Op-Ed: Attorneys general as political ambulance chasers: America’s energy policy should be decided by legislation, not litigation
Legal News Line, George Brauchler, May 24, 2018
There is a new phenomenon sweeping America. Attorneys general have become ideological ambulance chasers, racing to court to file politically motivated lawsuits seeking to mandate policies too extreme and unpopular to win the support of Congress, state legislatures, or the public. This is best highlighted by recent politically motivated climate change lawsuits. Cities and counties in Colorado and Washington state are the latest to join California and New York City in a misguided crusade against America’s energy manufacturers. Their lawsuits castigate individual companies — some of whom do not even operate in the cities or states suing them — for global climate change, solely to impose financial penalties to justify perceived harm.
Our Take: Policy decided by legislation not litigation! Every time you see “Colorado” in this quote – replace it with “Alaska.” “These lawsuits may clamor about climate change, but they do little to improve the environment or protect Colorado’s greatness. Instead, these lawsuits dramatically increase costs for Colorado’s families and businesses, while enriching trial lawyers on both sides of the issue. I believe it is important to protect my state’s environment. But endlessly suing lawful businesses to attempt policy change is not the Colorado way.” Trustees for Alaska and the Alaska Center (who dropped the “for the environment” from their name) fit well in the category of ideological ambulance chasers.
Zinke, Burgum tout innovation over regulation at oil conference
Bismarck Tribune, Amy Dalrymple, May 23, 2018
Interior Secretary Ryan Zinke and North Dakota Gov. Doug Burgum shared similar visions Wednesday for regulating oil development, focused on partnering with industry to spur innovation. “I don’t think the government should be in a position to be an adversary,” Zinke said as he delivered the keynote speech at the Williston Basin Petroleum Conference in Bismarck. “We have to, as Interior, be a better partner. We have to work with industry.”
Our Take: Innovation over regulation in the oil and gas industry. Partners not adversaries. Nuff said.
High Tech Mining in the Gold Belt
Barrick, May 23, 2018
An immersive website experience created by Barrick Gold gives users a sense of how the mining sector is not only evolving, but leading innovative practices across the globe.
Transboundary mine meeting includes State Department, B.C. reps
KTOO Public Media, Ed Schoenfeld, May 23, 2018
Alaskans concerned about possible impacts of British Columbia mines on cross-border rivers will get an update during a June 1 meeting in Juneau. Lt. Gov. Byron Mallott will host the third annual transboundary mining meeting. Mallott aide Albert Kookesh said officials from the federal, state and British Columbia governments will attend. So will tribal, industrial, environmental, fisheries and other leaders. He said this year’s meeting will allow more time for discussion than previous gatherings. “This is a chance for stakeholders, people who are interested in those types of transboundary issues, to come and talk to the powers that be, if you want to say it that way,” he said.
Our Take: This would be a great opportunity for the Lt. Governor to educate folks about the many ways modern-day miners use technology and data to make their operations safer, more productive and more sustainable, as highlighted by Hal Quinn of the National Mining Association.
China’s Sinopec to boost U.S. crude imports to all-time high: sources
Reuters, Florence Tan, May 23, 2018
Sinopec, Asia’s largest refiner, will boost U.S. crude oil imports to an all-time high as China tries to reduce its trade deficit with the United States, two sources with knowledge of the matter said on Wednesday. The company’s trading arm Unipec has bought 16 million barrels, or about 533,000 barrels per day (bpd), of U.S. crude to load in June, they said, the largest volume ever to be lifted in a month by the company. “The government has encouraged us to lift more U.S. crude,” one of the sources said.
Our Take: Just a reminder to our readers that Sinopec is a potential partner for the Alaska LNG project.
88 Energy to reenter Icewine well to test production capacity
Alaska Journal of Commerce, Elwood Brehmer, May 23, 2018
88 Energy is getting ready to test the production capacity of its latest North Slope exploration well as it evaluates seismic data that could lead to more drilling. The small Australian independent explorer plans to reenter the Icewine-2 well on June 11. After pressure gauges are retrieved from down the wellbore, the company will employ a nitrogen lift to recover up to 4,000 barrels of drilling and other fluids from the reservoir before production tests begin, according to a May 21 release on its upcoming operations.
Successful Slope season stirs optimism at DNR
Alaska Journal of Commerce, Elwood Brehmer, May 23, 2018
Alaska’s top resource managers believe a successful exploration season could signal the dawn of a renaissance on the North Slope. Department of Natural Resources Commissioner Andy Mack said that ConocoPhillips going “six-for-six” and finding commercial quantities of oil in all the exploration wells it drilled last winter is not only encouraging for the company, but for the long-term future of the state as well. “I think what we see is the success rate of drilling wells in the Arctic is really high based on modern technology, really good seismic data, the fact that they’re starting to hone in on the Nanushuk formation. It’s incredibly good news for Alaska,” Mack emphasized in an interview.
