Sullivan: Obama treads unfriendly waters

Entering third year, Sullivan balances frustration over Obama decisions with optimism over state’s prospects, citing recent lease sale

STEVE QUINN

For Petroleum News

U.S. Sen. Dan Sullivan is signing his name to a lot of letters addressed to President Obama. None of them of good cheer, either. He, along with his Alaska colleagues, wants Obama to cease with the executive orders that he believes are shutting down Alaska’s prospects for economic prosperity. Each week, another order, the more frustrated he gets. Sullivan shared his thoughts on the outgoing administration and what he believes a new administration means to Alaska. He spoke to Petroleum News before Obama ordered the closure of nearly 125 million acres in the Beaufort and Chukchi seas on Dec. 20.

Petroleum News: Let’s start with your thoughts on what you think changes in next year’s Congress and the new administration could mean for Alaska?

Sullivan: The way I like to talk about that right now at the end of one administration and the beginning of a new administration is in the terms of personnel and in terms of policy. As you know they both are inter-related. Look, I think the cabinet that the president-elect is putting together in terms of strong economic growth as a key focus, responsible resource development, our own energy in oil and gas on federal lands, less regulation, more access to those federal lands, I would say the Trump administration is putting together one of the strongest cabinets we’ve seen in decades.

There is also an irony here. We kept the Senate and I was certainly someone who was campaigning all over the country to keep my Republican colleagues in control and keep Sen. Murkowski in her chairmanship for Energy and Natural Resources. One of the ironies is when we weren’t in control, and Harry Reid was the majority leader, you may remember he undertook what was then called the nuclear option and he changed the rules in the Senate even though he didn’t have 67 votes to do it. That’s the requirement to changes the rules; he just ignored it.

He mandated that cabinet members and federal judges no longer needed the 60-vote threshold. The irony now is because of Harry Reid’s decision, which upset a lot of people, we only need 51 senators to approve these strong pro-resource development cabinet picks. If we had to have 60 votes, it would be a lot tougher to get Attorney General Pruitt from Oklahoma or Texas Governor Rick Perry for the secretary of Energy.

In terms of policies and personnel, I think we are looking at a very opportunistic time. The bottom line is what I’ve been focusing on and trying to get to our federal government, whether it was my time as attorney general or DNR commissioner or now as U.S. senator, is a federal government that wants to work with us, that wants to help us create opportunities, that wants to maintain a strong healthy environment, but also get projects online.

We haven’t had that in eight years with President Obama. It’s actually been exactly the opposite. Now it looks like we are going to have that opportunity to have a federal government who is a partner in economic opportunity not an obstacle. I certainly hope so. I think one indication of that - at least a sense that it is going to change - was the lease sale that Alaska had, which was a really impressive lease sale.

As a former DNR commissioner, I worked hard to get companies to bid. I want to commend the current commissioner (Andy Mack) and his team for what is a really strong lease sale. I think that is indicative of the opportunity people feel is returning to Alaska.

Petroleum News: Let’s talk about opportunity gained or lost. Last month Obama removed the Beaufort and Chukchi seas from the five-year lease plan. Can you speak to that please?

Sullivan: One of the things I tried to do my first few years in the Senate was bring back a more aggressive oversight role in terms of what these federal agencies and the agency heads were doing with regard to Alaska and whether they were abiding by the law. Every agency action and every agency rule has to be based in a statute or the U.S. Constitution. Literally every hearing I had a senior Obama official in front of me, I asked them “where do you get the authority to do what you’re doing?” Certain agencies like the EPA, I flat out stated that Gina McCarthy, I thought she was running a rogue agency who didn’t care about the rule of law or what the law required. I said the agency, meaning her, was to blame.

So whether it was the EPA, the Corps (of Engineers), or Fish and Wildlife Service, we’ve tried to have rigorous oversight but it’s not always easy because these guys can just say, well senator we are abiding by the law and just doing what they think was their goal which in my view was always to lock up Alaska, to delay, delay, delay until the companies essentially cried uncle. I’ll tell you this, one of my biggest frustrations with Sally Jewell - several times - and to be honest at the end of the day she just ignored us: that’s the importance of consultation with the state of Alaska, the elected representatives of that state, whether it be Sen. Murkowski and myself and Don Young, or Gov. Walker, or other interested parties. That just never happened. All these recent decision, no one reached out, no one gave us a heads up.

The Center for Biological Diversity and other extreme environmental groups had their press releases literally ready to go right when the announcements came, so obviously they are consulting with those groups.

I can’t overstate how frustrating that’s been and whether you or a Democrat or Republican, how insulting that is to the state of Alaska that on these major decisions, we got zero consultation, the people who represent the people of the state. So I’m certainly hopeful that is going to change.

