Production! Production! Production! Lawmakers got some good news in Juneau on Tuesday, as the state’s Department of Natural Resources unveiled the fall production forecast. Oil production is up. And they expect it rise again next year. It was a difficult year for the North Slope in 2016. After the drop in oil prices, operators cut 44 percent of their spending. They let drilling rigs go idle and laid off hundreds of workers. At Alaska’s Division of Oil and Gas, Ed King said they were surprised when they started putting together this year’s production forecast. “When we read the news of rigs getting laid down and kind of this global contraction of the industry, we kind of expected that to manifest itself in reduced production,” King said. “So, yeah, it is a little bit surprising to see how much they’ve been able to do in this low-price environment.” For the year, King said production was up about 3 million barrels, and the state is predicting that it’s going to be up next year too. King said a big part of that prediction is coming from the companies. “You know, last year they told us, the Prudhoe Bay operator (BP) at least, they told us that they were expecting to be able to hold production relatively flat and we were a little bit skeptical and this year they told us the same thing – now we have a tendency to want to believe them a little bit more,” King said. Headlamp agrees with AOGA President and CEO Kara Moriarty when she says: “Oil production increases don’t happen by accident — they require a lot of work, commitment, and investment in exploration and development,”
Keeping an eye on the LNG competition: New York-listed Tellurian’s new financing model can deliver US-produced LNG to Japan at $6/MMBtu, $2/MMBtu lower than it had claimed earlier this year, the company’s vice chairman Martin Houston said Monday.
- New model gives buyers equity stake and offtake volume
- Expected to lower final costs
The new sales pitch from the operator of the planned Driftwood LNG plant in Louisiana comes after its previous offer of a delivered price of $8/MMBtu for Japan fell flat with no takers as the LNG market becomes more liquid and averse to signing long-term contracts. Tellurian Chairman Charif Souki in May said the company was making the innovative marketing offer, saying the company would offer 7 million mt of LNG for five years, for deliveries starting in 2023, at a fixed price of $8/MMBtu. But said recently that the company had found no takers for this offer. Souki, the former chief executive of Cheniere Energy who is credited with opening up US LNG export markets, is now testing new business models to develop US LNG projects in the absence of long-term customers.
From the Washington Examiner Daily on Energy:
HOUSE PASSES BUDGET, PAVING WAY FOR DRILLING IN ARCTIC REFUGE: Republicans are one step closer to fulfilling a long-time goal of allowing oil and natural gas drilling in the Alaska National Wildlife Refuge after the House approved a budget resolution Thursday paving the way for it to happen. What the budget does: The budget resolution, passed narrowly by a 216-212 vote, contains instructions for lawmakers to create filibuster-proof legislation to open ANWR to drilling, as a way to raise revenue to help pay for tax reform.
For the first time! The Trump administration said Wednesday that it is offering a record 900 tracts for an upcoming lease sale within the National Petroleum Reserve-Alaska, a region that has attracted renewed interest from the oil industry and geologists. At 10.3 million acres, the tracts being offered for the lease sale in December represent about half of the 22.8-million-acre reserve. “(The) unprecedented sale in Alaska will help achieve our goal of American energy dominance,” said U.S. Interior Secretary Ryan Zinke, adding that he had pledged to help fill the trans-Alaska pipeline during a visit to see the line and Alaska fields in May.
Curbing regulatory burdens that don’t serve the American people. The U.S. Environmental Protection Agency said on Wednesday it will review how bedrock laws like the Clean Air Act and Clean Water Act affect energy industry job losses, one of several measures U.S. agencies will take to “reduce unnecessary regulatory burdens” on business. The measure was one of four initiatives proposed by the EPA to help carry out an executive order issued by President Donald Trump in March. He directed cabinet chiefs to identify ways to ease regulatory burdens on energy development. EPA Administrator Scott Pruitt, Energy Secretary Rick Perry and Interior Secretary Ryan Zinke each announced separate lists of measures they sent to the president to carry out his order. “We are working to curb unnecessary and duplicative regulatory burdens that do not serve the American people,” Pruitt said in a statement.
Bringing the real world to the classroom through STEM advocates. Holding the attention of tomorrow’s scientists and engineers can be tricky. Fortunately, Juneau is rife with professionals who work in those fields every day. A group of local STEM — or science, technology, engineering and math — advocates is working on a database to make it easy for teachers to connect bookwork with real world work and find those professionals. Jordan Watson is a fisheries scientist at National Oceanic and Atmospheric Administration, or NOAA. Watson and other members of Southeast Exchange, or SEE, wanted to find a way to bring all of those resources to teachers. They hosted a networking event recently to help bridge that gap. “From mining expertise and engineering, kind of geology, we have the glacial, we have University of Alaska Southeast, University of Alaska Fairbanks has fisheries here, we have NOAA fisheries, we have all the state organizations,” Watson said. “We have so many different expertise here and in such a small town, it would seem a shame to not be using it in the classrooms.” About 150 educators and STEM professionals came to network and register in SEE’s directory.
First Reads –
Oil production is up, and DNR expects it to keep climbing
Alaska Public Media, Rashah McChesney, October 25, 2017
NY-listed Tellurian claims new model can deliver US LNG to Japan at $6/MMBtu
Platts, Eric Yep, October 23, 2017
For the first time, all available tracts in Alaska’s National Petroleum Reserve are up for lease
Alaska Dispatch News, Alex DeMarban, October 25, 2017
EPA to review how clean air, water laws affect energy sector jobs
Reuters, Valerie Volcovici, October 25, 2017
STEM advocates build network for Southeast classrooms to connect with local experts
Alaska Public Media, Adelyn Baxter, October 25, 2017