We are almost to day 100 of session, meaning just over three weeks remains until the constitutional session limit of 121 days. There is still a lot remaining to do including the budget, education, and energy. Don’t hold your breath that anything significant will happen on education or energy. The Senate Finance Committee rolled out their committee substitute for the operating budget this week. The House Resources Committee held an explosive hearing where managers from a small oil company attacked Shell and Department of Natural Resources Commissioner John Boyle. And the Alaska Republican Party held their convention this weekend in Anchorage at the Captain Cook. They elected Carmela Warfield as their new chair.

A friendly message and reminder to all our readers. The Landmine is made possible by myself and a team of awesome Alaskans. I am back in Juneau for my sixth session in a row reporting on the Legislature. If you enjoy the content we provide, please consider making a one time or recurring monthly donation. You can click here to donate. We have a donation system that makes it super easy. We would really appreciate it. And thanks to everyone who has been supportive!

Session End Approaching 

Just 24 days remain until the constitutional session limit. The House and Senate did manage to meet their agreed upon deadline last week to exchange budgets. But the budget is just one part of the adjournment package. Various energy and education priorities are being floating around, but there is still no clear alignment between the House and Senate on them. And Governor Mike Dunleavy (R – Alaska) has essentially been checked out.

A problem with the budget could arise in the House. The Senate already cut the dividend down to approximately $1,500 when you factor in the surplus “energy rebate” that was put in place last year if oil prices remain high. That’s a $750 reduction from the House number. If the dividend number that comes out of a conference committee is not acceptable to the mega PFD members of the House majority, the majority will need minority votes to get to 21 to pass the budget. The House majority has 23 members, meaning they can only lose two votes if the minority does not vote for the budget. The House majority has at least eight mega PFD folks.

The House minority will want something for their votes. Probably a guarantee of an education bill like SB 140 and funding to upgrade the railbelt intertie. Those things cost a lot. The good news is it’s the second session. So if some members of the House majority cut a deal with the House minority and the Senate, things probably won’t get too loose because it’s an election year. There will be a new Legislature come January.

The next few weeks will be interesting. The Senate majority is a fine-tuned machine, so they will be taking the lead on the budget. If things do fall apart, they have the option to extend for 10 days. But the will to stick around does not seem to be there, at least now. The weather has been great and everyone wants to get out of town. It’s also an election year so members want to go home and campaign.

No consensus on energy reforms as legislative session nears end

The following is an excerpt from this week’s edition of the Alaska Political Report. You can click here for more information about the Political Report. A subscription is $1,299/year per organization. Discounted pricing is available for non-profits and government entities. Our coverage of the budget starts with the governor’s proposed budget, and we track everything in detail through the entire process. If you have any questions or would like to subscribe, please email jeff@akpoliticalreport.com.

Even as Southcentral nearly experienced a gas supply crisis, and with a huge number of bills circulating in Juneau, no consensus has emerged around the reforms lawmakers are considering. In January, this session was billed by legislative leaders and GOP Gov. Mike Dunleavy as an energy and education session. But with just under a month to go before the constitutional session limit, the Legislature has yet to pass any major energy legislation.

Transmission, natural gas subsidies and storage in Cook Inlet, and renewables are all on the table. But whatever lawmakers end up passing is still far from clear.

In early February, a long cold snap stressed the power grid in Southcentral due to a natural gas distribution problem. This was primarily caused by an issue with some of Enstar’s storage wells in the Cook Inlet Natural Gas Storage Alaska (CINGSA). Declining gas supply and production in the Cook Inlet means importing LNG is likely in the years to come.

Multiple proposals are floating around the House and Senate, including royalty relief and gas storage in Cook Inlet, a railbelt transmission organization, and funding for modernizing the railbelt energy grid.

The Political Report sat down with Fairbanks Republican Sen. Click Bishop, the co-chair of the Senate Resources Committee, and Anchorage Republican Rep. Tom McKay, the chair of the House Resources Committee, to talk about their energy priorities and get their thoughts on what might happen this session.

Bishop’s priorities are focused on the railbelt. Gov. Dunleavy introduced legislation in February that aims to increase efficiency and lower power costs in the railbelt. Bishop referenced a trip legislators took to Iceland last year. He said after Iceland formed the equivalent of a railbelt transmission organization (RTO) between their utilities, they saw an improvement. But Dunleavy’s bills have yet to see traction in either body.

Bishop also emphasized the importance of funding the Grid Resilience and Innovation Partnership (GRIP) with the federal government. This project, which in total would cost the state more than $200 million (with the same amount in federal match) would upgrade the intertie between the railbelt utilities, providing redundancy and allowing more power to be moved.

Bishop acknowledged the need for increased gas storage in Cook Inlet and also the potential for royalty relief. There are two gas storage bills, Senate Bill 220 and House Bill 394. HB 394, a bill by McKay’s House Resources Committee, is likely to be the vehicle for gas storage in Cook Inlet. Bishop said the Senate is waiting for the House to send them Cook Inlet legislation.

There are also several royalty relief bills floating around. But Sitka Republican Rep. Bert Stedman, co-chair of the Senate Finance Committee, told the Political Report that he does not see any kind of Cook Inlet royalty relief passing the Legislature until they get proper input from their oil and gas consultant, GaffneyCline. It is not clear if that information will be provided in time for lawmakers to act before the end of session.

