Archive for the ‘#alaska’ Tag

Actions Speak Louder Than Twitter Storms   Leave a comment

I didn’t vote for Hillary Clinton or Donald Trump. I’ve taken some heat for complaining about some of President Trump’s actions and I’ve taken some heat for applauding some of his actions. I don’t care about his Twitter flurries. Those are not governance. Honestly, I find it refreshing that a politician says what’s on his mind before convening a focus group to find out what should be on his mind.

By and large, I was at least half-pleased with President Trump’s cabinet picks. I know lots of people disagree, but they would have disagreed if Trump had allowed Hillary Clinton to pick his cabinet for him. And, no, that’s not a joke. Some people seem to be unfamiliar with how the Constitutional election system works. Donald Trump won the presidency completely by the rules. Maybe your candidate should have not played fast and loose with state secrets on her unsecured private email server and bit her tongue before declaring that 40% of the country’s voters were irredeemable racists she would consign to a “deplorables” basket where she wouldn’t have to take their concerns seriously. You don’t have to be a Donald Trump fan to recognize that she was declaring she would be president for only some Americans. We’re lucky she didn’t win, which does not mean we are blessed that Trump did.

Image result for image secretary elaine chao in alaska

Alaska swung pretty hard to Donald Trump. They didn’t need my help and they didn’t get it, but a lot of people here think they made a right decision because of the Trump administration’s behavior toward Alaska. Since the beginning of the Trump administration, Alaska has been the host to at least three federal department chiefs — Secretaries Rex Tillerson (State), Ryan Zinke (Interior) and Elaine Chao (Transportation). Zinke and Chao came to Alaska at the behest of Alaska’s Congressional delegation. two come quickly to mind, Interior Secretary Ryan Zinke and Transportation Secretary Elaine Chao, who was here a couple of weeks ago.

Both Zinke and Chao toured the state and talked to all walks of Alaskans and then said they hoped to be able to work with the State of Alaska and Alaska residents to develop infrastructure and allow reasonable resource development. Contrast this to the Obama’s administration’s cabinet visits. Antony Foxx (Transportation) and Sally Jewell (Interior) both visited Alaska, but they met only with Native groups, appeared to be hostile to the State government and announced they would further tighten regulations on the state so as to prevent development of infrastructure and further restrict resource development, hobbling our economy even more than the Jones Act and previous environmental regulations already do.

Last week Chao spoke with transportation officials and industry leaders in Alaska, coming to the conclusion that the federal government will more quickly advance projects, which have been delayed, often for decades, by a burdensome regulatory process.

This is no small matter for Alaska, which receives about $500 million annually for its transportation projects through the Federal Highway Administration. Southeast and Southwest Alaska benefit from federal highway funds through limited road projects, but federal funds are used to build Alaska Marine Highway System ships. Like all other states, Alaska matches federal dollars with a 10-percent contribution.

Toward alleviating project delays, Chao noted that Alaska has become only the seventh state to acquire an agreement with the federal government that allows it to conduct environmental reviews for state and federal highway projects. The agreement, which is under the National Environmental Policy Act (NEPA), is expected to be signed in October, according to Chao.

Environmental protections will remain and the federal government will monitor the state’s reviews, but projects should be able to move forward more efficiently.

Actions speak louder than Twitter storms, disapproving pundits and shouting, rock-throwing protesters. There’s been considerable noise coming out of Washington, D.C. since Trump’s inauguration. It’s often difficult to know what’s true and what isn’t, because politicians and pundits present points of view favorable to their preferences, often ignoring the needs of states and even those of the nation.

I’m still not a Donald Trump fan. I doubt I’ll vote for him in 2020, but he’s doing some things right and it’s been a long time since Alaska has seen that coming out of the Oval Office. Alaskans, lets focus on what’s actually being accomplished for Alaska and tune out the rest of the nonsense.

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Posted September 12, 2017 by aurorawatcherak in politics

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It’s All in the Attitude   Leave a comment

This is Brad. Lela admitted to me last night that she really hasn’t posted anything on Houston in the wake of Hurricane Harvey and so she’s letting me today. I have to thank our son Kiernan for helping me with hash tags and photos as I am still pretty blogging illiterate.

 

I used to live in Houston. Although I was raised in the Northeast, my father has been based in Texas since I was in middle school, so I spent a year of junior high there, summers all through high school and then I moved to Houston after high school graduation to work for Dad’s electrical company. All together, I lived in Houston about six years before moving to Alaska … my forever HOME.

Related imageMy dad pulled stakes for Austin some years ago, but two of my sisters and my brother still live in Houston. They are all fine. My sisters live on what amounts to higher ground in Houston, while my brother uses Houston as a base of operations, but doesn’t have a permanent residence there currently. His storage unit is on higher ground too.

For such a wild place, Alaska doesn’t really have natural disasters that get people really excited. I guess after you’ve lived through a 9.2 mag earthquake, a mere 7.9 is a yawn. Lela vividly remembers the 1967 Flood here in Fairbanks that devastated the community only weeks before winter usually starts here. While she feels sympathy for Houstonians and was worried about my sisters until they updated their Facebook statuses, she has a hard time weeping for Houston (especially my sisters who aren’t flooded) … and I think I get that after all these years here in Alaska, surrounded by practical people who view 40 below zero for weeks on end as a mere obstacle to overcome.

