The Weekly Top 3
The Weekly Top 3
The Weekly Top 3 (8.3.2026)
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Welcome to The Weekly Top 3 - our look at the top 3 things on our mind here at Alaskans for Sustainable Budgets - for the week of August 3, 2026.
This week, our top 3 issues are these: 1) we discuss some potentially troublesome developments with ANS oil prices (1:59), 2) we review some of the numbers behind the concerns about the reliability of Southcentral gas deliveries this coming winter (19:52), and 3) we explain why a recent op-ed from Adam Crum shows that some Republicans are part of Alaska's ongoing budget problems, not the solution (39:41).
The Weekly Top 3 is a regular weekly segment on The Michael Dukes Show. The Show broadcasts on Facebook and YouTubeLive as well as via streaming audio from the Show’s website weekdays from 6–8am. We join Michael weekly in the first hour of Tuesday’s show, from 6:25–7am, for a discussion between the two of us about our three issues.
Welcome And This Week’s Top Three
SPEAKER_01This is Brad Keith Lee, managing director of Alaskans vs Sustainable Budgets. Welcome to the weekly top three, the top three things on our mind here at Alaskans vs. Sustainable Budgets for the week of August 3rd, 2026. The weekly top three is a regular segment on the Michael Luke Show. The show broadcasts on both Facebook Live and YouTube Live, as well as via streaming audio from the show's website, weekdays from 6 to 8 a.m. I join Michael weekly in the first hour of Tuesday show from 6.10 to 7 a.m. for a discussion between the two of us about our three issues. We post the podcast of our discussion following the show on the Alaskans for Sustainable Budgets Facebook, YouTube, SoundCloud, Spotify, and Substack pages, also on the Alaskans for Sustainable Budgets website, as well as the project's page on national blog site, medium.com. You can find past episodes of the weekly top three also at the same locations. Keep in mind that in addition to these podcasts, during the week, you can also follow and participate in the discussion with us of these and other issues affecting Alaska's fiscal and economic condition by following us on the Alaskans for Sustainable Budgets Facebook page and through our posts on Twitter. This week, our top three issues are these. First, we discussed some potentially troublesome developments with AS oil prices. Second, we review some of the numbers behind the concerns about the reliability of South Central gas deliveries this coming winter. And third, we explained why our recent op-ed from Adam Crumb demonstrates that some Republicans are part of Alaska's ongoing budget problems, not the solution. And now let's join Michael.
SPEAKER_00Brad,
How ANS Tracks Brent And WTI
SPEAKER_00uh, we're going to start off this morning. And boy, I'm kind of looking forward to where we're going with this because uh there's some really interesting stuff out there. Let's talk first about the potentially troublesome developments with Alaska North Slope oil pricing. We've we've heard, you know, things going up and down. The war's on, the war's off, the straits are open, the streets are closed, gas is coming, gas is not. What I mean, what is up with AS crude pricing? Let's uh let's get things started here.
SPEAKER_01Well, Michael, on both uh on both a weekly basis, uh a running average of four weeks, and on a monthly basis, a running average of 12 months. We keep track of ANS pricing versus Brent pricing versus WTI pricing. Uh Brent is the waterborne price, the world waterborne price. WTI is uh the essentially the the internal US price uh production from the mid from the Midwest, Southwest. Um, and then ANS, of course, is Alaska North Slope. And we keep track of the relationship between those three. And there's something really interesting going on that is gonna have if it continues, it's gonna have some implications for the FY27 budget and and maybe beyond if it if it continues. I've got a chart that that that is gonna be an eye test this morning. I don't intend it as an eye test. No, but please don't try to read this chart uh on on Facebook uh or YouTube or whatever you're watching it on. But but what this chart shows is the the the heavy uh maroon line is at the top is the ANS price, and then then I've got the the Brent and the WTS and the WTI line of the WTI uh prices in in lines. What I really what's what's what's going on that's interesting to me is in the bars. The bars represent the differential between ANS and Brent, um, and represent, you know, if ANS is higher, the bars are are positive. If ANS is lower than Brent, the bars are lower. And and the reason I keep track of this is our budgets, the Alaska budgets, are done on Brent. So when you see a projection uh uh for the FY27 budget of X price, that's really the projection of Brent. And the reason we use Brent is because there's not that big a difference historically between Brent and ANS. Sometimes ANS is higher, sometimes it's slower, but the differentials, if you look at the left side of the chart, the beginning of that chart, you can see the differentials aren't that big. Uh, there you go. Uh uh for the for the bulk of the year, the differentials between Brent and ANS have not been that big. ANS has been up a little, but not much. And so when you look at the when you look at the the budget, you can see, all right, we're pretty, we're we're keeping track with Brent. Brent is different than than what was projected in the budget, but at least we're keeping track with Brent. What's happening, what's happened with the with the war in Iran
Hormuz Shock And The ANS Premium
SPEAKER_01is is as you would expect initially, um, ANS spiked. The the ANS price is really the U.S. West Coast price, the U.S. West Coast spot price. And the U.S. West Coast is really the tail on the dog of Asia, uh, the Asian price, the Asian Pacific price. And so when Hormuz started, what happened, when the closing of the Strait of Hormuz started, uh all of the supplies that that would go from the Strait of Hormuz to Asia, and that's the bulk of them, uh, got closed in, got cut off. And so ANS became developed a premium because in the Asian markets they didn't have access to the the Hormuz volumes. They needed additional volumes, and so they started bidding up ANS uh to uh uh to supply uh to supply the Asian markets. In fact, we had three tankers, all Exxon tankers, interestingly enough, but we had three tankers of ANS that went to uh uh Korean and one Japanese market in um uh in in the May-June time frame. And so that was sort of expected. And what that told you was that that during May and June, when those when those prices were going up, uh, that we were ending up with additional uh uh dollars for ANS, additional uh revenue to the state for ANS because ANS was selling at a premium to to Brent. What's happened, what's happened since is what's really fascinating to me. And you look at you look at Hormuz being closed over that over the period of time and ANS being being uh uh uh strong, ANS being at a premium to Brent. And then all of a sudden in July, ANS drops. And it doesn't drop back into its normal relationship to Brent, it drops below Brent. Indeed, it even drops below WTI, which is West Texas Intermediate, which is something that that you rarely, very rarely see, and usually see it on a day or two or three um as opposed to a sustained period. But what we've seen is ANS dropped uh significantly. Um on one day it dropped like $11 in its relationship to well, dropped $11 from where it was to where it went, and it dropped from being a premium to Brent all of a sudden to being a uh uh a discount to Brent, and it's stuck at that uh through July. Now, a lot of things are going on in the Asian market. Uh Saudi lowered its significantly lowered its official selling price uh for the volumes it was able to get out and get into Asia.
