"If we want more stability in state services, there’s a simple answer"

That was the title of an ADN editorial board editorial Sunday.  

First and most obvious, if there were a simple answer it would have been found long ago.  There are no simple answers in politics or government (which are not the same things, though they overlap.)

So what is that simple answer according to the editorial board?

After listing numerous shortfall's in this year's budget, they tell us:

"There’s also a simple solution that would go far toward helping restore that stability: Honesty in the budgeting process."

I agree that honesty in the budget process is helpful for the public to understand what's going on.  But is it simple?  Hell no.

First, the budget has to account for billions of dollars, so it's going to be long and complicated no matter what.  But sure, there are ways to make it easier to follow or harder to follow.
Second, the politicians - the governor and the legislators - who are trying to please constituents and funders with rewards that might not be appreciated by most, try to hide those items.   Questionable special favor allocations or cuts are well hidden in rows and columns of numbers that are hard to comprehend.
Third,  in these times of ideological warfare, many items will come under attack no matter how good they are for the general public.  Either they're ideologically unacceptable for one side or the other, or they might appear as a 'win' for one side and loss for the other.
These are just a few reasons why achieving a transparent budget is NOT simple.

Let's move on to the third paragraph of the editorial:

 "Sometimes, as with the senior benefits program, speedier processing of benefit applications results in more people than expected joining a program, draining funds more quickly. But failing to foresee scenarios like that - or deal with them swiftly when they arise - is a failure of leadership. Like not considering prices below $60 per barrel of oil as a realistic possibility for tax purposes, as happened before the 2014 price slump, failing to recognize or plan for the possibility of an uptick in benefit recipients is an indictment of our elected and appointed representatives."

OK, usually people are complaining that government doesn't act fast enough.  But when they do, they get criticized too.  Are they saying that by getting eligible people into the program quickly, the cost is too high?  If so, it's one of the few times I've seen government criticized for doing too good a job.

Let's look at the failure of leadership comment.

"But failing to foresee scenarios like that - or deal with them swiftly"   

Government is not a business where the CEO has the final say.  In a democratic government, decision making power is divided in different ways.  Broad policy making is supposed to be reserved for elected officials and their helpers, the high level appointed officials.  Career public servants are then asked to fill in the mechanical details of,  and then carry out, the policies.

But it's more complicated than that.  Power is split between the governor's office and the legislature (and, if needed, the courts.)  But the legislature is further split between the Senate and the House.  And each of those bodies is split between Republicans and Democrats and a few independents.

Leadership in such a situation isn't easy.  What's needed is peacemakers, maybe even therapists, as much as leaders.  But how do you make peace with people who see you as the enemy and whose supporters (voters and funders) tell them not to compromise?

In contrast, a marriage is simple.  There are only two policy makers and possibly some subjects of the policy (children.)  Often in a marriage, one of the two policy makers dominates the other.  Occasionally, the two work together in harmony.  But frequently they fight and disagree on everything.

Ask any divorce attorney how 'simple' it is to get angry spouses to work out the settlement of their property, and custody of the kids, even of the dog.


Then the editorial talks about oil tax credits.

 "they’re a classic example of the state’s destabilizing tendency to make a promise and then leave those who make plans based on that promise holding the bag, making residents wary and businesses disinclined to make investments in Alaska."

And to not look partisan, the editorial suggests the administration oughtn't renege on the two year school funding or senior benefits.

But this is the nature of a two year legislature that cannot commit funds beyond their two year session. (And since the new session just began, last year's commitments aren't law.)  It's also the nature of the power of large corporations to extract benefits from a legislature it paid for (in campaign contributions, in propaganda campaigns, and strong arm lobbying.)

When a commitment is made against the strong objections of the minority, then when that minority gets more power, that commitment will be challenged.  The oil companies have been telling Alaskans for years how they're going to pick up and leave if they don't get their way.  Well, either they've been bluffing or they've been getting their way.   [Figuring out comparative tax regimes is even more opaque than the Alaska budget.  Here's a long essay on whether Alaska oil taxes are fair by King Economics Group.  Unfortunately it doesn't compare our taxes to those of other oil producing states and countries.   And, it turns out, Ed King, according to his LinkedIn page,  has been Alaska's Chief Economist since Dunleavy took control in December 2018.    This ISER report also is focused only on in-state.   This OPEC comparison of oil taxes isn't about the industry taxes, but taxes at the pump. Finally, this ADN article says ConocoPhillips' Alaska region is its most profitable by far.  But that's not the point of this post, but I didn't want to make a statement without some backup.]

In the last paragraph, the ADN comes to its conclusion.

"So what’s the better answer? Make the hard choices — fund services fully or be up-front about the fact that they’ve been cut — instead of kicking the can down the road."

So, now they seem to be acknowledging that the 'simple' answer is really a 'hard choice.'  They don't talk about who has been kicking that can.  About the Republicans being in power for most of the last ten years when the budget kept going up, or how the Democrats have been trying to raise revenues with income or sales taxes, but the Republicans continue to block that.

Their simple isn't simple.  It's pap.

Here's a headline that caught my eye several years ago.

"For GOP presidential hopeful Carly Fiorina, solving the nation’s biggest challenges is pretty simple — “it’s not rocket science,” as she likes to say."

Here was my response:  Note To Carly Fiorina: Solving Nation's Problems Harder Than Rocket Science  It delves into other aspects of the difficulty of good government.

Killers Of The Flower Moon - Chilling Story Of Power, Collusion, Racism, That's Relevant Still Today [UPDATED]

David Grann's Killers of the Flower Moon tells the chilling and disgusting story of how white men in

power murdered scores, maybe more, Osage Indians in the 1920s, to get their 'headrights' which was their right to their share of the oil wealth. The headlights couldn't be sold, but they could be inherited.

Grann's interviewed children and grandchildren of murdered Osage.  He reviewed archival documents in libraries and agencies, What he found reveals a much bigger impact than others had.  The FBI quit investigating when the got convictions of two key people, but Grann suggests a lot more people were involved in the murders - both as perpetrators and as victims.

Basically, most ofl the important white men in Osage territory were involved.  The Osage had chosen what they thought was relatively desolate land in Oklahoma on the belief that whites would take over any decent land, as had happened to them previously.  But they did have a good attorney and they reserved the underground rights to all their territory.  When oil was discovered, they became rich.  That in itself was a problem because whites derided the idea of rich Indians living in nice house with fancy cars and clothes.  And the idea that Indians had whites working for them in their houses.

The law also had problems with the idea of rich Indians.

"The law mandated that guardians be assigned to any American Indians whom the Department of the Interior deemed "incompetent"  In practice, the decision to appoint a guardian - to render an American Indian, in effect, a half citizen - was nearly always based on the quantum of Indian food in the property holder, or what a state supreme court justice referred to as "racial weakness." (p. 78)

So the headright owners had to have a white guardians watch over their money.  This position gave the guardians many opportunities to syphon off money for their own uses.   But this wasn't enough for the white power structure of the area.  They began a long and relentless crusade to murder Osage headright owners to gain control of the money.  They used guns, they used poison, they even blew up someone's house.

They got away with this because all the key people - the mayor, the private investigators the families of Osage hired, the doctors who did autopsies, the undertakers, the various attorneys, the judges, the bankers, the juries, when there was one, were all involved.  All benefited financially.

It's a horrible story that should be highlighted in American history books, but isn't.  The FBI got involved because they'd already been embarrassed by an earlier case involving the Osage.  Hoover wanted to establish his new agency's credibility.  An upright Texas ranger who'd joined the FBI took over the case and managed to get witnesses to testify who hadn't before.  But when they got a few men convicted - notably William Hale and his nephew Ernest Burkhart -  they stopped there, not investigating the many other suspicious deaths.  Both these men were not given the death sentence for killing Indians, and were out of prison after serving relatively short terms.

Here's a bit of a summary from near the end of the book.

