AGDC Management and Operational Updates
At it’s June 20th meeting, the AGDC board heard operational, technical and regulatory updates.
- First third-party financial participation in Alaska LNG in 3 years. (BP and ExxonMobil)
- Draft Environmental Impact Statement (DEIS) anticipated June 28th
- AGDC underspending budget by 9% YTD
- $5m reduction in FY 19 contracted commitments
- 90-day public comment period July-September 2019
- FERC public meetings around state
- Final Environmental Impact Statement – March 2020
- Issuance of FERC Final Order – June 4, 2020
Our Take: Thumbs up to Governor Dunleavy for getting the project back-on-track with the private sector. The immediate reductions in spending, the focus on a commercially viable project and the commitment by the private sector to spend their money to get through the FERC process are great accomplishments.
EU leaders fail to agree on 2050 climate goal
Samuel Petrequin & Raf Casert, Associated Press, June 21, 2019
European Union leaders failed Thursday to back a plan to make the bloc’s economy carbon neutral by 2050 in spite of promises to protesters across the continent to fight harder against climate change. Ahead of a U.N. meeting in the fall, the proposal was relegated to a non-binding footnote in the final statement of Thursday’s summit of EU leaders in Brussels. “For a large majority of Member States, climate neutrality must be achieved by 2050,” the footnote read. However, for the change in approach to become an official target, all 28 EU countries need to back the change. The non-decision showed the rift between the western member states and the eastern nations on climate change. According to French president Emmanuel Macron and several other diplomatic sources, 24 countries including Britain, France and Germany supported the initiative, but were held back by Poland and three other nations which heavily depend on a fossil-fuel economy.
The Bureau of Land Management (BLM) Alaska State Office is issuing a call for nominations and comments on all available unleased tracts for the upcoming National Petroleum Reserve—Alaska (NPR-A) 2019 Oil and Gas Lease Sale.
Craig Medred, June 20, 2019
Inadvertent though Pebble’s role might be, the hugely controversial, proposed copper mine near Lake Iliamna clearly deserves some credit for inspiring at least a small effort to pick up some of the most common litter in Bristol Bay. Nakek fishermen Nels Ure last week told Alaska Public Media he has collected dozens of styrofoam gillnet floats, or what the story called “corks” in deference to what kept the nets afloat, since seeing a social media post about how other fishermen are using the floats to send anti-Pebble messages to Sen. Lisa Murkowski, R-Alaska, in Washington, D.C. “The corks are everywhere,’ Ure told APM reporter Liz Ruskin. ‘I mean, you can find old corks on the beach, in the grass, and then in these boatyards.’”
Exploration continues for mine near Haines
Alex McCarthy, Juneau Empire, June 20, 2019
After a recent court decision went in favor of those pursuing a mine in the Chilkat Valley, the company looking to build the mine is continuing to explore the area. For decades, the prospect of a mine in the valley near Haines has been in the works. Constantine Metal Resources, took over the claim in 2006 and has begun exploration in the area. The mine, referred to as the Palmer Project, is expected to produce a copper concentrate, a zinc concentrate, a little bit of gold and silver, and barite, Vice President, Community and External Affairs Liz Cornejo said in a recent interview at the Empire.
Big Oil looks to CCS, but will it really help the climate?
Mike Lee and Jenny Mandel, Energywire, Wednesday, June 19, 2019
Occidental Petroleum Corp.’s latest endeavor is about as far from traditional oil investments as you can get — a high-tech firm founded by a Harvard University professor, backed by a Silicon Valley billionaire and housed in a converted warehouse in a Canadian logging town. Oxy signed a deal earlier this year with Carbon Engineering Ltd., based in Squamish, British Columbia, to design a plant capable of pulling 500,000 tons of carbon dioxide annually from the atmosphere. It’s one of several that Oxy has signed or pursued with high-tech companies that aim to pull CO2 from the air or from industrial emissions. The company is also the first to announce initiatives tied to expanded federal tax credits for carbon storage, including the world’s largest planned air capture plant in the Permian Basin.
Coal comeback? Trump plan would breathe new life into aging power plants
Ledyard King, USA Today, June 19, 2019
Aging coal-fired power plants would get a new lease on life under the industry-friendly proposal known as the Affordable Clean Energy (ACE) Rule, under the initial rule unveiled in August. Presented as a change to the decades-old Clean Air Act, the Trump proposal would replace the Clean Power Plan, former President Barack Obama’s signature plan to confront climate change. That plan never took effect after the Supreme Court prevented its implementation in 2015. Environmental Protection Agency Administrator Andrew Wheeler is scheduled to unveil the final rule of the Trump administration during a news conference Wednesday morning.
