Energy Update 4-6-11
Whew! Don’t want to run out of energy now with only two weeks to go down here in Juneau.
Around town last week the biggest news was…you guessed it, oil and gas taxes! In the continuing drama that could make for some good daytime television (if Alaska’s future financial viability weren’t on the line) Governor Parnell, the House, the Senate and the oil industry all traded spars and made claims last week, like the week before. The House, in some of the first after hours legislating of the 2011 session, passed their version of the Governor’s tax revision, HB 110, on March 31st by a vote of 22 to 16. Representatives Austerman and Seaton were the only Republicans to vote against the measure, and Representative Foster was the only Democrat voting in favor. The bill now moves to the Senate Labor and Commerce Committee.
Whether the Senate will take action is certainly up for debate. The Senate last week touted positive reports on Alaska’s oil tax climate, citing Department of Labor statistics that show North Slope employment in 2010 at its 2nd highest since 1990. Those facts, in addition to the continued lack of oil industry evidence that slashing taxes will bring jobs has Senators on both sides of the aisle still skeptical of the Governor’s tax plan. With the Governor making references to a “do nothing Senate”, Senator Hollis French stood up on the Senate floor and challenged him to a debate during which both men could lay out all the facts of the case for Alaska’s future. The Governor declined the offer, but maintains that cutting Alaska’s tax revenue stream by $2 billion annually is the best move for Alaska in the long term.
On the practical front, Senator Thomas Wagoner has proposed tax incentives for exploration in SB 85 that may provide grounds for a compromise as lawmakers press for some action in the final twelve days.
If one had the patience to dig below the heaps of oil tax news, there were some other energy developments in Juneau last week. The House has taken up HB 142, a bill that would move Alaska to evaluate and potentially abandon the Alaska Gasline Inducement Act if it was found to be not financially feasible. TransCanada Vice President Tony Palmer testified on Monday that the state action may be in violation of their terms of agreement, something between threatening and urging Alaska to stick with the process it began two years ago to support a pipeline to ship natural gas to customers in the lower 48. Alaska has so far paid $50 million to the oil and gas company for its development work, and anticipates paying another $75 million by this July, with a possible $160 million to be payed out in 2012. All of this money has been spent without commitment of an actual gas line or consumers to buy the gas pumped through it. The next two weeks will certainly be interesting for Alaska’s gas industry as well.
And finally, for those Alaskans concerned with energy and economic viability today and practical solutions to help our state’s commercial sector: The Senate Labor and Commerce Committee last Thursday passed SB 32, a bill to appropriate $10 million to the Alternative Energy Conservation Revolving Loan Fund. The bill would allow 85 businesses or non-profits to receive low interest loans of $30,000 to make energy efficiency improvements. The energy savings would reduce carbon emissions while saving businesses money and creating jobs, and the loan fund would function in perpetuity on the initial $10 million investment. The bill now sits in Senate Finance committee, where hopefully it will be acted on as an appropriation to the capital budget due out this week. To show your support for this measure to help Alaska’s economy and environment, feel free to email Senator Stedman and Senator Hoffman of the Senate Finance Committee.
That’s all for now from down in Juneau, but there’s certainly more to come day by day as the state legislature reaches its crescendo. Stay tuned and speak up for Alaska’s energy future during these last two crucial weeks in the capitol.