Headlamp – A busy winter for ConocoPhillips and some help from DC for Alaska LNG

Road to energy dominance will lead through Alaska. Some new developments in the Great White North show that America’s road towards global Energy Dominance in the oil and gas sector will inevitably travel through Alaska. With a party-line, 13-10 vote on Wednesday, Republicans on the Senate Energy Committee have given new life to the possibility of opening up the northernmost sliver of the gigantic Arctic National Wildlife Refuge (ANWR) to exploration for oil and natural gas. The vote, led by Senate Energy Chairman Lisa Murkowski (R-AK) is the latest skirmish in the forty-year battle over whether this sensitive part of Alaska’s North Slope should be made available for resource development. “For many of us, we believe that [ANWR] is one of the best places that we can go for responsible development, and we should have done this some time ago,” Murkowski said in the wake of the vote.  Sen. Murkowski, in pursuing this goal, is carrying on the legacy of her father, former Alaska Sen. Frank Murkowski, who made several similar attempts during his 21 years in the U.S. Senate.

“Long way betwixt and between.” The U.S. House on Thursday passed a tax cut package. Like all but 13 Republicans, Alaska Congressman Don Young voted for the bill. “There’s some people saying it’s not so good, but overall if the actuarial figures are good, it’ll be about $3,000 in every tax-paying family’s pocket, that they didn’t have before,” Young said after the vote. “That’s how much the cut’s going to be.” Democrats say the House bill gives and outsized tax cut to the wealthy. A fact sheet issued by the Democratic National Committee says 11 percent of middle-income Alaska households would face a tax increase, of $600 on average. The figure comes from a report by the Institute on Taxation and Economic Policy, a left-leaning think tank. The House bill does not include opening the Arctic National Wildlife Refuge to oil drilling. Young says the plan is to pass ANWR in the Senate version of the bill, and then fight for it in the conference committee, where the two chambers negotiate their differences and write a final version. “I expect the House to concede to the Senate on the ANWR provisions and become a reality,” Young said. “Again, though, I want to warn people don’t go to the bank right away, because it’s a long ways betwixt and between.”

How many zeros in a trillion? Earlier this autumn, Norway’s oil fund reached the stunning value of $1 trillion. Built on transfer of oil revenue from May 1996, the fund is today the world’s largest sovereign wealth fund is supposed to secure pensions for generations to come. The fund has invested in some 9,000 companies in 77 countries around the world. In value, the fund owns 1 percent of all listed companies worldwide. Now, Norges Bank, who manage the investments, is shocking the petroleum market by recommending the removal of oil stocks from the fund’s benchmark index. In a letter to the Ministry of Finance on Thursday, the bank writes, “In the Bank’s view, this will make the government’s wealth less vulnerable to a permanent drop in oil and gas prices.” The letter informs that the vulnerability of government wealth to a permanent drop in oil and gas prices will be reduced if the fund is not invested in oil and gas stocks, and advise removing these stocks from the fund’s benchmark index. Norges Bank underlines in a press release that this advice is based exclusively on financial arguments and does not reflect any view on the sustainability of the oil and gas sector.

It’s going to be a busy winter for ConocoPhillips. The company that has led exploration into the National Petroleum Reserve-Alaska west of the existing North Slope oil fields is heading back into the federal lands to drill four more greenfield wells early in 2018, according to spokeswoman Natalie Lowman. Last January ConocoPhillips announced the Willow discovery in the NPR-A that the company’s Alaska leaders believe contains 300 million barrels of recoverable oil and is capable of producing up to 100,000 barrels per day with the right production and processing facilities. With another exploration well planned for state acreage recently added to the Colville River Unit just east of the NPR-A, the five wells make for the company’s largest North Slope winter exploration program since 2002, Lowman said. “There’s three to help us further appraise Willow and Putu and then this other one that we’re calling Stony Hill,” she said further. The Putu well could be ConocoPhillips’ last chance at developing a prized chunk of state land around the Native village of Nuiqsut just south of the company’s Alpine oil field in the Colville River Unit. It’s on the southern edge of the Pikka Unit, which holds the 1.2 billion barrel-plus Nanushuk oil prospect that operator Armstrong Energy just sold to Australia-based producer Oil Search Ltd.

From the Washington Examiner’s Daily on Energy – Alaska LNG gets some help from DC. 

FEDS, CHAMBER START NATURAL GAS EXPORT INITIATIVE: The U.S. Trade and Development Bank and the Chamber of Commerce launched a new joint energy initiative to promote U.S. natural gas exports Friday. Public-private partnership: The federal trade promotion agency, the Chamber of Commerce, the 27th World Gas Conference 2018, and LNG Allies, announced the U.S. Gas Infrastructure Exports Initiative at the U.S. Chamber of Commerce’s headquarters in Washington. Expanding natural gas exports has been a top priority of Trump’s pro-growth energy dominance agenda. How it will assist exports: The trade agency will deploy a range of tools, including reverse trade missions, feasibility studies, training, technical assistance, and the Global Procurement Initiative to accelerate and promote the export of liquefied natural gas. The agency is working with the energy industry and the government “to facilitate new gas infrastructure exports, including LNG exports through the development of gas-related infrastructure in key LNG receiving countries.” Helping U.S. allies: Karen Harbert, head of the Chamber’s Global Energy Institute, tweeted Friday that “US natural gas will help our allies around the world be #Energy Strong.”

Employment Down 1.3 Percent, Unemployment Rate Unchanged. Alaska’s total employment was down by an estimated 1.3 percent in October compared to October 2016, a loss of about 4,100 jobs. While the state continues to shed jobs, over-the-year losses have gradually slowed in 2017. The largest loss during the current downturn was -2.6 percent in fall 2016. Oil and gas employment was down by 7.8 percent, followed by construction (-7.2 percent). The only industries to add jobs were health care (2.0 percent) and local government (0.2 percent), which includes public schools and tribal government. Federal employment was down 1.3 percent and state government was down 2.0 percent.

First Reads:

With Or Without ANWR, Alaska’s Oil And Gas Fortunes Are Rapidly Reviving
Forbes, David Blackmon, November 16, 2017

House passes tax plan, the bill Young says will open ANWR
Alaska Public Media, Liz Ruskin, November 16, 2017

Norway’s oil fund wants out of oil and gas investments
Arctic Now/The Barents Observer, Thomas Nilsen, November 17, 2017

ConocoPhillips plans for busy exploration season
OG Links/Alaska Journal of Commerce, November 15, 2017

Employment Down 1.3 Percent, Unemployment Rate Unchanged
Department of Labor Press Release, November 17, 2017