Morning Headlamp – Senate eliminates cash incentives to oil companies.

Cash Credits are DOA. The Alaska Senate moved ahead Monday with a House bill to eliminate a cash incentive program for oil companies, but it rejected another House idea to raise oil taxes at prices below $100 a barrel. The Senate Resources Committee released its revision to House Bill 111 at a Monday afternoon meeting and advanced it 40 minutes later to the Senate Finance Committee, where it’s scheduled for hearings later in the week. The new proposal from the Senate accepts the House’s plan to eliminate cash incentives for North Slope oil companies and cuts the incentives even more than the House’s bill, because it would also eliminate the program for so-called “Middle Earth” — south of the North Slope and north of Southcentral Alaska, where it’s being used by Alaska Native corporations.

Statoil’s Statistical Probability on Arctic Drilling. Norway’s Statoil on Monday played down concerns that drilling in the Arctic is risky, days before it kick starts its drilling campaign in the Barents Sea, where the country believes around half of its remaining resources could be located. Despite opposition from environmentalists, the company plans to drill five wells in the Norwegian sector of the Barents Sea, including Korpfjell, which will be the world’s northernmost well and in a formerly disputed border area with Russia.

Like a good neighbor…miners are there. A recent poll conducted by Morning Consult shows that the average American does not understand the important and positive role mining companies play in land reclamation and in environmental stewardship. For example, only seven percent of those surveyed knew that U.S. mining companies have paid more than $10 billion to restore mines abandoned before laws requiring their restoration were enacted. These results reinforce the need for the mining industry and its supporters to educate Americans about our industry’s commitment to being good neighbors and responsible operators.

More pipelines = lower electricity rates. The US Chamber of Commerce’s Institute for 21st Century Energy in a report underscored the need for more natural gas pipelines in the Northeast US and slammed environmentalists for challenging new projects. “As a result, residents in the Northeast are paying the highest electricity rates in the continental US, with no relief in sight if infrastructure is not built,” Institute for 21st Century Energy President and CEO Karen Harbert said. Headlamp agrees wholeheartedly with the US Chamber and Alaskans understand the need for infrastructure probably better than anyone else in the United States. Let’s build things!

A little Icewine please? Australian oil firm 88 Energy said today that a well had been spudded on its Icewine asset in Alaska. Perth-based 88 Energy, which owns 77.5% of Icewine, said the Arctic Fox rig started drilling the production test well last night. Production testing remains on schedule for late June or early July, the London-listed firm said. 88 Energy managing director Dave Wall said: “The spud of Icewine#2 represents another milestone for the Company and its shareholders and we now look forward to a safe operation, above all else. It is only a few short weeks before production testing begins, which could unlock the huge resource potential of the HRZ shale play. More exploration leads to more production which leads to more revenue for Alaska. It’s a win-win. Good luck to 88 Energy.

More threats on the way? The Alaska House Rules Committee hasn’t held a hearing on a single bill this year – this is normal for a committee that often only meets during a legislative emergency. But on Wednesday, the committee will meet to consider six uncontroversial bills from the Senate — a move from the committee chair, Anchorage Rep. Gabrielle LeDoux, that has perplexed other lawmakers, legislative staffers and lobbyists. Headlamp would venture a guess that the rules chair is planning to hijack Senate bills in an attempt to force them to do the House’s bidding. Our money is on the Senate. 

 

First Reads

Alaska House leader schedules unusual meeting on batch of bills from state Senate

Alaska Dispatch News, Nathaniel Herz, April 25, 2017

Alaska Senate advances oil tax bill, but leaves out some of the pieces proposed by the House

Alaska Dispatch News, Nathaniel Herz, April 25, 2017

Cook Inlet gas leak shows why Alaska LNG route must end in Valdez, group says

Alaska Dispatch News, Alex DeMarban, April 25, 2017

North Sea Oil Floods to Asia Like Never Before on OPEC Cuts

Bloomberg, Alex Longley, April 25, 2017

Poll Shows Mining’s Environmental Accomplishments Unknown to American Voters

National Mining Association, April 20, 2017

US Chamber sees need for more natural gas pipelines

Argus Media, April 24, 2017

Arctic Fox spuds 88 Energy’s Icewine well in Alaska

Energy Voice, Mark Lammey, April 25, 2017

Norway’s Statoil plays down risks ahead of Arctic drilling
Reuters, Nerijus Adomaitis, April 24, 2017