We’ll be back Monday!
Alaska gas line agency chooses route for Kenai Spur Highway around proposed LNG plant
Elwood Brehmer, Alaska Journal of Commerce, September 20, 2018
State gas line officials have picked their plan to route a highway around the site for the massive LNG plant they hope to construct, but now they need to pay for it. In June, Alaska Gasline Development Corp. leaders selected the shortest and least expensive route to bend the Kenai Spur Highway around the roughly 800-acre LNG plant site in Nikiski. They are currently working to determine what it will cost to secure the right-of-way for the 3.4 miles of new road before further work can begin, said Frank Richards, AGDC vice president and Alaska LNG Project manager.
Our Take: AGDC shouldn’t pay for anything associated with a road until they know the outcome of Ballot Measure One. The Department of Transportation has stated that if passed, increased cost in project delivery and delay in project delivery will be very real threats to pending projects.
Now near 100 million bpd, when will oil demand peak?
Amanda Cooper, Christopher Johnson, Reuters, September 20, 2018
Sometime in the next few weeks, global oil consumption will reach 100 million barrels per day (bpd) – more than twice what it was 50 years ago – and it shows no immediate sign of falling. There is no consensus on when world oil demand will peak but it is clear much depends on how governments respond to global warming. That’s the view of the International Energy Agency (IEA), which advises Western economies on energy policy.
From the Washington Examiner Daily on Energy:
ENERGY DEPARTMENT WARNS THAT OIL DRILLERS ARE LEAVING TEXAS AMID PIPELINE WOES: The Energy Department says a lack of pipelines is beginning to drive oil companies out of the big shale region known as the Permian Basin, as they focus investment in regions where the oil is easier to get to market.
A lack of pipelines: The Energy Information Administration released its latest weekly oil analysis on Wednesday, focused on the lack of pipeline “takeaway capacity,” which translates to there being plenty of oil, but not enough ways to move it to refiners or export terminals.
The implication: The report highlights the case for more spending on pipes and for easing or expediting permitting decisions
Our Take: Oil is here to stay. We need more pipelines. Easing and expediting permitting is a no-brainer.
Shell Opens German LNG Filling Station
Natural Gas News, September 20, 2018
Shell said September 18 it has inaugurated its first public LNG filling station for trucks in Germany. It is near motorway junctions to the south of Hamburg, making it an important tanker spot for goods traffic in, from and to the Port of Hamburg. With storage capacity of almost 30 metric tons of LNG, the station will enable more than 200 trucks to be refueled every day from October onwards. Shell said Hamburg is its ninth such LNG filling station for trucks in northwest Europe, with seven open in the Netherlands and one in Belgium; four more are planned in Germany in the next 18 months. Already around 5000 LNG-fuelled trucks are driving on Europe’s roads, mostly manufactured by Italy’s Iveco and Swedish brands Scania and Volvo, noted Shell. LNG is already fairly common as a fuel for trucks across Scandinavia, Spain and the UK, and becoming so in Germany where rival Uniper has at least one such filling station in Berlin.
US oil giants ExxonMobil and Chevron finally join a global climate initiative—as an Indian titan exits
Akshat Rathis, Quartz, September 21, 2018
The oil industry has a history of actively sowing doubts about climate science. So it was a big deal when, in 2014, a group of 10 oil companies agreed to collaborate on climate action by creating the Oil and Gas Climate Initiative (OGCI). The founding members spanned the globe, with companies based in Italy, the UK, Spain, China, India, Mexico, France, Netherlands, Norway, and Saudi Arabia. But the US was conspicuously missing. Four years later, US oil giants finally look ready to take a seat at the table. ExxonMobil, Chevron, and Occidental Petroleum are set to join OGCI as soon as Monday, according to Axios. Together, the companies that make up the OGCI are responsible for supplying 30% of all oil and gas, which is about 20% of all the world’s energy. It’s a shame, then, that even as US oil giants join the initiative, India’s Reliance Petroleum (which is now part of Reliance Industries) has quit the coalition. Reliance supplies a small fraction of the world’s oil (about 1.2 million barrels per day in capacity, which is about 1% of global oil production). But its exit means the OGCI no longer has an Indian company among its ranks.
