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Quote of the day: No more petroleum economy for Alaska

Suzanne Downing
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7

“As the governor mentioned, a significant aspect of Alaska’s involvement response to the initiatives we will take in climate change will necessarily revolve around a transition from a petroleum economy to a renewable energy economy. That will be a critical and necessary focus going forward.”

– Lt. Gov. Byron Mallott, speaking to reporters directly after Gov. Bill Walker signed an administrative order creating a climate change team and signing onto the Paris Agreement.

Mallott is on the witness list to testify before the Senate Energy Committee on Thursday on behalf of the State of Alaska to ask the committee to pass legislation that will open up the Arctice National Wildlife Reserve Coastal Plain “1002 Area” for oil drilling.

Charlie Pierce holds onto lead for Kenai Borough mayor

Suzanne Downing
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0
Charlie Pierce holds onto lead for Kenai Borough mayor

It’s a wrap: The last Tuesday runoff for Kenai Borough mayor has gone to Charlie Pierce — by 45 votes. The election will be certified at tonight’s Assembly meeting.

The Oct. 23 runoff was the result of a three-way race on Oct. 3, when none of the candidates received more than 50 percent to have an outright win. Voter turnout in the runoff was 19 percent.

The outgoing mayor, Mike Navarre, heads to the Walker Administration, where he will serve as commissioner for the Department of Commerce, Community, and Economic Development. Navarre has served since Dec. 1, 2011 as borough mayor.

The borough government in Alaska is akin to a county government in other states. The Kenai Borough covers 29 communities on the Kenai Peninsula in Southcentral Alaska.

Borough election page results by precinct.

Alaska Gasline, China, and Walker’s ultimate Hail Mary pass

Suzanne Downing
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8
Alaska Gasline, China, and Walker’s ultimate Hail Mary pass

There’s something cooking over at the Alaska Gasline Development Corporation and it’s Chinese. Alaskans can expect a big announcement in the next few days.

With AGDC President Keith Meyer in China for the past many weeks, word is out that AGDC is one of 40 corporations taking part in President Donald Trump’s trade mission to China.

This is a critical month for the gasline project. After head fakes from the Japanese and Korean governments and utilities, the AK-LNG’s eggs are all in the China basket now, as Alaska looks for a customer and a funder for what would be the mega project of the century.

  • Maybe they’ll buy the gas.
  • Maybe they’ll finance the project.
  • Maybe they’ll be in charge of construction.

The public doesn’t know the details, and the public doesn’t even know some of the most critical questions that should be asked.

Some of the unknowns are involved in a rumored deal with Sinopec, which may have committed $45 billion for the project in the past few days.

The role of the Alaska Permanent Fund is another question: Will it pony up the rest of the money? And who among the players will take the risk if costs go through the roof or the financials are not solid?

There are two tracks to this project: Federal and State.

FEDERAL: The federal government has made a lot of progress for the gasline in a relatively short period of time:

  • AGDC received tax-exempt status from the IRS.
  • Getting the Trump Administration’s support for the project is “bigly.” He’s a big-project guy.
  • Getting an introduction to Chinese Premier Xi Jinping was key. Trump wired that for Gov. Walker.
  • All of this happened in 2017, even while the world was awash in natural gas.
  • The U.S. Department of Energy issued a license to the North Slope producers to export up to 20 million tons of LNG yearly. That was before the State took over the entire project.

STATE

At the state level, there is a lot of noise and a governor who has an obsession. The window for getting a customer is closing. AGDC is burning through $3 million a month. Alaskans are doubtful the gasline will be built. And the agency is not in good stead with its funder, the Alaska Legislature. Keith Meyers has been in China for weeks on end, and he’s got a lot riding on Trump’s trip.

