Headlamp –  Murkowski hypes Alaska’s LNG Project

Murkowski: U.S. Natural Gas Can Help Power the World
U.S. Senate Committee on Energy & Natural Resources, June 28, 2018

U.S. Sen. Lisa Murkowski, R-Alaska, today delivered opening remarks for a panel discussion on “Access to Sustainable Energy in Developing Economies” at the 27th World Gas Conference, which is being held in Washington, D.C. The conference has attracted thousands of the most influential leaders, policymakers, and experts in the energy industry from more than 100 countries to discuss how natural gas will fuel the future. “Access to energy is fundamental to reducing poverty, improving health, increasing productivity, and promoting economic growth,” Murkowski said. “It shapes our quality of life – how we will live, how well we will live, and even how long we will live.”

Our Take: We agree with Senator Murkowski. The U.S. is the largest producer of natural gas. Focusing on affordable, sustainable energy is a win for all Americans. As Murkowski said, “the proposed Alaska LNG project – will play a crucial role in meeting growing global demand.”

How China Got Sri Lanka to Cough Up a Port
The New York Times, Maria Abi-Habib, June 25, 2018

Every time Sri Lanka’s president, Mahinda Rajapaksa, turned to his Chinese allies for loans and assistance with an ambitious port project, the answer was yes. Yes, though feasibility studies said the port wouldn’t work. Yes, though other frequent lenders like India had refused. Yes, though Sri Lanka’s debt was ballooning rapidly under Mr. Rajapaksa. Over years of construction and renegotiation with China Harbor Engineering Company, one of Beijing’s largest state-owned enterprises, the Hambantota Port Development Project distinguished itself mostly by failing, as predicted. With tens of thousands of ships passing by along one of the world’s busiest shipping lanes, the port drew only 34 ships in 2012.

Our Take: The Chinese don’t mess around. Buyer beware!

UPDATE 1-U.S. EPA to undercut own power to block potential polluting projects
Reuters, Valerie Volcovici, June 27, 2018

The U.S. Environmental Protection Agency chief on Wednesday said he would eliminate regulations that allowed it to block permits for major projects that may pollute water, handing a victory to mining, oil and land development companies seeking to avoid delays over environmental concerns. In a memo, EPA Administrator Scott Pruitt said he is directing the agency’s office of water to change current regulations under the federal Clean Water Act to eliminate the agency’s power to preemptively or retroactively veto permits before or after they have been filed with the Army Corps of Engineers or state agencies. The action marked Pruitt’s latest move to unwind regulations he has said were unfair to businesses.

Our Take: We applaud EPA Administrator Scott Pruitt for upholding the core mission of the EPA without bias. “Today’s memo refocuses EPA on its core mission of protecting public health and the environment in a way that is fair and consistent with due process.”

Energy Secretary Rick Perry meets with Russia’s oil minister and airs US concerns about their foreign aggression
CNBC, Matthew J. Belvedere, June 28, 2018

Energy Secretary Rick Perry on Thursday confirmed he met with Russia’s oil minister this week, and laid out U.S. concerns about a number of issues, including Moscow’s annexation of the Crimean peninsula from Ukraine in 2014. “We shared with them our concerns about some of the activities they’ve been involved with, whether it’s Crimea, Ukraine [or] the continual development of the Nord Stream 2 [natural gas pipeline]. All of those are on the table,” Perry said on CNBC’s “Squawk Box” from the 2018 World Gas Conference in Washington, D.C.

Governor’s climate change task force adds science education to draft plan
KTOO Public Media, Elizabeth Jenkins, June 27, 2018

Draft recommendations are coming together that could shape Alaska’s climate change policy in the future. Governor Bill Walker’s climate change task force has been working this summer to nail down some clear objectives. The draft climate plan already includes statements on reducing carbon emissions and diversifying the economy. But task force member, Mark Masteller, encouraged the group to add another one: a policy statement on science education — addressing climate change. “This affects everybody right?” Masteller said. “So that’s why I felt like it needed to be its own policy statement.”

Our Take: Good news! Alaska Resource Education, an educational non-profit, is poised and ready to provide Alaska’s youth with fact based information about climate change!

From Today’s Washington Examiner, Daily on Energy:

WHAT DOES JUSTICE KENNEDY’S RETIREMENT MEAN FOR ENERGY ISSUES? Wednesday’s announcement that Supreme Court Justice Robert Kennedy will retire next month has raised a number of questions about his replacement and what it means for big issues in the future. Here is a look at some of them:

Mass v. EPA? Although some are speculating about a rehearing of the high court’s landmark Massachusetts v. EPA decision that said the agency was required to regulate greenhouse gas emissions under the Clean Air Act, more grounded voices say don’t count on it.

‘Clear ruling’ on clean cars: “More realistic short-term objectives would be to get a clear ruling that defines and limits federal wetlands jurisdiction and a decision that supports [the Department of Transportation’s] pre-emption of the EPA’s California waiver for regulating greenhouse gas emissions from vehicles,” said Ebell, who serves as the director for energy and environment at the libertarian Competitive Enterprise Institute think tank.

Endangered species: “Another medium term goal would be to reconsider the limits of the Endangered Species Act,” he said.