Our Take: The owner of Reliance Petroleum is still participating in other climate initiatives. There is more than one way to address the issue. President Trump exiting the Paris Agreement didn’t mean the US abandoning climate initiatives – despite what the ENGO’s and the media like to say.
Kawasaki, Kelly get heated in Senate debate
Erin McGroarty, Fairbanks Daily News Miner, September 21, 2018
Rep. Scott Kawasaki, D-Fairbanks, and Sen. Pete Kelly, R-Fairbanks, met to discuss state issues in an at-times heated debate Wednesday evening. Both men are running for Senate Seat A. This will be Kawasaki’s first attempt at a Senate seat. Kelly is the incumbent for the Fairbanks area Senate seat. The two differ on many, if not most, state issues and made that known while discussing Alaska’s political path forward.
Our Take: Kelly wants a spending cap. Kawasaki wants to tax businesses. Kelly is proud of all the legislation he has passed. Kawasaki is proud of sending birthday cards (with the state paying the postage.) In the quest for securing Alaska’s future – Kelly 2, Kawasaki 0.
Alaskans overflow Anchorage hearing on salmon habitat ballot measure Kortnie Horazdovsky & Derek Minemyer, KTUU, September 18, 2018
So many people showed up to a hearing on Ballot Measure 1, which would change laws protecting salmon habitat in Alaska, that attendees spilled out of the auditorium and into the hallway at the Anchorage Legislative Information Office Tuesday. Dozens of Alaskans signed up to testify at the hearing — with most in attendance opposing the measure, which will be on Alaska’s general election ballot November 6.
Our Take: While the supporters of the initiative claim that people were paid to be there, an Alaskan who took time off of work to testify in opposition noted that with almost 200 people there – the lost wages/revenue/productivity for people and businesses who stopped working in order to testify was easily $15,000. We wouldn’t call that getting paid to be there…
BP outlines economic impact to Alaska
Joe Vigil, KTVA, September 18, 2018
BP just released its sixth annual U.S. Economic Impact Report. BP began working in Alaska in 1959 and currently operates the entire Prudhoe Bay Field. The report says that the field produced an average of more than 280,000 barrels of oil per day in 2017 — half of the state’s total oil production according to the report. Here is a look at BP’s economic impact to Alaska by the numbers. The company supports more than 8,300 jobs across the state. In 2017, it says it spent more than $855 million with vendors and paid $543 million in taxes, royalties and other government payments. The company also donated more than $6.5 million to community groups, youth teams and student scholarships.
Our Take: Like a good neighbor….AKHEADLAMP greatly appreciates the jobs for Alaskans, the money spent with Alaskan companies and the taxes paid to the state. The icing on the cake is the money donated throughout the community.
US defense investments in Greenland infrastructure would keep NATO in, China out and Russia at bay
Kevin McGwin, Arctic Today, September 19, 2018
Politically, Greenland has cast its lot with the West. But, when it comes to commercial opportunities, it is more open. China, especially, has been the object of an intense lobbying effort, to the point where Nuuk is mulling opening a de facto embassy in Beijing. For the most part, the two approaches coexist. Greenland, for example, is a member of the Nordic Council and co-operates closely with the EU. Once it becomes independent, it intends to seek NATO membership. At the same time, Chinese money props up three Greenlandic mining projects. Meanwhile, in 2016, Huawei, a Chinese telecom alleged to have close ties to Beijing, was selected to install a high-speed subsea internet cable. A handful Chinese nationals staff fish processing plants. China, of course, has commercial interests just about everywhere. And many jurisdictions would like to land more Chinese investment. Rarely is this a problem, but there are limits.