Our Take: A renaissance on the North Slope means the quality of life for every Alaskan will improve- more jobs, more money in the economy, more tax revenue for the state. Yes, Commissioner Mack, it is incredibly good news for Alaska. Let’s try not to snatch defeat from the jaws of victory by creating an unstable business climate.
Craig Medred, May 22, 2018
President Donald Trump may do more to make an Alaska gasline a reality than Gov. Bill Walker could ever have dreamed if a columnist for the website Seeking Alpha is to be believed. Seeking Alpha columnist “Tokyo picker” – non-de-plumes are common on the site – pegs the gasline as a slam dunk if Trump truly hopes to reduce the U.S. balance of trade with China.
Our Take: We agree with Mr. Medred. Don’t buy it yet. “The assessment appears to overlook the fickleness of the President involved and the required review by the Committee on Foreign Investment in the United States (CIFUS), which has become wary of China exerting financial control over U.S. businesses. CIFUS operates independent of the president. The Walker administration was reportedly told last fall that the gasline project needed to get more U.S. investors involved if it was to satisfy CIFUS that the Chinese weren’t in control of the project.
Trump Backs Away From China Deal Under Pressure by Trade Hawks
Bloomberg Economics, Jenny Leonard and Saleha Mohsin, May 23, 2018
President Donald Trump is backing away from the trade agreement the U.S. just announced with China, under pressure from China hawks among his supporters and in Congress who have assailed the accord as a capitulation.
Our View: #NotWinning. In the words of Senator Marco Rubio and others: “Sadly #China is out-negotiating the administration & winning the trade talks right now,” Republican Senator Marco Rubio of Florida tweeted on Tuesday. “They have avoided tariffs & got a #ZTE deal without giving up anything meaningful.” He added, “This is #NotWinning.” Another critic of the deal, Senator Steve Daines of Montana, lectured Mnuchin during a hearing at the Capitol on Tuesday.
‘You have to fight these things:’ Why two Juneau men are standing in the way of the Alaska Legislature, Gov. Bill Walker and a billion-dollar debt
Juneau Empire, James Brooks, May 22, 2018
The odds are not in their favor. The State of Alaska is against them. So is Gov. Bill Walker. The Alaska Legislature doesn’t side with them, and neither does the state’s oil and gas industry. Nevertheless, Eric Forrer and Joe Geldhof have launched a lonely attempt to defeat a plan that calls for Alaska to borrow up to $1 billion to pay a debt owed to oil and gas drillers. Geldhof, Forrer’s attorney, filed a lawsuit last Monday.
Our Take: It’s like déjà vu all over again…Joe Geldhof attacking the industry.
From today’s Washington Examiner’s, Daily on Energy:
BP ENDS PROJECT IN IRAN AFTER U.S. THREATENS SANCTIONS
BP decided to end its involvement with projects in Iran Tuesday after the U.S. threatened to sanction companies that operate in the country. “JUST IN: British Petroleum is Ending projects in #Iran following threat of US Sanctions. Follows Total, Siemens, Maersk, Allianz, others…,” a reporter for the National, a news source in the United Arab Emirates, tweeted Tuesday morning. Run away: BP is the latest Europe-based company to pull out investment and commitments from Iran following the Trump administration’s plan to re-up sanctions on Iran.
EXXON MOBIL AIMS TO CUT METHANE EMISSIONS BY 15 PERCENT
Exxon Mobil on Wednesday morning announced new greenhouse gas emission reduction goals, aiming to cut its methane emissions 15 percent and flaring 25 percent by 2020 from 2016 levels. The company also announced its intention to improve energy efficiency in refining and chemical manufacturing facilities. Playing a part: Exxon joined other large energy companies last year such as Shell and BP in signing a pledge to reduce emissions of methane from natural gas production, part of an effort by the industry to show it is committed to combating climate change even as the Trump administration rolls back regulations forcing them to. Methane, the main component in natural gas, is more potent than carbon dioxide, although methane emissions are relatively short-lived.
BP to cut more than 500 upstream jobs
Upstream, May 23, 2018
BP will cut 3% of its exploration and production division by year-end, or more than 500 jobs, the UK supermajor said on Tuesday. The move is “aimed at further improving the efficiency and competitiveness of its organization,” a BP spokesperson said in a statement. “This is part of the ongoing process across BP to modernise its business to adopt more efficient ways of working and also to further simplify its organisation and increase efficiency following $50 billion worth of divestments over recent years.” The company’s upstream business employs around 18,000 globally, and BP did not specify what jobs would be cut.
