Archive for the ‘energy’ Tag

A bad fate for a good project   Leave a comment

Fairbanksans have had this familiar sinking feeling before!

A bad fate for a good project: Committee assignments belie claims of support for Interior energy – Fairbanks Daily News-Miner: Editorials.

Posted March 3, 2015 by aurorawatcherak in Alaska

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What Happens If Proposition 1 Passes?   Leave a comment

The Vote No crowd has outspent the Yes group by a factor of 8:1, but the polls show Prop 1 may still pass. It’s hard to absolutely know. Polls in Alaska vary greatly and are skewed by a variety of factors.

However, if Proposition 1 passes, the State of Alaska goes back to the ACES “taxation” system. I use the quotation marks because it’s not really taxation as we think of taxation. It’s the equivalent of the resource extraction fee a Texas landowner gets from the lease of his land to the oil companies. The subsurface minerals of Alaska are owned by the people in common, administered by the State of Alaska. No other state has this arrangement. It’s socialist as hell and I don’t think it was a good idea, but it is the way that it is. I believe Congress required us to write our constitution that way so that the people of Alaska would never take an ownership role in the resources. They misjudged us in that, but our legislature must relearn the lesson that the resources belong to US and that WE do not owe the oil companies anything. Proposition 1 is the people schooling the Legislature in remembering who they work for and that isn’t the oil companies.

When … if … Proposition 1 passes, dogs will not start mating with cats, as the oil companies want us to believe. ACES will return. Because the price of oil per barrel is down, Alaska will actually collect less revenue than it did under SB21. Why is that a good thing?

It’s not … but it is. SB21 gives the oil companies a very good deal for a very long time. ACES gives them a less good deal for a lesser amount of time. ACES can be tweaked to require the oil companies to deliver new exploration and development or lose tax credits. It sends a message to the oil companies that the Legislature and the Governor do not work for them, that the oil belongs to the people and that we refuse to be taken for granted. It also gives us an opportunity to pull leases from companies that have been sitting on resources for decades and perhaps offer those leases to smaller, preferably Alaska based companies that will be more competitive.

What will the oil companies do?

Well, I guess that depends on how much they want to retain their control over the Alaska fields.

I predict a lot of grumbling, some shifts of leases to smaller competitor and then Exxon, BP and Shell will get on board with the new regime and things will improve. Production might even increase.


Alaska should vote no on Measure 1 – Fairbanks Daily News-Miner: Community Perspectives   Leave a comment

Alaska should vote no on Measure 1 – Fairbanks Daily News-Miner: Community Perspectives.

I go back and forth on this issue, which is why I am running this Community Perspective and the following letter to the editor that takes it apart.

I’m of two minds. As a fiscal conservative, I think that low taxes are a good idea, especially on businesses. However, Alaska is not a normal state because our state government owns the mineral rights under everybody’s property. The only way Alaskans get any benefit from OUR resources are through the sale of royalty oil (and gas, if we ever get any out of the ground) and taxes. If I find oil under my land, it belongs to the State and the State leases it the producers and without taxation it would pass out of the state without an “owner” deriving a benefit.

Think of the State of Alaska as Farmer Joe Smith in North Dakota or Texas, not as the State of Alaska. In many ways, it is a business entity. It’s very socialist, I don’t think it’s a good idea, but it’s what the federal government required of us to become a state and … there you have it.

So after decades of the oil companies getting the LOWEST TAXES IN THE WORLD, we finally got around to restructuring the tax system to what was known as ACES. ACES was a fair taxation system that lacked a key element — tax breaks for exploration and development of new fields. ACES was on par with other states for taxes and in line with what it costs producers in OPEC countries. Alaska raked in some good revenue for a few years, thanks to ACES. The oil companies punished us by slowing down production. In typical Alaska wimp tradition, our Legislature decided to scrap ACES and return to lower tax structure. We’re back to selling our resources for far less than they’re worth. I opposed that because the math said we’d quickly be in revenue freefall and like it or not, we own the oil collectively and we have a right to get paid for OUR resource.

But ….

