Top Interior official who pushed to expand drilling in Alaska to join oil company there
Juliet Eilperin & Steve Mufson, The Washington Post, September 4, 2019
Last summer, Scott Pruitt left his job heading the Environmental Protection Agency and within a few months had started consulting for coal magnate Joseph W. Craft III. Three weeks after leaving the Interior Department, energy counselor Vincent DeVito joined Cox Oil Offshore, which operates in the Gulf of Mexico, as its executive vice president and general counsel. Now, Joe Balash — who oversaw oil and gas drilling on federal lands before resigning from Interior on Friday — is joining a foreign oil company that is expanding operations on Alaska’s North Slope. Balash, who had served as the Interior Department’s assistant secretary for land and minerals management for nearly two years, confirmed in a phone interview Tuesday night that he will begin working for the Papua New Guinea-based Oil Search, which is developing one of Alaska’s largest oil prospects in years.
Our Take: Great news for Oil Search and for Alaska!
California raises the caution flag on ‘green jobs’
Debra Kahn, Politico, September 4, 2019
California’s mixed record of using public investments and environmental mandates to create “green jobs” raises serious questions about the promises of some Democratic presidential candidates to use economy-transforming investments in environmentally friendly technologies to put millions of people to work. Many of the initiatives touted by the candidates in their environmental plans are already in place in California, and some of them having been promoted as important engines of job creation. But California stopped counting green jobs in 2013, struggling to separate truly new jobs from existing employment growth.
Our Take: Markets, not mandates. Be wary of promises made…
US blacklists oil shipping network allegedly run by Iran Revolutionary Guards
Reuters, September 4, 2019
- The sprawling network of firms, ships and individuals allegedly directed by Iran’s Islamic Revolutionary Guard Corps supplied Syria with oil worth tens of millions of dollars in a breach of U.S. sanctions.
- The Treasury Department’s Office of Foreign Assets Control action froze any assets in the United States of the designated entities.
- The department said that the Qods Force and Hezbollah profited financially by supplying Iranian oil and petroleum products that this spring alone were worth more than $750 million.
Hilcorp sale will cost state $30 million annually in lost revenue, former tax officials say
James Brooks, Anchorage Daily News, August 28, 2019
Two former directors of Alaska’s tax division and a former state legislator say a gap in Alaska’s corporate income tax system could cost the state millions in lost revenue once a new multibillion-dollar deal between Hilcorp and BP is finalized. The loss could be more than $30 million per year, said Ken Alper, director of the state’s tax division under former Gov. Bill Walker. Alper’s estimate of a $30 million annual loss is based upon information released Tuesday by BP, which said it currently produces 75,000 barrels of oil per day, or about 15% of North Slope production. The share of the state’s corporate income tax levied on oil producers is forecast by the Alaska Department of Revenue to generate $210 million in the fiscal year that started July 1. Fifteen percent of $210 million is $31.5 million. Dickinson said that estimate makes sense but cautioned that “there’s a lot of volatility there” when it comes to income tax revenue. In the state’s 2016 and 2017 fiscal years, tax revenue was negative; by 2018, it was above $65 million per year.
Our Take: The difference between “will” as stated in the headline and “could” as stated by those interviewed is HUGE. Also missing from this story? Any discussion about the potential for MORE production tax revenue for the state. Hilcorp’s specialty is getting more from aging fields.
Here’s a question you should ask about every climate change plan
Bill Gates, Gates Notes, August 27, 2019
I get to learn about lots of different plans for dealing with climate change. It’s part of my job—climate change is the focus of my work with the investment fund Breakthrough Energy Ventures—but it’s just as likely to come up over dinner with friends or at a backyard barbecue. (In Seattle, we get outside as often as we can during the summer, since we know how often it’ll be raining once fall comes.) Whenever I hear an idea for what we can do to keep global warming in check—whether it’s over a conference table or a cheeseburger—I always ask this question: “What’s your plan for steel?” I know it sounds like an odd thing to say, but it opens the door to an important subject that deserves a lot more attention in any conversation about climate change. Making steel and other materials—such as cement, plastic, glass, aluminum, and paper—is the third biggest contributor of greenhouse gases, behind agriculture and making electricity. It’s responsible for a fifth of all emissions. And these emissions will be some of the hardest to get rid of these materials are everywhere in our lives, and we don’t yet have any proven breakthroughs that will give us affordable zero-carbon versions of them. If we’re going to get to zero carbon emissions overall, we have a lot of inventing to do.
