Headlamp – Fossil Fuel Friday:  the sweet smell of …gas, pipeline progress and China’s oil tariffs. 

Love the Smell of Gasoline? It’s Now at a Museum in Stockholm
Lars Paulsson, Bloomberg, August 23, 2019

From the roar of a combustion engine to the sensation of filling up a gas-guzzling car — these are experiences immortalized at the world’s first museum for fossil fuels in Stockholm  “At The Museum of Fossil Fuels, you will be able to experience the sounds, smells, culture and phenomena that will have disappeared,” said Susanna Hurtig, Nordic Head of E-Mobility at Vattenfall AB, the Swedish utility that came up with the idea.

Our Take: We love the idea – even if we disagree that the “phenomena” of fossil fuels will disappear.

 

Keystone XL Pipeline gets nod from Nebraska Supreme Court
Miranda Green and Rebecca Klar, The Hill, August 23, 2019

The Keystone XL Pipeline is a step closer to beginning construction after Nebraska’s highest court approved plans through the state. The decision filed Friday by the Nebraska Supreme Court ruled that “after months of careful consideration” the court found evidence that showed the plans were in the “public interest,” and that the state’s Public Service Commission acted appropriately when it approved the path for the pipeline through Nebraska. The decision paves the way for construction to begin on the heavily stalled gas pipeline project.

Our Take: A good step forward, however, this pipeline has been in commission for NINE years and still faces multiple lawsuits before construction can begin. Environmentalists and their delay tactics hurt every American and the American economy – money wasted, jobs lost, lack of affordable energy. 

Related:

Trump’s path to ‘energy dominance’ in Alaska has a key opponent: lawyers

 

Oil Slides as Latest China Tariffs Reignite Demand Fears
Amrith Ramkumar, The Wall Street Journal, August 23, 2019
Oil prices fell Friday after China said it would impose tariffs on $75 billion worth of additional U.S. products including crude imports and President Trump said he would respond, the latest trade developments that investors fear could crimp fuel consumption.  U.S. crude futures fell 3.1% to $53.63 a barrel on the New York Mercantile Exchange following the announcement, the newest salvo in the U.S.-China trade spat that has swung markets in recent months. Oil is about 19% below its April peak with analysts wary that softening demand and steady supply will result in a glut.  Brent crude, the global gauge of prices, declined 2% to $58.70 a barrel on the Intercontinental Exchange.

Related:

U.S. Natural Gas and Oil – Still No. 1

 


 

Lawsuits! Get your lawsuits! Izembek land swap; exploration near Bering River

New Izembek land swap? New lawsuit, too.
Liz Ruskin, Alaska Public Media, August 7, 2019

The Wilderness Society and eight other environmental groups have filed a new lawsuit to block a road in the Izembek National Wildlife Refuge. For nearby King Cove, it’s the latest in a long series of legal and political hurdles, dating back decades.
The lawsuit challenges a land swap agreement Interior Secretary David Bernhardt and the King Cove Corporation signed last month, to create a road corridor that would be owned by the village corporation.
The conservation groups claim the swap violates environmental laws and the Alaska National Interest Lands Conservation Act.

Our take: Yet another example of environmental extremists hampering development without considering all the impacts. This road is not about industry, or the environment; it is about health and safety of a remote population. Maybe all the plaintiffs should go spend a year or two in King Cove!

 

Preliminary finding would allow oil exploration near Bering River
Elwood Brehmer, Alaska Journal of Commerce, August 7, 2019

Acting Division of Oil and Gas Director Jim Beckham signed a preliminary finding Aug. 2 that, if finalized, would give Cassandra Energy Corp. sole rights to exploring 65,773 acres at the mouth of the Bering River.
The 256-page draft decision would give Cassandra Energy exploration rights to the acreage for 10 years and includes a $1 million work commitment, a contingency established by Beckham based on work proposed by the company, it states.
The division is soliciting public comments on the preliminary exploration license through Oct. 4.
Division of Oil and Gas officials said Cassandra Energy leaders have outlined a general work plan to them but declined to relay that information out of commercial concerns. The company has not submitted formal exploration or operational plans to the state.
The exploration license could eventually be transformed into more formal state oil and gas leases.
Cassandra Energy initially planned to explore the nearby onshore historic Katalla oil field near the Bering River in the early 2000s by drilling from Chugach Alaska Corp. holdings inside the Chugach National Forest. The plan sparked a lawsuit over the U.S. Forest Service’s evaluation of Cassandra’s proposal, according to news reports at the time.

