AGDC: New board members – Big bonus paid while major milestone missed.

January 8, 2019 | Posted in : News

Gas line corporation president awarded $296,000 bonus as new board members chosen
Alex DeMarban, Anchorage Daily News, January 7, 2019

Gov. Mike Dunleavy announced changes to the board of the state gas line agency on Monday, the same day officials confirmed the head of the agency was awarded $296,000 in bonuses in late December. The performance-based bonuses for Keith Meyer, president of the Alaska Gasline Development Corp., come atop his $550,000 annual salary, the highest at the state.

Our Take: This bonus is completely on par and very common for executives at this level. The challenge is the optics: budget deficit, reduced PFD, performance bonus while missing a major deadline on December 31st.

Breaking: Dunleavy changes gasline board members
Suzanne Downing, Must Read Alaska, January 7, 2019

JOEY MERRICK, HUGH SHORT DISMISSED; DAN COFFEY, DOUG SMITH REPLACE

Gov. Michael Dunleavy today announced key changes and appointments to the seven-member board of directors governing the Alaska Gasline Development Corporation. But not before the previous board gave AGDC President Keith Meyer a $300,000 performance bonus for his work over the past two years, adding to his $550,000 base annual salary. Meyer’s contract is up this year. The board had given him $138,750 for June 2017, and $157,256 for 2018. Dunleavy has now changed out four of the seven members of the board, so Alaskans might expect more changes ahead in coming days.

Our Take: Congratulations to former Alliance board President Doug Smith! What a great private sector addition to the board. Thanks to Alliance member Joey Merrick for his service on the board.

Mining reform advocates dust off battle plan
Dylan Brown, E & E Daily, January 8, 2019

A power shift in the House and a new crop of lawmakers have mining critics reviving their attempt to fundamentally change the law that governs the practice, and companies are readying their counterattack. Step one for reformers is a major education campaign on the 1872 General Mining Act; step two is navigating the new political landscape on Capitol Hill. Debates surrounding mining will see a fundamental shift. Beyond the 95 new members, 58 percent of House Democrats have never worked in the majority and 70 percent of House Republicans have never been in the minority. The most recent iteration, H.R. 5753, would have replaced mining claims with a federal leasing system similar to other commodities.

Our Take: Reality check: “Energy and Natural Resources Committee Chairwoman Lisa Murkowski (R-Alaska) is likely to keep working on making permitting faster and reducing American dependence on so-called critical minerals.”

From the Washington Examiner Daily on Energy:

OIL AND GAS INDUSTRY GROUPS URGES END TO GOVERNMENT SHUTDOWN: The oil and gas industry is urging the Trump administration and Congress Tuesday to resolve the government shutdown before the energy industry is harmed.

“A longer shutdown is certainly not good for this industry,” said Mike Sommers, the president and CEO of API, the main trade group representing the oil and natural gas industry, in comments to reporters ahead of its 2018 State of American Energy event in Washington on Tuesday afternoon.

Sommers said the industry has not experienced any setbacks so far. Bloomberg reported Tuesday that the Trump administration is still processing oil and gas permits for drilling on federal land and water during the government shutdown.

But the industry fears a prolonged shutdown could slow progress at the EPA and Interior Department to roll back environmental regulations

TRUMP’S TRADE WAR IS ‘NOT GOOD FOR BUSINESS’ OIL AND GAS INDUSTRY SAYS: Sommers also encouraged the Trump administration on Tuesday to resolve its trade dispute with China, and to soften its broader approach to imposing barriers on markets for goods.

The oil and gas group’s CEO said he is “encouraged” by reports that U.S-China trade talks are making progress.

But he said: “We want this dispute to end quickly.”

“We need to do it in way that doesn’t affect American economic leadership that is really driven by American energy leadership,” Sommers added.

LNG and infrastructure are affected: Sommers specifically expressed concern about China’s 10 percent tariff on American liquified natural gas, which it imposed in October in retaliation to Trump’s tariffs.

Industry officials have warned that Trump’s trade war with Beijing is threatening to discourage China, the world’s fastest growing LNG market, from signing long-term contracts with American developers.