The Sudden Slide To A Discount
SPEAKER_01It wanted to hold on to uh Asian market share, and so it dropped its price. Uh China still hasn't picked up buying, uh, and so there's been a uh lagging in demand because of what the closure of the Strait of Hormuz, a bunch of additional supplies got pulled into the Asian market, not just AS, but a bunch of additional supplies got pulled into the ANS market, and so that increased supply in the Asian market. And then you've had Canadian supplies increase. Uh there's been an expansion of the TMX pipeline, the Trans Mountain pipeline that goes from Alberta over to uh uh uh Vancouver, Surrey, I think is where the terminal says. And and so you've seen additional Canadian loadings into the Asian markets. Um there's a bunch of additional supply going into the Asian markets. But but you wouldn't normally think, I wouldn't normally think that you would see ANS drop to a discount to Brent. You would see it sort of restore to its to its balance with Brent. The the reason this has some significance to the budget is again, the budget's done on Brent. So when we think about when people normally think about, well, how are we doing relative to the budget? You're thinking about how how Brent is doing relative, how how Brent actuals are doing relative to the Brent futures that were in, that were used in the calculation of the in the projections that were used in the calculation of the budget. With ANS selling at a Brent, I mean when ANS was selling above Brent, we were getting a premium, we were getting additional revenues in, we were the the we were looking good compared to the budget because we were we were selling it above the Brent, and Brent was selling it above the projections used in the budget. But now that we're below now that we're below Brent and sustained below Brent, uh that's really that's you're gonna have to re- at least I'm gonna have to re rethink how I think about the budget because we're not pulling in as much revenues for AS as we would typically do uh compared to compared to Brent. We're having a discount, deep discount for ANS compared to Brent. Those those bars out to the far right that look like we're recovering, look like we're going above Brent, uh, that's not really what's going on there. Those are averages. That's a 12-month average, a six-month average, a three-month average, and a one-month average for for uh June. Um, and so those are just averages that are showing the impact of the period during which we were Brent was high. We are actually continuing the discount uh on Brent um uh through yesterday. I mean, we were still the the price for AS yesterday was lower than Brent and lower than WTI. So it's it's um it's an interesting condition that we're finding on AS. Um, usually not what you see for AS, but it's sustained over a month now. And you know, some people are suggesting that it's gonna stay that way longer term because with the disruption of Hormuz and all of the changes that went on in the Asian market to deal with the disruption of Hormuz, all of a sudden the Asian market has sucked in these additional supplies, but that's creating a surplus uh in the Asian market. And as I say, U.S. West Coast, the spot price on the U.S. West Coast is sort of the tail on the dog of the Asian market. So we're seeing the impact of that uh flow through uh flow through to AS.
SPEAKER_00Now, July, of course, when they when it first dipped below here on the chart, um, that's the first month of the new fiscal year that they've planned this whole budget on. And so we're already uh upside down uh in that regard. Um, what do you think that this portends for the rest of the year? I mean, especially if it remains underneath not only Brent but WTI. I mean, what does that do for us with the budget that they have projected moving forward? What does that do for us then?
SPEAKER_01Well, we're currently running, we're currently running slightly over budget because Brent is still elevated. The current price for Brent is still elevated.
What The ANS Discount Does To Budgets
SPEAKER_01Well, the current price for AS is still elevated over what the projected price for Brent was. But we're we're heading down fast. And it's gonna be what what I'm really gonna be interested in is what happens once we click over to August. We'll click into a new Saudi official sales price for for Asia. We'll click into new contracts coming on or new deliveries coming on from various sources. And um, and if this continues into August, then I'm gonna start you know paying more attention to those who are saying that we've seen us that we've seen a sea change in the way that uh in the way that uh Asian pricing works. China also is a factor in here. China uh uh famously um uh uh held out uh during the early days of Hormuz. If there, if they had if China had continued its normal demand uh in the early days of the Hormuz shutdown, the price would have spiked to 150, 120, $150 because the demand would have been would have been substantial. But what China did was reduce was was turn on its storage facilities, reduce its demand, uh, not spike prices in that way, and reduced Asian demand in a way that that softened the price impact of Pore Moose on Asia. Um so it's gonna it's gonna be interesting, and China has still been fairly fairly low in terms of the purchases it's making of crude. So it's gonna be interesting once we get into August and September, uh uh what happens what happens to this price differential. But if it continues in this direction, we will soon be underwater. Uh even though Brent, even though the Brent price would tell you we're above water compared to budget, we're gonna be underwater because the ANS price is going, is is operating at this at a heavy discount to uh to Brent. Um so it's gonna be interesting as we get into the to the first quarter of the new year and uh and see what's going on with uh the ANS Brent differential and uh and and then follow flow that through to what's going on with the budget.
