A MAJOR FLIP-FLOP ON ARCTIC OIL AND GAS INVESTMENT
It was just 18 months ago that former Gov. Bill Walker announced he had struck an agreement with Goldman Sachs to participate in financing of a gasline from Prudhoe Bay to Nikiski, along with other global players, such as the Bank of China. The agreement is technically still on the books.
That was then. Of course, the gasline has proven to be financially unfeasible at this time, and other private sector players are now looking at shipping natural gas through newly opened Arctic Ocean shipping lanes.
[Read: Group to bypass gasline, ship Arctic gas via ocean]
Today, Goldman Sachs has done a massive flip flop and turned its back on oil and gas investments in the Arctic, specifically naming the Arctic National Wildlife Refuge, which Goldman Sachs has suddenly redlined against investment.
Goldman Sachs, one of the largest investment companies in the world, says it’s also going to shrug off a lot of forestry and mining. Basically, if it is an Alaska resource, one of the largest banks in the world is saying it’s just not that into it.
“Oil development in the Arctic Circle is prone to harsh operating conditions, sea ice, permafrost coverage, and potential impacts to critical natural habitats for endangered species,” Goldman Sachs said in its Environmental Policy Framework. “The unique and fragile ecosystems of the Arctic region also support the subsistence livelihoods of indigenous peoples groups that have populated certain areas in the region for centuries.
“For transactions relating to Arctic oil, we apply enhanced due diligence including understanding companies’ strategy and commitment to reducing overall [greenhouse gas] GHG emissions. Among factors, we consider: energy use and GHG emissions; environmental impacts; emergency management plans; forest and biodiversity preservation; endangered species protection and management plans; and any local community impacts, including those relating to indigenous peoples and subsistence resources.
We will decline any financing transaction that directly supports new upstream Arctic oil exploration or development. This includes but is not limited to the Arctic National Wildlife Refuge. – Goldman Sachs
“Companies’ diversification strategy and carbon emissions reduction initiatives will be a key consideration in our evaluation of future financings with the goal of helping their transition strategy,” the Environmental Policy Framework added. “We will phase out our financing of thermal coal mining companies that do not have a diversification strategy within a reasonable timeframe.”
Goldman Sachs makes no mention of its 2018 agreement with the Alaska Gasline Development Agency, which under the supervision of Gov. Bill Walker had developed a funding framework for the gasline.
The decree against Arctic oil and gas development is coming from the company that during the 2016 presidential election forbade its top executives from donating to the campaign of Donald J. Trump, while allowing them to donate to the Hillary Clinton campaign.
The Wall Street Journal took note of the company’s turning its back on Alaska’s economy.
In an interview with the newspaper, Gov. Mike Dunleavy told columnist James Freeman that Alaskans will have to decide “whether we want to do business” with Goldman Sachs anymore.
“And who can blame Alaska if it chooses to cut ties with the Wall Street megabank?” the columnist wrote.
Goldman Sachs’ newest version of its environmental policy says the company “will decline any financing transaction that directly supports new upstream Arctic oil exploration or development.”
Dunleavy told the newspaper that the unintended consequences of the company decision are real, and that Alaska has some of the most stringent environmental standards in the world. Oil producers will just head to regions that are less regulated.
“You’re going to push jobs and wealth and revenues” to overseas areas and “exacerbate” ecological problems, Dunleavy told the newspaper, which added the obvious: If Goldman Sachs takes this stance against Alaska, other investment institutions will step up and see opportunity. There’s plenty of capital out there right now. Goldman Sachs can virtue signal all it wants, but it’s not the only dance partner.
Could Alaska cut ties with Goldman Sachs? Not only does Alaska have a $67 billion Permanent Fund that is invested on Wall Street, but has billions invested through other trust funds, such as:
- Public Employees’ Retirement System (PERS)
- Teachers’ Retirement System(TRS)
- Judicial Retirement System (JRS)
- National Guard/Naval Militia Retirement System (NGNMRS)
- Alaska Supplemental Annuity Plan (SBS-AP)
- Deferred Compensation Plan (DCP)
- Defined Contribution Retirement Plan (DCR)
A political firewall between the executive branch and the funds’ managers makes it difficult for the Dunleavy Administration to take any specific retaliatory actions against Goldman Sachs through the Alaska Permanent Fund investments, as much as he and Alaskans would like to.
But that doesn’t mean Dunleavy has to remain silent. He can talk with the Legislature and the people of Alaska about whether the State wants Goldman Sachs to handle its bond sales (for oil and gas tax credits, ironically), now that the East Coast banking company has decided it wants to shut down Alaska’s economy. Those bond sales are handled by the Department of Revenue, in the Executive Branch.
In addition, with an ally like President Donald Trump, Dunleavy has some additional leverage of his own in the court of public opinion. And he’s shown he’s not going to be bullied by the environmental organizations that want Alaska to be a playground for the elite to come visit during the summer.
