Dr. Moniz is a respected physicist who has spent years working at the intersection of policy and scientific research.
Before returning to MIT in 2001, he spent four years as undersecretary of the Energy Department. So he’s had practice artfully dodging questions and providing diplomatic, often-vague answers.
Both the committee chairman Oregon Democrat Ron Wyden and the panel’s top Republican, Senator Lisa Murkowski used their first comments to pin the nominee down on exporting liquefied natural gas.
Sen. Murkowski asked whether he supports exports of LNG, and Dr. Moniz responded:
“I believe the Natural Gas Act suggests we should move forward with licenses unless there is a clear public interest issue.”
Dr. Moniz went on to say that cumulative effects, including overall cost, need to be examined before the Energy Department would grant an export license.
“But fundamentally, I think all of these issues have to come together,” he said. “And we’ll make a transparent, analytically based evaluation application by application.”
A case by case approval process could be what export skeptics want to hear. Sen. Wyden, a critic of exporting natural gas, said he’s concerned what exports would do to prices at both the national and regional levels.
Confirmation hearings provide senators a chance to rally a base and bring up parochial, home-state issues.
Sen. Joe Manchin, a conservative Democrat from increasingly Republican West Virginia, asked Dr. Moniz some pointed questions about threats to coal.
“How much longer will taxpayers have to subsidize renewables?” he asked. “Until they’re able to compete in the marketplace on their own?”
Dr. Moniz dodged the question; offering up a long, winding answer. He said the role of the government in energy production is to “make sure the marketplace has options.”
The Department of Energy oversees all sorts of programs: from a controversial loan program for energy firms to regulating fracking to assuring the safety of the country’s nuclear weapons.
Sen. Murkowski made note of the heavy load.
“You are not signing up for the easiest job here,” she said in her opening remarks.
One thing the Energy Department is not responsible for is federal tax policy. But that’s what Utah Sen. Mike Lee, a Tea Party favorite, asked about. He wanted to know whether Dr. Moniz supports a carbon tax.
Dr. Moniz responded in a fairly straight forward way: He’s not the right person to ask.
“First of all, it’s important to note the administration has not proposed a carbon tax and has no plan to do so,” he said. “That’s the first point. The second point, the Department of Energy is not the locus of discussion for such fiscal policies.”
Dr. Moniz is expected to pass through both the committee and full Senate. Sen. Wyden supports the nomination, and he hopes to bring the nominee back for a vote sometime soon.
Because in Wyden’s words, “the sooner he’s confirmed, the sooner he can get to work.”
Matanuska Electric Association is blaming an upcoming rate hike on the Regulatory Commission of Alaska. In March, the RCA approved a 42 percent base cost increase request by Anchorage – based Chugach Electric Association for the power that Chugach sells to MEA. MEA spokesman Kevin Brown says the rate hike could be temporary:
“While the RCA does a full investigation of this rate filing, they have approved an interim increase in the wholesale power cost to MEA of 42 percent. That investigation will likely take a year to complete. When that investigation is done, if the RCA decides that the rate increase wasn’t warrented, all the money that we’ve paid to Chugach as a result of that increase will be refundable to MEA.”
Brown says MEA purchases almost all of its power from Chugach under a contract that won’t expire until the end of next year. He says MEA strongly opposed the RCA’s interim increase in the cost of wholesale power paid to Chugach.
”As we purchase almost all of our power from Chugach Electric, we are largely at the mercy of their prices. Approximately two thirds of the MEA customers’ bill is just directly passed on from Chugach Electric. So when their costs go up, we feel that right alongside them. “
Brown says the RCA has allowed Chugach to increase rates for its other customers, too, but in amounts less than the 42% increase for MEA. He says the MEA customers can expect to pay eight point seven million dollars over the course of the year to cover the extra cost.
That shakes out to about nine dollars more a month for an average household bill for 750 kilowatt hours, starting this month. The Chugach rate increase starts today (Monday) he says, and customers will see the higher rate reflected in next month’s MEA bill.
Brown says Chugach’s increase is to cover the costs of Chugach’s new gas fired electric generation plant in Anchorage.
MEA is constructing it’s own electric generation plant in Eklutna. That project is expected to be complete by 2015.
Anchorage Police Department officials say the man shot and killed by officers in a downtown supermarket parking lot Friday night had a semi-automatic handgun. The man was identified as Detlef Wulf, a 27 year old with a long criminal record. KSKA’s Daysha Eaton has the story.