Headlamp –  China is on the way to becoming the most influential Arctic power?

“Rather than punishing fuels to reduce emissions through regulation, we seek to reduce emissions by innovation.”
Rick Perry, US Energy Secretary

China Is Planning a Nuclear-Powered Icebreaker
Popular Mechanics, Kyle Mizokami, June 25, 2018

China is preparing to start bidding on a nuclear powered icebreaker, the first nuclear powered surface ship in the country’s history. An icebreaker powered by nuclear energy would give Beijing access to the Arctic and its resources. It would also pave the way toward nuclear-powered aircraft carriers, giving the People’s Liberation Army Navy unprecedented reach.

Our Take: With the ever changing climate and evolution of technology, the Arctic is offering new sea routes and exploration opportunities not thought possible. China’s reach will be expanded and could lead to other ships, including aircraft carriers, using nuclear technology.

The Coexistence of Offshore Wind with Oil and Natural Gas is a Win for All Americans
NOIA, Justin Williams, June 26, 2018

NOIA President Randall Luthi issued the following statement regarding today’s House Committee on Natural Resources Subcommittee on Energy and Mineral Resources hearing, “Legislative Hearing on Offshore Renewable Energy Opportunities.”: “NOIA thanks Chairman Gosar and Ranking Member Lowenthal for the invitation to share our perspective at today’s hearing on offshore wind energy. We also thank Gulf Island Fabrication for participating, as they have experienced firsthand what a strong relationship between the offshore oil and natural gas and offshore wind industries can achieve, and their story is one Americans should hear about.”

Our Take: As we have said before, there is room for everyone at the energy dinner table. A productive relationship between different types of energy is a win for America and will help make energy more affordable.

Trump Trade Threats Turn Exxon, Chevron From Backers to Critics
Bloomberg Business, Kevin Crowley, June 26, 2018

Big Oil is losing faith in President Donald Trump’s pledges to build the U.S. into a self-reliant energy superpower. Top executives from Exxon Mobil Corp., Chevron Corp. and Total SA all took shots at Trump’s trade plans at the World Gas Conference in Washington, expressing concern that U.S. tariffs are a risk to oil and gas demand, and that restrictions on importing steel could impede one of the country’s fastest-growing major industries. An executive from BP Plc targeted Trump’s plan to “bail out” unprofitable coal and nuclear power plants.

Our Take: “Restricting trade hurts investor confidence.”

Oil Spending Surges in U.S. With Canada ‘Dying by Our Own Sword’
Bloomberg, Robert Tuttle and Kevin Orland, June 26, 2018

In a rural patch of prairie along the U.S.-Canadian border, the towns of Portal, North Dakota, and North Portal, Saskatchewan, couldn’t be closer. They share a fire department, and the first eight holes of the local golf course are in Canada, while the ninth and the club house are in the U.S. But here in the Bakken shale patch, one of North America’s most-prolific oil fields, the U.S.-Canada border represents a drillers’ divide. Spurred by a surge in crude prices, North Dakota’s production is rising more than three times faster than its counterpart in the Bakken region of Saskatchewan.

Federal Court and Ocean Agency say no to climate change radicals

U.S. court dismisses climate change lawsuits against top oil companies
Reuters, Reuters staff, June 25, 2018

A California federal court dismissed climate change lawsuits against five oil companies by the cities of San Francisco and Oakland, saying the complaints required foreign and domestic policy decisions that were outside the purview of courts, Chevron Corp (CVX.N) said on Monday.

Our Take: All parties involved recognized the complexity of the problem and the science behind climate change. The court recognized that it was a global issue beyond the control of the courtroom and the local area – AKHEADLAMP is pleased to see a federal court recognizing that it is a global issue.

 

Ocean science agency chief suggests removing ‘climate’ from mission statement
The Anchorage Daily News, Chris Mooney and Jason Samenow, June 25, 2018

A recent presentation by the acting head of the United States’ top weather and oceans agency suggested removing the study of “climate” from its official mission statement, focusing the agency’s work instead on economic goals and “homeland and national security.”

Our Take: The gnashing of teeth has begun from the climate change radicals. Getting back to basics – accurate predictions of ocean patterns, economic goals and national security – is a good move by the agency and good for America.

 

Oil-Sands Outage Upends Global Oil Market, Overshadowing OPEC
Bloomberg Business, Robert Tuttle and Kevin Orland, June 25, 2018

The shutdown of a key oil-sands facility in Canada is flipping the global oil market on its head and slamming shares of producers that depend on the plant. Just as OPEC and allied producers agreed to pour more oil into global markets, a transformer blast first reported by Bloomberg News last week cut power to Alberta’s giant Syncrude plant, which turns heavy crude into synthetic light oil for U.S. markets.

To reduce China’s leverage, rebuild America’s minerals supply chain
The Hill, Mark J. Perry, June 26, 2018

We are completely import-dependent for 21 mineral commodities, and imports account for more than half of our consumption for 50 critical minerals. Who’s our largest supplier? China. While much of China’s resource dominance comes from domestic production, it doesn’t end at the border. Chinese companies have come to control the production of key minerals resources in nearly every corner of the world.