The Alaska LNG Project Gasline Workforce Plan
The Alaska Department of Labor and Workforce Development, April 2018
The Alaska LNG Project Gasline Workforce Plan identifies the workforce needed to build and operate the project, and it provides a framework to maximize Alaska Hire on this project. Aligning Alaska’s robust statewide training network and making smart investments to expand training for in-demand occupations is critical to ensuring Alaskans are first in line for these jobs.
Our Take: The state shouldn’t spend money on workforce development for this project until a commitment to build it has been signed. Alaskans who work in the industry and live in the real world are skeptical of a 2019 start date for this project, but, if it actually starts within the next two years, there isn’t enough time to develop many of the skills needed. Many of the items listed as action items for the state are beyond their control, especially if China takes the lead on financing and construction. Some people reading this report might see it as a campaign pamphlet for the Governor instead of a practical approach to ensuring that Alaskans are “first in line for these jobs.”
IGU board considers Siemens proposal for alternative natural gas source for Fairbanks
Alaska Public Media, Tim Ellis, May 21, 2018
An affiliate of the Germany-based industrial giant Siemens is offering to build an LNG plant near Wasilla and transport the gas it processes there to Fairbanks at no cost to the Interior Gas Utility – if the IGU board of directors agrees to a long-term LNG-sales contract. Officials with Siemens Government Technologies outlined the proposal to the IGU board during a special meeting Tuesday. IGU board Chairwoman Pam Throop says there’s a lot to like about the Siemens Government Technologies proposal, but she says it all comes down to helping the IGU “get cheap gas real soon so we can get conversions immediately and start building.”
Our Take: An interesting development. Getting “cheap gas real soon” is no easy task. Best wishes to Siemens and IGU in their efforts!
Where Americans are moving for jobs
KTVA, May 21, 2018
As the job market heats up, many Americans are looking to move up — and maybe move out. About a quarter of applications submitted by job seekers were for openings outside the candidate’s metro area, career website Glassdoor found in a report published Friday. The data used in this study are from online job applications on Glassdoor. The sample included more than 120,000 unique users in the 40 largest U.S. metro areas, who applied to more than 600,000 jobs during a typical week from Jan. 8 to Jan. 14, 2018.
Our Take: Alaska isn’t in the top 10 places to look for jobs – not surprising when we have the highest unemployment rate in the nation.
I think we are on the verge of falling off a cliff with Venezuelan oil…
CNBC, May 21, 2018
Dan Eberhart, CEO of Canary LLC, discusses factors affecting the price of oil including supply, demand and infrastructure issues.
BP inks LNG deal with Venture Global
Upstream, May 21, 2018
UK supermajor BP has signed a long-term agreement for 2 million metric tonnes per annum of liquefied natural gas from a Louisiana export facility. The 20-year agreement with Venture Global LNG will begin in 2022, when its 1000-acre Calcasieu Pass facility is expected to start operations, and is on a free-on-board basis. To date, Venture Global has contracted a total of 6 million tpa with a range of European players, including Anglo-Dutch supermajor Shell, Italy’s Edison and Galp of Portugal.
This analyst says China holds the key for iron ore demand
CNBC, May 21, 2018
Paul Gray of Wood Mackenzie says China’s steel industry continues to show good demand for iron ore but will eventually level off as capacity reaches its “peak.”
From today’s Washington Examiner, Daily on Energy
SENATE COMMITTEE PASSES CARBON CAPTURE BILL
The Senate Environment and Public Works Committee Tuesday morning passed legislation promoting carbon capture, utilization, and sequestration technologies. The “Utilizing Significant Emissions with Innovative Technologies (USE IT) Act”, sponsored by a bipartisan group of senators, directs the EPA to support research for carbon capture and utilization and direct air capture. It also declares that carbon capture projects and pipelines transporting the collected carbon dioxide are eligible for expedited permitting reviews.
US and China agree on trade as Alaska’s governor meets Chinese vice premier
KTUU, Leroy Polk, May 21, 2018
Trade tensions between U.S. and China eased considerably Monday as officials with both countries signaled “significant progress” towards an agreement on trade matters. Governor Walker and others met with Vice Premier Liu He in Beijing as part of the Alaska trade mission to China. Walker extended thanks to both Pres. Donald Trump and Chinese Pres. Xi Jinping, for “working together to improve trade relations between our countries.” According to Walker, the news from Washington proved to be a big boon for the Alaska mission, stating, “The timing of our trade mission could not be better” and claimed “Alaska LNG Project is key to reducing the trade imbalance between the U.S. and China.”
