Alaska News Nightly: March 21, 2012

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Massachusetts Congressman Rallies Against Gas Line Exports

Annie Feidt, APRN – Anchorage

A Democratic Congressman from Massachusetts is rallying against the idea to build a natural gas pipeline from the North Slope to tidewater in Alaska for export to Asia.

This fall, Governor Sean Parnell came out in favor of the idea, saying prospects to build a pipeline to Canada and the Lower 48 weren’t favorable. But Representative Ed Markey calls it a “scheme” and says if Alaska exports gas to the Chinese, “Uncle Sam really would deserve to be called Uncle Sucker.”

Larry Persily is Federal Coordinator for the Alaska Natural Gas Pipeline. He says Representative Markey has been an outspoken opponent of exporting liquefied natural gas out of the United States. But he says he’s several steps ahead of reality.

“That’s the great thing about energy policy debate in this country is that the rhetoric gets way ahead of the facts. Exxon, Conoco Phillips, BP are not planning to build an export pipeline. Despite Representative Markey’s statement, everyone’s waiting to see whether the producers will go along with the Governor’s request to work together to study whether a project makes sense.”

Representative Markey was not available for an interview. But in a press release, he say exporting U-S gas will raise prices for U.S. Consumers. Persily says that’s not true.

“Right now they’re disconnected markets. You could export natural gas from Alaska and it’s not going to effect the Lower 48 because there’s no way to get it there anyhow.”

Currently there are eight applications before the Department of Energy to export U.S. Natural Gas. But Representative Markey has introduced a bill in Congress that requires any natural gas extracted from taxpayer-owned federal land to be resold to American consumers. Persily does not expect that legislation to pass.

In a statement, Senator Mark Begich called Markey’s comments “laughable” saying, “Yet again, Representative Markey is trying to shut down any Alaska Development.”

Oil Companies Continue Push For Tax Cuts

Dave Donaldson, APRN – Juneau

The state’s major oil companies today continued to promote their requirement that they must see meaningful tax cuts before the state sees meaningful production increases.

Conoco-Philips Alaska Vice President of Finance Robert Heinrich told the Senate Finance Committee that the bill before them – SB1-92 – would not lead to any change in the production decline.

“Not to say the numbers don’t seem big on a dollar basis. Our industry works in big numbers.   Conoco-Phillips has invested over $25 billion in Alaska since 2000.   The reduction is almost $300 million to producers.  But in the context of the taxes paid – of nearly $15 billion – it’s immaterial.  That’s less than a 2 percent reduction.”

His estimates were calculated with oil priced at $130 a barrel.

Heinrich also complained about the proposed cap on the progressivity element – that part of the tax that increases the rate as prices increase. He said that has the biggest impact on long-term cash flow and cash generation.

“Between $100 and $130 the producer’s share doesn’t move much. That’s the part that makes Alaska investment less competitive – or less attractive as prices increase.  Another component of this is the cap on the production tax rate at sixty percent.  It doesn’t help much in the price environment we’ve seen.  It takes a price of $230 before the cap would kick in – and we don’t expect to be in that price environment for quite some time.”

Heinrich also strongly encouraged the committee to include the older, already producing wells in any tax incentives.  He said those wells are the base of the companies’ income and would give the quickest return on increased production.  Committee co-chair Bert Stedman said a cap on progressivity is one of the topics the committee will discuss.

Basing his presentation on a description of the current tax regime as “broken,” BP’s Alaska Head of Finance Damian Bilbao presented a worst case scenario based on projections made by the Parnell Administration.  He said the state faces a crisis that must be dealt with quickly.

“In fact, if you consider the break-even price for the state remains over ninety dollars a barrel, the bottom line is that the policy that is in place is not delivering the future that Alaska needs to support its infrastructure, the needs of its population and as well as all the other additional requirement I know you guys spend a lot of time discussing.”

Stedman assured Bilbao that the legislature does review the administration’s projections – as well as those produced by the legislature itself.

“But we don’t accept them blindly as that’s what’s going to happen in the future. Because noone in their right mind would run the state straight into the ground.”

Bilbao said BP will take a look at the final committee bill before considering whether it meets the company’s needs.

Exxon’s Production Manager Dale Pittman said his company will support decisions on investments made by the operators of the fields in which it works – Conoco-Philips and BP.

The committee will continue its work on the new tax plan tomorrow morning.

Goose Creek Audit Findings Raise Questions

Ellen Lockyer, KSKA – Anchorage

An audit on Matanuska Susitna Borough’s Goose Creek Correctional Center finds facility construction cost over-runs were avoidable. The Anchorage certified public accountant who conducted the audit says the report raises questions.  But state and Borough officials contend the accountant did not understand the intent of the legislature.

Health Care Legislation Heading To Supreme Court

Lori Townsend, APRN – Anchorage

This Friday marks the two year anniversary of the Affordable Care Act- President Obama’s health care overall. Its birthday present will be a trip to the Supreme Court next week. Justices will hear arguments on whether two aspects of the law are constitutional- the individual mandate requiring citizens to purchase health insurance and the Medicaid expansion. Alaska is one of 26 states suing to overturn the law. But the state has also benefited from the Affordable Care Act.

John Hammarlund is Regional administrator for the Centers for Medicare and Medicaid Services. He points to several health care changes that have happened in Alaska because of the law.

This story is part of a reporting partnership that includes APRN, NPR and Kaiser Health News.

University of Alaska Health Care Premiums Rising

Dan Bross, KUAC – Fairbanks

University of Alaska health insurance premiums are going up.  Employee health care paycheck deductions will roughly double as of July 1.  The change amounts to $175 a month for a worker on the mid range coverage plan.  Add a spouse and kids, and the premium will be over $490 a month.   It’s the latest erosion of what used to be considered a Cadillac plan. UA spokeswoman Kate Ripley says the university is playing catch up after two years of flat employee rates.

Upper Yukon River Peregrine Falcon Population Stabilizes

Dan Bross, KUAC – Fairbanks

A once endangered population of peregrine falcons that nests along the upper Yukon River appears to have stabilized. North American peregrines were decimated by the pesticide DDT, and listed as an endangered species, in the early 1970s. A long running study in the Yukon Charley National Preserve has documented 53 nesting pairs for the last 3 years and a 60 to 70 percent breeding success rate. Biologist Skip Ambrose, who’s studied Upper Yukon peregrines for decades, says the birds have come a long way.

Gold Medal: March Madness In Southeast Alaska

Casey Kelly, KTOO – Juneau

It’s March Madness Alaska-style this week, as adult teams from around Southeast gather in Juneau for the 66th annual Gold Medal Basketball Tournament.

The event, organized by the Juneau Lions Club, has achieved legendary status in many of the small village communities that dot the panhandle.