Our Take: The USGS says that the U.S. is home to $6.2 TRILLION in minerals reserves. We need a regulatory approach to mining that pushes development here instead of somewhere else.

From today’s Washington Examiner, Daily on Energy:

PERRY CONDEMNS ‘STUBBORN OPPOSITION’ TO FOSSIL FUELS: Energy Secretary Rick Perry opened the World Gas Conference in Washington Tuesday morning by criticizing “stubborn opposition” to fossil fuels and hyping natural gas as key to the future energy mix because it produces only half the carbon emissions as coal.

“There is still stubborn opposition to natural gas and other fossil fuels,” Perry said in his opening speech in between splashy performances by the Blue Devils Marching Band and the Harlem Globetrotters. “The opposition exists even as fuels become cleaner and natural gas increases its share of use. These opponents flatly reject the all-of-the-above strategy that is helping us achieve energy security.”

Headlamp – AGDC executives speak at World Oil and Gas Conference

Global energy players converge on Washington as China trade war lurks
Reuters, Julie Gordon, June 25, 2018

The world’s biggest oil and gas players are gathering for a summit in Washington D.C. this week that will be overshadowed by the specter of shifting trade patterns due to a trade dispute between the United States and China. The uncertainty comes at a historic moment for the United States, which has become the world’s biggest natural gas producer, one of the top crude oil producers, and a growing exporter of both. It will host the triennial World Gas Conference for the first time in 30 years. “The timing is unfortunate,” said Charlie Riedl, executive director of the Center for LNG, noting the U.S.-China trade scuffle has ramped up uncertainty just as the next wave of U.S. liquefied natural gas producers are trying to finalize offtake deals needed to start construction.

Our Take: Timing is everything. The U.S. has become the biggest producer of natural gas and China is the largest consumer. Deals as large as the one AGDC is trying to negotiate are hard to make without a trade war. Headlamp would like to tip our hat to both Keith Meyer and Frank Richards who are speaking at the conference. Hopefully good things will come from it.

Future of Big Oil Increasingly Shaped by Fate of Global Gas
Bloomberg Markets, Kevin Crowley and Kelly Gilblom, June 24, 2018

Big Oil’s fortunes are becoming tied more closely to natural gas than ever before. Majors including Royal Dutch Shell Plc and BP Plc have boosted their proportion of gas output in recent years, helping them trim Exxon Mobil Corp.’s lead as the world’s most valuable oil company. Meanwhile Chevron Corp. added two giant Australian liquefied natural gas projects and Exxon is punching back with two major projects of its own, in Papua New Guinea and Mozambique. “We see the market growing rapidly, with gas demand growing faster than overall energy demand,” said Steve Hill, executive vice president for gas trading at Shell, the world’s biggest LNG producer. “We don’t see renewables as being a threat to gas.”

Our Take: Natural Gas is a more affordable energy and is easy to transfer. However, the high upfront costs make the “payback periods” much longer. Again, Alaska take note, stability is key for projects that have long term returns on companies’ investments.

EPA Is Said Ready to Propose Biofuel Quotas After Backlash
Bloomberg, Jennifer A. Dlouhy and Mario Parker, June 25, 2018

Oil industry opposition prompted Trump administration officials to at least temporarily abandon a proposal that would force larger refineries to use more biofuel to make up for exemptions granted to smaller facilities, according to two people familiar with the plans. The Environmental Protection Agency is on track to issue a slate of biofuel quotas without the contentious proposal as soon as Friday, said the people, who asked not to be named to discuss private negotiations. The move follows intense deliberation over the biofuel quota redistribution plan as two key Trump constituencies — the oil industry and agricultural interests — clash over the U.S. renewable fuel mandate.

From today’s Washington Examiner, Daily on Energy:

TRUMP’S ‘AMERICA FIRST’ TRADE POLICY DISRUPTING HIS OIL AND GAS AGENDA: President Trump’s “America First” initiative is going to war with his “energy dominance agenda, as his protectionist policies and expected intervention in competitive markets are putting up barriers to the oil and natural gas industry.

More than dominance: It’s a perilous time in U.S. policy as the natural gas industry convenes in Washington this week for the World Gas Conference, the first time the U.S. is hosting the triennial event since the Reagan administration.

“You can rightly ask how an administration focused on energy dominance can be pursuing policies that interfere with energy dominance, and the answer is energy dominance is not the only goal of the administration,” Kevin Book, managing director for research at ClearView Energy, told Josh.

Unwarranted complaints? Many of Trump’s policies under his “energy dominance” agenda are helping the oil and gas industry. His administration is pursuing an aggressive deregulatory agenda, beginning the long process of rolling back environmental regulations and not imposing new rules. It is easing permitting for energy infrastructure projects, such as natural gas pipelines, to transport the shale revolution to the rest of the country. It is pushing for more liquefied natural gas terminals to export around the world.

Real barriers: But the Trump administration is imposing barriers on its effort to dominate world markets with U.S.-produced natural gas and crude oil.

Tariffs on imported steel are raising costs for pipeline producers that can’t obtain the unique grade of steel they need domestically.

