• Yesterday, Gov. Bill Walker signed an LNG agreement with the Japanese energy company, Resources Energy Inc. 360North has it all on video for your viewing pleasure. Read the backstory here.

• Like Fight Club, there are no rules in Cyber Wars, so sayeth Politico.

• The LA Times reports that the FDA is just now going to allow homosexuals to donate blood but only if they are celibate. The Huffington Post explains why the new, yearlong moratorium on gay men from their last sexual encounter before they can donate blood is dumb and discriminatory. Blood banks across the country are constantly screaming for blood donations. If you would like to give the gift of life this holiday season, contact the Blood Bank of Alaska.

• The Alaska Journal of Commerce reports that Rep. Don Young is taking point on the Magnuson-Stevens reauthorization bill.

• OilPrice.com wonders if the Saudis and the U.S. were in cahoots in dropping oil prices.

• The Juneau Empire reports that our lefty city to the south has upped its street cred by earning a bronze medal from the League of American Bicyclists for being a bicycle-friendly community.

Continue reading →

Today Gov. Bill Walker signed a non-binding agreement with Japan-based Resources Energy, Inc., which, according to a Walker press release “is an extension of Alaska’s longstanding partnership with Japan in energy markets.”

The state already has such an agreement with REI, which is working with AIDEA on the planning stages of an LNG facility in the Kenai which will send LNG to Japan. The project is expected to cost about $2.5 billion, including the gas. The company also has an eye on North Slope gas. It has an office and staff in Anchorage. The state’s agreement with REI was set to expire at the end of this month.

The major difference between this one and the last agreement is that the governor’s signature will be on this one. “That was signed by the commissioner and this was signed by the governor,” Walker said at a press conference announcing the agreement.

Already Alaska has a few natural gas-related agreements with Japan. Last year, then-DNR Commissioner Dan Sullivan signed one with the government-controlled Japan Bank.  And in September, then DNR Commissioner Joe Balash signed one with the government of Japan.

• The Fairbanks Daily News-Miner is reporting that Fairbanks North Star Borough Mayor Luke Hopkins will be creating a working group to help write regulations regarding commercial marijuana, while Tribes are also carefully wading into marijuana policy.

• APRN’s Liz Ruskin crunched the latest numbers to find that Democrat Mark Begich spent nearly $10 million, and Sen.-elect Dan Sullivan spent $7.6 million in the Senate race. She also writes how donors are still eager to give post-election.

• $20 a barrel? Yep. That could soon become Alaska’s reality.

• It’s official: The Supreme Court will hear the highly anticipated case challenging ObamaCare subsidies on March 4, 2015.

• The Washington Post believes that Sen. Rand Paul might have accidentally revealed more than he anticipated during his annual Festivus or “airing of grievances” and heavily implied that he is in fact running for president. Also, he really wants turtlenecks to happen in 2015. That’s so fetch!

• The U.S. economy has grown by 5% in the past year, making this the single fastest growing year since 2003, so says The Guardian.

Continue reading →

In more very bad news for Alaska, not to mention Russia and Venezuela, The Financial Times is reporting that the Saudi oil minister, Ali al-Naimi, says that Opec won’t cut production even if oil drops to $20 a barrel.

“It is not in the interest of Opec producers to cut their production, whatever the price is,” al-Naimi is quoted in the FT as saying. “Whether it goes down to $20, $40, $50, $60, it is irrelevant.”

Opec has traditionally tried to keep prices high and the fact that it’s willing to let oil drop so low is a “dramatic policy shift” that hasn’t been seen since the 1970s, when OPEC leveraged its oil for political reasons by raising prices and causing an energy crisis.

Alaska needs oil to be at about $117 a barrel to balance the budget.

Here’s Rep. Don Young wishing Alaskans a Merry Christmas. (Do the three blinks indicate an SOS?)
http://youtu.be/YeTuhUOWA3I

Four Alaska Democratic legislators wrote a letter to Gov. Bill Walker, calling on him to consider re-appropriating about $20 million that the state has set aside for the road through Anchorage’s U-Med district. Construction hasn’t yet started on the road, which will cut through UAA land to connect South Bragaw Street and Elmore Road and is expected to alleviate traffic. The legislators said that re-appropriating the money is a prudent thing to do given the “major fiscal crisis” in Alaska. Sens. Bill Wielechowski, and Berta Gardner, along with Reps. Geran Tarr, and Andy Josephson signed the letter. (Read the full press release below, and here for the letter.)

It should be noted that the Legislature appropriates and re-appropriates such funds, not the governor. However, the governor’s support could be influential. Democrats have long opposed the road, and have lost the fight against appropriating funds for the road.

In addition to the $20 million it is expected to cost to build the road, the university will be paid between $3-4 million for the land, according to UAA spokesperson Carla Beam. She said that the university believes that the road is “critical to provide safe and much-needed access to the university.” Indeed, the area can be among the most congested in town.

Neighbors, however, are less than enthusiastic. Continue reading →

• Prepare for $40 per barrel oil? Reuters is reporting that SaudiArabia vowed not to cut oil output even if non-OPEC nations did so.  Saudi Oil Minister Ali al-Naimi told reporters: “If they want to cut production they are welcome: We are not going to cut, certainly Saudi Arabia is not going to cut.” Ouch.

• KTUU’s Kyle Hopkins has a great piece in the LA Times about Alaska’s budget woes.

• Twenty-five cents. That’s how much the AP reports that the average price of regular gas has dropped within the past two weeks.

• KTOO reports that Canada has ok’d the controversial KSM mine’s environmental plans.