The oil companies are showing some signs of developing new fields and new fields will mean more oil in the pipeline, more jobs for Alaskans, and more royalty oil for the State of Alaska corporation to sell.

And, uncertainty is the quickest way to drive away investment. Alaska is already nervous-making for capitalists because we are a socialist structure (like it or not), so the last thing we need to do is start acting in a capricious manner. Let’s hold the course for 3-5 years and see where it takes us. If it doesn’t work as Mr. Wein suggests it will, reinstate ACES with the addition of inducements to explore. I personally would like to see inducements that favor smaller, Alaskan-based companies, but that’s another topic.

So, as of today (I might feel differently tomorrow), I’m voting “no” on Proposition 1. Please read the article for a full discussion of the issues. I don’t wholly agree with Mr. Wein (no surprise there if you’re a regular reader), but his arguments are sound.

Alaska’s LNG Project Legislation Explained   Leave a comment

Alaska’s LNG project legislation explained

Larry Persily

Senate Bill 138, which passed the Alaska Legislature and is expected to receive Gov. Sean Parnell’s signature, provides a framework for the a large LNG project.File art

EDITOR’S NOTE: This article is written for publication by a federal agency whose goal is to transparently coordinate permitting and construction of a pipeline that delivers Alaska’s natural gas to the Lower 48.

Negotiations between the state of Alaska, major North Slope oil and gas producers and pipeline company TransCanada toward a partnership to develop the proposed Alaska LNG project will follow directions approved by state legislators April 20.

The measure, Senate Bill 138, was one of Gov. Sean Parnell’s main legislative initiatives this year. It passed the Senate 16-4 and the House 36-4.

The legislation amends multiple state laws, allowing negotiations to proceed toward the state becoming an equity partner in the multibillion-dollar project — one of the world’s largest liquefied natural gas export plants. Passage was essential for the five-party deal that will govern designing, permitting, building and operating the project.


Posted May 5, 2014 by aurorawatcherak in Alaska

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Unintended Consequences of Renewable Energy?   Leave a comment

Unintended Consequences of Renewable Energy?.

The article and attached comments say it all.

Lawmakers not quite done in Juneau, but gas project is approved – Alaska Journal of Commerce – Breaking News 2014 – Anchorage, AK   Leave a comment

Lawmakers not quite done in Juneau, but gas project is approved – Alaska Journal of Commerce – Breaking News 2014 – Anchorage, AK.

Posted April 22, 2014 by aurorawatcherak in Alaska

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Refinery shutdown may impact asphalt supply, costs – Alaska Journal of Commerce – March Issue 5 2014 – Anchorage, AK   Leave a comment

Refinery shutdown may impact asphalt supply, costs – Alaska Journal of Commerce – March Issue 5 2014 – Anchorage, AK.

Posted March 28, 2014 by aurorawatcherak in Alaska

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Fairbanks senator wants to pursue coal plant without regard to federal restrictions – Fairbanks Daily News-Miner: Local News   4 comments

Fairbanks senator wants to pursue coal plant without regard to federal restrictions – Fairbanks Daily News-Miner: Local News.

Alaska already suffers from crushing energy prices. In the winter, it costs us $500 a month to heat our 1800-square-foot home and home diesel was $3.70 to $4 a gallon through the winter. Electricity is $200 a month since we turned off the electric hot-water heater.

We are the most energy-rich state in the union, but we pay the among highest rates for energy in the 50 states. Whenever we try to do something to mitigate those costs, the federal government comes up with a permitting system that effectively destroy whatever plans we make.

It sounds nuts. Spend all this money to build a plant that we’re not going to use, but ….

We know the time is coming when the federal government will go into free fall and Alaskans will be on our own. We might as well be ready for it. And, technically, we can build whatever we want to build on state land and not have to worry about federal permitting until we fire it up.

If we wait for the federal government to be in a state where it can’t argue (much) then we can simply say “Go pound sand” and do it.

Just Do It!