Trump’s $50 billion tariffs on a variety of Chinese imports was met with a counterattack on U.S. energy from Beijing. China has said it will slap penalties on U.S. crude oil, though it will spare liquefied natural gas, because Beijing needs the cleaner-burning fuel source to weed itself off coal and reduce smog.

The Trump administration is also spooking natural gas businesses, and most everyone else in the energy industry, by promising to bail out coal and nuclear power plants as the legacy power sources struggle to compete with cheaper natural gas and renewables.

Alaska to EPA – “We don’t need your help.”

Alaska steps into legal battle over hard rock mining regulation
Alaska Public Media, Krysti Shallenberger, June 21, 2018

The Environmental Protection Agency’s decision to roll back a regulation to make hard rock mining companies pay for cleanup is sparking a new legal battle between Alaska and environmental groups. The state is intervening in a lawsuit over the EPA’s decision to rescind an Obama-era rule that would make sure hard rock mining companies pay for cleaning up their messes, even if they go bankrupt.

Our Take: Rolling back Obama-era rules is no easy task – but it’s worth the effort. As Cori Mills, spokesperson for the Alaska AG’s offices notes, the state of Alaska already has a process in place to deal with the issue. “We don’t need the EPA’s help.”

AGDC selects shortest, least expensive Spur Highway route
The Peninsula Clarion, June 21, 2018

The Alaska Gasline Development Corporation has chosen a route for the Kenai Spur Highway around its planned natural gas liquefaction plant. The preferred route, announced in a public meeting in Nikiski on Wednesday evening, would stay relatively close to the edge of the planned plant near the bluff in Nikiski. The rerouted section would be about 3.4 miles long, departing the current highway around mile 19, joining North Miller Loop and rejoining the existing highway between miles 21 and 22.

Our Take: AKHEADLAMP is looking for some big news out of AGDC today. Stay tuned!

OPEC Influencers
S&P Global, June 21, 2018

OPEC and its oil-producing allies have an important decision to make on June 22. At their meeting in Vienna the group, which controls almost half of global supply, will decide whether to boost output to ease prices or stick to quotas and risk cooling demand. Their task would be easy if supply and demand were the only factors determining policy and prices, which climbed above $80/b last month. Oil markets are among the world’s most complex, with a diverse range of actors influencing sentiment. The S&P Global Platts OPEC Influencers interactive chart is designed to illustrate how various players drive prices through their actions and words.

Our Take: After all the news leading up to today’s meeting – AKHEADLAMP is pleased to see that someone has made a game, literally, out of the OPEC decision making process! Happy Friday!

Russia-Saudi Plans for Super-OPEC Could Reshape Global Order
Bloomberg Markets, Will Kennedy, Elena Mazneva , and Wael Mahdi, June 22, 2018

When the group overseeing the so-called OPEC+ deal met last night, proceedings were dominated by two nations: Saudi Arabia and Russia. It was probably a snapshot of the oil market’s future. Beyond the drama of this week’s diplomatic efforts to agree to an increase in oil production, the more significant longer-term development may be moves to make Russia’s role in managing global supply permanent, bringing together the two largest oil exporters. Russia isn’t a member of OPEC, but for the last two years has led a group of countries outside the group lending support to the cartel, creating a coalition of 24 producers that’s been dubbed OPEC+.

Our Take: Certainly, something to watch. Will it be a “seismic shift in oil’s world order” or will it go the way of Russia’s Gas Exporting Countries Forum, and have little impact on supply?

U.S. Asks Japan to Halt Iran Oil Buying in Harder Stance

Bloomberg Markets, Tsuyoshi Inajima  and Serene Cheong, June 22, 2018

The U.S. has asked Japan to completely halt oil imports from Iran, going beyond the reductions that were demanded when sanctions were imposed earlier this decade, according to people with knowledge of the matter. The request to stop imports entirely signals a tougher American stance than in 2012, when nations were allowed to continue buying at reduced levels in exchange for waivers from U.S. financial restrictions.

Inside a Heist of American Chip Designs as China Bids for Tech Power
CNBC, Paul Mozur, June 22, 2018

With a dragnet closing in, engineers at a Taiwanese chip maker holding American secrets did their best to conceal a daring case of corporate espionage. As the police raided their offices, human resources workers gave the engineers a warning to scramble and get rid of the evidence. USB drives, laptops and documents were handed to a lower-level employee, who hid them in her locker. Then she walked one engineer’s phone out the front door.

OPEC+ to Boost Oil Output After Saudis Secure Deal With Iran
Bloomberg, Javier Blas, Julian Lee and Salma El Wardany, June 22, 2018

OPEC and allies including Russia will boost oil production starting next month, offering relief to consumers after Saudi Arabia secured a last-minute deal to overcome Iran’s opposition. While it fudged some differences between members, the agreement is a victory for Riyadh and Moscow, which for a month have advocated for a production increase to alleviate high prices. It’s also a success for U.S. President Donald Trump, who has criticized the Organization of Petroleum Exporting Countries for inflating the cost of fuel.

Renewable energies won’t replace fossil fuels

Embracing the Energy Transition and Alaska’s Resources
Resource Development Council, Susan Dio, June 20, 2018

Yesterday, Susan Dio, Chairman and President of BP America, Inc., spoke at the Resource Development Councils 43rd Annual Membership Luncheon. Some key points:

Missed the luncheon? Watch Susan’s speech in it’s entirety below.

