By Dan Fagan
Publisher
The Alaska Standard 

You won’t read any of this in the pro-tax, pro-ACES, anti-oil industry Anchorage Daily News, but things are not going very well for Alaska’s oil and gas industry.  

In the Alaska Division of Oil and Gas latest lease report, Eni Petroleum, Anadarko Petroleum Corp. and FEX, Talisman Energy’s Alaska subsidiary, have all relinquished significant state lease positions in northern Alaska. The relinquishments come just a month or so after Eni terminated its Rock Flour unit in the central North Slope.

Why are so many oil and gas companies losing interest in investing in Alaska? You don’t have to be an oil and gas economist to know raising production taxes on the industry 400 percent might have something to do with it. Or burdening the industry with a progressivity rate so high at certain prices the tax rate rises to close to 100 percent. 

The University of Alaska Institute of Social and Economic Research reports oil pays for about 90 percent of the State budget, and without it Alaskans would be faced with steep reductions in public services, ruinous taxes and a likely end to the popular Permanent Fund dividend.

Former Alaska Speaker of the House Mike Bradner has begun to sound the alarm. He writes in Alaska Business Monthly,

…the State’s overall fiscal structure imposes some of the world’s highest taxes on oil production, and that’s a touchy issue State leaders have yet to grapple with. The combination of high taxes, the high cost of working in remote areas, modest prospects for discoveries at least onshore, and what is said to be one of the nation’s toughest regulatory regimes may have created the perfect storm in driving off new industry investment.

A perfect storm indeed and one most candidates running for governor are ignoring. Democrat Hollis French, and Republicans Bill Walker and Sean Parnell all agree ACES is a wonderful tax policy. French practically wrote it and Parnell has been its champion since he took office as Lt. Gov.

While taxes are deterring investment on the North Slope tax incentives are spurring investment in Cook Inlet.

Bradner reports in Cook Inlet, new State incentives have prompted new interest by companies. Apache Oil and Gas, a major U.S. independent, has expressed interest in buying acreage, as have other companies. One is a Tennessee-based company, Miller Petroleum, that has acquired the small Redoubt Shoal and West MacArthur River fields. The new interest is sorely needed because Cook Inlet’s existing oil and gas fields are decades old and nearing depletion.

Geologists have said there is more oil and gas to be found in Cook Inlet, but the discoveries are likely to be modest and the costs high. Still, the Legislature has bet State cash on the prospects, in the form of the new incentives, and companies are showing interest.

Our current governor seems to understand the incentivizing power of lowering taxes on the Cook Inlet fields but not when it comes to the big three producers on the North Slope. Mr. Parnell also probably understands reducing taxes on the big three will bring a fight from the Anchorage Daily News. Or maybe he is so weak as a leader he can’t stand up to the Palin Gas team he left in place. Whatever the reason, time is wasting and the oil in the trans-Alaska Pipeline is reducing rapidly at a rate of 6 percent a year. 

There’s insufficient exploration to find enough new oil to flatten the decline. Projects like Shell’s offshore program, or ConocoPhillips’ development of known deposits in the NPR-A, could provide needed oil, but they are now delayed by federal restrictions and permitting problems Mike Bradner reports.

He also says there are worries that the amount of oil moving through the trans-Alaska oil pipeline may approach the point within just a few years where the pipeline will begin experiencing operating problems. Alyeska Pipeline Service Co., which operates the pipeline, says the point at which operating problems set in is a throughput of 500,000 barrels per day. The pipeline now moves about 640,000 barrels daily, but the rate is expected to decline to 500,000 barrels per day by 2014.

Bradner believes the geologic potential of the North Slope is huge. He says geologists believe that the Slope is one of the world’s greatest hydrocarbon-generation systems, so the oil and gas are clearly there.

Obviously the lack of new oil in the trans-Alaska pipeline is caused by several factors including obstruction from the Obama administration. But the biggest hurdle that we can control is state taxes.

But that will take a politician willing to spend political capital to make it happen. No one on office now seems interested in the fight. 

By Patrick J Buchanan

Where a man's purse is, there his heart will be also.

If you would know where the heart of the Obama party is today, consider. In the dog days of August, with temperatures in D.C. rising above 100, Nancy Pelosi called the House back to Washington to enact legislation that could not wait until September.

Purpose: Vote $26 billion to prevent layoffs of state, municipal and county employees whose own governments had decided they had to be let go if they were to meet their constitutional duty to balance their books.

Workers their own governments thought expendable, Congress decided were so essential, it borrowed another 26 thousand million dollars from China to keep them on state and local payrolls.

Click here to read the rest of the story. 

By Alex Gimarc 
Alaska Standard Contributor

The anti-Pebble Mine people have been very busy this summer.  They started out with a series of anti-Pebble ads by Trout Unlimited.  Nobody involved wants to tell us who has been funding those ads.  The next series of ads are aimed at people running for the state primaries in two weeks.  They demand that voters only support candidates that will kill the project. 