Thank Goodness For U.S. Natural Gas Exports
Forbes, Jude Clemente, May 20, 2018
A recent article caught my attention and hopefully yours, “Trump’s Iran Move May Kick Worst U.S. Gas Market While It’s Down.” There is indeed logic to the simplified idea: rising oil prices mean rising rig counts and rising oil production, which means rising associated natural gas production and thus falling natural gas prices.
Our Take: Driven by the Trump Administration’s decision to pull out of the Iran nuclear deal, rising oil prices mean two important things for our LNG, which is surely a larger baseload demand market for us than piped gas to Mexico. First, long-term LNG supply contracts linked to oil prices will get more expensive, upping the competitiveness of our non-oil indexed LNG. Second, U.S. gas production, especially in Texas, should grow as higher oil prices mean more drilling.
Murkowski Welcomes Final List of Critical Minerals
Federal Register, Interior Department, May 18,2018
“I thank Secretary Zinke for his efforts to develop this list of minerals, highlighting our most critical vulnerabilities,” Murkowski said. “These minerals are needed for energy, healthcare, manufacturing, defense, agriculture, and other technologies, and we must now take real steps to secure a reliable, long-term domestic supply.”
Our Take: The estimated value of rare-earth compounds and metals imported by the United States in 2017 was $150 million, a significant increase from $118 million imported in 2016. The growing demand is driven by the increased use of REEs in today’s high-tech devices. China currently dominates the supply side of the equation. What an opportunity for Alaska! We have large areas that either host known deposits of rare earth elements or are highly prospective for these increasingly important ingredients to modern devises.
April Was The 31st Consecutive Month Alaska Has Lost Jobs
KSRM, Jennifer Williams, May 18, 2018
The State Labor Department released the preliminary estimates showing April employment was down by 1,200, or 0.4 percent compared to April 2017. April was the 31st consecutive month Alaska has lost jobs, making this a longer downturn than in the 1980s, when a deep state recession led to 25 straight months of job loss. The construction sector held steady in April, with no further job losses. Oil and Gas lost another 500 jobs, while the retail sector loss 600 jobs with the closure of some major national chains.
Our Take: Alaska should focus on creating a bigger pie for everyone – not fretting over who gets the few good jobs we have. As highlighted in the Forbes LNG article and the Critical Minerals list – the opportunity for Alaska is great – if we make good decisions and create a stable investment climate for companies.
From Today’s Washington Examiner, Daily on Energy:
FERC WON’T CONSIDER CLIMATE CHANGE EFFECTS IN PIPELINE REVIEWS
A divided Federal Energy Regulatory Commission said Friday it won’t make broad evaluations about the impact of climate change when it decides whether to approve interstate pipelines. Limited by law: FERC Chairman Kevin McIntyre and fellow Republicans Robert Powelson and Neil Chatterjee wrote in the majority opinion that the National Environmental Policy Act does not require the commission to consider the upstream and downstream greenhouse gas emission impact in pipeline reviews.
Gold Dredge No. 8 has the scoop on the history of large-scale mining
Fairbanks Daily News-Miner, May 15, 2018
There are two kinds of gold found in Alaska, and both created stampedes to Interior Alaska and the Fairbanks area in particular. A trip to Gold Dredge No. 8 will give the visitor a chance to learn about both kinds. The first gold rush was for the mineral gold found in the rivers, streams and ponds dotting the Fairbanks area. That rush started in the early 1900s and in some form or another continued until almost the middle of the century.
Our Take: This is a great tour opportunity for Alaskans and visitors to Alaska to see first-hand the critical role mining has played, and will continue to play, in our state.
Walker’s trade mission highlights links to China, opportunities for Alaskans
Alaska Public Media, Rashah McChesney, May 17, 2018
From seafood companies to the Alaska Gasline Development Corporation and even a brewery — the group is hoping to spotlight shared interests between China and Alaska. At the 49th State brewpub in downtown Anchorage on Tuesday, about 30 people gathered in a private room to talk about the trip, and how they’re going to woo Alaska’s largest trading partner into developing deeper ties with the state. Representatives from more than 20 businesses, along with state officials and politicians will leave for China this weekend.
BP said to be in talks to take Conoco’s UK field in swap for Alaska assets
Anchorage Daily News, Kelly Gilblom and Dinesh Nair, May 18, 2018
BP and ConocoPhillips are in discussions for an asset swap deal that would see the U.K. energy major gain a greater foothold in a key project in the North Sea and the U.S. explorer get Alaskan assets, according to people familiar with the talks. BP is considering taking Conoco’s stake in the Clair field, in which BP already holds a 28.6 percent stake and is the operator, the people said, asking not to be identified because the talks are private. In exchange, Conoco is likely to take some of BP’s assets in Alaska. BP describes Clair as “the largest undeveloped hydrocarbon resource” in the U.K.