We have been, for weeks, drawing up a list of all these different orders, whether they are executive orders, whether they are full-blown regulations, whether it’s things like the NPR-A order, and use whatever means we have with a new administration and a new Congress. One is the Congressional Review Act where you can reverse rules that have been promulgated by the executive branch within 60 legislative calendar days. So we are going to look at every single element to reverse in what in my view is unlawful orders. Certainly the process didn’t abide by the law because they never consulted with the state of Alaska. So we are going to be very focused on that - and we already are.

Petroleum News: There was a policy analyst who believes the Obama administration is simply trying to overload the next Congress with executive orders making it difficult to address all of these measures recently taken. Are you seeing it that way?

Sullivan: Absolutely. The president’s regard for the rule of law and the Constitution has never been very substantial and it’s sunken to new lows. I think one of the big frustrations of Alaskans and the American people is the economy hasn’t grown.

The last 10 years if you look at the national numbers, there has been anemic economic growth. A lot of Americans thought the federal government not only didn’t care, but was almost the cause of that lack of growth and opportunity, and the federal government has grown arrogant. Let me give you an example. I recently had a meeting with the new head of the Fish and Wildlife Service here in Alaska. The whole point of the meeting was telling him how I was closely following the permitting process for Donlin Creek mine, which is an important resource development project, has strong stakeholder support from a vast array of Alaskans, could be strategic in helping our state, which is struggling economically with jobs, with energy from Cook Inlet, and that could increase demand for Cook Inlet. Then there are possibilities of increasing energy beyond Donlin to places like Bethel. I mean this is a real strategic project.

Then I asked him, as his agency was not the lead agency - it was a cooperating agency - why they submitted over 700 pages of comments - 700; from one agency. I said, look, I’ve been around the block here a little bit. I’ve watched the Obama administration as an AG, as a resources commissioner and as a U.S. senator and here is exactly what I know you’re up to. You are trying to kill this project. That’s not your role. You don’t have the legal authority to do it. That’s not your role as a cooperating agency and it’s my job as a U.S. senator to have extreme oversight to what you’re doing to these opportunities in my state and I’m going to continue to do that.

Now we will have the ability to change the direction of those kinds of agencies that were all about shutting down resource development. People like Sally Jewell made it so Shell took seven years and $7 billion to get permission to drill one exploration well in 100 feet of water. I’m certainly hopeful that we are going to be able to put new leadership throughout all of these agencies and bureaucracies to listen to Alaskans, to listen to Americans, to not take their orders from extreme environmental groups, and start enabling us to develop our resources in a responsible way and put Alaskans and Americans back to work with good high-paying jobs.

So if you’re sensing frustration in my voice it’s because I’m deeply frustrated that this administration, which has done so much damage to Alaska, seems hell bent in doing as much more as they can in the next month, most of which in my view is outside the law.

Petroleum News: Are you worried that there is more to come?

Sullivan: We are looking at all possibilities of what more might come. I certainly hope, and I’ve made this clear as I’ve tried to reach out to these guys and say: “You’ve done enough damage. You’ve done enough damage.” I was one of a number of senators who wrote the president recently and it said Mr. President the American people spoke in November. Please stop all new regulations. Your approach to the economy was rejected by the American people. They don’t want more over regulation of our economy and stifling job opportunities. They want you to stop. Please respect that. A number of us in the Senate have been making that case but again, I think their interest have never been aligned with us in terms of jobs and economic growth. I am concerned there is more to come. We are already drawing up ways to thwart it and if possible reverse it.

Petroleum News: Getting back to the Arctic, were you getting a sense from the industry that they were still interested in the Beaufort and the Chukchi?

Sullivan: I think there is clearly still interest. Just look at the recent lease sale. I know that was just state waters in some of the Beaufort areas. I’m very forward looking and very optimistic for a whole host of reasons, but one of the most disingenuous things Sally Jewell did during her tenure was that department clearly slow rolled the Arctic development. As I said it took seven years and $7 billion for Shell to get permission to drill one exploration well. Then Shell decided to leave Alaska, hopefully for the time being.

I talked to Shell’s senior officials: It was primarily because of the regulatory system that was so dysfunctional by the federal government. So Shell leaves because of our dysfunctional federal permitting system, then the secretary of the Interior indicates Shell’s leaving indicates there is no interest from industry. I mean if that is not disingenuous or even devious, I don’t know what is. My view is there is plenty of resources - enormous resources - on the North Slope both onshore and offshore. It’s not if and when you find oil. Just look at Caelus, Armstrong and Conoco. Our problems have been above ground not below ground.

