Saturday, December 22, 2012

Sandy Hook: Who or what is to blame?

What happened on December 15, 2012 with the attack on the school by a heavily armed Adam Lanza, aged 20, was a tragedy and the logical outcome of an incomplete policy.

The federal gun free school zone was passed in 1990. A constitutional challenge prevented this law from being enforced. Many states had laws that preceded the federal attempt to expand gun free zones around schools. Connecticut was a state that adopted such a ban, but, as happened in each state that passed such a ban, failed to follow through to actually make a meaningful policy that would protect the kids from a terrorist attack. Nationwide, politicians at the federal and state level dropped the proverbial round short. The carnage that ensued from the politicians’ arrogance and negligence has failed to catalyze any correction, other than specious demands of firearms bans.

Adam Lanza was a terrorist. He had a mission. He had the weapons, and he acted without restraint. He went to Sandy Hook Elementary with the knowledge that he would be safe, that there would be no armed staff or visiting law abiding citizens who would be legally carrying concealed to present a threat. He knew that he had some time before any response by the local police in which to do the maximum damage. He took full advantage of the politicians’ negligence in crafting the ban on firearms in schools. The only prohibition was . . . words in a statute.

To take attention off of what allowed Lanza to act with impunity, to gain access and shoot young children without armed response, the liberal media and the liberal politicians are going hell bent for leather to hang . . . a rifle. They are not making any attempt to fix the law, they are seeking to ban a particular style of rifle alleging that once again, merely banning with words will serve to protect our children in unprotected elementary schools.

What could have been done under the intent of the law intended to protect children in elementary schools that now was not being done?

The average elementary school is open to the public during the day with several unlocked entrances. In some schools, there are some security cameras, but not enough to cover every entrance. There are no protocols that require locked doors with single point of entry to the school. There are no armed security or armed staff members to present a counter threat to any attempting to harm the schools’ youngsters. Visitors are not escorted to and from the office tothe classroom and back to the entrance door after the visit. For all practical purposes, the schools are unprotected.

The threat from terrorists is world-wide. From Finland to Israel, attacks on schools over the last thirty years have been increasing. Whether the terrorists are Islamic jihadists, revolutionaries, or students under the influence of anti-depressents, the threat to U.S. schools has always been considered a possibility. Why then, after 9-11, after the November 2009 massacre at Ft. Hood, after the prior school shooting incidents were elementary schools overlooked with respect to upgrading their security?

Government at every level has been silent on this issue. They have their red herring in the media’s demonizing of the AR15 sporting rifle.

No politician, including President Barrack Obama and Sen. Diane Feinstein, has to date suggested improvements to elementary school security, rather than specious attempts to ban weapons that are incredibly popular with Americans. The politicians’ misdirected cries to ban the rifle have eliminated any opportunity to have a public discussion of actual security improvements for elementary schools.

Until the politicians get serious about security, only words will be the outcome of the Sandy Hook Elementary massacre. We owe our children and the memory of those killed at Sandy Hook meaningful attention to creating a an environment that is reasonably secure from a terrorist attack.

Other nations have faced this problem and have addressed the reality. None more so than Israel. Israel’s children were a target of high value for terrorists since its inception. The Israeli law requires an armed security guard on duty at all Israeli schools. Some of the school staff are also armed. The Israeli model presents no opportunity for an unopposed attack on a school.

The American liberal model of no armed guards or armed staff, no single point of entry, insufficient security cameras, no protocols for escorting visitors not having children at the school, but prohibiting firearms by law, only served to make the elementary school a criminal safety zone.

Americans need to demand from their politicians that the safety and security of our children does not call for firearms bans. The safety and security of our children require real world solutions. They need to demand armed security guards, the ability for the school staff to carry concealed, the ability of law abiding parents who legally carry to be armed on school grounds, thereby magnifying the number of law abiding adults who could act to defend the children by several orders of magnitude. Protocols need to be instituted that require locked doors, single point of entry, and security cameras. That banning weapons is a red herring that will prevent nothing.

The massacre at Ft. Hood, a U.S. Army base by Major Nidal Malik Hassan on November 5, 2009 should be an indicator that even the U.S. Army is not immune from terrorist attacks on U.S. soil.

Our schools need not suffer politically correct solutions, such as gun bans. It is time to go to work and to finish the job on making our elementary schools secure. Adam Lanza was a terrorist whose act could have been prevented by proper security. Banning the AR15 will not provide any such security. No criminal will attack an a prepared target.

Had the politicians carried through with the necessary steps to secure the elementary schools beyond the words of the firearms prohibition laws, no one may have ever heard of an Adam Lanza and Newtown, CT may have continued to be the quiet backwater that it was so proud of.

Firearms bans and restrictive gun laws are meaningless, feel good, ineffective legislation and a waste of time.

CT received $668.85M in DHS grants

The gun control advocates are going full bore to eliminate U.S. made rifles that are complimentary to our military models. These civilian rifles use the same type of magazines and the same caliber of ammo, making a readily available supply of spare magazines and ammuntion outside of military stores. Such is necessary to maintaining a strong, indigenous firearms manufacturing base for national defense. The Second Amendment and Alaska Statutes require that we as citizens maintain a firearm for use during a call up of the unorganized militia (AS 26.05.010, AS 26.05.110).

The fact that owning this type of rifle is a good investment and shooting them is just plain fun is an affront to the civility and righteous indignation of the liberal gun control advocate.

The howl for gun control and the banning of "high capacity" magazines are red herrings designed to obscure our politicians’ and state and local leaders’ negligence and outright ignoring of the very real danger to our schools. A danger that was promised by fatwa before and after September 11, 2001. Bin Laden had signed a fatwa in February, 1998 "to kill the Americans, civilian and military" that was inclusive of killing American children.

Another danger had been building since the 80s that was the result of the overuse of anti-depressants on young male children. A result that was unforeseen in the mad rush to ‘calm’ little boys into being quiet and to "behave" without instilling discipline or a sense of right and wrong. A result forced by liberals who believed that little boys should act other than as normal male adolescents. In the liberal view of man, males were too aggressive.

What was a noticeable change between those children who were in school since the early 80s, and those generations before? What could their parents and even schools do that was not legal prior to the 1980s?

The drugging of male children. At times, without the parents’ consent. That is why the shooters in school shootings are all male. Every shooter in the schools who was a student had been on prozac, luvox, ritalin or some other anti-depressant. They had taken themselves off of their prescribed medication and had gone ‘cold turkey’. The result was to create a paranoid, violent, psychotics. There was never any long term clinical study on the use of these drugs on male children, before they began to be prescribed for young children. Yet, these drugs have been used on male children as young as 3 years old. Behavioral modification by drugs, a liberal dream come true. In the 1990s, ritalin presecriptions rose to 2 million and then doubled every two years. (Merrow Report, PBS, 1995).

These dangers coalesced into the threat of armed attacks upon our schools, with the goal of killing children, creating terror, and gaining notoriety for the organization or the attackers themselves. Armed attacks were anticipated and mitigation for such was provided for under the Department of Homeland Security’s homeland security grant program to the States.

Adam Lanza was a terrorist. He did what terrorists do: he killed to create terror, for whatever his reasoning, he assaulted the school--he had to break in, and he attacked staff and students to gain noteriety and to send a message to his dead mother. He killed 27 people. It has been reported, that given his mental issues, he too may have been on anti-depressants.

Studies have been done at the federal level on how to protect our schools from an armed attack. Our military and our civil security know that the threat exists to the schools, but little or nothing has been done to create security protocols and to place armed security at elementary schools that would certainly reduce the potential for carnage, if not outright eliminate the potential for such.

In Israel, school security includes armed guards and armed staff. This model has been effective in preventing armed attacks on Israeli schools by terrorists.

At Sandy Hook Elementary a single point of entry through a locked door with a security camera was in place. That was a good first step. Evidently, the windows were not shatterproof, as that is how Lanza gained entrance after the door would not open. The principal put Lanza’s yelling and shooting on the loudspeaker system to notify the teachers to lock their rooms. The implication is that they lacked a common code word that would have notified staff to immediately go into lockdown. No armed guards or armed staff.

Did CT have the money to mitigate the armed threat that Adam Lanza demonstrated?

The State of Connecticut each year receives homeland security grants:
2011: $23M
2010: $142M
2009: $192M
2008: $37.5M
2007: $98M
2006: $22.6M
2005: $34.2M
2004: $60.6M
2003: $47.15M
2002: 11.85M

Total 2002-2011: $668.85 million in homeland security grants.

The DHS homeland security grant monies are designated by the applicant (State, county, city, school district) for planning, threat evaluation, disaster mitigation, hardening of vulnerable targets--including schools, training for emergency management, first responders, and impacted personnel--school staff for example; equipment for WMD and emergency response, communications, and emergency management.

Why did the state and local police, civil leadership of CT and DHS not act to harden the schools, against an armed threat? In failing to do so, they were negligent in their duties and responsibilities.

Schools have been targets of terror world-wide. On September, 1, 2004, over 1,000 school staff and students were taken prisoner at School 1 in Beslan autonomous republic with disastrous results for the students. 186 children were killed in the ensuing attempt to rescue the children. 334 people total were killed. How could this happen in a country with draconian prohibitions against private gun ownership? Russia has such strong gun laws, that only three groups have weapons: the Russian government agencies, including the military, the Russian mob, and the jihadis.