But there is progress:

  • AGDC has signed 23 confidentiality agreements to date involving entities from different countries across the Asia-Pacific region. The agreements enable the companies to review technical information in the AGDC data room and AGDC sees that as a critical step toward reaching definitive long-term commercial agreements. [Note: The governor has not been transparent and released who he has signed confidentiality agreement with.]
  • In addition to the Korea Gas Corporation (KOGAS) memorandum of understanding, AGDC concluded six letters of intent that establish the foundation for terms and negotiation parameters for definitive agreements. The letters are non-binding but contain indicative agreement terms. AGDC signed the three most recent letters of intent in Asia in October.
  • AGDC continues to work with KOGAS to advance the memorandum signed in Washington, D.C., on June 28, 2017.
  • AGDC participated in the LNG Producer Consumer Conference and held meetings with potential LNG buyers in Tokyo, Japan on Oct. 18, 2017.
  • AGDC concluded the capacity solicitation process for foundation customer capacity and one producer expressed interest in subscribing to space in the pipeline. In addition to one “conforming intent,” each of the three major producers expressed “interest” in selling gas to AGDC for future sale to global markets.

It’s all very fragile however. When AGDC Chairman Dave Cruz told the Legislature earlier this month that he wants lawmakers and the media to stop badmouthing the project, because it could cost AGDC credibility with the Feds, and that it could deflate any deal that is being advanced in China, he was sending a signal: “There’s something in the works, so don’t mess it up.”

WHAT ABOUT PRICE AND SUPPLY? Today, the AK-LNG line would deliver LNG to Asia for about $12 per million British thermal units, and would cost $45 billion or more to build, according to a Wood Mackenzie study.

Because the IRS has granted tax-exempt status to the AK-LNG project, with the government in the driver’s seat and no taxes, the project could put Alaska LNG into a more competitive range, maybe down to $8 a btu.

And China is a viable customer, whether or not Alaskans like the idea of bedding down with a despotic communist government. The International Energy Agency says that China will account for 40 percent of the global annual growth in natural gas demand over the next five years.

Beyond that, the U.S. will account for 40 percent of the world’s extra gas production to 2022, when production will stand at more than a fifth of global gas output.

WHAT ABOUT RISK? There is a great deal of risk for construction cost overruns in a project this size. AGDC has given out a lot of speculative information about revenue and benefits from the project, as shown in the chart above that was released by AGDC today, but has said nothing about the risks associated with construction. In a deal with China and a nonprofit gasline owned by the people of Alaska, who will be on the hook if the cost of the project is over by billions?

It’s the elephant in the room.

 

Walker Administration suing opioid manufacturer Purdue Pharma

Suzanne Downing
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2

In an unannounced press conference in Juneau this morning, the Walker Administration said it has filed a lawsuit against the manufacturer of OxyContin, an opioid.

Purdue Pharma, the subject of the state lawsuit, makes pain medicines such as hydromorphone, oxycodone, fentanyl, codeine and hydrocodone. Its brands include MS Contin, Oxycontin and Ryzolt.

“The claims that we’re bringing here are based on violations of Alaska state law,” said Attorney General Jahna Lindemuth, who alleged the company misled doctors regarding the risks and engaged in deceptive marketing tactics.

The investigation is ongoing and there may be additional claims that are brought against other companies, she said. The investigation is confidential and is sealed. The lawsuit was filed in Anchorage Superior Court yesterday.

The governor’s livestream video feed was cut for much of the announcement, so check back here for more details.

In September, Washington state sued Purdue Pharma, and the City of Seattle filed a separate lawsuit against Purdue, Teva Pharmaceutical Industries Ltd, Johnson & Johnson, Endo International Plc and Allergan plc.

Other states have filed similar lawsuits, including New Jersey, Louisiana, West Virginia, New Mexico, Oklahoma, Mississippi, Ohio, Missouri, New Hampshire and South Carolina, as well as several cities and counties.

Lindemuth said she considered joining a multi-state lawsuit but decided to go it alone as a complaint for unfair trade practice and consumer protection under Alaska law.