Our Take: We would be surprised to see BP give up any of their world-class assets in Alaska.
Trump signs new environmental executive order
Washington Examiner, John Siciliano, May 17, 2018
President Trump is starting his own government-wide environmental sustainability and energy efficiency program through an executive order he signed late on Thursday. The order directs federal agencies to manage their buildings, vehicles, and overall operations in order to “optimize energy and environmental performance, reduce waste, and cut costs,” according to the White House.
Our Take: Hats off to the President for leading by example. As the article points out the federal government manages more than 350,000 buildings and 600,000 vehicles and is the largest consumer of energy in the nation. The federal government spent over $6 billion on energy for buildings and $635 million on water.
Two candidates so far for House seat
Peninsula Clarion, Ben Boettger, May 17, 2018
Two candidates — Ben Carpenter of Nikiski and Shawn Butler of Hope — have filed so far for the Alaska House of Representatives seat that current Representative Mike Chenault (R-Nikiski) expects to vacate after November’s election. Chenault is planning a run for governor and said he doesn’t intend to seek re-election for the House District 29 seat he’s held since 2001.
$175K Andeavor grant to fund STEM programs at school district
Peninsula Clarion, ELIZABETH EARL, May 17, 2018
On Thursday, oil refining company Andeavor presented the school district with a $175,000 grant to further programs like a robotics class. “For us, we’re always very supportive of science, technology, engineering and math programs, because you see this need for it to be successful here on the Kenai Peninsula, to be successful in Alaska,” said Cameron Hunt, who manages Andeavor’s refinery in Nikiski. “We have a lot of industry here, and that relies on people coming up through our schools to be able to contribute to that.”
Our Take: Shout out to Andeavor for being a great neighbor, investing in their community!
Ten percent of the Alaska’s lawmakers say they are quitting or retiring
KTUU, Richard Mauer, May 16, 2018
Six lawmakers — ten percent of the Alaska Legislature — have announced they are retiring or quitting months before they would face voters, and the filing deadline for the next election is still more than two weeks away. Another five lawmakers are abandoning their seats in the hope that voters will send them to a higher office. A lawmaker, an aide and a political party official attributed the high number of departures to the lengthy special sessions over the past few years. They also said that the state’s budget deficit, and the need to find new revenue or cut the budget — or both — has made the job much more difficult. Angry Alaskans have accused legislators of “stealing” their Permanent Fund dividend, or worse.
Our Take: If you can’t take the heat…
Oil, natural gas industry spends billions to reduce greenhouse gas emissions, report says
Washington Examiner, Josh Siegel, May 15, 2018
The U.S. oil and natural gas industry invested $108 billion in technologies to reduce greenhouse gas emissions from 2000 to 2016, according to a study released Tuesday. The study, conducted by T2 Associates on behalf of the American Petroleum Institute, shows the balancing act sought by major oil and gas companies that are aiming to help combat climate change, even as they embrace the Trump administration’s “energy dominance” agenda supporting fossil fuels.
Our Take: The oil and gas industry talks the talk and walks the walk: “ between 2000 and 2016, there was a total U.S. investment of $597.8 billion in low-emission or zero-emission technologies, the study shows. Of that, the oil and natural gas industry spent $108.2 billion, compared with $143.6 billion invested by other U.S. industries combined. The federal government contributed $152.7 billion to the total.”
Exclusive: Conoco moves to sell North Sea oilfields: sources
Reuters, Ron Bousso, May 14, 2018
U.S. oil major ConocoPhillips is preparing to sell its North Sea fields as the company focuses on shale operations in its home market, industry and banking sources said. The disposal of Conoco’s North Sea assets after more than 50 years in the British offshore basin could fetch as much as $2 billion, but it was unclear how much of the portfolio would be put up for sale, the three sources said.
Our Take: Conoco is the latest major oil company seeking to exit the North Sea as production in the aging basin declines, other areas become more competitive and costs for dismantling aging infrastructure weigh.
EIA calls for rejection of Alaska LNG pipeline application
Hydrocarbons Technology, May 16, 2018
The Environmental Investigation Agency (EIA) has called for the rejection of Alaska Gas Development’s (AGDC) application to construct an 800-mile liquefied natural gas (LNG) pipeline and terminal in Cook Inlet, Alaska, US. During the construction stage, the AGDC project plans to carry out 101 days of pile driving in the Cook Inlet, as well as other noise-causing activities.
Our Take: At first blush, this appears to be the well-respected, non-partisan Energy Information Administration – FAKE NEWS! The Environmental Investigation Agency is an NGO founded by three environmental activists in the United Kingdom. Interesting to see them attacking a project in Alaska – and using an acronym that misleads people.