"I remembered the Shouns.  They were the doctors who had claimed that the bullet that had killed Anna Brown had disappeared  The doctors who had initially concealed that Bill Smith had given a last statement incriminating Hale and who had arrange it so that one of them became the administrator of Rita Smith's invaluable estate.  The doctors whom investigators suspected of giving Mollie Burkhart poison instead of insulin.  Many of the cases seemed bound by a web of silent conspirators  Mathis, the Big Hill Trading Company owner and the guardian of Anna Brown and her mother, was a member of the inquest into Brown's murder that failed to turn up the bullet.  He also manage, on behalf of Mollies' family, the team of private eyes that conspicuously never cracked any of the cases.  A witness had told the bureau that after Henry Roan's murder, Hale was eager to get the corpse away from one undertaker and delivered to the funeral home at the Big Hill Trading Company.    The murder plots depended upon doctors who falsified death certificates and upon undertakers who quickly and quietly buried bodies.  The guardian who McAuliffe suspected of killing his grandmother was a prominent attorney working for the tribe who never interfered with the criminal networks operating under his nose.  Nor did the bankers, including the apparent murderer Burt, who were profiting from the criminal "Indian business."  Nor did the venal mayor of Fairfax - an ally of Hale's who also served as a guardian.  Nor did countless lawmen and prosecutors and judges who had a hand in the blood money.  In 1926, the Osage leader Bacon Rind remarked, "There are men amongst the whites, honest men, but they are might scarce."  Garrick Bailey, a leading anthropologist on Osage culture, said to me, "If Hale had told what he knew, a high percent of the county's leading citizens would have been in prison"  Indeed virtually every element of society was complicit in the urderous system.  Which is why just about any member of this society right have been responsible for the murder of McBride, in Washington:  he threatened to bring down not only Hale but a vast criminal operation that was reaping millions and millions of dollars." (pp. 590-91)

In the background, we learn a little about the development of police departments in the US and some about J. Edgar Hoover's beginnings at the FBI.  We learn about private detective companies like Pinkerton and the William J Burns International Detective Agency.   And we learn about how greed and prejudice trumped justice.

Often the web of connections that enable the well-to-do to commit crimes in impunity is invisible to those on the outside.  This book shows those connections and how insidious they can be.  This is a valuable lesson as Mueller unravels the connections that Trump had with Russia.  And, of course, Trump had in New York that allowed him to swindle and scam clients, contractors, and the public through connections with New York high society and lawyers who would buy off any potential threats with a binding non-disclosure agreement.

It's also a reminder that reading well researched and written books can offer us a much better overview of a situation than the daily snatches of news that pop up and disappear, leaving us with a temporary outrage, but no context to put it in or to help us remember the details.

[UPDATE Feb 21, 2019:  As an exclamation mark to my comments about how this is relevant still today, here's a Miami Herald story about a judge ruling. 

"A judge ruled Thursday that federal prosecutors — among them, U.S. Labor Secretary Alexander Acosta — broke federal law when they signed a plea agreement with a wealthy, politically connected sex trafficker and concealed it from more than 30 of his underage victims.
U.S. District Judge Kenneth A. Marra, in a 33-page opinion, said that the evidence he reviewed showed that Jeffrey Epstein had been operating an international sex operation in which he and others recruited underage girls — not only in Florida — but from overseas, in violation of federal law.
'Epstein used paid employees to find and bring minor girls to him.,’’ wrote Marra, who is based in Palm Beach County. “Epstein worked in concert with others to obtain minors not only for his own sexual gratification, but also for the sexual gratification of others.'’’

This is exactly the kind of thing that happened in Oklahoma around the Osage killings.  Judges, prosecutors, attorneys, and the wealthy worked out deals that they hid from the victims.    In this case, the prosecutor then is now Trump's US Secretary of Labor.  And in the researching I've done in the last few years, I've run across stories saying that Trump was one of the people who enjoyed going to Epstein's parties and the young girls he provided.  From Think Progress:

"Trump told New York Magazine about his relationship with Epstein in 2002.
'I’ve known Jeff for fifteen years. Terrific guy. He’s a lot of fun to be with,” Trump said at the time. “It is even said that he likes beautiful women as much as I do, and many of them are on the younger side. No doubt about it: Jeffrey enjoys his social life.'”

Bill Clinton and many others were also party-going friends of Epstein according to this article.

My point is not to indulge in gossip here, but to make the bigger point:  That white men (particularly) in power take care of each other to cover up their illegal and often despicable actions.  And it's still happening today.  Epstein's out of prison after a short stint, Trump is president, and Acosta is his Secretary of Labor.  The victims still have gotten no real justice.  Exactly like the Osage Killings.

Why is Mark Begich Running For Governor? Tom Begich Explains

Like a lot of people, apparently, I was surprised and concerned when Mark Begich threw his name into the Governor's race.  A three way race could well give the office to the likes of Mike Dunleavy.  (I'm afraid my opinion of Dunleavy is not very positive, though I acknowledge it's based on one event - the hearings he chaired in Anchorage during a special session.  His committee's task was simply to pass a bill - Bree's Law, to teach kids to defend themselves from sexual predators -  that the Senate had passed unanimously the previous year but the House hadn't gotten too.  The House subsequently passed it and now the Senate merely needed to pass it one more time.  It should have taken five minutes.  It took days.  Dunleavy tried to water down bill and add his own - already rejected during the regular session - amendments.  Here's one of the posts that sums up much of those hearings.)

I consoled myself and others about Begich's decision by saying, "Mark is a good politician and candidate, he knows the issues and he is a real extrovert.  But much more important is that he wouldn't jump in this race without talking to his brother, State Senator Tom Begich. And Tom knows the numbers of Alaska politics better than just about anyone else.  I know this, and got to know Tom, when I was covering the Alaska Redistricting Board.  Tom was at most meetings along with his equally knowledgeable Republican counterpart Randy Ruedrich.

So, when I saw Tom at the immigration rally on Saturday, I gave him pretty much that preface I gave others.  Here's what he answered.  [It was noisy Saturday.  There was music and lots of people talking around us.  The audio is mostly understandable, but I've made a transcript.  There were a few parts I wasn't completely sure of, but nothing that changes the basic meaning.  The transcript follows the video.]



Reasonably close transcript:

Steve:  Tom
Tom:  Hey Steve, how’re you doing?
Steve:  I trust your judgment . . .
Tom:  I’m glad
Steve:  . . . But I’m really concerned about Mark jumping into the race, so tell me why this is happening.  Is this going to lose the race altogether?
Tom:  Not a chance.  When you look at the numbers we use  to analyze the race, what is . . . the key  here is to make sure a progressive is elected governor of the state of Alaska. I spent time talking to the Governor, the Lt. Governor, and others.  My brother.  Facilitating for the last week before the filing deadline.
And you know, it was our belief, based on the data, based on those discussions, that the governor wasn’t going to be in a position to win this race.  And, you know, we can’t sacrifice a progressive agenda, we can’t take that risk.  The imperative was to be sure that the strongest progressive candidate was in the race.  And that that candidate was part of our base party.  Try to remember, our primary is open to Independents and Democrats.  The Governor was ??? going to be in that primary and changed his mind.  That’s a problem.  There would have been another D probably if Mark hadn’t filed.  And Mark would have been, was, is the strongest D.
I never would have supported my brother getting into this race if I didn’t think he could win this race, and I’m certain that he can.  That being said, the question is how do we all come together as progressives?  There’s not a lot of hostility here between the Governor or between my brother.  What there is, is the need to have the strongest candidate face Mike Dunleavy.

Look, we’re talking about the situation now where the Supreme Court at the Federal level where you’re going to have Choice at risk, LGBT rights at risk.  There are a number of things that are going to take strong governance at the local level to ??? those issues.  Mark is the best candidate by far for that.
So with all that said, I believe Mark has the wherewithal to do it and the ability to do it.
Let me add one last thing.  Mark as the Democratic candidate brings other resources to the table.  The Democratic Governors’ Association resources, DFC resources that otherwise wouldn’t be coming to the state.  [http://www.democraticfreedomcaucus.org]   That’s going to help our down-ballot races, which matters a lot.
I know that both campaigns are going to continue to talk throughout this process, throughout the primary.  I’m certain that at the end of August, everybody will sit down and talk about who’s in third, who’s in second and make the right decisions.  I just believe that’ll happen.  But if it doesn’t happen, we have data that shows Mark wins a three horse race and he’s the stronger candidate in a two horse race.  And that’s what matters.  We have to win for progressives, we have to win.
Steve:  So you’re saying, if Mark didn’t get in the race, Dunleavy would have won anyway?
Tom:  I believe that to be true, yes.
Steve:  Thank you very much.
Tom:  You’re welcome.  

