Thursday, January 12, 2012

Gov. Parnell says he’s upbeat about state’s economy

By Tim Bradner
Alaska Journal of Commerce

Gov. Sean Parnell presented an upbeat picture of Alaska’s prospects, but also highlighted the state’s immediate challenges in a keynote address to the Alaska Support Industry Alliance’s annual Meet Alaska conference in Anchorage Jan. 6.

Parnell first applauded the Alliance and its industrial service and support company members.

“You are in the business to do what Alaskans have done from the beginning: maximize opportunity, develop private enterprise,” the governor said. “Every day you accomplish what no government can do. You generate an authentic GDP. And I don’t mean ‘Government Dependent Programs.’ I mean an honest-to-goodness Alaska GDP based on free enterprise. You make that happen every day.”

For now, things are looking positive for the state.

“In case there’s any doubt, I want to make something very clear: Alaska is open for business. Today’s newspapers let us know we’ve had the third straight year of job growth in Alaska. Yesterday (Jan. 5) we saw further evidence that others are taking notice that Alaskans will work together to grow our economy. Three CEOs from major oil companies met here in Alaska to talk about a gas line, to talk about alignment,” Parnell said. “It was the first time these three CEOs have been together in Alaska. Our discussions were very productive, and I was very encouraged. Also, it was announced that our state bond rating was upgraded to AAA. In this world economy, think about what that means. Alaska’s business environment is getting better.”

Still, there are troubling times ahead, he said.

“In 2012, my administration will not yield in our effort to directly address the most pressing economic issue facing our state – the decline of oil coming through the Trans-Alaska Pipeline System. TAPS production is an economic survival issue for Alaska,” Parnell said.

To address this problem, the governor’s plan to increase oil production from its current rate of about 600,000 barrels per day back to 1 million barrels per day was developed last year out of discussions with business and community leaders.

“We sat down, talked with business and community leaders across the state, and we heard their concerns. We carefully listened to these ideas,” Parnell said. “We said we were going to put more oil leases up for sale. We did so in December, during the annual (North Slope areawide) lease sales. We said we were going to challenge federal foot-dragging, and we do so at every turn. Alaska’s voice has rung loud and clear.

“Finally, we are seeing Washington loosen its death-grip on the NPR-A and OCS,” Parnell said, in reference to the federal government’s recent approvals of a permit for a key bridge crossing providing access to the National Petroleum Reserve-Alaska, or NPR-A.

“The federal agency approval is for CD-5, which will mean a bridge over the Colville River that allows access to leases within the NPR-A,” Parnell said.

There are also recent approvals for exploration plans for Shell’s offshore exploration.

“Progress is slower than we’d like, and some of Washington’s decisions in this regard have been disingenuous. But there has been change. We’re thankful for it, and we’re going to keep on fighting,” the governor said.

Parnell laid our some action items as the Legislature opens its 2012 session in Juneau.

“We will restructure our oil tax system to increase production. We will build roads to resources, and you’ll note in my 2013 budget we have funds for a road to Umiat and the Ambler District. We will continue to make the case for a vibrant, business climate and a growing economy,” the governor said.

Looking at the long term, Parnell said the state will reach the goal of having 1 million barrels per day in 10 years. And noted there will be a gas line, he said.

Infrastructure investment is a key part of the plan, he added.

“That means Roads to Resources. Transportation infrastructure. Maintenance of public facilities. And there’s a $350 million bond package I propose putting before Alaska voters to upgrade ports in communities from Ketchikan to Anchorage to Emmonak,” Parnell said.

The state’s investment in a 600-megawatt hydro project in Watana, on the upper Susitna River, is also part of the plan, he said. Susitna-Watana means, “massive amounts of hydro power that will lower the cost of doing business all across the Railbelt, and grow jobs during the construction phase,” the governor said.

There is other recent good news, most notably the fact that Sen. Lisa Murkowski introduced a bill to move permitting for offshore drilling under the Clean Air Act from the Environmental Protection Agency to the Interior Department.

And, “we’ve got a great turn-around story in Cook Inlet, with new players coming in,” Parnell said. “LNG shipments have continued from Nikiski, in response to a changing market around the Pacific Rim. We’re seeing more exploration on the North Slope than we have for a few years.

“Mining – now there’s a strong trend for 2012,” he added. “Red Dog, Greens Creek, Usibelli, all accounting for massive increases in our exports. Donlin (gold mine) is closer to production, and numerous other mines of all sizes are in advanced stages of development. We’re launching our state’s rare earth element mining sector.”

According to the Alaska Miners Association, one-third of all mining exploration in the U.S. is happening in Alaska. And last year exploration in Alaska topped $260 million.

Tim Bradner can be reached at tim.bradner@alaskajournal.com.

Read more: http://www.alaskajournal.com/Alaska-Journal-of-Commerce/AJOC-January-15-2012/Gov-Parnell-says-hes-upbeat-about-states-economy/#ixzz1jHtLzqeV