It’s ‘go time’ for Alaskans to weigh in on ANWR

Suzanne Downing
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1

WHAT: The Senate Energy Committee is seeking public comments concerning a bill that includes opening the Arctic National Wildlife Refuge Coastal Plain for exploration and production of oil.

Already, environmental groups are gearing up for battle, and pro-energy advocates say the committee must hear from the rest of Alaskans who want to restore the economy and increase the throughput in the Trans Alaska Pipeline System. Without those voices, the Senate may make a decision adverse to Alaska’s economic future.

WHY IT MATTERS: This is the best chance in a generation to access the oil-producing area of the Coastal Plain.

WHO’S IN CHARGE: Sen. Lisa Murkowski chairs the Energy Committee. Sen. Maria Cantwell of Washington State is the ranking member.

WHEN: The hearing will be held on Thursday, Nov. 2, 2017, at 9:30 a.m. EDT in Room 366 of the Dirksen Senate Office Building in Washington, DC. That’s 5:30 a.m. Alaska time.

Senators will receive testimony on the potential for oil and gas exploration and development in the non-wilderness portion of the Arctic National Wildlife Refuge, known as the “1002 Area” or Coastal Plain, to raise sufficient revenue to fund a portion of the federal budget.

The hearing will be webcast live on the committee’s website, and an archived video will be available shortly after the hearing is complete. Witness testimony will be available on the website at the start of the hearing.

The time to comment is now.

HOW TO COMMENT: Send a brief email supporting the ANWR provision to: [email protected] by Wednesday, Nov.  1 in order to be received prior to the hearing.

The committee will accept testimony for inclusion into the record for an additional two weeks following the hearing, but energy advocates are advising “the earlier, the better.”

Address your statement to: “Chairman Murkowski, Ranking Member Cantwell, and Members of the Senate Energy and Natural Resources Committee.” Send a copy to [email protected].

At the top of your comments, please reference: For Record of November 2, 2017 Hearing

For additional information on the hearing, visit:

https://www.energy.senate.gov/public/index.cfm/2017/11/full-committee-hearing

HELPFUL POINTS: 

  • Open the ANWR coastal plain (1002 area) to exploration and production. Require timely lease sales • Streamline and simplify the permitting process
  • Provide for a 50 percent‐50 percent federal‐state revenue sharing, rather than the 90-10 percent split under current law.
  • Alaska favors responsible development and protecting the environment.
  • Technically recoverable oil within the ANWR 1002 area (excluding State and Native areas) is estimated to be between 4.3 and 11.8 billion barrels (95- and 5-percent probability range), with a mean value of 7.7 billion barrels.

RESOURCES

USGS Publication on AWR

Witness list for invited comments

Live webcast of the hearing

 

Approval ratings: Murkowski, Sullivan even in eyes of voters

Suzanne Downing
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0

There’s not a senator in America whose constituents are so approving as those of self-professed Socialist Bernie Sanders of Vermont.

In the Green Mountain State, 71 percent of those polled by Morning Consult approve of Sanders’s performance.

Alaska’s Sens. Lisa Murkowsi and Dan Sullivan both received approval ratings of 49 percent, about in the middle of the pack and slightly above average.

In the more-conservative state of Alaska, Murkowski’s disapproval rating edged up to 38 percent, while Sullivan’s was 32 percent. The margin of error was calculated at 5 percent in this poll.

Murkowski’s approval has sagged by 6 percent since the last Morning Consult poll in July, when 55 percent of respondents said they approved and 37 percent disapproved.

The average senator approval rating is 47 percent in the third quarter poll.

 

 

Updated: Walker creates climate change team

Suzanne Downing
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15

ADOPTING PARIS AGREEMENT BY DECREE

Gov. Bill Walker this morning signed an administrative order this week establishing the Alaska Climate Change Strategy and the Climate Action for Alaska Leadership Team (Leadership Team), which will be charged with taking actions to address climate change.

