Paris Accord Flop. How much $ is too much $?

‘Who’s the cleanest of them all’
Stephen Moore, The Washington Times, August 20, 2018

Take a wild guess what country is reducing its greenhouse gas emissions the most? Canada? Britain? France? India? Germany? Japan? No, no, no, no, no and no. The answer to that question is the United States of America. Wow! How can that be? This must be a misprint. Fake news. America never signed the Kyoto Protocol some two decades ago. We never enacted a carbon tax. We don’t have a cap and trade carbon emission program. That environmental villain Donald Trump pulled America out of the Paris climate accord that was signed by almost the entire rest of the civilized world.

Are ConocoPhillips Profits Really Highest in Alaska?
Ed King, King Economics Group, August 18, 2018

On July 31st, 2018, ConocoPhillips released its second quarter 2018 10-Q, which was filed with the Securities and Exchange Commission (SEC). A couple weeks later, the Legislative Research group released a table which showed the production levels and net income that the ConocoPhillips filing reported. Shortly after publishing, some people began citing this statistic as evidence that ConocoPhillips is making excessive profits in Alaska. Let’s take a closer look.

Our Take: Thank you Mr. King “It is often tempting to compare things. But sometimes comparing apples and oranges isn’t really fair.”

Insight: US-China trade war raises concern LNG exports may feel the chill
S & P Global Platts, August 20, 2018

The ongoing US-China trade war has raised concerns about a key driver of LNG shipping demand – the trade flow between the US and China – but it is also expected to further the commoditization of LNG as it creates more trading opportunities and the need for shipping optionality.

PetroChina to dump US spot LNG in fear of tariffs
LNG World News Staff, LNG World News, August 13, 2018

State-owned PetroChina could pull the plug on winter spot LNG cargo purchases from the United States amidst the Chinese government’s proposed tariffs. Bloomberg cites sources close to the matter as saying that the Chinese company would turn to purchasing spot cargoes from other regions or swap its US LNG volumes with other East Asian countries as it looks to avoid paying the proposed 25 percent tariff.

A Maersk container ship is about to embark on an historic Arctic transit
Malte Humpert, High North News, August 20, 2018

Danish company Maersk, the world’s largest operator of container shipping, is about to send the first-ever container ship through the Arctic along Russia’s Northern Sea Route. While the route has seen rising traffic to transport oil and natural gas in recent years, the voyage of the Venta Maersk, a medium-sized container ship capable of carrying nearly 3,600 containers, will be an industry first. A Maersk representative involved in the project who spoke on the condition of anonymity confirmed that the Venta Maersk will be sailing via the Northern Sea Route starting from Russia’s Far East.

U.S. “bill from hell?” Response to criticisms – AIDEA, IGU, IEA, LNG, TGIF.

Crowded governor’s race gathers cash, steam before primary
Margaret Kriz Hobson, E&E News Energywire: Friday, August 17, 2018

The Alaska governor’s race comes at a pivotal time for the Last Frontier. After decades of oil production declines, Alaska is on the brink of a new generation of North Slope oil development. Drilling could begin in the coming years at several promising new oil discoveries. And the Trump administration is eager to open new oil leasing on other federal lands in Alaska. The next Alaska governor will also decide whether to advance the Alaska LNG project, a $43 billion state-run venture seeking to commercialize 35 trillion cubic feet of natural gas reserves now stranded on the North Slope.

Our Take: Headlamp is happy to simplify the situation: a governor can grow government and continually turn to more taxes on the oil industry to pay for it or a governor can reduce the size of government, put more money in the private sector, diversify the economy and maintain a stable tax structure. Make sure you clearly understand what each of the gubernatorial candidates plans to do before you vote.

Board wants proposal: IGU interested in LNG plant near Houston, but needs detailed plan for evaluation
Alan Bailey, Petroleum News, August 19, 2018

During the Aug. 7 meeting of the board of the Interior Gas Utility, several board members expressed concern that they need to see a detailed proposal for a concept being pushed by industrial manufacturing company Siemens and Knikatnu, the Native village corporation for Knik and Wasilla, to build a new liquified natural gas plant next to an Alaska Railroad siding near Houston. The plant would bolster LNG production for increased gas supplies for Fairbanks and its surrounds. Board Chair Pamela Throop told the board that Siemens has committed to present a proposal for the plant during the board’s next meeting on Aug. 21.

Responding to criticisms of AIDEA’s role in Interior Energy Project
Dana Pruhs, Fairbanks Daily News Miner, August 15, 2018

As Chairman of the Alaska Industrial Development and Export Authority Board, I know the commitment it takes to participate on state and local government boards. For this reason, I want to thank Frank Abegg for his past service at the Interior Gas Utility. As a member of the IGU Board, Mr. Abegg was involved in rigorous negotiations over the past 24 months leading to the consolidation of the natural gas supply and distribution systems under IGU ownership. While I appreciate differing and varied points of view in this process, I feel I must address numerous inaccuracies in Mr. Abegg’s departure memo.

Russian oil industry would weather U.S. ‘bill from hell’
Oksana Kobzeva, Dmitry Zhdannikov, Reuters, August 16, 2018

Stiff new U.S. sanctions against Russia would only have a limited impact on its oil industry because it has drastically reduced its reliance on Western funding and foreign partnerships and is lessening its dependence on imported technology. Western sanctions imposed in 2014 over Russia’s annexation of Crimea have already made it extremely hard for many state oil firms such as Rosneft (ROSN.MM) to borrow abroad or use Western technology to develop shale, offshore and Arctic deposits.