Friday night a security guard called police to report a possibly drunk man slumped over the wheel of a sports utility vehicle, at the Carr’s grocery store in Fairview. According to Anchorage Police Chief Mark Mew, the officers approached the vehicle, rapped on the window of the SUV and saw that the man inside had a semi-automatic handgun. Mew describes what happened.
“Things went very fast from there. They hollered at the person behind the wheel, who we now know to be Mr. Wulf to put his hands up. Instead of doing that, he produced the gun, cracked the car door open, raised the gun, leaned over his shoulder and pointed at the closest officer. And, at that point, both officers returned fire.”
The victim was identified as Detlef Wulf, age 27. Mew says officers boxed the car in and illuminated the area before approaching, because they believed the man could be intoxicated and they wanted to prevent him from driving away. The shooting happened just before backup arrived. Five shots were fired by two officers. An autopsy is underway. Wulf had a long record with the courts stretching back to 2000 with many cases involving alcohol and weapons. Chief Mew says law enforcement leaders are very concerned about the increasing number of officer involved shootings in Anchorage.
“In 2012, we had five officer involved shootings. That’s the most we’ve ever had, as far back as we could count. Two of those were fatal. Three of them were not fatal. That same year, State Troopers had eight, which I think is very high for them too. We’re both concerned and trying to determine how to attribute that. Is society getting more violent? Are our officers acting quicker? You know, I don’t know the answers to those questions yet.”
So far in 2013, the APD has had three officer involved shootings, two of them fatal. In January, officers attended a ‘use-of-force’ training. The state Office of Special Prosecutions and Appeals is investigating Friday’s shooting. Officers must be in fear of immanent, serious physical injury or death to themselves or a third person in order to legally use deadly force.
- APD Press Release: April 8, 2013 (PDF)
- Related Stories: APD and deadly force
- APD Officers Shoot, Kill Suspect (19 Feb 2013)
Protesters with the anti-abortion Center for Bioethical Reform held up large signs across from the state capitol building in Juneau this week, depicting graphic images of aborted fetuses.
In response to complaints, some state employees tried to block the protest signs with official vehicles.
The incident led Governor Sean Parnell and state Senate Republicans to charge the demonstrators’ free speech rights had been violated.
The signs were hard to miss, showing what the protesters claimed to be the bloody aftermath of an abortion. Officials at the Dimond Courthouse directly across from the capitol received complaints about the images. So, Alaska Court System Deputy Administrative Director Doug Wooliver says a longtime court employee requested state vehicles park in front of the signs.
“Our employee at the court system had received some complaints about the graphic nature of the photographs, particularly given that it was by a daycare center in the Tom Stewart Building,” Wooliver said. “His thought was, well, maybe we can just put some vans in the parking area, which is for loading and unloading and all kinds of regular daily uses anyway, as a way to try to create a buffer.”
Some protesters apparently complained to a state lawmaker, and by Wednesday a video of the incident was posted on the Restoring Liberty PAC website run by failed U.S. Senate candidate Joe Miller.
Another heavily edited video posted Friday shows demonstrators trying to block a van from parking in the loading and unloading zone in front of the courthouse. A capitol security official asks a protester not to stand or sit in the middle of the street. When the man refuses, the security guard attempts to escort him to the sidewalk. In the ensuing struggle the protester falls to the ground.
On the Senate floor Friday, Wasilla Republican Mike Dunleavy called it a blatant violation of free speech.
“These protesters were not yelling and screaming. They were not saying anything. They were standing there silently,” Dunleavy said. “Yet we had several vans – state of Alaska vans – park in front of those protesters. We had one of the protesters – it’s on the video – that was manhandled. This is an outrage.”
Governor Parnell released a statement blaming the situation on employees with the court system, the Legislature and the Department of Administration, and calling their actions “totally inappropriate.”
Eagle River Senator Fred Dyson took it a step further while talking to reporters at a Senate Majority press conference on Friday.
“I suspect whoever was responsible will at least get talked to about it,” Dyson said. “And may get time off to work on their resume.”
Andy Mills, a spokesman for Administration Commissioner Becky Hultberg, said the department’s vehicles only blocked the protest for 45 minutes on Tuesday. He said the employees involved would receive training about not interfering with demonstrations.
Legislative Affairs Director Pam Varni denied involvement by employees at her agency.
Wooliver says the court employee realizes it was the wrong decision. However, he says calling it a violation of free speech might be a little strong.
“I don’t know if it violated free speech. They were still on the sidewalk, they were still visible. I think they moved down a few feet,” Wooliver said. “But it was inappropriate on the part of the court. So everybody I think agrees it was not the right call to make.”
According to the Juneau Police Department, the Center for Bioethical Reform did not apply for a parade permit, which would have been needed for a demonstration anywhere off the sidewalk. No arrests were made and the protest wrapped up without further incident Wednesday afternoon.
