The Editorial Board, Wall Street Journal, October 20, 2019
Mr. Cuomo wants to make New York ground zero in the left’s plan to purge fossil fuels. First he banned shale fracking in southern New York despite its huge potential to boost local economies. Then he blocked a natural-gas pipeline from Pennsylvania that would have reduced energy bills and reliance on heating oil.
As a coup de grâce, in May he vetoed another pipeline to bring natural gas to Long Island from New Jersey. National Grid, which provides natural gas on Long Island, responded rationally by imposing a moratorium on natural-gas hookups to prevent supply disruptions when demand spikes in the winter.
This essentially stranded tens of thousands of folks waiting for gas hookups, including more than a thousand who had deactivated their service after moving or renovating. Apparently Mr. Cuomo didn’t understand that the result of his pipeline blockade was to force residents to use more expensive and less-efficient electric appliances for space and water heating.
Our take: “Consider this another parable of how the political campaign to ban fossil fuels is detached from energy and economic reality.” Meanwhile, as winter looms just around the corner, let’s remember Headlamp’s go-to slogan: Markets, not Mandates.
Becky Bohrer, KTOO, October 19, 2019
Thirty years after the Exxon Valdez oil spill, the state of Alaska is looking at whether to change its requirements for oil spill prevention and response plans.
State Environmental Conservation Commissioner Jason Brune said there’s no intent to do away with the plans. He said the department wants to make sure the rules are not outdated.
Brune said he has heard from many Alaskans that contingency plans “are unnecessarily burdensome while lacking corresponding environmental benefits.”
Sergio Chapa, Houston Chronicle, October 21, 2019
Houston oilfield service company Baker Hughes and the Norwegian energy company Equinor successfully tested automated and remote-controlled systems that were recently installed aboard the Askepott, an offshore drilling rig named after the Norwegian version of the fairy tale princess Cinderella.
Tasks such as cementing, fluid engineering and directional drilling can now be performed remotely by an operator working out of a control center miles away in the coastal city of Tananger. Connected to Askepott by an underwater fiber optic cable, Baker Hughes staff have performed their first cementing jobs via remote control on a pair of oil wells in the North Sea’s Oseberg field.
Our take: Increased safety, increased efficiency, no jobs lost… What’s not to like! Bravo Baker Hughes and Equinor!
Scott DiSavino & Sabina Zawadzki, Reuters, October 17, 2019
A gap is emerging in the U.S. liquefied natural gas industry as big players such as Exxon Mobil Corp and Cheniere Energy Inc race ahead to build export terminals with fewer long-term contracts, while smaller developers struggle to find financing for their first plants.
[The LNG trade] is changing. As the market grows and pricing mechanisms diversify, some buyers do not want to commit to 20-year contracts. The growing prowess of oil majors such as Exxon and recent entrants such as Cheniere and trading houses means there are aggregators that can supply buyers more flexibly, making it harder for smaller players.
From the Daily on Energy:
RENEWABLES ON THE RISE: Total global renewable power is set to more than double in the next five years, the International Energy Agency says in a new report out Monday. In fact, IEA projects an increase of 1,200 gigawatts by 2024, an amount equal to all the power capacity in the U.S. currently.
enewables’ doubling will be driven largely by increasing solar power — with China set to take over with the world’s largest solar PV capacity. Overall costs for solar and wind will continue to tumble, too, the IEA says.
Putting the numbers in perspective: A doubling in global renewable capacity isn’t as ambitious as it sounds. According to the IEA, the huge growth it projects in solar PV through 2024 represents a mere 6% of the technology’s total potential worldwide.
And the renewables’ growth IEA projects isn’t nearly enough to meet global climate goals. “Renewables are already the world’s largest source of electricity, but their deployment still needs to accelerate if we are to achieve long-term climate, air quality, and energy access goals,” Fatih Birol, IEA’s executive director, said in a statement.
Headlamp – A kindred spirit in AK’s U.S. District court; Flipping the bird & fiddling with mother nature?
