Headlamp – A busy winter for ConocoPhillips and some help from DC for Alaska LNG

November 17, 2017 | Posted in : News

Road to energy dominance will lead through Alaska. Some new developments in the Great White North show that America’s road towards global Energy Dominance in the oil and gas sector will inevitably travel through Alaska. With a party-line, 13-10 vote on Wednesday, Republicans on the Senate Energy Committee have given new life to the possibility of opening up the northernmost sliver of the gigantic Arctic National Wildlife Refuge (ANWR) to exploration for oil and natural gas. The vote, led by Senate Energy Chairman Lisa Murkowski (R-AK) is the latest skirmish in the forty-year battle over whether this sensitive part of Alaska’s North Slope should be made available for resource development. “For many of us, we believe that [ANWR] is one of the best places that we can go for responsible development, and we should have done this some time ago,” Murkowski said in the wake of the vote.  Sen. Murkowski, in pursuing this goal, is carrying on the legacy of her father, former Alaska Sen. Frank Murkowski, who made several similar attempts during his 21 years in the U.S. Senate.

“Long way betwixt and between.” The U.S. House on Thursday passed a tax cut package. Like all but 13 Republicans, Alaska Congressman Don Young voted for the bill. “There’s some people saying it’s not so good, but overall if the actuarial figures are good, it’ll be about $3,000 in every tax-paying family’s pocket, that they didn’t have before,” Young said after the vote. “That’s how much the cut’s going to be.” Democrats say the House bill gives and outsized tax cut to the wealthy. A fact sheet issued by the Democratic National Committee says 11 percent of middle-income Alaska households would face a tax increase, of $600 on average. The figure comes from a report by the Institute on Taxation and Economic Policy, a left-leaning think tank. The House bill does not include opening the Arctic National Wildlife Refuge to oil drilling. Young says the plan is to pass ANWR in the Senate version of the bill, and then fight for it in the conference committee, where the two chambers negotiate their differences and write a final version. “I expect the House to concede to the Senate on the ANWR provisions and become a reality,” Young said. “Again, though, I want to warn people don’t go to the bank right away, because it’s a long ways betwixt and between.”

How many zeros in a trillion? Earlier this autumn, Norway’s oil fund reached the stunning value of $1 trillion. Built on transfer of oil revenue from May 1996, the fund is today the world’s largest sovereign wealth fund is supposed to secure pensions for generations to come. The fund has invested in some 9,000 companies in 77 countries around the world. In value, the fund owns 1 percent of all listed companies worldwide. Now, Norges Bank, who manage the investments, is shocking the petroleum market by recommending the removal of oil stocks from the fund’s benchmark index. In a letter to the Ministry of Finance on Thursday, the bank writes, “In the Bank’s view, this will make the government’s wealth less vulnerable to a permanent drop in oil and gas prices.” The letter informs that the vulnerability of government wealth to a permanent drop in oil and gas prices will be reduced if the fund is not invested in oil and gas stocks, and advise removing these stocks from the fund’s benchmark index. Norges Bank underlines in a press release that this advice is based exclusively on financial arguments and does not reflect any view on the sustainability of the oil and gas sector.

It’s going to be a busy winter for ConocoPhillips. The company that has led exploration into the National Petroleum Reserve-Alaska west of the existing North Slope oil fields is heading back into the federal lands to drill four more greenfield wells early in 2018, according to spokeswoman Natalie Lowman. Last January ConocoPhillips announced the Willow discovery in the NPR-A that the company’s Alaska leaders believe contains 300 million barrels of recoverable oil and is capable of producing up to 100,000 barrels per day with the right production and processing facilities. With another exploration well planned for state acreage recently added to the Colville River Unit just east of the NPR-A, the five wells make for the company’s largest North Slope winter exploration program since 2002, Lowman said. “There’s three to help us further appraise Willow and Putu and then this other one that we’re calling Stony Hill,” she said further. The Putu well could be ConocoPhillips’ last chance at developing a prized chunk of state land around the Native village of Nuiqsut just south of the company’s Alpine oil field in the Colville River Unit. It’s on the southern edge of the Pikka Unit, which holds the 1.2 billion barrel-plus Nanushuk oil prospect that operator Armstrong Energy just sold to Australia-based producer Oil Search Ltd.

From the Washington Examiner’s Daily on Energy – Alaska LNG gets some help from DC. 

FEDS, CHAMBER START NATURAL GAS EXPORT INITIATIVE: The U.S. Trade and Development Bank and the Chamber of Commerce launched a new joint energy initiative to promote U.S. natural gas exports Friday. Public-private partnership: The federal trade promotion agency, the Chamber of Commerce, the 27th World Gas Conference 2018, and LNG Allies, announced the U.S. Gas Infrastructure Exports Initiative at the U.S. Chamber of Commerce’s headquarters in Washington. Expanding natural gas exports has been a top priority of Trump’s pro-growth energy dominance agenda. How it will assist exports: The trade agency will deploy a range of tools, including reverse trade missions, feasibility studies, training, technical assistance, and the Global Procurement Initiative to accelerate and promote the export of liquefied natural gas. The agency is working with the energy industry and the government “to facilitate new gas infrastructure exports, including LNG exports through the development of gas-related infrastructure in key LNG receiving countries.” Helping U.S. allies: Karen Harbert, head of the Chamber’s Global Energy Institute, tweeted Friday that “US natural gas will help our allies around the world be #Energy Strong.”

Employment Down 1.3 Percent, Unemployment Rate Unchanged. Alaska’s total employment was down by an estimated 1.3 percent in October compared to October 2016, a loss of about 4,100 jobs. While the state continues to shed jobs, over-the-year losses have gradually slowed in 2017. The largest loss during the current downturn was -2.6 percent in fall 2016. Oil and gas employment was down by 7.8 percent, followed by construction (-7.2 percent). The only industries to add jobs were health care (2.0 percent) and local government (0.2 percent), which includes public schools and tribal government. Federal employment was down 1.3 percent and state government was down 2.0 percent.

