Promising Arctic Positions from Administration Officials
Morning Headlamp, October 27
Did we hear you correctly? Members of the Obama Administration seemed to show support for Arctic oil and gas development at an Atlantic Council event this week. Amy Pope, Vice Chair of the White House Arctic Executive Steering Community and Deputy Homeland Security Advisor and Deputy Assistant to the President said the Arctic will "likely continue to provide valuable supplies to meet U.S. energy needs into the future," and that "responsibly developing Arctic oil and gas resources aligns with United States' 'all-of-the-above' approach to developing domestic energy resources."
Admiral Robert Papp, the State Department's Special Representative for the Arctic backed the region's inclusion in the Administration's offshore oil and gas leasing program: "I personally agree with all our Alaskan friends who have been here. We have to maintain our options [by including the Arctic]. And I think that somehow encouraging further development is important, simply because we are going to be dependent upon petroleum and gas for a long time."
During the event, Ms. Pope stressed that consultation with Alaska Native and indigenous communities is a "core principle of our national strategy for the Arctic region" and "absolutely paramount to a successful approach in the region."
Headlamp applauds the officials' acknowledgement that the Arctic represents a region of economic and strategic importance to the United States and encouraging infrastructure and development should be a key policy goal.
Economist Roger Marks fired back at Robin Brena's recent spate of op-eds arguing for the state's "fair share" of oil revenues. According to Marks, "There are two things wrong with this. First, the historical share since North Slope production began has been 23 percent, much lower than 33 percent. If you take the Alaska's Clear and Equitable Share (ACES) years out (2007-2013), where there were very high oil prices and tax rates, the long-term share is more like 20 percent. (This includes royalties and production, property, and state corporate income taxes, including restricted royalties going to the Permanent Fund.) Anyone can confirm this data using historical information from the Department of Revenue's 'Revenue Sources Books.' The second problem is that this is an ill-advised way to ascribe 'fair share.' In fiscal year 2016 the state received $1.3 billion in petroleum revenues, 17 percent of gross market value, while the taxpayers were losing money."
In North America alone, oil companies have signaled they may collectively hike oilfield spending 25 percent to $110 billion next year, the largest budget increase since at least 2000, according to investment bank Evercore ISI, which surveys the oil companies every year. That money would flow directly to the oil field service companies that make drilling equipment and employ thousands of workers in Houston and around the country.
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Obama Admin Officials Express Support for Arctic Oil & Gas Development
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