Russia’s military lead on Arctic shelf mapping stands trial for fraud
Atle Staalesen, The Independent Barents Observer, August 17, 2018

The top official from the Ministry of Defense reportedly stole 90 million rubles earmarked for mapping of the Russian Arctic shelf. The leader of the Russian Defense Ministry’s Department for Navigation and Oceanography Sergey Travin approved a 90 million rubles transfer (€92,000) to Prominvest in 2015. Two years later, that money has got the military official and his two associates into serious trouble. A court in St.Petersburg this week started hearings in a case against Mr. Travin, his deputy Leonid Shalnov and a representative of a state cartographic company. All are charged with large-scale fraud, newspaper Kommersant reports.

Oil Set for Longest Losing Run Since 2015 Amid Economic Fears
Erin Douglas and Grant Smith, Bloomberg, August 16, 2018

Oil has retreated more than 10 percent from the three-year high reached at the end of June as concerns about the global economy grow just as the Organization of Petroleum Exporting Countries and its allies revive production. Oil supplies have also appeared more plentiful as U.S. crude inventories expanded by the most since 2017, OPEC raised output in July and Libya recovered some halted production.

From the Washington Examiner, Daily on Energy:

TRUMP-ALLIED ENERGY CEO SAYS HE’S RAISING PRICES BECAUSE OF STEEL TARIFFS: Dan Eberhart, a Trump donor and CEO of America’s largest oilfield services company, plans to tell customers that he is raising prices to cover additional costs resulting from the president’s tariffs on imported steel.

Eberhart, who runs the oil equipment company Canary, provided Josh a copy of a letter he plans to send to customers, warning of impending price hikes because of higher material costs for steel it uses in products, such as wellheads and valves.

‘No other option’: “As a steel-dependent business that is downstream of the tariffs, we have no recourse except to pay the higher prices,” Eberhart said in the letter. “We have no other option other than passing at least some of those costs to our customers.”

His problem is simple: Eberhart said Canary spends millions of dollars per year on imported steel because domestic manufacturers do not produce the niche grade of steel he uses in his products.

And the solution is obvious: He hopes to revisit price increase when “the trade situation changes,” Eberhart said in the letter to customers, and urges the end of Trump’s trade war in order to “continue unleashing America’s energy.”

Alaska companies and Alaska government targeted by Chinese hackers

Chinese hackers targeted U.S. firms, govt after trade mission: researchers
Christopher Bing and Jack Stubbs, Reuters, August 16, 2018

Hackers operating from an elite Chinese university probed American companies and government departments for espionage opportunities following a U.S. trade delegation visit to China earlier this year, security researchers told Reuters. Cybersecurity firm Recorded Future said the group used computers at China’s Tsinghua University to target U.S. energy and communications companies, as well as the Alaskan state government, in the weeks before and after Alaska’s trade mission to China. Led by Governor Bill Walker, representatives of companies and economic development agencies spent a week in China in May.

Our Take: A bit unnerving to see Alaska companies and Alaska’s government listed as targets of Chinese hackers who were looking for “espionage opportunities.”

State seeks to boost geothermal energy production
Joe Vigil, KTVA, August 15, 2018

Do you know of a good geothermal hot spot in Alaska? If you do, the state wants to know about it. The state may then hold a lease sale on the land to provide more energy opportunities in Alaska. “Alaska is located along the most active tectonic and volcanic region in the world, but so far, its geothermal resource potential is largely untapped,” according to the Division of Oil and Gas.   The Division is asking people to nominate state-owned lands with geothermal potential for possible testing. If the state likes what it sees, then it may hold a lease sale to “qualified bidders”, similar to oil and gas leases. A lot would have to happen before a lease sale happened, including public comment opportunities.

Our Take: Headlamp is happy to help the local press do their job. This isn’t a new thing. Here is a great review of what has been done in the past in Alaska, where we are using geothermal now and some of the challenges.

ConocoPhillips: Efficiencies and discoveries lead ‘renaissance’ on North Slope
Elwood Brehmer, Alaska Journal of Commerce, August 16, 2018

ConocoPhillips Alaska employees have a big, round target to hit that company leaders believe is the key to staying competitive. And it’s not a buried treasure map that points right to where the next exploration well should be drilled — although with the company’s recent success indicates they might have one of those, too. “It’s just math,” ConocoPhillips Alaska President Joe Marushack said during an Aug. 9 meeting with Alaska Journal of Commerce and ADN staff. The target is $40 per barrel and making the math work so all of the company’s operations in the state are profitable at or below that key price point.

Dow surges 350 points on resumption of China trade talks, Walmart 10% jump
Fred Imbert and Alexandra Gibbs, CNBC Business, August 16, 2018

Stocks traded sharply higher on Thursday on renewed hope that a resolution to a trade dispute with China could be on the horizon. Investors also cheered strong quarterly results from Walmart. The Dow Jones Industrial Average rose 350 points, led by gains in Walmart and Cisco Systems. The S&P 500 gained 0.8 percent as consumer staples and telecom outperformed. The Nasdaq Composite jumped 0.7 percent. National Economic Council Director Larry Kudlow confirmed to CNBC’s “Squawk Box” earlier reports saying China and the U.S. will hold a fresh round of trade talks later in August, giving investors hope that the two world’s largest economies can solve an ongoing trade spat.

