Morning Headlamp — New regulations on Arctic development

The Obama administration via the Interior Department announced new safety and environmental regulations on Thursday to control offshore drilling in the Arctic Ocean off the Alaskan coast. “The unique Arctic environment raises substantial operational challenges,” Abigail Hopper, the Interior Department’s director of the Bureau of Ocean Energy Management, said in a statement. “These new regulations are carefully tailored to ensure that any future exploration activities will be constructed in a way that respects and protects this incredible ecosystem and the Alaska Native subsistence activities that depend on its preservation.”

The new rules would require companies to have access to — and the ability to promptly deploy — equipment that could cap and contain an underwater oil leak or spill. They would also require companies to have access to a separate rig that could, if an underwater well fails, drill a “relief well” to lower the pressure of the gushing oil. They would require companies to develop the capability to predict, track, report and respond to ice conditions and adverse weather events and to draft oil spill response plans that account for adverse conditions.

Alaska’s oil and gas industry has, and will, always strive for the highest attainable safety levels during resource development. The narrative that the industry needs further safety initiatives in our pursuit of sustainable energy is flat out false—the Arctic is our home, and we will always treat it as such. Further regulating the industry will further cripple an industry that is fighting to provide for the state’s economic future.

In an Alaska Dispatch News commentary, Tim Bradner warns that ending state’s gas line partnership with producers would be a mistake. According to Bradner, “Our best chance of really achieving this may lie with partners who know how to do these things, and aligning our goals with them. We should give the governor a chance, but let’s keep the Alaska LNG partnership intact.”

Against all odds. Alaska North Slope oil production rose an estimated 3.2 percent this fiscal year, an unusual increase following more than a decade of decline. The Alaska Oil and Gas Association announced the news Thursday, with president Kara Moriarty calling it “historic” and saying the industry has invested heavily in Alaska since the state’s production tax system was passed in 2013. The largest chunk of the extra production is not coming from state lands, but on federal and private lands at ConocoPhillips CD5 field in the National Petroleum Reserve-Alaska, reducing royalty benefits. Despite anti-industry policies, the industry was able to still reach new heights. This is exactly why lawmakers can’t hold the industry back. There is still incredible potential for ANS development if anti-industry fiscal policies don’t ruin it first.

According to Alaska Public Radio News, Governor Bill Walker faces a potential campaign to recall him from office. Joe Miller backs the effort. He was the runner-up in the 2010 U.S. Senate campaign and 2014 Senate Republican primary. State law provides for four grounds for recall – lack of fitness, incompetence, neglect of duties, or corruption. Miller cited Walker’s veto of half of Permanent Fund dividend funding in explaining why he supports ousting the governor before Walker’s term ends.

 

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First Reads

New Interior regulations raise bar for future oil explorers in Arctic Ocean

Alaska Dispatch News, Alex DeMarban, July 7, 2016

Alaska oil production rises for first time in 14 years

Mat-Su Valley Frontiersman, July 7, 2016

Walker faces recall effort in response to budget vetoes

Alaska Public Radio News, Andrew Kitchenman, July 7, 2016

Ending state’s gas line partnership with producers would be a mistake

Alaska Dispatch News, Tim Bradner, July 7, 2016