SPEAKER_00And if the streets and and if their streets remain closed and this Iranian thing drags out for another six, eight months, I mean, what are the futures saying on that? I mean, what is this what does this say for us?
SPEAKER_01Well, right now the futures market is saying that the streets aren't gonna remain closed. I mean, the futures market, the futures market is bouncing up and down depending upon what Trump says on any given day, basically. I mean, if he says, you know, we're gonna have we're gonna you know have World War II, a World War II bombing rate, a Dresden bombing rate on Iran, uh, then the futures market goes up. When he then announces, no, we're not gonna do that, that he's been talked out of it by the by the sheikhs in the Middle East, then the futures prices goes goes down. So that's what's really controlling the controlling the futures price. And right now, the futures price is trending down. We're sub-70, I think, um, over the five-year period, certainly, but we're we're getting close to the to the $70 range. Um, and and the and the projection for the budget is $75. So we're getting close to the $70 range uh on Brent. And ANS is below even Brent. So it's um it's it's look it we're trending down, but you know, things things have changed. Um it's just it's fascinating what's going on with the ANS Brent differential right now, and whether that is that is permanent enough or will will continue long enough to really do us significant damage on our budget.
SPEAKER_00Brian said, so Canadians are undercutting us. This aggression will not stand, man. They'll do it politely, though. They'll be like, sorry, sorry, sorry, but we've got to undercut, sorry.
SPEAKER_01You know, I mean those Canadians, they're cutthroat. Well, the Canadians had a the Canadians had a real problem. I mean, they had they they have most of their production is in Alberta. Um, and and the only outlet for the major outlet for that supply was down to the Gulf Coast. And so they were priced off WTI, and WTI was already a discount to Brent. And and so the Canadian supplies, because the transportation differential, the Canadian supplies
Canada TMX And West Coast Pricing
SPEAKER_01were were not were not doing too well in terms of in terms of price. So several years ago, maybe a decade ago, there was a proposal to expand the capacity from Alberta over to the over to the West Coast. That ran into all sorts of problems, um uh permitting, First Nations, all sorts of issues. Um, and so it was delayed and the and the and the Alberta price was was low. But they finally completed it and they've completed an expansion of it. And so that's bringing a lot of Alberta supplies, and it's really increased the price of Alberta supplies because the netback from the West Coast price is a heck of a lot better for the Alberta supplies than the netback from WTI from the Gulf Coast. And so it's brought a lot of Alberta supplies over that expansion, it's brought a lot of supplies over to the West Coast. So it's not so much the Canadians saying, oh, we're gonna do the Americans in. It's them finding an outlet, uh, them developing an outlet for the for what essentially were the stranded shut-in Alberta supplies that couldn't get to the to the Asian market. Now they're in the Asian market. And and a significant share. The second largest supplier to the U.S. West Coast, uh behind Alaska and barely behind Alaska is Canada. Uh, and so that that expansion has not only has not only affected Asian supplies, uh, but it's affected the tail on the dog of Asian supplies, the U.S. West Coast, and and is affecting the price on the U.S. West Coast.
SPEAKER_00And how does that how does that work? So these are they so they obviously have uh American flag tankers that can run back and forth. So this is the this they but they bypass the Jones Act on that or what yeah they bypass it because they're coming from a foreign port.
SPEAKER_01They're coming from Surrey.
SPEAKER_00Okay, right. So they're coming out of the they're coming out of Canada directly.
SPEAKER_01Right, right. Used to be the only way you got Canadian supplies into the US is through pipelines into the Northwest. And and so there the supply was limited. But now that they've opened up that access for big volumes to the to the Canadian West Coast, yeah, they're they're they're they're doing they're doing a lot bigger business out of Alberta than they used to do.
SPEAKER_00Well, uh interesting, interesting stuff to say the least. We'll uh we'll we'll see where that goes. Um Alberta getting ready to pipeline westward. I think that's what Brad was just talking about. This pipe, the the the uh they're transiting it from the the stranded stuff westward towards Surrey. Is that what you're saying? Yeah, yeah.
SPEAKER_01Well, no, they're already doing it, and they're talking about another expansion. I mean, so this has really opened up, it's opened up price because it's no longer the WTI discount. It's opened up price, and the price has had an impact on supply. So they're getting they're they're they're they've already taken bids, I think, for the next expansion of the TMX of the Trans Mountain Express uh pipeline. So there's gonna be more and more Canadian supplies showing up on the Canadian West Coast, which will affect the Asian price, which will affect the U.S. West Coast price. And I and we're and and some suggest that's yeah, and some suggest we're beginning to see the impact of that. I mean, that what these negative differentials are showing is we're beginning to see the impact of what all those Canadian supplies coming to the West Coast are gonna do are gonna do to Asian prices and then and then and then have the backward effect on the U.S. West Coast price.