‘Impossible to Ignore’: Why Alaska Is Crafting a Plan to Fight Climate Change
The New York Times, Brad Plumer, May 15, 2018
In the Trump era, it has mainly been blue states that have taken the lead on climate change policy, with liberal strongholds like California and New York setting ambitious goals for cutting greenhouse gas emissions. Now, at least one deep-red state could soon join them: Alaska, a major oil and gas producer, is crafting its own plan to address climate change. Ideas under discussion include cuts in state emissions by 2025 and a tax on companies that emit carbon dioxide.
Our Take: Governor Walker and Lieutenant Governor Mallott supported the recent decision by Congress to open the Arctic National Wildlife Refuge to oil and gas exploration, a move opposed by environmentalists, stating, “The state will continue to be an energy producer for as long as there is a market.” Thankfully, the task forced removed this language from their document: “There is an economic and ethical imperative to pursue a transition away from a global dependence on fossil fuels.” Kudos to Kara Moriarty, president and CEO of AOGA for a reality check: “I think they need to be focusing on things that will actually have an impact,” and “Climate change is a global problem, so unless you’re talking about a global carbon tax, I’m not sure this would move the needle in a state with only 750,000 people.”
Lobbyist seeks to run for Juneau’s state senate seat
Juneau Empire, James Brooks, May 15, 2018
Longtime Juneau resident and AFL-CIO lobbyist Don Etheridge is running for the Alaska Senate seat representing northern Southeast Alaska. On Sunday, Etheridge filed a letter of intent with the Alaska Public Offices Commission, an act that allows him to begin fundraising for office. He confirmed his run for office in a Tuesday morning phone call with the Empire. “I’ve been lobbying now for almost 24 years, and I just wanted to do something different, and with the seat wide open, I figured why not?” he said. Don will run as an independent.
CINGSA plans backup systems
Peninsula Clarion, Ben Boettger, May 16, 2018
After losing some capacity in March to a sand-clogged well and failed dehydration unit, Cook Inlet Natural Gas Storage Alaska (CINGSA) is planning to spend an estimated $41 million to back up its ability to store and dispense the fuel gas that generates most of south central Alaska’s heat and electricity. On April 27 CINGSA officials asked the Regulatory Commission of Alaska (RCA) — the state agency that oversees utility pricing — to allow them to recover the project’s cost in future storage rates. If approved, construction could start in January 2019 and the new features could be operating at the end of that year, according to CINGSA’s petition.
Our Take: CINGSA is an important part of our reliability and $41 million injected in to the economy is good for all.
House to Probe China Threat
The Washington Free Beacon, Bill Gertz, May 16, 2018
The House Permanent Select Committee on Intelligence will begin a major inquiry into the threat from China this week in a shift from its past attention on Russian subversion. The committee will hold a series of hearings, both open and in secret, examining threats posed by China in the military sphere, economic and industrial realm, technology arena, and Beijing’s significant influence operations against the United States, said committee aides.
Our Take: Our potential partners are being investigated for the “many challenges they pose to our national security through its aggressive territorial claims, unfair trade policies, espionage and cyber-attacks…”
IEA cuts outlook for global oil demand as crude nears $80 a barrel
Reuters, Reuters Staff, May 16, 2018
Global demand for oil is likely to moderate this year, as the price of crude nears $80 a barrel and many key importing nations no longer offer consumers generous fuel subsidies, the International Energy Agency said on Wednesday. The Paris-based IEA cut its forecast for global demand growth to 1.4 million barrels per day for 2018, from a previous estimate of 1.5 million bpd.
Legislative report misleads on ConocoPhillips profits
The Anchorage Daily News, Roger Marks, May 16, 2018
The Anchorage Daily News reported on May 6, about a report by Legislative Research Services comparing ConocoPhillips’ Alaska profits with profits elsewhere. Suppose you had a company that produced diamonds and gravel, and in some places, you produced more of one and less of another. Diamonds are, of course, much more valuable than gravel.
Our Take: We aren’t surprised it’s what they do – at the urging of Senator Wielechowski who has had this explained to him too many times to count -but continues to mislead the public.
LNG Edge Q1 2018 Trade Flow Report
ICIS, May 2018
China continued to surprise the market in the first quarter 2018, with a dramatic 65% year-on-year increase in imports as the country switched heating systems from coal to gas to improve air quality. The rate of increase accelerated from the previous quarter, but this is unlikely to be maintained during summer. The country has relatively low storage capacity so will have to rely more on importing at time-of-need rather than building up stocks in summer for the winter ahead.
Our Take: The LNG Edge: Q1 2018 Trade Flow Report draws on the latest voyage data from market-intelligence platform LNG Edge to analyze imports and exports in the global LNG market, bringing you market insights ahead of full data publication from customs authorities.