After I stopped the camera, I did ask Tom about the data he was basing this on.  He mentioned some polls, but pointed specifically to a poll that had been posted on Midnight Sun which showed, in a three-way race,  Dunleavy with 38%,  Mark Begich with 33%, and Walker with 23%.  These numbers were based on Begich having just gotten into the race and not having done any campaigning.   He also said that the Permanent Fund was really hurting Walker.  He also pointed out that Walker was a pro-life Republican.  He'd lost in a previous Republican primary so last round he entered as an Independent.  Walker and the Democratic candidate - Alaska Native and former head of the Alaska Permanent Fund Byron Mallott - realized that neither could beat the Republican Sean Parnell in a three way race.  So their Lt. Governor partners bowed out and Mallot joined as the Lt. Governor candidate with Walker as the candidate for Governor.  And they won.  Walker's main goal at the time was to build a natural gas pipeline, force the oil companies to release the natural gas they had on the North Slope, and ship the gas to Asia.  While there is action on that project and an agreement has been signed with a Chinese partners, there is also a lot of skepticism about whether it will ever be built.

If the poll numbers don't change much by August - or if Begich moves up - would Walker be willing to step out of the race?  The Democrats did that in 2014 to help Walker get elected.   I imagine he'd want Begich to commit to the pipeline and perhaps be given a position to lead that fight.  Walker has acted as a rational adult in Juneau- at least as I saw it, making decisions based on facts and practical realities rather than ideology.  But his cutting back the Alaska Permanent Fund while the Republicans blocked any other sources of revenue - recouping the oil taxes they cut earlier, an income tax, even a sales tax - doesn't sit well with Alaskans.  

Trump's China Deals And Alaska's Liquid Natural Gas Pipeline

NPR had a report on Trump's visit to China the other day and the story essentially said China was eating our lunch.  I'm going to offer you a fair amount here, because it's all relevant, but the key points are:

1.  Trump has sidelined the professionals who know China and replaced them with political hacks.  

2.  Even with seasoned professionals at the table for the US, China is one of the most restrictive countries for foreign businesses and the US is one of the most open, giving China great advantages.

3.  China has regularly supported its private companies so they could compete with an unfair advantage overseas.

4.  China, when it does work with foreign companies, requires partnerships with Chinese companies and access to all their technology advances.  

OK, here's from the NPR piece, just before this point there's a discussion about American beef having a much higher tariff than Australian beef.

"James McGregor, president of the greater China region for the consulting firm APCO, says China's lifting of the U.S. beef ban in May is the latest case of too little, too late. And he's not optimistic the Trump administration is focused enough to improve business for U.S. companies in China.
"There is no strategy and professionals are not involved," he says. "The people from [the U.S. Trade Representative's office] and Commerce and State are sidelined."
McGregor says instead of representatives from the U.S. Trade Representative and other government staff who typically deal with China, President Trump has political appointees with little to no trade experience engaging with the Chinese.
"It's really been a farce," says McGregor. "And if it continues like this, it's really going to hurt American business. The Chinese are pros. They know what they're doing. Anybody sitting on the other side of the table as Chinese negotiator has been doing that subject for 20 years."
McGregor says Chinese negotiators have called friends of his in Beijing to see what the Chinese side could give to Trump during his Beijing visit to please his base. He calls these "Twitterable deliverables," and he puts the lifting of the Chinese ban on U.S. beef in this category: an easily promotable gift that, because it has come so late, may not have a meaningful impact on the U.S. economy."

What would have an impact, says William Zarit, chairman of the board at the American Chamber of Commerce in China, is forcing China to open its markets to U.S. business and to stop giving preferential treatment to Beijing's own so-called "global champion" companies. Tech giants Baidu, Alibaba and Tencent, as well as telecommunications company Huawei, have all received generous support from Beijing. 

"These global champions are being nurtured in the domestic market with protection and with strong state support, so that in some ways, when these companies go international, it's tantamount to a Western company competing with the country," says Zarit. 

And when U.S. companies come to China, they're often forced to hand over their technology and enter into joint ventures with Chinese partners. U.S. companies in at least 10 sectors — including automotive, healthcare, tech and entertainment — have investment caps preventing them from competing with Chinese companies on a fair playing field. Chinese companies in these sectors have no such caps in the U.S. market.

I thought about this as I read  the Alaska Dispatch New account of the an Alaska deal signed with China's Sinopec, two large Chinese financial institutions, and the Chinese government to move along  the governor's pet project, the one he ran for governor to accomplish, a liquid natural gas pipeline.  

Are we once again the colony having our resources exploited by wealthy Outsiders?  Is the governor making too many concessions because this project is so important to him?  Are the Chinese giving Trump some empty fluff he can use to show his base how successful his trip was?  The ADN article said that nothing was really final and that "senior Sinopec executives weren't aware of the gas pipeline deal with Alaska."

Our governor is smarter and more pragmatic than most of our politicians.  He spent time as a lawyer in court over oil and gas issues.  That's a good way to learn to understand a business and the players in it.  

Maybe the best thing for the state is to just be able to use the gas we have to raise revenue while we can.  There don't seem to be any details available and we probably don't have that much leverage anyway.   Though I have wondered, with global warming, whether we might spare the $43 billion price tag for the pipeline (which experience suggests will be considerably higher in the end) and just wait a few years until tankers can pick up the gas directly from the North Slope.

But for now, we're part of Trump's evidence of what a great negotiator he is.  And maybe it's a show of Governor Walker's smarts, that he's willing to let Trump get the credit.  Stay tuned, this is going to be a long process.

Oil Pro: "The oil industry is in a horrible dilemma."

This blog is, at its core, about how we know what we know.  We all know that different people see the world differently than we do.  We have lots of sayings, like, "Where you stand, depends on where you sit" that express this notion.

The problem is that while people know there are other points of view, too many assume that their own view is THE correct one.  And there are lots of positions one can take that are 'right' from one angle, but wrong from another.  It may be 'right' for you and your cronies, but wrong for the vast majority of people.   It may be right in the short run, but wrong in the long run.  Or it may have been right for a time, but the times have changed.

We are closing in on the time when oil stops being the right decision.  Where big oil can put their pipelines wherever they please, the people whose land they take to do it, be damned.   It's already the wrong decision when it comes to climate change.  Massively wrong.  And before long, all the subsidies and political and military assistance that have favored big oil will be tilting toward other energy sources.

That's the essence of this article from OilPro - a website that appears to be aimed at people working in the oil industry.

"The oil industry is in a horrible dilemma. New developments simply do not have enough time to play out. Oil sector developmental activity will disappear for around two decades. The disruption crash is inevitable - it will stifle new projects. It compromises recovery of initial CAPEX outlay. New projects, if they were to commence today, will barely start production before the disruption black hole opens up and swallows them. Projects simply will not happen. This new situation all but wipes out cost recovery opportunity. 

Supply side capacity constraints are unlikely to occur. Existing players have a brief period to produce while demand persists, accrue cash, and use that cash to diversify out of oil. This is the Saudi strategy. It is now perfectly clear what they are up to. They are out to aggressively realise what they can now, while prices are elevated(!), and use that cash strategically to develop other sectors in their economy for the longer term. Oil's heyday is over. Hydrocarbons are in decline. COP 21 dealt the killer blow. The Saudis know it. Oil companies that want to survive will copy them - the race to diversify out of oil has started. It is now a matter of survival. Recent sector history is littered with half-hearted efforts in this regard. A sense of urgency might finally produce a different result. Dividends are going to have to stop. It is madness to continue to pay them when your very existence is at stake.  