Here in Alaska, a flood that doesn’t come into your house is an adventure. Our favorite relaxation place is Chena Hot Springs Resort and there’s a spot of low-lying road between the resort and Fairbanks. On several occasions we have driven through two feet of water to get to the other side of a wash-out there. It happened so often that the state Department of Transportation finally just built the road to be flooded periodically and they put up signs that say the road is passable, but before that, Lela and I would regularly dare the risks of a flooded road to get to the other side. One of us would walk out in front, in the COLD water, to determine if the road is still there and then the other one would follow driving the car.

To get to our cabin site off the Steese, we actually have to drive through an unbridged creek. You can’t do it with our passenger car (not enough clearance and front-wheel drive), but one reason we keep resurrecting our 24-year-old Jeep is because it can handle the creek. Summer before last, after a long period of rain, it got a little scary as water started coming in the doors and the engine started sputtering when the exhaust went under water, but again … it’s an adventure until it starts flowing into your basement.

In the last few years, no-wind-in-the-winter Fairbanks has had a handful of intense wind storms that have brought down trees into power lines and onto people’s roofs. It approaches a natural disaster for me when the electricity goes out in the winter because, of course, your needed home-heating device doesn’t works without electricity. Lela just bundled up and started the wood stove. The bad news was there were trees caught in the electrical lines that feed our house. The good news was no trees hit our house or vehicles because the safety net of power and communications lines caught them.

See the Alaskan attitude? It’s not a disaster until your life is in danger and even then … quit bellyaching about it and find a way to mitigate the harm so you don’t die.

Image result for image downed trees power lines fairbanks alaska

During one of those storms, a neighbor who is a lineman came and tapped on our door and asked if I could go around and volunteer to the neighbors to make sure they didn’t electrocute themselves while they cut up their trees. I’m a licensed industrial inside wireman and our lineman neighbor — who had to go to work, of course — knew: a) our neighbors would do it anyway and get themselves killed, and b) I have the skills to assure they did it safely. Within a couple of hours you could hear chainsaws all over the neighborhood. A long time before the electric company could get around to repairing downed power lines, a handful of neighbors who are wood burners, including Lela and me, had taken care of the downed trees. I think we’re using the last of the latest round of wind-blown trees right now.

During 911, I was in a remote Alaska village when the planes were grounded. The barge hadn’t arrived yet with winter supplies. Lela had just sent me a food box and it had arrived on the last plane, but some of my coworkers had nothing to eat. The villagers, even though they were at the bottom of their pantries until the barge came in, kept them from starving.

When a car goes off the road around here, or is pulled over to the side with its hood open, people stop and ask if you need help. They’ll pull you out if they can (and risk a ticket nowadays because it’s against the law according to the cops). Lela, who is quite capable of changing her own tires, has had men stop and insist she get into the warm vehicle while they do the heavy lifting, but she’s also stopped herself for women in inadequate winter clothing and old men who shouldn’t be working so hard. And, yes, so do I. There’s even a website, started by a high school student, called “I’m Stuck, Come Pull Me Out” where volunteers will do exactly that if you have smart phone service wherever you’re stuck. I’m sure it’s driving the professional tow-truck drivers mad, but that’s Fairbanks.

So, I’m kind of amused at how the media is shocked — SHOCKED — that volunteers are doing a better job of disaster relief than the government in Houston. I’m used to a culture where volunteers are the backbone of every relief effort. Lela and I give money to the Cooperative Program of the Southern Baptist Convention that partially goes to funding Southern Baptist Disaster Relief. If you’ve never heard of them before, that’s because the men and women who do the hard work don’t like to take bows, but they served the majority of the meals during the cleanup at the Twin Towers, they were a backbone agency in the recovery efforts from Katrina, and I even went with them to work on a lineman’s crew after Hurricane Sandy. I paid my plane ticket and they fed and housed me for two weeks as I hooked up people’s houses to the grid — the utility companies do not restore power when the break is between the pole and the house. SBA Disaster Relief works in coordination with other volunteer organizations (think the Cajun Navy) and some government agencies (although they had to violate some FEMA rules during Katrina to get help where it was needed).

Image result for image of 1967 flood fairbanks alaskaThe other day, Lela was hit up for yet another donation to Hurricane Harvey relief and the person soliciting the donation thought she was being uncharitable when she declined. Lela speaks her mind … I think you all know that by now … so she informed this do-gooder that we had given our regular tithe to our church, some of which had gone to a special donation to SBA-DR, then given a special donation on line to SBA-DR and then also donated to a friend who is member of the Cajun Navy. We don’t feel guilty for not giving to an organization that we know nothing about that may be using the donations to fund administration rather than actual relief efforts. We believe in the power of volunteers to do what needed doing. The Red Cross, which uses 90% of donations for administrative support, will be fine without our dimes and nickles.