Trump to pick former Alaska oil industry attorney for federal judgeship
Nathaniel Hetz, Alaska’s Energy Desk, October 16, 2019
President Donald Trump announced Wednesday that he intends to pick Joshua Kindred, a former oil industry attorney, as a new U.S. District Court judge for Alaska. Kindred works as a lawyer in Anchorage for the U.S. Department of Interior. Before that, he was regulatory and legal affairs manager for the Alaska Oil and Gas Association, an industry group that sometimes participates in lawsuits to defend oil development in federal court. Kindred has also worked as a state prosecutor.
From the Washington Examiner, Daily on Energy:
FLIPPING THE BIRD: A federal judge gave the proverbial you-know-what Wednesday to the Trump administration’s plan to weaken protections of the threatened chicken-sized Sage Grouse.
Judge B. Lynn Winmill of the U.S. District Court for the District of Idaho granted a preliminary injunction ruling that the administration failed to analyze how sage grouse would be harmed under a plan issued in March that would allow for drilling and mining activities amongst the bird’s habitat.
“It is likely that these actions will cause further declines of the sage grouse under the weakened protections,” Winmill wrote in his decision.
If Obama did it…: The Interior Department’s Bureau of Land Management sought to revise a previous sage grouse plan issued in 2015 by the Obama administration with the support of western states. The Obama administration decided not to list the bird as endangered — a more significant step — but protected large chunks of habitat from oil and gas drilling. The range of the grouse extends across 270,000 square miles in parts of 11 states in the western United States. The bird’s population once numbered in the millions but fell to a few hundred thousand in recent decades.
Our Take: Here’s an example of what can happen when the government tries to save a species:
Democrats’ Repeal of Trump Power Rule Rollback Faces Long Odds
Chuck McCutcheon, Bloomberg Environment, October 17, 2019
Senate Democrats face an uphill battle in a vote slated for today on their attempt to repeal the Trump administration’s efforts to weaken carbon pollution limits for U.S. power plants.
Senate Minority Leader Chuck Schumer (D-N.Y.) vowed to use expedited floor procedures under the Congressional Review Act to scrap the EPA rule but also Trump administration health regulations and a rollback of limits on state and local tax deductions in the 2017 tax law. It could be passed with just a simple majority vote. But with Republicans controlling the Senate 53-47, Democrats would need to avoid any defections—including coal-state Democrats.
Exclusive: No choice but to invest in oil, Shell CEO says
Ron Bousso, Dmitry Zhdannikov, Reuters, October 14, 2019
Royal Dutch Shell (RDSa.L) still sees abundant opportunity to make money from oil and gas in coming decades even as investors and governments increase pressure on energy companies over climate change, its chief executive said. But in an interview with Reuters, Ben van Beurden expressed concern that some shareholders could abandon the world’s second-largest listed energy company due partly to what he called the “demonization” of oil and gas and “unjustified” worries that its business model was unsustainable. The 61-year-old Dutch executive in recent years became one of the sector’s most prominent voices advocating action over global warming in the wake of the 2015 Paris climate agreement.
Our Take: Of course Shell is investing in oil; the world markets demand it. As noted in the article below, the oil and natural gas industry produces the energy we count on every day, while meeting climate objectives. Markets, not mandates.
The Continuing Quest for Energy – and Lower Emissions
Mark Green, API Energy Blog, October 14, 2019
Looking over EPA’s new Greenhouse Gas Reporting Program (GHGRP) data on methane emissions, let’s consider two overarching points: First, energy from natural gas and oil power and empower America’s modern way of life – better health, greater comforts and conveniences and opportunities for Americans and their families to prosper. No other energy comes close in terms of accessibility, reliability, affordability and useful adaptability across an economy and nation as large and diverse as ours. Second, as America’s natural gas and oil industry produces the energy we count on every day, it also must continue to capture as much methane as possible from that production, to help the U.S. meet its climate objectives. On both of those leading priorities, our industry is on it.
The oil tax initiative: Fair for whom?
