Morning Headlamp – Special, Special, Special, Special Session. Together Forever.

4th times a charm? The Alaska Legislature is likely to meet for a fourth special session starting in late October. That was the word from Sen. Dennis Egan, D-Juneau, as he spoke to the Juneau Chamber of Commerce’s weekly luncheon on Thursday. “Pretty soon, after AFN, I think we’ll have (special session) No. 4 to talk about new revenue,” Egan said, referring to the annual Alaska Federation of Natives convention, which takes place Oct. 19-21 in Anchorage.

Together Forever. Lt. Gov. Byron Mallott said Wednesday that he and Gov. Bill Walker will run for re-election next year.  He also said they’ll run together. Even for incumbents, that may be an uphill fight. Mallott went further than Walker has in talking about next year’s election. He spoke to host Pete Carran on Juneau radio station KINY. “Well, we have both decided that we will run again,” he said. Mallott said the decision isn’t absolute, because they don’t know what may occur in the future. But he said their minds are made up to run again. “Whatever we do, we’ll do together, for sure,” he said.

WOTUS review. The US Environmental Protection Agency and Army Corps of Engineers jointly began their reevaluation of and possible revisions to the Waters of the United States rule that was adopted during the Obama administration’s second term. They proposed rescinding the rule’s definition of US waters and returning to regulations that existed before a 2015 rule as their first step, the agencies said in a July 27 Federal Register notice. “Proposing to recodify the regulations that existed before the 2015 Clean Water Rule will provide continuity and certainty for regulated entities, the states, agency staff, and the public,” EPA and ACE said. “In a second step, the agencies will pursue notice-and-comment rulemaking in which the agencies will conduct a substantive re-evaluation of the definition of ‘waters of the United States’.”

Global war games. The U.S. military is moving toward more global exercises to better prepare for a more assertive Russia and other worldwide threats, a senior officer said in an interview with Reuters. Air Force Brigadier General John Healy, who directs exercises for U.S. forces in Europe, said officials realized they needed to better prepare for increasingly complex threats across all domains of war – land, sea, air, space and cyber. Some smaller-scale war games with a global focus had already occurred, but the goal was to carry out more challenging exercises by fiscal year 2020 that involved forces from all nine U.S. combatant commands – instead of focusing on specific regions or one military service, such as the Marines. “What we’re eventually going toward is a globally integrated exercise program so that we (are) … all working off the same sheet of music in one combined global exercise,” Healy said in an interview this week.

Fake oil production news? Oil is back at $50 per barrel, restoring some semblance of confidence in the market. But that is just about as much as we can expect in terms of a rally, according to most analysts, with momentum likely to dissipate from here. But not everyone agrees. Many are worried that oil prices will crash again next year as OPEC scrambles for an exit strategy, but there is actually a bullish case for oil that is not outlandish. First, crude oil inventories continue to fall. The EIA just released another week’s worth of data, showing another drawdown in inventories. It was a bit more modest last week – 1.5 million barrels – compared to previous four weeks, but the drawdowns continue. U.S. crude oil inventories are now down more than 50 million barrels from the peak hit in March, with stocks back within the five-year range.

One if by land, two if by sea? The “magic” of $50 oil is now in the sights of deep-sea drillers as they try to lure customer spending from shale wells on land. And after more than three years of pain, that prospect has some investors excited. Transocean Ltd. rose the most in more than eight months after the world’s biggest provider of offshore rigs predicted explorers could soon shift their spending from land to sea as crude futures inch closer to the key level. Shares of other deep-water service providers like Diamond Offshore Drilling Inc. and Noble Corp Plc also surged on the heels of Transocean’s rally.

It’s in the cards – Trumps record on rolling back regulations. The big question looming over much of this debate is whether the administration looks to repeal rules only, or eventually replace them. So far it’s a mixed bag. Regardless, the process is long and litigious. Repealing most rules will take at least a year, and replacing them even longer, because each step requires a proposal, public comment period, two White House reviews and then a final version. Along the way, legal and political pushback is certain, possibly prolonging things.

FERC back on track. The Senate voted Thursday evening to confirm two of President Trump’s nominees to the Federal Energy Regulatory Commission (FERC), paving the way for the commission to have its first quorum in six months. Neil Chatterjee and Robert Powelson were confirmed by unanimous consent and are slated to join the five-member board, which has seen its action paused since February following a pair of retirements. FERC is responsible for permitting decisions on energy projects like natural gas pipelines and export terminals. The lack of a quorum has left FERC unable to move such projects forward, inaction that has led to frustration in the energy, manufacturing and business communities. 

First Reads:

EPA, ACE begin review of Obama administration’s Waters of the US rule
Oil & Gas Journal, Nick Snow, August 4, 2017

Eyeing Russia, U.S. military shifts toward more global war games
Arctic Now/Reuters, Andrea Shalal, August 4, 2017

Is The EIA Exaggerating U.S. Oil Production?, Nick Cunningham, August 3, 2017

Oil at $50 Boosts Sea Drillers’ Hopes of Vying With Shale
Bloomberg, David Wethe, August 3, 2017

Senate confirms two energy commission nominees, restoring quorum
The Hill, Devin Henry, August 3, 2017

Lt. Gov. Mallott says he and Gov. Walker will run for re-election
KTOO/Alaska Public Media, Andrew Kitchenman, August 4, 2017

Egan: Fourth special session possible in October
The Juneau Empire, James Brooks, August 4, 2017

How Trump is rolling back Obama’s environmental rules
Axios, Amy Harder, August 4, 2017