Administrative Judge Benjamin Gutman reversed the suspensions of former prosecutors Joseph Bottini and James Goeke.
The two appealed their suspensions, which have not been enforced yet.
Bottini, now an assistant U.S. Attorney in Anchorage was suspended 40 days without pay. Goeke, an assistant U.S. Attorney in Washington State, lost 15 days of pay.
The ruling says the two received harsher than necessary punishments because the Department of Justice did not follow its own procedures. A senior attorney at Justice investigated the two instead of a subordinate lawyer.
Bottini and Goeke were originally charged with prosecutorial misconduct. They failed to follow legal procedure by not offering up character-damaging information about their star witness, disgraced former Veco executive Bill Allen.
The Department of Justice would not comment for the story. A spokesperson said the Department is reviewing the matter.
A joint House and Senate vote today [monday ] approved almost all of Governor Parnell’s appointments to various state boards and commissions — all but one. Vince Webster, Parnell’s choice for re-appointment for a third three year term on the state Board of Fisheries, was turned down by a one- vote margin
“Total combined, 29 yeas, 30 nays.”
“And so by a vote of 29 yeas, 30 nays, Mr. Webster has failed to be confirmed. “
Senate president Charlie Huggins asked for the vote tally to be read a second time. The vote came after an hour of spirited debate on the merits of Webster’s previous work with the state fish board. Webster had gained the ire of the Kenai River Sportfishing Association due to a Board of Fish move in March that lowered escapement goals for Kenai River late run chinook salmon. On Friday, KRSA issued a call to block Webster’s appointment.
An audit of the Knik Arm bridge finds that the agency handling the project has “overstated” its traffic forecasts. Government auditors expect substantially less toll revenue as a result, leaving the state at risk of having to make up the shortfall.
The bridge, which would link Anchorage to Port MacKenzie, has a price tag of $1.6 billion dollars. The Knik Arm Bridge and Toll Authority – the agency behind the project – anticipates that it would pay for itself within 30 years of being built through driver tolls. But the audit released on Saturday says that KABATA’s financial plan is “unreasonably optimistic” and that it’s based on inflated population estimates for the area.
KABATA is disputing the report, saying that the auditors failed to factor in potential development of the Port MacKenzie area.
A bill advancing the project is scheduled for a vote on the House floor tonight (Monday).
A bill that would give cities and boroughs in Alaska the ability to deal with derelict and abandoned vessels is on the move in Juneau. On Friday House Bill 131 received a unanimous vote in the Alaska House.
The prime sponsor of the Bill is Representative Paul Seaton from Homer. He says the bill addresses an important issue.
“Dealing with derelict and abandoned vessels is a costly endeavor and a growing problem. Unfortunately, that onus is falling on our municipalities, since the state has made a policy of giving our ports and harbors back to them. They simply don’t have the financial resources or sufficient legal authority in some cases,” Seaton, R-Homer, said. “HB 131 gives municipalities better legal traction to address this problem.”
Back in October the Alaska Association of Harbor Masters and Port Administrators passed a resolution requesting stronger municipal powers in regards to abandoned and derelict vessels. That resolution was supported by the Alaska Department of Transportation and Public Facilities. House Bill 131 basically allows a state agency or municipality to remove a derelict vessel from State waters if the vessel obstructs navigation or constitutes a danger to the environment. The bill also stipulates that a vessel that has been denied entrance to a harbor by a state agency or municipality may not be stored on the waters of the State for more than 14 consecutive days unless all hazardous materials and petroleum products have been removed. House Bill 131 also gives a state agency or municipality the authority to dispose of vessels that have been left unattended for 30-days if the vessel is on public property or on private property without the authorization of the owner of the property.
House Bill 131 now moves to the Alaska Senate, which has until Sunday, April 14th to move the bill. If not the bill will be waiting on the Senate next year when the 2nd session of the 28th Alaska Legislature gets underway.
A D.C. district court decision quietly released on Easter Sunday, has huge implications for Alaska tribal and state lands jurisdiction. The court found the Secretary of Interior has the authority to take land into trust for Alaska tribes. Most believed that was not possible after the Alaska Native Claims Settlement Act was passed.
Native American Rights Fund attorney Heather Kendall Miller argued the case on behalf of Alaska tribes. She told APRN’s Lori Townsend the ruling is an important recognition of tribal self determination and trust status will protect tribes from lawsuits, taxation and foreclosure.