First Reads:

With Or Without ANWR, Alaska’s Oil And Gas Fortunes Are Rapidly Reviving
Forbes, David Blackmon, November 16, 2017

House passes tax plan, the bill Young says will open ANWR
Alaska Public Media, Liz Ruskin, November 16, 2017

Norway’s oil fund wants out of oil and gas investments
Arctic Now/The Barents Observer, Thomas Nilsen, November 17, 2017

ConocoPhillips plans for busy exploration season
OG Links/Alaska Journal of Commerce, November 15, 2017

Employment Down 1.3 Percent, Unemployment Rate Unchanged
Department of Labor Press Release, November 17, 2017

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Headlamp – RDC Conference accentuates the positive. Oil & Gas Leasing 101 for Al Franken

November 16, 2017 | Posted in : News

Accentuate the positive… There is plenty for the players of Alaska’s extraction industries to be positive about and that should translate into a cheery Resource Development Council for Alaska conference. The annual gathering for some of the state’s largest industries will be held Nov. 15-16 as it usually is at the Dena’ina Civic and Convention Center in downtown Anchorage. RDC for Alaska Executive Director Marleanna Hall said some of the good vibes are being sent all the way from Washington, D.C. Last year’s conference convened shortly after President Donald Trump was elected and while there was anticipation about what a Trump White House would mean for Alaska businesses, no one knew quite what to expect. “There’s some optimism out there and a lot of it is coming from the changes in the energy outlook for America; it’s coming from opportunities to revise and revamp federal regulatory processes and a lot of it is coming from the top down,” Hall said.

Oil & Gas Leasing 101 for Al Franken. Senators had to explain to Democratic Sen. Al Franken of Minnesota the economics underlying federal oil and gas leasing during a hearing on opening up more areas in Alaska to drilling. Franken opposes a Republican bill to open a small portion of the Arctic National Wildlife Refuge (ANWR) to oil and gas exploration, arguing it could impact the porcupine caribou native to the region Franken also went on a long rant about why it didn’t make economic sense to him to open more Alaskan lands to drilling when millions of acres were left untapped by oil companies. Franken sits on the Senate Committee on Energy and Natural Resources. “This is a very contentious issue and since there’s another million acres that are already leased — oil companies don’t lease land, at least I don’t think they do, it doesn’t make any sense to me,” Franken said in the hearing. “I don’t know the oil business, but why would you lease anything where you didn’t think there was oil?” Franken said. “It doesn’t make any business sense.”

Vietnam signs MOU with AGDC. Alaska Gasline Development Corporation (AGDC) and PetroVietnam Gas (PVGAS) today signed a memorandum of understanding setting forth the basic principles to collaborate on potential opportunities of LNG supply from AGDC to serve LNG import projects in Vietnam and to evaluate the possibility of upstream resource investment in Alaska. The agreement was signed in Hanoi, Vietnam by executives of AGDC and PVGAS in the presence of U.S. President Donald Trump and Vietnam President Trần Đại Quang. PVGAS is a subsidiary of state-owned PetroVietnam (PVN). PVGAS is developing LNG receiving and regasification terminals in Vietnam, namely Thi Vai LNG Terminal and Son My LNG Terminal, in order to supply natural gas to newly built and proposed power plants and existing gas users. “The agreement with Vietnam fits very well with AGDC’s broader marketing program and recently announced deal with Sinopec, which leaves a portion of the Alaska LNG production capacity with AGDC for sale to regional Asian markets such as Vietnam,” said Keith Meyer, president, AGDC. “Vietnam is a new entrant to the LNG industry but has the potential to be a rapidly growing customer of LNG and we look forward to participating in the growth of the Vietnamese economy by providing reliable and stable natural gas supply.”

Ice, Ice Baby. Alaska officials expect a busy ice road construction season on the North Slope this winter, a sign of improving economic activity in the state’s oil patch after years of layoffs and low oil prices. Ice roads and snow roads used for exploration drilling and the cleanup of old wells in the National Petroleum Reserve-Alaska are key to the plans, said Melissa Head, who oversees the state’s ice road permitting program.

First Reads:

Optimism abounds in advance of annual RDC gathering
Alaska Dispatch News/Alaska Journal of Commerce, Elwood Brehmer, November 14, 2017

Al Franken Gets Schooled On How Federal Oil Leasing Works During A Hearing
The Daily Caller, Michael Bastasch, November 15, 2017

Alaska Gasline Development Corporation Signs MOU with PetroVietnam Gas
Informed Infrastructure, Parul Dubey, November 13, 2017

North Slope frozen road construction is up this winter
Alaska Dispatch News, Alex DeMarban, November 15, 2017

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Headlamp – Murkowski and Cantwell fight over Arctic drilling.

November 15, 2017 | Posted in : News

From the Washington Examiner’s Daily on Energy:

MURKOWSKI, CANTWELL FIGHT OVER ARCTIC DRILLING: The Senate Energy and Natural Resources Committee on Wednesday began debating Republican legislation to allow oil and natural gas drilling in a portion of the Arctic National Wildlife Refuge. Amendments galore: Committee Chairwoman Lisa Murkowski, R-Alaska, said senators offered more than 50 amendments as the panel began marking up the legislation with hopes to vote on it later Wednesday. As debate began, Murkowski and Sen. Maria Cantwell of Washington, the committee’s top Democrat, argued about the purpose of the legislation and the process by which Republicans conceived it. Murkowski’s legislation to permit drilling in a 1.5 million-acre section of the 19.6-million-acre Alaskan refuge, with the expectation that energy development there will raise just over $1 billion over 10 years. “We are being asked to consider legislation that is different than previous bills [that tried to allow drilling in ANWR], and has not been subject to single hearing. At its core, the chairman’s mark [bill] would change current law and turn the refuge into a petroleum reserve.” ‘Plenty of time’: “We have given members plenty of time to review the legislation and consider amendments,” Murkowski countered. “This was done in regular order.”

