Morning Headlamp – Pipelines, Petro Star and Point Thomson

Pipeline Permitting Progress. Republicans in the US House of Representatives are dusting off energy bills that died last year as they make a fresh attempt to expedite a permitting process for natural gas and oil pipelines they say takes too long. The bills under consideration include similar language included in legislation the House passed last year but that never became law. President Donald Trump has pushed to accelerate pipeline approvals, but Republicans view their bills as a more permanent fix to what they consider to be a flawed permitting process and avoid the types of issues that delayed the 830,000 b/d Keystone XL pipeline.

Petro Star Comes to Anchorage. Petro Star Inc., a subsidiary of Arctic Slope Regional Corp., will acquire fuel storage Terminal 1 from Tesoro at the Port of Anchorage. Last year, the Alaska Department of Law required the sale of the terminal in order to prevent Tesoro from having a gasoline monopoly. The move by the state came after Tesoro gained more fuel storage in North Pole in a purchase from Flint Hills Resources. The Terminal 1 sale is expected to close in about a month.

What does it all mean? ConocoPhillips has confirmed it’s giving up its small stake in the Point Thomson field on the North Slope. The move has some observers wondering if it’s a bad sign for the state’s effort to build a massive natural gas line.

Alaskans sue the President.  Environmental and Alaska Native groups sued Wednesday to overturn an executive order by President Donald Trump that could lead to expanded petroleum drilling in the Arctic and Atlantic oceans. Trump last week ordered Interior Secretary Ryan Zinke to review an Obama-era plan to permanently ban new offshore oil and gas drilling in the regions.

Give credit(s) where credit(s) is due… Lawmakers in the majority parties in both the House and the Senate seem to agree that the state oil tax credit system needs a change, but exactly what will change is unclear. The House’s bill cut credits that went to legacy fields like Prudhoe Bay. It doesn’t allow companies to dip below the state’s 4 percent minimum tax. And, it axed a credit that companies could trade to the state for millions in cash payments.  The Senate version of the bill also hardens the state’s minimum tax, but it allows companies producing new oil to take credits that would dip them below that minimum. Both the Senate and House versions of the bill have drawn criticism from oil and gas producers who have repeatedly asked lawmakers not to raise taxes during a low oil price environment.

 

First Reads

Petro Star to buy fuel storage terminal at Anchorage port

Alaska Dispatch News, Annie Zak, May 4, 2017

Divisions deepen as lawmakers tinker with Alaska’s oil tax credits

KTOO, Rashah McChesney, May 3, 2017

US House looks to expedite pipeline permitting

Argus Media, May 3, 2017

Conoco gives up stake in North Slope project seen as precursor to gas line

Alaska Public Media, Elizabeth Harball, May 3, 2017

Groups sue to keep drilling ban in Arctic, Atlantic waters

KTVA/Associated Press, May 3, 2017