You Can’t Make Lunacy Up   3 comments

The United States may well have the largest oil reserves in the world. Alaska alone, were we a stand-alone country, would rank as the 13th largest government-owned oil reserve in the world, making us OPEC material. Yet because of intense lobbying by environmental organizations, the United States government has locked up 67% of domestic oil reserves and 40% of domestic natural gas reserves on federal land, making us dependent on foreign oil imports. Our problems run much deeper than that, however.

The NIMBYs (Not In My Back Yard) and the BANANAs (Building Absolutely Nothing Anywhere Near Anything) oppose building so much that the United States hasn’t built a new oil refinery since 1976. All remaining American refineries are running at full capacity, so that when one needs to be shut down for routine maintenance, it causes a temporary shortage in the supply and a spike in prices. Rules and regulations at the state and federal levels block the petroleum refinement industry from building new refineries. Old worn-out refineries are closing. California closed 10 between 1985 and 1995, representing 20% of the state’s refining capacity. California’s energy policy is literally wedded to radical environmental groups, so it is unlike any new refineries will be built there in my lifetime.

Building a refinery would cost at least $2 billion and take about 10 years. If – IF – permits could be obtained, there’s no guarantee the refinery would ever be built. Why? Well, where would you build it where it would be welcomed? And, if you could find such a community, the radical environmentalists would organize and energize the NIMBYs and BANANAs with concerns about air pollution or the dangers of large trucks and railcars carrying hazardous materials or the potential for leakage into the environment. Scientific facts to the contrary, the ostrich party acts like refinery environmental standards haven’t improved at all in 40 years.

The Department of Energy predicts domestic oil consumption will increase 43% by 2025, but production will grow only 23%. Meanwhile, Congress has poured more than $23 billion of our money into alternative energy sources like windmills, solar panels and ethanol, all in the name of conservation. In reality, no combination of conservation, technology or alternative fuels can come close to replacing the fossil fuels system we already have. Maybe, after years of research, testing, permitting and construction, distribution system for alternatives will begin to take a larger share in the marketplace, but in the meantime, we NEED domestic oil and gas NOW!

The United States imports more than 60% of its oil from unstable nations in the Middle East where the entire region is on verge of revolution. Our policies have left us at the mercy of Libya and Saudi Arabia. We’re a coup or an assassination away from radical factions putting our economy into a tail spin that will pulverize the US economy.

It is WAY past the time to institute bold long-term plans to keep the nation’s lights on and disentangle our transportation system and industry from world conflict. Such plans would include reopening the off-shore fields and opening access to energy rich areas currently off limits to exploration, like the mere 2000 acres in ANWR. More importantly, we need to build refineries to process the raw materials into usable gasoline, diesel, etc.

For this to happen, the American people need to get real-world woke up RIGHT NOW. Our economy does not run on magic fairy dust. It runs on energy and, more importantly, it runs on reliable energy. Wind and solar do not, at this time and probably not for decades to come, qualify as RELIABLE energy. Solar is a low-efficiency energy source that costs more in fossil fuel to produce than it saves in the lifetime of a solar panel. Wind has high-efficiency, but is reliant upon the changeable weather. Both raise the ire of some NIMBYs because they tend to spoil the view. Do you see the irony of that? A green solution is not desirable because it causes visual pollution?

No, you really cannot make this lunacy up!

Popular Madness   1 comment

Ouch! I went to the gas station on Saturday morning fully intending to drive out to our cabin site with a full tank of gas.

$3.98 a gallon! This is for regular unleaded in the second largest city in Alaska. Alaska! Where the Trans-Alaska Pipeline runs just 10 miles from my house and the second-newest refinery in the nation (35 years old and counting) operates 15 miles from my house. Alaska, sitting on an ocean of oil. What the heck?!

You have probably had a similar experience. I hear Chicagoans are paying $4.36 a gallon. They deserve it more than I do.

What? Yeah. The main reason your gasoline prices and my gasoline prices are so stinking high can be found with a good look in the mirror in most American households. It’s not OPEC that’s screwing you. It’s you or your fellow Americans who support policies that block new drilling and the building of new refineries on American soil. You are the cause of high gasoline prices!