The economics of projects currently underway - such as Statoil's Johan Sverdrup - will undoubtedly undergo intense review in the light of this revelation. Most projects currently on the slate will be shelved indefinitely. The same goes for a number of projects already underway. This will be painful for those involved."

Alaska legislators need to upgrade their mental, energy software.

Thanks to Jeremy for this article.

Jay Hammond "If there has ever been a greater waste of energy and economic potential than what Alaska and the nation paid for the All-Alaska pipeline route, I don't know what it might be."

A little history is always helpful and this view of the Alaska pipeline from Jay Hammond's Tales of Alaska's Bush Rat Governor (1994) seems useful in its succinct and clear description of how Alaska built an all-Alaska pipeline (instead of a Canadian pipeline) which had some short-term benefits, but had, in Hammond's view, much, much bigger long term costs.

He frames this argument as a clash between people who have diametrically opposed narratives about the human mission on earth.

"One type are folks who, fed up with environmental degradation and people pressures found elsewhere, flee to Alaska believing it the last redoubt of pristine wilderness and broad horizons.  Here they can indulge in lifestyles which, if not long since lost elsewhere, are at least suppressed in their native states.  Those people have read Robert Service and Thoreau.  They arrive with romantic notions of life in a remote homestead cabin away from the urban rat race.
Along with those would be rustics, however, comes another type of 'pioneer' no less determined to find a different kind of 'good life.'  Jobless or discourage by conditions 'back,' and hearing tales of common, unmanned folk striking it rich in Alaska, they flood north intent upon exploitation.  It's inevitable that the shovels and picks of those treasure seekers often bruise environmentalists' toes." (p. 167)

[I'd note these two views are highlighted in the play The Ticket which is an imagined conversation between governors Wally Hickel and Jay Hammond. It's having its world premiere run in Anchorage through October 9.  But it's so good, I'm guessing it will be extended.  But don't count on it.]

While Hammond says he sees both sides, he acknowledges that he leans with the environmentalists.

Hammond is adamant about how wrong it was to build an all-Alaska pipeline instead of sending the oil through Canada to the midwest by pipeline.  And you could hear the words on the page getting louder as he explained why.

"Almost no one in Alaska, save of course, 'preservationist extremists' dared suggest we even look at a Canadian route for fear of being branded a 'crackpot conservations like Hammond' by the state's most powerful newspaper and labor union.
Clearly, Alaska would experience far less environmental trauma with only six hundred overland miles of pipeline construction across its wilderness than nine hundred miles to Valdez - not to mention the pollution hazards of tankering via Prince William Sound and down the Pacific coast.  The fact that the planned pipeline terminal at Valdez would be erected on a major earthquake fault was also not mentioned, as I recall.
In any event, transporting our oil through a single, 2,100 mile trans-Canada line to the Midwest would clearly be less costly than tankering past  West Coast ports - which is precisely what happened when the southern pipeline fell through and inadequate West Coast refining capacity required North Slope crude to be shipped to the Panama Canal.  There, supertankers had to be unloaded onto smaller vessels able to navigate the isthmus.  These took the oil another 1,500 miles north to the gulf of Mexico, to refineries in Houston.  From there, of course, the product was piped north and east to the marketplace.  Some Alaska oil didn't ship north to Houston, but went all the way to the East coast for refining and sale.
If there has ever been a greater waste of energy and economic potential than what Alaska and the nation paid for the All-Alaska pipeline route, I don't know what it might be.  It has already cost uncounted billions of dollars and has been a major contributor to the nations's enormous trade deficit.
Most economists in 1970 agreed;  only if Alaskan oil was shipped to neighboring Pacific Rim nations, did the longterm economic impacts on the state become a wash with piping it via a trans-Canada route.  There's no doubt this was intended.  Japanese interests admitted such negotiations were under way.
This revelation only further infuriated Midwestern congressmen who wanted Alaskan oil to flow to their refineries.  When Congress threatened to halt pipeline construction until assured no Alaska oil would be sold to the Japanese, pipeline owners and proponents of the trans-Alaska route, scuttled negotiations and gave their word not to ship Alaska oil abroad.  Instead, they'd just ship it twice that distance around the coasts of North and Central American - each additional mile of transportation costs deducted from the wellhead price of the oil.  Since severance taxes on oil extraction are based on the price of oil at the wellhead, less transportation costs, obviously the lower the transport, the higher the tax revenues.  Don't even mention the additional energy wasted in this most inefficient boondoggle." (pp. 176-7)

He does acknowledge that building the All-Alaska route provided jobs for Alaskans and for Valdez, but with caveats.

"Certainly the one-third greater pipeline construction costs expended in Alaska might have provided more jobs and contracts for locals, as proponents promised.  However, since most pipeline workers were imported, and many of the bigger contracts went to Outside firms, it's hard to quantify how much more Alaskans benefited in the short term - if at all - than had much of the pipeline gone through Canada.
True, the greater length of pipe in Alaska, and the number of capital projects located in the Port of Valdez, are values added.  Yet countering these are the costs of state services required to offset population explosions in communities like Fairbanks and Valdez.  Both played for the trans-Alaska route, but were the first to come begging the state for multi-millions in 'impact money' to offset spiraling demands for government services that came with the 'boom.'  .  .  .
"Economic studies financed by Alaska Legislators John Sackett, Al Adams and Jan Faiks, indicated by 1987 Alaska had lost an estimated $15 billion as part of the price paid for the all-Alaska Pipeline.  Since Alaska crude sells at a lower price than imported oil, the higher price would bring on the world market has cost the national treasury many billions as well. " (p. 178)

Hmmm  With a $4 billion deficit this year, that $15 billion would have come in handy.

And he's not done.  He talks about the delays - he says he predicted - caused by court injunctions because of failure onto comply with EPA standards.  A delay he says that added to the national problems caused by the OPEC oil embargo.  BUT . .

" . .  rather than blame 'environmental preservationists,' far greater blame should be laid at the feet of those 'developmental preservationists' who would preserve every exploitive, 'damn the torpedoes, full speed ahead' environmentally insensitive despoiling technique of the 19th Century.  By ignoring laws of the land and the forewarnings of those who promised to force legal compliance, they, not the environmentalists, caused the costly delay.
Forgotten by many who still curse environmentalists for those woes is the fact that during the delay, construction techniques were upgraded and engineering problems resolved.  Now, even some of the pipeline's most ardent promoters admit that, without those improvements, the line might well have proved a disaster.  today they point with pride to what the environmental activists compelled them to do." (pp. 178-9)

Hammond was the Senate President for some of this period and writes about how he tried to get the legislature to require reviews of all the alternatives - basically the Canadian route.  But he was clobbered by Bob Atwood's Anchorage Times.  He does acknowledge that some of the decisions made sense when you understood the financial interests of those pushing for the all-Alaska pipeline.
He concludes talking about the ban on exporting the oil to Japan.

". . .Alaska oil, on its way eastward through the Panama Canal to Gulf states and beyond, passes Mexican oil, on its way westward to Japan.  This is ridiculous.  What we should have done, of course, is simply swap, from for drum, Alaskan oil for Mexican - and enrich the treasures of both nations.  This issue, I regret, once more demonstrates the ability of politicians to subordinate our nation's well-being to demands of local constituencies." (p. 180)

As we deal with our budget deficits now, challenges to the Permanent Fund Dividend, oil credits, and a gas pipeline, it's useful to look back and see what happened 50 years ago and consider what parts of that history might be repeating themselves today.

Note The Nerds' Numerical Aesthetics

Did you catch it?  The meeting is September 7at 7 pm.  And it's at 49th State Brewing Company.   Pretty nifty, eh?

And the topic is compelling too - if you care about the future of Alaska and the Alaska Permanent Fund.  They left out the address, but I guess they didn't want to mess with beauty of the numbers already on the poster.  But for those who might want to attend:

717 W 3^rd Ave     It's tonight, by the way.  

"the 24-hour rule is a 'nonsubject"

Nat Herz has an ADN article today about the Republican majority ignoring the 24 hour rule for notifying people of a committee hearing.  He notes that Jeremy Hsieh, the news director for Juneau’s public television and radio stations,  regularly tweets violations of this rule, though he acknowledges that there is no penalty for the legislature violating their own rules.  The title quote comes from Cathy Giessel (R-Conoco-Philips).

