Tourism leaders join No on 1 chorus

A growing number of visitor industry leaders, including Cruise Line Agencies of Alaska, Alaska ACT, The Hotel Captain Cook, and the Millennium Alaskan Hotel, are encouraging fellow Alaskans to vote no on Ballot Measure 1.

They are worried that a yes vote would stop the new investment pouring into the North Slope that already is producing results.

Ballot Measure 1 would repeal the oil tax reform and return Alaska to its former tax, referred to as “ACES.” Under ACES, Alaska lost more than 200,000 barrels of production a day and was the only oilproducing state to lose production during the current oil boom.

Alaska needs a healthy, vibrant oil industry for long-term, sustainable state budgets, economic growth and to maintain the quality of life Alaskans enjoy, the leaders warn.

Oil provides 90 percent of the state’s general fund revenues and it would be virtually impossible to replace Alaska’s oil dollars. One University of Alaska Anchorage economist calculates that it would require a $4,000/person tax on visitors, $8,000/ounce tax on gold or a $40/salmon tax on seafood to equal what we raise in oil revenues.

If production continues to decline, there will be higher taxes on cruise ships, docking fees, hotel bed tax and property tax, the industry leaders say.

“We have seen what happens when the economic environment becomes too expensive to compete with global marketplaces,” Alaska ACT says.“Cruise ships move to different destinations, which then affects all large and small tourism businesses.”
(Source: CLIA Alaska and Alaska ACT).

Joint venture agreement signed on LNG project

The state, North Slope producers, and TransCanada have signed a joint-venture agreement to begin preliminary work on the 800-mile natural gas pipeline from the North Slope to a liquefied natural gas (LNG) export plant on Cook Inlet.

The Alaska LNG Project has fully entered the Pre-Front End Engineering and Design (Pre-FEED) phase – a milestone no previous Alaska gasline project has achieved. During the Pre-FEED phase, the producer parties will spend hundreds of millions of dollars on design and engineering of the project.The project is now working to secure an export license with the Department of Energy and continue permitting work with the Federal Energy Regulatory Commission.

“While many projects have faltered in the past, I am cautiously optimistic about this one because it’s the first time in our history when all the necessary parties for a project are aligned, all the necessary parties are putting down their money and all have agreed to work together,” said Governor Sean Parnell.

The $45-$65 billion project is still a long way from reality. The recent agreement will precede another phase of work in 2016, which will require another agreement and approval from the legislature. If the project is ultimately given a green light, Alaska gas could hit local and foreign markets by the mid-2020s.

Alaska’s oil tax change has improved the odds for an LNG project since a healthy oil business is a prerequisite for gas commercialization.

RDC comments on proposed forest directives

In comments to the U.S. Forest Service on proposed directives for National Best Management Practices (BMPs) for water quality protection on national forest lands, RDC urged the agency to avoid creating yet another costly layer of bureaucracy.

The agency is already successfully implementing BMPs using state-by-state procedures, RDC noted.“Virtually every BMP in the national core set already exists in current regulations, guidance, and procedures,” RDC said.“Given uncertain costs of the program and unintended consequences, we urge the Forest Service to only consider essential new BMP objectives in a series of small, discrete steps rather than creating another large federal program.“

The National Environmental Policy Act process and other procedures have already sharply increased the expense and time required for the agency to accomplish its land management objectives and for industry to comply with the law.

“Perhaps what would be best for the agency and national forest stakeholders would be to find a path forward in streamlining existing policies and procedures, as opposed to expanding them,“ RDC said.

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