The leaves are turning yellow here in Interior Alaska and that can only mean one thing — winter is coming. I sound so much like Ned Stark, yeah. But it’s true. Soon it’ll be colder than cold here and we’ll be facing what many places in the country would consider to be a natural disaster. We won’t complain because this is the life we’ve chosen to live and cold weather really isn’t a natural disaster. It just feels like it might be. So long as we have fire wood in the shed and diesel fuel in the tank, though, it’s merely an inconvenience.

Houston … you have a mess to clean up and I’m sure it won’t be any fun. But as Lela, who has lived through two events she actually considers to be natural disasters, has taught me … it’s all about your attitude. There’s nothing funny about your entire town and your house being under water, but … it’s also an adventure if you’re not in immediate danger of dying. Heck, when she tells the stories about the 67 Flood … she and others who lived through it sure make it sound like it was an adventure. I guess that’s why Alaskans don’t consider 40 below zero, 12 feet of snow or 7.9 mag earthquakes to be disasters. Their frame of reference – five feet of glacial flood water filling homes and businesses just six weeks before winter is a potentially killing event … and they even consider that to be an adventure rolled up into a natural disaster.

Can the Jones Act, Save Alaska   1 comment

Protectionism does damage to the economy. How do I know? I live in Alaska, where the Jones Act has been protecting the American Merchant Marine for nearly a century. I pay 30% more for my groceries than you do anywhere else in the United States. I paid $3.89 a gallon for gasoline yesterday. The rest of the country paid, on average $2.46. Some of our high prices are due to higher shipping costs (we are, afterall, 2000 miles from the mainland), but hidden in those costs is the cost of the Jones Act.

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For almost 100 years, the act has created monopolies for domestic shipping interests, undermined the U.S. shipping industry, and done long-term damage to local economies in Hawaii, Alaska and Puerto Rico. Like nearly all protectionist efforts, the law has, over time, undermined the very thing it was designed to support: national security during times of war through an unparalleled shipbuilding industry and U.S. Merchant Marine.

Under terms of the law, sea trade between any U.S. ports is required to be carried on U.S.-built ships that are also U.S.-owned and flagged and populated by crew composed of at least 75% U.S. citizens. These manufacturing and labor restrictions took effect when the German U-boat submarine — not offshoring — was the biggest risk to U.S. commerce. But research by the George Mason University’s Mercatus Center shows the law has contributed to making the U.S. shipbuilding industry largely uncompetitive over the past 60 years.

As the Mercatus study notes, there were 2,926 large ships in the U.S. commercial fleet in 1960, making up 16.9% of the world fleet. By 2016, that number had fallen to 169 ships, only 0.4% of the world fleet. U.S.-flagged ships carried 25% of U.S. international trade in 1955; by 2015, the share had dropped to 1% of total exports.

In any other industry, this sort of economic decline would have set off alarms and drawn a major political response. In a 1999 study, the U.S. International Trade Commission estimated the Jones Act cost U.S. consumers $1.32 billion annually, its requirements being the equivalent of a 65% tariff on shipping services.

So where’s the outrage? Both the Interstate Highway System and cheaper aviation have made massive inroads into interstate commerce over the past century. Meanwhile, U.S. export and import businesses simply use cheaper foreign-flagged vessels. It also helps that U.S. airlines aren’t prevented from purchasing aircraft from Europe, Canada, or Brazil nor U.S. truckers from buying German or Japanese-made big rigs. While no one would propose banning airlines or truckers from relying on these foreign industries, this is precisely what the Jones Act does for the U.S. shipping industry.

Itermodal transportation options have exploded throughout the contiguous United States, while the seafaring industry’s decline has largely been hidden from view, except for the non-contiguous states of Hawaii and Alaska and insular territories like Puerto Rico. In Puerto Rico’s case, the Jones Act is the structural foundation behind much of its current economic woes. It’s estimated that the cost of all non-U.S. goods imported into the commonwealth are 15 to 20% higher than on the mainland, with three or four Jacksonville-based shipping companies handling all Jones Act-related transport to Puerto Rico. Thanks to these shipping costs, cars cost roughly $6,000 more in Puerto Rico than on the mainland, and food is roughly twice as expensive as in Florida.

It’s easy to find similar examples of major trade distortions between West Coast ports and Alaska and Hawaii. Cattle ranchers from the Big Island have to charter a weekly 747 cargo jet to get their cattle to the mainland because it’s cheaper than Jones Act shipping. In the 1970s, it was cheaper for a Japanese-owned pulp mill in Southeast Alaska to send its products to Japan and then back to Seattle — 8,000 miles round-trip — than to ship the 700 miles directly to Seattle. There is no wood pulp industry left in Alaska today. While some would like to say it was a victim of environmentalism, the last company to operate here says the real culprit was the Jones Act and its insane costs. In the 21st century, such irrational shipping decisions would bear the additional worries about the excess carbon emissions they produce.