"Asked about Wielechowski’s objections about the oil tax bill, Giessel, the resources committee chair, responded that the 24-hour rule is a 'non subject.'”

What exactly is a 'non subject'?   Here's what the Collins dictionary says:

Clearly, she isn't using it in the first or third sense.  Definition number 2 seems the closest.

It's of no interest or importance.  Obviously, this isn't exactly true because the article says that Hsieh's tweeting

". . . drew a sharp response this week from the Republican-led Senate majority caucus. 

The caucus press secretary, Michaela Goertzen, asked Hsieh to remove one of his tweets that said the Senate’s labor and commerce committee, chaired by Sen. Mia Costello, R-Anchorage, appeared to have broken the 24-hour rule."

So they are interested and pissed at the attention.  They'd rather just do it and no one knows.

I think what Giessel means is that she has no interest in the 24 hour rule and it's not important to her.  She doesn't care.  And she doesn't have to care.

That's the problem we have when one party has a significant majority and can simply ignore the other party and the rules that have been set up to protect the people of Alaska from bills being rushed through with inadequate notice for anyone to prepare a response.  

Giessel has done this sort of thing before.  When it comes to oil issues, she pushes through, because that's her job, taking care of the needs of her husband's employer.

But this callousness to anyone who disagrees with them is having its effect on Republicans nationally and I expect that it will spill over to the states in November.  Giessel's district has proven to be well gerrymandered to protect her, but eventually power leads to enough arrogance that people finally say
'enough.'  

Potpourri: Brent Crude, Science Literacy, Burner Phones, And Hidden Netflix Codes

Some stuff that might interest folks.


1.  What is Brent crude?  When they talk about the price of oil, they mention West Texas Intermediate (WTI), and Alaska North Slope (ANS), they also mention Brent Crude.  What does that mean?  This Wikipedia post spells it out.  There's even a goose involved.


2.  Here's a good discussion on American science ignorance at Quartz, or put another way matching this blog's underlying theme, the American way of not knowing.  This physician begins by pointing out that the US as a country is one of the very best in science, but as individuals we've got a lot of ignorance. She picks out a study that defines scientific literacy in terms of whether subjects could identify 'correct' scientific facts.  She writes,

Scientific literacy has little to do with memorizing information and a lot to do with a rational approach to problems.

And she gives three reasons the fact based approach to scientific literacy is problematic.

• Facts change.  That may come as sacrilege to some, but she points out that old ideas get modified by newer experiments.
• It encourages people to dig in their heels about what they think they know.
• The interpretation of data requires critical thinking.  

Actually, I don't think Americans have a monopoly on scientific ignorance, but I suspect we market ignorance in a more sophisticated way than most other places.

3.  The Quartz page also had an article about El Chapo and Sean Penn and mentioned burner phones.  That led me to a post that explains the evolution of burner phones.   The Wire is mentioned as where many people first heard the term.  I watched The Wire but didn't remember that word.  So here's the burner phone post on PureTalk.

4.  Netflix codes for all their different categories.  This lets you get beyond what they think you'll like.

Why Sen. Giessel Was Wrong Not To Swear In Oil Company Witnesses In April 2014

[This leads up to an LA Times article on oil company deception about climate change. You can skip down to the bottom, but I'm trying to tie a number of things together.]

In April 2014 there was an Alaska Senate committee hearing on SB 21 - the bill that gave oil companies huge tax credits and is now aggravating the Alaska budget situation already hurt by falling oil prices.  Sen. Cathy Giessel was the chair.

Sen. Hollis French requested that witnesses be sworn in.  Giessel responded in part:

“We are to conduct ourselves with some decorum, and to spring that on people who are coming to testify would simply be unprofessional of us,” Giessel said. “I’m not an attorney, as the previous speaker is, but it is my understanding that the preparation for testimony under oath is a different type of preparation than simply coming and providing information.” [emphasis added]

My original post on this at the time has much more detail.  I did point out at the time that the oil companies were not "simply providing information" and linked to the extensive presentations they had prepared.

Giessel is one of the oil industry's strongest  supporters in the legislature.  Pat Forgey, in a 2013 article on the oil industry's influence in the legislature, wrote:

"Next, Senate Bill 21 went to the Senate Resources Committee, chaired by Sen. Cathy Giessel, R-Anchorage. Giessel is married to Richard S. Giessel, who manages R&M Consulting's Construction Services business. The company touts its petroleum ties on the firm’s website, starting with construction of the trans-Alaska pipeline and continuing with recent work on various gas pipeline proposals.
Cathy Giessel's financial disclosure forms show Richard Giessel was paid between $200,000 and $500,000 last year."

Forgery's article looks at the lax conflict of interest rules that allow legislators with such clear conflicts to participate this way in the legislature.

Why shouldn't people testify under oath?  If the oil companies had nothing to hide, then they should have said, "Of course we'll testify under oath."

So, why all this history?  

Because in many ways, we've learned that the oil companies are either just wrong or flat out lying.  Here's a Fortune piece on BP that chronicles how their actual safety programs were far sketchier than their public pronouncements.  I looked at Shell's safety plans for the Chukchi back in 2013 and found them to have a lot less operational substance than one would expect.  And when the Kulluk had problems I reported on that, including this post which shows how empty of content their press reports were. 

And today, the LA Times tells us this once again in a story about how oil companies knew that climate change was real, but their advertisements denied the science was trustworthy.

“Let’s face it: The science of climate change is too uncertain to mandate a plan of action that could plunge economies into turmoil,” the ad said. “Scientists cannot predict with certainty if temperatures will increase, by how much and where changes will occur.”

One year earlier, though, engineers at Mobil Oil were concerned enough about climate change to design and build a collection of exploration and production facilities along the Nova Scotia coast that made structural allowances for rising temperatures and sea levels.

So, Alaskans, as we prepare to vote on all the members of our state house of representatives and a third of the senators in November 2016, let's get smart about the people we elect.

The oil companies are NOT our enemies, but they are more like business adversaries.  Businesses are supposed to compete, that's why the market is supposed to work.  Even when they cooperate they are always testing each other.  The Alaska Republican Party wants us to believe everything the oil industry says.  And when there is major oil related legislation, oil industry employees turn out en masse - in the middle of work days - to testify.  Of course, they want to look good to their bosses, they want to protect their jobs.  So do the legislators who get strong financial support from the oil industry.

The State is already at a disadvantage when dealing with the oil companies, because so much of our proprietary information is public information, while the oil companies won't share theirs.  If you already know all this, then help educate the doubters by helping to gather and package information that shows:

• the oil companies aren't our friends, they're adversaries - they want our resources at the lowest cost they can get
• oil companies are headquartered outside of Alaska and their top executives have no long term interest in Alaska's future good
• oil company contributions to Alaskan communities are calculated business expenses to gain public support and they are all tax deductible
• oil companies don't tell the truth all the time - sometimes they think they do, but they're wrong, and sometimes, like the LA Times piece shows, they flat out lie
• many legislators are beholden to big oil - some are oil company employees, others have business ties to them, and others just get important campaign donations from them, and they help them get our resources cheap
• which legislators are most compromised and which stand up for Alaskans and the future of Alaska

If any of this comes as news to you, do your duty as a citizen and get informed before you vote.

Oil Jobs Down. Parnell, What About All Those Jobs SB 21 Was Supposed To Create?

Let's see.  If I recall right, Governor Parnell's every other words were Jobs and SB 21. and the oil and gas industry was plastering the state of Alaska with ads saying how jobs would be lost if people voted for repealing the tax credits the legislature had given them in SB 21.    Despite all the money they spent, the initiative lost by only by a small margin.

And now the ADN has this article about lost jobs.