Our take: Aside from the suit from the early 2000s, it sounds like healthy conversation is taking place between state departments, Cassandra, and the locals. “While adjudication of exploration license applications requires multiple rounds of public comment and subsequent evaluation, the process usually doesn’t take more than four years, which is how long it has taken to reach the preliminary decision for Cassandra Energy’s application.” Here’s hoping the regulatory system does its job to ensure responsible development without stalling the project. 

 

From the Daily on Energy:
CENTRIST HOUSE DEMOCRATS RELEASE INNOVATION-FOCUSED CLIMATE AGENDA: The New Democrat Coalition, a centrist group of more than 100 House Democrats, released a list of policy proposals to combat climate change Wednesday, with the goal of reaching net-zero emissions by 2050.
The platform contains broad principles and baseline actions uncontroversial among Democrats, such as re-committing the U.S. to the Paris climate change accord.
It endorses carbon pricing as central to decarbonizing the country across all sectors, including manufacturing and agriculture.
It also promotes bipartisan ideas, including investing in R&D for “innovative” clean energy technologies to export abroad; eliminating restrictive regulatory “barriers” hampering renewable energy development; and emphasizing a “technology-inclusive approach” that supports [carbon] capture and nuclear energy.
It supports reinvesting in fossil fuel-dependent communities during the clean energy transition, and confronting “the legacy of pollution” disproportionately impacting people of color and low-income communities.
The coalition also recommends pursuing an “actionable adaptation policy” that includes increased spending on pre-disaster mitigation projects to reduce the impact of flooding and droughts.


We’re still in the race, but we’ve dropped to 6th place?

Guess Where Alaska Stands in the Oil Race
Ed King, King Economics Group, July 8, 2019

Back in the 1980’s Alaska was a powerhouse in the oil market. At the time, our young oil fields were the envy of our peers. Texas production was falling, approaching 2 million barrels per day from above as Alaska approached the same mark from below. Briefly, Alaska challenged Texas as the number one oil producing state in the union and was responsible for 25% of all oil production in the nation.   Meanwhile, California oil production was dropping below the one million barrel per day mark. No other state was producing more than half that much back in 1988 (Louisiana). That handful of “small” producing states could not compete with the vast opportunity in the Last Frontier.   At the time, Alaska had a lot of leverage. Our land was known to have good source rocks and the region was underexplored. Companies were chomping at the bit to get exploration rights as their lower 48 resources were being depleted and they needed to replace those reserves. The state was awash with a previously unfathomable amount of money. So much money that we repealed our individual taxes, socked a quarter of the royalty money away, and started writing checks to our residents.

Those were the days.

Related:  Competing ideas of what leads to a stable business climate in Alaska. 

                Oil Companies, help save Alaska

                Alaskans should give the governor a chance on balancing the budget

 

The U.S. Is Overflowing With Natural Gas. Not Everyone Can Get It.
Stephanie Yang and Ryan Dezember, The Wall Street Journal, July 8, 2019

America is awash in natural gas. In parts of the country there’s hardly a drop to burn.  Earlier this year, two utilities that service the New York City area stopped accepting new natural-gas customers in two boroughs and several suburbs. Citing jammed supply lines running into the city on the coldest winter days, they said they couldn’t guarantee they’d be able to deliver gas to additional furnaces. Never mind that the country’s most prolific gas field, the Marcellus Shale, is only a three-hour drive away.

Our Take:  We need more pipelines!!