U.S. LNG exports to China decline as trade war escalates
Scott DiSavino, Reuters, September 18, 2018
As the trade war between Beijing and Washington escalates, fewer vessels carrying U.S. liquefied natural gas (LNG) have been going to China. China, which purchased about 15 percent of all U.S. LNG shipped in 2017, has taken delivery from just four vessels since June versus 17 during the first five months of the year.
Exclusive: Russian oil firm seeks dollar alternative amid U.S. sanctions threat – traders
Gleb Gorodyankin, Olga Yagova, Reuters, September 19, 2018
Russian oil producer Surgutneftegaz (SNGS.MM) is pushing buyers to agree to pay for oil in euros instead of dollars if the need arises, apparently as insurance against possible tougher U.S. sanctions, traders who deal with the firm told Reuters. Russia has been subject to Western sanctions since its 2014 annexation of Ukraine’s Crimea region, but Washington has threatened to impose extra sanctions, citing what it has called Moscow’s “malign” activities abroad. The prospect that causes most alarm for Russian firms is inclusion on a Treasury Department blacklist that effectively cuts them off from conducting transactions in dollars, the lifeblood of the global oil industry.
Obama Was Wrong on Oil. We Did ‘Drill Our Way Out of the Problem.’
Nicola Loris, The Daily Signal, September 14, 2018
When gas prices topped $4 per gallon in May 2011, President Barack Obama said, “We can’t just drill our way out of the problem.” Throughout his presidency, Obama stated some version of that sentiment every time he wanted to push to subsidize alternative energy sources. More than seven years later, human ingenuity, technological innovation, and the power of the free market have proven him wrong. To the benefit of American families across the country, the United States is now the largest global producer of crude oil.
Our Take: Music to our ears: Free, competitive markets are the solution. Higher prices for oil incentivize energy companies to extract and supply more oil and incentivize entrepreneurs to invest in innovative alternatives to oil—batteries, natural gas vehicles, or biofuels.
From the Washington Examiner Daily on Energy:
CHINA ANNOUNCES $60 BILLION IN RETALIATORY TARIFFS, INCLUDING AMERICAN GAS: China’s government announced $60 billion in new tariffs on U.S. goods Tuesday in response to the Trump administration’s latest round of tariffs on Chinese imports.
China’s Finance Ministry said that it is moving forward with its plans to increase in tariffs of 10 percent and 5 percent on over 5,000 U.S. goods. That includes a 10 percent tariff on American liquified natural gas starting next month, a big blow to the U.S energy industry. China is the largest growth market for LNG imports, and the U.S. is seeking to be a major exporter.
‘Niche’ role seen for Canadian LNG
Caroline Evans, Upstream, September 18, 2018
Canada may emerge as a niche supplier of liquefied natural gas to Asia as tensions between the US and China escalate over trade, a British Columbia official said Tuesday. The US-China trade dispute caused uncertainty surrounding the US LNG export market British Columbia deputy energy minister Dave Nikolejsin said at the Gastech conference in Barcelona. “Who would have ever thought that five years ago or even three years ago that customers in Asia would have to hedge against the uncertainty of supply from the US?” he said. “It’s almost inconceivable, but that’s part of what’s driving the conversations we’re having when we go into the markets in Asia, saying they must diversify their supply. And Canada’s very interesting geographically.”
Our Take: There is a reason, and a good one, why the US energy industry opposes Trump’s tariff tiff with China. The oil and natural gas boom the country is experiencing has supplied U.S. consumers and businesses with low cost energy, which strengthens the U.S. economy. The tariffs will not only harm drillers, but they will also harm the success of Trump’s pro-growth agenda, which relies on oil and natural gas production and exports.