Of course, this has been allowed to continue because Alaska, Hawaii and Puerto Rico have tiny little voices in Congress, so they can’t be heard over the bellicose slogan shouting of the Longshoreman’s Union. Coincidentally, the shale oil and gas revolution is bringing attention to the Jones Act in parts of the country with more political clout. The December 2015 lifting of the 40-year ban on crude-oil exports has boosted oil exports to more than 500,000 barrels a day out of Texas and Louisiana ports. Yet according to the Congressional Research Service, refineries along the U.S. East Coast on average import more than 500,000 barrels of crude a day from Nigeria, Angola, and Iraq, rather than from the U.S. Gulf Coast — thanks, once again, to costs imposed by the Jones Act. Shipping from Texas to Northeast refineries costs roughly $5–6 per barrel using domestic shipping, while shipping even further up the Eastern Seaboard to refineries in eastern Canada (using international tankers and crews) costs just $2 a barrel. For a standard tanker carrying 300,000 tons deadweight, this amounts to cost savings of about $1 million per shipment.

Labor costs are the most significant difference. A unionized U.S. sailor is 5.5 times more expensive than one on a foreign-flag vessel, and such vessels are usually populated with sailors from many nations, especially the Philippines and China. A separate 1915 U.S. statute, written when ships were run by steam boilers, adds to the cost by mandating larger crews to keep watch over the boilers 24 hours a day. The statute is still in effect, even though U.S. ships are now powered by much safer diesel motors or, increasingly, by natural gas turbines.

Jones Act defenders argue loudly that the Act must be preserved because “national security” is at stake. But few commercial ships are useable by a 21st century Navy. There have been thousands of foreign-flagged commercial vessels docked in US ports every year since 2001 without a single terrorist incident tied to them. How would traffic between U.S. ports by these ships somehow increase the terrorism threat?

The 97-year-old law is many decades past due for serious amendment and perhaps even complete repeal. The upcoming centennial, in 2020, presents an ideal opportunity to highlight the Jones Act’s mercantilist history — and to bid it a final un-fond farewell.

Peril of Perfectionism   4 comments

Don’t let the perfect get in the way of the good. That’s an old saying that has never been truer than today.

Environmental activists tend to be perfectionists. They want air quality to be completely free of all pollutants. That sounds like a worthy goal until you realize that it is unachievable.

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Seriously. If we want to have warm homes, be able to travel and make things for consumption, we have to burn fossil fuels to power things. Currently, renewables make up less than 10% of the energy available and that’s with massive government investment well above the return on the dollar. Fossil fuels may be replaced someday by nuclear electric powering hydrogen fuel cells, but we’re nowhere near that dream right now.

And, then there are the forest fires. I woke up to completely natural air quality contamination on Sunday morning, but that’s another topic for another day.

While some activists want to eliminate all fossil fuels use in the name of air quality, it is not possible without major disruption to our quality of life, jobs and economy. That’s the “perfect” getting in the way of the good.

The United States has made major environmental improvements over the last 40 years. That’s a net good for all Americans and we certainly don’t want to backslide now, but many environmentalists refuse to see the good that has already been done and to recognize that clearing the air completely is not possible.

Consider this example of positive change. Totem Ocean Trailer Express (TOTE) hauls more than 35% of all goods consumed in Alaska. That makes them a vital part of the Alaska economy. When they lost a barge in a storm last winter, our grocery store shelves looked pretty barren for the next month while they strove to replace the lost stock. If they failed to sail at all, Alaskans would go hungry.

In 2012, TOTE announced plans to convert its maritime fleet to operate on cleaner-burning liquefied natural gas (LNG). The fuel switch on its East Coast ships operating in the Caribbean is complete. Now, TOTE Alaska Maritime is focusing on the transition of its vessels operating between Tacoma and Anchorage.

In 2014, TOTE inked an agreement with Puget Sound Energy (PSE), Washington’s largest supplier of electricity and natural gas, to furnish LNG for its ships, but now its LNG conversion has hit a roadblock.

Activists are attempting to block construction of PSE’s $300 million LNG plant on Tacoma’s Tide Flats. If they succeed, they will put Washington’s ports at a competitive disadvantage with Los Angeles and Vancouver, B.C., ports which are currently adding LNG facilities.

“By switching from diesel to LNG, maritime vessels at the port will reduce their greenhouse gas emissions into Tacoma’s air by more than 30 percent and dangerous particulate (smoke) emissions by more than 90 percent,” Puget Sound Energy Vice President Andy Wappler pointed out in The News Tribune in Tacoma.

The Environmental Protection Agency calculated there are 23 million people with port-related jobs and seaports account for 26% of the U.S. economy. There are an additional 39 million Americans who live in proximity to ports.

LNG processing reduces greenhouses gases and eliminates other air contaminants. During conversion from natural gas to LNG, CO2 and other pollutants are removed. LNG is simply the same natural gas many Americans use in our homes and businesses, only purified and refrigerated to minus 260 degrees, where it turns into a liquid. It is not explosive or even particularly flammable in its liquid state.

When warmed, it’s the same fuel folks use in their stoves and furnaces, and requires the same safety precautions. LNG storage tanks are not pressurized, so cannot blow up if there is a breach.

The tank PSE plans to install in Tacoma is “designed to withstand a once-in-every-2,450-year earthquake (compared to our highway bridges, which are designed to a 1,000-year-earthquake standard),” Wappler contends.

