Headlamp – Keep your friends close and your enemies as partners

Keep your friends close and your enemies as partners? While much of the United States is contemplating a trade war with China, Alaska is banking on making the nation a closer trading partner — one day, a major buyer of liquefied natural gas. President Donald Trump has threatened to impose tariffs on up to $60 billion in Chinese goods in an effort to rectify the trade deficit with China. In 2017, the U.S. had a $375 billion trade deficit with China, importing more than it exports to the country. But Alaska is barreling forward with its long-held pipe dream: building a pipeline to bring natural gas down from the North Slope and exporting it to Asia, offering the state a fresh chance at a booming natural resource economy. Project leaders and some analysts say that even if Trump’s trade talk escalates to an all-out trade war with China, Alaska’s LNG exports are unlikely to be caught in the crossfire. A trade war wouldn’t immediately jump to China not buying American LNG, said Kevin Book, an analyst with Clear View Energy Partners. “We have gas for export and that is a product that China needs,” Book said. And China wants to “diversify away from its reliance” on gas from Russia and central Asia, he said. “In a few words, China’s energy policy is ‘not running out,’” Book said. “A proximate exporter of a significant resource is going to look attractive to China irrespective to other considerations such as trade,” he said. “Only in the most heightened and economically devastating escalation” of a trade war would he expect a problem for exporting.

We’ve got your back. President Donald Trump called his embattled environmental chief Monday to assure him his job is safe amid mounting scrutiny of Scott Pruitt’s travel, hiring practices and an unorthodox condo rental arrangement last year, according to two administration officials. The president told Pruitt, the Environmental Protection Agency administrator, to “keep your head up” and “keep fighting,” because the White House has “got your back” said one of the officials, who asked not to be identified discussing personnel matters. That message was reinforced by White House Chief of Staff John Kelly in a telephone call to Pruitt on Tuesday morning. Pruitt didn’t respond to questions from reporters at an event Tuesday morning in Washington.

Security before Seismic. Alaska’s Governor Bill Walker has proposed to use $10 million previously earmarked for a seismic study of the Arctic National Wildlife Refuge to update the state’s archaic 911 system. The state administration last month asked the legislature for $10 million to start a seismic survey campaign in the ANWR aimed at encouraging oil and gas companies to consider bidding for the acreage to be offered under the new tax law approved at the end of last year. Alaska is currently struggling with a budget crisis, and allocating the scarce available resources is proving to be a tough task. The state has also seen a consistent decline in its oil production. The Energy Information Administration has projected that the state will produce an average 500,000 bpd next year. That’s down from 2.09 million bpd 30 years ago—a fact which has caused new exploration to be a top priority. Opening up the National Wildlife Refuge was a stipulation in the tax reform bill passed in December, and there were plans to hold the first lease sale there as early as 2019. Given the opposition from environmentalist groups and the Democrats, it was doubtful from the start if the lease sale would take place and, if it did, how much interest it would attract from the oil industry. Still, the Alaska administration evidently wanted to be prepared by spurring interest with up-to-date resource data—the only estimates for oil and gas in the ANWR are 30 years old. In his letter to Alaska’s Congress, Walker said oil and gas exploration in the ANWR is still on the table, but the $10 million is “not needed for seismic work at this time.” Alaska’s emergency system is very out of date, with people in some rural areas having to dial a 1-800 number for help. Under the new proposal, the funds will be used to centralize Alaska’s State Troopers emergency dispatch system. It currently relies on four regional hubs, all of which use different computer systems, the Anchorage Daily News notes.


First Reads:

Here’s what the Trump-China trade negotiations could mean for Alaska’s gas pipeline
Anchorage Daily News, Erica Martinson, April 2, 2018

Trump told embattled EPA Chief ‘We’ve Got Your Back,’ Official Says
Bloomberg Politics, Jennifer A Dlouhy and Jennifer Jacobs, April 3, 2018

Alaska Governor Scraps Arctic Oil Study
Oil Price.com, Irina Slav, April 3, 2018