What the bill does: Murkowski’s bill requires the Interior Department to hold at least two lease sales within 10 years of the bill’s passage, the first within four years and the second within seven years. It says that lease sale areas should include at least 400,000 acres with a strong potential for drilling. But surface development would be limited to 2,000 acres of the coastal plain. GOP-friendly process: Republicans are considering the bill under budget reconciliation, meaning it is not subject to a Senate filibuster and can pass with a simple majority The introduction of the bill fulfills the terms of a budget resolution passed by the GOP-controlled House and Senate that directed the committee to create legislation to raise $1 billion over a decade to help pay for tax reform. The refuge was created under former President Dwight D. Eisenhower in 1960. In 1980, Congress provided additional protections to the refuge but set aside the 1002 area for study and future drilling if lawmakers approved it.

‘Turn everything on its ear’: Cantwell argued that Murkowski’s legislation would mandate oil and drilling in the 1002 area of the refuge in a manner that has never been done before. No other refuge in America has expressly permitted oil and gas development as part of its purpose, she said. “By putting that purpose in, you turn everything on its ear.” The committee passed the legislation out with ANWR provisions on a 13-10 vote. 

Shiver me Timbers. The largest potential timber sale in the Haines State Forest in decades was put on hold this summer. The decision from the Department of Natural Resources was made in response to a successful appeal of the forest land use plan for the 855-acre sale. Now, the Division of Forestry has put forward a new plan. The Baby Brown Timber Sale, about 35 miles northwest of Haines, offers up 20 million board feet of old-growth spruce and hemlock. Astoria Forest Products offered $270,000 for the timber last year. They were the only bidder. But the sale hasn’t gone forward. DNR Commissioner Andrew Mack canceled the deal as it was being offered, because Lynn Canal Conservation successfully appealed the state’s forest land use plan. The original plan was only for a portion of the sale. Lynn Canal Conservation said it shouldn’t have gone out to bid until plans were complete for the entire area. Haines Forester Greg Palmieri said that’s the main difference between the new document and the old one. “This plan takes into account the entire sale offering, which is 11 harvest units,” Palmieri said. “The first forest land use plan only offered a harvest plan that applied to the first two units that were going to be for the sale.”

AVTEC’s Alaska Maritime Training Center Receives $95,000 donation from Andeavor. The AVTEC Alaska Maritime Training Center announced today that it received a donation of $95,000 from the refining, marketing and logistics company Andeavor. The donation will support AVTEC’s arctic and ice navigation readiness project, which will upgrade the school’s full mission bridge ship simulator to enhance its ice navigation capabilities. The donation was prompted by a two-day training event sponsored by Andeavor (formerly Tesoro) and hosted at AVTEC’s Alaska Maritime Training Center. The event provided more than thirty ship masters and pilots the opportunity to hone their skills in navigating the ice-covered waters of Cook Inlet. The licensed deck officers participated in ten training scenarios navigating through ice in Cook Inlet that was programmed into the Alaska Maritime Training Center’s three interactive full mission bridge ship simulators. It was during this training event that Andeavor announced the gift, which will be directed at enhancing the bridge simulators through an upgrade of hardware and software.

 

First Reads:

State publishes new land use plan for proposed 855-acre timber sale near Haines
Alaska Public Media, Abbey Collins, November 14, 2017

AVTEC’s Alaska Maritime Training Center Receives $95,000 Donation from Andeavor
AVTEC news release, November 15, 2017
 

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Headlamp – Bristol Bay Native Corp. against Stand for Salmon initiative

November 14, 2017 | Posted in : News

BBNC comes out against Stand for Salmon. The Bristol Bay Native Corporation is opposed to the Pebble Mine, but the regional Alaska Native corporation is not backing the ballot initiative known as “Stand for Salmon.” “Notwithstanding BBNC’s opposition to Pebble, BBNC believes responsible resource development can take place in Bristol Bay. Development that aligns with local opinion and does not threaten the region’s fisheries and fish habitat can and should be given an opportunity to proceed,” BBNC President and CEO Jason Metrokin said in a written statement. BBNC does not support HB 199 – sponsored by Kodiak Republican Rep. Louise Stutes – or the Stand for Salmon initiative. “Each would unnecessarily and negatively impact resource development projects and potentially the subsistence activities upon which our shareholders depend,” Metrokin wrote. Stand for Salmon’s provisions might make Pebble impossible to permit, and two of its backers hail from Bristol Bay. Gayla Hoseth is a second chief with the Curyung Tribe in Dillingham, and Brian Kraft operates the Alaska Sportsman fishing lodges nestled in east and west side headwaters.

The right mine at the right time? The Trump administration is currently weighing a decision that could alter the future of the Pebble Mine — and the Bristol Bay region communities that would see the mine built in their backyard. That includes Dillingham and Iliamna. They were the only two places the Environmental Protection Agency visited last month to get public input on whether to scrap an Obama-era proposal to put restrictions on the mine. In Dillingham, residents spoke unanimously against the idea. But in Iliamna, the reaction was more mixed. At least one resident is still deciding whether the mine is a good idea.

From the Washington Examiner’s Daily on Energy:

NEBRASKA COMMISSION TO RULE ON KEYSTONE PIPELINE: The Nebraska Public Service Commission announced it will make its long-awaited decision on whether to allow the completion of the Keystone XL pipeline on Nov. 20. The five members of the commission will vote on whether Keystone XL developer TransCanada can build a section of the 1,200-mile pipeline as proposed. The final step: The vote represents the last regulatory hurdle facing the pipeline, which has been protested by environmental activists. Trump granted a permit for the pipeline in March.

Wanted: a diversified workforce. Industry is committed to making its workforce more diverse. Now and over the next decade or two, there’s great opportunity to realize that goal. With 40 percent or more of industry’s worker base on track to retire by 2035, research indicates hundreds of thousands of women and minorities will help fill the ranks through the next decade and beyond. Critically important is properly preparing them to be petroleum engineers, geologists, welders, electricians, accountants, business managers and more. API President and CEO Jack Gerard, in remarks prepared for last month’s energy policy summit of the American Association of Blacks in Energy (AABE):

“We’ll need the talent of everyone, without regard to gender, race, or background. … To address the disparity between where we are and where we need to be, API is working in partnership with organizations like AABE, to increase the awareness of our industry in currently underrepresented communities with a focus on STEM education.”