Oil, gas industry jobless claims up 7th month in a row
Jeannette Lee Falsey Alaska Dispatch News

 Jobless benefits claims are down in Alaska and across the country, but the same cannot be said for the state’s oil and gas sector. The lack of available work has boosted the number of former workers in the extraction and support industries who have filed for unemployment, according to the state labor department. Year-on-year increases in existing unemployment insurance claims by laid-off oil and gas workers began in May 2015, about one year after oil prices began falling. In November, 895 former workers in the sector were receiving jobless benefits, up from 463 for the same month in 2014. . .

Can you imagine how they would be blaming the lost jobs on the repeal of the tax credits if the initiative had passed?   But, I have to acknowledge, the oil companies never promised anything, it was their lackeys in the governor's seat and in the legislature who made claims about increasing jobs.   It's just like Shell blamed government regulation when it was pretty clear that the main reason they  pulled out of the Chukchi this fall was because their drilling produced nothing and the price of oil had tanked.

Now, I understand that government regulation can be quite an obstacle.  I just did another phone round with the IRS today and I feel anyone's pain who has to deal with people like Ms. Rutherford.  And I'm all for simplifying regulations whenever possible.

But it's my observation that the voluminous regulations are due to company lawyers finding loopholes and exploiting them, resulting in more and more regulations.

But we also know that without the government looking out for environmental risks, the oil companies would do in the Arctic what they've done around the world where there aren't good regulations.  Where the oil companies' bottom line is greater than the treasuries of the countries they're working in.  And where it is easy to bribe governmental officials for the permits they need.

And we're always hearing about the great private sector and how entrepreneurs take risks, but they also create LLC's (Limited Liability Corporations) to limit their liability.  They know going in that government regulations have to be met.  It's part of their business plan.  So moaning about it after the fact (well, also during the process) is just so much spin to avoid the responsibility for failing to find oil, or for an environmental catastrophe, or firing employees.

I've got tons of other stuff to do besides this post, but let me give you a few links to show that I'm not making this all up.

The Price of Oil: Human Rights Violations  

Myanmar's Oil and Gas 

McSpotlight on the Oil Industry

Effects of Oil Drilling (on Indigenous People)

And for those who remember the Exxon Valdez spill and the Deepwater issues, you'll note these things happen in the US too, but not quite as egregiously.

"In all, 140 foundations funneled $558 million to almost 100 climate denial organizations from 2003 to 2010."

This quote comes from a Scientific American article about Drexel University environmental sociologist Robert Brulle's study.  That two year old article went on to say

"Meanwhile the traceable cash flow from more traditional sources, such as Koch Industries and ExxonMobil, has disappeared."

But more recently, the ExxonMobil role has reappeared and the implication that it had gone to hidden money seems to  have been correct.  From a Media Matters article that cites different articles on this story:

"InsideClimate News published a six-part investigation in September and October detailing "how Exxon conducted cutting-edge climate research decades ago and then, without revealing all that it had learned, worked at the forefront of climate denial, manufacturing doubt about the scientific consensus that its own scientists had confirmed." InsideClimate's eight-month investigation was "based on primary sources including internal company files dating back to the late 1970s, interviews with former company employees, and other evidence." [InsideClimate News, Exxon: The Road Not Taken, accessed 11/13/15]"

Just as the tobacco industry funded campaigns to deny smoking's health threats, Exxon and other fossil fuel related corporations have been funding climate change denial campaigns.  But while smoking threatened the life of the smoker and those near him or her, climate change threatens people and animals all over the planet.

I'm still surprised at how few people seem to know that the massive tide of refugees from Syria to Europe (not to mention the Syrian civil war) are the result, in part,  of long term drought that forced impoverished farmers into the cities and eventually to join rebel movements.  Of course, Bashar al-Assad played a big role too, but without a population of desperate farmers, the uprising might not have occurred.

My point is that while we can all think of examples of climate change, most people have not faced the massive upheavals it's already causing and that will get worse unless we do something serious soon.

COP2 is coming this December in Paris and if you don't know about it, you should check the link.

But you don't have to go to Paris.  Anyone in the US can contact any number of local groups working to slow down climate change.  The group that most impresses me - Citizens Climate Lobby - now has chapters in almost every Congressional district and you can find your local group here.  Just go to one meeting.  That was all it took to convince me this was an incredibly competent, politically savvy, and socially positive group. By socially positive I mean that their methods are NOT focused on conflict and confrontation, but on building relationships, using the best available science,  and educating Congress on the realities of climate change. 

In the meantime, if you live in or near Anchorage, tomorrow (SATURDAY Nov 14) there's a great opportunity to learn more about climate change and what you can do about it.  The forum will be put on by Alaska Common Ground -  the same people who put on the fiscal forum last spring.  It starts at nine, but if you show up at any time, they'll let you in and you'll learn something.
Here's more information I got by email the other day: 

 Alaska’s Changing Climate:
Impacts, Policy and Action

Are you concerned about climate change and wondering what to do about it? Join us at a free, public forum discussing Alaska's Changing Climate: Impacts, Policy and Action. The agenda is attached and pasted below.

Saturday, November 14th
UAA Student Union (downstairs from the Bookstore)
9 am to 4 pm

This forum aims to move the conversation forward by understanding the impacts from climate change to Alaska and what the state and community policy makers can do about them as well as actions for individuals to take. Public Administration graduate students from UAA will present policy actions both during the afternoon sessions and during lunch.

The event will be recorded and broadcast on 360 North, tentative broadcast date of November 21st. Info will be posted on our website.

These forums are expensive to host. We appreciate all the support from our sponsors and partners. Please consider adding your name to our supporters by making a donation at www.akcommonground.org or sending us a check to PO Box 241672, Anchorage, 99524.

Questions? Please contact info@akcommonground.org. Hope to see you on Saturday.

 [More Feedburner issues, so reposting and deleting the original.  Sorr

Gov Wants Special Legislative Session To Do Three Things

Alaska's governor has sent the legislature an 'agenda' for the special legislative session that begins in Juneau on Saturday.  Here are the three key things he wants:

"The three items for consideration in this special session are: 
(1) passage of legislation lifting the tax holiday on real property leased from the State containing threshold volumes of gas in order to ensure that producers are incentivized to commit their gas to Alaska LNG, or to make gas available for purchase if Alaska LNG does not proceed with all current project participants on previously established timelines; 
(2)  an appropriation to pay TransCanada its development costs and terminate its participation in Alaska LNG, so that AGDC can take over TransCanada’s current equity position in the gas treatment plant (GTP) and pipeline;  and
(3) appropriations for the State to make cash calls on the GTP and pipeline components of Alaska LNG to continue pre-front end engineering and design (FEED) work necessary to reach a FEED decision, and for the other State agencies involved in Alaska LNG to fund the work to continue efforts to negotiate and reach final agreements necessary to reach a FEED decision."

He offers a little more detail in the rest of the letter, but no numbers.  That's coming later, the letter says.  If I were a legislator, I'd want as much time as possible to read all the numbers and try to figure out the implications, though in today's political climate, from the governor's perspective, that means more time for opponents to attack.  But really, we want all the questions to be asked and then answered. 

Item #1:  I think ending the tax holiday is easy to understand.  The gas is in the ground, but the oil companies don't have to pay property taxes.  The initial exemption from property taxes was that the oil companies would pump the gas.  But the governor argues, as have others in the past, that without the tax, they have no incentive to do anything.   

Item #2:  I generally like the idea that the state acts as a real partner in this and I guess buying out TransCanada's share is part of doing that.  But, how much does TC want to sell?  If they are happy to to get rid of it, shouldn't we be able to get a discounted price?  Are there any other potential buyers?

I also like that unlike Parnell and Murkowski, Walker seems to represent Alaska and not the oil companies.  That doesn't mean he's making good decisions, but it does mean he's not playing patsy to the oil companies. 

This is going to be big money.  And you need big money in the oil and gas business.  But the state has a history of bad investments in enterprises from the Matsu Dairy to the Seafood Processing Plant in Anchorage.   Is this different?  If so, what can the governor tell us to convince us?  How long will a pipeline take before gas flows?  Will it come on line before ice melts enough for tankers to just fill up directly on the North Slope? 

And, I for one, need assurance that Walker plans to run for reelection, so all this doesn't fall apart.  Should another oil company lackey become governor again, this would all be for naught. 