 

Fake News from ENGO’s as they are watched for relationships with foreign governments. 

House lawmakers step up probe on green groups’ international work
Reuters, Valerie Volcovici, June 20, 2018

U.S. Republican lawmakers on Wednesday stepped up their scrutiny of environmental groups’ work with foreign countries, requesting that the Center for Biological Diversity turn in a list of documents detailing their work with Japanese officials. It was the third action that Representatives Rob Bishop and Bruce Westerman have taken this month to put a spotlight on foreign governments’ relationship with green groups, who they allege can be used to influence U.S. policy or national security. Bishop heads the House of Representatives Natural Resources Committee and Westerman chairs the House Subcommittee on Oversight and Investigations. “The Committee on Natural Resources is continuing its oversight of the potential manipulation of tax-exempt 501(c) organizations by foreign entities to influence U.S. environmental and natural resources policy to the detriment of our national interests,” they said in a letter to the Center for Biological Diversity.

Our Take: Good. 

Executive Order Regarding the Ocean Policy to Advance the Economic, Security, and Environmental Interests of the United States
Executive Orders, Land and Agriculture, June 19, 2018

By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows: I am repealing and replacing bureaucratic overreach created by President Obama (Headlamp’s simplified version of the President’s Executive Order)

Our Take: This is great news for Alaska and America. Here are some bullet points from the White House Fact Sheet about what the EO does:    

  • Promotes a strong ocean economy by rolling back excessive and unnecessary bureaucracy
  • Promotes expanded access by states, businesses, and the public to federal data and information, and maximizes taxpayer dollars by coordinating priority research
  • Empowers states by eliminating duplicative federal bureaucracy and supporting appropriate federal engagement with Regional Ocean Partnerships, pursuant to the scope described in the order
  • Directs Ocean Policy Committee to streamline federal coordination on ocean policy, with a focus on growing the ocean economy

State efficiency incentives averaged $24 per customer, ranged from $0 to $128 in 2016
Today in Energy, U.S. Energy Information Administration, June 20, 2018

Alaska is number 50 in energy efficiency customer incentives according to the Energy Information Administration.  Most state reported spending supported residential and commercial energy efficiency: 43% of spending targeted residential customers, and 49% targeted commercial customers. The remaining 8% of spending targeted industrial customers. Average reported spending per customer varied by state, from $0 in Alaska to $128 in Massachusetts.

Shell sells $1.3 billion of oil and gas assets in Norway, Malaysia
Reuters, Ron Bousso and Nerijus Adomaitis, June 20, 2018

Royal Dutch Shell (RDSa.L) announced the sale on Wednesday of oil and gas assets in Norway and Malaysia for over $1.3 billion, bringing it closer to a target of $30 billion in disposals by year-end. The Anglo-Dutch company agreed to sell to OKEA, a Norwegian producer backed by private equity firm Seacrest Capital, its 45 percent interest in the Draugen Norwegian offshore field and a 12 percent in the Gjoa block for a total of $566 million, the two companies said. Earlier, Shell announced the completion of the sale of a 15 percent stake in Malaysia LNG (MLNG) Tiga to the Sarawak State Financial Secretary for $750 million.

OPEC Races for Oil Deal as Iran Strikes More Conciliatory Tone
Bloomberg Markets, Laura Hurst , Javier Blas , and Grant Smith, June 20, 2018

OPEC officials meeting in Vienna raced to salvage an oil-production deal on Wednesday after Iran said it was likely to reject any agreement that raised output from the group. With two days before OPEC ministers formally meet in Vienna to decide on policy, delegates were in closed-door talks to find a way to boost production and ease consumer anxiety about high oil prices. Making his first comments after arriving in Vienna, Saudi Oil Minister Khalid Al-Falih said “of course” there’ll be a deal this week.

Our Take:  Does it really matter if Iran objects to increasing output?  Read the next story…

China has an Iran oil lever over Trump and it’s all playing out at OPEC meeting
CNBC, Patti Domm, June 20, 2018

The U.S. trade dispute with China, in a roundabout way, could determine how successful the U.S. will be in sanctioning Iran’s oil this time around — and that uncertainty is also playing out at OPEC. In the tit-for-tat tariff war with the U.S., China said last week it would put tariffs on U.S. oil imports. The U.S. is not a major oil exporter, but it has been growing exports and is exporting about 2 million barrels a day of crude. About 300,000 barrels of that heads to China each day, and China could stop those purchases depending on how the trade dispute develops with the U.S., according to Scott Sheffield, executive chairman of Pioneer National Resources.


From today’s Washington Examiner, Daily on Energy:

PROTESTS ABOUND AT COMMENT DEADLINE FOR ARCTIC DRILLING: The comment period for drilling in the Arctic closed at midnight, which inspired a number of protests from conservationists and environmental groups.