We’re just talking about conventional. We haven’t even talked about the enormous potential on the North Slope in terms of oil and gas. So I think it’s an incredibly exciting time. We are going to work really hard with regard to trying to roll back regulations, then work with a responsible resource development community in the state and get projects going again. If companies are having a challenging time with federal agencies, they should reach out to me and my office. They know I’ll get personally involved to make sure these agencies are abiding by the law, abiding by the rules, abiding by timelines and helping Alaskans seize opportunities, not continuing to delay projects, which has been their record for the last several years.

Petroleum News: You’ve mentioned regulatory reform and that’s been an issue with you for years. When you first got into office, you wanted to establish a law that would take one regulation off the books for every one that was added. That’s still seems to be a priority, particularly of late with a Wall Street Journal Op-Ed. Is that correct?

Sullivan: If you look at that Op-Ed, I talk about the Red Tape Act, the one-in, one-out rule that would essentially cap regulations. That would dramatically speed up time if it’s in the law. I got a floor vote; we didn’t get it passed, but the permitting reform issues have been an obsession of mine when I was DNR commissioner. We had this backlog of permits. It’s an even bigger challenge at the federal level.

My team is working on a bill called the Rebuild America Now Act. It focuses mostly on helping to expedite the building of infrastructure whether it’s roads, or bridges, or pipelines, or ports, or harbors or rail lines. Right now, nationally that system is broken. There has been some talk that the incoming Trump administration wants to take on a big infrastructure package. Now there has been a lot of debate on how we would pay for that. What I tried to do in that Wall Street Journal Op-Ed is say we have to be able to execute infrastructure in a way where we dramatically reform our dysfunctional permitting system or you can spend $1 trillion and it’s not going to have an impact because the money will get tied up in red tape and litigation.

Just like the way President Obama’s 2009 stimulus package: It was $800 billion and it had a very small impact on the economy, blew out the balance sheet of our nation and so much of that money never got deployed. We all know the stories and I’ve highlighted a few I’ve seen in my career. It’s not just Shell taking seven years; Kensington Mine, if you include all the litigation, taking almost 20 years to get permits.

We had a hearing at the Commerce Committee where the head of the Seattle Airport was talking about building a new runway at Sea-Tac. I asked how long it took to build the runway, he said four years. I asked how long it took to get the permits. I had no idea what the answer was. He said 15 years. I honestly think this is an area where there could be bi-partisan report. Whether you are Democrat or Republican, you’ve got to know if it takes six years to permit a bridge in America, something is wrong.

Petroleum News: The words fast-track can carry negative connotation or negative interpretation. You used those words in your Op-Ed. How do you see it?

Sullivan: A negative connotation compared to what? Sometimes people hear the word fast-track, they think you’re cutting corners. That’s just not the case in Alaska. We have the highest standards on the environment of any place in the world. There is more oil dripped in a parking lot of Walmart in LA by far than any place on the North Slope. If it takes seven years to get permission to drill one exploration well in 100 feet of water, the system is broken. I think you can do it responsibly in terms of permitting but also expeditiously. Our federal permitting system doesn’t do that.

It’s not just policy; it’s personnel. What I’m hopeful for and in my role as a senator in terms of the confirmation process with members of the incoming administration, I’m going to be vigorous to make sure the people who are put in the federal government are officials who want to help us develop, build things and create things, not want to shut us down. Unfortunately, that’s clearly been the goal of most of the administration, and I’m excited for them to leave the scene.

Petroleum News: Let’s take a quick look at a few nominees, starting with Rick Perry. He once wanted to abolish the Department of Energy, now he’s in line to head the agency.

Sullivan: I’ve never met Gov. Perry. The Department of Energy has spent a lot of its time, money and effort on the nuclear efforts of the country.

Given his background, who was pro resource development, pro natural resource development, I think it’s a nominee who looks positive. I plan on raising important Alaska-related issues with the nominees for these cabinet positions.

Petroleum News: How about Scott Pruitt for the EPA. Here is someone who sued the EPA; now he wants to lead it.

Sullivan: I think that was an inspired choice. I met him a number of times when he’s testified. As a former attorney general who has also sued the EPA, I think one of the many things that needs to happen at the EPA, which is out of control, is to bring that agency back under a leader who understands the rule of law, statutory authority and the constitution.

Petroleum News: OK, last one: Ryan Zinke for Interior.

Sullivan: I’ve met Congressman Zinke before. He’s got a very impressive career as a Navy SEAL. I was pleased to see President-elect Trump choosing someone from a Western state who has also been a strong advocate for energy independence. But I look forward to speaking with him more about some of Alaska’s unique land issues, and having a better understanding of why and to what degree he has stated he’s against the transfer of certain federal lands to state and private hands. That is concerning to me and I want to have a deeper discussion with him to understand the contours of those beliefs.