The National Weather Service is downgrading it’s forecasted snow amounts for the latest April storm to hit the Anchorage area. Over the weekend 10 inches of snow fell in East Anchorage and on the Hillside. Highland Road in Eagle River received an impressive 29 inches of fluff. This morning the National Weather Service was predicting another 9-15 inches could fall by Tuesday. But now it looks like the storm totals will be closer to 4 to 8 inches.
Jason Ahsenmacher is a meteorologist with the National Weather Service:
“We saw much lighter snowfall today than we were anticipating. And even tonight, the main show when we get it moving in tonight, is probably not going to be as impressive as we thought. So really, just a very slight shift in the pattern to the east made all the difference for this event.”
Still, Ahsenmacher says snowfall rates should pick up in Anchorage around 7 pm tonight. The snow will lighten up early tomorrow morning and little to no accumulation is expected during the daylight hours tomorrow (Tuesday).
Modern technology, like snow machines, boats, and cell phones have changed how Alaskans gather their food – both in urban and rural areas. As part of our on-going series looking at how we define our culture and live our lives as Alaskans, Anne Hillman examines some of those changes and the aspects that haven’t changed at all.
Our series on culture is funded by the Alaska Humanities Forum.
John Marvin, Junior has been sentenced to 198 years in prison for the murder of two Hoonah police officers. The 47-year old Hoonah resident will essentially spend the rest of his life in prison for gunning down two officers in front of their families, and then holding other officers at bay in a stand-off for more than a day.
The National Weather Service is predicting another round of significant snow for Southcentral Alaska, from the Mat-Su Valley down to the Kenai Peninsula, this weekend. The storm is expected to hit Saturday afternoon, with the heaviest snowfall Saturday evening into Sunday morning. The forecast calls for between 4 and 10 inches of snow in the Anchorage area, with the highest amounts along the hillside. Dave Snider is a meteorologist with the National Weather Service in Anchorage. He says big snows aren’t especially unusual this time of year.
“Three of our top five high snow fall totals for just one day occurred in March and April. Back in 2008, we set a record about this time of the year for 15 1/2 inches of snow. So it can come down and it can come down pretty hard and fast as well even in this late part of the wintertime or spring, if you like to call it that.”
Snider says the highest amounts will fall over the Chugach mountains and the western parts of Prince William Sound. And he says even more snow is forecast for the region for the early part of next week.
Another major military exercise has been cancelled. The Alaskan command announced this (Friday) morning that it will not hold Northern Edge 2013. The event, held every other year was scheduled for the last 2 weeks of June. It’s the largest military training exercise in Alaska, spanning the entire state, and Gulf of Alaska. Alaska Command spokesperson Captain Tanya Bryan says the 2013 event fell victim to federal budget cuts.
A Fairbanks man survived a crevasse fall on a glacier near Delta Junction yesterday (Thursday). As KUAC’s Dan Bross reports, he was rescued unscathed, despite a long fall and hours trapped in the ice.
Alaska Moose Federation executive director Gary Olson says the project will keep moose from browsing along the Parks Highway corridor, thus helping to reduce moose – auto collisions. The Federation has launched programs the past couple of winters: one to remove live moose away from roadways, another to collect the animals’ carcasses when moose run afoul of traffic. Olson says the latest plan will lure moose away from the road by providing a smorgasboard of moosey delights.
”We’re trying to do some different programs now that will actually encourage the moose to live back in the woods other than hanging around these highway corridors. “
The project is taking place in an area that was charred by the Miller’s Reach wildfire about fifteen years ago, Olson said.
”And there’s a lot of moose in there. And so if we can go in and demonstrate how industry can assist in these conservation programs we’re hoping this demonstration project provides a model that the state and local governments and agencies can actually try to do in more areas to enhance more habitat.”
The three way partnership is using donated funds and equipment to meet expenses. Alaska Operating Engineers will provide a D8 caterpiller bulldozer and an apprentice operator and an instructor for the job. The dozer will pull a 40 thousand pound roller chopper behind it to crush more than four acres of willow an hour.
”And it’s a big drum, with cutting discs on it. And what it does is it replicates how after a natural fire you get all that regenerated willow and birch.
The downed trees spur the generation of new growth in the understory that is attractive to moose.
Tom Harris, the CEO of Knikatnu Native Corporation in Wasilla, says moose are sure to follow their noses.
