Headlamp – “a bunch of dead companies lying around”; Bat Cave fights off 22 million attacks/day

“They’ll just see a bunch of dead companies lying around…” A proposal to issue bonds to pay off about $900 million in tax credit debt to oil and gas companies hasn’t gained much traction in the Legislature. Gov. Bill Walker included it in his budget in December. Since then, the bill has had no hearings in the House and just one in mid-February in the Senate. Walker said Tuesday that he’s still hopeful that it will make it through this session. “Well, I actually have heard some fairly positive things about that from various legislators, once they understand it,” Walker said. “I think there was some confusion initially and so we spent some time with them and so I think there’s some interest in that.” Most of the credits are owed under a now-defunct cashable credit program that was designed to entice new companies to explore and produce oil and gas in the state. The bill would allow companies to opt into a program that would pay credits now, but at a discount. The cost of borrowing the bonds would be built in to the discounted rate, so the state won’t lose money.

Bat Cave fights off 22 million attacks a day. The symbol of a well-known caped crusader is taped to the door of a secure room at Alyeska Pipeline Service Company’s Anchorage headquarters. The sign reads: “THE BAT CAVE.” My guides don’t know why the sign’s there. Maybe it’s the lack of windows. Or maybe it’s because the people who work in this room see themselves as undercover crime-fighters, like Batman — because they sort of are. This is the office of Alyeska’s cybersecurity team. The trans-Alaska pipeline has dealt with its share of problems — earthquakes, declining oil flow, even gunfire. But today, the pipeline is facing another, more modern threat: cyberattacks. Energy infrastructure is a tempting target for hackers, and the trans-Alaska pipeline is no exception. Alyeska, which operates the pipeline, now ranks cyberattacks as one of its top three risks. In the room where part of the pipeline’s cybersecurity team is stationed, Alyeska’s Bill Rosetti points at a wall of data flowing down three giant screens hanging above the cubicles. It’s all totally incomprehensible to a layperson. But for Rosetti and his staff, weird activity on one of the colorful charts rippling across the screens could indicate something serious. “The idea here is that we are looking for things to be normal,” Rosetti explained. “And anything that’s not normal is something that needs to be investigated.” Rosetti is Alyeska’s chief information officer. He’s in charge of keeping cyberattackers at bay. Rosetti takes that job seriously, because the trans-Alaska pipeline is getting hit by cyberattacks all the time — and not just a few. “We see about 22 million attacks a day,” Rosetti said.

China on China in Alaska. The U.S. northwestern state of Alaska is getting one step closer for Chinese investment in its ambitious energy program after U.S. energy regulators set assessment in motion for a planned liquefied natural gas (LNG) project in the state. The Federal Energy Regulatory Commission has set December 2019 as the deadline for the Alaskan LNG project to receive its final environmental impact statement, which Alaska Governor Bill Walker said has cleared a hurdle for investments in the project, local media reported Wednesday. “This is a major step forward that establishes clarity and predictability in the federal permitting process, which is critical for investors,” Walker said in a statement. The LNG project in the design phase in Alaska would connect a natural gas reservoir in Prudhoe Bay in northern Alaska through 800 miles (about 1,280 km) of pipe with a liquefaction plant on the southcentral Alaskan coast. The project, upon completion, will have an annual design capacity of 3.9 billion standard cubic feet (100 billion cubic meter) per day peak capacity of natural gas. Alaska has been aggressively seeking foreign funds, particularly Chinese investment, for its energy program. The U.S. state signed an agreement with Chinese energy company China Petrochemical Corp., or Sinopec, last November on the latter’s purchase of its LNG resources. Sinopec said it was interested in the possibility of LNG purchase on a stable basis from Alaska state.

Exemption, please? U.S. energy pipeline developers say they intend to pursue exemptions to the Trump Administration’s proposed steel tariffs, as concerns grow for those companies and from key exporters to the United States like South Korea. “We have a number of pipeline projects that would be impacted significantly by this cost increase,” said Adam Bedard, chief executive of Arb Midstream, an energy transportation and marketing company. If exemptions become available, “we’d certainly try and qualify for it.” He was referring to the U.S. Commerce Department’s effort to devise a procedure for companies to apply to avoid paying a 25 percent tariff on imported steel or 10 percent on imported aluminum. Commerce has 10 days to come up with the procedure to apply for exemptions from the steel and aluminum tariff declaration issued last week. There is a national security exemption for U.S. companies to buy steel items that domestic manufacturers do not produce in the volumes or quality required. The president also said exemptions would be available to certain countries. Imports account for 77 percent of the steel used in U.S. pipelines, according to a 2017 study conducted for the pipeline industry. Some manufacturers already have customers waiting two years for pipeline to construct lines to carry shale oil and gas from West Texas fields to U.S. Gulf Coast export hubs.

From today’s Washington Examiner, Daily on Energy:

TRUMP TO GET AN EARFUL FROM BIG OIL: President Trump is scheduled to sit down Thursday afternoon with a group of large oil companies to discuss a “laundry list” of issues.

The American Petroleum Institute’s executive board has made meeting with Trump a priority given a number of pressing issues including steel tariffs, NAFTA negotiations, offshore drilling and the ethanol mandate.

Laundry list: Sources tracking the meeting say the “laundry list” likely will include: offshore drilling, Renewable Fuel Standard reform, regulatory reform, pipeline construction, natural gas drilling and methane rules, North American Free Trade Agreement renegotiation, and Trump’s inclination to impose tariffs. API opposes the steel and aluminum tariffs Trump imposed on those imports last week, saying it would disrupt energy infrastructure development.

Gerard not pleased with tariffs: API President and CEO Jack Gerard recently said in an interview on the sidelines of CERAWeek in Houston this month that he was hopeful he could meet with the White House to persuade the president against imposing a broad tariff. The tariff decision does carve out a process for industries to petition for exemptions on steel products.

Still, Gerard said he was disappointed that Trump moved forward with the steel tariffs.

Pence joins meeting: Vice President Mike Pence is scheduled to attend the meeting, too. Others tracking the meeting say that Pence’s presence suggests the ethanol mandate will come up. He was supposed to meet with large ethanol producers on Monday, but the meeting was scrapped because of a scheduling conflict. Pence’s home state of Indiana is a big corn producer and has a major stake in the Renewable Fuel Standard.



First Reads:

Walker hopeful plan to pay off oil tax credit debt with bonds will pass this session
KTOO Public Media, Rashah McChesney, March 14, 2018

The trans-Alaska pipeline fights off 22 million cyber attacks. Daily.
Alaska Public Media, Elizabeth Harball, March 14, 2018

U.S. state of Alaska one step closer for Chinese investment in energy
Xinhaunet, Liangyu, March 15, 2018

U.S. energy pipeline developers to seek exemptions to steel tariff
Reuters, Liz Hampton, March 14, 2018