Elwood Brehmer

Boosted by broadband, Alaska Communications posts net gain

Alaska Communications Systems Group Inc. reported net income of nearly $2.4 million in 2016 and a $195 million credit and loan package that will help refinance existing debt, company officials said in a March 14 investor call.

Net income in 2016 —Alaska Communications’ first year as solely a broadband and IT service provider — was down 81 percent for the year, but up nearly five-fold year-over-year in the fourth quarter at $1.6 million.

Village corporation says ConocoPhillips will drop drilling effort

Despite state demands, ConocoPhillips will not drill North Slope acreage this winter that it spent most of 2016 trying to acquire, according to an executive of the company that controls access to the land.

Kuukpik Corp. CEO Lanston Chinn said in a March 10 interview that his company was recently informed by ConocoPhillips officials that the major producer would not drill an oil exploration well on jointly held leases near the Native village of Nuiqsut in the remaining weeks of the waning North Slope winter work season.

Armstrong says oil prospect could double in size

Spanish oil major and North Slope explorer Repsol excited Alaskans last Thursday with a promising but ambiguous press release that hinted about success in the company’s joint drilling program this winter.

Titled, “Repsol Makes the Largest U.S. Onshore Oil Discovery in 30 Years,” the statement substantiated previous estimates that its in-permitting Nanushuk prospect holds at least 1.2 billion barrels of light oil recoverable at a rate up to 120,000 barrels per day.

Amended oil tax bill tempers increases, reworks deductions

Democrats in the House Resources Committee are amending their oil tax and credit bill and the changes indicate some advice from the Legislature’s consultant was taken to heart.

The official second draft of House Bill 111, the legislation put forth by Anchorage Democrats and Resource Co-chairs Reps. Andy Josephson and Geran Tarr about a month ago, was made public Friday afternoon.

Permitting process starts for Ambler road

Development of the Ambler Mining District road project is now in federal hands.

The Bureau of Land Management issued a Federal Register notice Feb. 28 requesting public input regarding what topics the agency should consider in drafting the environmental impact statement, or EIS, for the mining access road.

Oil and gas consultant urges tax simplicity, preserving deductions

The Legislature’s new consultant took the ongoing oil tax and credit debate in a new direction that momentarily eased partisan stances.

Instead of approving or denouncing the oil production tax changes proposed in the House Resources Committee, Rich Ruggiero, managing partner of the petroleum consultant firm Castle Gap Advisors repeatedly emphasized a need to abridge the contentious tax when providing advice to legislators.

“If I were to give you a recommendation from afar, it’s to simplify (the production tax),” Ruggiero said.

Industry reps voice concerns over proposed oil tax bill

Oil industry players made their pitch to the House Resources Committee against further oil tax changes in the last days of February, which included direct criticisms of the Legislature’s new oil and gas policy consultant.

Health care consumes three-fourths of budget supplemental

At $67.3 million in General Fund requests, the 2017 fiscal year supplemental budget is among the smallest in recent years, but this year’s ask is dominated by a cost that is straining nearly every sector of Alaska, and that is health care.

Less $15 million for wildfire suppression — a retroactive payment that varies greatly by amount but is an annual request — health care-related appropriations comprise $40.8 million, or 78 percent of the 2017 supplemental budget.

Not coincidentally, Alaska has the highest health care costs in the nation.

Senate puts forth spending cap, annual Fund draw

Senate Republican leaders have put forth their own plan to employ the Permanent Fund for deficit reduction that nearly matches Gov. Bill Walker’s proposal.

The one marked difference is the Senate Majority’s legislation, Senate Bill 70, includes a $4.1 billion spending limit on unrestricted General Fund appropriations for the annual operating budget.

ConocoPhillips reviewing state decision to rescind unit expansion

Department of Natural Resources Commissioner Andy Mack has rescinded approval to expand the Colville River oil and gas unit to include sought-after North Slope leases held by ConocoPhillips’ after the company backed off from a plan to drill the acreage.

Mack issued the determination Feb. 17, which conditionally reverses his Nov. 4, 2016, decision to add 9,146 acres over 22 leases to the Colville River Unit.