Oil shrugs at revival of U.S.-China trade talks to ease tensions
Ellen Milligan, World Oil, August 16, 2018

Signs of easing tensions between the world’s two largest economies have done little to lift oil as surging U.S. stockpiles offset potential gains in crude futures. Oil in New York was little changed while crude in London rose just 0.2% despite the announcement that the U.S and China are to resume trade talks in an attempt to diffuse geopolitical tensions between the two countries. A breakdown in negotiations between the U.S. and China two months ago stoked concern that global economic growth could slow, potentially curbing energy consumption. A standoff between the U.S. and Turkey subsequently sparked fears of contagion among emerging markets. A surprise gain in U.S. oil inventories last week has also weighed on crude futures.

 

 

 

 

Children’s Climate Change Lawsuit Trashed in Washington

Chinese oil importers shun U.S. crude despite tariff reversal
Jessica Jaganathan and Chen Aizhu, Reuters, August 14, 2018

Chinese oil importers are shying away from buying U.S. crude as they fear Beijing’s decision to exclude the commodity from its tariff list in a trade dispute between the world’s biggest economies may only be temporary. Not a single tanker has loaded crude oil from the United States bound for China since the start of August, Thomson Reuters Eikon ship tracking data showed, compared with about 300,000 barrels per day (bpd) in June and July.

South Asia’s LNG import growth
Shardul Sharma, Natural Gas World Magazine, August 14, 2018

In emerging Asia, China has been grabbing all the headlines in the past year for the blistering growth in its LNG imports triggered by government’s coal-to-gas switching policy. Last year, LNG imports to China were a record 38.13mn mt, up over 46% on year, according to the Chinese customs department, which meant that it edged ahead of South Korea to become the world’s second largest LNG importing nation after Japan. The trend has spilled over to this year too as demand for gas remains strong. However, south Asia – primarily India, Pakistan and Bangladesh – has also seen significant expansion in demand for the commodity.

Our Take: The market is certainly getting stronger for Alaska LNG. If the state recognizes market forces and doesn’t try to force a project…

Billionaires Druckenmiller, Soros Throw Weight Behind Oil Rally
David Wethe and Luzi-Ann Javier, Bloomberg, August 14, 2018

The recovery in the oil industry is attracting some of the most recognized billionaires in money management. Stanley Druckenmiller’s Duquesne Family Office bought 1.68 million shares in VanEck Vectors Oil Services ETF in the second quarter, the third-biggest addition to its portfolio in the period, a regulatory filing showed Tuesday. It also added the Energy Select Sector SPDR Fund. George Soros’s hedge fund bought energy stocks including Chevron Corp.

BLM releases more details on gas project
Tim Bradner for the Frontiersman, August 14, 2018

The U.S. Bureau of Land Management released details last week on ConocoPhillips’s planned Willow oil and gas project in the National Petroleum Reserve-Alaska, which would be a major development project if it proceeds. Conservation groups are meanwhile gearing up to fight the BLM’s fast-tracking of an environmental review of the project. Under a new procedure the agency must complete its draft Environmental Impact Statement within a year. In a plan submitted to BLM ConocoPhillips has proposed a project involving a central oil and gas process facility; up to five drill pads with 50 producing wells on each pad; in-field roads; an airstrip and a temporary offshore artificial island in Harrison Bay, to the north, that would facilitate the unloading of large production process modules for the field.

Our Take: The usual suspects “will be working to ensure that the Western Arctic’s rich habitat and subsistence resources are protected,” translation: we will use this opportunity to raise as much money as we can to fight any development anywhere in Alaska. Meanwhile in the real world, the area being discussed is inland, a good distance away from “ecologically sensitive coastal areas where there are lagoons, lakes and wetlands that are important habitat for migrating birds.”

More U.S. Marines to train in Norway, closer to Russia
Reuters, August 15, 2018

The United States will more than double the number of Marines stationed in Norway, in line with plans first outlined in June, the Norwegian defense ministry said on Wednesday. Plans to increase the number of Marines in Norway to 700 from 330 and moving some of them closer to the border with Russia had triggered a sharp reaction from Moscow, which called the plans “clearly unfriendly”. The government in Oslo, increasingly concerned about Russia since the annexation of Crimea in 2014, insists the increased U.S. presence is only for training purposes and should not be interpreted as a military escalation.

Norway’s border with Russia profoundly shapes its Arctic security policy, says study
Malte Humpert, High North News, August 15, 2018

A new study published by The Polar Journal identifies geography as a key factor to understanding Norway’s and Canada’s differing approaches to Arctic security. In addition, the study concludes that the way the two countries rely on and utilize NATO shapes their Arctic security policies. The authors of the study, Andreas Østhagen, Gregory Levi Sharp, and Paal Sigurd Hilde, explain that the Arctic must be understood not as a singular region, but as a series of distinct subregions “where the dominant security variable is Russia.” “Norway’s approach to NATO is arguably quite different from its fellow Nordic NATO-members,” says Østhagen. “The direct border with Russia and being strategically important in the North Atlantic are key explanatory factors.”

 

From the Washington Examiner, Daily on Energy:

JUDGE SLAMS CHILDREN’S CLIMATE LAWSUIT IN LATE-NIGHT RULING: A judge in Washington state issued a late-night ruling Tuesday that killed off a climate change lawsuit filed against the state by a group of child activists.

King County Superior Court Judge Michael Scott ruled in favor of the State of Washington’s motion to dismiss the lawsuit, Aji P. v. State of Washington. The 13 young activists in the suit argue that the state is violating their constitutional rights through actions that cause climate change. Judge Scott ruled that issues brought up in the case are political questions that cannot be resolved by a court and must be addressed by Congress and the president.

A similar lawsuit by child activists has also targeted the Trump administration and will be heard in federal district court in October. It appears the child plaintiffs are having better luck going up against big government, and not the states.