Rocket hits ExxonMobil, other oil firms in Iraq
Reuters, NBC News, June 18, 2019
A rocket landed at a residential and operations headquarters of several global major oil companies, including U.S. giant ExxonMobil, near Iraq’s southern city of Basra early on Wednesday, wounding three Iraqi workers, police said. There was no immediate claim of responsibility. It came after two separate attacks in as many days on bases housing U.S. military personnel in Iraq, as tension increases between the United States and Iran.
With an on-the-ground seismic survey delayed, a new plan emerges to study Arctic refuge oil potential from the sky
Yereth Rosen, ArcticToday, June 14, 2019
CGG Canada Services Inc., a unit of Paris-based CGG, has informed the U.S. Department of the Interior of its intent to fly over the refuge’s 1.6 million-acre coastal plain to collect geophysical data in the area where the Trump administration is planning a lease sale by year’s end.
CGG uses gravity gradiometry technology, which measures minute changes of surface gravitational qualities to use as clues to subsurface structures.
The company may proceed with its plans without getting any federal permits, Interior officials said.
“DOI does not have the authority to require a permit for airborne geophysical data collection that have no ground component on federal lands,” Molly Block, Interior’s press secretary, said in an email.
Our take: Leave it to the environmental extremists to find something wrong with every plan, even those that disturb the area even less: ‘a coalition of environmental groups criticized the plan, saying the “noisy, low-altitude, high-density aerial surveys” would likely disrupt seals and polar bears…The company should reconsider the whole plan, [they] said.’ Shaking our heads.
Crude prices finally see relief with inventories decline
Jordan Blum, Houston Chronicle, June 19, 2019
Crude inventories dipped by 3.1 million barrels while gasoline stockpiles fell by 1.7 million barrels. U.S. oil output fell to 12.2 million barrels a day, down from an estimated record high of 12.4 million barrels daily set in late May. Crude exports are also near a record high of more than 3.4 million barrels per day. After flirting with the danger zone threshold of $50 per barrel, the U.S. oil benchmark jumped back above $54 a barrel Wednesday morning.
ConocoPhillips picks up another oil prospect west of Prudhoe Bay
Elizabeth Harball, KTOO, June 17, 2019
ConocoPhillips today announced it intends to buy 21,000 acres from Caelus Natural Resources, which includes the Nuna oil discovery. State documents show Nuna previously was estimated to contain between 75 million and 100 million barrels of oil. But ConocoPhillips said it will spend the next few years doing its own appraisal of the field before it decides to move forward with the project.
Our take: Cheers to Conoco Phillips! We look forward to the results of their appraisal and study of the newly acquired discovery.
Trump’s Tariffs Disrupt USMCA And The U.S. Oil & Gas Boom
Jude Clemente, Forbes, June 16, 2019
Bluntly put then, OPEC and Russia are benefitting from unrealistic Western environmental groups that seek to block our own domestic production and infrastructure build-out for oil and gas. They are doing the bidding of our adversaries. We simply cannot afford to listen to those who ignore the reality that oil, for instance, is the world’s most vital source of energy, has no large-scale substitute, and has ever-growing demand. In other words, any policy that blocks U.S. oil and gas production and exports is ultimately helping the other suppliers that know global demand faces a single direction: up.
If we don’t get our act together, we will dangerously be handing the market to OPEC and Russia.
Our take: We often hear the same song being sung in Alaska. Create robust regulations to keep our environment safe, but burdensome overregulation or pages of policy do little other than slow production and negatively impact our economy.
U.S. shale oil output to rise to record 8.52 million barrels per day in July: EIA
Devika Krishna Kumar, Scott DiSavino, Leslie Adler and Marguerita Choy, Reuters, June 17, 2019
U.S. oil output from seven major shale formations is expected to rise by about 70,000 barrels per day (bpd) in July to a record 8.52 million bpd, the U.S. Energy Information Administration said in its monthly drilling productivity report on Monday. However, the EIA has revised lower its total U.S. crude oil production growth forecast. It said last week in a monthly report that output will rise 1.36 million bpd to 12.32 million bpd in 2019, 140,000 bpd less than previously forecast. That will top the current all-time high of 10.96 million bpd set in 2018.
