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Vol. 14, No. 41 Week of October 11, 2009
Providing coverage of Alaska and northern Canada's oil and gas industry

Stevens: State needs ‘incentive climate’

Alaska must unite to tout its natural resource potential to world industry and Washington, ex-senator tells Alliance crowd

Wesley Loy

For Petroleum News

Citing the spirit and drive of statehood proponents 50 years ago, former U.S. Sen. Ted Stevens said Alaskans today must unite in a bipartisan effort to “encourage global industry to invest in our state.”

It means moving beyond infighting over such issues as which route a natural gas pipeline should take and instead working to “create an incentive climate” of the sort that’s yielding dream projects in other states and nations, Stevens said.

He made the remarks in an Oct. 1 speech at the annual meeting of the Alaska Support Industry Alliance.

It was the first major public address for Republican Stevens since he lost his bid for re-election last November, shortly after a Washington, D.C., jury convicted him of failing to disclose gifts on his Senate financial disclosure forms. A federal judge later set aside the conviction after the Justice Department acknowledged prosecutors withheld evidence that could have helped the defense.

Stevens, 85, never touched on the subject of his defeat or legal troubles during his 21-minute speech at the Sheraton hotel in downtown Anchorage.

The big crowd of drillers, truckers, suppliers, bankers and others who support Alaska’s oil and gas industry greeted Stevens with a standing ovation.

His speech largely reflected his 40-year tenure in the Senate, where he championed resource development as Alaska’s economic lifeblood and tilted with what he calls extreme environmentalists keen to block such activities as drilling in the Arctic National Wildlife Refuge.

Sounding nearly as intense as when he was a power player in Congress, Stevens noted Alaska’s declining oil production and said residents face an imperative to “start something new” and halt the “constant delays” that threaten the state’s future.

“You face challenges much more complex than the fight for statehood,” he told his audience.

Internal struggles

Resource development, which helped make statehood possible, “has been in many ways stagnant now for almost a decade,” Stevens said.

“We’re now paying the price,” he said, with Cook Inlet running short of natural gas to fuel the state’s population centers and oil production from the inlet and the North Slope at less than half the 2 million barrels per day seen two decades ago.

“It’s just a matter of time, without new discoveries, that decline threatens the continued operation of the trans-Alaska pipeline,” Stevens said. “And our gas line … which should have started 10 years ago is stuck in the slow lane.”

To some degree, Alaskans themselves are to blame, he said.

On the gas pipeline, “We’ve argued too much about the route and still not reached a consensus.”

He continued: “Seeking increased income from declining production, inconsistent government policies and litigation, continue to hinder new industry including oil and gas and mining.”

Further infighting could hurt the state in the long run, Stevens suggested.

“Much has been said about the need for Alaskans to get our fair share of oil and gas revenues. All of us agree with that. The question is, what’s fair? And for whom? For those of us here now or for our grandchildren? Income from the oil and gas industry has provided state revenue, jobs, the Permanent Fund, lower personal taxes and the Permanent Fund dividend.”

Creating an ‘incentive climate’

Alaskans must come together in a bipartisan way to focus themselves, and the world, on the great development opportunities in the state, Stevens said.

“Many of the best projects in the world for energy development are right here,” he said. “People are inclined to forget, two-thirds of the outer continental shelf is off our shores. Enormous oil and gas potential is there. There’s vast potential in hydrates, and half of the coal in the United States is in our state. The Alaska gas pipeline, the National Petroleum Reserve, ANWR, and coal-to-gas or coal-to-liquid are tremendous opportunities for the future of this country.

“Those are our projects. Alaskans need to promote a new energy paradigm to create an incentive climate in this state for investment in our state and to renew a common effort to convince Americans of the national necessity for resource development here in Alaska.”

Stevens mentioned some big projects elsewhere that he said are the result of industry incentives.

In South Dakota, a series of legislative initiatives this decade has prodded that state’s oil and gas production to record highs and encouraged development of a coal-to-liquids plant, he said.

In Australia, Stevens said, government incentives to the oil and gas industry are helping bring about the giant Gorgon liquefied natural gas project, which will generate more than 6,000 jobs and $300 billion in LNG exports.

“Examples of new development that may compete with our projects are rampant. BP has its new discovery in the Gulf of Mexico, Brazil with enormous energy finds off the coast,” Stevens said.

“We need new incentives now for industry to develop our resource potential,” he said.

Singing Alaska’s song

“There is a dire need for coordinated, planned action to assure that global enterprises recognize Alaska’s resource potential,” Stevens said. “This entails ensuring confidence in our state’s willingness to maintain a favorable fiscal environment for industry while protecting the natural environment and lifestyle that we all enjoy.

“Nationally, a coordinated campaign is needed to convince Americans of the need to utilize our Alaska resources.”

He noted the nearly $1 trillion economic stimulus package Congress approved for infrastructure and other projects, saying it represents a great opportunity for a unified Alaska.

“A bipartisan coalition is needed now to assure that the administration is aware of the opportunities here in Alaska, so we may leverage part of those resources to build our state’s future. We succeeded as a bipartisan team throughout our history, and I think that approach is more critical today than ever before.”

Stevens received another standing ovation at the end of this speech.

And, showing perhaps he has relaxed a bit from his Senate days, Stevens stood up later in the evening to sing a little of “King of the Road” as part of the Alliance’s wacky amateur talent show.

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