Don’t be so quick to write off natural gas
William F. Shugart, II, Washington Examiner, August 28th, 2019
Earlier this month, as temperatures topped 100 degrees and homeowners and businesses cranked up their air conditioning, Texas’ grid struggled to cope with the record demand for electricity. The heat wave was compounded by a loss of power from thousands of wind turbines that couldn’t function on days when not so much as a breeze was blowing. Predictably, energy costs skyrocketed in the Lone Star State. In Houston, as peak electricity demand climbed to record levels, wholesale power prices spiked virtually overnight by an astounding 49,000% (to $9,000 per megawatt-hour). The operator of the electric grid, the Electric Reliability Council of Texas (ERCOT), warned that reserve margins were so dangerously low that it might have to institute rolling blackouts. ERCOT called for the construction of more gas-powered generating plants. Yet, a number of states, most notably California, want to push natural gas out of the picture, putting residents on a collision course with reality. No one should think that the days of burning natural gas for electricity production are numbered, or that gas has been overtaken by solar and wind. America’s vast gas reserves and the development of combined-cycle power plants, using gas and a steam turbine to generate 50% more electricity than traditional gas plants, together with advanced designs and better efficiency will keep natural gas in the energy picture for decades to come.
Our Take: California, slow your roll to ban natural gas…
The BP Sale To Hilcorp Looks Like A Win For Everyone
David Blackmon, Forbes, August 28, 2019
In a deal that will no doubt be characterized as surprising by some, but really should come as no surprise to anyone, BP announced on Tuesday that it has agreed to sell all of its remaining Alaskan operations to Houston-based independent producer Hilcorp. The deal, worth $5.6 billion, will result in BP’s exit from the state of Alaska after 60 continuous years of operations there. The deal will make Hilcorp the second-largest producer in Alaska behind ConocoPhillips and includes all of BP’s Prudhoe Bay assets as well as its midstream assets in the state. Attaining the status of a major player in a state is nothing new for Hilcorp, which already ranked as the nation’s largest privately held upstream company and the operator of more wells than any other company in the lower 48 states.
Reactions to the sale:
From the Washington Examiner, Daily on Energy:
BP’S ALASKA EXIT NOT A GOOD SIGN FOR ANWR DRILLING: BP’s exit from producing oil and gas in Alaska should dampen expectations for the level of industry interest in drilling in the Arctic National Wildlife Refuge.
At least that’s the argument some Democrats were making in reaction to BP selling all of its Alaska assets to privately held Hilcorp Energy for $5.6 billion after the British oil giant had operated for 60 years in the state.
“If BP thought it could have squeezed a nickel out of drilling in the Arctic Refuge, it wouldn’t have hesitated to annihilate it,” Senator Ed Markey of Massachusetts tweeted Tuesday. “Their exit is further evidence that there is absolutely no reason to turn the Refuge over to the oil and gas industry. All risk, no reward.”
ANWR lease sale is coming soon: Republicans are closer than ever to achieving their goal of drilling in the long-off limits Arctic National Wildlife Refuge, known as ANWR, after Congress as part of the GOP tax cut bill of 2017 voted to allow energy exploration in a 1.5 million-acre section of the refuge, known as the “1002 area,” where billions of barrels of oil are believed to lie beneath the coastal plain.
However, it has been an open question on how interested energy companies would be in the opportunity, with oil prices hovering at low levels in the mid- $50s per barrel and competition steep from in the nation’s lower 48 shale regions.
