Headlamp – 2018 “crucial” for resource development in Alaska.

Arctic sees some action. Exploration drilling began this week for a record-length oil well planned by Eni that targets a formation beneath federal waters of the U.S. Arctic Ocean, regulators said Wednesday. Eni U.S. Operating, an Italian multinational company, in a partnership with Shell, plans to drill the well from a man-made island in shallow state waters near Alaska’s North Slope shore. The well is expected to extend 6.5 miles into rocks beneath federal waters of the Beaufort Sea. ConocoPhillips last year announced it had set a long-distance drilling record in Alaska with a 5-mile well at its CD5 field. Inspectors from the Bureau of Safety and Environmental Enforcement were on hand Monday, Christmas Day, to oversee compliance as operations began, the agency said in a statement. Joe Balash, an Alaskan and a new top official in the Interior Department, said in the statement that the Arctic is important to the Trump administration’s national energy strategy.

2018 make or break time. The upcoming year will be a telling year for several of Alaska’s prospective development projects, starting with the biggest: the $40 billion-plus Alaska LNG Project. That’s not to say the state-owned Alaska Gasline Development Corp. did not produce any accomplishments in 2017. After taking control of the LNG export effort to start the year, AGDC promptly submitted its environmental impact statement application — nearly 60,000 pages of scientific and socioeconomic information — in April. Agency officials believe it to be the largest single EIS filing in the history of the National Environmental Policy Act review process. AGDC leaders have stressed their desire for Federal Energy Regulatory Commission, or FERC, to have a final EIS published by the end of the year, with a record of decision following shortly thereafter.

Through Russia? No love! Russian lawmakers have passed legislation earlier this month banning most fossil fuel shipments along the Arctic shipping route that links the nation’s Pacific coast with its western Arctic ports—and with Europe. The amendment in the federal shipping code comes after Putin in mid-November announced that all shipments of oil and natural gas along the Northern Sea Route would be nationalized. A law from the State Duma, the lower house in the country’s legislative assembly, came only four weeks later. On Dec. 20, the legislators adopted the amendments, which ban foreign petroleum shipments along the Russian Arctic route, information from the Duma shows. In addition to oil products and liquefied natural gas, the legislation also includes coal. The amended law comes into force on Feb. 1, 2018.

Another Trump rollback. The Trump administration on Thursday began dismantling safety rules created after the Deepwater Horizon offshore oil rig disaster in the Gulf of Mexico. The Interior Department’s Bureau of Safety and Environmental Enforcement, which regulates offshore oil and natural gas drilling, says its proposed changes to the rules are intended to reduce “unnecessary burden” on the energy industry and would save $228 million over 10 years without compromising safety. “By reducing the regulatory burden on industry, we are encouraging increased domestic oil and gas production while maintaining a high bar for safety and environmental sustainability,” said BSEE Director Scott A. Angelle in a statement Thursday. The bureau officially will publish its proposed rule changes Friday in the Federal Register, opening a 30-day public comment period.

First Reads:

Company begins drilling 6.5-mile Arctic oil well set to be Alaska’s longest
Anchorage Dispatch News, Alex DeMarban, December 27, 2017

Major Alaska resource projects face crucial year in 2018
Alaska Journal of Commerce, Elwood Brehmer, December 27, 2017

Russian legislators ban foreign shipments of oil, natural gas and coal along Northern Sea Route
The Independent Barents Observer, Atle Staalesen, December 27, 2017

Trump administration starts rollback of offshore drilling rules imposed after Deepwater Horizon spill
The Washington Examiner, Josh Siegel, December 28, 2017