Was CT's problem simply being too politically correct to accept the idea of armed security and staff in elementary schools, or was it a sitaution of recognizing the threat, but dismissing it, because of the small probability of an armed incursion actually happening?

NEA, liberal administrators and staff do not want armed security in elementary schools. Guns! are bad!

We need to adopt the Israeli policy of an armed guard and at least one trained armed staff member. Teachers should be allowed concealed carry.

Law abiding citizens should be allowed to carry in a school when they come to visit their kids, to pick them up, or to attend functions. This increases the armed security protection significantly at no cost to the school district.

Had there been an armed security guard or had there been armed staff, Adam Lanza's attack would have been truncated very early on, probably at the door.

Instead, we have liberal gun control advocates howling about 'high' capacity magazines and other nonesense that has no bearing on the problem. They express anger and outrage that the NRA would even suggest armed security. Yet, the liberal gun control advocates and politicians want a meaningful dialogue.

Why do banks have armed security? To protect the customers’ valuables. Were the 20 kids killed at Sandy Hook unworthy of the protection afforded . . . money?

The liberal politicians at every level of government, including President Barrack Obama, do not want to owe up to the fact that all they did when the school firearms prohibitions were passed was to put words in a code book. Without the rest of the program--locked doors, training, security protocols, and armed staff and amred security--the words of the law only created safety zones for the Adam Lanza’s.

Who's to blame for our school massacres? Liberal politicians and anti-gun groups.

The only effective remedy to reducing crime has been arming the law abiding citizen. Criminals do not want to encounter, armed citizens. They want unarmed victims. Same for terrorists.

CT had collected over $668,850,000 from the federal DHS homeland security grant program. Why did CT’s leaders not see to it that their schools were hardened against an armed threat? Heads should roll. They ignored the threat. The children and the school staff paid the price.

Now, do we learn from that inexcusable negligence, or do we let the red herring of ineffective gun laws take away our attention from the reality of the Sandy Hook Elementary massacre: CT had the money, but did not protect their children!

Saturday, December 15, 2012

The 2d Amendment and the Sandy Hook Elementary Massacre

On December 14, 2012 a horrific mass murder occurred in Newtown, CT, a small town that was noted as being ‘quiet’ and a nice place to live. Already, the liberal politicians are jumping on this like ‘white on rice’ to make political hay over the bodies of the dead.

A 20 year old named Adam Lanza who evidently suffered from mental issues was the shooter. It is reported that a total of four pistols had been found at the shooting site. He also had a semi-automatic rifle in his trunk that was not used. He murdured 28 people, including Nancy Lanza, his mother, that day.

The liberal outcry has focused the public scrutiny upon the firearms and the false need to further restrict American’s Second Amendment rights to self-defense and self-protection.

Apparently, Nancy Lanza was one who collected firearms legally. The liberal press has been trying to make her hobby appear aberrant in the eyes of the public and has implied that her acquisition of the firearms was possibly illegal. It appears that at least two of the pistols used were hers. The Bushmaster AR15 rifle found in the trunk of Adam Lanza’s car was also her’s. All legally owned, and legally purchased.

Adam Lanza killed his mother and used her legally owned firearms to commit mass murder. Not once has the media managed to link Adam’s possession of the firearms with the killing of his mother. Obviously Adam Lanza acquired the firearms used in the mass murder by murdering his mother. Not by legally acquiring them. The question that should be asked is, did he have to kill his mother to get the firearms in the first place?

It has been reported by NBC that recently Adam Lanza tried to purchase a rifle on two separate days at a sporting goods store in Danbury, CT, but had been refused the purchase both times. CT has a waiting period before purchase. However, the report stated that he had been refused the purchases. A waiting period is not a refusal for a purchase. More should be forthcoming in the investigation as to why Lanza was refused the purchase of a rifle twice.

Connecticut, like every State, has imposed restrictions on legal firearms carry on school grounds. Law abiding citizens who legally carry a firearm are not allowed to take the firearm into a school. Law abiding citizens obey the law, criminals and those with criminal intent do not. Elementary schools are left unprotected from the criminal. Many inner city middle and high schools in heavily populated states with gang related violence have metal detectors and armed guards.

Given the prohibition against carry on school grounds, would any sane law abiding concealed carry gun owner risk jail time to go to the aid of the people in the school with their firearm, were the individual to witness a shooting in progress?

Legally carrying concealed carries no obligation to go to the aid of another or to put your own life at risk. That many have gone to the aid of others in jeopardy is a tribute to their sense of civic duty and training. The legal use of firearms by law abiding citizens has stopped 1.5 million to 2.5 million crimes a year across the U.S., and saved hundreds, if not thousands of innocent lives each year.

An Alaskan, like his/her Outside peer, who legally carries a firearm will not carry the firearm where prohibited to avoid breaking the law. The individual is not a threat to the children, other than in the minds of liberals who want absolute control over our lives.

The liberal believes that taking the firearm away from the law abiding citizen makes us all safe. History has shown that premise false. The Brady law waiting periods, and CT is one state with a waiting period to purchase a firearm, did not result in any reduction in crime rates where implemented.

Where concealed carry laws have been passed, mass mayhem arising from shootings between legal carry citizens has not happened, much to the disappointment of the liberal politicians. From 1977 to 1992, states that passed concealed carry laws had a reduction of 8.5% in murder, 5% reduction in rape, 7% reduction in aggravated assault, and a 3% reduction in robbery.

If the number of kids killed were a factor, football for our children would be outlawed. 45 kids were killed over a three year period in the 90s from heat stroke, injury to the head, and heart failure. Yet, there is no hue and cry to ban football.

NYC Mayor Michael Bloomberg is prominent in his taking advantage of this tragedy to call for the banning of firearms. This is typical of the liberal elite. Bloomberg is a billionaire who has one of the few concealed carry permits in NYC and is protected by armed body guards. A typical liberal hypocrite. You, lowly citizen are not to be trusted with a firearm, but those who live in the world of the rich and liberal are as gods on Mt. Olympus, above reproach and excepted from any earthly restrictions on self defense and protection. It is for the common man or woman and the children to be sacrificed upon the liberal alter by the criminal so that these elite can ‘feel good’ about themselves. Oh, see how civilized that we are, we took their firearms away, violence has been banished . . . because we say it is! And, they tend to live in areas relatively crime free due to private security, and increased police patrols, because of their economic and political status. Such people do not live in the real world, but they recognize the danger, because they enjoy private armed security protection and they exercise their Second Amendment right to self-defense by concealed carry, where they act to deny the same right to the average law abiding citizen.

Is everyone forgetting the 13 service members killed at Ft. Hood by Major Nidal Malik Hasan on 5 November, 2009? This slaughter happened on a military base where concealed carry is prohibited. The soldiers were all unarmed.

The July 20th theater shootings by James Holmes in Aurora, Colorado were in a business that prohibited the legal carry of concealed firearms. Only Holmes was armed. The theater was a safe place for Holmes to commit his carnage.

April 16, 2007 Virginia Tech campus shootings were enabled, because the college regents had prohibited the legal carry of concealed firearms. Only the shooter was armed, leaving the student body at the mercy of the criminal and the insane.

In each of these massacres, the victims were unprotected, unarmed and vulnerable. The common element was their vulnerability imposed by shortsighted politicians passing unrealistic laws prohibiting their right to self-defense using a firearm under the Second Amendment.

You cannot outlaw something and make it so. The war on drugs is an abject failure. DUIs are still prolific–yet there is no law to outlaw cars, other than SUVs.

Crime is rampant in our major cities in the face of major initiatives to better police the high crime areas and to educate against violence. The missing element is the armed law abiding citizen.

To the socialist liberal, if firearms were banned, then Adam Lanza could not have killed those children. Yet, in China, on the same day, a demented individual with a knife managed to slash 22 elementary children at their school. Private firearms ownership is prohibited in China. The weapon used is irrelevant, because it is merely a tool, it is the state of mind of the killer that is the catalyst.

A firearm can be an advantage a criminal, but, not if there are citizens legally armed and prepared to respond. We arm the police for self-protection, why not ourselves? We have the right under the Second Amendment to self-defense. Our rights are endowed by a Creator and immutable.

The major factor in the proliferation of crime in many states has been the disarming of the law abiding citizen, or placing such restrictions on firearms ownership that one cannot carry outside of the home, and must keep the firearm locked and unloaded in the house, thereby making them useless–except as an object of theft. The effect is that only the police and criminals are armed.

Outlawing legally carried firearms is the only instance where the government has chosen to unreasonably restrict or to outright deny the law abiding citizen their rights to self-defense under the Second Amendment. The liberal is not interested in preventing a criminal entry to a premises that prohibits the carry of firearms, but to restrict the law abiding, because in the liberal mind there is a greater danger from the law abiding armed and trained citizen than from an armed criminal. In their liberal minds, they believe that their fellow law abiding citizens are mentally unhinged in wanting to own a firearm in the first place, and incompetent and untrustworthy in the use of a firearm, because that’s how the liberal ‘feels’ about firearms ownership. Of course, there are exceptions, but only liberal hypocrites are allowed to be the exceptions, like Bloomberg and his liberal ilk.

It is interesting that in the liberal mind, it is alright for only two groups to be armed: one with a badge and a gun, and the other the lawless criminal. The government controls the group with the badge and gun. This group comes on the scene after the group operating outside of the law finishes their evil. The law abiding citizen is expected to just suffer the consequences of the criminal act and to move on with their life, if they survived the encounter with the criminal.