The State will engage with national and international partners to support the goals of the United Nations 2015 Paris Agreement and the UN Sustainable Development Goal #13, “Climate Action.”

This fall, Walker hired a top climate change adviser who is commuting to work from Seattle to Juneau by jet to serve in his cabinet. Nikoosh Carlo will be the cabinet’s point person for the climate change team.

[Read: Governor hires climate change adviser]

[Link: Administrative order as signed]

According to the draft order obtained by Must Read Alaska, the Alaska Climate Change Strategy “should encourage community input and collaborate with local and regional governments, indigenous organizations, private sector entities, nonprofit organizations, and educational and academic institutions. Climate solutions should provide equitable support to communities impacted most by climate change. In addition, State leadership should ensure that Alaskan communities and businesses have the support necessary to benefit from the educational and economic opportunities created by the global response to climate change.”

The leadership team will address:

• Mitigation: Actions to reduce, sequester, and offset greenhouse gas emissions to decrease our carbon footprint.

• Adaptation: Actions to evaluate risks and adopt measures to address or reduce the vulnerability of Alaska’s citizens, environment, and infrastructure to climate change impacts.

• Research: Actions to support and bolster monitoring, observing, modeling, scientific analysis, data sharing, planning, innovation, and public outreach and education related to climate change and mitigation and adaptation strategies.

• Response: Actions to plan and train for timely and robust responses to protect and address near-term threats to Alaska’s communities and regions from current consequences and impacts of climate change, including, but not limited to, ocean acidification, coastal erosion, storm impacts, oil and other toxic spills, and infrastructure damage.

Further, the Leadership Team may consider these and other themes in the context of climate change:

  1. Renewable energy and energy efficiency
  2. Social, health, and economic assessment
  3. Economic opportunity and technological innovation
  4. Infrastructure and the built environment
  5. Increasing collaboration and information sharing
  1. Risk communication and planning
  2. Human capacity building
  3. Community engagement and resilience
  4. Emergency response and immediate action

The Leadership Team shall identify measures to attract financial and human resources to the state, the University of Alaska, nonprofit organizations, and other organizations working to address climate change in Alaska with the aim to meet and expand the goals of this strategy.

The Team will present Walker a preliminary plan of action before Sept. 1, 2018 and an annual report in subsequent years.

The order directs State agencies to “prioritize, develop, implement and recommend actions that further the purpose of this Order including regulatory and statutory changes as may be timely and appropriate.”

The team will be made up of 15 public members, as well as a representative from the University of Alaska, a representative from the Alaska Energy Authority, and the Commissioner of the Department of Commerce, Community and Economic Development and the Commissioner of the Department of Environmental Conservation; each commissioner may designate a representative. The Governor may appoint commissioners of other departments as members of the Leadership Team.

The Leadership Team will meet at the call of the Governor or the chair, as may be required. The chair may invite non-members, create and dissolve committees of non-member subject matter experts, and otherwise facilitate the work of the Leadership Team.

The governor’s administrative order repeals Gov. Sarah Palin’s Climate Change subcabinet as detailed in Administrative Order 238.

The governor signed the order in Juneau this morning at an unpublicized press conference.

 

Quote of the day: Pete Kelly tough on crime, taxes

Suzanne Downing
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0

“The Senate will stand with the Governor as he searches for answers to the crime wave.  However, it is inappropriate to link crime to his persistent desire to tax working Alaskans.”

– Alaska Sen. President Pete Kelly, responding to Governor Bill Walker using his crime crisis press conference to push for a payroll tax, per SB 4001.

[Read: Walker gets the message: Crime a top priority now]

 

Walker gets the message: Crime is top priority now

Suzanne Downing
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8

In late 2014, as Gov. Bill Walker was taking office, he assembled his transition team to help develop his list of priorities. It was chaired by Rick Halford and Ana Hoffman, and the document produced for the governor by the transition team is an inch thick. It touches on nearly every topic in Alaska.