Item #3:  Some specifics and some numbers would help out here.


Now, the Republican majority in the legislature is full of oil company supporters, even some oil company employees.  Walker has to entice them to vote his way.  The special session on Medicaid expansion earlier this year wasn't exactly a show of bi-partisan support. 

But let's all remember that this is precisely what Walker campaigned on.  A politician who is keeping his promises.  From the EnergyWire last December:

During the campaign, Walker suggested that, if elected, he might renegotiate the gas line contracts to give the state a leadership role. Industry supporters warned that such a step could set the project back by a decade (EnergyWire, Nov. 6).
Continued tensions over the pipeline issue were apparent last month when Walker's team held a town-hall-style transition meeting in Anchorage to draft recommendations for the new administration.
During oil and gas panel discussions, industry representatives called for Walker to endorse the Alaska LNG contracts that Parnell signed with BP Alaska, ConocoPhillips Alaska, Exxon Mobil Corp. and TransCanada Corp.
But Walker supporters protested that the incoming governor shouldn't be asked to sign off on contracts that neither he nor the public has seen in their entirety. Instead, they wanted Walker to push the oil companies to guarantee they'll build the pipeline.
"We'd like to achieve a commitment to build because the agreements we have right now aren't binding," noted Anchorage energy attorney Robin Brena, who served as chairman for the transition conference's oil and gas panel.
Despite their differences, Walker spent the days after the final votes were counted reaching out to Alaska oil industry groups. He held private meetings with the Alaska Oil and Gas Association and the Alaska Support Industry Alliance.

Watching The Pieces On The Chess Board: Climate Change, Ukraine, Oil Prices, Putin Support of Asad, Greek Debt, Refugee Crisis

Let's start with this LA Times headline Tuesday:

"A crisis of unity exposed in EU" 

In the last couple of weeks I've been thinking about how Europe's influx of refugees is causing great disruption in Europe not to mention the horrors that are causing the refugees to leave their homes.  But there's one clear winner - Russia, of course.  A united Europe is not good for Putin's ambitions.

As I see this, we get news about the world in fragments, and often that's how they stay in our brain - fragmented.  But everything is related to everything.  So this post is a way for me to try to connect in my own head a lot of these fragments.    And I'm sure I'm missing a lot, but let's look at some of the moves on the chess board.


1.  Russia's march into the Crimea made for daily headlines such as this back in spring 2014.

2.  Western reaction was strong and included sanctions.   

3.  Sanctions against Russia caused Putin to retaliate including threats to Europe's natural gas supply.

4.   EU stands firm on sanctions.

5.  And don't forget Russia's offer to help Greece with its debt to the rest of the EU.

6.  Meanwhile, the Syrian civil war expands as ISIS comes in.  And Russia continues its support of Syria's Asad.


7.  The Saudis, unhappy with Russia's support of Asad,  have increased oil production, which led to lower oil prices.  Since oil is critical to Russia's economy, the Saudis were hoping the economic impact would lead Russia to drop support of Asad, according to the New York Times.









 8. Back to the  Los Angeles Times headline  that I began with:

A crisis of unity exposed in EU

Some of the 28-nation bloc’s key initiatives are in jeopardy amid deep discord over the influx of refugees.

BY HENRY CHU

   LONDON — Just three years ago, the European Union basked in the glory of a Nobel Peace Prize and boasted of being a tight-knit community bound by “European values” of democracy, diversity and dignity.    By its own measure, the 28-nation club is now looking decidedly less European and even less a union these days as it grapples with the continent’s biggest refugee crisis since World War II.. .

So, if millions of Syrian (and other) refugees flood into Europe, critical parts of the European unity get tested.  Schengen - the agreement that eliminated stops at border crossings between most European countries - has been one of the most important symbols of the EU's unity.  And now Hungary's building of a border wall to block the refugees, raises question about Schengen.  Croatia has only applied to be a Schengen member so it isn't a breach of Schengen yet. But now Austria is talking about closing its borders with Hungary, which would be a breach. 

Another symbol of that unity is the Euro which came into crisis with the Greek debt showdown.  And the Russians offered to support Greece against the rest of Europe.

If, in fact, the refugees help break down the European Union, then Russia's European opposition is much weaker economically and militarily and Putin would have much more freedom to treat his people and neighbors as he pleases.   


Abdul Jalil Al-Marhoun  argues that Russia's key goal in Syria is access to the Mediterranean Sea.  While a port in Syria would be a useful base, he argues, it's not essential.  A weaker Europe would make securing this route much easier.  Especially through the narrow strait by Istanbul.

Click to enlarge and focus - map from Wikipedia

The map shows the Black Sea geography.  Russia has a major naval base in Sevastopol which it leased from the Ukraine for, according to a state sponsored  Russia Today article: 

"$526.5 million for the base, as well as writing off $97.75 million of Kiev’s debt."  

After the takeover, that agreement was voided by the Duma.  That's over half a billion savings for Russia and loss for Ukraine.  A Center for Strategic and International Studies article describes the strategic benefits to Russia of this naval base.


Life is much simpler when the news anchors just say "the good guys" and "the bad guys" and that's all you have to know.   And when news is made up of discrete unrelated incidents of video violence.  News is merely entertainment - real life examples of action movies.  But it doesn't help us understand how and why things are happening.  For that you have to think like a chess player - each move is about the position of all the pieces and where they will be three or four or five moves hence.   Certainly Putin, head of a nation of chess players, has in mind strategy such as this offered by the United States Chess Federation:

"When you are considering a move, ask yourself these questions:

• Will the piece I'm moving go to a better square than the one it's on now? 
• Can I improve my position even more by increasing the effectiveness of a different piece? 
• Will the piece I move be safe on its new square?  
• If it's a pawn, consider: Can I keep it protected from attack? 
• If it's another piece, consider: Can the enemy drive it away, thus making me lose valuable time?

Even if your intended move has good points, it may not be the best move at that moment. Emanuel Lasker, a former world champion, said: "When you see a good move, wait---look for a better one!" Following this advice is bound to improve your chess." 

Maybe American schools should start teaching chess so American students can learn to think about the long term implications of their actions.


Oh yes, climate change.  How does that fit in here?  From Scientific American:

"Drying and drought in Syria from 2006 to 2011—the worst on record there—destroyed agriculture, causing many farm families to migrate to cities. The influx added to social stresses already created by refugees pouring in from the war in Iraq, explains Richard Seager, a climate scientist at Columbia University’s Lamont-Doherty Earth Observatory who co-authored the study. The drought also pushed up food prices, aggravating poverty. “We’re not saying the drought caused the war,” Seager said. 'We’re saying that added to all the other stressors, it helped kick things over the threshold into open conflict. And a drought of that severity was made much more likely by the ongoing human-driven drying of that region.'”

Alaska State Lottery - Governor [Shania Sommers] Announces Everyone Wins $2072

Screen shot of Shania Sommer announcing PFD amount 2015

Technically, it's not called a lottery.  It's called the Alaska State Permanent Fund Dividend.  PFD for short.  Individuals don't have to put any money down for a ticket.  No numbers are drawn from a hat.  But you can't be a winner unless you fill out an application to demonstrate that you've lived in Alaska the whole previous year, that you aren't a resident of any other state, and that you plan to stay.

The total amount each resident wins (the governor announced that total today)  is calculated by formula (from the PF website):

1. Add Fund Statutory Net Income from the current plus the previous four fiscal years.
2. Multiply by 21%
3. Divide by 2
4. Subtract prior year obligations, expenses and PFD program operations
5. Divide by the number of eligible applicants

The fund comes from monies the state collects from mineral related income.  The state constitution says: 

"At least 25 percent of all mineral lease rentals, royalties, royalty sales proceeds, federal mineral revenue-sharing payments and bonuses received by the state be placed in a permanent fund, the principal of which may only be used for income-producing investments."

Originally, it was thought that since oil and other minerals extracted from the state were not renewable resources, the wealth generated should not be used up by just one or two generations.  Instead, it should be conserved for the benefit of all future Alaskans.  It was envisioned to eventually serve as a trust fund for Alaska when the oil revenues ran out.  A small percent would be used each year to help fund the state.