”The moose has the biggest nose on the continent and if there’s food out there they are going to find it. “
Harris is a long time advocate for habitat enhancement programs aimed at increasing the numbers of moose. He says the Moose Federation’s project also could provide hunting opportunities. Harris says urban hunters are competing with rural Alaska hunters for the same moose
“If we can provide an increased chance for harvest on the road system, then that hunter is less likely to want to go to a remote community and be competing for a moose that’s critical for the Western or rural villages of Alaska. Today, a pound of meat that is store-bought is anywhere from seven to 20 dollars a pound. Well, at 600 pounds of moose meat, that’s a pretty expensive bill. As a result of that, the loss of a moose to a rural family can be as much as the replacement cost of 8 to 10 Permanent Funds,” he said.
Harris says if there are more moose in the Valley, urban hunters won’t have to fly out to rural Alaska for opportunities.
State Fish and Game assistant director of wildlife conservation, Tony Kavelok says the program is on private land, and Fish and Game has not been consulted.
”We have a question about the value of doing that specific for moose in that area. I can’t imagine that it’s going to have a significant increae in moose use. This will be a small postage stamp in a bigger area, ” Kavelok said.
And it is not certain that the land in question has the biological potential for enhanced habitat. Fish and Game wildlife physiologist Bill Collins, with the Palmer office, says moose may linger in a area where food is tasty, but in general the animals have fixed habits, and tend to traverse the same terrain year after year. He says it is not likely they will stay in one place for long.
Olson says the program got started over a week ago, but workers are taking a temporary break due to spongy spring conditions. He says they’ll resume in coming weeks.
The U.N. Global Arms Trade treaty took seven years to negotiate. It aims to block the sale of weapons to countries charged with crimes against humanity, prevent future genocide, and assure terrorists won’t get their hands on tanks, artillery and helicopters.
Scott Stedjan, senior policy adviser with Oxfam America, a group that supports the treaty, said the new rules would force arms dealers to weigh human rights equally with profit.
“It puts an end to what some call the body bag approach to international arms control,” he said Thursday. “That’s where countries wait until a situation becomes really bad, a situation like Syria right now, or previously in the Democratic Republic of Congo or Sudan, where the body bags have to pile really high before the international community does anything to stop arms flowing into those countries.”
Fifty countries will need to ratify the treaty. In the United States, only the Senate does so, and because of the magnitude of these treaties, they require 67 votes.
“Anything with UN on it is almost dead on arrival in the Senate,” said Mark Helmke, a longtime aide to former Senator Richard Lugar.
Lugar, a moderate Republican and two-time chair of the Foreign Relations Committee, lost a primary campaign last year.
Helmke said the administration knows there’s no chance of ratification in the Senate.
But it needs to make a show of support because it wants to distance itself from the three countries that voted against the treat: Iran, North Korea and Syria.
And in the Senate, opposing the treaty gives conservatives a chance to rile a base opposed to the United Nations.
“Every time a U.N. treaty comes up, the opposition raises a lot of money with a lot of phone calls, a lot of emails to people who somehow believe blue-helmeted people are going to come in and confiscate our guns,” Helmke said.
Helmke, who now teaches at Trine University in Indiana, said the Senate could use a Republican internationalist like his former boss to get colleagues on board.
Senator Lisa Murkowski, who declined an interview for this story, supports the separate U.N. Law of the Sea treaty. She’s tried unsuccessfully to recruit her fellow Republicans to support that cause.
But on this international agreement, she stands with her party in opposition. Senator Murkowski signed a letter to President Obama saying she worries the treaty will enforce international arms regulations on Americans.
Senator Mark Begich is one of the few Democrats who signed that letter.
“It’s going to be a problem if can’t differentiate between domestic trade and international trade. That treaty melds it all together. Therefore it does infringe and jeopardize the Second Amendment rights of this country,” Begich said.
The National Rifle Association has maintained that argument as well.
Oxfam America’s Scott Stedjan said the treaty clearly lays out its boundaries, noting that the preamble states domestic regulations will be handled within the country.
“The treaty does not undermine the Second Amendment in anyway whatsoever,” he said. “The treaty is only about the cross border trade of armaments.”
Stedjan warned the treaty won’t become law for several years. Countries can begin signing onto the treaty in June, and then the ratification battle will begin.
There’s no indication whether Senate Majority Leader Harry Reid would bring the treaty to the floor before the next election in 2014.
The Anchorage Assembly Chair says he’s going to introduce a new ordinance that will better outline how public hearings work. Meanwhile, Anchorage union leaders have applied to hold a referendum that could repeal a controversial ordinance recently passed by the Assembly. KSKA’s Daysha Eaton has more.