It should be noted that the Constitution of the United States provides no bar to being offended or to being afraid. It does, however enable the individual the right to speak out and a right under the Second Amendment to self-defense of person and family using a firearm. In fact, it deems ownership and use of a firearm for such purposes necessary.

Connecticut made it illegal to enter a school with a firearm. It is illegal to carry concealed by a law abiding citizen or a soldier on a military base. NYC banned the ownership of handguns under the Sullivan Act. It is illegal to carry openly or concealed in many states where murder and mayhem are serious problems. The outcome of government abolishing legal firearms carry by law abiding citizens only results in the unnecessary death of innocents and the proliferation of crime. Such failed policies do serve the purpose of keeping the law abiding citizens afraid and looking to the government to afford them safety that they themselves have the right to under the Second Amendment. A safety that government has failed to provide and cannot provide.

The deaths of the children at Sandy Hook Elementary are a direct result of a failed government policy designed not to protect the children, because no sane individual would believe that the mentally imbalanced or the criminal would obey the restriction on firearms carry, but to restrict the law abiding, because it makes liberals ‘feel’ safer.

Instead of America and Americans focusing on those calling to restrict restrict our Second Amendment rights, and and the facetious lie that Americans should somehow be collectively ashamed by the murder of these innocents at Sandy Hook Elementary, we should argue for the full exercise of our Second Amendment rights under the Constitution. Our rights are immutable. Yet the liberal politicians are again telling us that we need to further restrict our rights to meet the liberal utopian view of the world so that Bloomberg and his liberal cohorts can ‘feel’ good. And, to be the only citizens allowed to legally carry under their law.

There is legislation introduced in Michigan to once again allow legal carry in schools and government buildings. This means that any citizen who has a concealed carry permit and has taken additional firearms training will be allowed to carry when they visit a school or a government agency. This should be the example for the rest of the U.S., including Alaska. This is how it used to be and should be again for a free society. This would be good in Alaska, given our high percentage of active duty, former military, and former and retired police officers, and a well trained and legally armed citizenry.

While Alaska has the most liberal carry laws in the U.S., Alaskans still cannot exercise their legal Second Amendment rights on school grounds, in government buildings, and those businesses that post a notice prohibiting the carry of a firearm on the premises. A notice must be posted near the door or on the door readily visible to the public that demonstrates that the building or business prohibits the free exercise of our Second Amendment rights.

Such firearms free zones create danger free zones for the criminals, and unnecessarily endanger the government employee, students, and business owner and their clientel. Notice is prominent that there will be no danger to the criminal who elects to commit a crime.

School staff should have the right to legal carry, with at least some of the staff armed at all times, especially in major high schools with a history of violence against the teachers. Additional training should be required to qualify for such carry.

The responsible, legal carry of concealed weapons by armed law abiding citizens should not be prohibited, but welcomed by business and government.

The liberal attitude that the public should be disarmed needs to be set aside by our politicians in favor of the recognition of immutable Creator given rights to self-protection and self-defense under the Second. Even the federal courts are beginning to recognize that our rights under the Second Amendment to self-protection mean that our firearms be carried with us for that use.

On December 12, 2012 in the case of Moore v. Madigan, the federal Seventh Court of Appeals ruled against the State of Illinois ban on lawful concealed carry. The court ruled that the concept of self defense is "broader than the right to have a gun in one’s home." Illinois will have 180 days to draft legislation to enact legal carry legislation that "will impose reasonable limitations, consistent with the public safety and the Second Amendment…on the carrying of guns in public."

The Legislature of the State of Alaska needs to extend Alaskan’s ability to legally carry firearms where they are now restricted against doing so. Law abiding Alaskans should be allowed to legally carry concealed on school grounds without restriction. The safety of our children may depend upon the law abiding citizen who happens to be in the right place at the time an "Adam Lanza" decides to use that school as his obituary.

It is the duty of each American to be armed and adequately prepared in the use of a firearm. It was the Framer’s intent that the firearm be carried at all times for self-protection. It is time to throw off the liberal lie and to demand the full and unfettered exercise of our Second Amendment rights.

Saturday, December 8, 2012

Fiscal Cliff: Alaska's problems lie elsewhere

There is a great deal of press on the so called fiscal cliff that Congress has been wrestling with since 2011. After working on the issue for almost two years, no progress has been made. What is at stake, what is the potential impact upon Alaskans?

The fiscal cliff is a failure on the part of Congress and President Obama to reconcile the Administration’s desire to push the United States further into deficit spending and wealth redistribution with fiscal reality. The Obama Administration wanted a tax increase on those earning over $250,000 per year, without any reductions in spending. The Republican majority in the House had to this point refused any tax increases and had worked instead on spending cuts. The amount in contention with respect to the ‘fiscal cliff’ negotiations is about $600M. The total deficit for 2012 is approximately $1.1T.

The tax increase is an about face for President Obama who said in July, 2011 that no tax increases were necessary, that deductions and loopholes would provide the necessary revenues.

The United States is borrowing $4.8B per DAY to fund government. President Obama’s administration has accomplished the greatest expansion of government since FDR’s New Deal Administration in the 1930s. In the first two years of his adminstration, the federal government grew by 117,000 employees.

In 2011, an attempt was made to resolve the $1.6T in deficit spending for that year. Congress failed to reach a consensus and appointed a bipartisan supercommittee to negotiate a budget. The supercommittee failed. No budget was produced, and the federal government has been operating on debt limit increases since.

However, Congress did agree that if no budget was passed, sunset provisions would end the Bush tax cuts and a 10 year reduction in military spending termed sequestration would occur. The military budget would be cut 9% per year, or $55B per year, beginning in 2013, and continuing for another 9 years. Another $55B would be cut from domestic programs: social security and Medicare. Personal income taxes across the board would increase as the Bush tax cuts would also sunset.

The expected increase in taxes to the average middle class taxpayer is over $2,000 with the Obamacare increases in set to begin this coming year.

Bottom line is that the Republican Congress will most likely cave on the no tax position on the upper income bracket increase. However, that may not be enough for President Obama, as he does not want any decreases in spending. Therefore, it appears that the Republicans in Congress are in a no win situation, as the Obama Administration and the Democrats have them in a no win situation. If the Republicans cave on the tax increase on the upper income earners, there will be no accompanying decrease in spending and the deficit will continue to increase. If the Republicans hold their ground and House Speaker Boehner does not cave, then they will be blamed for the sequestration cuts, the end of the Bush tax cuts, and the negative impact upon the economy.

The reality is, that the Democrats have never failed to increase taxes when it suited their agenda. Therefore, they feel that they will not be the losers if there is a failure to remedy the ‘fiscal cliff’ scenario. They will simply blame the ‘intransigence’ of the Republicans.

The national debt figure that is admitted by the Obama Administration is estimated at $16T, an impossibly large number for most people to comprehend. However, that figure may be just an indicator, and nothing more. Former Representative Chris Cox, former Chair of the House Republican Policy Committee and the Securities and Exchange Commission, and former Representative Bill Archer, former Chair of the House Ways and Means Committee, both of whom served on President Clinton’s Bipartisan Commission on Entitlement and Tax Refore in 1994, wrote in the November 26, 2012 WSJ that the national debt is being purposefully understated to hide the true cost of government and the liabilities of entitlements to the people. They stated that were the federal government required to account for future and present liabilities to Social Security, Medicare and federal employees retirement benefits, these liabilities exceed $86.8T.

Corporations are required by law to report these liabilities, but not the federal government.

Former Reps Cox and Archer disclosed that U.S. liabilities are increasing at a rate of $8T per year. In order to reduce deficit spending, tax revenues of $8T would be required to balance the deficit. Unfortunately, the total adjusted gross income of all Americans earning more than $66,193 per year is $5.1T, leaving a deficit of $2.9T necessary to balance the budget. In otherwords, there is not enough money available/collectable by the IRS to balance the budget. Ever.

The truth is, the United States went over the ‘fiscal cliff’ years ago.

As America’s remote northwestern step-child, given the 222 million acres of federal lands to the approximately 103 million acres of State lands granted by the federal government at Statehood in 1959, Alaska is particularly vulnerable to any cuts in federal spending. 239 villages are largely dependent upon federal grants and other funding under BIA programs. Alaska further depends upon federal highway funding to repair and maintain existing roads, airports, and harbors, and to construct new infrastructure.

According to the Institute of Social and Economic Research, UAA, federal spending in Alaska in 2010 amounted to $10.9B. The federal government provided $3.5B in grants, $2.6B in payments to individuals (BIA), $3.3B in defense spending for wages and procurement in the State, and $1.5B in federal agency spending in wages and procurement. Governor Parnell’s budget for the same year was $10.5B in capital improvements and State operating budget.

Alaska is not like the rest of the United States in that Alaska came into the Union in 1959 as a largely undeveloped frontier State. It was recognized that the amount of money it would take to give Alaska parity in transportation and communications infrastructure exceeded the money available from federal resources. Congress gave Alaska a 90% royalty from any resource development as a means of self-funding needed roads, airports, and harbors. Today, most of Alaska is still accessible only by boat or airplane.