Roger Marks, Anchorage Daily News, October 15, 2019
Alaska’s constitution provides for “utilization, development, and conservation of … resources … for the maximum benefit of the people.” What is maximum benefit? Cash to the state? Short-term cash? Long-term? Jobs? Income? Environmental quality? Who knows? Then there is the idea of the state getting its “fair share.” What is fair? For eons, philosophers, theologians, lawyers, economist and countless others have pondered this. There is currently a ballot initiative to raise oil taxes called “The Fair Share Act.” Most economists would say fairness entails taxes being competitive; taxpayers should pay a similar amount to what they pay in other similar places. Otherwise investment will go elsewhere, and production suffers. As measured by percentage of net pre-tax profits going to the state and federal government, the current system is competitive. (Including the “credits,” which do not really function as credits, but rather provide progressivity to the system.)
Our Take: Today is the day. Alaska’s lieutenant governor will either certify or deny the “Fair Share” ballot initiative. As noted in the article, “The initiative sponsors have not stated what is fair, how they justify it, how they measure it or how the initiative attains fairness.” Adding an additional $1 billion in taxes would triple the tax rate – the sponsors of this initiative assume that such a drastic increase will have no impact on investment levels. #voodooeconomics
Santos Targets Asia LNG Growth With $1.4 Billion Conoco Deal
James Thornhill, Bloomberg, October 13, 2019
Santos Ltd. agreed to buy ConocoPhillips’ northern Australia business for $1.4 billion in a deal that will boost the Adelaide-based oil and gas producer’s position in the growing Asian liquefied natural gas market. The transaction may allow Santos to become the country’s largest independent energy producer and capitalize on a push by Asian consumers, including China, to switch to cleaner burning natural gas away from coal. Conoco is selling its operating interests in the Darwin LNG processing plant and the Bayu-Undan, Barossa and Poseidon gas fields. Conoco is the second U.S. energy major to announce plans to sell down its interests in Australia after Exxon Mobil Corp. in September said it would start a process to find a buyer for its Bass Strait producing assets off the coast of southeast Australia. Conoco completed the sale of its stake in the Greater Sunrise field to Timor-Leste’s government for $350 million earlier this year, and the Santos deal will free up capital to invest in U.S. shale and return cash to shareholders, two of its priorities in recent years.
Oil and Gas Companies Turn to AI to Cut Costs
Neanda Salvaterra, The Wall Street Journal, October 13, 2019
Amid a growing push to cut operating costs, big oil is looking to artificial intelligence for help with automating functions, predicting equipment problems and increasing the output of oil and gas. AI tools can quickly find solutions for the costly problems that can disrupt the business of searching for and extracting hydrocarbons. For example, a faulty well pump at an unmanned platform in the North Sea repeatedly disrupted production earlier this year for Aker BP, a Norwegian oil company in which BP owns a stake. The company finally fixed the problem by installing an AI program that monitors data from sensors attached to the pump and flags glitches before they cause a shutdown, says Lars Atle Andersen, vice president of operations for technology and digitalization. Engineers now can fly in to fix such problems ahead of time and avert a shutdown, Mr. Andersen says.
Facing climate change, ExxonMobil ramps up energy research
Amy Harder, Axios, October 14, 2019
ExxonMobil is expanding its research efforts with the stated goal of producing more — but cleaner — energy in the face of climate change. Driving the news: The world’s biggest publicly traded oil company has been creating new partnerships with American and foreign universities in recent years totaling at least $75 million, and it just inked another, unprecedented $100 million deal with the U.S. Energy Department.
The big picture: Oil and gas companies have been funding energy and climate research at universities and other entities for years. Exxon’s recent moves are an expansion of this trend at a time of heightened scrutiny facing oil companies and their role fueling climate change.
- To critics, this corporate funding casts doubt on the scientific independence of research, especially from oil and gas producers with bottom lines to protect in the face of policies targeting their products.
- To academics and executives involved, the partnerships are genuine and mutually beneficial as oil companies seek to adopt cleaner energy technologies and universities get deep pockets of money and expertise.
