An Alaska Air line is one of the largest fossil fuel-producing companies in the world, and now it is facing new scrutiny as it seeks to sell off the company.
The company has faced questions about its management of its operations in the past, and a new government report has raised concerns about its future.
Alaskans are now demanding answers about how the company came to own oil and gas assets that are still in use by many Alaska residents.
A federal regulator is looking into the company’s oil and natural gas operations and the state is also asking questions about the state’s tax-exempt status, which allows it to operate without a tax on fuel used to fuel its operations.
The state is asking for a public hearing on Nov. 14 at a public library in Anchorage.
Al Jazeera and The Associated Press reported on Wednesday that Alaska Airlines will sell off its Alaska Railroad to the Canadian-based AltaGas Corp. on Dec. 6.
The sale, which would come as Alaska’s railroads were struggling with heavy crude and high costs, comes amid rising concerns about the company as the federal government ramps up its environmental review of the oil and fossil fuels industry.
Alaska Airlines CEO Scott Cook said the deal was the company “coming to terms with the reality that the oil industry is in the midst of a significant change and change is coming.”
AltaCorp’s shares rose 0.3 per cent in after-hours trading on Thursday.
Alaska’s Alaska Railroad has been an oil and mining hub for more than 100 years and the company has been owned by the state since 1899.
Alaska is the second largest producer of oil and other natural gas in the U.S. Alta has said it has more than 1,300 employees in the state, but has struggled financially.
Its stock has dropped more than 17 per cent over the past year, and its stock price has fallen more than 11 per cent.
It has struggled to stay afloat, losing more than $7.5 billion in the last year alone.
The railroad is the world’s second-largest passenger service provider after the U, and the railroad is one the state relies on to transport more than 4 million barrels of crude oil daily from Alaska’s west coast to the west coast of Canada.
The railway was originally built to carry oil and liquefied natural gas and it is one major hub for that industry.
“It’s an asset that we’ve been working on for the last 30 years and now the reality is that it’s being sold off,” Cook said in an interview.
Altsa is the only major fossil fuel transportation company in the country that does not receive federal tax-deductible funds, which means it is not required to provide information to the government about its operations, and is required to disclose its tax-free reserves.
The federal government has raised questions about Alta’s management of the company, with the Office of the Inspector General (OIG) looking into its finances, operations and other aspects of its business.
“We do not have a lot of information about how Alta did business over the last several years,” OIG Director John Bambenek told the Senate Energy and Natural Resources Committee in a hearing on Tuesday.
The OIG report has called into question AltaCo’s management and operations of its rail operations, saying it has not followed standard industry practices to properly manage the assets it owns and keep them out of the hands of tax-exempt entities.
Cook said that the company is in a difficult position, with its financial situation in a state of financial crisis.
“The state of Alaska is struggling,” Cook told Al Jazeera.
“There is a lot that needs to be done and we need a response from the federal Government and we’re not there yet.”
Cook said Alta is currently seeking federal permission to sell assets in Alaska.
“A lot of the questions we’re going to be asking the OIG are going to relate to those assets that the government is looking at, and we will be asking for additional information on how that’s done,” Cook added.
Cook told the committee that the Alaska Railroad is an important asset that Altsas economy depends on and said the state needs to do more to protect its economy.
“They have an asset they have been able to hold for decades, they’ve got to keep it, and that’s not something that we’re ever going to put into jeopardy,” he said.
Alsa will pay $8.6 billion for the Alaska Railway in exchange for a $2.3 billion tax break and a $500 million cash infusion, and Cook said there will be “no cost overruns”.
“We are not going to spend $1 billion of our own money on something that’s just a piece of paper,” Cook explained.
Alasa will also receive a $400 million tax write-off in exchange.
The $4.5 million in tax credits the state receives for selling its Alaska Railways