AK: Prolific Production & Environmental Stewardship; Australia: Chaotic Policymaking

Unleash Alaskan Energy
Mike Sommers, API Blog, June 10, 2019

The United States leads the world in natural gas and oil production, but that doesn’t mean we can get complacent. Global consumption  has reached 100 million barrels per day — more than double what it was 50 years ago. And demand is expected to keep growing, as opportunities expand for millions living in poverty around the globe. Even under optimistic scenarios for renewable energy, U.S. and international projections agree that three-fourths of demand will be supplied by fossil fuels , with more than half coming from natural gas and oil, for decades to come.  Fortunately, from the Permian Basin in Texas and New Mexico to Alaska’s Prudhoe Bay, the U.S. has not just the resources but an industry with the technology and skill  to develop them safely.  Take for example the North Slope of Alaska, an area poised to re-emerge as a “super basin” following discoveries like Willow, Pikka and Liberty. The resurgence has been great news for the Trans-Alaska Pipeline System, or TAPS — backbone of Alaska energy and critical pillar of U.S. energy security. TAPS throughput is ticking up, and new finds in National Petroleum Reserve Alaska, or NPR-A, could singlehandedly increase  its volume by 18 percent.

Our Take:  This can’t be said enough “The long-held assumption that we can’t increase energy production, grow the economy and decrease emissions – all at the same time – no longer applies. It doesn’t apply in Alaska either…where the energy legacy is one of prolific production and the highest standards of environmental stewardship.”

Australia risks status as a natural gas superpower
Jayme Smith, Financial Times, June 3, 2019

As a $200bn wave of new global investment gets under way, the energy industry is warning that chaotic policymaking and overseas competition are threatening to cut short Australia’s tenure as the world’s biggest exporter of liquefied natural gas. The energy companies say the government has failed to deliver coherent climate and energy policies, appears willing to intervene for the benefit of local industry over LNG exporters and has been unable to approve more gas exploration. “Australia’s policies are somewhat uncertain with calls for government intervention — that raises concerns,” Ryan Lance, ConocoPhillips’ chief executive, said at Australia’s largest oil and gas conference last week. “We are seeking clarity and stability to provide confidence around the viability of Australian investments.”

Conservative groups tell Congress: ‘We oppose any carbon tax’
Naomi Jagoda, The Hill, June 10, 2019

A group of 75 conservative organizations and leaders on Monday sent a letter to Congress expressing their opposition to a carbon tax, pushing back at an idea that has received support from politicians and policy experts on both sides of the aisle as a way to combat climate change.  “We oppose any carbon tax,” states the letter, which was signed by Americans for Tax Reform President Grover Norquist, Club for Growth President David McIntosh and FreedomWorks President Adam Brandon, among others.

Their Take:  “A carbon tax raises the cost of heating your home in the winter and cooling your home in the summer,” they added. “It raises the cost of filling your car. A carbon tax increases the cost of everything Americans buy and lowers Americans’ effective take home pay. A carbon tax increases the power, cost, and intrusiveness of the government in our lives.”

From today’s Washington Examiner, Daily on Energy:

DEMOCRATS PREPARE TO FIGHT TRUMP EPA’S EFFORT TO FORCE PIPELINES ON STATES: Democrats led by Tom Carper are clamoring for a fight over President Trump’s most recent executive order hobbling states’ powers to block natural gas pipelines and other energy infrastructure using Clean Water Act permits.

The Environmental Protection Agency stoked Carper’s rage on Friday by issuing guidance to federal agencies on implementing Trump’s April order to rein in states’ authority to block permit approvals.

Carper, the top Democrat from Delaware on the Environmental and Public Works Committee, said in a statement Friday evening that he is convinced EPA and the president are violating “congressional intent.”

“The president’s executive order and EPA’s new guidance are indefensible and defy the clear intention of Congress,” Carper stated.

GOP ready to rein in state abuses: Nevertheless, Republicans see EPA’s guidance as blocking states from abusing their authority under the law.

Sen. Lisa Murkowski, R-Alaska, chairwoman of the Energy and Natural Resources Committee, said the EPA guidance balances states’ authority over water resources while promoting responsible development of energy resources.

