Click To Enlarge Mike Chenault's Ego

I think I need the click to reduce option

It's the end of another legislative session and there's another showdown between the Alaska Senate and the House on ACES reform.  House Speaker, Mike Chenault, had the bill his branch of the legislature passed,  re-worked by the senate.  The house bill was the $2 billion/year giveaway to the major oil companies; the senate throwback to him just addressed giving credits to companies that would increase production but the senate version kept most of the rest of ACES intact.

Armstrong Oil & Gas Inc., one of Alaska’s new independent oil producers was in favor of the Senate version.  Mike didn't even allow the house to vote on the bill the senate sent over, but rather used a procedural ruse that prevented it from even getting out of the Rules Committee. Soldotna's representative in the house, Kurt Olson, was Chenault's partner in this latest attempt to give away state money to the richest corporations in the world.

A few years back, Mike proudly wore his CBC  (Corrupt Bastards' Club) cap.  He's presided over the House during some of the most stunning financial fiascoes in state history (Goose Creek Prison, the Port of Anchorage, the Knik Arm bridge, etc).  He gave himself a back-door raise with a bill that let legislatures pocket the money that was allocated for office expenses, and has gone golfing in the lower 48 on the state dime.

Just what are his qualifications to have such a powerful position in the state?  Well, he's got a high school diploma.

He has no background in finances, in petroleum engineering, or economics.  Well, he does represent Nikiski and I guess that might explain it all. 

Mike is simply a tool for Conoco Phillips.  The version of tax reform he is trying to push through comes with no strings attached.  The majors have pledged to do some development if the House version passes, but aside from loose figures far below the credit they would be given, there is no language requiring them to invest the money back in Alaska.

And Chenault (and Olson and Gov Parnell) think this is reform?

Politics and Oil. Why We Pay So Much At the Pump

Remember Walt Kelly, the creator of the comic strip Pogo? 
  
Resolve then, that on this very ground, with small flags waving and tinny blast on tiny trumpets, we shall meet the enemy, and not only may he be ours, he may be us. (1953)

Gas Prices are high?

1) Aside from countries that are mega oil producers like Venezuela where the price is kept ridiculously low so that corrupt politicians and populist dictators will get the vote/support of the masses, the US still pays some of the lowest gasoline prices in the developed world.

2) The US consumes more oil per capita than any other nation.  Really, where else on the planet do you see the general populace use huge V-8s and 10s as commuting vehicles, not take public transport, refuse to walk or ride a bike and live so far from where they work? How many folks here in AK leave their car running when they go into a store to shop? Why are there still tax breaks for companies that buy gas-guzzlers? Why do we give tax breaks to those with huge houses and the resulting excess fuel consumption? Where else does recreation mean fill the tank of my (fill in the blank)?  We get charged so much because we will pay it.  Somehow we Americans have developed this sense of entitlement.  We're suppose to have it all - but no one anywhere else on the planet is allowed to participate in such wanton waste. That fantasy is over. Forever. 

I saw a lady with a "Don't Tread on Me" decal on the largest Suburban I've ever seen, pumping gas at Fred Meyers not too long ago. Maybe that rig got 6 MPG. Maybe. She had a little baby in the car seat. No one else was with her.  It was a classic "What's Wrong With America?" moment. Don't let the feds mess with me was her decal's message, yet she griped that the gov't wasn't doing anything about the high price of gas as she was wasting gas.  WTF?!?

3)We elect politicians who are quick to go to war - especially in the middle east. So, exactly why did we invade Iraq? Raise your hand if you think it's a good idea for the US or Israel to bomb Iran. 

4) The US is becoming less and less a factor on the global market.  How fast are the Chinese and Indian economies growing?  How many cars did they have 20 years ago? 

5) Capitalism is all about making money.  Those who are making a fortune are just doing what the market lets them do. Of course, by not regulating speculation, by letting oil companies dictate our foreign policy, by cutting the companies every tax break possible and by feeding our addictions as if the fantasy could go on forever, we game the system to our own disadvantage.