Legislature continues digging in to oil tax changes

The House Resources Committee is in its second consecutive year of analyzing the state’s oil tax system with Zapruder film-like scrutiny as the Democrats now leading the committee look to implement tax changes former House and Senate Republican leaders balked at last year.

Debate on House Bill 111, the proposal introduced by Resource co-chairs Reps. Geran Tarr and Andy Josephson, both Anchorage Democrats, has not ramped up yet.

State agency will work to keep graphite refinery in Alaska

The state infrastructure bank is partnering with a junior graphite mining company in an effort to keep Alaska’s natural resources in state a little longer.

A memorandum of understanding, or MOU, signed Feb. 7 by leaders of the Alaska Industrial Development and Export Authority and Graphite One Resources Inc. aims to find a suitable site for a value-added graphite processing facility in conjunction with the mine the company is working to develop.

Alyeska: tug concerns a result of incomplete information

Alyeska Pipeline Service Co. remains confident in the ability of the incoming fleet of oil tanker escort tugs to continue safe operations out of the Valdez marine terminal in spite of vessel design concerns raised by a third-party naval architect.

Alyeska spokeswoman Michelle Egan said many of the potential performance shortcomings identified by marine engineer Robert Allan were due to a simple lack of timely and detailed information about the tug designs.

Northern Dynasty calls critical report ‘misleading’

The owners of the Pebble mine project fired back Friday against claims from a New York stock investment firm that the prospect is not economically or politically viable.

Northern Dynasty Minerals Ltd. called the Feb. 14 report from Kerrisdale Capital Management — which holds a short position in Northern Dynasty and could benefit from its stock value dropping — “unfounded” and “unsupported speculation.”

AGDC board hears project cost dropping

There is a $102 million spending plan for Alaska’s gasline projects.

The Alaska Gasline Development Corp. board of directors unanimously approved the budget at its Feb. 9 meeting in Anchorage. The plan would exhaust the state’s two gasline funds over the next 18 months or so.

The board also heard from AGDC President Keith Meyer that cost estimates for the Alaska LNG Project — regularly characterized in the past as $45 billion to $65 billion — are dropping.

2016 ends with $911M profit for Alaska Air

Alaska Air Group Inc. turned a $911 million profit in 2016, extending its streak of record annual earnings to seven years while also closing the purchase of one of its primary West Coast competitors during the busy year.

The Seattle-based parent to Alaska Airlines and regional carrier Horizon Air reported record fourth quarter 2016 and year-end net income of $193 million and $911 million, respectively, in its annual earnings report released Feb. 8.

Report: Pebble shares are ‘worthless’

A New York investment firm tore apart claims by the owners of the Pebble mine project that developing the prospect is economically viable in a no-holds-barred report released Feb. 14.

Port Authority resurfaces seeking Valdez route

The Alaska Gasline Port Authority wants federal regulators and state proponents of a large natural gas pipeline project to remember Valdez still wants a second pipeline.

The authority, or AGPA, filed 52 pages of comments Feb. 9 with the Federal Energy Regulatory Commission petitioning the agency to at a minimum thoroughly vet the option of routing the Alaska LNG Project to terminate near Valdez, with the hope Valdez would be selected as the best option at the end of the environmental impact statement, or EIS, process.

Alaska Railroad to cut 49 positions, lay off 31

In-state economics have combined with world market forces to push the Alaska Railroad to again cut its workforce.

The state-owned Alaska Railroad Corp. announced Friday it would be eliminating 49 positions as part of an internal restructuring effort to save $5.7 million, according to President and CEO Bill O’Leary.

The cuts will result in 31 direct layoffs and the elimination of 18 positions that were left unfilled in 2016, a railroad press release states, and save an estimated $4.7 million annually.

AGDC board approves $102M spending plan for gasline projects

There is a $102 million spending plan for Alaska’s gasline projects.

The Alaska Gasline Development Corp. board of directors unanimously approved the budget at its Thursday meeting in Anchorage. The plan would exhaust the state’s two gasline funds over the next 18 months or so.

The $102 million is what remains from previous appropriations to advance the Alaska LNG Project, a $45 billion export effort, and the smaller Alaska Stand Alone Pipeline project, or ASAP, which is a backup line focused on getting natural gas to in-state customers.


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