First Reads:

Bristol Bay Native Corp. against Stand for Salmon initiative
Alaska Public Media/KDLG, Dave Bendinger, November 13, 2017

A potential neighbor to the Pebble Mine sees both sides
Alaska Public Media, Elizabeth Harball, November 13, 2017

Working For A More Diverse Workforce
Breaking Energy, Energy Tomorrow Blog, November 13, 2017

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Headlamp – U.S. becoming the leader in clean coal tech needed to meet Paris goals.

November 13, 2017 | Posted in : News

From the Washington Examiner’s Daily on Energy:

STUDY: U.S. BECOMING A LEADER IN CLEAN COAL TECH NEEDED TO MEET PARIS GOALS:

The Trump administration isn’t promoting clean coal for nothing. The U.S. is a global leader in commercializing the technology, according to a study issued Monday in Bonn. The Global Carbon Capture and Storage Institute released its latest assessment on the progress being made in developing carbon capture and storage, or CCS, technology.

Do the crime, do the time. The U.S. Department of Justice on Friday pledged to prosecute protesters who damage oil pipelines and other energy infrastructure, a move that could escalate tensions between climate activists and the administration of President Donald Trump. The DOJ said it was committed to vigorously prosecuting those who damage “critical energy infrastructure in violation of federal law.”

Oil price increases aren’t enough. North Slope oil prices have reached their highest level in more than two years, but the increase may not last and the boost to the Alaska treasury will likely be limited, state analysts say. And while North Slope oil production is also up in recent years after a long slide, Alaska still faces a $2.5 billion deficit. The higher oil prices are “good news,” said David Teal, legislative fiscal analyst, on Wednesday. But things aren’t like they were in the old days, when much more oil flowed from Prudhoe Bay and other fields, said Teal. In 1990, every $1 increase for a barrel of oil over a year’s time brought $150 million extra to the state’s treasury, news accounts show. Now, every $1 increase annually brings Alaska about an extra $30 million, said Ken Alper, Tax Division director. “It’s not as responsive to price change as it once was,” said Teal.

Senate panel considers arctic drilling bill. A Senate Committee is scheduled to consider legislation next week opening the door to oil drilling in the Arctic National Wildlife Refuge (ANWR). Sen. Lisa Murkowski (R-Alaska) unveiled her bill to open up a portion of ANWR for drilling on Wednesday, a week after a tense committee hearing saw supporters and opponents of drilling there go head-to-head for the first time this session. The bill would direct the Interior Department to hold drilling lease sales for up to 800,000 acres of land in ANWR, with the federal government and Alaska sharing any potential royalties from production there. It would raise $1.092 billion over ten years, according to a Congressional Budget Office score.

Alaska LNG on shaky ground? China’s largest oil company, Sinopec, signed a deal last week to explore the development of a massive $43 billion natural gas pipeline and LNG export terminal in Alaska. The project would carry natural gas from Alaska’s North Slope to its southern coast, where it would be liquefied and exported. The announcement was one among a flurry of putative deals inked as part of U.S. President Trump visit to China. But despite the hype, it is merely a non-binding vague agreement that lacks details regarding financing, offtake agreements, or timelines. Without those hard contracts, it is highly questionable whether the project moves forward. “This is a typical announcement that comes out of these big summits,” Jason Feer of energy consultancy Poten & Partners, told Reuters. “You really can’t build, or get financing for a big project, unless all those pieces are in place.”

China says “this is NOT a contract.” An agreement signed between three major Chinese entities and Alaska’s state-owned natural gas corporation has added new momentum for the $43 billion-plus Alaska LNG Project and could help speed federal regulatory approvals needed for a Final Investment Decision in 2019, a key target. The agreement is still a framework for further talks but it could link Alaska will a large potential customer for North Slope gas. “This is the first time we’ve had these levels of commitments from customers,” Dave Cruz, AGDC’s board chair, told the Alaska Support Industry Alliance in a briefing last Friday. “We know we can offer a competitive price and we know we are not technically challenged. We just needed a customer,” Cruz said. But Sinopec, the lead Chinese company in the deal, expressed caution. “This is a letter of intent for mutual cooperation, not a contract,” Lu Dapeng, a spokesman for Sinopec, told the New York Times. “We are really positive about this, but it will take time,” he said in remarks to the Times.

Let’s Make a Deal. The Fairbanks Daily News-Miner reports Interior Gas Utility Board Chairman Mike Meeks and recently appointed board member Bob Shefchik will meet this week with Alaska Industrial Development and Export Authority Board Chairman Dana Pruhs and Chief Executive John Springsteen. The Interior Gas Utility seeks to purchase Pentex for $60 million from the Alaska Industrial Development and Export Authority using state grant money. By purchasing Pentex, the utility would acquire Fairbanks Natural Gas, the Titan LNG gas liquefaction plant and a semi-truck hauling operation to bring liquefied natural gas to Fairbanks.

First Reads:

U.S. Justice pledges to prosecute activists who damage pipelines
Reuters, Timothy Gardner, November 10, 2017

Oil prices reach 2-year highs. It’s not enough for Alaska
Alaska Dispatch News, Alex DeMarban, November 12, 2017

Week ahead: Senate panel to consider Arctic drilling bill
The Hill, Devin Henry, November 13, 2017

$43 Billion China-Alaska Energy Deal Looks Shaky
Oil Price, Nick Cunningham, November 12, 2017

What Chinese LNG deal means for Alaska
The Frontiersman, Tim Bradner, November 11, 2017

Interior Gas Utility set to meet with Alaska officials
KTVA, The Associated Press, November 12, 2017

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Headlamp – Could Saudi tensions mean out-of-control oil prices for us?

