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November 2017

Vol. 22, No. 48 Week of November 26, 2017

Grenn: Working group has pivotal role

Anchorage Independent says he is enjoying his freshman year on House Finance while getting a seat on HB 111-created working group

Steve Quinn

For Petroleum News

Jason Grenn insists his votes on oil and gas issues are that of an Independent, which is why you’ll never find an R or D next to his name. He’s one of two Independents in the Legislature (along with fellow House Finance Committee member Dan Ortiz), but Grenn represents a West Anchorage district with residents who work in the oil industry. This includes Kara Moriarty, executive director for the Alaska Oil and Gas Association. Recently named to a working group that examines the state’s oil and gas tax regime, Grenn sat down with Petroleum News to offer his views on recent developments with the AKLNG project and recent passage of HB 111.

Petroleum News: I’m accustomed to interviewing someone who is either a Republican or a Democrat, so how do you define Independent?

Grenn: Well, first of all, I was a Republican when I was 18. I was involved with the party, volunteering. For me as I grew older and had a family and looked at the world, seeing things not as black and white according to a platform of a party. If I disagreed with a platform, maybe I’d take 10 points and find myself disagreeing with one point, now maybe two and maybe three. Still there are a majority of things I agree with as a conservative, but for me to define it, you can look at the policies, you can look at things pragmatically, logically and you really don’t have to go back to what the party leaders voted on as far as yes or no on an issue. You can focus on what’s best for Alaska.

I think a lot of Alaskans feel the same way on how they view policies, how they view legislation, how they view everything from taxes to resource development to social issues. They want to look at it as themselves, not as a party. Truthfully for me, it’s been easy not to have a letter attached to my name and work all of these different t issues. It some ways, it allows me to connect with people a little easier. They don’t look at a party designation, they look at me as a representative.

Petroleum News: As someone who is Independent but represents the West Anchorage area, you represent a lot of oil patch people. They are your constituents, and even if they weren’t, they would still be in your office, but this time it’s a bit different, especially with oil tax bills. Talk about that.

Grenn: It makes for interesting times when you run into them in the parks when we bring our kids. They know they can bend my ear, which is something I welcome. When it comes to resource development and taxes, I feel, for the most part, we are on the same page. Something I campaigned on was setting up a plan for the state of Alaska to pay back the credits in a systematic way, not randomly as with the past few years.

I was a proponent if SB 21 and I thought that it needed time to see if it would be successful or not. I was against major changes when I came down here to Juneau, which is why I voted against HB 111 when it first came to the House. I voted against it in House Finance; I voted against it on the floor and I think in that regard, I do line up with a lot of my constituents. A lot of them are experts I their fields. It’s to my advantage.

I can go to a constituent but also someone who is so knowledgeable and say look you happen to be my constituent, school me up, give me your perspective. I need to hear more. It’s not surprising when I go door to door to find out someone works for X oil company or X mining company. The neighborhood has a lot of families who have been there a very long time. They represent to me a big part of what Alaska’s future is when it comes to resource development.

Petroleum News: Do you feel like your constituents, whether it’s someone who works on the Slope or someone with a higher profile like Kara Moriarty, do you feel more grounded on these issues?

Grenn: I really enjoy being able to hear from all the perspectives, from someone who is two weeks on, two weeks off to someone more at the executive level. It gives me a whole spectrum of who is affected by what we do as a state, not just in resource development but any industry. I get to hear from a vice president to someone who is on the pad doing real work. I got to go to Prudhoe Bay this summer for the first time and do a tour with Hilcorp and a few of the legislators. For me, it really opened my eyes to what the infrastructure looks like to what it means to live and work up there, then come back and live in my neighborhood. It gives you a look at how it affects your family. You want to volunteer with your kids in the neighborhood but you have to go to the Slope every other week. It shows how important people believe the impacts the oil companies have from environmental to financial. People take that job very seriously.

Petroleum News: So talk more about that trip to the oil patch. What was that like?

Grenn: I had never been up there before, so I had jumped at the opportunity. It was a full day. There were 10 or so legislators. We went up there with AOGA. It was amazing to see how much infrastructure had been built up over the last 30 to 40 years, then seeing the difference on how they used to do things, how they are doing things and what the future may look like.

The biggest thing for me was the investment. If someone is investing that level of infrastructure and people with a long-term approach, it made it clear for me that we need to set up a structure that brings investment to Alaska and keeps investment here. These are billions of dollars we are taking about. When they make an investment, it’s a serious move. It’s a matter of how do we encourage that, how do we keep investment here. It opened my eyes to how vast and expensive it is to do business there.

Petroleum News: Going back to HB 111, what are your thoughts on the final product that emerged?

Grenn: You know I voted yes on it (the final product). I thought it was at a place where I heard from oil companies and people in the industry who said we understand we need to get out of the cash credit game. This is a good step. It got to a place where I was comfortable voting yes for it, and being able to defend my stance. Like I said I do believe in good policy that keep investment here and will bring new investment here. I think HB 111 was something the state needed to do but also was a compromise from where it started. All of my conversations with state officials and industry was this was a step in the right direction for most people.

Petroleum News: One part of HB 111 as a working group to further look into the state’s competitiveness. You’re the only one from House Finance on the working group. The rest are from House Resources. What do you like about having a seat on that group?

