Headlamp – AGDC Quarterly Update to the Legislature; Updating the Endangered Species Act

Standing room only for the AGDC update to the Legislature’s Joint House and Senate Resources Committee. AGDC, the Department of Revenue (DOR) and the Department of Natural Resources (DNR) each briefed the legislators on their activities regarding Alaska LNG. A few of the key points:

AGDC:

  • AGDC has progressed anchor capacity agreements with Sinopec, CIC Capital & the Bank of China
  • AGDC does not believe the trade war will significantly impact Alaska LNG
  • AGDC plans to make investing in the project available to public and private investors
  • AGDC has enough funding to work through fiscal year 2019 at its current pace
  • Click here for AGDC presentation

DOR:

  • Presented their goals of investment and fiscal analyses
    • Provide objective review of the opportunity/risks of Alaska LNG for State
    • Evaluate fiscal implications of project for State
    • Assess potential risks to State and mitigating factors
    • Assist Legislature and state in decision to invest in project and financing options
    • Click here for DOR presentation

DNR:

  • Provided a detailed update on their royalty gas
    • Selection of Royalty in Kind (RIK) or Royalty in Value (RIV)
    • Develop and execute a gas sales agreement with AGDC for RIK
    • Address valuation process used to calculate royalty gas value if RIV selected
    • Click here for DNR presentation

DOR discussed the possibility of the permanent fund investing in the project. DNR Commissioner Andy Mack, who sits on the APFC board, told the crowd that he hasn’t seen any proposal to do so nor has he had any conversations with the Walker administration about plans to do so.

Oil Market Report
International Energy Agency, July 12, 2018

The world’s excess supply of oil may be “stretched to the limit” as Middle East countries and Russia boost production to offset a confluence of output disruptions from major producers. The International Energy Agency, in its monthly oil market report released Thursday, welcomed the recent deal by OPEC and Russia to increase oil production by a collective 1 million barrels per day to stem rising prices and offset lost barrels in Venezuela, Libya, and Iran.

From the Washington Examiner’s, Daily on Energy:

HOUSE TO ROLL OUT ENDANGERED SPECIES AGENDA: House members of the Western Congressional Caucus will come together late Thursday afternoon to introduce eight bills that will make up the GOP-led legislative agenda for updating and modernizing the Endangered Species Act. “These much-needed, critical pieces of legislation will provide important updates to historically and currently problematic or dysfunctional components of the law,” according to the Natural Resources Committee.

Our Take: A big step forward for responsible resource development. The ESA has been abused by “keep it in the ground” groups far too long.

Alaska Wants to Fight Warming While Still Drilling for Oil
E&E News, Kelsey Brugger, July 12, 2018

Alaska’s appetite for oil is as ubiquitous as the state’s proliferating examples of a changing climate.

Our Take: An interesting read on climate change, oil and the Governor’s race. There is a GOOD reason why none of the gubernatorial candidates oppose drilling in ANWR.