SPEAKER_00Which again will affect us because they're again tailwagging the dog and all that stuff. All right. Well, uh, yeah, I would say that that's a um um I would I would definitely say that that's a problem for Alaska in the future. That's a future us problem, but not too much in the future us problem. Uh like in the immediate future. We're continuing with Brad Keithly for Alaskans for sustainable budgets. On to number two. The numbers
Southcentral Gas Worries In Context
SPEAKER_00behind the current worries about South Central Gas. Brass Brad is gonna get down into brass tax. Don't let your eyes glaze over. This is important stuff, okay? So let's just let's go on it.
SPEAKER_01Yeah, this is numbers day. Uh for good or for good or for bad. So I I've I've been trying to figure out there that I can go back and find and find news stories from last January and February saying that NSTAR is doing okay, it's going to survive the winter. Uh, and and from from Chugach and others saying, okay, we're we're okay for the next couple of years, and and and and we don't really need to worry about the next couple of years. And then all of a sudden we get to this winter, and all we're having all these warnings and press conferences and all that sort of stuff. So I tried to figure, I tried to start going back and looking at numbers to try to figure out what's really going on, and I found a couple of very interesting numbers that I think tell a big, a big part of the story of what's uh of what's going on. The first one is from Singza. Uh Singza is the Cook Inlet natural gas uh storage uh area, storage something. Um, and it is uh uh it is NSTARS storage field where they take gas that's produced in the summer months and fill storage and have it ready for deliverability for the peaks uh in the winter months. Cook inlet production can no longer meet peak demand uh just from production. You have to store uh the gas in the summer when there's low demand, and then use that to um uh meet peak demand in the uh in the winter. Let's let's do let's do the other one first, Michael, and then yeah, go to this one. So this is Synxa. This is Cook Inlet natural gas storage, whatever, uh, whatever the A is. And it is NSTAR's uh storage field. And there this got several numbers on here, obviously. Uh it's got injection numbers on the left hand side, it's got injection and withdrawal numbers, how and the capacity that NSTAR. Has that this storage field has for injections, the capacity it has for withdrawals. And then it has working inventory on the on the far uh right hand side. And working inventory is how much gas is in the storage at any given point in time. And um and and you can tell you know how prepared NSTR is for the winter. Really interesting numbers going on here. So when you look at the right hand side and you look at working inventory, the design capacity and the maximum contracted capacity, which are the same thing, um uh for the storage field, is 13 million MCF. That's how much uh uh 13 billion, that's that's how much uh the um uh the
SINGSA Storage Inventory Looks Low
SPEAKER_01the storage field can hold. Um and so what you want as you approach the winter is you want to fill up your storage field and have it full and ready to go uh when you start hitting winter winter weather. And in Alaska, we can hit start hitting winter weather in October. So by August 1, you certainly want a big part of your storage field uh filled up. If you look at these numbers, the design capacity is 13 billion uh cubic feet. If you look at the inventory numbers, uh and the inventory is how much is in there, and then the bottom number is available inventory, how much how much is yet to go or how much capacity you have that's not yet filled, you can see that the the inventory numbers in Synxa at the begin at as of August 2nd uh is only 6.3 billion, 6.4 billion, 6.3 is 6 billion. So 6.4 billion compared to an inventory to compared to a capacity of 13 billion, available inventory, that is the amount of spare uh the amount of not yet filled capacity in the field is also six billion, six point six billion, more than half, uh, more than half of the storage field is not yet filled. And that's you know, when you're sitting at August one and you're you know, you're looking at the winter ahead, and you've only got you less than half of your storage filled, you're getting concerned because the storage, the the amount of gas you've got in there determines not only how much you can take out, obviously, how much you've got stored and is available, but it also affects the pressure at which you can withdraw. The less gas you have in the field, the less pressure you have in the field, the less gas you can you can pump out on a on a peak day. Right. And here's really the worrying number. Even that number is very worrying. The fact you have less than half the storage field filled. But the worrying numbers over on the in is over on the left-hand side, the injection and withdrawal numbers. And so injection, this is the injection season, this is the season you want to be filling storage. And given that you've only got half storage full, you want to really be going gangbusters, you want to really be filling this thing up. But you look at the injection numbers, the operating capacity of the amount that can be injected on any given day is 206 uh million cubic feet, uh uh 206.320 uh is the amount you could inject on any given day. The available capacity, that means the amount, the additional amount you could be putting in there is 171, which means you're only putting the difference in there. What is that 35? 35 million a day into the storage field right now. You got a half at you got a half empty storage field, you're sitting at August 1, you got a half empty storage field, you're only putting 35 million a day compared to a capacity of 206 million a day. You're only putting 35 million a day in there. I I can see the reason for the concern. You're not you're not filling storage at at anywhere near, yeah, the storage isn't filled at anywhere near the level it needs to be, and you're not filling it at anywhere near the rate you need to be filling it to get it to where it needs to be by by August 1 or by by October 1. Okay, let's go to let's go to the other chart. So I so I started going backwards to try to figure out what's going on here. And and this is a very interesting number. This is a chart that the division of oil and gas uh puts out. It is the the the capacity of all the storage, well, it's all of the production sources into the into the cook inlet, all of the the levels of production where the production's coming from, including, including storage. This is the number from March, last March. If you look over on the right hand side, the the bottom part of the chart, you can see the production profile, uh, the production numbers, that number, the the line, you can see the the production numbers for uh the winter of 2020, 2025 and 2026. And if you look at the previous years, you see they go up and then they start coming down. They go up and then they start coming down. 2025 went up, plateaued for a bit, didn't ever really reach a peak like previous years had, and then went back down. If you look at 2025 and 2026, there's something really weird going on. Uh, the production numbers go up in December and January, and then in February, they start coming down, as is typical. And so you would think in February, okay, we're gonna be okay. We got through, we got through the peak, uh, and we did and and we survived. And so when you look at the press releases that are coming out at the time, the Chugach and NSTAR are saying, okay, we're doing fine. Um, but but what happened then is you see another peak hit in March, um, which is not typical at all across this entire range. You don't see a March peak like what we saw last year. And the the the chart above, the pie chart above that shows the sources of supply in March for the to for hitting that March peak. The the DOR for or DNR for its own reasons, division of oil and gas for its own reasons is dividing uh production into