“ANWR could be a big find, and big finds imply fat margins, but this is not a time of oil scarcity,” Kevin Book, managing director for research at ClearView Energy, told me. “Companies may not want to tie up capital on 10-year megaprojects if there’s a faster cash turn waiting onshore. Plus, nobody wants to drill the next multi-billion-dollar duster at $55 per barrel.”
The Interior Department is expected any day to release an environmental impact statement assessing the risks of drilling in ANWR, a necessary step before the agency conducts a lease sale, which the Trump administration is planning for this year.
Any actual drilling wouldn’t happen for 10 to 15 years. But Democrats and environmental groups have accused the Trump administration of rushing the environmental review and leasing process before the 2020 election, when a Democrat could win the White House and block the planned sales.
Will industry come? The level of interest won’t be known until the lease sale happens, and it’s unclear if BP would have participated, industry allies are quick to point out.
“Shut up and let the sale happen,” said Robert Dillon, an energy consultant and former senior staffer for Republican Senator Lisa Murkowski of Alaska, who led the push in Congress for opening ANWR to drilling. “If nobody shows up you’ve got your answer.”
BP was part of a group of big oil companies that helped drill an exploratory well in ANWR in the mid-1980s, the only well ever drilled in the refuge.
Alaska oil production trends: BP’s exit from Alaska more broadly shows the trend of declining production in the frontier oil producing state, and how major companies are moving on to chase opportunities in shale.
Oil production in Alaska has fallen from more than 2 million barrels per day in 1988 — more than any other state — to 464 barrels per day in 2018, according to the Department of Energy, an amount less than four shale producing states.
“This will not be the last deal in the region,” Wood Mackenzie analyst Rowena Gunn said in a note to reporters Tuesday. “ExxonMobil may be next to follow BP, Anadarko, Pioneer and Marathon in the list of companies having sold out of Alaska.”
David Hayes, a former deputy secretary of the Clinton administration’s Interior Department, told me BP’s exit is “consistent with two realities” of oil exploration and production in the Alaskan Arctic.
Oil and gas operating costs in the Alaskan Arctic are higher than in other fossil fuel producing areas in the U.S., and many of the current oil fields in Alaska are becoming mature.
Expanding opportunities into long-protected and remote areas like ANWR could be a risky bet given those realities, and the added scrutiny major companies are facing over their contribution to climate change.
“I suspect that both of these factors played into BP’s thinking,” said Hayes, who now the State Energy & Environmental Impact Center at New York University School of Law.
Jumping the gun? Alaska-based industry groups, however, say it would be wrong to interpret BP’s move out of the state as a bad sign for ANWR.
Rebecca Logan, executive director of the Alaska Support Industry Alliance, told me it’s not surprising to see smaller companies like Hilcorp take over the aging oil fields in the state, because they are more willing to invest in drilling for oil that is harder to get.
“It’s shocking to people to have a company that’s been here for 60 years leave,” Logan said. “But it’s a leap to say what this means for ANWR. The lease sale will show us the level of interest. Regardless of sales and acquisitions, companies will make that decision based on other factors.”
Dunleavy sends letter encouraging potential Pebble investor
Liz Ruskin, Alaska Public Media, August 26, 2019
Officially, Gov. Mike Dunleavy is neutral on the Pebble mine. But a letter he wrote to a potential investor in the controversial project calls his neutrality into question. “It’s like a PR letter from Pebble,” mine opponent Norm Van Vactor said after reading a July 30 letter Dunleavy sent to the CEO of a Canadian company called Wheaton Precious Metals. Alaska Public Media obtained the letter in response to a public records request. In it, Dunleavy said he’d seen a letter Wheaton received from the Natural Resources Defense Council. The environmental group, along with Bristol Bay tribal leaders and commercial fishermen, pressed Wheaton not to invest in Pebble, which would be built at the headwaters of rivers that flow into the bay. In his own letter to Wheaton Precious Metals, Dunleavy said the state has a keen interest in the project, as the land owner. “I want to assure you the state will stand by those who invest in Alaska,” he wrote. Once the appropriate permits are granted, the governor wrote, “I am equally committed to removing obstacles that would hinder immediate construction.”
