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Morning Headlamp - Former Governor Weighs in on State's Fiscal Decision

Confidence is key


Confidence is key. In a Fairbanks Daily News Miner op-ed, former Governor Frank Murkowski calls Alaska "its own worst enemy" when it comes to developing a gas line. Murkowski notes that certainty in fiscal policy is step one if the state wants to get on the same page with private industry. According to the piece, "In short, it is the constant change in direction over short time periods (relative to the time it takes to develop a project of the gas line's size) that has caused and will continue to cause the gas line to elude us for so long." Industry investors deserve to know the playing field if investment is to continue. Frequently changing fiscal policy will leave the private sector with no choice but to curb their commitment to Alaska.


According to the Energy Information Administration, U.S. dry natural gas production continued to increase in 2015, reaching 74.1 billion cubic feet per day (Bcf/d). This record-high level was a 4.5% (3.2 Bcf/d) increase over 2014, according to EIA's Natural Gas Annual, which provides final production data for 2015. Production gains were highest in Pennsylvania, Ohio, and West Virginia, due in large part to production from the Marcellus and Utica/Point Pleasant shales. These three states accounted for most of the total increase in 2015. Although annual production in 2015 grew, monthly U.S. natural gas production has since declined in 2016, falling to 71.4 Bcf/d in July 2016 after reaching a peak of 75 Bcf/d in April 2015.


No time like the present. Exxon has been critical of some of Obama's efforts to safeguard natural resources. The company, under now Secretary of State pick Rex Tillerson's leadership, has questioned the wisdom of limiting offshore oil drilling off the Atlantic coast and Alaska. Tillerson told The Associated Press last year that drilling off Alaska is important despite disapproval from environmentalists because "eventually we are going to need it" to meet energy needs. U.S. policy about domestic drilling would fall under the Interior Department more than under Tillerson.


The Alaska Supreme Court ruled in favor of the state on Friday after an epic tax dispute with some of the major North Slope oil companies, a victory that means the state won't need to refund an estimated $500 million in taxes and interest, officials said.


First Reads

Alaska often its own worst enemy on gas
Fairbanks Daily News Miner, Frank Murkowski, December 17, 2016

Governor Releases Fiscal Year 2018 Budget
Sit News, Mary Kauffman, December 17, 2016

Walker renews push for Fund earnings to fill deficit
Peninsula Clarion, Elwood Brehmer, December 17, 2016

Q&A: Secretary Of State Rex Tillerson Could Affect Climate Policy
CBS Miami, December 17, 2016

Oil Patch Job Postings Increase in Early Signal of Recovery
Newsmax, December 17, 2016

U.S. natural gas production resilient to market changes in 2015, but has fallen in 2016
US Energy Information Administration, December 17, 2016

New Alaska House leaders embrace loophole to raise campaign cash from lobbyists
Alaska Dispatch News, Nathaniel Herz, December 17, 2016

State wins case against oil companies worth an estimated $500 million
Alaska Dispatch News, Alex DeMarban, December 17, 2016

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


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