Tuesday, August 26, 2014

What did NO on Prop 1 do for Alaska . . . NOTHING.

SB21 brought industry commitments.
So say T.J. Presley and Nick Moe, the two who pushed the SB21 Prop 1 NO campaign.
Industry commitments?
 What industry commitments?
 What did Alaska trade with SB21? Another one-way deal brokered by Hawker and Chennault, Conoco's boys.
BP is laying people off.
The work being done is maintenance that was ignored for many years. Now, maybe, in 2016, there will be a favorable Congress elected and a President who just might open ANWR and allow offshore oil and gas development. Makes sense to spend the money, just in case.
How will offshore development help or benefit Alaska? Alaska does not get a cut of those royalties. Aside from whatever village becomes the staging area, there is no benefit.
Then, there is the idea of upping production in a time of 'glut'. How many tankers from Valdez full of Alaska crude are turned away from West Coast refineries, because of the wealth of shale oil being produced?
Is our oil wanted in the market right now?  No.  There is an excess of oil, with surpluses being produced in the Middle East as a hedge against any crisis that might cause a spike in demand.  
Saudi Arabia is trying to produce sufficient surplus oil to cause a downturn below $80/bbl as part of a plan between the Saudis and the Obama Administration to create financial stress on Putin's Russia.  At $80/bbl, Russia can pay for government, at $79.99/bbl, it cannot.  Now, you know why the price of oil has been declining lately.
What happened to the NG from Qatar that was supposed to supply the U.S. domestic needs for 25 years? The first LNG tanker was turned around and sent to Asia last May. That gas now supplies 60% of the Japanese LNG market.
Even though the Japanese are looking for new suppliers, Alaska's governor and Legislature are not interested.
 Our governor and Legislature could have cared less about the Japanese delegations that came to Alaska to secure LNG post the Fukishima meltdown.  The Gov and the Legislature evidently work for Conoco and Exxon. That is clear, otherwise, why would $3B in potential investment into an Alaska natural gas pipeline and LNG train have been allowed to walk to Kitimat and Chenier in LA? Alaska was not interested in the deal, so the money walked and was invested elsewhere.
What did NO accomplish? More money for the oil companies, less for Alaska.
I am a no tax kind of conservative. I believe that Alaska should have stuck with royalties and never bothered with taxes on the oil industry. We would have been much better off, and the oil industry would have thrived here with a vibrant oil and gas service industry instead of the few companies engaged in oil and gas anything in Alaska--fiscal certainty and all of that. However, we became greedy, allowed our gov't to milk the oil companies and now, we play stupid games. Our Legislature and governor studies and studies and studies and we languish wondering if there will ever be any new development in the oil sector and in the gas sector?
People move to Alaska hoping, only to find an expensive place to live with the economy largely being fueled by gov't money.  Eventually, those taillights will be headed south--sooner the better.
The oil companies promised nothing and that's what we received with SB21. Nothing.
There is no leadership in Juneau. The increasing spending is a demonstration that we have devolved from building infrastructure with our oil royalties largess to maintaining and keeping the plebes happy with social entitlements. No leadership, no direction, no commitment to do other than kiss the oil companies' corporate posteriors in the vein hope that they will pull the rabbit of economic prosperity out of the declining oil revenue hat before we use the entire PF to keep the illusion of fiscal solvency alive. That is the problem, has been the problem ever since Sarah Palin was elected, left Alaska, and the boy wonder, otherwise known as Captain Zero, became Governor six years ago. Yeah, six years, we've been blessed with . . . nothing.

Now, we have a $7M per day deficit spending with Governor Parnell's spending excesses.
 SB21 is still the law, meaning less money to the State.
Now what?
November will be the 'what'. The Legislature will not change. The same "me toos" will be back in Juneau to do what Hawker and Chennault say.
Hopefully, Bill Walker and Craig Fleener will have their shot at running the State. At least we will have a governor who has a plan to move forward with economic prosperity and fiscal responsibility as the goals.