Our take: What’s wrong with an “open for business” Governor letting potential investors know that, “once the appropriate permits are granted”, the state will work to remove obstacles that would stop progress? Nothing. Absolutely nothing. Unless you are the mainstream media, suffering from Dunleavy Derangement Syndrome (DDS). Calling the Governor’s neutrality into question shows that the media can’t (or won’t) differentiate between process and project. An elected official promising to let the process work, and once the legal process is completed, defend the results of the process isn’t really newsworthy – unless you wake up everyday with DDS.
ExxonMobil, Mosaic Eye New CCS Tech
Natural Gas News, August 27, 2019
US major ExxonMobil and Mosaic Materials have agreed to explore new technology for removing carbon dioxide from emissions sources, they said August 26. Mosaic Materials has progressed research on a unique process that uses porous solids, known as metal-organic frameworks, to separate carbon dioxide from air or flue gas. The agreement with ExxonMobil will enable further discussion between the two companies to evaluate opportunities for industrial-scale use of the technology. “New technologies in carbon capture will be critical enablers for us to meet growing energy demands, while reducing emissions,” said ExxonMobil. “Our agreement with Mosaic expands our carbon capture technology research portfolio, which is evaluating multiple pathways – including evaluation of carbonate fuel cells and direct air capture – to reduce costs and enable large-scale deployment. Adding Mosaic’s approach will allow us to build on their work to evaluate the potential for this technology to have a meaningful impact in reducing carbon dioxide emissions.”
Our Take: Private sector projects like this will do more to reduce carbon dioxide emissions than any government mandate can. Metal-organic frameworks (MOFs) are a hot topic among academic and private research groups internationally. Utilizing MOFs for emissions storage is a huge market. Markets, not mandates.
U.S. Glut in Natural-Gas Supply Goes Global
Ryan Dezember, The Wall Street Journal, August 27, 2019
More shale gas than ever is leaving U.S. shores. Unfortunately for the country’s beleaguered natural-gas producers, global prices for the fuel have never been lower. Natural-gas prices in Europe and Asia have plummeted this year to historic lows in the midst of reduced demand, the trade dispute with China and brimming storage facilities in Europe. The biggest driver of falling prices, though, has been the U.S. gas that is spilling into global markets. “It was inevitable,” said Ira Joseph, head of global gas and power analytics at S&P Global Platts. “There is simply too much supply coming into the market at one time.” The price decline has eliminated some of the allure involved in liquefying cheap U.S. gas and shipping it abroad, where it typically fetches much higher prices.
Feds take step to advance big ConocoPhillips prospect
Alex DeMarban, Anchorage Daily News, August 25, 2019
The Trump administration has chosen a preferred development plan for a big ConocoPhillips project that could significantly boost Alaska oil production, according to an environmental report unveiled Friday for public comment. The Willow project in the northeastern National Petroleum Reserve-Alaska could produce up to 130,000 barrels of oil daily, if developed, according to a draft environmental report released by the Bureau of Land Management. Alaska oil production is averaging about 500,000 barrels of oil daily this year.
Why climate change is so hard to tackle: Our stubborn energy system
Amy Harder, Axios, August 26, 2019
To adequately address climate change on the level scientists say we must, the world would need to slash its use of oil, natural gas and coal within 30 years, a Herculean task given our deep dependence. Driving the news: Democrats on the presidential campaign trail and international leaders preparing for a United Nations summit next month say urgent action is needed, but few actually have viable plans for how and when to cut our fossil-fuel use. The big picture: In 1987, 81% of our world’s energy consumption came from oil, natural gas and coal. Thirty years later, it is still 81% — despite the incredible increase in wind and solar energy, according to the International Energy Agency.