From the Daily on Energy:
THE FUTURE OF THE PARIS CLIMATE DEAL ON THE TABLE AT BONN: Energy companies and researchers, as well as climate activists, are arguing over the direction of the Paris climate agreement on Tuesday as the United Nations meets in Bonn, Germany, to place the finishing touches on the climate deal’s “rulebook.”
A new report from renewable advocates, released Tuesday morning to coincide with the summit, concluded that the world isn’t doing enough to stop the use of fossil fuels and switch to renewable energy.
REN21’s Renewables 2019 Global Status Report said the problem is that renewables aren’t penetrating the market fast enough outside of the electricity sector. Solar and wind have been slow to displace fossil fuels for heating, cooling and transportation, and in fact have seen significant drops in these areas.
The report blames the “lack of ambitious and sustained policies” for the lack of progress, calling for a global phaseout of all subsidies for fossil fuels.
The Paris agreement calls for countries to work to slow the Earth’s temperature from warming 2 degrees by the middle of the century. But more recently, U.N. climate scientists have called for more aggressive actions to stop the Earth from warming 1.5 degrees beginning in the next decade.
A place for fossil fuels: But others believe renewables are only part of the solution to hitting the U.N. targets. Energy officials gathering at a conference in Norway on Tuesday say meeting the goals of the deal will not come from completely curbing the use of fossil fuels, but rather from upping the world’s financial commitments to so-called carbon capture technologies.
These technologies are seen as the only way to keep burning coal and other fossil fuels in a carbon-constrained world. Climate advocates rebut the idea that carbon capture is a real solution.
“Europe needs to reach deep into their wallets to make the Paris Agreement work,” said Nils Røkke, chairman of the Board of the European Energy Research Alliance, who will be addressing the conference. He said that he believes research on carbon capture is “key to a low-carbon Europe.”
Craig Medred, June 17, 2019
A Pew Research survey out at the start of the month found the citizenry ranking “made-up news” one of the country’s greatest problems, and they expect journalists to fix it.
“Indeed, more Americans view made-up news as a very big problem for the country than identify terrorism, illegal immigration, racism and sexism that way,” Pew reported.
Our take: Medred really hits the nail on the head when he outlines the “Publish or die” mentality—possibly the same mentality that allows pictures of mountain estuaries to accompany articles on Pebble Mine: ‘They live on “traffic,” the churn of viewers on the web. Immediacy is viewed as the currency of the day. The goal isn’t really to cover anything; it’s to get as many different things as possible into play as soon as possible. Fact checking? Fact checking? Who has time for fact checking?’
Oil’s Slide Highlights Global-Growth Fears
Amrith Ramkumar and Ira Iosebashvili, The Wall Street Journal, June 17, 2019
Brent crude, the global price benchmark, posted its third weekly drop in four weeks even after the tanker attacks. Brent is 17% below its April peak and down about the same amount in the past year. U.S. crude oil is in a bear market, down more than 20% since late April.
BP rig zigzags North Sea in chase with Greenpeace ship
Ron Bousso, Reuters, June 17, 2019
LONDON (Reuters) – A BP drilling rig heading to an oilfield in the British North Sea has been forced to turn away twice over the past two days as a Greenpeace vessel protesting climate change tries to hamper its progress. The high-sea chase is the latest step in Greenpeace’s nine-day effort to stop the 40,000 tonne Paul Loyd JNR rig from reaching the Vorlich oilfield to start its drilling campaign.
Pebble Mine (Alaska) is the largest undeveloped gold and copper mine in the world. Northern Dynasty Minerals, Ltd. is the sole owner of the Pebble Mine, which is located 90 miles away from Bristol Bay. Bristol Bay is a prime fishing spot for salmon that is shipped around the world. The Natural Resources Defense Council (NRDC) for years has been waging war against Pebble Mine, through false information and scare tactics. Tom Collier (a democrat) who once managed environmental policy for former President Bill Clinton and former Vice President Al Gore, has now become the face of the Pebble Mine project as the company’s CEO. It is important to note that Collier considers himself an environmentalist.
AKHEADLAMP is a big fan of Ed King – even when we disagree on an issue. This piece on the PFD takes a few minutes to read – but is well worth it! As the legislators continue to struggle with the issue – Mr. King provides a good description of the differing opinions in a manner that shows Alaskans can disagree on this issue and still be friends. Follow the link to read the full blog post.