The State does not receive any royalty from development on federal lands, including offshore leasing for oil and gas development. Shell Oil Company’s off shore development in northwestern Alaska’s continental shelf will not produce any royalties for the State of Alaska. The benefit will be to the local villages that provide services and labor for the project.

The State of Alaska has managed to save approximately $45B in the State’s Permanent Fund (PF), largely invested in the stock market from royalties and taxes produced by the North Slope oil development. The PF is intended to fund State government should there be a severe economic downturn and declining State revenues. Every year, Alaskans enjoy a dividend check from the PF from a percentage of the PF’s earnings. This is one of the first programs that will go by the wayside, if federal expenditures and federal funding is sharply reduced. Especially, in the face of declining oil production. Expect to see legislation for a State income tax in the near future.

The PF is very exposed because of the amount of money invested in the stock market. During the massacre of 2000, the PF lost $10B in a matter of a few days. The money has since been restored, but the potential negative impact of severe downturns in the stock market is still there.

The oil industry revenues contribute approximately half of Alaska’s 374,000 jobs, largely State and local government. Directly, the oil companies account for 4,497 jobs, and another 8,410 jobs in the oil service sector. It is estimated that another 28,837 jobs are created through the trickle down of oil company Alaska wages and procurement. The oil industry has provided over $170B in revenues to the State since Statehood. (ISER 2010)

The reality of Alaska’s economy today is that it is oil driven. There is very little in the way of diversity in our economy. Alaska’s economy is oil and government and the retail and construction sector that support oil and government. Alaska has been fortunate to have a defense spending priority because of the strategic geographical position Alaska has with respect to Asia and the Pacific.

The defense initiatives benefitting Alaska has seen an increase in the number of National
Guard personnel on full time active duty.

The Alaska Air National Guard has seen a tremendous growth with a C17 heavy lift squadron and three aerospace rescue and recovery squadrons based at JBER near Anchorage, and a KC135 aerial tanker squadron at JBEW near Fairbanks. These are active duty squadrons with strategic support and war support missions.

The Army National Guard has seen some changes structurally with a new Military Police Battalion replacing an infantry battalion. The Alaska Army National Guard gained the security and operations responsibilities for the Ft. Greeley Missile Defense Base near Big Delta, Alaska. The Army National Guard in Alaska has a UH60 Blackhawk company and a C23 Sherpa company at JBER near Anchorage, an Eskimo scout battalion located in various villages throughout the interior and western Alaska, and a transportation battalion located in the Matanuska Valley. The AK ARNG is now organized as a battlefield surveillance brigade, rather than an infantry brigade consisting of cavalry, infantry, and organic air support.

The National Guard has pumped a lot of money into Alaska since 9-11 and provides jobs or an extra paycheck for part-timers for more than 2,000 Alaskans who serve in the National Guard in Alaska.

However, the USAF recently announced a 5,000 man reduction in manpower with some personnel to be transferred to the federal USAF, along with a reduction in ANG fighter squadrons nationwide. It is doubtful that Alaska’s ANG will be affected, as the ANG role of heavy airlift squadron and aerial refueling are strategic missions, and global in nature. Thus far, only midwestern States’ ANG fighter squadrons have been mentioned as being in jeopardy for the reduction or transfer of personnel and equipment to the USAF.

The U.S. Army has a Stryker Brigade at JBEW as it primary maneuver element in Alaska. The USAF has a squadron of F22 Raptors at JBER and a squadron of F16s at JBEW. Therefore, there is little impact locally with respect to any reduction in federal military forces in Alaska. It looks like the 9% reduction in the DOD’s budget, should sequestering happen on 31 December, will have little impact because of Alaska’s strategic geographical position.

The increased emphasis on the development of Arctic resources has seen the stationing of a U.S. Coast Guard cutter at Pt. Barrow and air patrols of the northern and northwestern coast of Alaska above Kotzebue. This has mean money and opportunity for the villages in the area used as support bases.

This year’s State budget is $12.5B. An incredible amount of money for a state with about 650,000 residents. Even with the incredible budgets beginning with Governor Frank Murkowski in 2003, Alaska’s leadership has failed to diversify since the first oil and gas lease sales on the North Slope in the late 60s. This has left Alaska in its present predicament of being largely a single source economy, fueling a bloated and socialist State government. Granted, the PF will keep the State afloat for three or four years post any shut down of the Trans Alaska Pipeline System (TAPS). Last years budget was declared unsustainable by Rep. Bill Stoltze, Co-Chair House Finance. Yet, an even larger budget was passed for 2013.

Whether it be Fiscal Cliff or the shut down of TAPS, Alaska has some hard times coming if the leadership of the Legislature and Governor Sean Parnell cannot come to grips with the long term implications of the failure to act on an in-state natural gas pipeline to tidewater and the inevitable increase in south central natural gas prices by at least 8%-13% due to the need to import natural gas into Cook Inlet. Since the early 1990s, some legislators and mayors of south central boroughs and cities have been warning of the shortfalls in the production of Cook Inlet gas insufficient to meet the needs of Alaskans during winter months. This coming year will see the first Russian LNG tanker loaded with LNG coming into Cook Inlet.

The bottom line is that it does not look like the federal government will cut spending in Alaska anytime soon. It is not the desire of the Obama Administration to cut government spending, but to increase spending and the to increase the size and reach of the federal government. What is inevitable, given the past history of democrat administrations, is that our taxes will go up. Given the incredible reality of a $86.8T debt, the U.S. is in serious, serious trouble financially. Eventually, this mess will impact Alaska’s economy in a very negative fashion. However, reality is not what Washington, D.C. is about. The worst is yet to come.

54% of Americans who voted, voted for a socialist expansion of government with the increase in deficit spending and increased liabilities that come with the lack of reality associated with socialism. They have given their future generations an incredible burden, but shirked their responsibility with Obama’s reelection.

Already, the Obama Administration is planning a carbon tax, which will certainly impact Alaska’s coal and diesel power generation costs and increase the cost of power to all Alaskans. Obamacare will increase medical costs to Alaskans, and restrict services.

Unfortunately, the Fiscal Cliff and Obamacare are not the real threat to Alaskan’s welfare or cost of living, as we are in the same boat there with the rest of Americans. The real threat to the economic well being of the State of Alaska and her people is the shortsightedness of our Governor and the Legislature to provide a sound, diversified economic base for the future with sufficient low cost energy to insure that future. 35 trillion cubic feet of the energy available is in natural gas under Alaska’s North Slope. After 35 years, that energy has yet to be tapped.

Saturday, November 10, 2012

Exxon's conflict of interest--why there will be no Alaska natural gas pipeline.

Governor Sean Parnell and oil company bosses

Exxon and Alaska’s oil and gas

Exxon is Alaska’s bad boy of oil development. Who does not remember the Exxon Valdez spill in Prince William Sound and the aftermath? As a result, Exxon has been cast as the "heavy" in any oil development conspiracies abounding regarding Alaska’s North Slope oil taxes controversy and oil development in general in Alaska. Exxon is the largest oil company in the world and the wealthiest. Exxon is the great white shark of oil development, the rest are remoras or pilot fish who go where the big fish goes and feed off the leavings. In the Book of Five Rings (Go Rin No Sho) by Miyamoto Musashi, a 17th century Japanese Samurai, he describes five states of military strategy. They are air, fire, water, void and the mountain. Exxon is the mountain. When Exxon speaks, the world oil and gas industry listens.

After the North Slope oil and gas lease sale in 1972 that netted the State of Alaska $900M, the oil companies were not in any hurry to build a pipeline to bring Alaska’s North Slope oil (20,000,000,000 barrels) to market. Then Governor William "Bill" Egan (D) had to take the proverbial bull by the horns. In 1973, after months of wrangling with the oil companies, Egan threatened the oil companies that if they did not announce plans for a pipeline within the week, the State of Alaska was going to build an oil pipeline to Valdez. By the end of the week, the oil companies had announced plans for the Alyeska Pipeline Service Company which would build and operate the Trans Alaska Pipeline System (TAPS). Construction began in April, 1974.

Oil development on the North Slope had been moving forward since the 1960s.

The cost of TAPS, a 48 inch diameter steel casing pipeline 800 miles long was estimated at $900 million. By the end of construction in June, 1977, the cost had risen to $8 billion. The oil companies did have a 30 year tax write off for all expenses associated with the construction and operation of the pipeline. TAPS was allegedly paid for in the first 3 months of operation transporting 2,000,000 barrels of crude per day to Valdez for shipment by U.S. flagged tankers to refineries on the West Coast.

The cost of oil production on the North Slope steadily declined as the cost of construction and infrastructure was recouped over the years. Today, the profit margin for North Slope oil production varies, but using Conoco’s figures 2011 saw a profit of $25 per barrel of oil from North Slope Alaska production. It is this relatively high profit margin for a barrel of oil in relation to other hydrocarbon reservoirs world-wide that is the basis for resistence to any change in the Alaska’s Clear and Equitable Share (ACES) oil production tax.

Like AGIA, ACES was a product of then Gov. Sarah Palin’s Administration.

The North Slope profit margin of $25/barrel is much higher than the $1/barrel profit allowed under the Iraqi oil bids by Exxon in 2009.