From the Washington Examiner, Daily on Energy:
OIL INDUSTRY FRETS OVER NEW CHINA TARIFFS, WARNS TRUMP TO END TRADE WAR: The American Petroleum Institute warned Trump Friday that his trade war with China is harming the oil and gas industry, and poised to cause more damage.
The oil and gas industry trade group issued an unusually aggressive statement after China announced another round of retaliatory tariffs on $75 billion worth of U.S. goods, including U.S. crude oil and several other petroleum products.
China had already imposed a 25% retaliatory tariffs on U.S. liquified natural gas, just as the country is poised to be a top consumer of the fuel.
“This escalation of the U.S.- China trade war is another step in the wrong direction, the consequences of which will be felt by American businesses and families,” said Kyle Isakower, API’s vice president of regulatory and economic policy. “In addition to the impacts on the U.S. economy and jobs, U.S. energy leadership and global competitiveness are threatened as U.S. natural gas and oil exports continue to serve as targets for retaliation.”
Already feeling the damage: Even before China’s retaliation against U.S. crude exports, API said the trade war has harmed the oil and gas industry.
From October 2017 to June 2018, China had imported 22% of all U.S. crude oil, but that number has dropped to 3%.
We already have a Greenland. It’s called Alaska.
Heather Conley, The Washington Post, August 21, 2019
With all the discussion about the economic importance of Greenland, the ironic part of this tale is that Arctic mineral and energy resources, key shipping infrastructure and fisheries already exist in the United States today … in Alaska, a strategic purchase the United States made from the Russian empire in 1867 for a mere $7.2 million. Wouldn’t it be better to wisely and sustainably invest in the American Arctic? The American Arctic urgently needs a deepwater port to responsibly manage an increase in shipping traffic through the narrow Bering Strait. Although it is controversial and must be balanced with strong environmental protection, the United States can enhance its mineral and energy extraction from Alaska while working toward diversifying its resource-based economy. Rather than buy Greenland, I strongly encourage the president to invest in Alaska and deepen our economic and security engagement with Greenland and Denmark. After all, both are open for business.
Our Take: We couldn’t agree more! Alaska is ready to develop its mineral and energy resources and key shipping infrastructure!
Natural Gas, Lower Methane Emissions and Rising Opportunity
Mark Green, API Energy Tomorrow Blog, August 19, 2019
Even with natural gas playing a leading role in reducing U.S. energy-related carbon dioxide emissions to their lowest levels in a generation and strong industry initiative to keep lowering production-related methane emissions, natural gas opponents remain on the attack, including a new study that’s critical of natural gas from North American shale. More authoritative and trustworthy than the negative analysis is the National Oceanic Atmospheric Administration (NOAA), which issued these methane-related conclusions in a study published earlier this year (emphasis added):
- U.S. natural gas production has increased 46 percent since 2006, but there has been no significant increase of total U.S. methane emissions and only a modest increase from natural gas and oil activity.
- There has been a “major overestimation” of industry’s methane emissions in some recent studies. NOAA found emissions from natural gas and oil are up to 10 times lower than has been asserted in some studies.
- Overall, methane in U.S. air samples were shown to be increasing at the same rate as the global background – meaning there was no statistically significant increase in total U.S. methane.
Our Take: It can’t be said enough “U.S. natural gas has proven environmental and climate benefits, and it’s critically important here at home and around the world, helping to reduce energy poverty and improve peoples’ lives.”
Breaking: Fogle, Donley, Shaw forwarded for Senate Seat M
Suzanne Downing, Must Read Alaska, August 21, 2019
District 25 and 26 Republican Party officers chose three people as finalists for the Senate Seat M position that was created when Sen. Chris Birch died on Aug. 7. Dave Donley, Laddie Shaw, and Al Fogle are the names that won the most votes. The party officials had the option of sending three or four names to the governor, who will make the selection. Senate Republicans must agree with the choice.
Our Take: Big shoes to fill. Donley, Shaw and Fogle have all been strong supporters of responsible resource development in Alaska.