APNewsBreak: Alaska sued over Walker’s bonding proposal
AP News, Becky Bohrer, May 15, 2018
An Alaska resident sued the state Monday over Gov. Bill Walker’s plan to allow for the issuance of bonds to pay off the state’s outstanding oil tax credit obligations. The lawsuit was filed in state court on behalf of Alaska resident Eric Forrer, a former member of the University of Alaska Board of Regents. The action comes just days after the bill passed the Legislature; Walker has yet to sign it into law.
Our Take: We can’t say we’re surprised. Senator Wielechowski made passionate speeches about the issue – even though he had previously voted multiple times for bills that authorized bonds whose debt is serviced solely by independent and annual legislative appropriations.
Republican senator demands EPA scale back refinery biofuel waivers
Reuters, Jarrett Renshaw, May 15, 2018
Republican Senator Chuck Grassley on Tuesday said Environmental Protection Agency chief Scott Pruitt must scale back the use of biofuels waivers for small refineries, or else he will join other lawmakers calling for Pruitt’s resignation. Corn state senators like Iowa’s Grassley have been infuriated by the EPA’s decision to provide an unusually large number of waivers to refineries in recent months, exempting them from a law that requires biofuels like ethanol be mixed into the nation’s fuel.
Our Take: Who will win the battle in DC – corn vs oil? “The corn lobby supports expanding sales of E15 and reducing the waiver program, but opposes counting exports toward volume quotas. The oil industry, meanwhile, is resisting the expansion of E15 – because it worries the move will cut petroleum’s share of the fuel market – and supports both the waivers and the export tweak as ways of cutting regulatory costs.”
The Oil And Gas Situation: Four Big Factors Influence U.S. Oil Markets
Forbes, David Blackmon, May 14, 2018
Here are four big factors influencing the domestic oil and gas industry as the week begins:
The rig count continues to escalate steadily. The DrillingInfo daily rig count sits at 1105 as of May 13, up 25 from two weeks before. This is not surprising at all – crude oil prices remain strong, making an increasing population of potential drilling projects economic to drill. More than 80% of those rigs are drilling oil wells, and over half of them are doing it within the state of Texas. Again, no surprise, given that the preponderance of the vast Permian Basin lies within the state.
Our Take: The rest of the story? The oil price didn’t rocket up after President Trump’s Iran announcement. A widening Permian price differential could send capital to other U.S. basins during the second half of the year. The growing U.S. refinery/production mis-match means America’s crude exports will keep rising.
From today’s Washington Examiner’s Daily on Energy:
EPA SEEKS TO SPEED PERMITTING WITH EFFICIENCY OFFICE
The EPA announced Monday it will create a new efficiency office to speed permitting reviews and shorten the time it takes for the agency to complete other functions, such as meeting legal deadlines. The Office of Continuous Improvement aims to eliminate waste and resources, Pruitt said during an event at EPA headquarters. “Through lean management, EPA is tracking, measuring, and improving vital agency processes, such as permitting and meeting legal deadlines on time, for the first time,” Pruitt said. “Establishing the Office of Continuous Improvement will ensure that these actions are implemented throughout the agency and produce lasting results for years to come.”
Our Take: They had us at “office of continuous improvement.”
Grow America’s Infrastructure Now
May 14, 2018
Grow America’s Infrastructure Now (GAIN) is a diverse coalition of businesses, trade associations, and labor groups that share an interest in creating jobs and strengthening our nation’s economy through infrastructure development. Investing in our nation’s infrastructure creates both long and short-term benefits for our communities and keeps our economy competitive in an increasingly global marketplace. We’ve let the integrity of our roads and bridges slip, our energy grid and infrastructure need updating, and scores of Americans are unable to access high speed internet. It is time for lawmakers in Washington to overhaul and improve our infrastructure. To learn more head to www.gainnow.org.
Our Take: This effort to develop infrastructure in America is crucial to Alaska’ future. Check out the website and sign up to receive updates.
China’s night-owl retail investors leverage up to dominate oil futures trade
Reuters, Meng Meng and Josephine Mason, May 14, 2018
As 9 pm approaches every weekday night in China, a small army of individual investors from around the country log onto trading apps on their mobile phones and laptops. Wall Street may be about to open but these night owls are interested in trading something much closer to home – the new Shanghai crude oil futures contracts that were launched in late March. Armed with risky loans from online firms or digging into their own savings, they threaten to play an outsized role in the new market, which has got off to a roaring start.