The 3 Opposing Views of the PFD
Ed King, King Economics Group, June 13, 2019
The legislature is currently debating the future of Alaska’s Permanent Fund Dividend (PFD). The operating budget has passed, without a PFD. A separate appropriation bill for the PFD has failed on the Senate floor. The House minority tried to stuff the PFD into the capital budget but didn’t have the votes. And now, a “PFD working group” has been created, which went to work immediately, and is apparently preparing a history lesson for Alaskans.
I’m looking forward to that report. It is tempting to think that this issue is new, having arose from the ashes of the oil price crash in 2014. But the same debate we are having today has been had before. For most of our history, the opposing voices were muted by the steady flow of oil money gushing into the state coffers. But, in two distinct periods, this same debate raged with significant public interest. First at the inception of the Permanent Fund; then, around the turn of the century when oil prices bottomed out.
The narratives being voiced today are not new. The arguments have all been made before. And from what I have heard over the years, and read about in history books, I think I can tease out the root cause of the disagreement. I think that’s important. Because, only by seeing an issue from all angles can we draw a complete picture. And, as the issue is being debated and decisions about the program are being proposed, I hope that we can appreciate that those conclusions stem from different root assumptions.
I was going to wait until I was finished with my time with the state (I have two weeks left) to post this. But the debate is too timely right now and the PFD working group appears to be attached to a rocket. So, I’m going out on a limb and doing it today. Just know that I’m not writing this as a public official. This is not an opinion piece. It is not intended to be persuasive. I am merely attempting to help all of us expand our point of view.
That said, I do have personal opinions on this matter. As such, I am sure that they will drip between the lines as I write. For that, I apologize in advance and assure you that I attempted to remove as much as I could.
So, if you’ve already made up your mind about this topic, I welcome your criticism in the comments and a share on social media about how wrong I am. But, if you’re genuinely interested in gathering information before generating an opinion, I hope this (and the future posts on the topic) helps.
Unleash Alaskan Energy
Mike Sommers, API Blog, June 10, 2019
The United States leads the world in natural gas and oil production, but that doesn’t mean we can get complacent. Global consumption has reached 100 million barrels per day — more than double what it was 50 years ago. And demand is expected to keep growing, as opportunities expand for millions living in poverty around the globe. Even under optimistic scenarios for renewable energy, U.S. and international projections agree that three-fourths of demand will be supplied by fossil fuels , with more than half coming from natural gas and oil, for decades to come. Fortunately, from the Permian Basin in Texas and New Mexico to Alaska’s Prudhoe Bay, the U.S. has not just the resources but an industry with the technology and skill to develop them safely. Take for example the North Slope of Alaska, an area poised to re-emerge as a “super basin” following discoveries like Willow, Pikka and Liberty. The resurgence has been great news for the Trans-Alaska Pipeline System, or TAPS — backbone of Alaska energy and critical pillar of U.S. energy security. TAPS throughput is ticking up, and new finds in National Petroleum Reserve Alaska, or NPR-A, could singlehandedly increase its volume by 18 percent.
Our Take: This can’t be said enough “The long-held assumption that we can’t increase energy production, grow the economy and decrease emissions – all at the same time – no longer applies. It doesn’t apply in Alaska either…where the energy legacy is one of prolific production and the highest standards of environmental stewardship.”
Australia risks status as a natural gas superpower
Jayme Smith, Financial Times, June 3, 2019
As a $200bn wave of new global investment gets under way, the energy industry is warning that chaotic policymaking and overseas competition are threatening to cut short Australia’s tenure as the world’s biggest exporter of liquefied natural gas. The energy companies say the government has failed to deliver coherent climate and energy policies, appears willing to intervene for the benefit of local industry over LNG exporters and has been unable to approve more gas exploration. “Australia’s policies are somewhat uncertain with calls for government intervention — that raises concerns,” Ryan Lance, ConocoPhillips’ chief executive, said at Australia’s largest oil and gas conference last week. “We are seeking clarity and stability to provide confidence around the viability of Australian investments.”
Conservative groups tell Congress: ‘We oppose any carbon tax’
Naomi Jagoda, The Hill, June 10, 2019
A group of 75 conservative organizations and leaders on Monday sent a letter to Congress expressing their opposition to a carbon tax, pushing back at an idea that has received support from politicians and policy experts on both sides of the aisle as a way to combat climate change. “We oppose any carbon tax,” states the letter, which was signed by Americans for Tax Reform President Grover Norquist, Club for Growth President David McIntosh and FreedomWorks President Adam Brandon, among others.