Inslee Drops Out and Bernie Announces the Most Radical GND of All
Power the Future, August 22, 2019
The past 24 hours has seen major developments in energy and environmental news. Here’s the latest:
Inslee Drops Out
Washington Governor Jay Inslee has officially dropped out of the 2020 presidential race. As Power The Future has detailed since the beginning of his run, Inslee has made eco-extremism the centerpiece of his campaign. He thought that embracing the eco-left was his ticket to the presidency, and he hoped to become the “First Climate President.”
Bernie Announces His Own Green New Deal
Axios reports that Sanders’ “Green New Deal” would cost a whopping $16 trillion. He wants 100 percent renewable power by 2030, wants to ban fracking, and he even wants to stop fossil fuel imports and exports.
As the oil and natural gas industry supplies the energy needed to power America’s modern economy, its continued commitment to advance environmental solutions has never been stronger. That’s the context for The Environmental Partnership, a new coalition of oil and natural gas companies that have voluntarily committed to continuously improve the industry’s environmental performance. To underscore our commitment, our participants agreed to track their progress and report annually.
Our Take: The oil and gas industry has made huge strides in improving their environmental performance. This partnership is committed to continually improving the industry’s environmental performance.
Alaskan Joe Balash resigns as assistant secretary of Interior
Liz Ruskin, Alaska Public Media, August 20, 2019
U.S. Interior Department Assistant Secretary Joe Balash, one of the highest-placed Alaskans in President Donald Trump’s administration, has resigned. His boss, Interior Secretary David Bernhardt, announced it by tweet Tuesday afternoon. Balash was confirmed in 2017 as Interior’s assistant secretary for Land and Minerals Management. He oversees the bureaus of Land Management and Ocean Energy Management. He’s been working to prepare for the first oil lease sale in the Arctic National Wildlife Refuge. In his resignation letter, Balash does not cite a reason. He said he’s proud of the work he’s done, including lifting regulations on resource extraction industries, and the environmental work on ANWR.
Our Take: A real loss for Alaska. Balash was working hard to advance opportunities for drilling in ANWR. Best wishes in your new venture Mr. Balash.
Socialism does more harm than good for the environment
Danielle Butcher, The Hill, August 20, 2019
In no other economy do producers have such a responsibility to consumers and to their resources as they do under capitalism. Free-market societies require excellent business practices. If you do not treat your fellow man with the best of intentions, if you do not follow sustainable business practices, and if you do not responsibly manage your resources, consumers have the option to leave for a competitor. You will have a surplus of goods with no buyers, and your business will fail. It is in the best interest of everyone to do business well. Believing that corporations and the market will do well is not an idealist fantasy of the right — it happens every day. Delta Airlines works with The Nature Conservancy to voluntarily offset carbon emissions. Madewell gives their customers a $20 discount on new jeans when they bring in an old pair. Those old jeans are then donated to Habitat for Humanity to be upcycled into housing insulation. Patagonia recently saved $10 million dollars through tax cuts and planned to donate that sum to conservation and charity organizations.
Corporate America’s Hunger for Green Power Is Facing a Big Test
Brian Eckhouse, Bloomberg, August 12, 2019
Companies and public agencies worldwide have already agreed to buy 8.6 gigawatts of clean energy this year through July, according to a report Monday by BloombergNEF. That’s well ahead of the 7.2 gigawatts of deals signed in the first seven months of last year and is on pace to shatter the record 13.6 gigawatts purchased in 2018.
That growth, however, may not continue into next year. The U.S accounted for 69% of this year’s purchases, and a looming shift in federal tax policy there threatens to undermine the clean-power surge. A solar tax credit is set to shrink in 2020, which means project developers are making a big push to get contracts before the end of the year, according to Kyle Harrison a New York-based analyst at BNEF.
Our take: A delicate dance between helping green energy get off the ground and coddling it well beyond infancy. At some point these technologies will have to be able to withstand a free market economy. The end of 2019 is strikingly close. Best jump now while you have the chance to recharge your Tesla.
