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Young argues for new development mindset Says both the Alaska and US economies need energy for growth but that regulators are putting roadblocks in the way of development Alan Bailey Petroleum News
Alaska suffers from an under-abundance of energy development and an over-abundance of government regulation, seemed the take-away message from a meeting between Congressman Don Young and the Anchorage Energy Task Force on April 19. And the availability of home-grown energy is the key to the future prosperity of both Alaska and the U.S. as a whole, Young said.
“I’m beginning to get more interest in developing the energy resources of this nation, including the State of Alaska,” Young said. “Gas is going to go to $5 a gallon … that’s going to impact the (economic) recovery.”
Alaska oil development would not necessarily lower oil prices but it would help smooth out the fuel price spikes that kill the economy, he said.
High energy costs Alaska became a state to be able to use its resources but has been impeded from doing so by the federal government, Young said. And, internally, the state is now facing a serious problem of escalating energy costs, he said. Commenting that he supports the development of a new hydropower plant on the Susitna River, Young said that cheap power in Alaska would enable the establishment of a manufacturing base in the state.
Nobody has done much to address the shortage of energy in Alaska, he said.
“We need that power or we can’t grow,” Young said. “Alaska should be the power center of the United States. We have the hydro. We have the gas. We have the fossil fuels.”
In the nation as a whole, stationary energy sources such as hydropower or nuclear energy should be the prime means of supporting the base electrical load, with fossil fuels primarily being used for transportation. Unfortunately, the Japanese earthquake has given rise to exaggerated views of the risks associated with U.S. nuclear plants, Young said.
You cannot be a free society without energy and the United States needs investment in activities, such as energy development, that will create value for society.
“We ought to be investing in what creates new wealth,” Young said. “We’ve got to create real dollars.”
Over-regulation Meantime, while government regulators have adopted an attitude of knowing what is best for everyone, manufacturers have moved their operations overseas to obtain returns on their investments more quickly than in the United States, Young said.
And a core problem in the United States, including Alaska, is the rampant growth of regulations that, while producing nothing, impede business, Young said, citing the two manuals of permit forms that he said are now needed to simply operate a commercial boat on the Yukon River.
“We need to eliminate regulations that just don’t make sense,” Young said.
Young particularly took aim at the Environmental Protection Agency, saying that EPA is effective at finding every reason that a project cannot be done but does not seek ways of supporting energy development.
“We’re bleeding with 72 percent of our fossil fuels now being imported,” Young said. “That’s like cutting your wrist here and asking for a transfusion over here. It doesn’t work. You’re eventually going to die.”
And the Alaska Department of Environmental Conservation supports EPA too much, rather than standing up for Alaska’s interests, he said.
EPA obstruction The action by the EPA and the Fish and Wildlife Service to block the construction of a bridge over the Colville River for access to National Petroleum Reserve-Alaska oil development was especially unjustified, although a Colville River bridge permit may now be in the offing, Young said. If a permit is not forthcoming Congress could use the federal budget process to put pressure on the agencies, he said.
When it comes to oil development in the coastal plain of the Arctic National Wildlife Refuge, the escalating price of gasoline may well drive a change in the political climate, with the prime resistance to development coming from the U.S. Senate, Young said.
On the other hand, the prospects of seeing construction of a North Slope gas line do not look good, he said. There is now too much natural gas available in the Lower 48, with a pipeline infrastructure already in-place.
The proposed gas bullet line from the North Slope to Southcentral Alaska looks expensive, but the question is how the abundance of North Slope gas could be used to benefit Alaskans, Young said.
“I’m thinking more about Alaska and how we can get power to houses without breaking more into the standard of living,” he said.
And from the perspective of encouraging more oil and gas development in the state, perhaps through tax changes, people need to understand that Alaska fossil fuel is relatively expensive.
“This state is not an attractive state for investment,” Young said.
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