Borough calls AGDC’s evaluation of Port MacKenizie woefully inadequate
Tim Bradner, The Frontiersman, September 16, 2018
The Matanuska-Susitna Borough has fired back at a state-owned natural gas corporation over its evaluation of the borough’s Port MacKenzie port for a large liquefied natural gas plant for the proposed $43 billion-plus Alaska LNG Project. The borough called the evaluation woefully inadequate. Alaska Gasline Development Corp., or AGDC, had selected Nikiski, on the Kenai Peninsula, as its preferred site for the large LNG plant and terminus of an 800-mile 42-inch gas pipeline built from the North Slope. AGDC initially considered the wrong location in the Mat-Su for its alternative plant site analysis, confusing Point MacKenzie, a geographic feature, with the borough’s existing Port MacKenzie.
Just as China launches a second icebreaker, a fresh report details problems with US plans
Dermot Cole, Arctic Today, September 17, 2018
News from Shanghai about the completion of a new Chinese icebreaker arrived at about the same time as a report questioning the process under which the U.S. plans to build its first heavy icebreaker in more than 40 years. The Chinese ship is expected to enter service next summer, at about the time the U.S. Navy and Coast Guard hope to award a design and construction contract for the first of three U.S. icebreakers. But the General Accounting Office, the top federal watchdog agency, alleges that the work so far on design, technology, cost and scheduling has been inadequate, creating risks that the project will cost more and take longer than expected.
Per Alaska State law, the Office of the Lt. Governor has begun to hold required public hearings around the state on Ballot Measure 1, the Fish Habitat Initiative. Public comments are accepted.
Tuesday, September 18, 2018 – 2:00 p.m. to 4:00 p.m.
Legislative Information Office Auditorium – 1500 W. Benson Blvd., Anchorage, AK 99501
Friday, September 21, 2018 – 10:00 a.m. to 12:00 p.m.
Harrigan Centennial Hall – 330 Harbor Drive, Sitka, AK 99835
Monday, September 24, 2018 – 2:00 p.m. to 4:00 p.m.
Legislative Information Office – 1292 Sadler Way, Suite 308, Fairbanks, AK 99701
Tuesday, September 25, 2018 – 2:00 p.m. to 4:00 p.m.
Yupiit Piciryarait Cultural Center – 420 Chief Eddie Hoffman Highway, Bethel, AK 99559
Saturday, September 29, 2018 -2:00PM-4:00PM
Bristol Bay Campus – 527 Seward Street, Dillingham, AK 99576
Pipeline Investors Fight Climate Change
Simon Lack, Forbes, September 12, 2018
Although the Sierra Club attracts members who care deeply about the environment, they have opposed the most successful steps taken to lower CO2 emissions. The Shale Revolution has unlocked vast amounts of cheap American natural gas. This is steadily replacing coal as a source of electricity. As a result, the U.S. is far ahead of everyone in reducing its CO2 output over the past decade
Our Take: “ Environmental groups like the Sierra Club try to claim the moral high ground. But by opposing all energy sources except solar and wind, they are against the most successful steps we’ve taken to slow global warming. Most of our energy will continue to come from fossil fuels for decades to come.”
Russian warships hold drills in Bering Sea in huge military exercise
Reuters, September 14, 2018
Russian warships held drills in the Bering Sea which separates Russia from Alaska, part of Moscow’s biggest military maneuvers since the fall of the Soviet Union, footage aired by the Ministry of Defense showed on Friday. The Vostok-2018 (East-2018) drills, which run until Sept. 17, are taking place in Siberia and in waters off Russia’s eastern coast, involving 300,000 troops, over 1,000 military aircraft and two naval fleets. The drills are taking place at a time of heightened tension between the West and Russia, and NATO has said it will monitor the exercise closely, as will the United States which has a strong military presence in the Asia-Pacific region.
Our Take: While inspecting the war games, Putin said “Russia is a peaceful country…”.
Gas agreement, but what about the pipeline project?