We ask Senator Murkowski to let the Pebble process play out
Lisa Reimers, Ventura Samaniego, Brad Angasan, Anchorage Daily News, October 7, 2019
Perhaps you have seen our ads thanking Sen. Lisa Murkowski for standing up for the permitting process for Pebble. The theme of our ads is “we need jobs” and “we want hope.” While the coastal communities in our region see some benefits from the short commercial fishing season, many in our home communities do not. Recently, several of our Bristol Bay leaders took to these pages pushing Sen. Murkowski to more be more aggressively involved in the permitting process. We support Sen. Murkowski staying informed and engaged about the Pebble issue. When it comes to the permitting process, we encourage her to help keep it on track. We worry that if Sen. Murkowski inserts herself too far into the Pebble permitting process, it will set a precedent for future resource projects in Alaska. We think we can all agree that Alaska resource development projects engender a fair amount of controversy. This is why we need an objective and transparent permitting process — which is exactly what we have witnessed via the U.S. Army Corps of Engineers for Pebble.
Big Oil’s Renewable Shift Seen Flooding Shareholders With Cash
Dan Murtaugh and Sharon Cho, Bloomberg, October 8, 2019
Shareholders of global oil giants will be “drowned” in cash from dividends and buybacks for the next 20 years as the firms shift their capital structure to finance renewable projects, according to Rystad Energy. Majors such as Exxon Mobil Corp. and Chevron Corp. have traditionally had to hoard cash as they looked to their own balance sheets to fund billion-dollar megaprojects, founder Jarand Rystad said at his firm’s annual summit in Singapore. That will change as they gravitate to wind and solar projects, which tap debt markets backed by project financing for as much as 95% of their cost, he said.
ConocoPhillips hikes dividend nearly 40% amid weak oil prices
Jordan Blum, Houston Chronicle, October 7, 2019
ConocoPhillips announced a nearly 40 percent increase in dividend payouts to investors to help instill confidence in the company on Wall Street amid subdued oil prices and a slowing energy sector. The Houston oil and gas producer said it will increase its quarterly dividends payments 38 percent, to 42 cents per share from 30.5 cents a share. That’s an extra annual cost of about $500 million to the company. The past 12 months have proven tough on the energy sector and, even with its favored status on Wall Street, ConocoPhillips has suffered as well, seeing its stock value plunge by more than 25 percent over the last year. To help counteract that downward trajectory, ConocoPhillips is flexing its financial muscle and emphasizing that it will continue to put its shareholders first even in the weaker oil price environment. In recent years, ConocoPhillips has focused on financial discipline and financial returns, shrinking the company in order to become more efficient and profitable.
Like It or Not, Alaska’s Economy is Growing
Ed King, King Economics Group, October 7, 2019
It was over a year ago that I pointed out that Alaska was on the verge of a recovery. Wages were starting to grow again, and I predicted that jobs would follow suit. When we look at the data today, it’s clear that those predictions came true. Yet, I still hear people talking about being in a recession. Or, I see people try to dismiss the persistent good news to fit some narrative. There is no foundation for an argument that a recession persists or that the economy is fragile. But, don’t take my word for it. Let’s dive into the data
Our Take: All good news for Alaska: unemployment down, jobs up, wages up = growing economy!
Supreme Court Turns Down Property Owners’ Bid to Stop Pipeline
Bloomberg Environment, October 7, 2019
- Dispute centers on Mountain Valley natural gas project
- Experts view case as important property rights test
The Supreme Court won’t get involved in a case pitting property rights advocates against the natural gas industry. The justices on Oct. 7 denied a petition from Virginia landowners who challenged a developer’s seizure of private property to build the Mountain Valley pipeline, a 303-mile project set to cross West Virginia and Virginia. At issue in the case was whether pipeline builders had authority to use an eminent domain process called “quick take” to acquire land before paying for it.