The Anchorage Assembly ended public hearings on the controversial ordinance after listening to four, 5-hour evenings of public testimony from 285 people. The rewrite of municipal labor code passed by a vote of 6 to 5 on March 26th. The next week voters let Anchorage Assembly Chair Ernie Hall know they were dissatisfied. Thousands of voters in his West Anchorage Assembly District wrote-in a last minute candidate, Nick Moe. At the end of election night Hall led Moe by just 93 votes. Who wins won’t be determined for at least a week, after questioned and absentee ballots are reviewed and counted. Hall says, meanwhile, he’s introducing a new ordinance that will require people sign-up ahead of time in order to give public testimony.
“It’s basically going to set up the procedure, protocol for taking public testimony. It will be very clear and this will never be a problem in the future, because as chair, you know I asked, okay how’s this been handled in the past? And they said said sometimes we do sign-up sheets, sometimes we do this – nobody had a written protocol. There will be one.”
Union leaders says that’s a bad idea.
“The intent of the way that’s written is for the community to be able to provide their input for these very important things. And I think it was left gray so that they could make the decision to allow all of these people to talk and to be heard and have their voice be heard. And they made a conscious decision to say, we know that there are more of you that are waiting and ready to be heard, but we just don’t want to hear it right now.”
Sergeant Gerard Asselin, who represents the Anchorage Police Department Employee Association, says changing the protocol to require the public to sign-up to ahead of time to testify, could potentially limit busy working people from turning out to get involved in the public process. Besides, the public testimony issue is a red herring, Asselin says. Wednesday union leaders filed paperwork applying to hold a referendum on AO37. Gerard Asselin says they want to repeal the ordinance.
“And so we have submitted the initial petition to the city, which kinda gets that ball rolling. The administration has 10 working days to respond to our initial application. The next step would be that the city clerk’s office would then respond to us with the official signature gathering pages, as well as official language that would then be presented to the voters.”
The clerk’s office and municipality’s legal department are reviewing the application. If the application to hold the referendum is approved, union leaders will have to collect more than 7-thousand signatures, or signatures equaling 10 percent of the voters that voted in the last mayoral race. Once the signatures are submitted and certified, the Assembly is required to hold a special election within 75 days — theoretically in late August or in early September. The Assembly could vote to hold the referendum later, but the ordinance would have be suspended until then.
With less than two weeks of the session to go, the Alaska State Legislature is concentrating on the state’s budget and major pieces of legislation that would affect tax policy and energy projects. APRN’s Alexandra Gutierrez sat down with Gov. Sean Parnell to talk about his expectations for the final days.
We’re getting close to the end of the legislative session right now. What are the must-pass bills for you?
You know, at this point there really is only one constitutional priority, and that is to pass a budget. The legislature is working on that. I’ve had great success I think with legislative leadership in setting a spending limit, creating the framework for a 5-year fiscal plan and really just setting Alaskans up for a prosperous future in that way.
Legislators have made a number of changes to the oil tax bill since we last spoke. You said in the past that any oil tax bill needs to protect Alaskans on the low-end and needs to be simple. Do you still feel that this bill is your own?
GP: Let’s go back to those four guiding principles. Because the first was any bill that passes must be fair to Alaskans. Two, that it focuses on production. Three, that it be simple and restore balance in the system. And fourth, that it make us competitive for the long-haul or the long-term. I think that SB 21 as it has been changed and as it has come through the process still meets those guiding principles.
I certainly would like to see a few more changes made to it, perhaps at the lower-end where we could protect ourselves better against low oil prices. But taken as a whole, I do think the changes made do meet those four guiding principles. We still have a couple committees to get through in the Senate (Ed. note: The bill has passed the Senate, and is now moving through the House). We’ll continue working with legislators on that bill and work to create new production for Alaskans.
We’re hearing from oil companies that they don’t like the current system, that they think that the bill moving through the legislature would make Alaska more competitive, but that this legislation doesn’t go far enough. Why aren’t we hearing more enthusiasm from them?
Well I think you should ask them. I’m not in this for the oil companies. I’m in this for Alaskans, and our independent experts tell us that this bill now moves the needle on production, increases investment opportunities for companies, and — in doing — so creates more job opportunities and more revenue for Alaskans. So, I think you better put that question to the companies instead of asking me.
But just to follow up on that point, two years ago, BP came out saying that your earlier bill was a “necessary step in the right direction” and they actually had a decent amount of enthusiasm for a number of provisions. Now, we’re hearing from them that the legislation before them doesn’t go far enough to make the state’s future look different.
They’re negotiating. They always want more, and I want more for Alaskans. I want more production for Alaskans, and that’s what this is about.
Sources have told me that you have a scenario showing the consequences of not changing the oil tax structure and that it paints a pretty grim picture for the state treasury. What does that look like, and why aren’t you using that to make your case to the legislature for SB 21?