In the1980s, a proposal was put forth to the oil companies on the North Slope and the State by Yukon Pacific, a consortium of companies including Sempra Energy, attempted to promote a natural gas pipeline project to Valdez. Yukon’s project was a 2 bcf/da-2.5 bcf/da capacity pipeline to terminus LNG port at Valdez. Meeting stiff resistance from Alaska’s governors who had their own pipe dreams, Yukon failed to make any progress after spending hundreds of millions of dollars on permits. Yukon sold most of its permits to AGPA.

Exxon’s position with respect to building a natural gas pipeline to take Alaska North Slope natural gas to market has aways been to settle the Thompson Point lease controversy with the State, then move forward. Or, to do nothing.

In 2006, Exxon had allegedly reached an agreement with Governor Frank Murkowski along with BP and Conoco to move North Slope gas to market. As was revealed when the "contract" was made public, the pipeline was just a pipe dream on the part of the Murkowski Administration. Exxon and the other North Slope Producers promised nothing, other than to study the issue, and, then at some indefinable point in the future to consider building a pipeline.

Exxon stated to its shareholders and to anyone who would listen during Murkowski’s Administration (2003-2006) that it was Exxon’s position that Alaska North Slope gas would begin flowing to market around 2025, given a construction start estimate of 2018-2020.

In 2009, in a suprise move, Exxon joined with AGIA contractor TransCanada to build a natural gas pipeline under AGIA. However, at that time, the focus was still on bringing Alaska natural gas and the valuable gas liquids to the Alberta Hub. It was suspected that Exxon’s involvement was self-serving, both acting to delay any pipeline decision or to redirect Alaska’s gas for Exxon’s benefit in the recovery of oil from Alberta’s tar sands.

It was demonstrated in 2010 during the Bill Walker for Governor campaign that this route was not profitable, and that Alaska’s natural gas would most likely end up in Ft. MacKenzie being used to recover oil from the massive Alberta tar sands desposits. The price of natural gas at the time was about $5/1,000 cf. The cost of transporting the gas from the North Slope to the Alberta Hub was estimated at $5, leaving no profit for Alaska to tax. The ‘unprofitable’ Alaska gas would then have been transported to Alberta freeing Canadian gas to go to market in the U.S.

The October 30, 2012 letter to Governor Sean Parnell declared Exxon, BP, Conoco and TransCanada were willing to study the feasibility of a pipeline to Valdez for conversion to LNG and transport to Asian markets.

Thompson Point is a massive high pressure gas deposit. By October, 2012, Gov. Sean Parnell’s Administration had reached agreement with Exxon regarding Thompson Point. The way was now clear to move forward with development of the Thompson Point gas field. The development of Thompson Point was considered necessary to produce the volume of natural gas to make any North Slope to tidewater natural gas pipeline project viable.

Exxon’s conflict of interest

Exxon’s 2009 move to join with TransCanada was surprising to most. Previously, in 2008, both BP Alaska and Conoco, the other two major North Slope Producers, had announced their own natural gas pipeline project. The Denali gasline project was another 4.5 bcf/da natural gas pipeline from the North Slope taking gas to the Alberta Hub.

What was paradoxical was that with Exxon’s joining with TransCanada in a competing project, all three Producers were now aligned with competing projects. Yet, all three companies’ gas production was necessary to make any natural gas pipeline viable. Therefore, neither AGIA nor Denali were viable. For whatever reason, neither Governor Sean Parenll nor the Legislature ever figured this out or completely ignored the reality of the situation. Governor Parnell continued to mouth platitudes about the viability of AGIA, Open Season and that AGIA would happen. The Legislature, however, took off on its own down an entirely different route.

Exxon’s conflict of interest where AGIA is concerned is in its foreign natural gas commitments.

In 2011, the first exports from Qatar where Exxon had invested $12B in upgrading the Northern Field LNG train to export LNG to the U.S. were delivered to the U.S., and immediately turned around for transport to Asia. "In cooperation with our partner Qatar Petroleum, ExxonMobil used its experience and knowledge of gas marketing around the world to successfully access traditional LNG markets in Asia, such as Japan and Korea, and develop new opportunities in Europe and the United States. ExxonMobil is proud to have played a role in helping Qatar become the world’s largest exporter of LNG." The shale gas revolution had impacted what was to be a 25 year commitment to bring Qatar LNG into the U.S. domestic gas market. That market no longer exists due to the low price for U.S. domestically produced shale gas.


The August 28, 2012 Platts and the Wall St. Journal reported ExxonMobil and Qatar Petroleum had formed a joint venture named Golden Pass Products which had applied for a domestic U.S. produced shale gas export permit overseas, including Asia. GPP is seeking to export 740 bcf of natural gas yearly from its LNG terminal at Port Arthur, TX. GPP would spend about $10B in upgrading the LNG train for export. The Port Arthur, TX LNG port would be able to export 2 bcf/da of natural gas.

(;; )

By contrast, the AGIA or AGPA LNG option to Valdez would ship up to 1,095 bcf of North Slope natural gas to market per year as LNG (3 bcf/da X 365 days).

On October 12, 2012, Bloomberg reported that Exxon, Conoco and TransCanada were estimating the cost of the AGIA natural gas pipeline to Valdez and LNG train to cost at between $45 to $65B and to take up to 10 years to construct.     ( )  Exxon is developing the Australian Gorgan gas field located 130 kilometers off shore. Exxon owns a 25% share in the development. The Gorgon gas fields have a recoverable reserve of natural gas of an estimated 40 tcf. The market for Gorgon gas is Australia and Asia. In 2009, Exxon signed a deal worth $41B with PetroChina to provide the PRC with LNG. ( ; )

Exxon is negotiating with with CBM Asia Development to partner in the development of coal bed methane gas deposits in the Barito Baswin, South Kalimantan, Indonesia.

Exxon bought Celtic Exploration, Ltd.’s leases in the Duvernay and Montnay Alberta shale gas formations for $2.86B Canadian. Exxon also has leases in the Horn River British Columbia shale gas formation.
( )


Does Exxon have a reason to delay any Alaska natural gas development of its North Slope fields, including Thompson Point, given its Pacific basin and Qatar natural gas developments?

Does Exxon have a reason to delay the construction of any natural gas pipeline to move Alaska North Slope gas into a world market where that gas would compete with other foreign sourced gas projects in which Exxon has invested?

Is there any reason why the State of Alaska should not declare a breach of contract under AGIA for conflict of interest on the part of Exxon and TransCanada?

Thursday, November 8, 2012

Does TransCanada have a conflict of interest?

Through Canada or to Valdez?

When former Governor Sarah Palin took office in 2007, she turned her back upon her campaign’s support of the all-Alaska natural gas pipeline to Valdez, even though she spoke in support of the project and stood with those who supported the project during the campaign. Supporters included former Governor Walter J. Hickel who was an outspoken proponent of the Valdez LNG project and a vocal opponent of Murkowski’s give away to Canada. Undoubtedly, her rising popularity was in no minor part due to her support of the all-Alaska natural gas pipeline to Valdez alternative to then Governor Frank Murkowski’s "contract" with Exxon, Mobil, and BP to build a 4.5bcf/da pipeline through Canada to the Midwest. Palin then beat former Governor Tony Knowles in the General Election in November, becoming the first woman governor of the State of Alaska.

By 2006, it was obvious to most Alaskans that then Gov. Murkowski’s pipeline contract was nothing but a promise by the oil companies to consider building a pipeline after much study and consideration. Exxon spoke of 2025 as the time frame for Alaska North Slope natural gas to move to market. Palin beat Murkowski in the August, 2006 Primary Election. Palin then won the November General election against former Governor Tony Knowles.

The die was cast for the Alaska Gasline Inducement Act.

Upon taking office, Sarah Palin literally reset on her support of the all-Alaska natural gas pipeline. Then Gov. Sarah Palin reappointed Tom Irwin as Dept. of Natural Resources Commissioner. Former Deputy Commissioner Marty Rutherford was also reappointed as Deputy Commissioner DNR. Both had been fired by by Gov. Frank Murkowski for disagreements regarding his actually having a contract with the oil companies to build a pipeline. However, both were firmly convinced that Alaska needed the large diameter 4.5 bcf/day pipeline through Canada to replace oil revenues from the Trans Alaska Pipeline Systems steadily declining volume transported to market. The North Slope oil production was about 700,000 barrels per day (bpd) at that time.

Irwin and Rutherford played a major role with legislative input in drafting AGIA. The project initially mirrored Murkowski’s project with one exception. The project did not rely solely upon the oil companies to build a gas pipeline. AGIA called for a competition with the best project as the winner. TransCanada became the sole competitor and was selected as the sole contractor under AGIA. The Alaska Gas Port Authority, a consortium of the cities of Fairbanks, Big Delta, and Valdez, submitted a proposal that was deemed late, incomplete and, therefore, not considered. By the gubernatorial election of 2010, the route was to the Alberta Hub, and not down through Alberta to the Midwest.

Since, AGPA has touted its route and LNG terminal plan as an alternative to AGIA. AGPA’s arguments have largely fell upon deaf ears in both the Paline/Parnell Administrations and the Legislature. Yet, the LNG market was demonstrating a major growth in Asia.

