Category Archives: The Monthly Lead/Alaska Business Monthly

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

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

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

Alaska Oil Policy| “Maximum Benefit” (the fifth in the Alaska Business Monthly Series, from the March 2013 edition)

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

Article VIII, Section 2 of the Alaska Constitution requires that “[t]he legislature shall provide for the utilization, development, and conservation of all natural resources belonging to the State, including land and waters, for the maximum benefit of its people.”

As we have often heard during this legislative session, many read this provision as having significant relevance to the current oil tax debate, arguing that the provision requires the state to tax oil production at high rates in order to derive the “maximum benefit” from the oil for the state’s citizens. Continue reading

The Fourth in the Alaska Business Monthly Series: “Alaska Oil Policy| Achieving Alignment” (from the January 2013 Alaska Business Monthly)

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

The last column in this series (“Out of Alignment,” Alaska Business Monthly, November 2012) focused on the reasons why Alaska oil policy is misaligned with the objective of maximizing the development of the state’s oil and gas resources.

The column discussed the state’s attempted use of two tools—tax credits and direct regulatory intervention—to steer investment to Alaska and why those tools have failed to produce significant results in terms of increased production. As I explained, the state’s use of the tools has been similar to backseat driving—and just about as successful.

The column also briefly mentioned a potential solution to the state’s alignment problem—developing a means for the state to co-invest alongside industry in the development of the state’s oil and gas resources. This month’s column further explains that concept. Continue reading

The Third in the Alaska Business Monthly series: “Alaska Oil Policy| Out of Alignment” (from the November 2012 Alaska Business Monthly)

As noted on these pages previously, recently I agreed to write a bi-monthly column on oil & gas issues for the Alaska Business Monthly.  This is the third column, originally published in the November 2012 print edition and available online here.

 As Alaska finishes this year’s election cycle and starts looking toward the coming legislative session there are several steps which are needed to restore Alaska as an attractive location for oil investment. Continue reading