Our Take: Headlamp hopes for the same outcome here in Alaska. We reported on this story earlier Alaskan youth sue state government for lack of action against climate change. How many judges will have to say, “these are political questions that can’t be resolved in court”, before people stop wasting time and money on frivolous lawsuits?

Musk “I want you, I need you, but there ain’t no way I’m ever gonna love you”

Elon Musk’s Vast Oil Conspiracy Ends with Saudi Billions
Tom Randall, Bloomberg, August 14, 2018

Elon Musk has always hated the fossil-fuel industry. His stated mission for Tesla Inc. is to hasten its demise, and more than once he’s blamed the “unrelenting and enormous” power of oil interests for sabotaging his efforts. But now, in his bid to take Tesla private, Musk is courting billions of oil dollars. After a week of playing coy about who he’s been trying to enlist to help buy out Tesla’s publicly traded shares, Musk revealed at least one potential partner: Saudi Arabia. It’s hard to think of a more perfect symbol of Big Oil and its money than a sovereign wealth fund created by the world’s biggest oil producer. Musk said in a blog post on Monday that he’s been in talks with Saudi Arabia “going back almost two years.”

Our Take: A new way to spell hypocrisy – MUSK.

Donlin Gold Project Receives Record of Decision and Major Federal Permits

  • The U.S. Army Corps of Engineers (the Corps) and Bureau of Land Management (BLM) issued a joint Record of Decision for the Donlin Gold project four months after the publication of the Final Environmental Impact Statement, marking the completion of the multi-year federal environmental review process
  • The Corps issued a combined Clean Water Act Section 404 and Rivers and Harbors Act Section 10 permit to Donlin Gold
  • The BLM also issued the Offer to Lease for the pipeline right of way to Donlin Gold

Our Take: HEADLAMP doesn’t get to say this very often – Congratulations for working through the NEPA process and getting permits that will lead to responsible resource development, jobs and a stronger economy!

New wave of oil and natural gas mega-projects set to test capital disciple: Wood Mackenzie
S & P Global Platts, August 14, 2018

A new wave of oil and natural gas mega-projects lined up for approval by producers over the next 18 months will test industry hopes that cost overruns and delays on large-scale, complex upstream projects are a thing of the past, according to a report by Wood Mackenzie. An uptick in major project sanctions began towards the end of last year, suggesting confidence is returning to the upstream sector and project approvals are set to shift again in 2019, Wood Mac believes. Most of the new planned projects are giant, capital-intensive LNG plants with multi-billion boe developments such as Mozambique LNG, Canada LNG.

Hey Siri – What Would a ‘No-Deal’ Brexit Mean for the UK Oil and Gas Industry?
OilVoice Press, OilVoice, August 14, 2018

The discussion around hard Brexit, soft Brexit, divorce bill, transition arrangements, new trade deals and the Chequers Brexit plan is now rapidly turning into a bewildering array of statements, claims and counter claims. The Governor of the Bank of England, Mark Carney, explained it well when he told the BBC in early August that “the possibility of a no-deal Brexit is uncomfortably high and highly undesirable.” Mr. Carney also said that “if a no-deal Brexit were to happen, it could mean disruption to trade and economic activity, as well as higher prices for a period of time.”

Our Take: A stable fiscal climate matters. The UK has been able to increase production between 2014 and 2018 – by over 16% and is expected to continue on this path for the remainder of this decade. That will require major new investment, which will require “urgent clarification around the ‘rules of the game’ so investors can be confident about continued investment.”

What can Alaska learn from Connecticut’s green bank?
Elizabeth Jenkins, Alaska’s Energy Des, August 13, 2018

Governor Bill Walker’s Climate Action Leadership Team is trying to envision innovative ways to reduce carbon emissions in Alaska. For inspiration, task force members are looking to Connecticut, where a state-sponsored bank has helped loan millions of dollars for energy efficiency projects. Bert Hunter has a favorite project the Connecticut Green Bank has helped fund. You can almost hear his eyes sparkling through the phone as he describes it. An old textile mill is being transformed into shops and affordable housing, and on site is a built-in hydroelectric dream. That river will generate power for the building through two turbines — lowering energy costs for the residents.

From the Washington Examiner’s Daily on Energy:

TRUMP SIGNS DEFENSE BILL PROTECTING MILITARY BASES FROM CLIMATE CHANGE: Trump signed a military funding bill on Monday that mandates the armed forces to protect bases from floods, storms, and rising sea levels caused by climate change.

Climate ‘resilience’: The massive $717 billion National Defense Authorization Act directs the military to include in every installation’s master plan an examination of “energy and climate resilience.”

It defines climate resilience as “anticipation, preparation for, and adaptation to utility disruptions and changing environmental conditions and the ability to withstand, respond to, and recover rapidly from utility disruptions while ensuring the sustainment of mission-critical operations.”

Congress forces action: The bill, a bipartisan compromise by the House and Senate, also orders the Defense Department to consider flood risk when building new bases.

The language on climate change is a sign that Republicans in Congress are moving toward more acceptance of climate change being a serious security issue, and that the military will continue efforts to assess and plan for the risks even if Trump does not take the problem seriously.

A trend: Last year’s NDAA bill ordered a Pentagon report on the top 10 at-risk bases and what should be done to protect them.

It said climate change is a “direct threat” to U.S. national security, endangering 128 military bases with sea rise and global destabilization that could fuel terror groups.

Make Coal Great Again. Turf wars over Alaska LNG. DNC will take oil $.

