It’s been a long time coming, but finally substantial and measurable progress is being made toward finally unlocking the job-creating energy resources below the Beaufort and Chukchi seas. Imagine that? Well, you should. And can.
The Alaska Journal of Commerce’s Tim Bradner peels the layers back in “Shell one step closer to drilling in Beaufort, Chukchi seas”:
Shell Oil is a step closer to testing oil and gas prospects in the Beaufort and Chukchi seas this summer.
The U.S. Environmental Protection Agency has issued a draft air quality permit for Shell’s 2010 exploration program in the Alaska Chukchi Sea, and the company says it is now “guardedly optimistic” that it will be able to clear hurdles in time to drill in the summer open-water season in the Arctic, a Shell official said Jan. 8.
Pete Slaiby, Shell’s vice president for Alaska, said the agency’s release of a final draft air permit, actually a second version of an initial draft released last fall, is a positive step in Shell’s efforts to drill on leases for which it paid $2.2 billion in a 2008 outer continental lease sale in the Chukchi Sea.
Shell’s Slaiby describes EPA’s commonsense decision to move forward in the permitting process as a “big step”:
“The announcement is good news, but the length of the public comment period combined with likely appeals still pushes the boundaries of our ability to drill in 2010,” Slaiby said. “Obviously, the windows in which we have to operate are limited and a decision to move forward is an extremely expensive one. We will continue to monitor our options in the days ahead as we get closer to making that critical decision.”
Alaska’s two senators, Begich, a Democrat, and Republican Lisa Muskowski, provided important support for the permit, as did Republican Gov. Sean Parnell, Slaiby said.
Expanded access to Alaska’s sizable energy reserves, though, could all be for naught if excessive taxes in the state discourage production and drive businesses overseas. Gov. Parnell understands the need to balance responsible production with a tax code that will promote jobs and economic activity in the state.
The Associated Press reports this today under the headline “Alaska governor pushes changes to state energy tax”:
Gov. Sean Parnell said Thursday that he wants to give oil and gas companies greater incentives to do business in the state, a plan he says will boost production and create potentially hundreds of new jobs for Alaskans.
The plan comes amid forecasts of slumping oil production on Alaska’s North Slope and concerns by some Republican lawmakers that a state tax on oil and gas production – passed two years ago at the urging of then-Gov. Sarah Palin – is doing more harm than good and hindering new development.
Parnell said the recommendations strike a balance between protecting Alaska’s interests and declaring the state open for business. While the state currently has billions of dollars in budget reserves, Parnell said its economy is struggling and he’s trying to create more jobs and opportunities. The estimated hundreds of millions of dollars in additional tax credits are a small price to pay, he said, for a state that runs on oil and gas revenue.
And Sean Cockerham at the Anchorage Daily News reports this in a story entitled “Parnell seeks investment incentives for oil companies”:
Parnell said Thursday he doesn’t want the tax rate lowered, but does want tax credits for investments. His announcement comes as the oil companies and many Republican state legislators maintain Alaska’s oil taxes are too high and are driving away investment. This will be a battlefront in the legislative session which begins next week and in this year’s governor’s race, with candidates running on opposite sides of the oil tax issue.
Parnell said a new Department of Revenue study found the oil-tax system generally works well and that oil companies are increasing investment and jobs in the state. But he said there are incentives the state can give to create more economic activity.
“The numbers speak for themselves. Investment has been up in the industry. But frankly it could be better, that’s why we are offering incentives and credits,” Parnell said.
The Dept. of Revenue study on oil taxes can be viewed HERE.
Bottom line: Increasing access to Alaskan energy, while keeping taxes low for anyone that uses energy, is key to strengthening our national and economic security. Folks in Alaska overwhelmingly understand this. And a clear majority of Americans are realizing this, too.
Governor Sean Parnell’s State of the State speech last night properly challenged the Federal government for its improper attacks on Alaska’s economy. “Today, however, the federal government’s actions often seem at war with Alaskan interests. The federal government has misused the Endangered Species Act as a regulatory weapon to delay development of Alaska’s resources. Now, they have proposed setting aside an area larger than the state of California as critical habitat for polar bears. I strongly oppose such overreactive ESA listings and critical habitat designations. These are job killers and beyond the feds authority.”
Point Hope and environmental groups are foolishly challenging a Chukchi Sea outer continental shelf oil and gas exploration program in the 9th U.S. Circuit Court of Appeals this week.
These activists are aligning themselves with the Obama Administration philosophy that Governor Sean Parnell properly criticized in his State of the State speech last night. He said that, “…the federal government’s actions often seem at war with Alaskan interests,” and how right he was! But some coastal village leaders have adopted the legal strategy of some of the most aggressive opponents of Alaska’s economy. Those rural leaders are misleading their people into opposing the very industry that sustains their culture. Without oil and gas activity, how can the State (i.e. Whose budget is over 80% dependent on oil revenue) afford to support rural schools, power cost equalization, or provide the various social service jobs in the villages?
If coastal leaders who are marching with Outside environmental activists want to return their citizens to a pre-pipeline culture, that is within their power. But if they do, they should not expect to continue receiving all of the blessings of an oil and gas supported civilization that enables them to sustain a subsistence lifestyle in relative comfort.
The Legislature should take a long hard look at this situation. Without the prospect of an OCS future, the economic outlook for the entire state is at risk. The enlightened self interest of the Bush Caucus along with House and Senate Majority and Minority caucuses should carefully consider their options when faced with the reality that our children’s generation may well be inheriting an economy which has been mortally wounded by a small band of well-intended northern coastal leaders possessed by extraordinarily poor judgment.
Dave Harbour
Publisher, http://www.northerngaspipelines.com