Eight pages of the 176-page report were devoted to public safety. Half of that was about beefing up communications and infrastructure capabilities for the general safety of the public, and working on “smart justice” to take justice in a new direction.

“There is a misperception that “smart on crime” means being ‘soft on crime.’There is general widespread ignorance of the large cost savings available for justice reform.” – Walker/Mallott Transition Team Report, November, 2014

The rest of the transition team report covered in great depth tribal sovereignty, tribe-to-state intergovernmental relations, reestablishing coastal zone management, implementing the United Nations Millennium Agreement, revenue sharing with tribes, subsistence, Arctic engagement, fiscal plans, fisheries, reforming Corrections, Medicaid, economic development. And a gasline. The gasline would be the focus, the plan acknowledged.

Weeks later, in his first State of the State Address of 2015, Gov. Walker said nothing of public safety.

At his Sustainability Conference in Fairbanks in June of 2015, Public Safety was not a priority for his room of advisers.

Today, Gov. Walker held a press conference to outline new steps for public safety, which he admits has spiraled into a crisis on his watch. Lt. Gov. Byron Mallott, almost always by his side, was missing, but Attorney General Jahna Lindemuth, and Commissioners Valerie Davidson (HHS), Dean Williams (Corrections), and Walt Monegan (Public Safety) all spoke.

Walker’s public safety action plan shows his intent to study, evaluate, and explore various remedies for crime, but the plan is short on actual targets, milestones or timelines that would be measurable by the public, other than increasing the number of treatment beds for addicts.

But at least as his first term enters its final year, Walker now understands public safety as a priority.

Walker Public Safety Action Plan: Summary October 30, 2017

To address the trend of increasing crime in Alaska, Governor Walker tasked the State’s public safety agencies with evaluating the causes of the rise in crime and developing a concrete action plan. While public safety is a complex and evolving challenge, the Public Safety Action Plan focuses efforts in four main areas: fairness and efficiency in the criminal justice system, addressing the resource needs of Alaska’s public safety agencies, improving the system for addressing mental health and substance abuse issues, and addressing the immediate challenges of the opioid epidemic and drug trafficking.

To improve outcomes in the criminal justice system, public safety agencies will:

  • Continue to evaluate the impacts of criminal justice reform legislation passed in 2016;
  • Work to pass Senate Bill 54 (2017);
  • Begin reviewing clemency applications; and
  • Evaluate law governing exoneration and expungement for potential changes.

To identify public safety resource needs, public safety agencies will:

  • Use existing resources more efficiently by developing tools to better share data among stateagencies and taking other steps to improve interagency sharing and collaboration;
  • Leverage technology to increase agencies’ capacity and improve communications, including creating a statewide domestic violence and sexual assault hotline and adding telecommunication resources in rural jails;
  • Increase local capacity to contribute to public safety, including strengthening the VPSO program, expanding options for tribal courts to provide civil remedies for certain state law violations, and stepping up efforts to educate local law enforcement officers about evidentiary standards; and
  • Request additional resources, such as more troopers and prosecutors.

To improve access to mental health and substance abuse treatment, public safety agencies will:

  • Work to increase the space available at treatment facilities and explore ways to improve process and avoid unnecessary delays in getting people needed treatment;
  • Evaluate and develop a long-term strategy for Title 47 holds; and
  • Explore legislative options to improve processes for criminal cases involving mental health and competency concerns.

To address the opioid epidemic and drug trafficking, state agencies will:

  • Implement the Strategic Plan for Responding to the Opioid Epidemic;
  • Commit more resources to combating drug trafficking, including prosecutors and drug dogs;
  • Seek additional funding and capacity through federal partnerships; and
  • Propose legislation to enable law enforcement to respond more effectively to the threats posed by drug trafficking.
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