Last month I outlined some concerns about the proposed Alaska LNG project and suggested that the legislature look more deeply to the experiences of other, successful projects elsewhere in the world to evaluate whether Alaska was applying global best practices. (See The Legislature should rethink the Governor’s LNG proposal, Feb. 18, 2014)
As I have listened to the testimony and presentations about the Alaska LNG project in the intervening period my concerns have only deepened, and, disappointingly, the legislature still has not appeared to turn to the lessons learned from other, successful projects to determine whether Alaska could be doing better with this one. As Alaska discovered with AGIA and ACES, sometimes — oftentimes — its not productive to create new approaches when others already have proven successful. I am concerned that Alaska is going down the same road again.
As I outline in the attached (a copy also can be downloaded here), I believe this project is going wrong in three critical areas.
- Fails to achieve the “alignment” which the earlier Alaska North Slope Royalty Study found critical to successful efforts,
- Unlike successful, similarly situated projects elsewhere in the world, does not provide Alaska with an active role in the critical upstream segment of the project, and
- Something I know a little bit about, potentially creates significant fiscal policy issues for the state and, by transferring a profitable segment of the project to a Canadian entity, does not maximize return to Alaskans.
Sometimes these things are better captured in a slide deck than by an extended essay. I developed this slide deck in the format I would use if asked to testify or speak further on the issue.
My appreciation to the Anchorage Daily News and Fairbanks News-Miner for running an op-ed piece I wrote. The links to the online versions are here (ADN) and here (News-Miner). I titled the piece “The Legislature should rethink the Governor’s LNG proposal.” The ADN ran it as “Governor’s plan the wrong way for the state to get a gas line.”
BY BRAD KEITHLEY
As someone who long has argued in favor of state co-investment in the development of Alaska’s oil and gas resources, I was hopeful last fall when the state released the “Alaska North Slope LNG Royalty Study.”
With references to the need for “alignment” between the state and the industry and analyses of successful projects elsewhere in the world involving state participation, I believed that the Governor potentially was positioning Alaska to play a more active role in the development of its own resources, much in the same way as do some large landholders in the Lower 48 states and other governments that are resource owners.
The “Heads of Agreement” and related legislation (Senate Bill 138) that the Governor introduced at the start of the session, however, fall well short of the mark. Instead of adopting global best practices taken from successful LNG projects, the Governor’s proposal is a confusing patchwork that is fraught with risk and even if it works perfectly, would not advance the goal of enabling the state to help drive increased activity where Alaska needs it most – in the upstream development of its oil and gas resources. Continue reading
Through last month, I wrote a monthly op-ed column on oil, gas and fiscal policy issues for the Alaska Business Monthly. I have suspended that column while some talk about me running for Governor (ABM’s policy understandably is to discontinue any “writings” by formally announced, or potential candidates). In the meantime I am continuing to write a lead monthly article for the blog, called “The Monthly Lead.” This is the first such piece.
With certification this fall by the Division of Elections, the question of whether to repeal Senate Bill (SB) 21 – the oil tax reform enacted and signed by the Governor earlier this year – will be put to a statewide vote next August. The issue on the ballot will be “Should this law [SB 21] be rejected?” A “yes” vote will be to repeal SB 21; a “no” vote will be to retain it.
If SB 21 is rejected, Alaska’s oil tax approach will revert to ACES (Alaska’s Clear and Equitable Share), the state tax policy enacted in 2007, which virtually all legislators last session agreed was in need of reform, although many argued for different approaches.
Retaining SB 21 is the right decision if the Governor and legislature enact needed budget reforms this coming legislative session. This piece explains why. Continue reading
Last year (2012), on the afternoon of July 27, I had a meeting at my request with UAA Chancellor Tom Case, primarily to discuss the recent hiring of then-UAA Women’s Basketball Coach Nate Altenhofen.
The University had announced the hiring of Altenhofen in late May, as the successor to highly successful Coach Tim Moser.
During the intervening two months I had come to develop deep concerns about Altenhofen based on his prior record and discussions with others Outside involved in women’s basketball. As politely stated as I can, Altenhofen had developed a reputation of becoming involved with his players and staff in inappropriate ways, not something you want especially in a women’s basketball coach. He had left his prior position as an assistant at Indiana University amidst rumors after only a year there, and had been out of college basketball entirely (i.e., no one would take a chance on him) in the year preceding his hiring by UAA. Continue reading
Two seemingly unrelated events came together this past week to bring the emerging condition of Alaska social policy into stark relief.
The first event occurred Monday, with the release by the federal Energy Information Agency (EIA) of its most recent Short Term Energy Outlook (STEO). Published monthly, the STEO is a look at the year ahead based on the then-best information. In my experience, Continue reading
Arctic oil and natural gas resource basins in the Arctic Circle region (click to enlarge).
Source: US Geological Survey
In addition to pieces on this page and elsewhere, I have been writing a monthly op-ed column on oil, gas and fiscal policy issues for the Alaska Business Monthly. The following piece is the last in that series (at least for awhile), as I go to the bench while some talk about me running for Governor (ABM’s policy understandably is to discontinue any “writings” by formally announced, or potential candidates). This final piece for the ABM was originally published in the November 2013 print edition and is available online here. In the future I will continue writing a lead monthly article for the blog, called “The Monthly Lead.”
Normally pieces that begin with this title are about the environmental aspects of oil and gas exploration and development in the Arctic. This piece isn’t.
Instead, this piece is about the commercial aspects of oil and gas exploration and development in the Arctic and near-Arctic, and what economic characteristics make ongoing activity sustainable in some regions and not in others. From my perspective, there is a lesson for Alaska in the results. Continue reading
At one point in college I took a writing class. (I know what the readers of this blog are thinking at this point, “he should have taken more!!” But that’s not the point of this piece.)
The professor had a particular point of view that he hammered in class after class. Writing, particularly fiction but also sometimes non-fiction writing, he argued, is really about conveying “subtext.” The story on the surface is never the real story; the real story is always in the “subtext.” Continue reading
Yesterday afternoon I understand an Alaska Republican Party official used a meeting I regularly attend — but did not yesterday — to go negative about me.
Not that he was very creative in doing so. Claiming to have done “opposition research,” he appears simply to have duplicated the same script that already had been offered about a month ago to Amanda Coyne, probably the best of Alaska’s political columnists.
Here was her response: Continue reading
Click above for full slidedeck.
One of the things that is critical in the race for Governor and legislature this coming election cycle is for the candidates to spell out their vision for how Alaska survives the challenges it faces in the coming decade. What the state looks like in the 2020′s and beyond largely will be shaped in the next four years. As the University of Alaska-Anchorage’s Institute of Social and Economic Research (ISER) has said: Continue reading
In addition to pieces on this page and elsewhere, I write a monthly op-ed column on oil, gas and fiscal policy issues for the Alaska Business Monthly. The following piece was originally published in the October 2013 print edition and is available online here.
Based on state Office of Management and Budget data, over the last decade annual state government general fund spending—operating and capital combined—has nearly tripled, from roughly $2.3 billion in FY 2004 to a now-projected $7.1 billion for FY 2014.
Over the same period, the Consumer Price Index (CPI) has only increased by 27 percent. Continue reading