PSE’s new facility doesn’t just benefit TOTE and other shippers. Wappler figures it will save its natural gas customers between $50 million and $100 million over 10 years compared to the cost of increasing pipeline capacity into the region.

There is one other environmental benefit. TOTE’s relationship with Alaskans for Litter Prevention and Recycling brings tons of recycled material to Tacoma for processing.

Grace Greene, TOTE’s Alaska general manager, told Alaska Business Monthly magazine there are other partners who contribute to the project, “but we’re probably one of the top three contributors, to the tune of more than $1 million every year.” Recycling has never really taken off in Alasaka because of the cost of shipping refuse to the Lower 48 for processing. TOTE is improving that situation and perhaps reducing the amount of trash Alaskan landfills collect.

As with everything humans do or build there are associated risks, but total risk avoidance is impossible. Why strive for the perfect and reject the good getting better?

Third Time’s the Charm?   Leave a comment

Image result for image of Alaska legislatureAlaska legislators have called themselves back into a third special session to address the state capital budget. Governor Bill Walker called the previous two special sessions after the Legislature utterly failed to get anything done during the 90-day regular session. He expressed reluctance to call legislators back into session (which is extremely expensive) until they were in substantial agreement on the capital budget, but a tentative deal has been struck on the measure that appropriates funds mainly for state construction.

The House-Senate conference committee on the capital budget is set for 1 p.m with only one item listed on the agenda, though others items could be added. Both the House and Senate passed different versions of SB 23 but reconciliation between
the two must be agreed on, enacted and signed by the governor. The bill should have been in effect July 1, which is the start of Alaska’s fiscal year, and some road and facilities projects have affected by delays of state money to match federal funds. The Legislature must act quickly to minimize those losses.

However, disagreement on key areas in SB 23 are focused on issues not related to construction. One is over funds appropriated for payments on past oil tax credit liability, which totals over $700 million. The Senate approved $288 million for this and the House $57 million.

Another disagreement is over money for the state gas corporation, Alaska Gasline Development Corp., which is now leading the big Alaska LNG Project. In its version of the capital budget the Senate cut $50 million from AGDC’s available funds, which now total about $80 million. In its version of the capital budget the House left AGDC’s funding intact. AGDC, a critical and long-term project for the state, will like be dinged in the final compromise although a $50 million cut seems unlikely. If too much money is taken out the corporation’s ability to continue the Federal Energy Regulatory Commission (FERC) license application process will be in jeopardy. There has been a huge investment
in this project to date and keeping the regulatory process on track is necessary to retain that value. The LNG pipeline project is a big priority for the governor and the lower cost fuel is critical for Interior communities, but the Senate is very skeptical of the near-term viability of any large LNG export project, though aware that a smaller in-state-only line will not lower heating and electrical generation costs for Interior residents.

The final potential area of uncertainty is the language in the House version of SB 23
that would fund an extra $750 million for Permanent Fund dividends. Lawmakers have already approved $750 million in the operating budget, which has been signed by the governor and is now in effect. This is sufficient for a $1,100 PFD check this year. The House proposes adding $750 million to that through the capital budget, to bring the PFD up to about $2,000. The House added the extra money late in its own capital budget version and it was connected to political maneuvering, so the lower figure is likely to prevail. There is broad consensus and unpopular consensus in both the House and Senate that the PFD does need to be capped. This not being an election year, Legislators appear to be gambling that Alaskans won’t punish them in the polls next year.
Image result for image of alaska oil wellHB 111 basically finished what HB 247 attempted to do last year in winding
down the state’s costly oil exploration and development tax credit program. HB 247 set up a three-year phase-out, but did not deal with how Net Operating Losses, or NOLs,
were treated for tax purposes. HB 111 put curbs on the NOLs, totally ending the cash payments and restricting NOLs to deductions against future production income with 10 percent annual reductions beginning in seven years for losses on producing properties and 10 years for losses on non-producing properties. It would take several years before the allowable deductions are reduced to zero.

Significantly, the bill prevents NOLs from being taken so as to allow the required minimum tax to be taken below 3 percent of gross value. This would represent an immediate tax increase for companies with NOLs that are also producers (mainly Caelus Energy and possibly Eni) but the extent depends on the company’s tax situation, which is confidential. ExxonMobil and BP may have a tax exposure because these companies might have large past-year NOLs because of their massive Point
Thomson investments. Major producers are not otherwise affected.

Which is my whole reason for posting this article. The major producers are large multinational corporations and yet this bill does nothing to reduce the tax welfare that Alaska pays to these companies. Iraq pays $2 a barrel to BP in production credits. Alaska will still be paying 10 times that much. But, the Legislature spent the entire regular session fighting about whether to impose an income tax on Alaska residents while giving money to huge corporations for producing our oil. At one point last year, the State was paying more in production credits than it was receiving in revenue. Thank goodness for savings.

