Headlamp – Let’s make a deal – 151 years ago today Seward signed the deal to buy Alaska.

Let’s make a deal. On this day in 1867, after an all-night negotiating session that ended at 4 a.m., Eduard de Stoeckl, the Russian envoy in Washington, signed an agreement with Secretary of State William Seward to sell Alaska — a remote and sparsely populated territory about twice the size of Texas — to the United States for $7.2 million, or about $125 million in today’s dollars. Russians started to settle Alaska in 1784, setting up trading posts and Eastern Orthodox churches, mostly along the coast. By the late 1850s, having lost the Crimean War to Britain, and fearful that Britain would seize Alaska in any future conflict, Tsar Alexander II decided to seek a deal. Authorities in St. Petersburg, the czarist capital, had first approached the United States in a bid to sell the territory in 1859 while James Buchanan was president. But the Civil War put the negotiations on hold. Seward, who was secretary of state under both Abraham Lincoln and Andrew Johnson, favored the deal, snubbing mocking editorials that castigated the proposed sale as “Seward’s icebox” and Johnson’s “polar bear garden.” For successfully carrying out the negotiation, the czar awarded Stoeckl $25,000, a sizable amount at the time, and an annual $6,000 pension. Stoeckl resigned as the Russian minister in 1869, spent the final years of his life in France, and died in Paris in 1892. Gwenn Miller, a historian at the College of the Holy Cross in Worcester, Massachusetts, told The Seattle Times that Washington insiders also thought the purchase would improve American prospects in trading with China while countering any British thoughts of encroachment on the West Coast. “It was really about Manifest Destiny,” she said, “about expanding the U.S.”

Mack says 30 days isn’t adequate. The U.S. Army Corps of Engineers is preparing an Environmental Impact Statement for the proposed Pebble mine, and the Walker administration is asking for more time to comment on it. The proposed gold and copper mine would sit upstream from Bristol Bay. Gov. Bill Walker has said he doesn’t support the mine and believes the priority should be on the region’s salmon. The Corps announced a “scoping” period that would last the month of April. During those 30 days, the Corps plans to identify the areas and concerns it will focus on in its environmental study. Alaska Natural Resources Commissioner Andy Mack is asking that the scoping period be three or four months. In a letter to the Alaska commander of the Corps of Engineers, Mack said a 30-day scoping period isn’t adequate for the scale of the project. Mack described it as “an open-pit mine, a mile across, near the headwaters of the most prolific salmon fishery in the world.” The Pebble Limited Partnership says it’s committed to minimal impact and says its latest design incorporates new environmental safeguards.

More Mitigation Measures – FERC to AGDC. The Federal Energy Regulatory Commission (FERC) has requested more details regarding mitigation measures to protect wildlife and public land during construction and operation of the proposed Alaska LNG project. FERC has requested that the Alaska Gasline Development Corporation (AGDC) submit tangible details on the measures the project would most likely use, even if they might later change. In a statement from Oil and gas news briefs from Larry Persily, FERC’s instructions come as the project team is working with federal agencies to determine how the 870 miles of pipeline, North Slope gas treatment plant and liquefaction plant in Nikiski would affect the environment — and decide on acceptable measures to reduce those impacts. The AGDC and FERC met for almost two and a half hours in Washington, D.C., on March 22 to run through roughly two dozen questions as the state works to finish answering regulators’ requests for details that will be used in preparing the project’s environmental impact statement (EIS). Persily wrote that at this time there is no deadline for the state to submit the missing information, other than AGDC is eager to respond so that FERC can meet its self-imposed timeline to issue the project’s draft EIS in March 2019.

More production helps to end two years of losses for BP. BP Exploration (Alaska) reported a gain in its annual financial statements for 2017 on Thursday. According to the company, the gain is attributed in part to the improved price of oil, the lack of production decline at Prudhoe Bay, and the reaped benefits from the recently revised federal tax code. “On the financial front, I am very proud of the progress that BP Alaska, and indeed the entire Alaska industry, has made in adapting to the lower for longer oil price environment,” said BP Alaska Region President Janet Weiss in a statement. According to the report, BP Exploration Alaska (BPXA) had a profit of $830 million; moreover, the profits include a reduction of the U.S. federal corporate income tax rate of “about $500 million in future federal corporate tax liabilities.” On Jan. 1, 2018, the tax rate changed from 35 percent to 21 percent. Also affecting BPXA’s gains is increased production at Prudhoe Bay, with “over 280,000 barrels per day for three years.” Plus, the price of oil increased from $43.27 per barrel in FY2016 to $54.49 per barrel in FY2017. BPXA’s financial report only represents a portion of BP Alaska, which is made up of several businesses. It does not take into account costs associated with TAPS, Alaska LNG and the marine shipping business. “All in, our entire BP Alaska regional businesses did make a profit of $118 million in 2017, which is lower than the 20-F reports for the BPXA business by itself,” said Weiss. “We also had positive cash flow for the year at about $619 million, following two straight years of losses.”

 

First Reads:

U.S. cuts deal to buy Alaska from Russia, March 30, 1867
Politico, Andrew Glass, March 30, 2018

Walker admin says Corps moving too fast on Pebble
Alaska Public Media, Liz Ruskin, March 29, 2018

FERC Wants AK LNG Project To Submit More Specific Mitigation Measures
KSRM Radio Group, Jennifer Williams, March 29, 2018

BP reports financial gains in Alaska for 2017
KTUU, Sidney Sullivan, March 29, 2018