Well I think we have made the case for SB 21 both in terms of declining production — declines ranging from 3 to 6 percent per year– and using our reserves, which right now total about $16 billion, to manage through that.
The problem, though, is that if we stay where we are today with the current tax system, we are guaranteed decline. We are guaranteed that production will continue declining, that our savings accounts will continue declining, and we’ll leave nothing for our kids or grandkids. What I’m working to do is to change that picture, to create an Alaska comeback in oil and that is to create a future for our kids.
So, what I proposed is a five-year fiscal plan. We set spending limits across the next five years starting with this year, where we’ve cut about 15 percent from the existing year’s spending. We also manage draws on reserves, so that there are $700 million or less per year, assuming the current forecast stays true.
The bottom line is if we limit our appetite for government spending and if we manage our reserves well, our kids and will have a future and will have savings longer in reserve.
Do you have a projection that does show what things look like for the state and its treasury without this, and is there a reason that we’re not seeing a full fiscal plan for what happens if we don’t pass SB 21?
Part of the reason is because anything beyond five years gets more and more speculative, because we don’t know what the price of oil is going to be. I don’t have a plan in the back room or something that shows the state crashing, but we know from looking at the ten-year fiscal plan that we submit every year to the legislature that we begin draining reserves, and we’ve begun draining reserves this year.
So, you can’t just keep spending more than you’re taking in and say life is gonna be peachy. That’s head-in-the-sand thinking, and we’re taking the totally different approach which is, here’s the five-year fiscal plan, and here’s what we can do together to create opportunity for Alaskans.
On the subject of that five-year fiscal plan. I spoke with your budget director Karen Rehfeld last week and the idea basically is to cap the general fund spending at $6.8 billion for the next five years. Is that still what you all are considering?
It’s actually to ratchet it back a little bit from $6.8 billion by about $25 million increments. I don’t have that in front of me here, but effectively it would keep it in that $6.7 to $6.8 billion range. The other key component, though, is to limit draws on reserves, on our savings accounts to $700 million or less per year.
So, those are key elements of maintaining fiscal restraint and managing our way to new production.
Even with the current forecast — not changing anything and not considering what happens if SB 21 passes — we’re looking at a pretty serious deficit over the next five years. Even keeping at $6.8 billion and putting a $700 million limit on savings, it’s going be difficult to bridge that shortfall. How do you plan on shrinking the budget to meet that? And is $700 million your hard limit for drawing on savings?
I’ve already made those hard choices with the budget I proposed. I already proposed reducing spending by a billion dollars.
The House, to their credit, actually reduced the operating budget we submitted by a bit as well. The capital budget that has just been laid on the table by the Senate is also within the range of the spending limit that I’ve set. Legislators have worked well with me to meet the needs of their constituents, but also to look out for the long term of Alaska.
On that point, the Senate capital budget cuts about $100 million from your capital budget for this fiscal year (Ed. note: Since the taping of this interview, the Senate capital budget has been revised and now increases the governor’s budget proposal for FY2014 by $21 million). But it adds even more than that amount to the current fiscal year. Could you speak to that sort of accounting?
That’s a practice that’s happened every year. The difference this year is that this is the only year they’ll be able to do it under the five-year fiscal plan, because they will have used reserves up to $700 million — or close to that — in each of fiscal year 2013 or 2014.
They won’t have that flexibility in fiscal year 2014. They won’t have the ability to move the walnuts around like that next year. That’s part of why we have to build restraint into the system. Because there’s always more spending — more desire to spend — than there is money. We have worked well together to create a spending limit. I think we’re going to be able to maintain that, both through the legislative process as well as through my review process when this over.
So, I’m confident that we can restrain spending and get our way to new production and new revenues as well.
Last month the first lady spoke before the Senate Finance Committee asking that money for a State Trooper sex-trafficking investigation unit be restored to the budget. That money wasn’t. Were you disappointed by that?
I’m clearly disappointed in not being able to have specific funds dedicated to a sex-trafficking unit. I think that Alaskans are becoming more and more aware that our children are being trafficked and that unless we have investigators looking specifically for kids being trafficked and the traffickers, these kids will not self-report. They are enslaved by their traffickers and are not going to report harm to themselves.
At the same time, we are working in the conference committee process. The House budget numbers, for example, don’t have a limitation in the sense that the numbers for Department of Public Safety could be used for new troopers who are on the road system or for new troopers who are also part of a sex-trafficking unit.
So, I’m not getting everything I’ve asked for when it comes to public safety, and the officers,and troopers, and VPSOs. But we may have some flexibility there depending on what comes out of the conference committee.