So the outcome of HB 111 is that the tax burden on the more competitive smaller companies will increase, but the major producers will be held harmless. This is why I hate government, because it will always side with whomever can line its pockets best regardless of whether that company is producing (like Caelus Energy) or sitting on leases (like BP). When will we get around to rewarding actual production? That’s right … never because that’s not what the Legislature is all about. It’s about maintaining a relationship with multinationals who have no intentions of producing those leases until the State is completely desperate and willing to give away the moon to get a trickle of income.

Remember this next year, folks! Remember and vote them all out. Don’t replace them with someone of the same party because that just keeps the established relationships inheritable. No, instead, vote third party and send a message that we are no longer playing the same stupid games that we’ve played for 40 years. The libertarians don’t owe any oil companies because, not having been in power, the oil companies haven’t gotten around to bribing them yet, and being by and large business people, they might actually have some understanding of economics so that they will think to reward the producers and put the non-producers (those sitting on leases) on notice that they’d better get busy or get lost.

Framing the Kobuk Road   3 comments

I wrote this a couple of years ago, but the topic came up recently and I thought it was appropriate to re-run it. Lela

 

While the Yukon River Access Road (currently just the 54-mile Road to Tanana with a distant dream of taking it all 500+ miles to Nome) is welcomed by the majority of the residents of the corridor, not every community wants roads for a variety of reasons.

Source: Framing the Kobuk Road

I make no secret that I think my mother’s people are among the most bigoted ethnic groups in the United States. Although I am a stateside Indian, I see the same cultural prejudice at work in the Inupiat and Athabaskan of Alaska. I find it odd that a people who so pride themselves on a history of non-ownership of the land are so greedy for it in this generation. I’m told that’s the Caucasian in my blood stream talking. If I weren’t a “breed”, I’d get it. Then they turn around and say white men are greedy for land in an unhealthy way.

Related imageAnd, people wonder why I think my Indian cousins are bigots ….

Can we just admit that mistakes were made in the past, but that we live in a different era today, so should start working together as the human race, not as separate competing silos of skin color? As one who stands astride more than one silo and does not see a compelling reason to choose which part of my DNA to reject, this bigotry got old and worn out a long time ago. That’s my transracial rant for the day. Back to the subject at hand.

Sometimes the real issues involved in building a road or developing a mine get obscured with the window-dressing of environmental and cultural issues. Let me lay it out for you. The Kobuk region is losing population fast. The old folks are dying off and the young folks are moving away. It’s approaching a point where the only ones still left in Ambler are the alcoholics and bootleggers – those who can’t leave because they can’t function in the modern world and those who won’t leave because they derive a benefit from those who can’t function in the modern world. The Kobuk region is a beautiful place and there are some truly lovely people who come from there, but those truly lovely people tell me that Ambler is in trouble. There are plenty of theories why. Some would say it’s all the fault of the “white man” who came bringing “alien ideas” and telling the young ones that the life there wasn’t worth living.

I’m popping bubbles today.

Eskimos make their own choices just like everyone else. If you don’t want to lose your culture, make it worth keeping. Sexual abuse of minors and alcoholism are not cultural values worth hanging onto. For those who are self-aware, the causes are a bit more complicated than “the white man caused it.”

Life in a Native village that is not connected by road is isolated and limited. You collect wood to burn, you haul water, you hunt and fish in season, you pick berries and grow a garden … and then you sit in the cabin all winter and stare at four walls. That might have been enough when they didn’t know there was more, but that time went away a long time ago. Now the mind-numbing boredom of eight months of winter wears on a person. Alcohol is readily available and Alaska allows its citizens to grow their own pot. Both drugs are depressants. The television brings in images of places where it is warm and sunny and you can do something besides stare at four walls or haul water. The imported teachers try to educate the kids, but when you’ve been up all night hiding under your bed to avoid your drunken father’s sexual advances, it’s really hard to even go to school, let along concentrate on algebra or English, skills that would allow you to move to Anchorage or Fairbanks or even just Kotz and get a job. The suicide rate among teenage Natives is huge. The alcoholism and drug addiction rate is even higher.

Then there’s Tim’s family. They are a Native family that lives in Fairbanks. They have a nice home and jobs and they don’t drink. I go to their house for agutaq (Eskimo “ice cream”) and muktuk (whale meat) and they tease me because I don’t understand the appeal of seal oil. Tim’s mom is an Inupiat from Kotzebue whose mother is from the Kobuk, but his dad is Yupik from the Bethel region. A century ago their ethnicities were at serious war with one another. Today they’re married. They foster kids from the villages. Most of the kids they foster are doomed before they ever get them. When your mother drank a fifth of whiskey every day while she was pregnant with you, your brain doesn’t develop correctly and you are forever damaged by it. But occasionally, they get kids who can take advantage of the non-drinking environment to get an education and learn to keep those parts of their culture that are worth keeping and adopt those parts of modern culture that are worthwhile. Tim talks about his “brothers and sisters” who now live out on their own – some going to college, some to trade school, some of them now have jobs and families of their own. They go back to the village to visit, but they don’t live there.

Would they chose to live there if there were jobs not only to provide money to buy food, fuel, etc., but also to provide adults the dignity of meaningful work and to alleviate the mind-numbing boredom?