Grenn: Being on Finance is both a blessing and a curse. I missed out on being on Resources or the Energy committees or Labor and Commerce. It’s a great opportunity. As a freshman to be on Finance, I got to learn so much in a very quick way regarding the budget, but I missed out on other things the state is going through. So being on the working group for me, it allows me to set aside a good amount of time with experts on resources, with a group of like-minded individuals wanting to do a deep dive in our structure and our policies.

I’m really looking forward to that time. I may not have been able to carve out and become an expert on what’s going on with oil and gas taxes. My big thing is how do we keep investment here and how do we bring it here in the future. Those are the questions I’ll be asking and bringing it up in the working group.

There are people from the working group who have been immersed in this issue for a long time: Sen. (Cathy) Giessel and Sen. (Peter) Micciche. It allows me to open some doors to pick their brain or learn from them. From there we can put together some recommendations and show them Alaska is open for business. I can go back to my constituents who are experts in this field and I can tell them I’m getting schooled up and am part of a group that is working toward Alaska’s best interest.

Petroleum News: The term working group can sometimes be viewed as just another layer of bureaucracy where nothing really gets done other than maybe a report that eventually gathers dust. Do you have a sense that won’t be the case, that there will be some substance coming from the group?

Grenn: I think when you look at who is on the committee, I don’t think anyone on there wants it to be a waste of time. You have people who are going to take it very seriously. I think they will demand substance will come out of it. That’s how I view it anyway. I hope that in six months it won’t be a case where we have met for coffee just one time and we haven’t done anything. I hope there is some meat to it all. Like I said, given who is on the committee, I wouldn’t expect anything less. Sure the term working group, it’s not a committee and there is nothing official, but this could be something that works in partnership with the oil and gas competitive review board as a complement to them. I’m looking forward to what happens here.

Petroleum News: As you guys were holding your first meeting, more of an introduction, the U.S. Senate was holding hearings on ANWR and prospective development. What are your thoughts on that?

Grenn: Again, as a lifelong Alaskan who understands the importance of oil for our state, I’ve always been a fan of opening ANWR. I remember in 2002 when the elections were happening and some of the stars that were aligning after that election. I was 20 at the time about to graduate from college in a few years and getting excited for the future of Alaska and opening up ANWR and that it was a possibility. Here we are 15 years later and ANWR is obviously not open, but another exciting opportunity might happen. I’m always an optimist. I try to see the best of the news that’s coming out. Maybe the stars are aligning. It would be great for Alaskans. I think it would be great for the United States.

Our track record for being responsible with development, as a state, for the most part is solid and I think we can do it in a way that shows the world how we can do something like this in a responsible manner but also in a way that maximizes what’s underneath there. I’m excited. All of these parts and pieces are coming together on something that’s really cool.

Petroleum News: Have you heard from the industry on whether there is any interest in ANWR?

Grenn: No, I think locally, there is more focus on what’s going on with the tax structure and our future. I anticipate next session, there might be ways for us to help. If there are, I’m definitely on board to make it known that Alaskans are ready for this and we as a state can do whatever we can to help.

Petroleum News: Let’s move on to AKLNG. What are your thoughts on Gov. Walker and AGDC President Keith Meyer delivering news of a development deal with heavy-hitting Chinese entities and in front of Presidents Trump and Xi?

Grenn: Like I’ve mentioned, this is a project where every 10 or 15 years great news happens, then it dies down again, great news happens, then it dies down again. That’s where we are right now and that’s some great news has happened. You can’t deny the news we’ve heard is a positive step. You can’t deny there is something good there. People are skeptical. They wanted something that is binding and or they wanted to see something that was a little more formal, but I think this at least signifies to us as politicians, it signifies to investors and it signifies to the rest of the world that as of 2017, we are serious about getting our gas reserves out of the ground.

The biggest part to me that signified that this is a serious step forward are the players involved from China. You don’t get corporations and investors involved like that if there isn’t something to be gained shortly in the future. You had two of the most powerful people in the world at the signing. That also signifies something that we’ve never seen before in a project like this. I’m cautiously optimistic and am looking forward to details as they emerge.

I take it at face value when (AGDC President Keith) Meyer says we have an engagement after a long courtship. You want all engagements to end in marriage. Some don’t, some do. I think all we can do now is find ways to help develop that relationship and support this project. This is a complete game-changer for the state of Alaska if it comes to fruition.

Petroleum News: So what would you like to hear from AGDC on what’s next for the project? What would give you confidence if things start to move forward?

Grenn: I think I’d like to hear from someone other than them with the good news, not to be harsh, but we’ve heard good news from them before. Not to be harsh. That is their job to show us all the great things that they are doing. I’d like to see other investors or buyers, perhaps from China, to say this is something to be taken seriously. Until we get through the FERC issues, we tread lightly. Next summer, are we going to have any buyers, that’s the thing I’m looking forward to. That might not happen for another 12 months. In terms of things that happen quickly, they need to show us the progress that isn’t just press releases, I guess.

Petroleum News: You’ve been told that AGDC doesn’t plan on coming back to you for money. What would it tell you if AGDC did seek more money?

Grenn: My belief is they have enough money to get though everything they need through the end of next year and into 2019. I’m not sure what could change in that regard. If they came back to us for more money, they would have to have some actual agreements - binding agreements - in place, as serious as this gets. Anything less than that, I think I would be very, very hesitant to allocate more funds through 2019.






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