Injection Rates And Winter Deliverability
SPEAKER_01uh from pre-2020 wells or 2020 wells and post-2020 wells. That's the blue and the green. The yellow is the production from storage. If you look at this chart for every March going back um uh across across time, you very rarely see yellow. If you see yellow at all, it's just a very thin slice of the production uh for March. But what you see here for March 2026 is a big section, about a quarter of the supply coming out in March is coming from storage. March is usually when when you have when you have a typical production period or a typical production cycle, you two one of two things is going on in March. Either you have a very slight withdrawal in March and you're finding opportunities, frankly, to put gas into storage in March. You've come off your peak and you're continuing production, so you find opportunities to put gas in storage, or you find, you know, no, no use of storage, uh, uh no withdrawals from storage, and you find all the gas going going into peak. And I and last February, I would, I would think NSTAR would have said to itself, and Shoe Gatch and others would have said to ourselves, okay, we got through the peak, don't worry about it. We can now start refilling storage and we'll be okay by the time we get to August. Instead, what happened in March is they had to use storage to meet that mark that that March peak demand. And so it did two things. One, it pulled additional gas out of storage you weren't counting on, and it deprived you of the opportunity because you were pulling gas out of storage, you needed gas from storage to meet the peak. You it deprived you of the ability to start filling storage. So you go from there and then you go over to what's going on now, and you can see that what happened was we had to hit storage, they had to hit storage hard uh in March. It delayed the the the start point. It it took storage down further than I would guess they were anticipating. It delayed the point at which they could start refilling storage, and so now we get to August, uh, and we have storage only half full, Singsa at least, only half full, and um, and and not really doing much, uh not having a lot of gas to go into to help refill Singsa currently in August. There's another storage field. Hillcorp has a storage field, a commercial storage field that they store third-party volumes in. It's bigger than Synxa. Um, and so it's got more capacity than Thingsa, but it's not, it's not, it's about three quarters full. It's not full. And if you look at their injection numbers on their field, it's not running much better than the Synxa numbers are running. So we're we're going into this coming winter with with only at this point, only half the storage field, full, and we're coming in with without without a real strong stream going into that storage trying to refill it, getting ready for winter.
SPEAKER_00And of course, we heard from John Hendricks that uh that they didn't buy any oil or didn't buy any gas in February. Uh, and in fact, in his previous, uh, in his previous interview with us, he said he's kind of capped. He's only been
The Unexpected March Peak Drained Storage
SPEAKER_00able to sell uh hundred uh hundred a hundred million, up to 190 million uh mcf per day. Uh and they've had to shut in some of the stuff that they could, they could produce more, but the demand is not there. So again, are they really looking for it or is there some kind of artificial crisis? Or I mean, it just raises so many questions, Brad. And especially for those of us that aren't into the intricacies of oil and gas and everything else, it raises a lot of questions that we can't seem to get a lot of answers on.
SPEAKER_01Yeah, it raises questions. I mean, there is a question. I so February, February is going to be an interesting month. February, if you if you look back at the chart that had the March peak in it, the the the division of oil and gas chart, February is starting uh is starting to slide down. And so if you're a normal in a normal year, you're saying, okay, we're coming off the peak, our December, January, winter peak. We're we're not having we're not having a strong February peak. Um, and so and so you know, we we can ride a little bit and we'll have the normal summer. You can tell yourself you're gonna have the normal summer, you'll fill storage back up and you'll be fine by October 1st of next year. So I can sort of see some justification for NSTAR not being overly concerned about supplies in February. That March peak, that that second peak in March should came as a surprise, I would anticipate, came as a surprise to everybody because nobody you we hadn't had March peaks. So all of a sudden you have this March peak, you have to pull from storage in order to meet the March peak. So not only are you not able to fill storage, you've had to pull from storage, and so you've you're going into summer now with in a in a much more difficult situation. I would think I'm what Sims has said is he anticipated a bunch of blue crest volumes uh from the blue crest field down by Anchor Point. He anticipated a bunch of blue crest volumes coming in and helping him refill storage over summer, and they haven't shown up. So it's so he's in a situation. I can see the I can see the source of the panic now. He's in a situation where he he's not he doesn't have storage where it needs to be. He's not filling storage at the at anywhere near the rate he needs to be filling it in order to get it ready for this coming winter. And he's looking in a winter that you know, if it's if it's like two winters ago, sort of mild, he'll be fine. But if but if he has a winter like he did last year, where he has a March peak, he's he's in trouble.
SPEAKER_00This this whole thing kind of uh again, uh it kind of cooks me. What got me and what really irritated me in this, and again, I there's so many questions, was this comment uh from Sims. As you said, Bluecrest plans are not coming to fruition this year, where they haven't really been doing any. I mean, it's just you know, there's a whole lot of nothing coming from Bluecrest, but then Sims is quoted as saying, an Alaska-owned hex is delivering less than half of what the utility expected, said Sims. And John Hendricks is like, we've delivered 112% of what we were contracted for, and we have more if you want it, like you didn't buy any in February, plus we've got more available. What's going on?