McKay is much more concerned with Cook Inlet. He wants to see increased gas storage and royalty relief. He acknowledged the benefit of upgrading the railbelt, but his clear priority is Cook Inlet. McKay said he is not interested in tapping the treasury – what occurred a decade ago when the Legislature approved cash credits for Cook Inlet – but instead, through royalty reduction, he believes more gas will be produced.

McKay told the Political Report, “My agenda to address our energy needs is natural gas from Cook Inlet in the short-term and a gas pipeline from the North Slope in the long-term.”

Any energy legislation that passes the Legislature will likely be part of an adjournment package as only 27 days remain in session. And after the Superior Court ruling ruling on the correspondence program last week, education is sure to take up a lot of time in the final weeks of session. The House and Senate have different energy priorities, and Gov. Dunleavy has not made any public statements on energy in several weeks.

Early on in session, there was agreement between both bodies and Dunleavy that Alaska is facing an energy crisis. But so far, no meaningful action has been taken. The Legislature has the ability to extend 10 days or call a special session. But it’s an election year and legislators want to get home. Bills need to start moving quickly in order to pass before the end of session. We are watching closely and will provide updates in the weeks to come.

Other Happenings 

If you have not seen the debate I hosted on Friday between John Sims, president of Enstar Natural Gas, and Brad Keithley, managing director of Alaskans for Sustainable Budgets, on the natural gas supply issue in Southcentral, you can check it out here.

The Alaska Republican Party held their biennial convention this weekend in Anchorage. Carmela Warfield was overwhelmingly elected as the new chair, getting more votes than the other three candidates combined. Congrats to her! And good riddance to Ann Brown, an extremely dishonest and nasty person. I stopped by for a bit yesterday to check it out. Several Republican legislators were in attendance. But my big takeaway was that many of the attendees are living in the past. The biggest and best thing the single primary and ranked choice voting did was diminish the role of the already waning political parties. But a lot of the people in both parties have failed to grasp that. These party types should familiarize themselves with the term “adapt or die.”

A House Resources Committee hearing on Monday (4/15/2024) got explosive when two representatives from the independent oil company Narwhal gave a presentation on oil leases they hold in West Harrison Bay. The West Harrison Bay Unit (WHBU) is currently controlled by Shell, but Narwhal holds adjacent leases. Check out this Landmine article to read about what happened.

Check this out. The plaintiffs in the Texas lawsuit against Furie, owned by John Hendrix, sent letters to Governor Dunleavy, Senator Cathy Giessel (R – Anchorage), Senator Jesse Bjorkman (R – Nikiski), and former Governor Bill Walker requesting their depositions and asking they preserve any correspondence related to the matter. The chickens are coming home to roost for John Hendrix.

Representative Andi Story (D – Juneau) filed a letter of intent for re-election this week. No one else has filed for the seat yet. The filing deadline to run for office is June 1.

Representative Mike Prax (R – North Pole) picked up an opponent this week, North Pole Mayor Michael Welch. Prax was unopposed the last two cycles. Sources say Welch is running because Prax won’t request money for capital projects for the district.

There has been a lot of chatter thar former Republican Representative David Nelson is going to challenge Representative Cliff Groh (D – Anchorage). Groh beat Nelson in 2022 by 3.8 points. But that district includes JBER and it’s a presidential election year, meaning turnout will be higher. Turnout in that district was only 18.7% in 2022. If Nelson runs, that will be a race to watch.

This Week’s Loose Unit 

There were plenty of good candidates in Juneau this week. But a weekend trip home made this week’s designee clear. This week’s Loose Unit is Anchorage. I got back on Thursday night and right away noticed the sheer amount of trash on the roads. Ok, it’s break up and this normal, I thought to myself. But the squalor I noticed this weekend was just fucking depressing. In addition to the large amount of garbage all over town, there are tents all over the place, homeless people congregating and sleeping all in public spaces, abandoned vehicles in parking lots, and just a general feeling of decay.

I went to Barnes and Noble this evening. I discovered an old Ford Expedition in the parking lot that looked like something out of Sarajevo in the 1990s. One commenter on the Facebook post said it’s been there for weeks. And one reported another abandoned and stripped vehicle in the Applebee’s parking lot, just down the road.

If you drive around Anchorage, especially Midtown, you will encounter tents all over. It’s only April. Just think how much worse it’s going to get. There’s also that large encampment at Cuddy Park. In addition to the homelessness, Anchorage just feels like a city in decline. I was driving down Lake Otis yesterday and saw several properties that were being used as storage for old cars and RVs. It looked horrible.

I remember when I moved to Anchorage in 2004. The city was clean and it felt thriving. The last decade has been a steady decline. And no one seems to want to fix it. Sure, we all talk about it. But the problems just worsen. Old roofs have been collapsing. We can’t seem to figure out how to plow the roads. Housing prices are continually rising because we can’t build more homes, which leads to people leaving and/or not moving here. The whole situation is depressing. We have to fix this town.

If you have a nomination for this week’s Loose Unit, or if you have any political news, stories or gossip (or any old pics of politicians or public officials) please email me at jeff@alaskalandmine.com.