From the Washington Examiner, Daily on Energy:

DNC REVERSES POLICY, ACCEPTS CONTRIBUTIONS FROM FOSSIL FUEL WORKERS: The Democratic National Committee on Friday reversed its ban on taking financial contributions from fossil fuel companies, after an outcry from union workers that said it was alienating a major part of the Democratic base.

‘Draw the line’: “We have to draw the line that we are indeed a party of a big tent where all working people are welcome,” said DNC Chairman Tom Perez on a conference call Friday night. “We’re not a party that punishes workers simply based on how they make ends meet.”

Resolution: Perez sponsored the Friday resolution that allows the DNC to accept contributions from workers that are employed by fossil fuel firms, such as those that mine coal, drill for and refine natural gas and oil.

Our Take: How very magnanimous of them NOT to punish workers in the fossil fuel industry by taking their money…

Alaska’s North Slope Hit by Strongest Quake Ever Recorded in the Region
Associated Press, August 12, 2018

Alaska’s North Slope was hit Sunday by the most powerful earthquake ever recorded in the region, the state’s seismologist said. At 6:58 a.m. Sunday, the magnitude 6.4 earthquake struck an area 42 miles (67 kilometers) east of Kavik River Camp and 343 miles (551 kilometers) northeast of Fairbanks, the state’s second-biggest city. The U.S. Geological Survey says the earthquake had a depth of about 6 miles (9.9 kilometers.) State seismologist Mike West told the Anchorage Daily News that the earthquake was the biggest recorded in the North Slope by a substantial amount. “This is a very significant event that will take us some time to understand,” he told the Daily News. The previous most powerful quake in the North Slope was in 1995 at magnitude 5.2, West told the newspaper.

Our Take: No impact on pipeline operations and nothing wrong at the Prudhoe Bay field according to statements from Alyeska, the pipeline operator and BP, the field operator for Prudhoe.

Borough, Nikiski seek to have greater participation in LNG export project
Ben Boettger, Peninsula Clarion, August 12, 2018

The Kenai Peninsula Borough is seeking an official role in federal permitting of plans to export North Slope natural gas to Asia via an 806-mile pipeline to a liquefaction plant and export terminal planned for Nikiski — where the Kenai Peninsula Borough intends to keep it, countering efforts by other local governments to propose other locations. At their Tuesday meeting, the Kenai Peninsula Borough Assembly voted to petition the agency leading the LNG project’s environmental permitting — the Federal Energy Regulatory Commission (FERC) — for intervenor status in the gasline’s environmental impact statement, which would allow the borough to request rehearing of FERC decisions or appeal them to a U.S Circuit Court.

Our Take: With Valdez and Mat-Su “hemming and hawing” for the project, it’s no surprise that the Kenai Peninsula Borough wants to be at the table to protect their interests.

Novatek’s Yamal LNG project doubles its production capacity ahead of schedule
Malte Humpert, High North News, August 13, 2018

Russian natural gas major Novatek and its French partner Total announced the commissioning of the second production line at their Yamal Liquefied Natural Gas facility on the Arctic Yamal peninsula. The doubling of capacity comes six months ahead of schedule and follows the opening of the first production line, or train, in December 2017. The second train began operating on July 12 when the first natural gas was fed into the plant and the first LNG was placed into storage tanks on July 21. “Following the successful start-up of Yamal LNG in December last year, the first shipment from the second train ahead of schedule is another major milestone for this world-class LNG project,” commented Patrick Pouyanné, chairman and CEO of Total.

Forget Trump — coal seeks new life in high tech
Amy Harder, Axios, August 13, 2018

Randy Atkins is trying to make coal great again, but not how President Trump has promised. The intrigue: Atkins’ company, Ramaco Carbon, is working to open what would be Wyoming’s first coal mine devoted not to electricity, but to high-tech products like carbon fiber or 3D printing material. Atkins represents the leading edge of what could be a new, high-value market for coal after decades of being America’s cheapest power source. The big picture: Coal’s share of U.S. electricity mix has plummeted from nearly 50% to 30% in just the past decade, fueled by growth in cheap, cleaner-burning natural gas and tougher environmental regulations. Trump has promised to revive coal and is directing his Energy Department to bolster economically struggling coal plants (and similarly challenged nuclear reactors).

Climate Action Leadership Team: Janet Weiss
From Alaska Governor Bill Walker, August 8, 2018

Listen to BP President Janet Weiss discuss her participation in the Governor’s Climate Action Leadership Team and the need for data driven discussions.

ExxonMobil Adds Support to Permian Gas Pipe Project
Dale Lunin, Natural Gas World, August 10, 2018

Kinder Morgan said August 10 that US super-major ExxonMobil has agreed to support the proposed Permian Highway Pipeline (PHP) project, a 430-mile intra-state conduit designed to transport up to 2bn ft3/day of associated gas from the Permian Basin in Texas to connections that would move it to markets in the US Gulf Coast region and Mexico. Under a letter of intent signed by ExxonMobil, its unconventional oil and gas subsidiary, XTO Energy, may contract for up to 450mn ft3/day of capacity on the $2bn pipeline project. “We are committed to supporting development of the infrastructure needed for our planned production growth in the Permian Basin,” XTO Energy president Sara Ortwein said. “The Permian Highway Pipeline will provide additional capacity for reliable transportation of natural gas to the US Gulf Coast.”