SPEAKER_01Yeah, that's definitely a question. I mean, that's that's definitely a question to press Sims on, and definitely a question to press press uh uh Hendrix on. Um Lanfield ran a ran a Twitter last night, a tweet last night that said that Hendrix is selling to Marathon, the refinery.
SPEAKER_00He said that yesterday on the show.
SPEAKER_01For for its needs as opposed to to NSTar. And Lanfield's close to Sims, and and so you can sort of say you can sort of think that Sims has put this in Landfield's ear to to publish. Um, so there's definitely an issue going on there. I will say this with all due respect to John, with all due respect to Hex, they're the tail on the tail. It's not it that's not that's that's not big volumes.
SPEAKER_00It would every little bit helps. No, he's he's only providing 10% of the gas for the utilities. He's only that's what he said it yesterday. He's only providing 10%, but he has more, he has some available. He wants to get up to 20. He said it's there. He said, yes, he's selling to marathon because he can't sell enough to end star. He did, you know, they delivered 112. But end star now says they're only he says maybe he spoke off the cuff. I don't know. I mean, there's so many questions here, Brad. That's a thing. It just smells bad. What is going on?
SPEAKER_01Yeah, and and the question and and so you can see that with that storage number, this thing's a storage number.
Utility Producer Disputes And Open Questions
SPEAKER_01That is a concern. And so you would think, and given Sims' statements otherwise, you would think that they'd be buying every available cubic foot they could out there to stick into storage to get the storage numbers up to get it ready for uh to get it ready for winter. So it's yeah, there's a there's there's definitely a question there, and I don't have I don't have the answer to what's going on between those two. But I will say, I will say that Hex is sort of the tail on the dog. I mean, even if Hex put full boar, even if Sims bought everything that that John had and put John Sims bought everything that John Hendricks had and and put it full boar into storage, that's not gonna fill storage. It's gonna make it, it's gonna make a uh a marginal difference in filling storage. The real gap in storage, I don't know where it's coming from. Maybe, maybe Sims was counting on Bluecrest for a lot. Maybe there's some shortfall in what he was counting on from Hillcorp. Um, maybe there's some shortfall someplace else. But, you know, when you're when you're sitting at half storage in August, especially in Alaska, you know, if you were sitting in Texas, half half storage in August, you wouldn't be that concerned about. But if you're sitting at half storage in at August in Alaska and you're not maximizing the the inputs, uh the injection rate into the storage, you gotta be concerned.
SPEAKER_00You got eight weeks. You got eight weeks to get that thing pumped up to 13 billion cubic feet, and you're at six and a half. How do you get there?
SPEAKER_01Yeah. Well, it's it's a number. I mean, I really hadn't dug into this. I I just was sort of flabbergasted by this whole, you know, this whole thing last week about the crisis and all this sort of stuff. And um, at first I sort of dismissed it as as, you know, they're they're they're just trying to use an excuse to talk about the about the big line, trying to pressure the Senate. But then I thought, well, I'll just dig into the numbers and see what the numbers say. And then I started digging in the numbers, and I see you can see where the where the concern is when you've got storage at that at that at that capacity. So it's uh it's a problem. I what when the history is written of this period, where we have where we have failed is not getting the LNG imports up and running. What we've seen is the cook inlet fail faster than we thought it was going to fail. And and Blue Crest would be an example of that. It didn't come on with those volumes. And and so we're seeing the cook inlet fail faster than we thought it was gonna fail. We don't have we don't have the big line. The big line's not coming if it ever comes, it's not coming for a while. So where we're falling short is not having the LNG import capacity ready to go. And and nobody's nobody's really talking about what they're gonna do to get the LNG capacity ready to go.
SPEAKER_00Where's the plan? I mean, because NSTAR wants to build their own big standalone import facility at Point Mac or whatever, and Hillcorps got theirs there at the marathon plant where they could retrofit it. And but who's who's running the plan? Who's who's got the plan? Where does it go? Give me a timeline. Nobody knows. Uh again, we're all waiting or you
LNG Imports And The Missing Plan
SPEAKER_00know, and that's the thing. We're gonna bloviate and wait around and sit and sit on our thumbs until the crisis really begins. And then what are we gonna do? That's the problem. Then what are we gonna do? We're gonna continue on. Brad Keithley, Alaskans for Sustainable
Child Care Op Ed Meets Fiscal Reality
SPEAKER_00Budgets, the weekly top three. On to number three, which I can't Adam Crumb demonstrates why a lot of Republicans are part of the problem and not the solution. I eye rolled so hard when I was looking at this stuff. Uh, Brad, go ahead and hit us with it here. We got we're we're running a little late. We've only got about seven minutes.