Some say they would. Some of them point out that the opposition to the Kobuk road is driven by outside environmental interests more than by local sentiment. When you’ve got someone whispering in your ear that all it would take to save your village is to seal the modern world out and that a road would do just the opposite, you’re going to fight against the road. But the modern world has already brought a corrupting influence to the village. Bootleggers wouldn’t bring the alcohol in if villagers didn’t buy it. The television that helps to relieve the boredom of the parents also brings in glimpses of the world beyond the village that tempt the children to leave.

There’s no sense closing the barn door after the cows have run off.

The State of Alaska also has an interest in building the road that goes beyond the economic benefits of providing access to the mineral prospects. There are costs associated with people sitting on their asses not producing anything of value. Village police officers are needed to keep drunken idiots from beating each other to death or gang-raping young girls. I’m not making that up. Read the Alaska media and you’ll see this happens often. Health aides are needed to treat the affects of alcoholism and drug use. Mental health clinicians are also needed to combat the damage done by a culture of alcoholism and sexual abuse. The State of Alaska provides a school for every village with at least 15 students, but the students aren’t learning because of the alcoholism and resultant chaotic environment. Public assistance dollars must go to support a “subsistence” lifestyle that increasingly depends on modern technology – rifles, snow machines, 4-wheelers, power boats, fuel to power these items and heat your home, sewer treatment to deal with the effects of staying in one place for generations, etc.

The road would provide jobs and access to services and allow the people of the Kobuk Valley to start supporting themselves rather than forcing those of us who don’t even live there to support them so they can live there. But it would also provide them with a reason to get up in the morning and do something with their lives besides stare at four walls. It’s not a panacea for the cultural sickness in the Kobuk Valley, but it might well be a step in the right direction, a step away from deliberate isolation in the interest of protecting a culture that was never as lovely as portrayed and has become undignified and damaging to generation after generation.

Insanity is doing the same thing over and over and expecting different results.

Keeping a stranglehold on a culture that is dying doesn’t save the culture. It just kills the people who are doing the strangling. Adapting to the inevitable might help them save those parts of their culture that are worth saving.

Potential Good News for a Resource State   Leave a comment

Like it or not, resources drive the train of Alaska’s economy and so President Obama’s wrecking-ball approach to environmentalism really harmed us and is one reason Alaska is in a recession right now. Yes, low oil prices are part of it, but more than that, our inability to expand oil development and put more oil in the pipeline creates a chronic problem. So, this is potentially good news for Alaska … and, whether you know it or not, the country. Lela

http://www.alaskajournal.com/2017-05-17/state-will-pursue-revised-rules-npr-interior-dept#.WR3XGuvytpg

Alaska Journal of Commerce

Tim Bradner

State officials will push new U.S. Interior Secretary Ryan Zinke for a revamp of Obama administration rules restricting oil and gas development in the National Petroleum Reserve-Alaska, state Natural Resources Commissioner Andy Mack said May 12.

Image result for image of npr-a

“We will be submitting a specific proposal within the next couple of weeks to Secretary Zinke. This grows out of meetings our governor, Bill Walker, had with the secretary earlier this year in which he seemed receptive,” Mack said in an interview.

“We believe we can help BLM (Bureau of Land Management) in developing a new plan that is balanced,” between resource development and environmental protection, said Mack, who was officially confirmed to his position May 16.

The NPR-A was created in 1923 as a potential source of oil for the U.S. Navy, but despite exploration over the years it is only recently that there have been commercial oil and gas discoveries.

The U.S. Bureau of Land Management, which manages the 23-million-acre petroleum reserve on the western North Slope, would develop the new plan, but Mack said the state hopes to be heavily involved.

BLM’s current management plan, developed under former Interior Secretary Ken Salazar, was implemented in 2013 and placed large parts of the reserve into special conservation areas, effectively putting large areas off-limits to petroleum exploration and development.

The current plan also makes access difficult for transportation infrastructure, such as pipelines or roads for use by communities in the region, state officials have said in the past.

Salazar’s final Record of Decision approving BLM’s plan placed 11 million acres, about half of the reserve, into special conservation areas. This included a 3.6-million-acre special protected area around Teshekpuk Lake and including coastal wetlands near the Beaufort Sea coast.

State officials were critical of the plan because NPR-A’s coastal areas are considered highly prospective for petroleum discoveries. The Barrow Arch, a broad regional geologic formation that hosted the large Prudhoe Bay-area oil discoveries farther east, also extends along the coast of the northeast NPR-A and includes areas Salazar put off limits.

Mack said the restricted areas also impede infrastructure needed to support discoveries on state-owned submerged lands offshore the reserve.

Caelus Energy, a Dallas-based independent, has announced a significant discovery at Smith Bay, offshore the NPR-A and about 100 miles northwest of the nearest industry infrastructure at the Alpine field.

If Caelus is unable to build an onshore pipeline from Smith Bay through coastal areas of the reserve it will be forced to build an offshore pipeline, which creates risks and environmental hazards.

The prospectivity of NPR-A itself for discoveries has now been confirmed by ConocoPhillips and its minority partner, Anadarko Petroleum, who are making discoveries further inland in the reserve.