Liz Raines, KTVA, September 13, 2018
Two of the three major North Slope leaseholders have signed gas sales agreements with the agency overseeing a state-owned natural gas pipeline project. But the agreement doesn’t exactly get state closer to a gas line, according to Larry Persily, a former federal coordinator for Alaska gas line projects. On Monday, ExxonMobil signed a binding gas agreement in which the company would sell gas to the state for export to Asian markets if the pipeline project is successful. The gas agreement is just one of the dozens of contracts in the state-run project. So, how meaningful is this particular piece?
Congress funding bill to help Alaska’s military, energy needs
Jeff Bridges, KTVA, September 13, 2018
Some highlights from the bill:
- Provides $286.8 million for military construction projects in Alaska, including: $63.8 million at Eielson Air Force Base for F-35 bed down project; $174 million at Clear Air Force Station for Long Range Discrimination Radar; $8 million at Fort Greely for improving a missile field; $41 million for two Joint Base Elmendorf–Richardson projects: a replacement operations facility and U.S. property and fiscal office
- Methane Hydrates: Provides $20 million to further research the production of natural gas from methane hydrates and encourages a long-term methane hydrate production test in the Arctic. (Alaska’s Arctic contains an estimated 32,600 trillion cubic feet of natural gas locked in ice crystals – enough to meet domestic demand for more than 1,000 years.)
- Denali Commission: Provides $15 million for the Commission tasked with coordination of construction and infrastructure efforts in rural Alaska
Our Take: A big shot in the arm for Alaska’s fragile economy.
Borough Approved Intervenor Status In Alaska LNG Project
Jennifer Williams, KSRM, September 12, 2018
The Federal Energy Regulatory Commission (FERC) approved the Kenai Peninsula Borough’s late motion to intervene in the proceedings for the proposed Alaska LNG project. The borough is now the third municipality in the state to be granted intervenor status on the project, the other two being Valdez and the Matanuska-Susitna Borough. John Quick, the Kenai Peninsula Borough Mayor’s chief of staff, told the Kenai Borough’s public advisory committee on the project August 6: “Right now we have Valdez and Mat-Su hemming and hawing for this project, and they’re intervenors. If we’re not at the table, we’re not at the table. So I think this will put us in a better position to have a bigger voice from the borough, and do everything we can to make sure this project lands in Nikiski.”
Our Take: Three municipalities with the power to intervene…on a $43 billion project.
Alaska-producer deal extends Point Thomson development deadline
S & P Global Platts, September 12, 2018
Alaska has agreed to extend a key deadline in a 2012 lawsuit settlement with ExxonMobil and BP over development of the Point Thomson gas and condensate field 60 miles east of Prudhoe Bay on Alaska’s North Slope. The deal was reached to facilitate ExxonMobil’s agreement to supply its North Slope gas, both at Point Thomson and in Prudhoe Bay field, to the proposed $43 billion-plus Alaska LNG Project, state Commissioner of Natural Resources Andy Mack said Tuesday.
Our Take: Deadlines that ignore the free-market aren’t good for anyone. Good move by the state.
With east coast gas supply situation expected to remain precariously balanced for the foreseeable future, some sort of policy that gives powers to the Australian federal government to restrict gas exports in order to ensure adequate domestic supply may continue even after the Australian Domestic Gas Security Mechanism (ADGSM) ceases in 2023, Wood Mackenzie said in a note September 12. The ADGSM was introduced by the federal government July 1, 2017, amid gas shortages on Australia’s east coast markets. It gives the federal government power to restrict gas exports to ensure there is adequate gas supply to meet domestic demand until January 1, 2023. The federal government has yet to exercise this power. Australian Labor Party, which is in opposition at present, recently said it will put in tighter controls on LNG exports to rein in rising domestic gas prices and ease supply shortage if it wins the elections. The party said that, if elected, it will strengthen the ADGSM.