Our Take: Lots of fake news from the ENGO’s today. “Only the drillers were heard, promises not to undercut environmental laws were broken, requests for more hearings were denied.” Claims of 700,000 comments submitted in favor of protections fails to reveal how many form letters (that are considered one comment) were included in the 700,000, and how many came from non-residents. All stakeholders had the same opportunity, requests for more hearings and an extension of the comment deadline came from both sides and were denied.

Germany flops on climate change. Natural Variability is culprit – not drilling or fracking

Germany Flops on Climate Change Goals
Reason, Nikhil Sridhar, June 18, 2018

Germany won’t be able to meet the goal of cutting emissions by 20 percent before 2020. But the attempt caused residential energy prices to double.  State-sponsored ventures into renewable energy have hit a wall in Germany, the supposed leader of the war on climate change. The Associated Press reports that Germany’s environment minister, Svenja Schulze, said that the country will probably not meet its carbon emission reduction goals for 2020. This follows the government’s official decision to abandon these goals in January.  Germany set out to establish itself as a leader in the international fight against man-made climate change by promising to cut carbon emissions by 40 percent by 2020 and up to 95 percent in 2050, relative to 1990 levels. The German government now says it will miss the 2020 target by eight percent.

Our Take: The author calls Germany’s efforts “a noble goal.” AKHEADLAMP will eschew rhetoric and call it what it is – political pandering that ignored the impact on its citizens – doubling the residential energy rate – to appease other nations and environmental groups. If government subsidies couldn’t  help the “supposed leader of the war on climate change” – perhaps it’s time to change course. 

 

China expected to spare LNG imports from tariffs
Chron, Katherine Blunt, June 18, 2018

China’s response has been swift and predictable: When the Trump Administration on Monday threatened to expand tariffs to include some $200 billion in Chinese goods, Asia’s economic powerhouse promised swift retaliation should that occur. The back-and-forth picked up on Friday, when the U.S. announced tariffs on $50 billion of Chinese goods. China countered with measures that will affect a wide range of American imports, including many energy and petrochemical products. But China’s list excluded one notable commodity: liquefied natural gas.

Our Take: Good for Alaska LNG!! How will Governor Walker handle the situation? In an interview with KTUU he said ““Next week, I will meet in Washington with leaders from both governments who have been at the table leading the efforts to avoid an unnecessary trade war. I will continue to work directly with both sides to make sure Alaska’s interests are protected.”   

 

China tariffs could halt surging US crude oil exports to a huge growth market
CNBC, Tom DiChristopher, June 18, 2018

The escalating trade war between China and the United States threatens to halt surging U.S. crude oil exports to China, which has become the biggest Asian market for American drillers over the last 2½ years. Beijing on Friday announced plans to slap a 25 percent duty on U.S. crude oil in response to President Donald Trump’s decision to hit $50 billion in Chinese goods with an equivalent tariff. The impact on overall U.S. crude oil exports could be muted in the near-term, provided drillers are able to find other buyers. But if the standoff persists, it could destroy a huge source of future demand growth, drive down the cost of U.S. crude and weigh on the balance sheets of America’s shale drillers.

 

Oil producers face their ‘life or death’ question
Financial Times, June 19, 2018

It is a question that dominates the energy industry and will determine what the oil majors, including Shell and BP, look like in the future. Driven by investor pressure and a need to rein in costs after the oil price halved in 2014, the industry has largely abandoned new investment in the type of mega-projects, from Arctic exploration to Canadian oil sands, which were once its forte. In the second half of this decade total capital expenditure by the large oil and gas groups is projected to fall by almost 50 per cent to $443.5bn from $875.1bn between 2010-15, according to Norwegian consultancy Rystad Energy. Although partly offset by a fall in oilfield development costs, the drop also coincides with the big groups ploughing more capital into shorter-term projects, which pay off quickly, as well as renewable energy.

 

OPEC at the Crossroads
The Oxford Institute for Energy Studies, June 2018

In this Energy Insight, we consider the hard realities of oil market and price dynamics for 2018 and 2019 to draw, analyze and assess the most prevailing oil output policy scenarios that are likely to drive the discussion during the upcoming OPEC Ministerial Meeting, through the lens of a structural VAR model of the global oil market. The study does not take a stance on what will be the outcome of the June 22nd OPEC Meeting, but rather it attempts to quantify and evaluate the risks associated with each policy scenario in terms of the impact on oil prices and global demand growth for the remainder of 2018 and 2019.

Our Take: Oxford on OPEC. This is a very helpful look at the impact of each  potential policy outcome from the OPEC meeting scheduled for June 22nd. Not for the faint of heart. 

 

U.S. oil pipeline companies, producers seek relief from steel tariffs
Reuters, Liz Hampton, June 18, 2018

Major U.S. energy companies including Plains All American Pipeline (PAA.N), Hess Corp (HES.N) and Kinder Morgan Inc (KMI.N) are among many seeking exemptions from steel-import tariffs as the United States ratchets up trade tensions with exporters including China, Canada and Mexico. There have been nearly 21,000 requests overall for exclusions submitted to the U.S. Commerce Department since the Trump administration imposed levies this year. Of those, more than 500 petitions involve pipes and related materials.  Initial decisions are expected this month, offering the first clues as to how the administration will balance an agenda favoring oil and gas exports while also supporting the U.S. steel and aluminum industries.