But, somehow giving the oil companies in AK $2 billion/year kickbacks with absolutely no commitment for anything is our duty?  OK, raise your hand other hand if you voted for Sean Parnell, Tom Wagoner, Mike Chenault, or Kurt Olsen because that is what they are all about.

Preposterous Alaska

Sometimes you just have to smile.

I hope you all read the most excellent OpEd piece in today's PC by Les Gara about the Governor's plan to give away a couple of billion dollars each year to the oil companies.  A plan endorsed by Kurt Olson and Mike Chenault.  Mr.  Gara makes a convincing argument that the Governor is full of it, but if you've been following his attempt to overturn ACES, you already know that.

What's funny is the ad campaign the PC is running sponsored by Prosperous Alaska, some shadowy front for the oil companies, is on the banner where Gara's article appears.  It cries the same Chicken Little Story as the Governor and so soundly refuted by Les.  The Truth below and the Lies on top. 

I hope you all read Gary Steven's speech on the Alaska Senate floor where he most politely, but most thoroughly, also takes the Governor to task for his rush-job with no questions answered approach to repealing ACES.  It's nice to see a Republican with  some integrity.

On a related note, Mike Doogan has tried to find out just who wrote the Governor's bill, since the governor's staff didn't know answers to some basic questions the lawmakers had. Of course the Governor, a former lobbyist for Conoco Phillips, is stonewalling.  Gee, what a surprise.  The money bet is that the oil companies wrote Parnell's bill.

And a surprise, while Mike Chenault and Kurt Olson are obvious lapdogs for the industry (remember their town hall meeting a few weeks ago that was was mostly by word-of-mouth invitation so they could stack the audience with their shills?), voted in favor of the give-away, Senator Tom Wagoner has stuck his finger in the air and saw that the wind was not in Parnell's favor and seems to be part of the Senate majority that opposes deforming ACES.  Well, at least until if and when it comes down to an actual vote.

Dumbing-Down Politics

Did you happen to see the informal assessment earlier this week that pegged Alaska as the fifth dumbest state in the US?

We here on the Kenai are doing our part to show the world that our stupidity rank should match our 49th state stature.  Want some evidence?

Kurt Olson and Mike Chenault held a town hall meeting to make the case that the oil companies need bigger profits and that the state should subsidize Alaska's big oil industry despite the record profits that these companies have enjoyed the last few years and the fact that new start-ups are investing and drilling in Alaska despite the doom and gloom portrayed by Parnell (a former oil company lobbyist) and crew. The sad part is that most of the crowd bought that bit of propaganda that says the oil companies are being taxed too much. Well, we did overwhelming vote for Joe Miller here, so that explains the lack of any thinking skills the general populace has here.

And then yesterday Mike and Kurt joined the other Republican house members and voted to pass the bill.  Paul Seaton, the Republican rep from Homer at least had enough sense and honesty to vote against it.  One can only hope that the senate has a bit more integrity.

Of course, nothing in the bill actually requires big oil to invest in the state, they just want to give them $2 billion a year. Voters on the Kenai don't get that Alaskans own the oil, so what Kurt and Mike are doing is giving away our property.  Do read Hollis French's piece on ACES as well as view Senator Bill Wielechowski’s presentation on Shannyn Moore's show.

It's too bad we just don't charge the oil companies the market rate for the oil coming out of the ground. That way it is not a tax, but a simple charge for a product - one with a price that fluctuates as the market does. Capitalism at its best.  But at the end of the day, no matter what you call it, we Alaskans get what the resource is worth.  The money then gets spent in the state as we fund schools, municipalities, the Permanent Fund, roads, law enforcement, and all the other benefits of civilization.  What will the oil companies do with the money that Mike and Kurt will give them?  Invest it in third-world countries and give their executives fat bonuses.