The companies are now developing one project, Greater Mooses Tooth No. 1, or GMT-1, which is scheduled to start production in late 2018, and have two other prospects, GMT-2 and Willow, a new discovery, in the planning stages.

Any new initiative to unwind restrictions will be highly controversial with national environmental groups, particularly if it eases restrictions in the Teshepuk Lake and coastal wetlands areas of the reserve that are heavily used by migrating waterfowl in the summer.

It would also require a redo of the environmental impact statement for the current NPR-A management plan, which is also likely to spark litigation from conservation groups.

However, what is also different now, Mack said, is that Inupiat communities on the North Slope, now mainly dependent on air and seasonal barge service, are supporting provisions for transportation infrastructure in the NPR-A as a way to bring living costs down.

In other remarks, Mack said in a May 12 briefing that he believes recent new discoveries on the North Slope will continue to prop up North Slope production. The commissioner spoke to Commonwealth North, an Anchorage-based business and public policy group.

“The recent increase in oil production can almost entirely be attributed to the strong performance at CD-5,” a new project near the Alpine field developed by ConocoPhillips and Anadarko Petroleum, Mack said. Strong production at Prudhoe Bay and the Kuparuk River field, which supply most North Slope oil production, were also factors.

The state Department of Natural Resources is now forecasting a 4 percent drop in North Slope crude oil production next year to an average of 505,000 barrels per day. The new estimate revises a number published April 14 in an earlier forecast, that reflected a sharp drop to 445,000 barrels of average slope output, a 12 percent decline which alarmed state legislators working on state budgets.

Ed King, a petroleum economist and the Department of Natural Resource liaison with the Legislature, said the agency adjusted figures in the earlier number to account for new production.

“New information has come in since the production estimates were prepared several months ago. When we assembled the forecast certain new projects were not included but those are included in the revision,” King said.

The forecast period is for state fiscal year 2018, which begins July 1 and extends to June 30, 2018.

The department is also estimating an increase in Cook Inlet oil production in fiscal year 2018 to an average of 17,400 barrels per day, up from a 14,900 barrels per day average for this year, fiscal year 2017.

King cautioned that North Slope production estimates could still vary, depending on the success of producers in the large Prudhoe Bay and Kuparuk River fields holding production even, as they did in 2016, King said.

The two fields provide the bulk of North Slope production and have historically declined at about 5 percent yearly. However, field operators BP, at Prudhoe Bay, and ConocoPhillips, at Kuparuk River, managed to largely stem the declines last year.

BP held production at less than a 1 percent decline at Prudhoe even after cutting its drill rigs from five to two. King said it’s uncertain that performance will be repeated in 2017 with fewer rigs at work.

In the Kuparuk River, field production was roughly even with 2015 with the decline largely offset by production from the new Drill Site 2S. CD-5, a nearby production site, also contributed new production, King said.

No new projects are expected in 2017 that will provide a similar offset to decline. However, new production projects now in construction on the Slope will begin production late 2018 and help stem decline in 2019.

These include ConocoPhillips’ new Greater Mooses Tooth No. 1 project in the National Petroleum Reserve-Alaska, with an expected output of 30,000 barrels per day, and Hilcorp Energy’s new Moose Pad project in the Milne Point field, with an expected output of 12,000 to 18,000 barrels per day.

The state spring forecast also revised a production estimate for current-year fiscal year 2017 production to an average of 523,700 barrels per day, a second straight year of increases and far greater than the 495,000 barrels per day that was projected this past December.

This includes greater output from the Prudhoe Bay than state officials expected earlier as well as more production from CD-5.

While the near-term outlook is for level production in Alaska, or a minor decline, the medium-term, to 2022, is more uncertain because low oil prices have delayed some projects that were expected to come on line in that period, according to Paul Decker, chief of resource evaluation group in the state Division of Oil and Gas.

Those include Caelus Energy’s Nuna project, which could produce 25,000 barrels per day, and Mustang, a small project planned by Brooks Range Petroleum, which will be able to produce 12,000 barrels per day to 15,000 barrels per day. Both are on hold and are unlikely to be put into production before 2022.

However, prospects are brighter for the long-term beyond 2022, Decker said, although this may depend on some improvement in oil prices. Armstrong Oil and Gas and Repsol are engaged with regulators on approvals of the Pikka project, which will be capable of producing 120,000 barrels per day, and ConocoPhillips has its GMT-2 in the NPR-A, which could produce 25,000 to 30,000 barrels per day, the company has said.

King said both of those projects are at least five or six years out.

Further out in the queue is Willow, a new ConocoPhillips discovery in NPR-A, that could be capable of 100,000 barrels per day, and Caelus Energy’s discovery at Smith Bay, in state-owned offshore waters north of the NPR-A, the company believes might produce 200,000 barrels per day.

Tim Bradner is co-publisher of Alaska Legislative Digest and a contributor to the Journal of Commerce. He can be reached at timbradner@gmail.com.

Posted May 19, 2017 by aurorawatcherak in Alaska, Uncategorized

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