The contradiction in the volume of the planned pipeline projects, both Palin’s and Murkowski’s, was the Alaska Oil and Gas Conservation Commission limit of allowable production committed for export to market for North Slope Natural Gas. AGOCC set the amount at about 2-3bcf/da. This figure took into consideration the amount of natural gas necessary to keep the North Slope oil fields pressurized for continued production. Where Murkowski or Palin intended to come up with another 1.5 bcf/da between AGOCC’s limit and the 4.5 bcf/da capacity of their pipelines to Canada has to this day never been fully explained. Nor, has Governor Sean Parnell’s administration bothered to explain why his administration has continued to support TransCanada’s planned 4.5 bcf/da pipeline through Canada under AGIA in the face of the AGOCC’s limit on North Slope natural gas available for export.

In 2007, the Palin Administration announced the award of the AGIA contract to the sole applicant: TransCanada. TransCanada plans incorporated much of former Governor Murkowski’s pipeline. The volume was 4.5 bcf/da, the diameter a >=48 inch casing, the route through Canada to Alberta, then down to the Midwest. Later, TransCanada modifed its plan to use the Alberta Gas Hub distribution system to the U.S., thereby using existing pipelines to distribute gas to the U.S. from Canada. However, the price of the project continued to grow. The estimated cost for construction increased from $18B to over $40B by the gubernatorial election of 2010. From 2007 to today, little or no progress was made on the project. No permits for a route were issued in Canada or Alaska. No firm construction date was ever stated by TransCanada.

In 2008, Conoco and BP announced a competing natural gas pipeline project to Canada called Denali. The plan called for a 4.5 bcf/da natural gas pipeline to export North Slope natural gas to Canada. In May, 2011, Conoco and BP announced that the Denali project was no longer viable. About a week before that announcement, the Alaska president of Conoco’s Alaska operations stated that it was never the intention of Conoco or BP to bring Alaska’s North Slope to market, as they had intended to warehouse the natural gas indefinitely through reinjection back into the wells. Conoco and BP’s Denali proposal was intended to influence the course of Alaska’s legislative and gubernatorial policies pertaining to gas production and marketing of North Slope natural gas. The acts on the part of BP and Conoco amounted to fraud upon the State. The silence on the part of the Parnell Administration and the Legislature was deafening. (

On June 11, 2009, Exxon partnered with TransCanada. This partnership raised questions about the viability of just one producer on the North Slope participating in the project, when it was recognized that all three were necessary to any agreement to sell enough gas to move by pipeline. At that time, BP and Conoco were touting their "competing" Denali gasline project.

Since 1978, the completion of the TAPS oil pipeline, no discernible forward progress has been made towards actual construction of a natural gas pipeline in Alaska. Neither Denali’s nor TransCanada’s heavily publicized Open Seasons had produced any customers for their Alaska projects.

The reality of any natural gas pipeline from the North Slope, was that it took production from all three producers, Exxon, Conoco and BP, to provide sufficient natural gas to make a pipeline project viable. Further, the Point Thompson controversy between Exxon and the State also had to be settled.

The all-Alaska natural gas pipeline project first proposed by Yukon Pacific in the early 80s was for a 2.5 bcf/da pipeline from the North Slope to Valdez to be converted to LNG for export to the U.S. That was basically the same pipeline and volume intended in the plan voted on 2002. AGPA’s pipeline plan today is 3.0 bcf/da. Note that these volumes are within the AGOCC’s volume restrictions for North Slope gas export.

In mid-2011, Governor Sean Parnell finally awakened to the reality of the world LNG market. He suddenly decided that the only viable market for Alaska’s North Slope natural gas was as LNG to Asia. Since, he has tried to move AGIA in that direction. Under AGIA, TransCanada has the option to build a pipeline to a LNG terminus at Valdez for LNG export to market.

In October, 2011, Governor Sean Parnell called for a meeting with the North Slope oil producers to discuss a gasline and the LNG option. On January 6, 2012, Gov. Parnell met with Exxon’s CEO Rex Tillerson, BP Alaska’s CEO Bob Dudley, and Conoco’s Alaska operations CEO Jim Mulva in Anchorage. Gov. Parnell announced that he achieved a promise on the part of the producers to consider ways of getting Alaska’s North Slope gas to market. As promised, in a letter dated March 30, 2012, the oil companies outlined their intent to move forward on a gasline under AGIA. They updated their progress in another letter dated October 3, 2012. However, the progress was basically couched in terms declaring that ‘fiscal certainty’ was required for both a natural gas pipeline and any increase in oil production in Alaska. A position that the oil companies have steadfastly promoted for some time.

The first open season by TransCanada and Exxon ran from April 30-July 30, 2010. The second open season was conducted August 31-September 14, 2011. Both were apparently a bust with insufficient commitments to make any announcements regarding pipeline construction. Under AGIA, TransCanada has five years from the first open season before the project can be declared uneconomical and abandonment would be declared by either the State or TransCanada. (

Today, Alaskans are still awaiting news of a natural gas pipeline project that will actually move North Slope natural gas to market.

Does TransCanada have a conflict of interest in its commitment to Kitimat?

Kitimat, British Columbia is the site of a proposed LNG terminal. In 2010, Apache Corp. announced the first agreements regarding LNG commitments with Korea. A 10 year commitment was made by Korea for Canadian LNG exported from Kitimat.

Since, the Kitmat development has expanded to include an additional LNG terminal and oil export capability to be built by a partnership lead by Shell to transport Alberta tar sands oil and LNG to Asia. The oil pipeline will be two parallel pipelines to be built by Enbridge. The pipelines would run 694 miles from Bruderheim, AB to Kitimat, B.C. with an estimated construction cost of $5.5B Canadian. Up to 1,000,000 barrels of crude per day would be transported by the pipelines.

TransCanada’s involvement and conflict of interest lies in its commitment to Shell to build a $4B (Canadian) 434 mile long natural gas pipeline from the B.C. shale gas fields to Kitimat. Kitmat’s LNG terminal will export approximately 1.2 bcf/da of LNG for Asian markets. Shell expects to export up to $10B in Canadian LNG to Asia through TransCanada’s pipeline. Shell is estimating a demand that will see up to 200 LNG tankers a year taking on LNG from Kitimat. The estimated completion date, given the environmental and indigenous lands rights of way issues, is expected by the end of the decade. The pipeline to be built by TransCanada is expected to measure over a meter (>39 inches) in diameter with an initial capacity of 1.7 bcf/da.

( ;; ; )

Shell and its partners, Korean Gas, Mitsubishi, and PetroChina, are planning to build a separate LNG terminal from that planned by Apache Corp. back in 2010.

However, there may be a new wrench in the monkey works of the plans for any west coast LNG terminal, including Valdez.

TransCanada has an exclusive under AGIA. An exclusive normally implies a higher standard of commitment to the grantor than would an ordinary contract without an exclusive.

Given TransCanada’s commitment to Kitimat, should the State of Alaska move to declare breach to end AGIA?

Is there any basis in fact or common sense that would require the State to continue what is clearly a contract that is compromised by a conflict of interest by the grantee of the exclusive under that contract?

The latest cost estimate to construct a 3.0 bcf/da natural gas pipeline from the North Slope to Valdez is now estimated by TransCanada and Exxon to be $65B, including the LNG train at Valdez. The last estimate of the cost of construction for the AGIA Alberta Hub pipeline was approximately $40B. Compare the $65B cost of the AGIA LNG option to that the cost of the Kitimat 1.7 bcf/da >39 inch natural gas pipeline to be built by TransCanada under its agreement with Shell Oil. The cost of the Kitimat natural gas pipeline is just $4B Canadian.


Is the $65B price tag of the Alaska natural gas pipeline and LNG train under AGIA just hype to dissuade any protest at further delays?

Wednesday, November 7, 2012

The election . . .