The guidance will also “reduce abuse” of Clean Water Act permits to block infrastructure needed to provide reliable and affordable energy, Murkowski added.

Murkowski’s office explained that the guidance is a preliminary action, and that EPA will soon issue new regulations updating how section 401 is implemented, noting that the law governing the permit authority has not been revised since 1971.

Trump’s order directs EPA to issue the new rules 120 days after the guidance is published.

The Republican chairman of Carper’s committee, Sen. John Barrasso of Wyoming, said the EPA reforms are needed now more than ever.

“We need reform, and we need it fast,” he said, accusing states like Washington, New York, and New Jersey of preventing the U.S. from exporting natural gas and other energy resources.

Oil and natural gas groups welcomed the EPA guidance on Friday, while environmental groups rebuked it as a step in the wrong direction for states’ rights and climate change.

Results not Rhetoric on Budget; Supreme Court for Alaska Offshore Drilling?

As the Alaska budget discussion intensifies, so does the need to fact check what is being said publicly.
Headlamp will start today with a chart on where the money comes from to fund our budget. The rhetoric that the oil industry is “held harmless” in the current budget is simply not true.

**It is important to note that the total projected contribution to the state from oil revenue for FY 2019 is $3.078 billion – not all oil revenues go to the general fund.

Related:
As Alaska budget tightens, $ 1.2 billion oil tax deduction comes under scrutiny

Supreme Court Could Be Best Shot for Alaska Offshore Drilling
Bloomberg Environment, April 2, 2019

The Trump administration’s best hope to overturn a March 29 lower court decision shutting down oil and gas drilling off the Alaskan coast may lie across the country at the U.S. Supreme Court, environmental lawyers said. All five conservative justices on the high court have shown skepticism about agency claims of authority where Congress hasn’t clearly delegated it—the core issue in the Alaska case. A federal district judge struck down an executive order from President Donald Trump that opened Arctic waters to oil and gas drilling. The Outer Continental Shelf Lands Act can be seen as a “one-way ratchet” that grants the president the right to withdraw certain areas for drilling, but not for revoking prior withdrawals, said Patrick Parenteau, an environmental law professor at Vermont Law School in Royalton, Vt., and currently a visiting professor at the University of New Mexico law school in Albuquerque.   “That would leave it to Congress to decide whether to either amend the OCSLA or revoke or modify any prior withdrawal,” Parenteau said. “That might appeal to the conservative view of the separation of powers doctrine.”

Hilcorp delays seismic exploration in lower Cook Inlet
Aaron Bolton, KBBI, April 6, 2019

Hilcorp said it’s holding off on plans to conduct seismic exploration for oil and gas in lower Cook Inlet because of potential conflicts with halibut and salmon fishermen. The company also lacks a crucial permit to conduct the work, and it’s unclear when it may get the green light to move forward. In Hilcorp’s permit application to the Bureau of Ocean Energy Management, the company said it wants to update 40-year-old seismic data in a 370-square mile lease site offshore from Homer and Anchor Point.

Our Take: “ The company said it’s now delaying the survey until after “the height of fishing and tourist season,” due to concerns raised by fishermen like Maw and Flores.”   Contrary to popular belief, companies do listen to community concerns and respond appropriately.

Blamed for Climate Change, Oil Companies Invest in Carbon Removal
Clifford Krauss, The New York Times, April 7, 2019

Everyone knows an electric fan can make people feel cooler on a steamy day. But could fans moderate the planet’s rising temperatures? Some of the world’s biggest fossil fuel companies would like to find out. Chevron, Occidental Petroleum and the Australian mining giant BHP this year have invested in Carbon Engineering, a small Canadian company that claims to be on the verge of a breakthrough in solving a critical climate change puzzle: removing carbon already in the atmosphere. At its pilot project in Squamish, an old lumber town about 30 miles north of Vancouver, the company is using an enormous fan to suck large amounts of air into a scrubbing vessel designed to extract carbon dioxide. The gas can then be buried or converted into a clean-burning — though expensive — synthetic fuel.