November 10, 2017 | Posted in : News

From the Washington Examiner’s Daily on Energy:

COULD SAUDI TENSIONS MEAN OUT-OF-CONTROL OIL PRICES FOR US? Oil prices could spike even higher than they already have this week as tensions between Saudi Arabia and Iran increased Friday, prompting analysts to brace for havoc in the oil markets. A growing number of analysts, including some who support President Trump, are predicting higher oil prices in the coming year. The international benchmark for oil prices rose to its highest level in months this week after a Saudi-led purge of its own government officials and major businessmen drove speculation of supply problems from the country with the largest oil reserves in the world. Trouble in Lebanon, with its prime minister resigning suddenly and seeking refuge in the oil kingdom, increased uncertainty in the region because of Lebanon’s role as a safe haven for Iranian-backed Hezbollah. And the Saudis blamed Iran for a missile fired from Yemen to Saudi Arabia. That led to saber rattling between Saudi and Iran on Friday, and speculation began to increase about the possibility of war and what that could mean for oil prices if Saudi crude were suddenly cut off completely. “One out of nine barrels in the world is produced out of Saudi Arabia, so whatever happens in Saudi Arabia is really a revolution or turmoil for the world of oil,” Paolo Scaroni, former CEO of Italian oil giant Eni and vice-chairman of NM Rothschild and Sons, told Bloomberg Television Friday. At the same time, Saudi Arabia is engaged in a protracted plan to push up oil prices in response to the over-supplied market that forced prices to plummet and slashed the budgets of many OPEC countries. Saudi Arabia is leading OPEC and non-OPEC countries in a push to curtail production so that prices rise. “Stripping away the nonsense in Saudi, I think supply and demand are legitimately crossing and we’re headed for higher prices,” said oil executive and Trump supporter Dan Eberhart in an interview with the Washington Examiner. “I think the Saudi purge has thrown a bucket of gas on top of an already raging fire. I think the price is going to move upward.”

Locals at the table for Pebble Project. Next month, the Pebble Partnership plans to file for permits to build a gold and copper mine in the Bristol Bay region. The company says it’s a much smaller one than originally planned, one they think should be more acceptable to the communities in the area. In May, the company formed an Advisory Committee to get feedback on a variety of issues. One of its founding members was one of its loudest critics. However, Kimberly Williams resigned after just a few weeks, after she says she lost her job at Nunamta Aulukestai, an association of village corporations and tribal councils, and under pressure from the Bristol Bay Native Association, where she is a board member. Her replacement is AlexAnna Salmon from Igiugig, a small community just 50 miles from the proposed mine. Igiugig sits at the mouth of Lake Iliamna and the Kvichak River, a very isolated place. AlexAnna considers it her job to protect that “unglu,” or nest in Yup’ik. That’s why she says it was important for her to join the Advisory Committee, especially after she found out there was only one other person on the board from the Bristol Bay area. “Immediately my first thought was we really need locals at the table for this project,” Salmon says. Salmon says she’s simply there to learn, and claims the company doesn’t care what she thinks. “Their science is shaped in a way that they will prove that development and salmon can co-exist,” Salmon says.

Majority vote for ANWR. Alaska Sen. Lisa Murkowski (R) unveiled legislation Wednesday that would, for the first time, open part of the Arctic National Wildlife Refuge (ANWR) for oil and natural gas drilling. The legislation would require only a 51-vote majority in the Senate, instead of the usual 60 votes, because it is written under the auspices of Congress’s 2018 budget resolution The proposal opens a significant new step in the decades-old debate around ANWR drilling, which has energized and mobilized generations of environmentalists while serving as a perennially tempting development opportunity for the oil industry and Alaskans. Murkowski estimates that the drilling on the federally owned land would bring the government at least $1 billion over the next 10 years, thus fulfilling the budget’s requirement for the Senate Energy and Natural Resources Committee, which Murkowski chairs. “Our instruction is a tremendous opportunity both for our committee and our country,” said Murkowski, who has introduced some form of ANWR drilling legislation in each session of Congress since becoming a senator in 2002.

Never cry wolf. You have to forgive Alaskans if the deal announced yesterday between the state and three Chinese firms to advance efforts to get North Slope gas out of the ground feels like just another pipe dream. Countless projects past, touted as a sure thing at one press conference or another, have all fallen apart. So, is the new deal championed by Gov. Bill Walker and the state-owned Alaska Gasline Development Corp. actually going to end with the long-awaited economic boom? The short answer: maybe.

Maria Cantwell’s rendition of “Don’t cry for me Argentina.” In the U.S. Senate, opponents of drilling in the Arctic National Wildlife Refuge are having trouble getting the word out. Sen. Maria Cantwell, D-Wash., on Thursday lamented that the refuge drilling proposal isn’t drawing public outrage like it did more than a decade ago. “Listen, I know it’s a busy news cycle we live in,” Cantwell said at a press conference she called at the Capitol. “But last time this issue captured the public’s attention, and it’s been out of the public’s attention for a long time.” Asked what her strategy is, Cantwell said she hoped the reporters present would write a lot, to let people know Arctic refuge drilling could be tucked into the tax cut plan, a proposal that is grabbing bigger headlines. “We really sincerely hope that we can illuminate for the American people that this choice is being made,” Cantwell said.

Juneau Assembly looking to add public to mining committee. Applications are coming in from members of the public looking to be on the Assembly Mining Committee, and the current members of the committee met Wednesday to better examine candidates. The Mining Committee currently consists of Assembly members Norton Gregory (the chair of the committee), Maria Gladziszewski and Beth Weldon. The committee will add two members of the Planning Commission and two members of the general public. The formation of the committee sprang from a proposal this April to reexamine the current mining ordinance. A group of businessmen suggested that Juneau’s ordinance is unnecessarily duplicative of state and national standards, which is discouraging companies from pursuing mining in the borough.

First Reads:

New Pebble advisory board member joins to ‘protect the nest’
KTVA, Emily Carlson, November 9, 2017

Alaska senator proposes drilling in Arctic refuge
The Hill, Timothy Cama, November 8, 2017

Alaska’s Gas line deal with China explained
KTUU, Austin Baird, November 9, 2017

Arctic drilling foes find public passion has cooled
Alaska Public Media, Liz Ruskin, November 10, 2017

Mining Committee examines applications, possible roles of public members
Juneau Empire, Alex McCarthy, November 10, 2017

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Headlamp – Have the stars aligned for Alaska?