The outcome of the election yesterday is contradictory at the national level.  The incumbent won, but his party lost ground in the House.  The Republicans hold a firm majority there.  The House controls the spending.  In the Senate, nothing really changed, the Democrats still hold the Senate.  The intriguing thing is that our Constitutional Republic, which was established upon Christian and capitalist ethos, is still in the hands of a radical socialist President who has increased our national debt by $16 trillion with deficit spending double that of his Republican predecessor who had a two front war underway, without the Congress passing any budgets for the first four years of his presidency.  This President has now promised increased taxes in the form of a Carbon Tax upon industry, and an unfettered growth in government. 
14 million Americans who voted last election did not vote this election.
Alaska has managed to correct the parity between the parties in the Alaska Senate.  Anchorage Sen. Bettye Davis (D), a long time Alaska pol, lost her seat to Anna Fairclough (R) of Eagle River.  Fairbanks Sen. Joe Paskvan (D) lost his seat.  Anchorage Sen. Hollis French (D) may yet lose his seat to Rep. Bob Bell (R), a race which has French in the lead by 249 votes, with challenged and absentee ballots yet to be counted.  The net result is that Republicans gained a total of three seats in the Senate giving a 13-7 Republican majority.  This majority may end the parity but does not insure the clear majority needed to move forward Governor Sean Parnell's oil tax reduction plan. Kodiak Senator Gary Stevens and Southeast Senator Bert Stedman both sided with the Democrats forming a majority last session that stonewalled any oil and gas legislation having to do with taxes and a gas pipeline.  How they will stand with a Republican majority will soon be demonstrated.  If they continue to support no change in ACES, then the Republican majority will be effectively 11-9.
The Alaska House remains firmly Republican.
What is the potential impact upon Alaska's growth of government and spending of the election?
The portent of this majority would normally bring groans to those who want growth in government.  However, neither House Republicans or Senate Republicans have stood the line with respect to fiscal discipline or restrained the growth of government.  Since Governor Frank Murkowski's budget, succeeding Republican governors have increased the budget far beyond that of previous administrations.  Last year's budget by Governor Sean Parnell exceeded $10B.  This budget was declared unsustainable by many of the same Republicans that passed it in both the House and the Senate.  The number of State employees has increased by an additional 800 employees under the current and previous two Republican administrations. Therefore, will Alaskans see fiscal restraint or any halt to State government growth imposed by a Republican majority in the House and Senate and a Republican governor?
What is the potential for a gas pipeline to bring Alaska's North Slope to market under the new Republican majority in the House and Senate?
Given the passage of CH9 last session, and the introduction of CS9 in the Alaska Senate, it is unlikely that the 500 million cubic feet per day (500mmcf/da) Alaska Stand Alone Pipeline (ASAP) will make much progress this session.  Even were CS9 to be passed by the Senate intact, the estimated start date by Dan Fauske of AHFC is estimated at 2018 or later, if a route is finalized.  Previously, the Legislature appropriated $200M last year to fund the permitting process, but failed to give any provision to actually spend the money.  The Alaska Gasline Development Corporation was created by CH9.  CH9 ended the voter mandated Alaska Natural Gas Development Authority created by the passage of Proposition 3 in 2002.  Without a route, permits, or any real plan in place, the ASAP is still a pipe dream with little chance of success. 
The ASAP is considered to be uneconomic, given the limitation of 500mmcf/da limitation for any instate pipeline under AGIA.   The ASAP has no permits or even a route finalized, even after $214M in appropriations.  The legal hurdles are permits through a national park, a national wildlife preserve, a State park, and permits to cross numerous salmon streams.  It is unlikely, the environmentalists will allow the State to build this pipeline without legal challenges, thereby delaying any start of construction by at least one or two decades.
Some progress towards development of North Slope gas development has occurred with the recent agreement between the State and Exxon over the Point Thompson Unit development.  The Point Thompson Unit is a major gas deposit, the development of which is necessary to any natural gas pipeline plan.
Governor Parnell has recently touted a letter dated 3/1/2012 from the Producers (Exxon, Conoco, and BP) as a willingness to commit to the all-Alaska natural gas pipeline to Valdez.  As a requirement, the Producers made it very clear that fiscal certainty is a requirement for any development of Alaska's North Slope natural gas resources:  
" Serious discussions between our companies have taken place over the past several months, along with the Alaska Pipeline Project (APP) parties who are supporting the AGIA License. We have aligned on a structured, stewardable and transparent approach with the aim to commercialize North Slope natural gas resources within an AGIA framework. As a result of the rapidly evolving global market, large-scale liquefied natural gas (LNG) exports from southcentral Alaska will be assessed as an alternative to gas line exports through Alberta. In addition to broadening market access, a south-central Alaska LNG approach could more closely align with in-state energy demand and needs. We are now working together on the gas commercialization project concept selection, which would include an associated timeline and an assessment of major project components including in-state pipeline routes and capacities, global LNG trends, and LNG tidewater site locations, among others.
Commercializing Alaska natural gas resources will not be easy. There are many challenges and
issues that must be resolved, and we cannot do it alone. Unprecedented commitments of
capital for gas development will require competitive and stable fiscal terms with the State of
Alaska first be established. Appropriately structured, stable fiscal arrangements have opened
new opportunities around the world, and will playa pivotal role in making Alaska competitive in
the global market and unlocking the economic potential of North Slope resources."
Very recently, Governor Parnell used the 10/3/2012 letter from the Producers and TransCanada as proof of his progress in achieving a natural gas pipeline from the North Slope to Valdez under AGIA to send LNG to market in Asia.  Once again, the Producers make it very clear that before any commitment to build a pipeline occurs, the Producers want ". . . fiscal terms necessary to support the unprecedented commitments required for a project of this scope and magnitude and bring the benefits of North Slope gas development to Alaska." 
Unfortunately, the Governor's commitment to AGIA fails to take into consideration conflicts of interest on the part of TransCanada and the Producers.  Alaska's natural gas sent to Asia as LNG would be in conflict with their existing LNG projects overseas and in Canada.  Exxon, Conoco and BP all have Asian and Australian natural gas development projects that are intended for Asian markets.  Exxon and Conoco are sending their Qatar LNG to market in Asia after the U.S. domestic market was made untenable by the domestic shale gas development.  Permits to export U.S. domestic natural gas have been made to export LNG to Asia. TransCanada has an interest in the Kittimat, BC LNG terminal project with feeder pipelines and its association with Foothills Pipeline Company.  Kittimat has national support and is a national priority.  Alaska's natural gas pipeline to Valdez with natural gas converted to LNG for export would compete with those projects.  Would TransCanada act to compete with Kittimat with a pipeline to Valdez?
To a prudent observer, these conflicts of interest on the part of TransCanada and the Producers would serve as justification for a dissolution by the State of AGIA as the bases. 
Both the ASAP pipeline and AGIA have huge hurdles to overcome on the part of the participants and the State.
What is the portent of the national election to Alaska and Alaskans?
Taxes on business and individuals will go up.  The Bush Tax cuts sunset on 16 January.  They will not be renewed.  An estimated increase in healthcare costs of over $2,000 per individual is anticipated with Obamacare this coming year.  This President has already stated that he will seek a Carbon Tax on industry, which will result in even more U.S. manufacturing going overseas and the loss of even more jobs.  U.S. power production will continue to decline under this President.  President Obama's war on coal production and coal power plants will result in increased cost of power to all Americans. Only Europe has a carbon tax on industry and power production.  Neither the People's Republic of China nor India has such a tax. 
Those who work for government in Alaska are becoming the new elite.  The government worker is now estimated to have wages and benefits exceeding the private sector by 2:1, an average of $80,000 for the federal government worker to $35,000 for the average private sector employee.  The foxes are now in charge of the hen house.
Alaska's offshore oil development benefits only the federal government in terms of royalties.  Alaska will receive taxes and jobs.  However, this President has restricted offshore development, and will certainly be able to act with impunity with respect to further restrictions on domestic energy development through executive orders.  The net result will be increased energy costs Alaskans and Americans, and fewer jobs in the energy development and power generation industries.
The socialism of the federal government will continue to be more intrusive and more aggressive in the intent to impose social engineering upon our schools, military and society in general.  Expect more homosexual lifestyle agenda impositions.  Expect more attempts to limit free speech and the practice of Christianity. 
Our military is about suffer catastrophic losses.  For Alaska this means an reduced military presence, or at least the probability of the military being unable to defend Alaska's continental shelf from Russian attempts to stake claims to Arctic resources.
Alaska's social programs will not suffer, until there is a decline in revenue forcing reductions by the State.  Eventually, federal overspending will result in less money to the State.
The Alaska Permanent Fund Dividend check will certainly end.  The Alaska Legislature and this governor cannot see the forest for the trees with respect to oil and gas development.  A declining TAPS is the bellweather for Alaska's economy.  The Legislature and governor will be forced to institute an income tax before the next four years of the President's administration is over.  Alaska will be receiving fewer federal funds.
The economy of Alaska will continue to slow.  People will leave.
In the mean time, we all get to witness and to experience what our grandparents and great grandparents experience during the Great Depression. This recession is a depression that is world-wide in magnitude.

The worst is yet to come.

Wednesday, October 31, 2012

Anchorage Daily News wants only the liberal discussion

Follows is my letter to Patrick Doyle, President and Publisher of the Anchorage Daily News (

Mr. Pat Doyle,
P.O. Box 149001
Anchorage, Alaska 99514

Re: Shannon Moore’s recent column regarding rape and abortion; banning from making comments

Mr. Doyle:

I became engaged in the commenting process to Ms. Moore’s very recent piece on rape and abortion. I considered her piece very offensive. She made bald faced assertions with her comments that were simply libelous in any other context, were the objects thereof not in the public purview–politicians. She also included conservatives in general, which I am, as subjects of her rage. I also noted that the bent of her opinion piece venting her spleen dealt with the subjects of rape and abortion. She offered nothing constructive as to anything to diminish either rape or abortion. Further, Ms. Moore totally ignored the illegal practices in contravention to State and federal law by Planned Parenthood of not notifying the authorities of the rape of underage girls by adult males.

I noted those commenting and realized that with one or two exceptions, the vast majority of comments arose from the left of the community in support of her rabid fomenting against the Republicans mentioned by name, and conservatives in general, thereby including yours truly in that group. Her attack was simply outrageous, inaccurate, and served no purpose other than to divide the community.

I responded to several of the commenters by noting that the platform of the Democratic Party was at opposition with the philosophy and intent of our Framers and Founding Fathers as expressed in the Constitution. I did use the word traitor as a description of anyone who believed that our rights under the Constitution were other than endowed by a Creator, and, therefore immutable by man. As a result, I was also called a ‘traitor and coward’ for my National Guard and Army Reserve service by commenters using the user Ids Frostyone and FrankieFlynn. They did not appreciate my conservative interpretation of the Democratic initiatives assaulting faith, patriotism, family, the value of our children, and supernatural basis for our rights under the Constitution. However, I did not seek their exclusion from the conversation.

In fact, FrankieFlynn evidently had access to a database that showed my military record, as he made derisive comments regarding the length of time it took me to make E-5. Both Flynn and Frosty then labeled me as a coward and traitor, which, taken in context became inclusive of all NG and Reserve members, past and present.

