We’ll have a shale of a time. A shale gas drilling boom over the last decade has propelled the United States from energy importer to exporter, taking the country a giant leap toward the goal of energy independence declared by presidents for half a century. Now the upheaval of the domestic energy sector is going global. A swell of gas in liquefied form shipped from Texas and Louisiana is descending on global markets, producing a broader glut and lower energy prices. The United States was supposed to be a big L.N.G. importer, not a world class exporter. The frenzy of drilling in shale gas fields across the country changed that over the last decade, creating a glut far larger than domestic demand could possibly consume. Companies that spent billions of dollars to build import platforms suddenly had useless facilities until they spent billions more to convert them for export. You can hear an update on Alaska LNG today at 1pm at the Anchorage LIO as AGDC presents to the Senate and House Resources committees.
Conoco Phillips brings hope to Alaska. The company is planning its most ambitious exploration program in years, and the effort could provide more details about a newly promising North Slope play. The company plans to drill five exploration wells in early 2018. Three wells will help the company further analyze its large Willow prospect in the National Petroleum Reserve-Alaska, said Joe Marushack, president of ConocoPhillips Alaska, on Thursday night. That prospect could produce 100,000 barrels of oil daily, the company has said. Two other wells will be drilled near the Colville River, not far from where Armstrong Oil and Gas has heralded a large discovery it says could produce 120,000 barrels daily. Marushack said the plans, if completed, will represent the most exploration wells drilled per year by the company in 15 years. Marushack unveiled the proposal as keynote speaker at the annual meeting of the Alaska Support Industry Alliance, at a downtown Anchorage hotel. Alaska, mired in a recession brought on by low oil prices, had the nation’s highest unemployment rate in August. The plans generated applause from the large crowd.
Alaska and the sanctity of a contract. There is a strong case to be made for the state to honor the agreements it made to fund the oil exploration companies who were selected to be included in the state’s tax credit incentive program. The state, because of fiscal constraints, has chosen not to appropriate funds to meet the contractual draws as proposed by the various qualified exploration companies. Rather, the state distributed the minimum amount (about $10 million to those companies). While the state had the authority to make a partial payment, it did not absolve the state from its contract terms. So here we are. Oil production is in decline. The state is in a fiscal dilemma with concern on how to fund its deficit. And the recipients of the state’s incentive program are having to curtail or cancel their planned exploration programs for the coming year. The alternative to doing nothing is not in the best interest of the state. It will hold back jobs and delay the likelihood of new oil and gas discoveries and affect the state’s credit rating.
Boom in American Liquified Natural Gas Is Shaking Up the Energy World
The New York Times, Clifford Krauss, October 16, 2017
ConocoPhillips Alaska plans largest exploration season in 15 years
Alaska Dispatch News, Alex DeMarban, October 15, 2017
Alaska and the sanctity of a contract
Fairbanks Daily News-Miner, Frank Murkowski, October, 16, 2017