Our Take: 21,000 requests for exclusions – what could go wrong? 

 

Studies show groundwater holding own against drilling boom
ABC News, The Associated Press, June 18, 2018

Energy companies have drilled more than 11,000 wells since arriving en masse in 2008, making Pennsylvania the nation’s No. 2 gas-producing state after Texas. Residents who live near the gas wells, along with environmental groups and some scientists, have long worried about air and water pollution. Two new studies that looked at groundwater chemistry did not find much of an impact from horizontal drilling and hydraulic fracturing — or fracking — the techniques that allow energy companies to extract huge volumes of oil and gas from shale rock deep underground. The results suggest that, as a whole, groundwater supplies appear to have held their own against the energy industry’s exploitation of the Marcellus Shale, a rock layer more than a mile underground that holds the nation’s largest reservoir of natural gas.

Our Take: A team from Yale collected water samples every few weeks for two years and concluded that natural variability, not drilling or fracking, led to rising methane levels. AKHEADLAMP awaits acknowledgment from the ENGO’s that natural variability is the root cause.    Waiting…

STURGEON WILL BE HEARD AGAIN BY US SUPREME COURT. 

From the man himself this morning as he spoke to Suzanne Downing: “Going to the Supreme Court is a miracle. And of the 8,000 petitions this term, they took 20. It means that hopefully the federal government will understand the state sovereignty issues: The State of Alaska owns the rivers and navigable waters, and it gets to manage them. Above all, this is about state sovereignty.”

A big thanks to Downing and Must Read Alaska for this great news! You can see for yourself on the Supreme Court’s website SCOTUS adds 5 cases to it’s merits docket for next term.  

Cheney bill proposes fee for fed land oil and gas protests
AP News, June 15, 2018

A bill sponsored by Wyoming U.S. Rep. Liz Cheney would impose fees on protests against oil and gas projects on federal land. The Republican introduced the bill in the U.S. House of Representatives on Wednesday, saying it aims to deter intentional burdens to Wyoming’s energy development. Cheney says in a statement that some groups are flooding the permitting agencies with frivolous protests. The Casper Star-Tribune reports that under the measure, individuals or groups would be charged $150 to file a protest under 10 pages, with additional pages charged at $5 each. If a single filed protest concerns multiple parcels of land, each is assessed at an additional $10.

Our Take: AKHEADLAMP likes it – PAY TO DELAY! Last Thursday we shared information about the House Republicans submitting a plan to penalize states that stopped the federal government from hosting lease sales in their states and depriving them of revenue, Headlamp likes where these elected officials are going. 

From today’s Washington Examiner, Daily on Energy:

CHINA TARGETS U.S. ENERGY IN TARIFF COUNTERATTACK: China is targeting U.S. energy in response to President Trump’s decision Friday to place tariffs on $50 billion in goods from the Asian power. Two-part counter attack: China announced that it would launch its $50 billion counter attack in two waves. The first will begin July 6 and will impose a 25 percent tariff on soybeans, agricultural products, automobiles, and even water originating in the U.S., according to the Chinese foreign ministry. Energy tariffs coming soon: The second round of tariffs, of 25 percent, will include energy commodities from the U.S., including natural gas and crude oil. China didn’t announce a start date.

China’s tariffs on U.S. oil would disrupt $1 billion monthly business
Reuters, Henning Gloystein, June 17, 2018

In an escalating spat over the United States’ trade deficit with most of its major trading partners, including China, U.S. President Donald Trump said last week he was pushing ahead with hefty tariffs on $50 billion of Chinese imports, starting on July 6.  China said Friday it would retaliate by slapping duties on several American commodities, including oil. Investors expect the spat to come at the expense of U.S. oil firms, pulling down the share prices of ExxonMobil and Chevron by 1 to 2 percent since Friday, while U.S. crude oil prices fell by around 5 percent.

Our Take: The President says the US can withstand the “trade tiffs”, AKHEADLAMP hopes so as this is not good for Alaska seafood and not good for Alaska LNG. Related: Google is investing $550m with the Chinese

ExxonMobil considers importing LNG to Australia
Upstream, June 18, 2018

ExxonMobil, southeastern Australia’s biggest gas supplier, is considering importing liquefied natural gas to help plug a looming gas shortage from 2021 and protect its market share.  The move would compete with plans by both Australia’s number two energy retailer AGL Energy to start importing LNG by 2021 and a consortium involving Japan’s JERA to start imports from 2020. ExxonMobil is also stepping up exploration off the coast of Victoria and considering developing a gas field called West Barracouta close to an existing field, it said in an emailed statement sent to Reuters on Monday

Rich donor gave $250K to Trump after EPA reversed decision on Pebble Mine
ABC News, Stephanie Ebbs, June 16, 2018

A wealthy activist who has funded efforts to block a proposed mine in Alaska’s Bristol Bay donated $250,000 to President Donald Trump’s re-election effort six weeks after the administration abruptly decided to prevent the mine from moving forward. The move to block the Pebble Mine in Bristol Bay from moving forward seems to diverge from a trend in policy under the leadership of Environmental Protection Agency chief Scott Pruitt – seen as one of President Donald Trump’s most productive cabinet members in moving to undo environmental regulations put in place under the Obama administration. During the Trump presidency, the EPA in 2017 had previously allowed the mine to move forward.