November 9, 2017 | Posted in : News

All China all the time. China’s giant state-owned oil company, Sinopec, and a pair of Chinese financial institutions have signed an agreement to advance Alaska’s liquefied natural gas export project, state officials announced Wednesday. The five-party agreement includes the state of Alaska, its gas pipeline agency — the Alaska Gasline Development Corp. — Sinopec, and the state-owned Bank of China. In an Alaska twist, the final participant is China Investment Corp., a state-owned $800 billion investment account that’s essentially a Chinese version of the Alaska Permanent Fund.

More China. China’s top oil company Sinopec announced earlier today it has agreed to help develop Alaska’s long-awaited $43 billion natural gas pipeline megaproject, according to the U.S. government. Alaska Gasline Development Corp., the state of Alaska, Sinopec, China Investment Corp. and the Bank of China have signed an agreement to advance the pipeline in Alaska. According to initial reports, the investment could be as much as $43 billion. The deal also has the potential to create as many as 12,000 U.S. jobs during construction, reduce the trade deficit between the United States and Asia by $10 billion each year and provide China with cleaner energy, according to the announcement.

Still more China. President Donald Trump can return to the United States claiming to have snagged over $250 billion in deals from his maiden trip to Beijing. Whether those deals live up to the lofty price tag is another question altogether. “This is truly a miracle,” China’s Commerce Minister Zhong Shan said at a briefing in Beijing. The quarter of a trillion dollar haul underscores how Trump is keen to be seen to address a trade deficit with the world’s second-largest economy that he has long railed against and called “shockingly high” on Thursday.

One more China. The headline number is impressive: A quarter-trillion dollars worth of deals from China that President Donald Trump can use to show he’s creating opportunities for U.S. businesses and jobs for his base. The reality, however, is that the roughly 15 agreements unveiled on Thursday are mostly non-binding memorandums of understanding and could take years to materialize — if they do at all. A day earlier, Commerce Secretary Wilbur Ross announced $9 billion of deals, many also MOUs with few details, rather than contracts.

But wait, there’s more. The stars have finally aligned in the long-elusive effort to get Alaska’s massive gas reserves out of the ground, or at least it seems that way right now. Late Wednesday, state officials announced that Chinese firms and the state-run Alaska Gasline Development Corp. (“AGDC”) have inked a joint development agreement to advance the liquefied natural gas project. Presidents Donald Trump and Xi Jinping were in attendance as the State of Alaska, AGDC, Sinopec, China Investment Corp., and Bank of China signed the deal at the Great Hall of the People, a famed building at the edge of Tiananmen Square in Beijing which is used for legislative and ceremonial activities of the Communist Party of China.

Last one…we promise. China’s top state oil major Sinopec, one of the country’s top banks and its sovereign wealth fund have agreed to help develop Alaska’s gas sector as part of U.S. President Donald Trump’s visit, company and government statements said on Thursday. Sinopec, China Investment Corp and the Bank of China will work with the Alaskan government on LNG marketing, financing and China’s role in developing the state’s major liquefied natural gas (LNG) project. Aiming to tap its North Slope gas reserves, the state created Alaska Gasline Development Corp (AGDC) in 2010 to build a gas treatment plant and pipeline network to produce up to 20 million tons of LNG per year for export. The U.S. government said in a statement the deal will involve investment of up to $43 billion, create up to 12,000 U.S. jobs during construction and reduce the trade deficit between the United States and Asia by $10 billion a year.

From Washington Examiner’s Daily on Energy:

TRUMP’S MIDNIGHT ENERGY DEAL WITH CHINA A VICTORY FOR ALASKA: President Trump late Wednesday night oversaw a major deal between Alaska and China for a natural gas export terminal. Chinese banks and energy companies would finance and build the terminal in Alaska to create an energy supply route to China. The agreement was signed in the presence of Trump and Chinese President Xi Jinping on Trump’s visit to the communist country, according to the Alaska Gasline Development Corp., one of the parties to the deal. An economic boom: “This is an agreement that will provide Alaska with an economic boom comparable to the development of the Trans-Alaska Pipeline System in the 1970s,” said Alaska Gov. Bill Walker. Who is involved: the development corporation and the Alaskan government signed the joint liquefied natural gas, or LNG, development agreement with the state-run China Petrochemical Corporation, or Sinopec, CIC Capital Corp., and the Bank of China. China wants ‘stable’ supply from U.S.: Sinopec said its goal is to help create a “stable” route for purchasing LNG from Alaska.

First Reads:

Alaska gas line agency signs agreement with Chinese oil company, financial institutions
Alaska Dispatch News, Nathaniel Herz & Alex DeMarban, November 8, 2017

China backs landmark LNG pipeline deal with Alaska
Fairbanks Daily News-Miner, Erin Granger, November 8, 2017

Trump’s $250 billion China ‘miracle’ adds gloss to ‘off-kilter’ trade
Reuters, Matthew Miller and Adam Jourdan, November 8, 2017

Trump’s $250 Billion China Haul Features Little of Substance
Bloomberg, Nick Wadhams, Peter Martin, and Keith Zhai, November 8, 2017

Alaska-China gas deal to be finalized over next year
KTUU, Austin Baird and Kortnie Horazdovsky, November 8, 2017

UPDATE 2-Chinese companies agree to develop LNG in Alaska as Trump visits
Reuters, Reuters Staff, November 9, 2017

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Headlamp – Will Parish, perish? “Costly foray into renewable energy.”

November 8, 2017 | Posted in : News

Explore today for tomorrow’s energy security. The U.S., the world’s largest consumer of oil, will use more than 7 billion barrels of oil this year – right around 20 million barrels a day. Since we produce less than 15 million barrels each day domestically, we’re forced to import the rest from countries like Canada and Saudi Arabia. Oil imports cost us $144 billion last year, or $395 million every day, and are the fourth largest contributor to our national debt. Studies suggest that the U.S. will consume oil for the next few decades in ever increasing amounts, resulting in an even greater drain on our economy. Every barrel of oil produced at home replaces one that needs to be bought from abroad, decreasing our debt and the outflow of money from our treasury. The Arctic National Wildlife Refuge (ANWR) is a refuge on the northeast tip of Alaska’s Arctic Slope. The 1002 area of ANWR, a 1.5-million acre coastal plain in the 19-million acre refuge, was set aside by Congress in 1980 specifically for its potential for oil and gas development. This area is not designated as wilderness, and today, it is the largest unexplored, potentially productive onshore basin on the continent.