Saudi cuts oil output as OPEC points to 2019 surplus
Alex Lawler, Reuters, August 13, 2018

OPEC on Monday forecast lower demand for its crude next year as rivals pump more and said top oil exporter Saudi Arabia, eager to avoid a return of oversupply, had cut production. In a monthly report, the Organization of the Petroleum Exporting Countries said the world will need 32.05 million barrels per day (bpd) of crude from its 15 members in 2019, down 130,000 bpd from last month’s forecast. The drop-in demand for OPEC crude means there will be less strain on other producers in making up for supply losses in Venezuela and Libya, and potentially in Iran as renewed U.S. sanctions kick in.

Make no mistake – Salmon initiative is bad news for Alaska.

Republican Resource Committee Members Respond to Salmon Initiative Decision

After thoroughly reviewing the Alaska Supreme Court’s decision to remove unconstitutional sections of Ballot Measure #1 and allowing it to appear on the November statewide ballot, three House Republicans on the House Resources Committee issued the following statements. “While the most obvious unconstitutional portions have been removed, this remains a poorly written measure,” said Rep. Chris Birch (R-Anchorage). “If passed, certain provisions could still face constitutional challenges and will result in the loss of jobs and investment. These are consequences Alaskan’s take seriously and our economy can’t afford.”

Our Take: It’s good to hear from someone on the resources committee. It would be nice to hear whether the co-chairs, Reps Josephson and Tarr, share the sentiment of these members – that the initiative is a job-killing, economy-killing nightmare.

EU Urges End to ‘US LNG Red-Tape
Mark Smedley, Natural Gas News, August 9, 2018

The European Commission (EC) said August 9 that increasing imports of US LNG into the European Union since April 2016 are welcome, but that US red tape over their export should be scrapped. It said that since the first US LNG arrived in the EU (at Sines, Portugal) in April 2016, more than 40 US LNG cargoes have been imported, amounting to the equivalent of 2.8bn m3 gas. But US legislation still requires prior regulatory approval for LNG to Europe, it added: “These restrictions need to be addressed and US rules made easier for US LNG to be exported to the EU.”

With warming Arctic, Russian navy gets larger areas to patrol
Thomas Nilsen, The Independent Barents Observer, August 9, 2018

Eight vessels from Russia’s Northern Fleet set sail from the fleet’s main base in Severomorsk on the Kola Peninsula Wednesday heading northeast on a long-distance Arctic voyage, according to the press service of the fleet. “The main goal for the vessels in the Arctic expedition of the Northern Fleet is to ensure safety of maritime navigation and other types of Russia’s maritime economic activity in the Arctic zone,” the announcement reads.

From the Washington Examiner, Daily on Energy:

SEN. RON JOHNSON DEMANDS TRUMP EXPLAIN ‘ARBITRARY’ STEEL TARIFF EXEMPTION PROCESS: Sen. Ron Johnson, R-Wis., demanded on Thursday that the Trump administration better explain its process for how some companies are granted exemptions to steel tariffs, claiming that businesses in his Midwest state find decisions to be “arbitrary.”

Johnson, whose state hosts the second most manufacturing-heavy job market in the U.S., wrote to Commerce Secretary Wilbur Ross that the administration’s denial of an exemption request for one Wisconsin business cost it $2.6 million.

Shared ‘frustration’: “Across the country, many businesses share the same frustration about the difficult and time-consuming process,” wrote Johnson, the chairman of the Homeland Security Committee.

Our Take: Follow the rules, follow the process, don’t grant exemptions to your friends and arbitrarily deny them to others. It seems pretty basic.

Latest move in tit for tat trade war; Tax Credit program wasn’t all bad.

Alaska puts chunks of North Slope up for single bids in unprecedented lease sale
Elwood Brehmer, Alaska Journal of Commerce, August 9, 2018

Attention oil explorers: Alaska officials have three flavors of SALSA they would like you to try. Painful puns aside, Department of Natural Resources officials for the first time have put together large chunks of available North Slope acreage that will each be auctioned off with a single bid during the state’s annual fall lease sales held by the Division of Oil and Gas. The three Special Alaska Lease Sale Areas, or SALSAs, are some of the only remaining swaths of unspoken-for acreage in the middle of one of the country’s preeminent hydrocarbon basins; and they come with a starter kit of data to inform drilling that any wildcatter should love.

Our Take: The refundable tax credit program provided the state with 3D – seismic data that they can now use to attract new explorers to the North Slope. HEADLAMP is anxious to see the results of this sale.

With tweaks, Alaska Supreme Court rules Yes for Salmon can go on ballot
Elizabeth Harball, Alaska’s Energy Desk, August 8, 2018

The Yes for Salmon initiative — or at least most of it — will be on the November ballot. The Alaska Supreme Court today ruled that only certain provisions of the controversial ballot initiative are unconstitutional. Whether the rest becomes state law will be up to Alaska voters. The decision guarantees a big fight ahead. The initiative is aimed at putting in place a much tougher permitting regime for projects built in salmon habitat and is fiercely opposed by a coalition of mining and oil companies, Alaska Native corporations and other groups.

Our Take: Alaska’s Constitution states that ballot initiatives can’t prioritize one state resource over another. HEADLAMP is glad the court required those provisions to be removed from the ballot but the fight to responsibly develop our resources and have a strong economy continues until November.

China hits US oil products, LPG with new tariffs but backs off crude for now
S & P Global Platts, August 8, 2018

China announced Wednesday retaliatory tariffs on an additional $16 billion worth of US imports, including oil products, LPG and coal in a new list of affected goods but leaving off widely-expected import duties on US crude. The Chinese Ministry of Commerce’s latest list imposes 25% tariffs on a swathe of energy commodities from August 23 including “asphalt shale, oil shale and tar sand.” But the ministry said the latest tariffs remove a previous reference to US crude in earlier proposals announced on June 16. Naphtha, propane and butane all remain on the new list which also covers waste metals, petrochemical products and cars.

