventional to not, from longtime stakeholders such as former Associated General Contractors of Alaska Executive Director John MacKinnon being tapped to lead the Department of Transportation to an experienced government hand like Bruce Tangeman at Revenue and a fresh set of eyes from Outside with Donna Arduin to lead the Office of Management and Budget.
However, the rollout of the resignation demand was disastrously fronted by Dunleavy’s Chief of Staff and former Republican Party Chairman Tuckerman Babcock, whose fiery press releases have been a fixture of Alaska politics for years.
While not explicitly worded as such, the demand for employees to affirmatively state their desire to keep their jobs in a Dunleavy administration was quickly dubbed some kind of “loyalty pledge” in the vein of those that Babcock has attempted to enforce over the years with Republicans from former Rep. Paul Seaton to Sen. Lisa Murkowski.
Some employees took their disdain for the request public, leading to further escalation in Babcock’s rhetoric that did nothing to diffuse the situation or smooth the transition.
By holding his swearing-in ceremony in rural Alaska and celebrating in his wife’s hometown of Noorvik, it is clear that Dunleavy wants to be a governor of all Alaskans, with a particular passion for devoting attention to the oft-forgotten Bush where poverty and crime are rampant.
But by picking someone like Babcock as chief of staff and having him claim a mandate that is not nearly as strong as he’s asserted, the message has been muddled from being the governor of Alaska to being the governor of Republicans and created unnecessary uncertainty and distrust among the workforce that was not needed before, and certainly not after, the Nov. 30 earthquake.
There’s a time and place for partisanship, and for vigorous debates over policy philosophies such as the size and expense of government. This is not to suggest Dunleavy should not appoint people who align with his vision, or not expect that those who work in his administration should help advance his goals to the best of their ability.
This was, though, an unforced error that got him off to a rocky start before he even took office and one that he should endeavor not to repeat.
Andrew Jensen can be reached at [email protected]
Posted Wednesday, November 28, 2018 - 10:06 am
Four years and a $4 billion deficit ago, the Legislature had a $44.5 million problem.
After moving into new glass-encased digs in Downtown Anchorage on the site of its old Legislative Information Office, the new 10-year lease at $3.3 million per year was the subject of a lawsuit challenging its legality at the same time oil prices were plunging toward $26 per barrel.
Amid more flush times, former Anchorage Rep. Mike Hawker had wiggled his way through the state procurement code to classify the new lease as a renewal not subject to competitive pricing rules and the Legislature had agreed to put $7.5 million toward the cost of the $44.5 million project that essentially rebuilt the structure at 716 West Fourth Ave.
In March 2016 a Superior Court judge ruled the lease invalid, leaving legislators stuck with the choice to simply abscond and leave its owners holding the bag with a $28 million loan and $9 million of their own cash tied up in a custom-made project with no tenant, or to negotiate a purchase of the building outright that would relieve them of the embarrassingly expensive annual rent.
A $32.5 million price was agreed to by the Legislative Council in a 13-1 vote a month later, but Gov. Bill Walker stuck his nose into the matter and declared he’d veto the purchase based on the state’s ongoing budget woes without regard to the fact that he would be essentially evicting one branch of government from its Anchorage offices with the demand it relocate into the executive branch home in the Atwood Building.
But by then we already knew Walker was unconcerned with making moves that hurt the state’s credibility with the business community after vetoing $200 million in tax credit payments approved by the Legislature in 2015 and proposing oil tax increases despite his campaign promise to respect the vote of the people in 2014 to keep the current structure known as SB 21.
Around this time an enterprising real estate agent got it into the news that Wells Fargo was looking to sell its building on Benson Avenue in Midtown. That led legislators — many of whom had decried Walker’s veto of the tax credit payments — to jump on the $11.85 million purchase and screw over the owners of the Downtown office who were then forced into foreclosure by their lender EverBank of Jacksonville, Fla.
(In a funny-but-not-haha-funny twist, Wells Fargo ended up getting paid on both sides of this transaction as one of the construction lenders on the Downtown office that was paid off by EverBank’s loan consolidation and as the recipient of the appropriation that bought its Midtown office.)
Of course, the building was not set up to house the Legislature as the Downtown office was, and another $3.7 million was appropriated for renovations.
Now the Legislative Council has voted unanimously to spend another $8 million on further remodeling, bringing the tab just at the Midtown office to nearly $25 million.
Add up the $7.5 million it kicked in at 716 West Fourth, plus the $5 million give or take it spent on rent over less than two years there and the Legislature has spent at least $37.2 million in five years on Anchorage office space.
Meanwhile, EverBank ended up selling the building for a cutrate price of just $14 million — or about half of the outstanding loan balance — to the Anchorage Community Development Authority as a new home for the police department.
But rest assured, we’re told, there will be no automatic garbage cans in the new building.
A more flippant summation of this fiasco is hard to fathom after such an inane amenity — a common household item for those of even modest means — became the focus of this situation rather than the devastating consequences on private business owners who were forced to shoulder the entirety of the Legislature’s mistakes and Walker’s meddling.
Any contractor who ends up getting a bid to renovate the Benson building better insist on getting paid up front.
Andrew Jensen can be reached at [email protected]