Missile Defense for $200 million please. President Donald Trump has asked Congress for an additional $5.9 billion dollars for the Department of Defense, $4 billion of which would support missile defense operations to counter the threat from North Korea. The request, dated Monday, specifically asks lawmakers to authorize $200 million for construction of an additional ground-based interceptor field at Fort Greely in Interior Alaska. It would be the fourth missile field at Fort Greely. Sen. Dan Sullivan, who is a member of the Senate Armed Services Committee, and the conference committee for the National Defense Authorization Act, says the request is good for the country’s national defense, and for Alaska’s economy. “That kind of construction work is going to positively impact Alaska contractors, union workers, and that’s obviously very important to our state right now, particularly as we’re in a recession,” Sullivan told Channel 2 by phone on Tuesday. President Trump’s budget request also asks for $839 million for combined missile detection, disruption/defeat, and defense. Alaska also has two listening stations that are part of the Missile Defense Agency, at Shemya on the Aleutian chain, and Clear Air Station, also in Interior Alaska.

Will Parish, perish? Juneau’s deputy mayor has his sights on state office. On Tuesday, Deputy Mayor Jerry Nankervis filed a letter of intent with the Alaska Public Offices Commission to run in the Aug. 21, 2018 Republican Primary Election for the Mendenhall Valley’s District 34 House of Representatives seat. If successful, he will face current Rep. Justin Parish, D-Juneau, in the Nov. 6, 2018 general election. Parish is currently in his first term. Nankervis, a retired Juneau Police Department captain, has served on the City and Borough of Juneau Assembly since 2012 and has served as deputy mayor since October 2016. In a release, Nankervis listed his main priorities as keeping Juneau affordable, keeping the capital in Juneau and providing more opportunities for Juneau’s working families and young people.

From the Senate Majority Press: ICYMI: Last week, Alaskan leaders flew thousands of miles to Washington, DC to make a strong case for why responsible energy development should be allowed in a small portion of Alaska’s non-wilderness 1002 Area. One of those leaders was Aaron Schutt, the president and chief executive officer of Doyon and a tribal member of the Native Village of Tanana. Mr. Schutt testified about the remarkable evolution of technology on the North Slope and how it has strengthened environmental protections. Thanks to extended reach drilling, innovative completion techniques, and the use of ice roads and pads, the surface footprint of Arctic development has never been smaller—while our ability to access underground resources has never been greater. A few notable excerpts from Mr. Schutt’s written testimony: “Directional drilling in the 1970s permitted oil companies to produce oil from only about 16 square miles surrounding a single well pad. Today’s drilling rigs can easily drill wells from a single pad that can access over 100 square miles. That means that pads can be spaced up to ten miles apart and the habitat between pads can be protected with little or no surface disturbance. “Rig 26 [is designed] to drill up to 35,000 feet horizontally. That capability will allow the rig to drill wells covering 125 square miles from a single surface well pad. “Today’s well pads are now 70 to 88 percent smaller in acreage than three decades ago…the number of pads needed to access a field has fallen by up to 70 percent.” Did you miss Doyon’s President and CEO Aaron Schutt testifying in D.C. last week? Here’s the link to his testimony.

“Costly foray into renewable energy.” Two decades ago, BP set out to transcend oil, adopting a sunburst logo to convey its plans to pour $8 billion over a decade into renewable technologies, even promising to power its gas stations with the sun. That transformation – marketed as “Beyond Petroleum” – led to manufacturing solar panels in Australia, Spain and the United States and erecting wind farms in the United States and the Netherlands. Today, BP (BP.L) might be more aptly branded “Back to Petroleum” after exiting or scaling back its renewable energy investments. Lower-cost Chinese components upended its solar panel business, which the firm shed in 2011. A year later, BP tried to sell its U.S. wind power business but couldn’t get a buyer. “We made very big bets in the past,” BP Chief Executive Bob Dudley told Reuters in an interview. “A lot of those didn’t work. We’re not sure yet what will be commercially acceptable.” The costly lesson of the biggest foray yet by an oil major into renewable energy was not lost on rival firms.

First Reads:

Peak oil? Majors aren’t buying into the threat from renewables
Reuters, Ernest Scheyder and Ron Bousso, November 7, 2017

Woolston: America’s security and economy depend on ANWR
Durango Herald, Kristina Woolston, November 8, 2017

Trump requests $200M for new missile interceptor field in Alaska
KTUU, Kortnie Horazdovsky, November 7, 2017

Juneau deputy mayor announces campaign for House seat
Juneau Empire, Alex McCarthy, November 7, 2017

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Special Edition Headlamp -For Inupiat, responsible development is key to their economic self-determination

November 7, 2017 | Posted in : News

From the Senate Energy Committee:

ICYMI: We wanted to make sure you saw the excellent testimony that Richard Glenn delivered last week before the Senate Energy and Natural Resources Committee, as he made the case for limited development in a small portion of the non-wilderness 1002 Area.

 

Mr. Glenn is originally from Barrow, Alaska, which is more than 300 miles north of the Arctic Circle. He is the Executive Vice President for Lands and Natural Resources at the Arctic Slope Regional Corporation, which is owned by 13,000 Iñupiat shareholders from villages such as Point Hope, Point Lay, Wainwright, Atqasuk, Utqiaġvik, Nuiqsut, Kaktovik, and Anaktuvuk Pass. Kaktovik, we would note, is the only village located within the 1002 Area.