Our Take:   China blinked first. Import duties on US crude would have hit them hard, leaving them with few options to purchase oil from someone else.

Exxon Seeks Long-Term Deals for U.S. Oil Exports
Catherine Ngai, Serene Cheong and Sharon Cho, Bloomberg, August 8, 2018

Exxon Mobil Corp. is courting refiners with rare long-term U.S. crude export deals, according to people familiar with the matter, as the company expands its trading scope. The oil giant has approached several refiners to discuss contracts for exports of light, sweet crude from the prolific Permian Basin starting as early as this year, said the people, who asked not to be identified because the discussions are private. The talks are in early stages, with volumes, timing and price still to be determined.

China tariffs create headache for next wave of US natural gas export projects
Tom DiChristopher, CNBC, August 9, 2018

China’s threat to slap tariffs on U.S. natural gas exports is injecting uncertainty into a construction boom for the multibillion dollar facilities that ship American shale gas around the world. By the end of next year, six facilities in the United States are expected to be exporting liquefied natural gas. During that same period, several companies are slated to decide whether they’ll move forward with another wave of American LNG export terminals. Many of those projects are looking to line up buyers in China, which is poised to surpass Japan as the world’s largest consumer of LNG, a form of natural gas super-chilled to its liquid form for export by sea.

Our Take: Alaska LNG is noted in this article

Former state senator appointed to Interior Gas Utility board
Robin Wood, Fairbanks Daily News Miner, August 8, 2018

Fairbanks city Mayor Jim Matherly has nominated former state Sen. Gary Wilken to replace Frank Abegg on the Interior Gas Utility board of directors’ city-appointed seat. Abegg resigned from the position Tuesday in protest of IGU’s purchase of Pentex Natural Gas. Wilken will need to be confirmed by the Fairbanks City Council at its Aug. 20 meeting. Wilken resigned from the Alaska Industrial Development and Export Authority board of directors in order to accept Matherly’s nomination. He was first appointed to the board in 2010 and was serving his fourth term. AIDEA was the entity that sold Pentex to IGU and provided the loan.

Headlamp – Interior Gas Utility and AIDEA – you have some splaining to do.

Pentex purchase prompts IGU board member to resign
Robin Wood, Fairbanks Daily News Miner, August 8, 2018

Claims of unfair business practices from a state entity, incomplete information, crippling debt and unrealistic growth projections were among a long list of grievances cited in the resignation letter of Interior Gas Utility board member Frank Abegg. In the five factors Abegg expands upon, he claims Pentex was too expensive, a consistent supply of liquefied natural gas is at high risk, gas rates are too high, growth projections are too optimistic and that AIDEA dealt unfairly with IGU.

Our Take: Abegg’s claim that Golden Valley Electric serves 35,000 customers for about $20,000 per customer compared to IGU’s $70,000 per customer for the 1100 existing customers is startling. His grievances should not go unanswered. AIDEA would do well to be specific in a response to Abegg’s claims. The Fairbanks community and the state of Alaska can’t afford another boondoggle.

ConocoPhillips’ Willow prospect advances with review effort by federal government
Alex DeMarban, Anchorage Daily News, August 7, 2018

The federal government announced Tuesday that it will launch the regulatory process and start taking public comments for a major oil discovery on Alaska’s North Slope, in a statement that drew swift criticism from conservation groups. The Bureau of Land Management said it will begin taking steps to conduct an environmental review of ConocoPhillips’ Willow prospect in the National Petroleum Reserve-Alaska, according to a notice in the Federal Register.

U.S. crude exports to India surge as China intake fades
Clyde Russell, Reuters, August 7, 2018

U.S. crude oil producers appear to have found an alternative buyer for cargoes no longer heading to China, with India on track to import record volumes in August. India has booked a total of 9.94 million barrels of crude, about 319,000 barrels per day (bpd), to arrive from the United States this month, according to vessel-tracking and port data compiled by Thomson Reuters Oil Research and Forecasts. This would be almost triple the 119,000 bpd India imported from the United States in July, and well above the 190,000 bpd for November last year, the previous record for a month.

Saudi-Canada Fight Shows Need for More Pipelines, Oil Group Says
Kevin Orland, Bloomberg, August 8, 2018

The escalating trade battle between Canada and Saudi Arabia highlights the need for more pipelines to move oil and natural gas around the northern nation to improve its energy security, according to the Canadian oil industry’s largest trade group. Canada’s energy producers could supply a greater portion of their domestic market and satisfy more of world demand if they could move supply from producing regions to both coasts, said Ben Brunnen, vice president of oil sands operations and fiscal policy for the Canadian Association of Petroleum Producers. Canada imported 71,300 barrels of crude a day from Saudi Arabia as of 2014, accounting for about 11 percent of the country’s imports, according to Natural Resources Canada.

Donlin Gold Helps Green Star Remove Thousands of Pounds of Hazardous Waste
Alaska Business Monthly, August 8, 2018

Donlin Gold teamed up with Green Star this summer to collect almost 30,000 pounds of hazardous material and special wastes from five villages that were safely transported back to Anchorage for recycling or disposal. The pilot program is designed to remove the most hazardous legacy material from local landfills to improve human health and the environment.