Suit against tax credit bonds bogs down over jury trial motion
Elwood Brehmer, Alaska Journal of Commerce, September 11, 2018
A lawsuit challenging the constitutionality of a state law to pay off nearly $1 billion in oil and gas tax credits has slowed to a crawl as attorneys squabble over whether or not a jury should decide the matter. Former University of Alaska Regent Eric Forrer requested a jury trial July 19 in the public interest lawsuit he filed May 14 against Gov. Bill Walker’s administration with the Juneau District of state Superior Court. The request has resulted in each side filing multiple briefs in the debate over a trial, exemplified by the latest in the series filed by state attorneys Aug. 20 entitled, “Defendants’ Reply to Plaintiff’s Response to Defendants’ Motion to Strike Demand for Jury Trial”. That filing, signed by Assistant Attorney General Bill Milks, contends the issue at hand is a matter of the reading of law and therefore is not eligible for determination by a jury of 12.
Our Take: Oh the beauty of a public interest lawsuit – delay, delay, delay. Headlamp is with the state on this one – reading of the law is not best handled by a jury of 12.
As climate change looms large for the oil industry, what could that mean for Alaska?
Elizabeth Harball, Alaska’s Energy Desk, September 11, 2018
This spring, ExxonMobil held a meeting with investors. It didn’t generate many headlines. And that’s a little surprising, considering what the company was there to talk about. “This was the first time that Exxon had ever held a session devoted entirely to carbon, as they called it, but to the larger issue of climate change,” said Amy Harder, a veteran energy reporter who used to work for the Wall Street Journal and is now with Axios in Washington, D.C. In Alaska, oil companies are already seeing the consequences of climate change. Shorter winter seasons are impacting the use of ice roads for oil exploration and construction. It’s also forcing the use of more refrigeration technology to keep thawing permafrost stable beneath infrastructure.
Our Take: It’s good to see the media acknowledging how serious oil companies like Exxon are about strategizing around climate change.
John Sellers and Cody Campbell are holding court one hot August evening in the corner of an oil-themed dive bar in Midland, Texas. After flying in on their private jet, they’re shaking hands, cracking jokes and talking deals with aspiring oilmen, contractors and land traders, almost all in their early 30s. A life-size, stuffed grizzly bear stands by a wall wearing a baseball cap embossed with: “Make Oil & Gas Great Again.” It’s not hard to see why Sellers and Campbell are in such high demand in this hardscrabble city that has become the global center of the shale revolution. Over the past decade, they’ve bought and sold tens of thousands of oil leases in the Permian Basin, making deals blessed with a handshake in diners, on the hoods of trucks and in bars such as this.
China launches its first domestically built icebreaker
Malte Humpert, High North News, September 12, 2018
China launched the Xue Long 2 (雪龙2), which translates to “Snow Dragon,” in an elaborate ceremony at the Jiangnan Shipyard in Shanghai on Monday. The new icebreaker follows on the heels of China’s first official Arctic policy announced in early 2018, in which the country placed special emphasis on maritime navigation and the importance of open access to the Arctic Ocean. It aims to include the region in its Belt and Road Initiative as a new “Polar Silk Road.” The new flagship icebreaker, operated by the civilian Polar Research Institute of China, was developed in cooperation with Finnish ship-building specialists Aker Arctic and laid down at the end of 2016. Designs were finalized by the Chinese Marine Design and Research Institute in Shanghai and the vessel was assembled from 114 individual segments by the China State Shipbuilding Corporation in just over two years.
Our Take: Two years for China to build an icebreaker while the US claims it will take 10. Houston, we have a problem.
“Remember the hours after Sept. 11 when we came together as one!It was the worst day we have ever seen but it brought out the best in all of us.”
The Fresh Quotes
US energy since 9/11: More production, but still at the mercy of other countries
John Siciliano, The Washington Examiner, September 11, 2018
Since Sept. 11, 2001, the U.S. has become a dominant energy producer, yet cannot seem to break free from the unpredictable nature of the global oil market. Even with the U.S. producing more of its own oil in 2018 because of the shale boom and fracking, it remains at the mercy of the global price of oil, as shown by federal oil analyses from 2002 to 2018 and recent actions by the Trump administration. President Trump, like many of his predecessors, must still call on large OPEC oil producers, such as the Saudis, to avoid any uneventful price hike that could shoot up fuel prices going into a midterm election season.