• From the Bristol Bay Times: “An emergency measure to help northern Bering Sea halibut fishermen was defeated at last week’s North Pacific Fishery Management Council.” The measure would have transferred bycatch quotas from pollock trawlers to hook-and-line halibut fishermen. All of the Alaska reps on the council voted for the transfer, including new Alaska Department of Fish and Game commissioner Sam Cotton, who is on the council. Trawlers vigorously opposed the measure.

• Add yet another reason salmon is proving its importance to Alaska. Science World Reports that fish such as the Dolly Varden have successfully evolved with climate change by altering its migration cues from following environmental shifts to following spawning salmon.

Continue reading →

Gov. Bill Walker filled three key positions in his administration on Friday. Heidi Drygas will be the new commissioner of the Department of Labor. Darwin Peterson will be Walker’s legislative director, and Larry Hartig will stay on as commissioner for the Department of Environmental Conservation.

Born and raised in Fairbanks, Drygas went to undergrad at UAF and received her law degree from Willamette University. For the last ten years, she has been a lawyer for the Alaska District Council of Laborers. She also has an awesome food blog and won the Alaska Democratic Party’s annual chili cook-off contest last year.

The new legislative director, Darwin Peterson, was most recently Sen. Bert Stedman’s chief of staff. He’s well liked in the Legislature, particularly among Republicans, which is important given that the make-up of the administration so far appears heavy on Democrats.

Finally, few will likely have a problem with Walker’s decision to keep Larry Hartig on. He’s been the commissioner of DEC since 2007, and by accounts, he’s done a good job.

Here’s the press release announcing the appointments: Continue reading →

I realized when I posted Garand Fellow’s piece about Alaska’s credit rating being on the verge of being downgraded by two of the three credit rating services, that although it sounds really bad, I didn’t fully understand what that meant for Alaska.

First a little background: There are three credit ratings services, Standard & Poor’s, Fitch, and Moody’s. Alaska has a AAA rating from all of them, which is the highest rating and means that the state has “extremely strong capacity to meet financial commitments.” In 2013, it was one of 13 states to have that rating. (At an A-, Illinois had the lowest rank among states.)

If the state’s rating is downgraded, it means that we might have to pay a higher interest rate on future state-backed bonds. But given that ratings agencies are cautious, and change ratings in slow increments, it probably wouldn’t have a huge effect on the state if it were downgraded, said Department of Revenue Deputy Commissioner Jerry Burnett, adding that those ratings are very important and DOR is taking it very seriously.

If the state is downgraded, which is a big if, “The sky is not going to fall…We’d have to be downgraded to junk bond ratings for that to happen and that’s not going to happen under any plausible scenario,” Burnett said. Continue reading →

From the Alaska Department of Law:

The Attorney General’s office announced today that a fund for the daughters of Assistant District Attorney Brian Sullivan has been established to allow the public and Brian’s colleagues to donate in his memory. Brian was shot and killed in Barrow, Alaska on Monday, December 8, 2014.

Brian, who was 48 years old at the time of his death, had worked in the district attorney’s office in Barrow since 2012 and formed a strong bond with the small Arctic community. Prior to taking the post in Barrow, Brian had worked as a private attorney in the Mat-Su Borough along with his previous work in the military as a paratrooper and JAG lawyer and his four years of service in the Washington House of Representatives.

Deputy Attorney General Richard Svobodny described Brian Continue reading →

In a comment on the story about Standard & Poor’s warning Alaska to get its fiscal house in order or risk a credit-rating downgrade, reader Garand Fellow argues that not only are the credit ratings agencies urging Gov. Bill Walker to make tough choices, Alaskans have given him buy-in to do so also, if he chooses to go that route. If he doesn’t? The agencies, which are watching Walker closely, will take note. “If there is a credit rating downgrade it will come not from lowered oil prices but from lowered expectations of this still new governor,” Garand writes.

He/she drives the point home:  “This is a strong governor state. The governor can take action without having to convince an elected AG and an elected state treasurer. An Alaska governor who would rather not lead has no place to hide; no one else to blame.”

Read on:

The credit rating agencies are not surprised that a credit has challenges, and even a triple-A credit is expected to have them. But there are additional expectations. Cash is king, but the agencies expect to see more leadership, and decisive leadership, out of say a triple-A credit than they might out of a double-A credit. They expect no games; no hide-the-peanut, no razzle-dazzle, no Hail Mary action. They expect quick, organized, decisive action explained very well to Alaskans and to the agencies. I cannot imagine that anything would be a higher priority right now for Governor Walker.

What does this mean? It means that Governor Walker must bring agreement early in the legislative session to some plan that matches revenues and expenses before the CBR and SBR are exhausted. Counting on higher oil prices coming to the rescue, selling bonds (including pension obligation bonds), and making proposals that the legislature is unlikely to accept would not be appropriate for even a single-A credit (although downgrades are done in small increments over time, otherwise the agencies look like they may not have been paying attention).

The best and arguably the only tool Governor Walker has for the remaining half of FY2015 and for FY2016 is reducing expenditures. Continue reading →

• Medicaid released data today that showed that enrollment jumped even in states (including Alaska) that didn’t expand their programs. The New York Times drills down the data into readable bites.

• Many communities are scrambling to figure out the best policies to govern marijuana possession and sales within their communities. It doesn’t help that Gov. Bill Walker is now talking about imposing some sort of delay. As the Fairbanks Daily News-Miner wrote: “(J)ust what mechanism Walker can use to delay the regulations is unclear” and would likely lead to a court challenge if he tried.

• NovaCopper admits that they have ‘substantial doubt’ regarding the financial health of Ambler road without financial assistance from the state.

• The LA Times Editorial Board wrote an extensive op-ed about Pebble Mine. Shocker alert: LA thinks Pebble is a bad idea.

Continue reading →