Our Take: Hmmm – this seems more like a “placed” story by people who want to feel important than a reality. 

Headlamp – Exxon doubles down; Steve Martin responds to BP; Pipeline deal with North Korea?

Exxon Doubles Down on Oil
Bloomberg Businessweek, Kevin Crowley, June 15, 2018

At a time when most of Big Oil is restraining spending, in part because of uncertainty over the future of energy markets, Exxon plans to boost expenditures every year from now until 2025. It wants to invest a total of more than $200 billion, almost all on traditional oil and gas megaprojects around the world, from Brazil to Papua New Guinea. The company has no plans to follow global rivals such as Royal Dutch Shell, Total and BP into wind, solar, or battery storage.

Our Take: 130 years ago, faced with the declining use of kerosene, John. D. Rockefeller doubled down on oil – not surprising that today Exxon still follows his “bet-on-what-you-know” mantra. AKHEADLAMP will bet on Exxon being successful.

India, China Look To Form ‘Oil Buyers Club’
Oil Price.com, Tsvetana Paraskova, June 14, 2018

India and China have discussed creating an ‘oil buyers’ club’ to be able to negotiate better prices with oil exporting countries and will be looking to import more U.S. crude oil to reduce OPEC’s sway, both over the global oil market and over prices, India’s Petroleum Ministry said on Wednesday. “With oil producers’ cartel, OPEC, playing havoc with prices, India discussed with China the possibility of forming an ‘oil buyers’ club’ that can negotiate better terms with sellers as well as getting more US crude oil to cut dominance of the oil block,” a tweet from the Petroleum Ministry’s Twitter account reads.

Our Take: A bit of dictionary history on their relationship: “Although the relationship has been friendly, there are border disputes and an economic competition between the two countries that have at times led to strained relations. China and India are the two most populous countries and fastest growing major economies in the world. Growth in diplomatic and economic influence has increased the significance of their bilateral relationship.”

Statistical Review of World Energy
BP Global, June 15, 2018

Introducing the 2018 edition of the BP Statistical Review of World Energy, Bob Dudley, BP Group Chief Executive, said: “2017 was a year where structural forces in the energy market continued to push forward the transition to a lower carbon economy, but where cyclical factors have reversed or slowed some of the gains from prior years. These factors, combined with rising demand for energy, has resulted in a material increase in carbon emissions following three years of little or no growth.”

Our Take: Click here to watch Navin (Steve Martin) best express how AKHEADLAMP feels about the annual arrival of the BP Statistical Review of World Energy. The report contains everything you ever wanted to know about world energy, and more – plan to spend hours reviewing!  

Trump sets $50 billion in China tariffs with Beijing ready to strike back
Reuters, David Lawder, Ben Blanchard, June 15, 2018

U.S. President Donald Trump announced hefty tariffs on $50 billion of Chinese imports on Friday as Beijing threatened to respond in kind, in a move that looks set to ignite a trade war between the world’s two largest economies. Trump, whose hardline stance on trade has led him to wrangle with allies, said in a statement that a 25 percent tariff would be imposed on a list of strategically important imports from China. He also vowed further measures if Beijing struck back.

There’s a Gas Pipeline Deal to Be Done With Kim Jong Un. Any Takers?
Bloomberg Businessweek, Marc Champion, June 13, 2018

The idea of building a conduit to carry natural gas from the Russian Far East to South Korea has been around since the 1990s. From 2008 to 2011, as Russia’s gas giant, Gazprom PJSC, was building a pipeline as far as Vladivostok, the company signed a memorandum of understanding with North Korea and a framework agreement with Seoul’s Korea Gas Corp. to extend it south. It went nowhere, primarily because of the politics surrounding Kim’s bid to build up his nuclear and missile programs. With North Korea’s relations with the U.S., Seoul, and China now on the mend, and South Korea trying to reduce its dependence on coal and nuclear power, the pipeline would seem an obvious piece of economic diplomacy.

From today’s Washington Examiner, Daily on Energy:

FEDS SAY UNCERTAINTY FACES TRUMP’S ALASKA OIL WIN IN TAX BILL: The Energy Department’s analysis arm finished a review of the president’s December tax bill on oil drilling in Alaska Thursday, saying crude oil won’t be added to U.S. production until well after 2030. The Energy Information Administration looked at several ways opening the Alaska National Wildlife Refuge to drilling, called for in the Republicans’ tax law, would affect oil production in the U.S.

Lack of certainty: “Much uncertainty surrounds any projection of production from ANWR,” the energy agency said in the report.

The great oil unknown: “The only well drilled in the coastal plain was completed in 1986, and the results have remained confidential. Federal resource estimates are based largely on the oil productivity of geologic formations in neighboring state-owned lands in Alaska and two-dimensional seismic data that had been collected by a petroleum industry consortium in 1984 and 1985.”

Who will be president in 2031? Three estimates done by EIA, including low, average, and high, all showed that production from the Arctic refuge would not start until 2031, because of the time needed to acquire leases, explore, and develop the required production infrastructure.