Candidates for Alaska governor talk crime, budget gap and oil in Anchorage forum
Annie Zak, Tegan Hanlon, Anchorage Daily news, September 10, 2018
Alaska’s candidates for governor kept it relatively low-key at a one-hour forum Monday in Anchorage where they discussed their plans for crime, oil, the Permanent Fund and more. There were no vicious attacks at the event, hosted by the Anchorage Chamber of Commerce at the Dena’ina Civic and Convention Center. No harsh words. No jabs thrown. All four gubernatorial candidates arrived in suits: former U.S. Sen. Mark Begich, a Democrat, former state Sen. Mike Dunleavy, a Republican, incumbent Gov. Bill Walker, an independent, and Libertarian William “Billy” Toien.
Our Take: Though no punches were thrown – there are clear differences. Begich is the only candidate who supports the Yes for Salmon( aka Stop All Progress in Alaska) initiative; Dunleavy appears to be the only candidate who recognizes that Alaska has a spending problem. All the candidates recognize that more oil in the pipeline is the clearest path forward for Alaska.
State announces tentative deal with ExxonMobil to supply gas for Alaska LNG project
Rashah McChesney, Alaska’s Energy Desk, September 10, 2018
In a hastily assembled, early morning press conference on Sept. 10, state officials announced that they have settled on the terms of a gas sales agreement with ExxonMobil. The agreement is not binding but is intended to supply gas for the Alaska LNG project. Though they would not share a copy of the agreement, officials say it contains key terms like the price for the gas and volume the company agrees to sell into the Alaska LNG project, which would build a pipeline to bring gas from the North Slope to Cook Inlet for export.
Our Take: Progress! Price and volume are important terms that are fundamental for any long-term gas sales agreements.
US HOUSE APPROVES SMALL SCALE LNG EXPORT LAW
Dale Lunan, Natural Gas World, September 10, 2018
The US House of Representatives, in a bipartisan vote of 260-146, passed legislation on September 6 providing for the prompt review and approval of applications to export or import LNG in amounts up to 140mn ft3/day. Three Republicans and 143 Democrats voted against the bill, fearing it would lead to increased domestic natural gas prices. The legislation, sponsored by Republican Congressman Bill Johnson of Ohio and his Democrat colleague, Henry Cuellar of Texas, will now move to the Senate, where it is expected to get a quick seal of approval. It is similar to a recent rule finalized by the US Department of Energy (DoE).
Our Take: Government can do good things – quickly!
From the Washington Examiner Daily on Energy:
TRUMP ADMINISTRATION ROLLS BACK METHANE RULES TO HELP DRILLERS: The Environmental Protection Agency proposed on Tuesday to roll back Obama-era regulations targeting methane leaks from oil and gas drillers and fracking operations.
The methane emissions rules were part of the Obama administration’s climate agenda, which targeted methane as a short-lived greenhouse gas that is more potent than carbon dioxide.
The proposed improvements to the 2016 New Source Performance Standards for the oil and gas industry look to streamline implementation, reduce duplicative EPA and state requirements, and significantly decrease unnecessary burdens on domestic energy producers, the EPA said Tuesday morning.
Show me the money: “Removing these excessive regulatory burdens will generate roughly $484 million in cost savings and support increased domestic energy production — a top priority of President Trump,” said EPA Acting Administrator Andrew Wheeler.
The cost savings that Wheeler described would be over a six-year period from 2019 to 2025. The annual cost savings to the industry would be $75 million.
Cut the red tape: “These common-sense reforms will alleviate unnecessary and duplicative red tape and give the energy sector the regulatory certainty it needs to continue providing affordable and reliable energy to the American people,” Wheeler added.