The latest outrage out of Bristol Bay are attempts to get the EPA to weigh in before any of the state permitting has even begun and prohibit any use of dredged or fill materials by the mine.  They even managed to invite EPA Administrator Lisa Jackson to Dillingham for a “listening session” to hear complaints about the project.  The final insult took place this week as the Bristol Bay Native Corporation wrote a letter to the EPA demanding it preemptively step in and kill the project by blocking any use of rock taken from the mine for fill or other purposes.

So the anti-Pebble Alaskans and greens outside of the state that have turned obstruction of this project into a cause celeb want to invite the EPA to stick their tentacles further into this state?  Be careful what you wish for Boys and Girls, as it is in your best interest that the EPA stay as far away from you and your villages as humanly possible.

Remember that this is the very same EPA that was singularly unable to execute its primary mission of oil spill cleanup in the Gulf of Mexico.  The nation was saved from their incompetence and buffoonery by the microscopic life in the Gulf of Mexico that literally ate the oil and turned it into food for higher life forms like fish and shrimp.  The EPA did nothing in the Gulf other than obstruct and make the cleanup and spill mitigation efforts more difficult.  Do you really want them in Alaska with a larger footprint?

This is the same EPA that announced that they were going to start regulating particulate discharge into the atmosphere under the Clean Air Act.  This is aimed squarely at farming and rural America, as you simply cannot farm without raising dust.  And you cannot drive down a dirt road if it is dry without raising dust.  The EPA in all their wisdom aims to stop all that “pollution.”  There aren’t a whole lot of miles of paved roads in the Bristol Bay region.  What makes you think that after nuking Pebble Mine under the Clean Air and Clean Water Acts, the EPA won’t turn next to regulating every aspect of your lives in Bristol Bay?

This is the same EPA that announced it was going to regulate discharges of carbon dioxide based on some specious notion that manmade emissions of carbon dioxide cause manmade global warming.  The last time I checked, the commercial fishing fleet in Bristol Bay was all diesel powered.  And when you burn diesel, you put carbon dioxide, water vapor and particulate matter into the atmosphere.  You also spill some small amount of diesel into the “pristine” waters of Bristol Bay every single time you take a boat out.  Do you really, really want the EPA nosing around in Bristol Bay – for whatever reason?  Really? 

Be very careful what you wish for, as the EPA will never stop where you want them to stop.  And if you invite them into the State of Alaska to kill your own particular dragon (Pebble Mine), don’t be surprised if it turns right around and kills your businesses, communities and livelihoods just like it has in countless small communities nationwide.  When that happens, don’t expect anyone else in the state to stand up for you or take any steps to mitigate the damage, as you will have brought it upon yourselves.  You won’t get much sympathy either.

My suggestion for Bristol Bay is to let the state process work.  The State of Alaska has the most stringent permitting and approval process for new mines in the nation.  And Pebble is just another mine.  Trying to undermine and obstruct the process at every step will only serve to further erode and damage the credibility of everyone from the Bristol Bay region.  And eventually, the rest of us are going to stop listening and caring.

By Dan Fagan
Publisher
The Alaska Standard

I’ve had my doubts about Senatorial candidate Joe Miller from my first dealings with him.  Miller shouts from the rooftops how he is so much more conservative than his opponent Lisa Murkowski and yet he’s been a big cheerleader for the gigantic job and investment killing tax increase we know as Alaska’s Clear and Equitable Share or ACES. How can such a stanch conservative be so pro tax?

For me strike one against Miller came when ACES first passed Miller called my show praising the tax increase. Then after announcing his candidacy for the U.S. Senate he appeared once again on the show and tap danced on the tax increase refusing to take a stand. He has since said ACES could be, could be mind you, deterring investment but the verdict is out.

What type of conservative has to see evidence gigantic tax increases deter investment? The kind of conservative who needs to stay on Sarah Palin’s good side. With that type of conservative who needs liberals.

Another strike against Miller is his insistence on being dishonest about Lisa Murkowski’s stand on Obama Care. Murkowski has done everything in her power to fight Obama Care and Miller knows it. Yet he continues to insist Murkowski is against repealing Obama Care even though she has already voted to do so.

But where I really question Miller and what amounts to strike three for me is his decision to hire Paul Bauer as his campaign manager. Bauer has sent me several angry e-mails through the years indicating he unstable at best, completely crazy at worst.  

Bauer’s wife has also called me several times going on wild tirades about several different issues. Last week she called the owner of the company I work for, who just happens to be in his 70’s, at midnight his time to complain about my show.

And then last night Bauer’s wife approached my colleague and fellow talk show host Dave Stieren and some of the UAA College Republicans while they were enjoying an evening out together in what can only be described as a profanity laced tirade. At one point Bauer threatens to bury Stieren alive. 

Someone caught the incident on video and you can see it below. Warning: Some may find Mrs. Bauer’s language offensive.