Senate Finance Co-chair Pete Kelly has said that a team is working on a multi-year education funding package. Have you been involved in talks about that?
I have not personally. My legislative office has been made aware of those discussions. Certainly, we have been working through my legislative office to fund education. We did it last year with the extra $25 million that offset the heating costs and was the equivalent of a $100 per student BSA increase. This year I think we’ll see some more funding directed at schools, but again I think you better wait for the co-chairs to see which direction they’re headed.
So do you have a specific preference on what that package should look like?
Certainly I’m concerned about the conference committee numbers, on the one side where our early learning and digital learning components were taken away. At the same time, I’m fairly confident that the legislators will increase funding again for education.
The numbers are up that I proposed as well as both bodies have proposed. Again, I think the details need to await release by the co-chairs.
It sounds like they’re not looking to do this through any change of the formula, but were that to happen, would you support that?
Well again, we focused on results. We said if we are going to fund increases to education then we ought to get results for the kids. So, that’s why last year we knew what we were buying with the extra $25 million. We were buying the increase in heating costs. This year I expect that anything that comes out from legislators will have similar results-based component.
This week a bill advancing an in-state gas line project passed the House. Between that, the Fairbanks gas-trucking plan, the Susitna dam project, and the obligation to AGIA, we have a number of energy-relief projects that have us on the hook for over a billion dollars. How do you see all of these projects fitting together?
They actually all do fit together.
For example, the LNG trucking bill for the Interior would help to build a distribution system in Fairbanks for gas. That is tied to a large-diameter or small-diameter gasline project. When a gasline comes through the Interior of Alaska, it’s going to need a distribution system to go through. The distribution system will be there. In the meantime, until that gasline is built, Fairbanks and Interior Alaska will have a shot at cheaper energy and gas through trucking as a means to get that gas off the North Slope. So, certainly it all fits together in that sense.
Given the proposed spending cap we’re talking about, how do you keep on advancing these things? These are expensive projects, and we also have a large operating budget and capital projects that are important to legislators.
The five-year fiscal plan that I put forward had a caveat to it, and the caveat was that we can exceed the spending limit for a state-wide legacy project, one that benefits all of Alaska. A gasline certainly fits into that.
The key is that we not fritter away the state’s savings on little spending projects around the state year after year and keep increasing that. The key is that we manage our way through the five years coming forward, and then have some left over that we can make big investments with.
Additionally when you speak to, for instance, the cost of some of these projects, if you look at the Fairbanks Interior LNG project — the trucking project — we’re talking $50 million of general fund spending. The hundreds of millions of dollars are in the form of loans that would be paid back by the users of that gas. So, we’re not just talking about straight cash for every project. We’re working to think through these and make a smart project for all Alaskans.
Congressman Don Young recently used a word that was offensive to Latinos. How do you see that affecting the Republican party’s relationship with minority groups in the state?
I had a personal conversation with the Congressman. I let him know the comment was inappropriate. I told him that I appreciate that he made an apology for it. But, it just has no place in public discourse. Beyond that, to talk about campaigns, I won’t do in my public office. But I can tell you there’s no room for that kind of language in anybody’s conversation.
In an opinion issued last week, the Alaska Supreme Court ruled that the state must look at the cumulative impacts of oil and gas projects after lease sales. Environmental groups believe this could impact one of your bills that would allow DNR to approve development over whole geographic areas. How do you see this affecting your goal of streamlining the permitting process?
I don’t believe it really affects that bill. What it will affect are future regulations by DNR with respect to how they handle addressing cumulative impacts once leases are made and once projects are ongoing.
I used to work for the Division of Oil and Gas many years ago, and they spend a lot of time working through these kinds of issues with plans of development, monitoring the plans of development, and the question really is, how do they put that on paper in terms of what they do and the cumulative impacts that they’re required to take into account. I think that can be done by regulation.
Certainly the legislature’s free to take that up themselves as well through statue, but at this point, I look at it as a regulation project.
Is there anything else you would like to add?
The unemployment insurance tax that I am working to suspend in terms of the increases that are automatically made. Effectively, what happens is we have an unemployment insurance fund that makes payments out to unemployed workers. That fund has over $270 million in it. We have more dollars in it than we need to make these payments. And yet, under Alaska law, your paycheck and everybody else’s in this state automatically gets deducted for payroll tax — unemployment insurance contributions. And every year, your contribution goes up out of your paycheck, even when the state doesn’t need it. And I’ve introduce a bill to suspend those increases at times when that fund is solvent. And so, I’m really trying to give Alaskans a break in their paycheck. The state doesn’t need the money. Alaskans earned it. They ought to keep it.