SPEAKER_01All right. So there was an article in the Alaska Beacon uh this past week. The article was headlined Alaska providers say child care gap is growing. And the article focused on the fact that we have more demand for child care than we have supply. Uh, and so the gap between the number of people who want childcare, the number of working families that want child care, and the availability of child care, uh, that gap is growing. So as you would expect, a politician jumped on that. Uh, and a few days later, Adam Crumb appears on the opinion page of uh of the ADN, the Alaska Daily News, uh, with this opinion piece. The answers to Alaska's child care problems are within reach, says Adam. And and so I thought, okay, well, great. You know, we're gonna have a Republican talk about what the solutions to the child care problem are. And and I read it, and and two things stand out. One is the in as he articulates the the solutions that he advocates for solving this issue. One is to to continue to use Alaska's corporate tax structure to allow companies uh that to should also allow companies that subsidize or provide child care to claim those costs. And what he's talking about is additional, the allowance for additional credits against the Alaska corporate income tax uh uh for companies that provide childcare. In essence, subsidizing child care by those companies by reducing by reducing their tax bill. Right. And the and the other one in the next paragraph was a grant program. In other words, state spending with accountability requirements, of course, but a grant program to provide uh money to those uh institutions that aren't employers that don't pay corporate income taxes. And so the rest of the world out there that wants to provide childcare, we give them a grant program. We just directly subsidize them with government money. What's not included in Adam Crowden's editorial is where the money's gonna come from. The money to replace the corporate the corporate taxes that now are going to be uh not collected because of the credit, and the money that's gonna come from to replace the grant program. And what's the marginal source of revenue in the state right now? It's PFD cuts. So what Crum is essentially saying, when you when you boil down, because he doesn't otherwise talk about where the revenue is gonna be gonna be to pay for this stuff, what crumb's talking about is increased PFD cuts in terms uh to replace the corporate taxes that that otherwise aren't gonna be collected and to generate the revenue to pay for the grants that he proposes, PFD cuts to pay for to pay for the increased child care that he that he proposes. So what we're doing, just think about this. What we're doing is is we've got a claim that families, high income, medium income, low income, families have a need for additional for additional child care. We're gonna pay for it by taxing through PFD cuts, taxing middle and lower income Alaska families to pay for the child care, the the select child care for all middle and lower income Alaska families, to pay for the select child care for the upper income, the middle income, uh, and the lower uh the lower income families. We're just churning money. We're taking money. We're we're we're gonna he's gonna make one situation work better, child care, at the expense of making the incomes of the families of a lot of the families who need child care worse. You're just taking money out of Peter, out of you're robbing Paul to pay Peter or Peter to pay Paul or however that how however that uh that that that Phrase goes. You're just taking money out of the very families that you claim you're helping
PFD Cuts As The Default Funding Source
SPEAKER_01to pay for a select group of families that need child care, not only a select group of middle and lower income families, but also upper income families. We're essentially going to have middle and lower income families subsidize the the child care of upper income families. So what's the difference between Republicans and Democrats? Right. I mean, the Republicans are saying we need to spend more government money on child care, or the Democrats say we need to spend more money on more government money on this stuff. Adam Krems saying the same thing.
SPEAKER_00Well, you need to spend more government money on this stuff. And talk about an expansion of government. He says on the supply side, Alaska's facility permitting process needs a provider by provider review with one accountable navigator assigned to walk every applicant through the process. Wow. How much how many people is that? And how much is that going to? I mean, you know, it's just it's astonishing how everybody is looking to government to solve the problem in this regard.
SPEAKER_01Yeah, Republicans or Democrats. It's always, it's always going to be, we got a problem, we'll just spend more government money on it. Or we'll collect less through the corporate income through the corporate tax credit. And who's going to pay for that money? Who's going to provide the money? Well, we'll just take it more of it out of the pockets of middle and lower income Alaska families. We'll just push them deeper into the economic hole they're already in, in order to help a select group of them, those who need childcare, including upper income families, in order to help a select group of them uh uh to deal with the situation. It's not there, there's no difference between the Tom Begage position and the Adam Crumb position uh on on that issue. Um, if you know somebody was really concerned about this and wanted to take government money to do it, at least you'd collect it from everybody. You'd look for revenue sources that didn't impact the very people you claim to be helping, that didn't make their economic situation worse. You would look for revenue sources that spread the burden and reduce the burden on middle and lower income Alaska families. But Crumb's proposing steps that will increase the burden on middle and lower income Alaska families.
SPEAKER_00And unfortunately, that's what we're seeing from almost all these candidates at some point or another. There's some program that they can't do without, or something's going. Um, and again, with no plan, or we have these pie in the sky plans with no way of nobody asking, okay, how do we pay for that? Who pays? Right? I mean, that's the crisis here. 30 seconds, Brad. Final thoughts.
SPEAKER_01Well, it's just
Candidates Avoiding The Hard Answers
SPEAKER_01it's the same thing as the K through 12. I mean, the question's always the question always should be who pays. Every editorial should say, I want to spend money and hit this is how I'm gonna pay for it. But the Republicans, like the Democrats, are just out there saying, I'm gonna spend money and and and and don't address how they're gonna pay for it, leaving open the fact it's gonna come from middle and lower income Alaska families through increased PFT cuts.
SPEAKER_00Well, we're gonna see. What are we 14 days away from the primary? We'll see who's whose ideas are sellable. There's just not one candidate who's worth an absolute shit at this point. I mean, really, when you look at this, I just I don't see a candidate who just reaches out and grabs me by the throat and says, dude, we got to fix this. It's all perpetuation of the same cycles of pain that we've had so far.