Our Take:   Like a good neighbor…

From the Washington Examiner, Daily on Energy:

FINAL ACTION ON REPEALING OBAMA-ERA METHANE RULE COMING SOON: The Trump administration will soon finalize its repeal of the Obama administration’s “venting and flaring” rule to manage emissions from fracking, Joe Balash (DOI’s lands and mining chief) said.

‘Final stages’: He told the Heartland Institute that the agency is in the “final stages” of working with the White House Office of Management and Budget to prepare the final rule on updating and revising the venting and flaring regulations in the coming weeks.

Obama’s ‘cloak’ and ‘cover’ rule: The rule “upset decades of precedent on how we count waste” from the oil and natural gas sector, he said. It was a “cloak, just a cover, to use federal land management and royalty policy to regulate emissions.”

He said the U.S. is missing out on billions of dollars in revenue by restricting energy development on public lands.

“If production on federal lands had grown at the same rate as overall U.S. production from 2009 to 2015, total royalties would have been 31 percent higher,” he said. “We would have had an additional 20 billion dollars in the Treasury. And that would have helped across the board.”

SEVENTY NEW COAL MINES, SEVEN NEW COAL LEASES: “From Jan 2017 to March 2018, we’ve issued seven new coal leases by application, we’ve approved 70 new coal mine plans and these approvals positively impact 1,900 employees with those associated mines,” Balash told the Heartland Institute.

 

How about a salmon tax?

Oil rises ahead of US sanctions
Reuters, August 7, 2018

Oil prices rose on Tuesday ahead of the introduction of US sanctions against major crude exporter Iran. Spot Brent crude futures were at $73.88 per barrel at early on Tuesday, up 13 cents, or 0.2%, from their last close. US West Texas Intermediate crude futures were up 1 cent at $69.02 barrel. US sanctions against Iran, which shipped out almost 3 million barrels per day (bpd) of crude in July, are set to begin at 12:01 am US Eastern time on Tuesday.

Letter: How about a salmon tax?
Don Johnson, Anchorage Daily News, August 6, 2018

The Stand For Salmon group has a desire to restore Alaska’s salmon populations, but it wants to do it by only addressing salmon habitat. Alaska’s salmon bust problems are not that simple. Unfortunately, there are many offenders to blame for our current salmon bust problems.

Blaming only habitat issues for salmon bust, while ignoring user groups, is like trying to catch a serial murderer by regulating the park the murders are committed in. You catch a murderer by going after the murderer, not by regulating the environment they are murdering in. User groups are busy slaughtering hordes of salmon while Stand for Salmon is busy trying to regulate only salmon habitat. Our salmon bust problems are local and foreign user groups slaughtering our salmon, period. We can end our salmon bust problems by directly addressing the people who are overharvesting our salmon.

Alaska could address these people by charging a straight salmon tax for each salmon killed by anyone. A solution can be reached by increasing the tax until users either cannot afford to kill salmon or pay enough tax to finance a real salmon solution. A salmon tax would guarantee a salmon solution either way. Minor habitat impacts could then be addressed after reducing major user group impacts.

Our Take: While tongue in cheek, this letter makes some good points. Headlamp would like to add that a salmon tax will also capture wages that are going out-of-state with the fishermen who don’t live in Alaska.

New Coast Guard commandant sees the Arctic as an urgent concern
Melody Schreiber, Arctic Today, August 7, 2018

Less than two months into his new job, Adm. Karl L. Schultz, the new commandant of the U.S. Coast Guard, encountered a surprise. The House of Representatives unexpectedly zeroed out the budget for a long-anticipated heavy icebreaker. Schultz was taken aback, but still has hopes the icebreaker — and five other polar-class vessels like it — will still find funding in Congress, and soon. “We need six icebreakers, three of them need to be heavy icebreakers, and we really need one today,” Adm. Schultz said at a recent event at the Center for Strategic and International Studies in Washington. “I am guardedly optimistic, but things change quick,” he said. “It’s a dynamic environment.”

Our Take: Headlamp shares Admiral Schultz’s concern. The U.S. needs icebreakers, today.

Chinese newspaper mocks Trump’s claim of winning trade war as ‘wishful thinking’
Engen Tham, Reuters, August 6, 2018

Chinese state media kept up their criticism of U.S. President Donald Trump’s trade policies, with a newspaper on Tuesday describing as “wishful thinking” Trump’s belief that a fall in Chinese stocks was a sign of his winning the trade war. As the world’s two biggest economies remained locked in a heated tariff dispute, Beijing and Washington have kept up a blistering rhetoric with threats and counter-threats of more punitive trade measures.

Russia says ‘deeply disappointed’ by US sanctions on Iran
AFP, August 7, 2018

Russia on Tuesday said it was “deeply disappointed” by US President Donald Trump’s decision to re-impose unilateral sanctions on Iran. “We are deeply disappointed by US steps to reimpose its national sanctions against Iran,” the Russian foreign ministry said in a statement. The ministry said it will do “everything necessary” to save the historic 2015 Iran nuclear deal and protect its shared economic interests with Tehran.

Our Take: Russia promising to do “everything necessary” to protect its economic interests while China mocks President Trump about the trade war – lots of rhetoric and threats.

Trafigura plans US deepwater oil export terminal
David Sheppard, Financial Times, August 6, 2018

Swiss commodity trader Trafigura has submitted plans to build the first deepwater US oil export terminal capable of loading some of the world’s largest supertankers, with crude shipments expected to soar in coming years. The plan would see the commodity house build an offshore deepwater port facility in Corpus Christi, Texas, on the Gulf of Mexico, with a view to accommodate very large crude carriers capable of carrying more than 2m barrels of crude.