Our Take: As a potential partner for a $45 billion gas project – Alaskans are curious about China, especially their business acumen and investment environment. The trading activity here is high risk – and can have a significant impact on China’s role in oil trading
Alaska LNG developers in supply talks
Upstream, May 14, 2018
ExxonMobil and ConocoPhillips are continuing talks with the developers of the $43 billion Alaska LNG project to supply North Slope gas to the proposed facility. A spokeswoman for ExxonMobil said the company had recently met with Alaska Gasline Development (AGD), which is leading the Alaska LNG project, to “progress” potential gas sale agreements.
Our Take: It’s good to see all three of Alaska’s major companies working with the state on potential gas sales agreements.
Industry doesn’t always fight regulations. Here’s why
Axios, Amy Harder, May 14, 2018
It’s an easy political talking point to say industry opposes all regulations, but the real story is more complicated, and we’ve seen it unfold in dramatic fashion under President Trump. Why it matters: Trump’s deregulatory push has got Washington lobbyists anxious and industries parting ways with usual Republican Party allies. Here’s why companies lobby for and against certain regulations, while changing positions over time.
Our Take: A great read about industry compliance with regulations and the misconception that they always oppose regulations.
Rep. Guttenberg’s nephew files to run for vacant House seat
Fairbanks Daily News-Miner, Erin Granger, May 12, 2018
Grier Hopkins, nephew of Rep. David Guttenberg, D-Fairbanks, and son of former Fairbanks North Star Borough Mayor Luke Hopkins, has officially filed to run for Guttenberg’s soon-to-be vacant House seat. This announcement comes just days after Guttenberg announced he does not plan to run for reelection in this year’s upcoming state race. He will be facing Republican candidate Jim Sackett.
Headlamp – Three cheers for Sullivan Smackdown; “Behold the latest Leftist anti-energy enviro-scam.”
Senator Eyes Canada Oil Tax After Alaska Drilling Clash
Bloomberg, Ari Natter, May 10, 2018
As Alaska’s congressional delegation worked feverishly last year to achieve the decades-long dream of drilling for oil in the Arctic National Wildlife Refuge, they came across a formidable opponent: Canada.
Now one lawmaker has a plan to punish the North American neighbor with what amounts to a new tax on hundreds of millions of barrels of Canadian oil imported annually into the U.S. Alaska Republican Senator Dan Sullivan said he will introduce legislation to end a loophole through which imported oil from Alberta’s oil sands deposits doesn’t come with a 9-cent-per-barrel tax to fund clean up of oil spills. Such a change would have generated about $47 million for the U.S. in 2016, according to the Congressional Research Service.
Our Take: Three cheers for Senator Sullivan!!! “It was outrageous,” Sullivan, a former Alaska attorney general and natural resources commissioner, said. “They were going to every office in the Senate.” “It was not a smart move,” he added. “It’s a loophole and we intend to close it.”
Oil prices could hit $100 a barrel next year, Bank of America says
CNN Money, Ivana Kottasová, May 10, 2018
The bank’s analysts wrote Thursday that collapsing oil production in Venezuela and potential export disruptions in Iran could push the price of Brent crude as high as $100 per barrel in 2019. The analysts said their target price for Brent, the global benchmark, was $90 for the second quarter of next year. But they warned there was a risk that deteriorating conditions in Iran would push prices to $100, a level not seen since 2014.
Alaska LNG project president says he’s done ‘preaching to the non-believers’
KTOO Public Media, Elizabeth Harball, May 11, 2018
Since taking the lead on the gasline project about two years ago, the Walker administration has doggedly pursued its plan for the megaproject. In the process, they’ve chalked up some successes, including interest from China’s president and a tentative agreement with BP. Now, the president of the state-owned Alaska Gasline Development Corporation says he’s no longer bothering to convince skeptics that the project is real, and it’s moving forward.
Our Take: Good. It isn’t the job of a $750,000/year executive to “convince skeptics” that a $45 billion project is going to work. It’s his job to present a commercially viable project that will secure investors and customers and get the project done. Progressing a commercially viable project will quiet the skeptics.
NY AG Schneiderman: The Left Loses an Anti-Energy Elected Official; the Awfulness Continues
Red State, Seton Motley, May 9, 2018
Many of us are now aware of the mascara-wearing, woman-abusing, recently-ex-Attorney General of New York – Eric Schneiderman. Schneiderman put this massive abuse-of-power to really bad use. Schneiderman is a Leftist. And Leftists don’t like capitalism generally – or the energy that fuels it specifically. So Schneiderman spent years persecuting energy companies generally – and ExxonMobil specifically.
Our Take: Alaska is noted in this article as a prime target. “Alaska is inordinately energy-rich (thank you very much, William Seward). So of course the Left is inordinately busy trying to prevent us from accessing any of it. Behold the latest Leftist anti-energy enviro-scam. Blocking another attempt at energy development – in the alleged name of allegedly saving salmon.”