And then a sign that the apocalypse is surely imminent, Debi Holle Brown announced that she is running for borough mayor.  Ms. Brown, you might remember, was so inanely uninformed and ineptly outspoken when she was a school board member, it was embarrassing to hear her speak about anything.  Of course, if you've ever attended a borough assembly meeting where she has taken to the mic, it is almost like comedy.  Few people on the planet can make a certain former (or current) governor of Alaska seem astute.  That, and not one thing else, Debi can do.

Wake Up and Smell the Giveaway

Oh, Boy.  $1,000,000,000 + and that is just a start of the serious money that the State of Alaska is proposing that we give away to the oil industry, those very same companies that posted record profits. And what for? To protect oil companies from the vagaries of the free market system.  The governor and all of our locally elected officials that represent the Kenai in Juneau would give this amount of money and more to the oil companies without actually requiring them to guarantee that they would do more exploration or drilling. BTW, the state has already given these companies about $3,000,000,000 in breaks in the last four years with no guarantees.  Guess what? In this case, you don't get what you pay for. If you haven't read Mike Doogan's take on this, you should click here.

So, the oil companies are stinking rich, the state is flush.  Why the rush to promote development by giving away subsidies to the filthy rich?  What happened to free market system dictating development?  Why are those who decry government bailouts for the bankrupt auto industry the first to want to bailout extremely profitable oil companies? 

And then Mike Chenault has this piece in the Clarion about how we need to act or opportunities will pass us by.  Wow, that sounds we should do something and do it now, but just what are you proposing Mr Chenault?

Some other competitor beat the price that Conoco and Marathon was selling LNG to the Japanese.  Business happens.  And it wasn't because of regulations or taxes - with new technologies, new fields in the world and a glut of natural gas on the market, Alaskan natural gas is just priced out of the market right now.  Is Mike proposing that the state subsidize an in-state pipeline when there is not much of a market for the product?  That smacks of something that is not free-market capitalism to me. Well, Mike really doesn't offer much of a plan as there are no facts, no figures, no projections, just some sort of sense of impending doom and gloom. 

Please, someone help me understand this.  Yes, we have oil in the ground and offshore.  Yes, we have tremendous reserves of natural gas. Does anyone really have any doubt that sooner or later, these fields will be developed?   Our state fiscal reserves are brimming, and while production is certainly down, revenues for the oil owned by the state are the envy of every other state in the nation.

And when the price is right, and it sure isn't now, the state will make a bunch of money, the oil companies will make a lot of money, but maybe you and I won't make a lot.  But maybe our kids and grandkids will.  We've already proven that we'll piss away what we get.  Let's hope that our kids aren't quite as dumb .

And if you are of the tea-bag persuasion, here's your golden moment.  If you really believe in the free market and no government bailouts, don those tri-corner hats and just tell those republican politicians in Juneau that garsh-darn it no, no more subsidies for the most profitable businesses on the planet. Yeah right.  I won't hold my breath.

Of course there is a fallout to it all.  By giving away our natural gas at subsidized prices to Agrium and their fertilizer plant and to Conoco and Marathon to sell to the Japanese, enough natural gas was produced to offer the citizens of the Kenai the gas at relatively affordable prices.  Now that the free market is about to reclaim its place, we are all going to give more to Enstar.  The free market sucks when you have to pay market prices, but that is the way supply and demand works, isn't it?

Now imagine that we got smart.  Instead of paying $500,000,000 to Transcanada for looking into building a natural gas pipeline across Canada (surely that will create a lot of AK jobs), instead of giving the oil companies over $4,000,000,000 in subsidies, instead of thinking about giving  $150,000,000 to the Knik Arm Bridge developers, instead of the $11,000,000+ to study The road to Nome which could cost a few billion by the time it is completed, instead of funding the $5,000,000,000 Susitna Dam, let's take that all of that money and begin moving AK to sustainable clean energy (and maybe on a local rather than grand scale), fully fund our universities to attract and keep the best and brightest minds, help more homeowners make their homes energy efficient (and reducing the demand for more fossil fuels), develop viable mass transit and promote and develop businesses and industries that match the needs of the changing world?

Then our kids and grandkids might have a fighting chance.