Category Archives: Published Commentaries

The Legislature should rethink the Governor’s LNG proposal

Compass (2.18.2014)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

The Monthly Lead: Retaining SB 21 is the right decision, if …

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.

Parnell SB 21

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

Sustainable Arctic Oil & Gas Exploration and Development (from the November 2013 Alaska Business Monthly)

Arctic Oil & Gas Basins (Nov 2013 AK Business Monthly)

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

Why Alaska Needs to Reduce State Spending (and how to do it) (from the October 2013 Alaska Business Monthly)

October 2013 Alaska Business MonthlyIn 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

Morning in Alaska …

Compass (9.8.2013)My appreciation to the Anchorage Daily NewsJuneau Empire and Fairbanks News-Miner for running an op-ed piece I wrote.  The link to the online versions are  here (ADN),  here (Empire) and here (News-Miner).   I titled the piece “Morning in Alaska.”  The ADN ran it as “Alaska spending its way into poorhouse,” which is a quote.  

By BRAD KEITHLEY

During the 1984 campaign, President Reagan’s team ran a 60-second ad that has become an all-time classic. Titled “Morning in America,” the spot focused on America’s sense of renewal during Reagan’s first term. It closed with the line, “Why would we ever want to return to where we were less than four short years ago?”

It is not yet “Morning in Alaska.” In fact, Continue reading

The Alaska OCS and State Fiscal Policy (from the September 2013 Alaska Business Monthly)

September 2013 Alaska Business MonthlyIn addition to pieces on this page and elsewhere, I write what began as a bi-monthly, and now has evolved into a monthly, column on oil, gas and fiscal policy issues for the Alaska Business Monthly.  The following piece was originally published in the September 2013 print edition and is available online here.

Sometimes state officials and other proponents argue that oil tax reform is needed to keep the Trans Alaska Pipeline System (TAPS) operational “until” oil from Shell Oil Company’s Chukchi Sea or other Alaska Outer Continental Shelf (OCS) projects come online in the 2020s.

The implication is that Continue reading

Alaska Fiscal Policy: Is This Generation of Alaskans Failing the Next? (from the August 2013 Alaska Business Monthly)

August 2013 Alaska Business Monthly

In addition to pieces on this page and elsewhere, I write what began as a bi-monthly, and now has evolved into a monthly, column on oil, gas and fiscal policy issues for the Alaska Business Monthly.  This is the eighth column, originally published in the August 2013 print edition and available online here.

In 1976 Alaskans passed a constitutional amendment establishing the Permanent Fund. The amendment provides in pertinent part that “at least twenty-five percent of all mineral lease rentals, royalties, royalty sale proceeds, federal mineral revenue sharing payments and bonuses received by the State shall be placed in a permanent fund.”

Those here during that period attribute the passage of the amendment to two things. Continue reading

Comment: Rep. Gara’s myopic view

(Reprinted from the Juneau Empire, July 7, 2013)

AN OP-ED BY BRAD KEITHLEY

In a recent My Turn piece (“Answers to questions about the oil tax cut,” June 27, 2013), Rep. Les Gara argues that supporters of SB 21 are “spinning” facts. In fact, Rep. Gara is the one who has gone into full “spin” mode.

The real test of whether a change in tax policy is good or bad is its overall, long term revenue impact, not what it generates in a select number of years. By focusing only on the revenue levels estimated to be produced in the first few years, Rep. Gara argues that SB 21 is failed tax policy, when the full set of facts demonstrates otherwise. Continue reading

Alaska Oil Policy| Missing the Point (from the July 2013 Alaska Business Monthly)

Alaska Business Monthly (July 2013)As noted on these pages previously, I write what began as a bi-monthly, and now is shifting to a monthly, column on oil, gas and fiscal policy issues for the Alaska Business Monthly.  This is the seventh column, originally published in the July 2013 print edition and available online here.

At the time this piece publishes, those seeking signatures on petitions to hold a referendum to overturn SB21, the governor’s oil tax reform bill, will be in the final days of their effort. If they succeed, a long campaign of more than a year will follow on the issue, with a vote scheduled for the August 2014 primary ballot. Continue reading

Alaska Oil Policy| Understanding Investment (the sixth in the Alaska Business Monthly Series, from the May 2013 edition)

As noted on these pages previously, I write a bi-monthly column on oil & gas issues for the Alaska Business Monthly.  This is the sixth column, originally published in the May 2013 print edition and available online here.

Petoro Investment Cycle Slide 2Alaskans heard the word “investment” a great deal during the recent legislative session.  They likely will hear more of the word in the months and years ahead as the state continues efforts to bring increased investment to the North Slope, and others evaluate whether those efforts are successful.

In that context I thought it would be useful to write a column on oil investment.

The Chart

To do that, I have borrowed a chart from a company called Petoro.  Those who read my January column (“Alaska Oil Policy:  Achieving Alignment,” Alaska Business Monthly, Jan. 2013), will recognize Petoro as the arm of the Norwegian government engaged in co-investment with industry in the development of that country’s oil and gas resources.  I chose to use a chart from Petoro because it is viewed largely as a neutral entity, not likely to tilt the information playing field one direction or another. Continue reading