Policies Should Address Global Climate Change By Incenting Innovation
Wayne Winegarden, Forbes, October 4, 2019
Amidst all of the rhetoric and dire predictions surrounding global climate change, it is easy to lose one’s perspective. But we will not successfully minimize the risks created by global climate change without perspective. Fundamental to this perspective, U.S. greenhouse gas (GHG) emissions have been declining for more than a decade. As visualized in the above figure, total U.S. carbon dioxide emissions peaked in 2007 and has declined nearly 14 percent through 2016. According to Berkeley Earth, the largest contributor to this decline is the “transition from coal to natural gas for electricity generation”. Increased use of fuel economy cars and electricity generated from wind turbines have also contributed. It is also necessary to understand the actual risks global climate change poses. As Bjorn Lomborg has eloquently argued, “yes, global warming is real and human-caused”, but claims that climate change will lead to the end of the world are unsupported.
Our Take: Common sense good. Panic bad. “Clearly, the UN’s Intergovernmental Panel on Climate Change results do not support the current “call to panic” (as if panic is ever an effective response to emergencies). The IPCC’s results demonstrate that global climate change imposes costs that need to be managed. Panicked responses, on the other hand, will impose large unacceptable costs that will be borne by the poor, particularly the poor living in low-income countries.”
Oil Search pushes up production date for Pikka
Elwood Brehmer, Alaska Journal of Commerce, October 2, 2019
The company developing one of the largest oil prospects on the North Slope has applied with state regulators to change its plans and start producing oil a year early. Oil Search Alaska submitted a modification to its July 2019 Plan of Operations for its Nanushuk project in the Pikka Unit on Sept. 26 with the Division of Oil and Gas. The amended plan calls for some changes to the layout and size of the project’s three drill sites near the Colville River delta and moving the tie-in pad that will connect to ConocoPhillips’ Kuparuk River Unit that will link the project’s pipelines to the rest of Slope oil infrastructure at a site that won’t interfere with existing operations.
From the Washington Examiner Daily on Energy:
WHAT TO MAKE OF TRUMP’S SOFTER TONE ON CLIMATE: President Trump and his White House are subtly shifting how they talk about climate change and environmental issues, even as they push ahead with boosting fossil fuel production and easing regulations.
Trump allies are noting the changes, which they say comes from pressure from his re-election campaign, which has noticed polls showing increasing concern about climate change and environmental protection, including among younger and suburban Republicans.
“The campaign is having some influence on the rhetoric coming out of the White House,” Myron Ebell of the Competitive Enterprise Institute, who led Trump’s EPA transition team, told Josh. “It’s in the direction of softening the rhetoric on some issues, including climate. However, I have seen no sign that any policies are being changed because of campaign considerations.”
The U.S. pledged Wednesday to work with Finland to help address challenges caused by the melting of sea ice in the Arctic, after a White House meeting between Trump and Finnish President Sauli Niinistö.
“The Arctic provides new economic opportunities, but environmental changes such as the diminishing of sea ice raise environmental concerns,” the statement said. “The United States and Finland share a commitment to clean air and water and environmental protection.”
The U.S. also pledged to help combat black carbon emitted from coal plants, which has contributed to warming of the Arctic.
Trump has shown a shift in tone in other recent circumstances, delivering a speech in July defending his environmental record, and referencing climate change when he toured flooding in Houston last month.
“There is a thread of thought in the campaign that the environment in general and climate as a subset of that needs to be addressed with more moderation,” Mike McKenna, a lobbyist who led Trump’s Energy Department transition team, told Josh, while noting there is an “internal bright line” that Trump won’t cross to moderate the substance of his policy.
do you revive an almost ghost town in remote Alaska? Ask the 20 residents of
Red Devil who are betting on Donlin mine.