U.S. oil firms challenge pipeline surcharge for steel tariff: filing
Collin Eaton, Reuters, August 20, 2019
Two U.S. shale producers have challenged an energy pipeline operator’s proposed surcharge for the Trump administration’s 25% tariff on imported steel, raising the stakes for pipeline builders facing higher construction costs.
U.S. oil producer ConocoPhillips (COP.N) and a unit of Canadian producer Encana Corp (ECA.TO) on Monday asked the Federal Energy Regulatory Commission to reject Plains All American Pipeline’s (PAA.N) proposed tariff surcharge on its Cactus II oil pipeline, according to a regulatory filing.
The U.S. leads global petroleum and natural gas production with record growth in 2018
US Energy Information Administration, August 20, 2019
U.S. petroleum and natural gas production increased by 16% and by 12%, respectively, in 2018, and these totals combined established a new production record. The United States surpassed Russia in 2011 to become the world’s largest producer of natural gas and surpassed Saudi Arabia in 2018 to become the world’s largest producer of petroleum. Last year’s increase in the United States was one of the largest absolute petroleum and natural gas production increases from a single country in history.
U.S. crude oil production increased by 17% in 2018, setting a new record of nearly 11.0 million barrels per day (b/d), equivalent to 22.8 quadrillion British thermal units (Btu) in energy terms. Production in the Permian region of western Texas and eastern New Mexico contributed to most of the growth in U.S. crude oil production. The United States also produced 4.3 million b/d of NGPLs in 2018, equivalent to 5.8 quadrillion Btu. U.S. NGPL production has more than doubled since 2008, when the market for NGPLs began to expand.
Our take: You can watch a great video chart on this shift in energy dominance on the Alliance Facebook page.
Trump hasn’t saved coal in W.Va. They don’t care
Kelsey Brugger, E&E News, Monday, August 19, 2019
It is true that since Trump took office there has been increased production in West Virginia of metallurgical coal, high-quality coal used to make steel, as well as steam coal exports, according to the West Virginia Coal Association. The state has more steam than metallurgical coal.
But that jump is largely attributable to international market forces as demand grows overseas, said West Virginia Coal Association Vice President Jason Bostic. While the United States continues to shutter coal-fired power plants, the developing world is building more plants to supply electricity.
“West Virginia has the highest quality in the world,” Bostic said. “You have to pay to burn and move it — you might as well buy the highest quality.”
Our take: A fascinating look into communities whose livelihood is directly linked to coal. And a great reminder that coal mining is not all about burning for energy, but also that it is used in metal-making. The tensions can be summed up later in the article: ‘Peeking out of the foothills along the highway are billboards that read, “If your lights are on, thank a coal miner.”’ Note to Democratic 2020 nominees—you will lose these votes.
By the deadline, at least 5 people apply for vacant Anchorage seat in Alaska Senate
James Brooks, ADN, August 18, 2019
At least five South Anchorage residents have applied to fill the Alaska Senate seat left open by the death of Sen. Chris Birch, R-Anchorage, according to interviews Sunday evening.
The deadline for eligible Alaskans to submit an application to the Alaska Republican Party was 5 p.m. Sunday. The party did not immediately release a list of applicants, and party chairman Glenn Clary did not answer a call seeking comment, but five people are known to have applied: Rep. Laddie Shaw, R-Anchorage; Rep. Josh Revak, R-Anchorage; former state senator and current Anchorage School Board member Dave Donley; Tali Birch Kindred, daughter of Chris Birch; and Al Fogle, who ran for the Legislature in 2018 and the Anchorage Assembly in 2017.
Under state law, Gov. Mike Dunleavy has 30 days to name a replacement for any Legislative vacancy. The replacement must be a registered voter of the same political party as the original legislator and be otherwise eligible to run for the seat. A replacement is also subject to confirmation by his or her counterparts; in this case, a majority of the Alaska Senate’s Republicans must approve Birch’s replacement before the person begins serving.
