Mayor seeks to return borough oil and gas liaision position

With the anticipation of a liquid natural gas pipeline terminus in Nikiski, the Kenai Peninsula has the potential to see its largest economic impact ever.

To facilitate such projects, Borough Mayor Mike Navarre is looking to re-create a position in his office to focus on oil, gas and mining issues.

Navarre introduced an ordinance to the borough assembly at the Jan. 6 meeting for the position of “special assistant to the mayor on oil gas and mining.”

Prorated funding for the job would total $67,500 to start from Feb. 1, 2015 to June 30, 2015, the end of fiscal year 2015.

According to a memo from Navarre to the assembly, the position would evaluate oil, gas and mining industry related projects and “develop responsive policy positions and initiatives and implement and advocate for those positions approved by the mayor and assembly.”

The annual salary for the position is proposed to be $98,171.

Including benefits and other expenses, the cost of the position is estimated to be approximately $161,800.

Navarre requested a shortened hearing for the position to be discussed at the Jan. 20 meeting so recruitment could begin as soon as possible.

Navarre discussed the need for the position during the assembly finance committee meeting Tuesday.

He said the AK LNG project is a “game-changer” to the Kenai Peninsula economy and a socioeconomic study would define what the state would pay for and what the impact would be to the borough

“We have to start planning now,” he said.

“It is of critical importance to the borough. I have not brought new positions to you on a regular basis. This is one that makes absolute sense.”

Assembly member Blaine Gilman said he thought the position would be a good fit for the borough given the type of revenue projected to come in.

Navarre said for perspective with the current mill levy applied to the proposed site, revenues could be about $400 million, which is quadruple the borough’s total current assessed value.

Assembly member Stan Welles said given the tight financial times the borough is walking into with regard to low oil prices, he would be more in favor of a hiring freeze and asked if another administrative employee could be re-assigned to the position. Navarre refuted the notion.

“We have to have a specific expertise not currently available to focus on this issue and follow the legislation that takes place this year in Juneau,” he said.

“We would be remiss if we didn’t plan for a project of this magnitude. I think a new position is both required and prudent.”

The borough previously created such a position when current Assembly President Dale Bagley was borough mayor in 2002. Bill Popp, now president and CEO of the Anchorage Economic Development Corporation, served as a special assistant to the mayor as a liaison on oil and gas development issues for four years until 2007.

Popp said the job required him to focus on policy and advocacy for the oil and gas industries at the state and federal level.

He also spent a lot of time educating the public on the development that took place in the Cook Inlet.

“On my watch the major players were Marathon, Chevron and ConocoPhillips … a good year of capital investments was between $80-$100 million,” he said. “Now … look at the significant development taking place in the Cook Inlet with Hillcorp, XTO Energy, Apache, Furie … the total is several hundred million (dollars). The unemployment rate is the lowest in 26 years. The difference is night and day.”

Prior to Popp’s time as special assistant, the focus of oil and gas efforts were left to individual staffers or different members of the assembly and the issues didn’t get the attention they deserved, he said. Popp said Bagley asked him to fill the position due to his experience developing connections in the oil and gas companies during his time on the Kenai Peninsula Borough assembly from 1996 to 2002.

Popp’s tenure included challenges from a coal methane issue in the Homer area and his attempts to lobby for federal energy legislation.

The position ultimately dissolved shortly after the Agrium fertilizer plant in Nikiski closed and 250 plus jobs were lost.

“Those were some of the toughest days,” he said. “It was a difficult challenge when (Agrium) shut down.”

Popp said he sees a bright economic future for the Kenai Peninsula and thinks it’s an important concept for the borough to address.

“The need for a fulltime staffer is so incredibly important to the economic future and health of the borough,” he said. “With the kinds of development that need to take place the borough needs to do what they can to get a seat at the table.”

Navarre said he has a couple people in mind for the job, but he hasn’t reached out to anyone. He said for some reason should the LNG project stall, he said it would be up to the assembly to decide the future of the position during each budget cycle.

Reach Dan Balmer at daniel.balmer@peninsulaclarion.com.

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