We’ve got high hopes. Optimism among chief executive officers of large U.S. companies rose to the highest in almost six years, as the outlook for capital spending improved, a Business Roundtable survey showed Tuesday. Hiring plans eased as wages became the top cost pressure. Highlights of CEO Economic Outlook (4Q):
- Index advanced to 96.8, highest since 1Q 2012, from 94.5; readings above 50 indicate expansion
- Gauge of capital spending plans in the next six months increased to 92.7, highest since 2Q 2011, from 86.4; sales outlook rose to 122 from 116.9
- Measure of hiring expectations fell by 4.5 points to 75.7
- CEOs identified labor as biggest cost pressure, first time in six years that regulatory costs weren’t the top answer
Cart before the horse? It’s been nearly a month since the state signed a joint-development agreement with three Chinese entities to potentially build a natural gas pipeline in Alaska. But, does the state have an agreement to sell the gas produced by oil companies? That was question lawmakers asked the Alaska Gasline Development Corporation’s President, Keith Meyer, at a House Resources Committee meeting Monday. It’s one of many agreements on the Alaska LNG project that still need to be secured. Meyer says the corporation says is actively negotiating with oil companies on the matter. Alaska owns the resource when it’s in the ground, but oil companies own the leases to produce oil and gas. As part of the project, the state is now offering those companies $1 per million BTU of gas, a set unit often used to quantify the commodity. “To get a dollar for that, a billion a year, we think is pretty reasonable,” Meyer said Monday. “It’s not as high as Henry Hub, which is north of $2 now, you know, $2.50, but Henry Hub’s at the beach in Louisiana, not up on the North Shelf.” But oil companies may not be ready to accept an offer just yet. “We need to know what it costs to produce gas before we sign an agreement to sell gas,” said Damian Bilbao, vice president of commercial ventures with BP, adding that the company hasn’t studied what it costs to produce natural gas to take to market. “We need to make sure that if we’re going to enter into agreements for 20 years, 25 years, to sell gas, that we know what it’s going to cost to produce.” Without a commitment from oil companies to sell their gas, the state can’t market or tax it.
Statoil’s Arctic oil project becomes reality. After years of hesitation, consideration and re-consideration, the Norwegian oil company Tuesday announced that the Arctic oil project will become reality. The Johan Castberg will be one of the biggest industrial projects in the Norwegian Arctic ever. About 49 billion NOK (€5 billion) will be spent on the development of the 450 to 650 million barrels of oil equivalent. Although it was expected, the announcement is still big news from the company which in the course of 2017 has conducted a series of unsuccessful exploration well drilling operations in region, while a bit further south, oil company Eni has experienced serious problems with its Goliat project, a license in which Statoil has a 35 percent stake. “This is a great day!” says Margareth Øvrum, Statoil’s executive vice president for Technology, Projects and Drilling.
Congressman Young named to conference committee. Alaska congressman, Rep. Don Young (R), was named Monday by Speaker of the House, Rep. Paul Ryan, (R) Wisconsin, to serve on the conference committee that will be tasked with trying to reach a compromise over differences between the House and Senate tax reform legislation, which includes a provision to allow oil exploration in the Arctic National Wildlife Refuge. In a press release, Young said “There is still a long way to go in our unified effort to unleash Alaska’s true energy potential, but I am committed to getting this across the finish line.” Senate Majority Leader Mitch McConnell is also expected to soon name senators to the conference committee, and Sen. Lisa Murkowski (R) Alaska, said after the GOP tax reform bill was approved that she wants to serve on the panel. BREAKING NEWS: Congressman Young will become the longest serving member of Congress when Congressman Conyers steps down.
KPEDD highlights economic diversity at annual forum. Next month’s Industry Outlook Forum will hinge around the diversity of the Kenai Peninsula’s economy, featuring speakers from nearly every industry. The annual event, coordinated and hosted by the Kenai Peninsula Economic Development District, brings together state officials, business owners and industry leaders from around the state to look at the upcoming year for their industries. The lineup features speakers from oil and gas companies, the health care industry, the cannabis industry and the state, among other businesses. Kenai Peninsula Economic Development District Executive Director Tim Dillon said he and events coordinator Caitlin Coreson took a look at the industries on the Kenai Peninsula early in the process and wanted to make sure as many as possible were represented. “When you look across the board, we’ve got almost every industry,” he said.
China may buy Alaska gas, but are producers ready to sell it?
KTVA, Liz Raines, December 4, 2017
U.S. CEO Optimism Strongest Since 2012 on Sales, Investment
Bloomberg, Sho Chandra, December 5, 2017
Statoil announces massive investment in its northernmost oil field
Arctic Now / The Independent Barents Observer, Atle Staalesen, December 5, 2017
Rep. Don Young named to tax reform, ANWR committee
KTUU, Mike Ross, December 4, 2017
Industry Outlook Forum looks to diversity
Peninsula Clarion, Elizabeth Earl, December 4, 2017