Another one bites the dust. Another independent oil and gas company in Alaska is blaming the state’s scaled-back tax-credit payments for upsetting drilling plans. Furie Operating Alaska said it has conducted “substantial well and pipeline work” at its offshore Kitchen Lights Unit in Cook Inlet this year, according to paperwork filed Oct. 6 with the Alaska Oil and Gas division. But Furie hasn’t been able to drill “additional exploration or development wells” this year because of reduced tax-credit payments from the state, according to its development plan for the unit in 2018. The state government, slammed with a $2.5 billion deficit brought on by low oil prices, has in recent years paid oil and gas operators the bare annual minimum allowed under the tax credit program. The Legislature appropriated payment of $77 million to oil and gas companies this year, but that left $390 million unpaid to the industry, Furie’s plan said.
Looming oil shortages? For more than three years the oil market has been strangled by a persistent supply glut, but next year there’s the opposite issue to be concerned about: an outright supply shortage. In a range of notes out on Wednesday, analysts at Allianz Global Investors, Jefferies and RBC Capital Markets all expressed optimism that recent efforts to balance the market are working, which could mean the world will be short of oil in 2018. “An abundance of oil, thanks largely to U.S. shale, has pushed down oil prices and sector sentiment. But since that means less investment in new production sources, the bearish market may soon rebalance from fears of oversupply to concerns over shortages — which would push prices higher,” Neil Dwane, global strategist at Allianz, said in a note.
Comment period nears end for North Slope project. Hilcorp project manager Mike Dunn solicited support for his company’s Liberty project — which would drill wells from 9.3-acre artificial gravel island six miles offshore in the Beaufort Sea — in a presentation to members of the Kenai and Soldotna Chambers of Commerce on Wednesday. The privately-owned Houston, Texas-based Hilcorp has been a familiar name locally since it became Cook Inlet’s largest oil producer after buying up leases and facilities of major producers Marathon and Chevron in 2012. Three years ago, Hilcorp ventured into the North Slope by acquiring a 50 percent share in the undeveloped Liberty field from BP. The April 2014 deal with BP also gave Hilcorp a 50 percent share in the Milne Point field and control of the Endicott and Northstar fields — also drilled from artificial Beaufort Sea islands, in a way similar to the Liberty plans, in 1987 and 2000, respectively. BP remains a 40 percent partner in the Liberty project, and the Native corporation Arctic Slope Regional Corporation holds a 10 percent share.
From the Washington Examiner’s Daily on Energy:
NATIONS STRUGGLE TO MIND THE ‘TRUMP GAP’ AT CLIMATE MEETING: The big question going into next month’s U.N. climate meeting in Bonn, Germany, is monitoring the effects of what is being called the “Trump Gap” from the U.S. pulling out of the Paris climate deal. Leonardo Martinez-Diaz, global director for finance at the World Resources Institute, told reporters Friday morning that one of the key challenges will be meeting the funding goals in the Paris Agreement now that President Trump has decided to withdraw from the deal. The World Resources Institute is a global environmental think tank that will be at the meeting in Bonn as countries come together to discuss moving forward on Nov. 11. Less money: The “Trump Gap” refers to the need to fill the Green Climate Fund, which is a financial mechanism that funnels money to smaller, developing nations to help them cope with the effects of climate change. Although with the U.S. out of the picture, it’s “not disastrous,” said Martinez-Diaz. But it is a challenge. The gap means there’s “more work and more effort” on getting to the $100-billion-per-year goal of the fund by 2020.
Keep on truckin’. A federal appeals court Friday halted implementation of a portion of an Obama administration regulation that set emissions-reduction standards for big trucks’ trailers. In a brief order regarding the Environmental Protection Agency’s (EPA) rule, the Court of Appeals for the District of Columbia said that a trailer industry group “has satisfied the stringent requirements for a stay pending court review.” At issue is a 2016 regulation that increased fuel efficiency and greenhouse gas standards for heavy-duty trucks. For the first time, the EPA asserted authority to regulate the design of trailers. The trailers do not have engines, but their aerodynamics can significantly impact the efficiency of the truck-trailer combination. The standards were due to take effect Jan. 1. The Trump administration is considering repealing the trailer portion of the rule, among other pieces.
Alaska Dispatch News, Alex DeMarban, October 26, 2017
Oil is escaping from ‘purgatory,’ as supply fears shift from glut to shortage
Market Watch, Sara Sjolin, October 26, 2017
Comment period nearing end for first Hilcorp North Slope development
Peninsula Clarion, Ben Boettger, October 26, 2017
Court halts EPA rule regulating big trucks’ trailers
The Hill, Timothy Cama, October 27, 2017