SPEAKER_01Yeah, Michael, I was reading through, so the Beacon, uh, the Alaska Beacon has published uh uh its um campaign materials. They interviewed all the candidates or they sent a questionnaire to all the candidates. They all and all the candidates, both the both the candidates for governor and the candidates for uh for the legislature, as well as I guess the federal candidates uh responded to it. And I was looking through the responses of the candidates for governor. Uh, and I was hoping to find one that said, we've got to deal, we've got to focus on families, families first, and we've got to restore the economic strength of families. One way to do that is not to tax them as heavily as we have been through PFD cuts. I was looking for a candidate that would that would start with families and the economic situation faced by middle and lower income Alaska families. Start with families and say, we're gonna fix that first, and then from there, we will we will have a general a general fix or a general recovery in the economy because we focused on families and on households first. Not one, not one of the 17. Now there were a couple of candidates who didn't respond, but not one of those who responded said that. Some of them said, we're gonna focus on families, and then they said, by spending more government money on families, like Adam Crumb, you know, we're gonna focus on families, we're gonna spend more government money on them, without addressing where the revenues are gonna come from to to to you know provide those additional, to provide that additional spending. It's just it's it's it's a wasteland out there in terms of in terms of candidates who are really focusing on the core economic issue important to Alaska's Alaska families.
SPEAKER_00No, it's uh it's definitely frustrating, and especially when you look at it, and you know, I mean, personality-wise, yeah, there's a couple candidates that I really like, but what is the solution? And nobody's and and of course, some of I get some pushback on this because they immediately say, well, they don't want to lay out their full fiscal plan before the primary because then you know, because they're delivering bad news and they wouldn't get anywhere in the primary, they can only do that in the general. And I'm like, look, if somebody's not gonna buy it in the primary, what makes you think they're gonna buy the bad news in the general? Your plan that's going to cause some hardships, there's gonna be some austerity measures, there's gonna be some other things. What makes you think that you're they're gonna want to buy it in the general if you don't want to sell it to them in the primary? I I again, I don't understand the justification here.
SPEAKER_01Oh, it's it's it's it's the typical government. We'll get to your problem. Don't worry about it, we'll get to your problem. Just hang on, we'll get there. I mean, they're they're gonna say the same thing in the general. Well, I can't say it in the general now because you know, I got all these other people in the general, and I, you know, I want to win the general, so I can't say it in the general. It's uh if a candidate isn't willing to step up and articulate uh a family first, family values um uh uh campaign, economic campaign in the in the primary, I don't trust them to show up in the general, and I certainly certainly don't trust them to show up once they're once they're governing. I the first one, the first candidate I went to, to be honest, I I paged down to get to get to Shelly Hughes's. I wanted to see if Shelly was evolving her pitch in a way that that started to started to resonate with me, and it's not. I mean, it it's basically it's a it's it's a different way uh to come into the spending cuts only approach, uh, but it's basically a spending cuts only approach. And and we saw with Dunley that that just doesn't work. I mean, and and we got a bigger deficit now. We got a bigger deficit now than we had it at at Dunley's at the beginning of Dunley's term. So yeah, to think that spending cuts only is gonna is gonna resolve this is just foolish.
SPEAKER_00Craig says there's zero chance that our state legislature would agree to any conservative fiscal plan. So what's the point?
Turnout Fears And Final Wrap
SPEAKER_00I mean, I don't know, Craig. What's the point of getting out of bed this morning if uh if it's gonna be so bad and doom and gloom? I mean, you can't stop fighting it, but see that that feeds right back into what Brian was saying. He says, What I fear is a much lower than average turnout because of the terrible slate of proffered candidates. The union hacks and lackeys can turn out the few votes necessary to fully control the state. Uh, I mean, if if everybody feels like Craig and it's like, what's what difference does it make, then why bother to show up, Craig?
SPEAKER_01Yeah, and and so and so I want to show up. I mean, I want to I want to have somebody to vote for, but but there isn't anybody to vote for. So I mean, Brian's point's excellent. I mean, the the if if you don't show up, uh if you don't show up for some candidate, then then those who do show up, the unions, uh, and education unions are gonna are gonna are gonna determine the outcome. But but who do but who do I vote for? I mean, do I vote for Shelley, notwithstanding the fact she doesn't have a doesn't have a plan that works? Um it's just uh I it's a very disappointing, uh it's a very disappoint uh disappointing uh uh campaign in that regard.
SPEAKER_00Fixing the legislative makeup is the only solution, says Craig. We've been trying that, and that's the thing. How do you change out the players where their constituencies are happy with it? You know, where the Gary Stevens and the Louise Stutes and the Bert Steadmans and the Bill Willakowski. I mean, most of these people don't have uh don't have opponents, Craig. They don't even have the Republican Party's not running anybody against Willakowski, right? Nobody else is gonna run against Bert. Nobody, you know, we've tried that. Uh so I don't know, man. Uh I just, you know, yeah, you're right. Is it would it be an uphill battle with this legislature? Absolutely. But do we just stop trying? Uh I I don't know. I'm gonna have to hold my I'm gonna have to hold my nose and vote for somebody in this junk primary. I I wish there were better candidates. That's that's all I could say. Better plans. But uh anyway, Brad, thanks for uh sharing with us and and bringing us in and giving us the giving us the depression. I appreciate that. It's uh it's good. We got to have this kind of conversation, though. We appreciate you coming in, Brad. Thanks for being part of it today. Michael, as always, thanks for having me. It's always educational, Brad.
SPEAKER_01Always educational. Thank you so much. Well, that's a wrap for another week's edition of the weekly top three from Alaskans for Sustainable Budgets. Thank you again for joining us. Remember that you can find past episodes on our YouTube, SoundCloud, Spotify, and Substack pages, and keep track of us during the week on Facebook and Twitter. This has been Brad Keithley, Managing Director of Alaskans for Sustainable Budgets. We look forward to you joining us again next week for the next edition of the weekly top three.
