Morning Headlamp – Big Decisions on the Back Burner

 

Big decisions on the back burner. The Legislature will return to Juneau on Thursday to vote on a capital budget that Senators and House members have agreed to. Soldotna Republican Sen. Peter Micciche said the bill is unlikely to address the most contentious issues: Permanent Fund dividends and oil and gas tax credits. “Clearly those are going to be the most difficult issues that have to be solved going forward,” he said. “I don’t think they’re going to happen in this bill.” The Legislature will meet at 11 a.m. in the Capitol. The leaders of each chamber polled members, and more than two-thirds supported calling the Legislature into session to consider Senate Bill 23, the capital budget.

Falling into an oil discovery, literally. Richfield Oil Corporation found crude on the Kenai Peninsula this week in July 1957. That discovery helped Alaska on its way to statehood two years later, as Congress believed that Alaska would now be able to fund its own government. But that wasn’t the first time Alaskans had found oil. Alaska Natives used the black wealth oozing out of the hills and beaches long before white men came north. Northern Natives burned the tar-like chips, Southeastern Natives used it for war paint and others used oil shale in knives and nose rings.

Bear country. Oil’s bear market may finally be taking its toll on the shale boom. Hours after Halliburton Co. warned Monday that explorers are “tapping the brakes” on drilling, Anadarko Petroleum Corp. said it’s trimming spending in the first earnings report this quarter from a major shale producer. That could make this week a turning point for the troubled global oil market — the moment when shale companies showed signs of bowing to the low prices they helped inflict. The surge in U.S. production this year has stymied efforts by OPEC and other major oil exporters to unwind a supply glut that’s weighed on the crude market for three years.

Repeal and Replace…Fracking?  The Trump administration is proposing to completely repeal Obama-era standards governing hydraulic fracturing on federal land. The proposal from the Interior Department’s Bureau of Land Management (BLM) is due to be published Tuesday in the Federal Register. Trump officials say in the proposal released Monday that the Obama regulation is largely duplicative of state and tribal standards, and would cost the oil and gas industry up to $45 million a year to comply. “Considering state regulatory programs, the sovereignty of tribes to regulate operations on their lands, and the preexisting authorities in other federal regulations, the proposed rescission of the 2015 final rule would not leave hydraulic fracturing operations entirely unregulated,” the BLM writes in the proposal.  The BLM did say they intend to replace the rule.

Record highs for US crude oil production

 US Crude Oil by Region

 

First Reads:

Capital budget compromise unlikely to restore PFDs, address oil and gas tax credits
KTOO, Andrew Kitchenman, July 24, 2017

Shale Boom May Finally Have Succumbed to Oil’s Price Slump
Bloomberg, Alex Nussbaum, July 24, 2017

Trump administration seeks to repeal Obama fracking rule
The Hill, Timothy Cama, July 24, 2017

U.S. crude oil production forecast expected to reach record high in 2018
U.S. Energy Information Administration, Jeff Barron & Danya Murali, July 25, 2017

Story Time with Aunt Phil: Alaska crude oil’s explosive discovery
KTVA, Laurel Downing Bill, July 24, 2017