But over the years, Alaska residents have come to view it as an entitlement.  Just this weekend one of the speakers at the Fiscal Future Forum talked about using the earnings of the Permanent Fund as the "third rail of Alaska politics." 

The payoff to Alaskans was originally determined by a formula that gave those who'd been in the state the longest, the most money - the payout was to be $50 per year of residency since statehood. But that was found by the US Supreme Court  to violate the guarantees of the Equal Protection Clause of the Fourteenth Amendment.  The law was changed to allow all Alaskans to receive the same amount.  

I did use the word 'win' in the title and many Alaskans view this as a 'win' though, as I said above, one they are entitled to.  

But I would argue that value of the PFD paid out to individuals may well be less than what we could do with all or even just some of the money were it used for needed services like schools or maintenance of state infrastructure.  

Undoubtedly, the PFD helps many Alaskans pay basic expenses.  And there are a number of Alaskans who economically do not need the dividend.  And there are others who spend their checks  on short term pleasures - drinking, an expensive vacation, etc.   Mine will go directly to the new water heater we had to install last week.  

Others have argued - though the exact proof is elusive - that the dividend attracts lower income migrants with large families from other states.  The $1884 per family member we got last year, sounds pretty good to a family of ten living on welfare.  And even with Alaska's higher cost of living it seems to be good enough to keep folks here.  

The lack of a state sales and income tax, plus the PFD means that most families come out ahead.  

It also makes people who demand that the legislature "spend my tax money wisely" sound pretty silly, because the only tax money they might possibly pay would go to local government for their sales or property taxes.

But then there are many ironies in "the last frontier" where people believe themselves to be ruggedly independent, yet we get the PFD and the state gets much more federal tax money than we contribute. It's easy to be indignant when you're ignorant.  

As I'm thinking about this, I bet Alaskans would be willing to add a lottery twist to the PFD.  I bet we'd be willing to lower the average payout if there was a chance to win some really big prize money for a few who are randomly selected.  I bet most Alaskans would give up 10% of their check for the chance to win $100,000.  

[Note:  I had this ready to post when the governor made the announcement, but was busy at the exact moment.  When I checked the video on the governor's  mulitmedia page, I was pleasantly surprised to see a girl talking about her college plans and how the dividend will help with that.  Announcing the PFD is one of the things that Alaska governors love to do because it's lots of free publicity on something everyone is happy to hear about.  Especially this year when the dividend is the highest on record (by $3). 

But this governor gave that moment of glory to  Shania Sommers.  Another sign that Walker is not only an adult, but also someone who is comfortable with who he is and happy to give away his  limelight to someone else.  Great move on his part. 

 

LA Gas Prices, Freeway And Weather Notes

Last December, I reported on LA gas prices.  We'd just gotten gas fpr $2.39/gal at Costco and I compared that to Anchorage prices (lowest then was $2.83) where the tax is significantly lower.

I also remarked that the Anchorage Costco prices were not even the same.  (Costco told me then, that price depends on the competition near the stores.)


I caught this Chevron sign this afternoon as we were coming back from visiting relatives in the valley.

Lowest price at this station is $3.78.   This is noteworthy because J filled the tank last night at the nearby Costco for $2.99.  I wonder about all the folks who let stations get away with this sort of price difference.  I realize that location is important.  Costco isn't far from my mom's place, but there is also something called planning.  Especially with an 80 cent per gallon difference!  But with the way prices fluctuate, getting gas last week at Costco may not have been such a bargain now.

By the way, I checked on Anchorage Gas Prices and the lowest in Anchorage is $3.13 right now.  But with such websites, people can find the lowest nearby prices easily.  And if they only shopped within ten cents of the lowest local price, I guarantee that 80 cent spreads would disappear soon.

We got home fairly quickly after we got past the jam behind this accident on Ventura Freeway. (Sorry, I'm old school and still call them by their names, not by their numbers.)

By the way, the temperature for where we visited is predicted to be only 101˚F (38˚C) by 4pm today (in 30 minutes).  It's supposed to be only 88˚F at my mom's by 4pm.   It doesn't feel that much cooler - the humidity here (closer to the beach) is 47% but only 21% in the valley. 

Oil Addiction Prevents Alaskan Politicians From Making Good Decisions

Image Screenshot from Video In 2010 Post

Most people don't change their habits unless they have to.

Alaska politicians (and the people who elect them) have been addicted to easy oil money for the past forty years.  The cozy relationship between some of our politicians (i.e.  ex-governor Parnell was a Conoco-Phillips lobbyist (literally, not just figuratively) and two sitting senators are also oil company employees and others get lots of support and advice from the industry) doesn't hurt either.

So our Republican dominated state government (for the last ten years or so) has spent that money like giddy lottery winners.  They didn't listen to warnings of eventual declines in oil revenues from ISER over the years.  It's true, though, that new technologies allowed for oil extraction longer than originally expected and increasing oil prices kept the revenues up even when production started dipping, letting politicians ignore the economists' warnings.

But the politicians in power positions made no serious plans to find alternative revenues or cut spending.  And because oil so dominated the economy, other traditional sources such as timber or tourism would never come close to what oil has brought in.  And as Republicans, they kept new taxes off the table.  And since none of them have the vision,  the guts, or the charisma to inspire the public to new thinking,  they've avoided the idea of tapping the Alaska Permanent Fund for what it was originally intended to do:  supplement the budget when the oil money runs out.  Nor have they been willing to broach reestablishing a state income tax.

And now the oil is hitting the fan.  The oil price decline plus Republican led tax giveaways to the oil companies have put our state budget into crisis.  Instead of planning for the day when oil revenues would no longer pay all the bills like rational, intelligent people do, they've continued to spend until their fingers come up empty when they stick their hands into the state coffers, at least the ones that don't have special locks on them like the Permanent Fund and budget reserve funds. 

OK, some will complain I'm being partisan here picking on Republicans and letting Democrats off the hook.  Democrats certainly have challenged the big tax breaks the Republican majority gave oil companies, but after redistricting, they no longer had the votes to block them.  And even the public was there, losing a ballot initiative to restore the tax by only 4% despite huge oil company spending on the election. And the Democrats have challenged big capital projects like the Susitna Dam and the Knik Arm bridge.  I don't know that Democrats have been particularly better about leading the way to use the Permanent Fund as a trust fund to help support our budget.

But the fact is that Republicans have been in power - both in the legislature and the governorship - and thus we got to our current dilemma on their watch.  So naming Republicans isn't partisanship, it's factual.

All these thoughts came pouring out of my head after reading an AP piece on the impacts of the low cost of energy  in today's ADN.  Oil and coal and natural gas company stock is down, down, down.  And Alaskan's have known for the last year or so that our stock is way down too.  But it didn't have to be if we had looked beyond the short term and prepared.  But we were drunk on oil money and we weren't forced to.


And just the other day we learned that Sen. Murkowski worked to get Alaska exempted from new EPA rules on energy companies that would require them to lower their carbon emissions. 

I get the short term impacts this will have on rural Alaska.  But the actions they would be forced to take would help wean them off the expensive fuels they've continually been using.  And there are Alaskan locations - like Kodiak and villages around the state - who are already breaking their addiction and finding alternative energy sources. Instead, most places, especially in the Capitol building in Juneau, have continued feeding their and our addiction. 

Some addicts just spiral down into self destruction.  Others break from their destructive ways and learn new, healthier habits.  It's what Alaskans need to do.  And we need politicians who have vision and can inspire Alaskans to break from the unsustainable easy way, to the harder but ultimately necessary path.

We are a state of welfare recipients, getting our state budget funded by oil taxes and the federal government, not to mention the actual individual cash Permanent Fund dividend payouts.  We need to think like the wealthy people we still are -  our Permanent Fund has $52 billion and the constitutional budget reserves has another $10 billion - and use the income of our wealth in a responsible way as others have proposed.  We need to supplement that with some sort of taxes - yes, pay our own way, not rely on others to subsidize our schools, state parks, roads, police, health care.  Let's start being healthy, responsible adults.