 

As Mr. Glenn explained to the committee, the Iñupiat have partnered with industry to create jobs and provide resources to meet their communities’ needs. Revenues from responsible development help put food on the table for families and facilitate basic infrastructure. Mr. Glenn also highlighted that while development has helped them enjoy a more modern lifestyle, it has not been at the expense of the Iñupiat culture and heritage, or local wildlife or the environment.

 

For many Iñupiat – who actually live on the North Slope – responsible development is central to their right to economic self-determination. As Mr. Glenn said last week, “The only indigenous people that should be listened to the loudest are the folks from Kaktovik. And today’s hearing, to me, shows that there is a lack of attention paid to them. Listen to what they’re saying. They need an economy. They need development in their area. They want to have the freedom to do what the rest of the country seemingly takes for granted. We’re talking about reliable power, and water, and schools, and the ability to use sanitation that keeps their kids healthy.”

 

To hear all of Mr. Glenn’s testimony, please click below.

Mr. Richard Glenn’s Testimony

 

 

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Headlamp – Ambler ambles along; Mack promotes NPR-A.

November 7, 2017 | Posted in : News

EIS for Ambler. The Bureau of Land Management is taking the lead on an environmental review of the state proposed Ambler Road. The controversial project would punch an industrial access road from the Dalton Highway west to the Ambler Mining district. The proposed 211-mile road already faces substantial opposition from many area residents. BLM Central Yukon Field Office manager Tim Lamar said his agency is charged with looking at a full range of issues in drafting an environmental impact statement. ”That can range from what you think of natural resource issues to economic and socioeconomic benefits or concerns,” Lamar said. The Alaska Industrial Development and Export Authority is shepherding the Ambler Road project for the state, has applied for a right away to cross a mix of lands, prompting the EIS review. Lamar said it covers a mix of lands, including Gates of the Arctic National Park and Preserve.

Commissioner Mack wants to plant Alaska’s trees. We couldn’t agree more. In 1923, President Warren Harding set aside 23 million acres in the middle of the U.S. Arctic as a petroleum reserve. The National Petroleum Reserve-Alaska, or NPR-A, is magnificent and its oil resource potential is world class. In 2002, the U.S. Geological Survey estimated 10 billion barrels of undiscovered oil in the reserve. While that number was downgraded to 900 million barrels in 2010, exciting new discoveries at the Nashik and Willow prospects indicate the 2002 estimate was likely more accurate, and might even be too conservative. Alaskans know better than most that we are vying with other nations for control of the Arctic. To win the race for control our top priority should be developing infrastructure in the region. Doing so will protect and strengthen Arctic communities, increase commerce for Alaskans and our country, and provide a platform for our nation to face challenges and even threats from other countries attempting to infringe on our waters.

Hamilton comes on board at PLP. The Pebble Partnership announced today that long time Alaskan and retired Major General Mark Hamilton will join the project as Executive Vice President of External Affairs. Hamilton is also President Emeritus of the University of Alaska. “Mark Hamilton is among Alaska’s best known and most highly respected residents, in large part for his tremendous accomplishments and service to the state over 12 years as President of the University of Alaska,” said Pebble Partnership CEO Tom Collier. “We fully expect Mark’s vision, his leadership and his credibility to materially advance our efforts to re-position the Pebble Project, to ensure it provides meaningful and enduring benefits to the people of Bristol Bay and Alaska, and to help create the social and political conditions necessary to permit this project in the years ahead.” Collier said Hamilton will begin work immediately this fall, and expects to connect with political, business, community and Alaska Native leaders throughout the state to better understand their views and consider their advice as the Pebble Project advances into permitting.

A bust with no boom? Congratulations Houston, another oil bust has ended. Just don’t count on another boom. Oil markets have finally stabilized at prices where companies can make money. U.S. crude inventory dropped 2.4 million barrels last week to 454.9 million barrels, marking the fifth decline in six weeks. Gasoline stocks dropped 4 million barrels, while diesel and other distillates dropped 400,000 barrels. The Brent oil futures market, where oil companies and speculators bet on international oil prices, is signaling that oil supply is tightening. The West Texas Intermediate futures market, which prices U.S. oil, is on the verge of flipping too as stockpiles revert to five-year averages.

From the Washington Examiner’s Daily on Energy:

SYRIA JOINS PARIS CLIMATE PACT, LEAVING U.S. AS LONE HOLDOUT: Syria announced Tuesday that it would join the Paris climate change agreement, leaving the United States as the only country opposed to the deal after President Trump’s June 1 decision to withdraw from the accord. “There has been no change in the United States position on the Paris agreement,” White House spokeswoman Lindsay Walters said in a statement to the Washington Examiner. “As the president previously stated, the United States is withdrawing unless we can re-enter on terms that are more favorable for our country.” The U.S. and Syria were the only countries not parties to the agreement after Nicaragua joined the Paris deal last month. Syria made the announcement at the COP23 United Nations climate change talks in Bonn, Germany, which began Monday and end Nov. 17.

“…fighting like the third monkey on the gangway to Noah’s Ark.” Suppose you were a deer staring blankly into the blazing headlights of an oncoming, speeding truck. And suppose you were a member of the Alaska Legislature. But, with a tip of the hat to Mark Twain, I repeat myself. The state Department of Revenue guys analyzed Gov. Bill Walker’s proposed payroll tax — read income tax or pay cut, your pick — and concluded it would cost the state $10 million and require the hiring of 40 new bureaucrats when fully implemented in 2020. If adopted, and it ain’t likely with next year’s election looming, the 1.5 percent levy would take effect Jan. 1, 2019. It would have a maximum cap equal to two times the Permanent Fund dividend distributed in the previous calendar year. Good grief. It would affect every worker and those who are self-employed.

First Reads:

BLM is moving forward on proposed Ambler Road project
Alaska Public Media, Dan Broses, November 6, 2017

OPINION: NPR-A promises wealth of oil, strong Arctic presence
The Arctic Sounder, Andy Mack, November 3, 2017

Oil bust may have ended, but a boom isn’t in sight
The Houston Chronicle, Chris Tomlinson, November 6, 2017

OPINION: Earnings reserve of Permanent Fund can cover government and dividends
Alaska Dispatch News, Paul Jenkins, November 5, 2017

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