Goldman Sachs might be a good one to stay away from, for Alaska and investors in Alaska. Virtually every stock market, currency and precious metals manipulation scandal has Goldman Sachs right at the top of usual suspects. Goldman Sachs has been busted numerous times, both in America and abroad and paid enormous settlements/fines (enormous to us little people). That doesn’t stop them. They’re as crooked as the road between Indian and Anchorage.. With their “banning” investment in Alaskan resource development, their true leftist bent is obvious. Another instance where the left will sacrifice anyone or anything to attain their goal of absolute control (turn Alaska bluer). I’ll bet not one of them has ever lived in Alaska and experienced the rigors, trials and tribulations endured by all (ok, most) Alaskans.
They’re as crooked as the road between Indian and Anchorage
Must be why Trump hires these guys. Wonder why he took Gary Cohn when he could of had Donna Arduin? The redline comment is ridiculous. I did not know oil companies, mining companies and the timber industry were considered minorities.
Leo,
Never said a word about Trump. Why, when anything less than sterling is said about anyone, is President Trump brought up? That’s asinine. Even in a “deplorable” company like Goldman Sachs, there are bound to be a few who are honest and straightforward enough to be chosen by the President. I trust President Trump implicitly. I don’t trust any leftists. Can you be trusted?
There is no room for a populated Alaska in Agenda 30.
The vampire squids ran the numbers and determined it is more profitable to take a stand against economic activity in the Arctic than the fees they might from Arctic transactions. Unfortunately, the permitting risk is so great and getting worse, there isn’t enough for them to get excited about. Nevertheless, we should severe all ties with GS.
You forgot that on average around 2 Million tourists visit Alaska year after year.
Many of these tourists are long time “returnees”…these two million people from the outside are more than twice the amount of Alaskans who call this place home.
The outside consumer voice is strong…these folks invest in 401 K’s, Mutual Funds and IRA’s.
Goldman Sachs is reading the writing on the wall all the way from AFN to Atlanta.
The message is clear that Climate Change is a real concern to our country and Social Media Campaigns are stronger than ever.
The 6 PF Board of Trustees are governor-appointed. If they don’t pull investments in GS, then he just has to rotate them out, appointing some who will.
Begin the slicing of fund and money relationships one account at a time till they are all cleaned away from the state of Alaska. Walker and Mallott were the worst of managers this state has seen. Goldman Sachs needs to be totally cleaned out of any business with the state of Alaska and its employees, retired persons and insurances. The federal government should be helpful through the help of President Trump and the agencies dealing with debt and insurance.
Oh yeah face? You wanna play hardball? Well here goes your nose.
GS is leaving a vacuum that someone else will fill.
GS is leaving a vacuum that someone else will fill.
Sorry boys – you got it all wrong.
Alaska bond rating is declining because our Governor and a substantial part of the electorate believes they are owed a Permanent Fund dividend before we pay off our debts. Not a good investment for anyone.
The dividend is poison to our long-term economic stability.
The sooner you wrap your tiny head to that concept, the better!
Funny there is No money in our budget for PFD’s but somehow the Legislator Aid’s just got a $$$ per diem bump that will cost the state of Alaska nearly half a million dollars a year?
No money for PFD’s yet per diem and salaries are on the rise year after year?
Not even sure what to call the garnishment of people’s funds for government?
Can’t blame the imbalance on Capitalism that is for sure there is plenty of Revenue year after year.
Is anyone old enough to remember when Goldman Sachs helped cause the 2008 mortgage crisis? Goldman was forced to pay $5 Billion in penalties for their crimes. Of course, that was a mere slap-on-the-wrist pittance compared with the amount of wealth Goldman managed to transfer into its pockets from Main Street American taxpayers. You know, the Americans whose homes were foreclosed on and lost their life savings?
Do you remember how The Federal Reserve (which has always been staffed with ex-Goldman Sachs executives) bailed out all the Wall Street banks and not one single executive went to prison for their crimes?
If one looks deeply into Goldman, one will find a whole lot of people running it that could care less about America, let alone Alaska.
As we sit at the precipice of the first deep state coup of a duly elected president in U.S. history, we might be wise to never do business with companies like Goldman Sachs again.
Goldman loved Bill Walker’s gas pipeline for two reasons: He was a liberal and because China (where Goldman has firmly attached its tentacles) was going to the be on the receiving end of that state subsidized liquefied natural gas….plus it was going to be backed and guaranteed by the Alaska government (read: the Alaska people).
No matter what, Goldman would have had made a fortune on the deal, all while enjoying a failsafe backstop on any possible losses courtesy of Alaska.
Time for all of us to reasess who we do business with. Look at the massive levels of corruption that has infested corporate oligarch global corporations (loyal to no country) who are in a conspiratorial partnership with our most powerful politicians.
While Goldman Sachs, one of the largest investment enterprises in the world, has caved to radical environmentalists by saying the company won’t invest in Alaska’s Arctic oil, it’s investing heavily in oil development in the Russian Arctic.
Goldman Sachs, in fact, is investing in unregulated dirty oil.
Hooray!! Governor Dunleavy has instructed the State of Alaska (12/23) to begin eliminating Goldman Sachs from all investment opportunities offered by the State. They (Goldman S) also has been removed from the State list of “preferred” financial institutions for Alaska. Way to go Governor.
Funny how Goldman Sachs talks down about Alaskan investment, espousing “environmental” issues, while at the same time, they invest in Russian arctic oil drilling, the most polluting in the world. Little two-faced there, Goldman Sachs? Try your leftist tactics on the Russians. See where that takes you,
GS.
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