Our take: Best of luck to the candidates. Senator Birch leaves behind big shoes to fill.
Cook Inlet gas producer files for bankruptcy, citing lack of tax-credit payments and lack of production
Alex DeMarban, ADN, August 17, 2019
An Alaska natural gas producer filed for bankruptcy protection last week, pointing to challenges producing enough gas in Cook Inlet and the state’s decisions to withhold many millions of dollars in cash tax credits the company had counted on.
Furie Operating Alaska, owner of an offshore production platform in Cook Inlet and a subsea pipeline, wants to quickly find a buyer, the company’s interim chief operating officer told federal bankruptcy court in Delaware last Friday.
“The real big factor to me is the state promised payback on tax credits and that got vetoed,” [Dave Cruz, owner, Cruz Construction] said. “That hit ’em pretty doggone hard.”
After oil prices and state revenues crashed starting in 2014, the state began reducing the annual tax-credit payments it had long made to small independent companies to encourage oil and gas exploration. The state began paying the legal minimum required by law, rather than the amount companies applied for and had come to expect.
Former Gov. Bill Walker began capping the payments in 2015, and the Legislature later followed.
The Legislature has since ended the program, but the state still owes many companies. Furie says it’s owed $105 million.
Our take: Unfortunately, this is not new news and this has been building up for a long time. The Alliance supports a favorable business climate. It is difficult to do business when the rules change constantly. Dave Cruz’s comments are on point.
Murkowski now supports a ‘complete exemption’ for Tongass from Roadless Rule
Jacob Resneck, Alaska Public Media, August 15, 2019
That’s according to Senator Lisa Murkowski who said Tuesday that rolling back restrictions to road building is crucial for Southeast Alaska’s economy. “I very early on went to the Trump Administration and said as we look to the state of Alaska and the application of the Roadless Rule, we have to be able to have a plan that is specific to us,” [Murkowski said.]
The head of the US Forest Service was directed by the Secretary of Agriculture to initiate an Alaska specific rule for the Tongass. A 90-day comment period last fall received 144,000 comments, the majority expressing opposition to rolling back protections. Ninety percent of the comments were form letters or petitions.
“I think complete exemption from the Roadless is what’s best suited for Alaska,” [Murkowski stated.]
Our Take: We learned with the Stand for Salmon initiative that’s it’s not too difficult to galvanize (well-intentioned) environmental activists into a crusade. We are curious which voices from which states made up the 90% in “form letters and petitions.” Regardless of a rollback or a complete exemption, we just need to use common sense when it comes to responsibly building roads for the health, safety, and economic benefit of our neighbors in Southeast.
OPEC sees bearish oil outlook for rest of 2019, points to 2020 surplus
Alex Lawler, Reuters, August 16, 2019
In a monthly report, the Organization of the Petroleum Exporting Countries cut its forecast for global oil demand growth in 2019 by 40,000 barrels per day (bpd) to 1.10 million bpd and indicated the market will be in slight surplus in 2020.
The bearish outlook due to slowing economies amid the U.S.-China trade dispute and Brexit could press the case for OPEC and allies including Russia to maintain a policy of cutting output to support prices. Already, a Saudi official has hinted at further steps to support the market.
Natural gas production is at record-high levels despite low prices
US Energy Information Administration, August 15, 2019
U.S. natural gas production continued to increase in August despite relatively low natural gas spot prices, setting a new daily production record of 92.1 billion cubic feet per day (Bcf/d) on August 5, 2019, according to data from OPIS PointLogic Energy. Natural gas production increased by 1.5 Bcf/d (2.5%) between May and August 2019, led by production gains primarily in the Northeast. The northeastern region continues to be the largest natural gas-producing region in the country, accounting for 34% of the U.S. total. Average daily production levels in that region reached a new high of 32.2 Bcf/d in the first week of August, 1.5 Bcf/d higher than its monthly average in May.
Our take: Good. More natural gas usage helps reduce emissions, provides safe, reliable energy, and fuels the economy.