Tom Deweese of Canadian Free Press suggested that the real political parties in the United States are the NIMBYs (Not in My Back Yard) and the BANANAs (Build Absolutely Nothing Anywhere Near Anything). These two political forces are driving the nation’s future by dictating the policy agendas of the Republicans and the Democrats. These are one variety of progressives who infest both major political parties and have far reaching effects.

I like to call these people collectively “the ostrich party”. They want towns to remain small, but they want homes of their own and jobs to support them. They want to build those homes in rural areas with beautiful vistas and clean air, but complain when someone else gets the same idea. They complain that a neighbor’s new home has blocked their view, never considering that their home blocked someone else’s open space. They want to be able to use their cell phones and computers wherever they go, but they support programs that lock away land to keep wilderness pristine, free of human development, power lines and, uh, cell towers.

There is something entirely ironic about a nation of three-car-garage homes that opposes filling stations, refineries and power plants. Our lovely, clean, well-ordered American landscape has no place for industry to make the things we need, but then we expect our policymakers to make those things work at a reasonable price.

This is the result of at least three decades of implementing the radical agendas of special interests like the Sierra Club and the Nature Conservancy – rich powerful groups that have spent billions to push their policy of no growth, which they brand as Sustainable Development, through Congress and into our local communities. The news media and corporate commercials constantly barrage us with the “go green” message to indoctrinate the nation into a collective guilt complex because we need to use energy and grow food to eat.

Banning the building of things that have been termed “not green” sounds noble. Americans pack public meetings to express our outrage over plans to build a power plant in our community. If, as recently happened in Fairbanks, the public demands were to have one of those smelly polluting coal plants built to relieve our 27 per kilowatt hour electric bills, the local newspaper is deluged with comments from people who live elsewhere demanding to know why we’re so stupid. Don’t we know that breathing coal fumes will give a small percentage of the population asthma and possibly acserbate the COPD of elderly smokers in 30 years?

Don’t you know that cold will kill us this winter if we can’t afford to keep the power on? But what about the view of Denali (Mt. McKinley to the Outsiders)? We’ll destroy the view of that precious peak by wreathing it in pollution. I can live with smack-awesome winter sunsets to keep my modestly-sized home warm.

Modern American society is properly indignant with no responsibility for the consequences. We restricted our access to energy and our ability to process it into a useable form to the point where the cost of heating and cooling our homes, driving our cars, and flying our planes is spinning out of control.

Eighty-eight percent of the energy for America’s transportation, industry, government, and residential needs comes from oil, gas and coal. The nation shuts down without them! Except for a handful of House members, there is no drive in Congress to ease regulations to allow for domestic production and the Executive branch insists the only solution is the stop using energy … be “sustainable”.

Is freezing to death sustainable?

It then pretends to address the energy shortage with massive grants for “alternative energy,” like wind mills and solar cells. We have to get off our dependency on foreign oil, Barack Obama insists, as these alternative energy sources supply only about 1% of our energy needs with no signs of immediate improvement despite massive “investment”.

Just suggest to a green that the solution to reducing our dependency on foreign oil and lowering costs at the pump might be a few more oil wells on American soil and watch their blood pressure soar. Veins will start popping in their foreheads! Congress and federal agencies have banned oil activity on more than 300 million acres of onshore federal land and 460 million acres of offshore territory. The United States may well have the largest oil reserves in the world, but 67% of oil reserves and 40% of natural gas reserves are locked away on federal lands in the western states because environmentalists fear that drilling will damage ecosystems.

Such green scare-mongering is little more than bedtime terror stories told to frighten children. Technology allows for safe drilling, even in Alaska’s tundra wasteland of ANWR and the shallow Chukchi Sea.

Oh, but we don’t want oil wells in our back yards! Really? Are you that stupid? Maybe it comes from living through -50 (that’s below zero) every winter, but I’d be fine with seeing an oil wellhead pump on my way to work every day if it meant it didn’t cost me $7000 a winter to heat my home.

But access to the oil in the ground is just a small part of the problem. The spoiled brats packing the public meetings have created a much greater crisis than that.

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