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Morning Headlamp - Alaska sucks?


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The loser state. According to a Forbes' report on the Best States for Business, Alaska ranks 47th. Craig Medred took offense to being ranked next to West Virginia, but understands how Forbes got to their conclusion. According to Medred, "The 49th state continues to face a revenue shortfall of more than $3 billion per year. Gov. Bill Walker has already robbed Alaskans of half of their beloved Permanent Fund Dividends in hopes of using the money to help shore up the budget and denied oil companies tax credits that had been hoped would encourage them to up the ever declining flow of oil through the transAlaska oil pipeline. Instead the oil industry is cutting jobs, and the economy is spiraling downward."

 

"Alaska's economy is unlike any other in the U.S.," Forbes noted. "It is estimated that the oil and gas industry is responsible for more than 80 percent of the state's revenues...Alaska is one of only four states where gross state product is down over the past five years and the employment outlook ranks as the fourth worst in the country, according to Moody's Analytics.

 

The ever-present threat of new taxes only digs this hole deeper. Alaska's biggest industry, and employer, does not deserve the fiscal uncertainty we've witnessed over the past two years. Headlamp can only assume that even the slightest improvement to industry conditions would result in Alaska moving up in the rankings.

 

Sen. Lisa Murkowski recently sent a letter to the Bureau of Land Management (BLM), urging it to withdraw its Draft Regional Mitigation Strategy (DRMS) for the National Petroleum Reserve-Alaska (NPR-A). "First, the premises of the Draft Regional Mitigation Strategy are deeply flawed," Murkowski wrote in her letter. "The document seeks to address conditional impacts resulting from hypothetical development and requires advanced compensation for the sustainability and enhancement of environmental conditions."

 

According to a BLM report, "the intent of the DRMS is to provide a well-balanced mitigation framework that will increase consistency, predictability, and certainty for future oil and gas development, while providing for environmentally responsible development of resources within the Northeastern NPR-A," BLM State Director Bud Cribley said. "Once the DRMS is finalized, it will be an important step towards ensuring the sustainability of natural resources in the Arctic, including important subsistence wildlife populations." Headlamp applauds Sen. Lisa Murkowski's continued advocacy for the industry and Alaska's future.

 

Pentex Alaska Natural Gas Co. is close to changing hands for the second time in less than two years in an effort to shepherd along the struggling Interior Energy Project. The Fairbanks North Star Borough-owned Interior Gas Utility has a preliminary $58.2 million agreement in place with the Alaska Industrial Development and Export Authority to purchase the parent company to Fairbanks Natural Gas and holder of the Titan LNG plant on Point MacKenzie in Southcentral.

 

Holding hands in the cold. Associate in the Geopolitics and Security Unit at Polar Research and Policy Initiative Richard Clifford penned an extensive dive into US-Russian Arctic relations examining the surprising levels of cooperation between the two global powers. Clifford included a look at global economic trends in his and according to the author, "global economic trends have diminished the attractiveness of developing Arctic oil in the short term. If there is to be contestation over resources within the region, this has been postponed for the time being as cooperation in the region continues. At time of writing, oil prices are at roughly $51 per barrel. With the low oil price, OPEC states refusing to cut production and developments like US shale gas, global oil markets have been in flux for some time. Currently, the race for Arctic resources narrative is not playing out as some expected. For example, while the frequently-cited statistic is that 22% of the world's undiscovered resources reside under the Arctic ice, much of these resources actually fall within the EEZ of states, thus giving them sovereignty over these areas."

 

The midnight hour. The U.S. House of Representatives passed legislation yesterday that would allow Congress to more quickly overturn "last-minute" Obama administration rules, including for the energy sector. The bill is part of GOP efforts to streamline or cut regulations as Republican President-elect Donald Trump prepares to take office. The House voted 238-184 to pass the Midnight Rules Relief Act of 2017, or H.R. 21. The bill would amend the Congressional Review Act so that Congress can repeal multiple new regulations at one time. Under the CRA, lawmakers can file a disapproval resolution to undo a regulation finalized in the past 60 legislative days and prevent the government from crafting substantially similar regulations.

 

First Reads

AK, the loser state
Craig Medred, January 4, 2017

Murkowski seeks withdrawal of Alaska mitigation strategy
Daily Energy Insider, January 4, 2017

AIDEA agrees to sell Pentex to Fairbanks utility
Alaska Journal of Commerce, Elwood Brehmer, January 4, 2017

How has cooperation in the Arctic survived Western-Russian geopolitical tension?
Arctic Now, Richard Clifford, January 4, 2017

NOAA releases plan for Alaska endangered beluga whales
Fairbanks Daily News Miner, Dan Joling, January 4, 2017

House GOP kicks off new anti-reg push with passage of Midnight Rules Relief Act
SNL, Molly Christian, January 5, 2017

AK Headlamp
A project of the Alaska Support Industry Alliance
3301 C Street
Anchorage, AK 99503

 

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