QatarGas strikes Chinese LNG deal
Upstream Online, September 10, 2018
Qatar gas said on Monday it had agreed on a 22-year deal with PetroChina International, a unit of PetroChina, to supply China with about 3.4 million tons of liquefied natural gas annually, as the nation stepped up efforts to combat air pollution. The Qatari state-owned company will supply LNG from the Qatar gas 2 project – a venture between Qatar Petroleum, ExxonMobil and Total – to receiving terminals across China, with the first cargo to be delivered this month.
REPSOL SIGNS UP FOR VENTURE GLOBAL US LNG
Natural Gas News, September 7, 2018
US Venture Global LNG has contracted to sell Spanish energy company Repsol 1mn metric tons/yr of LNG from its Calcasieu Pass LNG export facility in Louisiana, it said September 7. Repsol will take the LNG free on board for 20 years, starting from the commercial operation date of the 10mn mt/yr Calcasieu Pass LNG export facility, expected in 2022 assuming Venture Global takes final investment decision early next year as planned, and the other customary conditions precedent have been met.
PUNISHING BOLIVIAN TAXES DETER GAS EXPLORATION
Natural Gas News, September 10, 2018
Exploration activities to discover more natural gas in Bolivia have been deterred mainly by one thing: a high flat tax rate at the well-head. “I think the main barrier to Bolivia not developing more exploration activities is its high flat tax rate to do deep exploration in unconventional areas,” Alvaro Rios Roca, Gas Energy Latin America’s managing partner told NGW in a September 9 interview. Bolivia, the small South American country with estimated proved natural gas reserves of 10.7 trillion ft³ at December 31, 2017, has struggled to boost proved reserves in the last four years, according to a recent reserve report by Canada’s Sproule International.
Our Take: A good reminder for Alaska’s elected officials, and those seeking office. If you tax something, you get less of it.
Drilling and suburbia collide in Colorado fracking fight
Amy Harder, Axios, September 18, 2018
A fight underway here in Colorado over a ballot initiative curtailing oil and gas drilling is NIMBYism at its most stark. Why it matters: NIMBYism — “not in my backyard” opposition — is as old as time and often has a negative reputation. But in the case of Colorado, it shouldn’t. It’s the surprisingly simple result of a growing population and oil drilling encroaching on each other. It’s a national symbol of both the economic benefits of drilling and its understandable drawbacks to nearby neighborhoods. Driving the news: Coloradans are set to vote on a ballot initiative Election Day that would ban drilling within 2,500 feet — nearly a half-mile — from buildings and some green spaces. That’s up from a current limit of 500 feet. Internal polling conducted on behalf of the state’s oil industry and not previously disclosed shows the initiative is likely to pass with around 60% support.
Our Take: Jobs Matter. So does $1billion in revenue to the state of Colorado. What are 60% of the people in CO thinking?
Under Trump, the jobs boom has reached blue-collar workers. Will it last?
Heather Long, Andrew Van Dam, The Washington Post, September 9, 2018
Blue-collar jobs are growing at their fastest rate in more than 30 years, helping fuel a hiring boom in many small towns and rural areas that are strong supporters of President Donald Trump ahead of November’s mid-term elections. Jobs in goods-producing industries – mining, construction, and manufacturing – grew 3.3 percent in the year preceding July, the best rate since 1984, according to a Washington Post analysis. Blue collar jobs, long a small and shrinking part of the U.S. economy, are now growing at a faster clip than those in America’s much larger service economy. Many factors collided to produce the blue-collar boom. Some are tied to short-term boom-and-bust cycles, but others may endure.
Our Take: Jobs matter part 2. When asked to score President Trump’s performance on a scale of 1 to 10, gubernatorial candidate Mike Dunleavy gave him an 8, Bill Walker a 5 and Mark Begich a -4. How can you be a champion for working people if you don’t recognize the importance of jobs?