I believe that Flynn used a computer that was either State or Federal to find the information

regarding my military record, which he then used that information, which is privileged, private, and confidential, as the basis to make derisive comments.

Those inappropriate comments did not really bother me, as anyone who is familiar with the reserve components knows, one has to have a slot to justify the rank, and one is not promoted without having a slot allowing the promotion. The Alaska National Guard, and I have been both Air and Army Guard, is relatively small in comparison to the federal military. The Army Reserve at the time had only one unit in Alaska. Therefore, opportunity for promotion was very limited in the units to which I belonged. Just the way it works.

However, it is the use of information derived from a federal or state database that is the issue, and I will be making a complaint to the FBI, the Army and USAF regarding the situation. FrankieFlynn implied in his comments and by his access to the information that he may have been active duty or a civilian employee of the military or the State of Alaska in a capacity that gave him access to the info. He may have violated the law. Banning me, and not taking any action against FrankieFlynn or Frostyone shows agreement with their conduct by virtue of allowing those comments to remain. No reasonable individual could believe that Date of Rank information is in the public domain and readily accessible. Therefore, whomever made the decision to ban my comments discriminated against me, but allowed the illegal use of confidential information to remain, thereby condoning the conduct.

The fact that I have been banned from making further comments on any article in ADN I find discriminatory, given the outrageous nature of Ms. Moore’s inclusion of every conservative minded person as the object of her rant. My banning demonstrates that the ADN is not interested in fostering any community discussion, but rather promoting only one viewpoint. In which case, you have lost a reader and one who has placed many comments contributing to many discussions. I have even had Compass pieces published in the past.

The liberal at ADN who made the decision to ban any further comments on my part served to ignore what was clearly 1st Amendment protected political speech on my part with my criticisms of the Democratic Party’s policies. My banning made my points about the inability of the liberal mind to tolerate an opposing viewpoint.

I am a 58 year Alaska who writes and will comment upon this hypocrisy on the part of ADN and its liberal bent elsewhere. Your paper’s liberal bent is out of touch with this community and Alaska.

Maybe, one day, the liberals who comment and the management of ADN will cease to be intolerant and allow a public discourse without restoring to ad hominem attacks or the public dissemination of private information on the ADN’s website?

I truly look forward to the day after the coming election. I am looking forward to the collective howl from the liberal community over their realization that they are not in the mainstream of political and social thought in this country.

Lawrence D. Wood (Larry)

Saturday, October 27, 2012

Benghazi: The Obama Admin left them without support . . .

On the 11th Anniversary of the September 11, 2001 attack upon the United States by Islamic jihadists, the United States Mission in Libya located in Benghazi was attacked by Islamic militants.  Our Ambassador and three other U.S. personnel were killed.  In the aftermath of the attack, the Obama Administration had placed blame on a little known Youtube video.  Since, the Obama Administration has finally admitted that the attack was a coordinated attack by an armed force conducting a military operation against the U.S. Mission and the nearby CIA Annex. 
Fox News is reporting that the CIA team located approximately two blocks away from the American Mission building were in constant contact with their headquarters from the start of the attack on the American Mission in Benghazi.  They requested help from U.S. military sources three times through the CIA chain of command.   It is alleged that their superiors ordered them to stand down three times and not to go to the assistance of the State Dept. mission personnel.  However, this allegation is denied by General David Petraeus, Director of the CIA.

A statement attributed to CIA Director General David Petraeus reported by the Weekly Standard stated:  "No one at any level in the CIA told anybody not to help those in need; claims to the contrary are simply inaccurate."  Who then ordered the CIA personnel at the Annex not to go to the assistance of their fellow Americans under attack at the American Mission two blocks away?
Four CIA personnel disobeyed the orders to stand down and proceeded to the Mission building and rescued several personnel and recovered the body of Foreign Service Officer Sean Smith.  Ex-Navy Seals Glen Doherty and Tyrone Woods were later killed in a mortar attack on the CIA annex two blocks from the State Dept. mission.

The entire attack was streamed live to the White House, the Pentagon, the State Department and the CIA from security cameras at the U.S. Mission.  There were at least two MQ-1 Predator drones overhead with live video coverage being provided from those sources.  The Predators may have been controlled by British pilots.  The British were given several drone aircraft for reconnaissance during the NATO involvement in indicting Ghadaffi's armed forces operating against the rebels.

The attack upon the Benghazi U.S. Mission and the nearby CIA Annex was conducted by an estimated 120 well armed jihadists.  Within two hours Ansar al-Sharia, the Al Qaeda group operating in Libya, was claiming responsibility for the attack.
The attack upon the U.S. Mission and the CIA Annex raged for 7 hours with reinforcements and tactical air support readily available at NAS Sigonella and elsewhere in the Middle East and Africa.  Elements of the USAF 177th Tactical Air Wing are stationed at Aviano AB in northern Italy, less than 2 hours away from Benghazi on full afterburner for F15s and F16s. 

The Benghazi Mission and CIA Annex were less than 2 hours away from NAS Signonella on Sicily.  NAS Signonella hosts NATO and USAF aircraft such as the AC130U Specter.  The AC130U is a heavily armed variant of the C130 tactical airlift aircraft that is armed with a 105mm cannon, a 40mm cannon and two 20mm gattling guns.  The Specter is used for precision air strikes and direct support of infantry and special forces ground operations.
Woods and Doherty were killed by a mortar strike at the CIA annex.  A battle raged there with CIA personnel calling for air support by a AC130U Specter gunship based at NAS Sigonella on Sicily 480 miles away.  Woods and Doherty were killed when a mortar shell hit their position.  CIA personnel manning a machine gun on the roof top informed their superiors by radio of the exact coordinates of the mortar shelling their position.   They had the mortar and its crew under direct observation the entire time.

Several military options appeared to be available to conduct rescue and security operations for the U.S. Mission and the CIA Annex. including at least three mission specific teams of special forces personnel, including members of Delta Force.  More U.S. Marine infantry resources were available at NAS Sigonella two hours away by C130.

Given the nature of the attacking forces, had American forces shown, the enemy would have departed the area.  The attackers were not military troops, but members of an Al Qaeda militia with poor training and light weapons consisting of AK47s, PPSH 57mm machine guns, RPGs, and at least one mortar.
The U.S. Consulate in Benghazi has been improperly deemed a Consulate.  The facility under attack did not rise to the level of a Consulate and was actually a U.S. Mission.  It has now been disclosed from various sources that Ambassador J. Christopher Stevens mission was to facilitate the delivery of arms to various rebel factions.  Arms that were delivered through the auspices of the Qatar, Saudi Arabian, and Turkish governments.  The attack on the mission occurred just after the departure of a Turkish official who had dinner with Ambassador Stevens.

It has been alleged that Ambassador Stevens was dealing directly with the Muslim Brotherhood and other radical Muslim groups to move arms into the hands of the various hard-line Islamist rebel groups operating in Libya.  Stevens was working with the Muslim Brotherhood to convey arms provided by Qatar, Saudi Arabia, and Turkey to radical Islamist rebel groups.
The CIA mission that Woods and Doherty were part of was charged with finding missing MANPADS, Russian SA-7 Grail man portable anti-aircraft missiles similar to the U.S. military's Stinger.  There are allegedly 20,000 Russian MANPAD missiles missing from Libyan military stockpiles.  The reason for the search is to account for these weapons to prevent them from being used against the U.S. military elsewhere in Africa, the Middle East and Africa.

Meanwhile, in the White House, Pentagon, and State Department, insulated from the death and destruction they were witnessing, Sec-State Hillary Clinton, President Obama, and SecDef Leon Pannetta began the spin that the attack was not what they were witnessing, but an act of 'spontaneous mob violence' over the Youtube video.  Even U.S. Ambassador to the U. N. Susan Rice was promoting this falsehood.  For whatever reason, the Obama Administration chose to lie about the Benghazi attack.  Perhaps to the hide the gun running mission of Ambassador Stevens in the face of "Fast and Furious"?

Who and at what level denied the American personnel under attack U.S. military assistance?  Who ordered the CIA personnel to 'stand down' three times during the fight, effectively acting to deny the Mission personnel under attack assistance until four brave men obeyed their conscience and oath and acted to go to the aid of their fellow Americans?  These men are true heroes.

Where was the U.S. military response during the attack?  SecDef Leon Panetta is now claiming that there was too little information to formulate a plan.  Instead, the Obama Administration let U.S. Sovereign territory, which the Mission was under international law, be violated with impunity by an Al Qaeda affiliated Islamist militia, resulting in the deaths of U.S. personnel without recourse, other than to say that those "responsible will be brought to justice", as if the attack was a convenience store robbery.

The President of the United States, the Secretary of State, and the Secretary of Defense have much to answer for in their failure to act upon Ambassador Stevens multiple requests for increased security, for their failure to act upon the intelligence provided by the Libyan interim government with respect to the potential for an impending attack, for their failure to act during the attack to protect U.S. personnel, and for their outrageous lies in the aftermath.  The lie of the 'spontaneous mob' motivated by a Youtube video was carried forward two weeks post the September 11th attack in Benghazi.
Additional security personnel were cheap insurance, why were they denied? 

What was Ambassador Stevens doing running guns to Islamist radical groups?

Once again, accountability is being denied by this administration.  Yet, there are four dead whose deaths demand action.