Their Take: “A carbon tax raises the cost of heating your home in the winter and cooling your home in the summer,” they added. “It raises the cost of filling your car. A carbon tax increases the cost of everything Americans buy and lowers Americans’ effective take home pay. A carbon tax increases the power, cost, and intrusiveness of the government in our lives.”
From today’s Washington Examiner, Daily on Energy:
DEMOCRATS PREPARE TO FIGHT TRUMP EPA’S EFFORT TO FORCE PIPELINES ON STATES: Democrats led by Tom Carper are clamoring for a fight over President Trump’s most recent executive order hobbling states’ powers to block natural gas pipelines and other energy infrastructure using Clean Water Act permits.
The Environmental Protection Agency stoked Carper’s rage on Friday by issuing guidance to federal agencies on implementing Trump’s April order to rein in states’ authority to block permit approvals.
Carper, the top Democrat from Delaware on the Environmental and Public Works Committee, said in a statement Friday evening that he is convinced EPA and the president are violating “congressional intent.”
“The president’s executive order and EPA’s new guidance are indefensible and defy the clear intention of Congress,” Carper stated.
GOP ready to rein in state abuses: Nevertheless, Republicans see EPA’s guidance as blocking states from abusing their authority under the law.
Sen. Lisa Murkowski, R-Alaska, chairwoman of the Energy and Natural Resources Committee, said the EPA guidance balances states’ authority over water resources while promoting responsible development of energy resources.
The guidance will also “reduce abuse” of Clean Water Act permits to block infrastructure needed to provide reliable and affordable energy, Murkowski added.
Murkowski’s office explained that the guidance is a preliminary action, and that EPA will soon issue new regulations updating how section 401 is implemented, noting that the law governing the permit authority has not been revised since 1971.
Trump’s order directs EPA to issue the new rules 120 days after the guidance is published.
The Republican chairman of Carper’s committee, Sen. John Barrasso of Wyoming, said the EPA reforms are needed now more than ever.
“We need reform, and we need it fast,” he said, accusing states like Washington, New York, and New Jersey of preventing the U.S. from exporting natural gas and other energy resources.
Oil and natural gas groups welcomed the EPA guidance on Friday, while environmental groups rebuked it as a step in the wrong direction for states’ rights and climate change.
Alaska sees job gains for 7 months straight after 3 years of losses, report says
Annie Zak, Anchorage Daily News, June 6, 2019
A streak of job gains in Alaska could signal the end of the state’s recession, according to a new report released this week. The state recently saw year-over-year job growth for seven months straight, starting in October, the Alaska Department of Labor and Workforce Development said in its monthly gauge of Alaska’s economy. That growth was small — in most of those months it was less than a 0.5% gain from the same month the previous year — but it is an encouraging sign after three years of job losses. Previous state data showed two consecutive months of job gains in January and February of this year. The state labor department revises job numbers after releasing initial estimates. After revisions to 2018 figures, the labor department found the state actually registered year-over-year job gains for seven months in a row after 36 months of losing jobs.
2019’s Best & Worst States for Jobs
Adam McCann, Wallet Hub, May 30, 2019
Spoiler Alert: Alaska’s job market rank is 50th. The news about 7 months of job gains is encouraging!
From the Washington Examiner, Daily on Energy:
MANCHIN REFUSES TO ENDORSE SENATE PARIS DEAL BILL: Sen. Joe Manchin refused to join the rest of the Democratic caucus in co-sponsoring a bill introduced Thursday barring Trump from using federal funds to withdraw the U.S. from the Paris Climate Accord.
Manchin, D-W.V., the coal state top Democrat of the Energy and Natural Resources Committee, said he held out on backing the bill because he “never believed the Paris Agreement created a level playing field amongst nations.”
“I believe climate change is an urgent threat we must address,” Manchin said in a statement explaining his decision. “That is why I am focused on bipartisan proposals that allow for U.S. leadership on climate science and technology.”
The Senate legislation is a companion to a bill passed by the Democratically controlled House last month. All House Democrats backed that bill. It likely won’t advance in the GOP-led Senate.
D-Day 75th Anniversary
National Mall and Memorial Parks, World War II Memorial
The beaches are now quiet in Normandy, France but 75 years ago soldiers heard the shriek of artillery, the crack of gunfire, and the cries of the wounded. On that day, June 6, 1944, “D-Day”, the outcome of World War II hung in the balance. The seemingly invincible Nazis had occupied Europe for the past five years. When the day closed, the “beginning of the end,” as British Prime Minister Winston Churchill described the invasion, had started.