Krysti Shallenberger, Alaska’s Energy Desk, October 2, 2019
Rebecca Wilmarth can see the empty school building across her lawn in Red Devil, Alaska. It shut down in 2009, and for a while, willows and alders shrouded it from view. Wildland firefighters recently cut them back to reveal a brown building with blue trim. For a place that’s been abandoned for ten years, it appeared in remarkably good shape. For Wilmarth, it’s a symbol of what was lost after the Red Devil mercury mine shut down in the 1970s. “It was like a domino effect of things that made this place so deserted. The school closed. Families had no other option but to relocate or send their kids somewhere else.” Wilmarth said. Red Devil is a tiny town with about 20 remaining residents. A mercury mine that built the town used to operate 3 miles away. But once it shut down, people started leaving for other jobs. Now Red Devil has no health clinic and no store. It doesn’t have a tribal council or city government. A handful of residents are fighting to get basic services back.
Capitalism Is What Really Worries Global Warmists and Fractivists
Robert P. Murphy, Natural Gas Now, October 2, 2019
Capitalism, and revulsion to it, is at the heart of the opposition to oil and gas development by today’s global warmists and fractivists. They’re wrong. Presumably bolstered by the fiery claims of Greta Thunberg and the general theme of Climate Week, people on Twitter have been declaring that capitalism threatens humanity. This angst rekindled interest in a Guardian article that ran a few months ago, in which author George Monbiot argued that the very nature of capitalism is “incompatible with the survival of life on Earth.” Not only do such claims ignore the obvious progress of humanity staring us in the face—and the environmental activists are supposed to be the empirical ones in this debate—but even if Monbiot’s worries about the climate were correct, capitalism would still be the best social system to deal with the crisis.
Big Oil Of The Past Helped Launch The Solar Industry Of Today
Andrea Hsu, NPR, September 30, 2019
Call it a sign of the times.
Renewable energy has gotten so cheap that even oil giant Exxon Mobil, which reported $20.8 billion in earnings in 2018, is getting in on the savings. Over the next couple of years, Exxon Mobil will begin purchasing wind and solar power in West Texas, part of a 12-year agreement signed late last year with the Danish energy company Orsted. The plan is to use cheap, clean electricity to power Exxon Mobil’s expanding operations in the Permian Basin, one of the world’s most productive oil fields. It’s not the first-time economic considerations have led the company to explore the possibilities of solar. Half a century ago — before climate change was a topic of much discussion and before Exxon was accused of deceiving shareholders and the public by downplaying the risks of climate change, prompting investigations and lawsuits — the company then known as Jersey Standard funded groundbreaking research into solar photovoltaic technology, which converts sunlight into electricity.
Our Take: “economic considerations led the company…” Markets, not Mandates.
Mine eyes federal permit for expansion
Jacob Resneck, CoastAlaska, September 30, 2019
One of Alaska’s largest gold mines seeks to extend its life by a decade. The Kensington Mine is one of Southeast Alaska’s biggest private employers. Chicago-based Coeur Mining wants to invest in an expansion to extend operations at least through 2034. “The mine was originally designed for a 10-year mine life and we’ve exceeded that,” Kensington’s General Manager Mark Kiessling told CoastAlaska on Friday. Coeur Alaska has applied to the U.S. Forest Service to increase its footprint in the Tongass by 150 acres. That would expand three existing waste rock storage sites and add a fourth to boost overall capacity by about 5 million tons. The mine employs nearly 400 people — with more than 40 percent living in Southeast. The Kensington Gold Mine is located 45 miles north of Juneau in the Tongass National Forest of Alaska. It opened in 2010.
Our Take: Great news for Southeast Alaska and all of Alaska! 10 more years of high-paying jobs and revenue to the state!
Mat-Su Borough wants another review of Port MacKenzie as project site
Larry Persily, Oil and Gas News Briefs, September 30, 2019
Just six days before the close of public comment on the draft environmental impact statement for the Alaska LNG project, the Matanuska-Susitna Borough has accused federal regulators of failing to prepare an “adequate analysis” of the municipality’s Port MacKenzie as a potential site for the multibillion-dollar gas liquefaction plant and marine terminal. The borough filed a motion with the Federal Energy Regulatory Commission on Sept. 27, calling on FERC to prepare a supplemental draft EIS “in order to cure the foundational defects in the current draft.”