Elwood Brehmer

Senate caucus similar to previous sessions

Although the Alaska House has organized a bipartisan caucus, the Alaska Senate will look much the same as it has for several years, but it will be led by Fairbanks Republican Sen. Pete Kelly as the state’s new Senate president, taking over for Anchorage Republican Sen. Kevin Meyer. Sen. Gary Stevens, R-Kenai, will be chair of the Legislative Budget and Audit Committee.

Meyer is now chair of the Senate Rules Committee.

Caelus announces 6 billion barrel discovery

Caelus Energy announced Tuesday that it is sitting on 6 billion barrels of oil on the western North Slope, a prospect CEO Jim Musselman said he expects will continue to grow.

The prospect is Smith Bay, a remote inlet of state-owned water more than 100 miles west of current Slope infrastructure.

Musselman and the rest of the Dallas-based independent’s leadership team acknowledge development will not be easy, but if seen through to fruition it could produce up to 200,000 barrels per day.

Permanent Fund grows 1.35 percent in FY 2016

The Permanent Fund unofficially grew a modest 1.35 percent on a $52.8 billion portfolio in fiscal year 2016, the result of a volatile 12 months for public financial markets, according to Fund leadership.

Alaska Permanent Fund Corp. Executive Director Angela Rodell said during an Aug. 18 meeting of the policy study group Commonwealth North in Anchorage that market fluctuations followed oil’s wintertime foray to less than $30 per barrel, the first time the dominant commodity had been that cheap for that long since the early 2000s.

Furie takes first steps toward adding Inlet oil platform

Furie Operating Alaska is taking the first steps towards adding an oil platform to its Kitchen Lights gas development in Northern Cook Inlet.

Furie Senior Vice President Bruce Webb said in an interview the company plans to re-enter the KLU-4 well roughly six miles north of the Julius R platform the company installed last year above its natural gas producing wells.

The KLU-4 well was originally drilled to 10,000 feet in 2014 and will be punched down to 18,000 possibly this year but more likely next, according to Webb.

Anchorage attorney Jahna Lindemuth named new AG

Gov. Bill Walker’s cabinet is finally whole again.

Walker introduced Anchorage attorney Jahna Lindemuth as Alaska’s new attorney general at a Tuesday afternoon press conference.

Lindemuth replaces former Attorney General Craig Richards who resigned abruptly June 23 citing personal reasons.

Walker said he was “struck” by her “passion for Alaska.” He referenced more than 950 hours of pro bono work she did in 2015 representing a victim of domestic violence and a wrongly convicted defendant in the very public “Fairbanks Four” case.

Walker introduces bills for two of 11 special session agenda items

This Legislature’s fourth special session began midday Monday when legislators were given bills to address two of Gov. Bill Walker’s 10 original agenda items.

Those bills were an omnibus tax bill and a seemingly noncontroversial bill providing health insurance to families of emergency responders killed in the line of duty.

It took two special sessions in 2015 to pass the budget, and a third special session was held last fall to buy out TransCanada’s share in the Alaska LNG Project.

State seeks more info on Prudhoe work plan

The state Division of Oil and Gas wants significantly more information from Prudhoe Bay field operator BP and its fellow working owners on how a scaled-back work plan for this year could impact prospects for a gasline down the road.

Oil and Gas Director Corri Feige wrote a letter to senior BP Alaska officials April 11 asking more than a dozen technical questions related to a major gas sales project including drilling plans, management of carbon dioxide pulled from Prudhoe natural gas, gas balancing agreements and efforts to market the gas.

Credit legislation hearings canceled as negotiations continue

It has been three weeks since legislation to scale back Alaska’s oil and gas tax credit program took a big step backwards to the House Rules Committee.

In the meantime Rules chair Rep. Craig Johnson, R-Anchorage, has put forth two very similar versions of House Bill 247 that would all but eliminate the state’s refundable credit program.

Salaries spotlighted as session continues

Most state employees will give up some, but not all, pay increases in the latest round of union contracts before the Legislature for approval.

Nearly 75 percent of executive branch employees will forgo cost of living allowance, or COLA, raises under the three-year agreements negotiated with the Labor, Trades and Crafts, Alaska State Employee, Confidential Employee and Mount Edgecumbe Teachers bargaining units.

Alaska Airlines poised to become fifth largest carrier in United States

Alaska Airlines keeps making news, seemingly for all the right reasons.

The company announced a $4 billion deal to purchase Virgin America April 4, a deal that when finalized will make Alaska the fifth-largest domestic carrier.

Spokesman Tim Thompson said to Anchorage Chamber of Commerce members April 11 that Alaska will “leapfrog” JetBlue — the airline Alaska reportedly outbid to buy Virgin — to take over the spot as the fifth-largest U.S. airline.

More tourists slated to see Alaska in ’16

Alaska’s tourism industry should be a bright spot in 2016 as other sectors of the state’s economy face uphill battles.

 The final tally of cruise passengers, which often make up more than half of all visitors to the state, is expected to be up about 2 percent over what was a strong 2015, according to Cruise Lines International Association Alaska President John Binkley.

Analysis finds buying Anchorage LIO close to cost of moving offices

An independent review of the Legislative Council’s options to deal with the Anchorage Legislative Information Office building found the cost of purchasing the building to be nearly on par with moving the Legislature’s Anchorage offices elsewhere.

San Francisco-based Navigant Consulting Director Nigel Hughes concluded in a report dated March 14 that purchasing the Anchorage LIO would cost 4 percent more, on a per square-foot present value basis, than moving to the nearby Downtown Atwood Building, which houses state executive branch agencies.

State bond package unlikely

With little appetite from legislators for a general obligation bond package, bare bones capital budgets the next couple years are probably a harsh reality of the state’s fiscal situation.

The administration’s proposal for a $500 million general obligation, or GO, bond package to fund up to $250 million of capital appropriations in each of the 2017 and 2018 fiscal years received, seemed possible, if not likely, to pass the Legislature based on reactions when the idea was first offered by Gov. Bill Walker in December.

Enstar, Furie seal gas deal through April ’21

Enstar Natural Gas Co. appears to have locked up 90 percent of its gas supply needs into 2021 after finalizing a deal with Furie Operating Alaska.

The gas supply and purchase agreement filed March 14 with the Regulatory Commission of Alaska is for a firm supply of 6.2 billion cubic feet, or bcf, of natural gas per year from April 2018 through March 2021.

More bad news for state’s finances

Not surprisingly, Alaska’s fiscal picture got worse with the March 21 release of the 2016 Spring Revenue Forecast.

Total state revenue for the 2016 fiscal year, which ends June 30, is now projected to be about $3.6 billion, down more than 60 percent from the $9.5 billion of income estimated in the Fall 2015 Revenue Forecast released last December.

TAPS value settled at $8B for 5 years

The next court battle over the value of the Trans-Alaska Pipeline System won’t be for at least another five years.

Two settlements over the taxable value of TAPS between the State of Alaska, its owners and municipalities along the pipeline corridor were announced March 1. The agreements fix the value of the 800-mile pipeline, for property tax purposes, at $8 billion through 2020, according to a release from the North Slope Borough.

Construction industry outlook ‘challenging’

Alaska’s contractors will begin to feel the effects of the new oil reality in 2016 as statewide capital spending declines about 18 percent from last year, according to a construction industry forecast.

The University of Alaska Anchorage Institute for Social and Economic Research projects just more than $7.3 billion will be spent on capital projects in 2016. About $8.9 billion was spent on construction projects in Alaska last year.

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