“We need to make sure retaliatory tariffs on LNG don’t continue and certainly don’t expand,” Sommers said.

Sommers added that Trump’s 25 percent steel tariffs are raising costs for energy infrastructure that API says is needed to transport record U.S. production of oil and natural gas.

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A gassy New Year; Pelosi resurrecting failed cap-and-trade bill.

January 7, 2019 | Posted in : News

A gassy New Year
Natural Gas News, January 7, 2019

The expected flurry of final investment decisions that will be taken this year to build LNG terminals in North America, Russia, Africa and elsewhere cannot of course disguise the fact that oil is still of paramount importance. And the same producers are involved in some of the biggest projects in both oil and gas, so there cannot be cut-throat competition, exactly. Nevertheless, the rate of change is heartening and reflects the rapid absorption of LNG on the global market in the last year, when many were digging themselves in for a glut and knock-down prices. Competitive pricing is one thing, value-destruction another. After a relatively quiet few years, it means that there is confidence in a market for gas in its own right – power, heating, marine and road transport, petrochemicals and manufacturing – but also it will be less rigid than before.

Despite shutdown, Trump administration continues work to begin oil drilling in ANWR
Elizabeth Harball, Alaska’s Energy Desk, January 4, 2019

As the partial government shutdown drags on, the Trump administration is making sure some Interior Department employees continue work on one of its biggest, most controversial priorities: opening the Arctic National Wildlife Refuge to oil drilling. Drilling opponents were quick to criticize the move, contrasting it with the overflowing trash cans and unattended public toilets in national parks managed by Interior, which have become a symbol of the continuing stalemate in Washington, D.C.

Oil rises 3 percent; lifted by OPEC cuts, steadying stock market
Stephanie Kelly, Reuters, January 7, 2019

Oil prices climbed about 3 percent on Monday, rebounding further from 1-1/2-year lows reached in December on support from OPEC production cuts and steadying equities markets. Brent crude LCOc1 futures rose $1.47 to $58.53 a barrel, a 2.6 percent gain, as of 11:12 a.m. EST (1612 GMT). U.S. West Texas Intermediate (WTI) crude CLc1 futures rose $1.56 to $49.52 a barrel, a 3.3 percent gain. Oil futures have gained about 10 percent since last Monday.

Related:

                  Saudis Plan to Cut Crude Exports to 7.1 Million Barrels a Day, Say OPEC Officials

From the Washington Examiner Daily on Energy:

PELOSI PLANS TO RESURRECT FAILED CAP-AND-TRADE BILL FROM A DECADE AGO: House Speaker Nancy Pelosi said Friday that she plans to resurrect something similar to the failed cap-and-trade bill that the House passed nearly a decade ago but that the Senate couldn’t muster the votes to pass.

“We couldn’t pass in the Senate our climate bill, and we’ll be returning to that,” Pelosi said on Friday at as part of MSNBC’s “The Speaker” town hall broadcast.

Old ideas reborn: Pelosi is referring to the bill named after former Reps. Henry Waxman and Ed Markey, who is now a senator. The bill put in place a cap on carbon dioxide emissions, while offering emission credits to the power plant operators, which they would have to purchase in order to meet the cap. The price of the credit would adjust as an incentive to reduce emissions.

Our Take: What was that definition of insanity? The Senate wouldn’t pass it before and Headlamp would put money on the same thing happening again.

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Court victory for tax credits; Sinopec under audit for trading losses

January 4, 2019 | Posted in : News

Judge tosses lawsuit questioning constitutionality of tax credit bonds
Elwood Brehmer, Alaska Journal of Commerce, January 3, 2019

The small oil companies and banks holding more than $800 million in refundable tax credits scored a victory Wednesday when an Alaska Superior Court judge threw out a lawsuit challenging the state’s plan to sell bonds to pay off those credits. Judge Jude Pate granted the State of Alaska’s motion to dismiss the suit filed by former University of Alaska regent Eric Forrer arguing against the constitutionality of the bond scheme contained in House Bill 331 that the Legislature approved last spring.

Our Take: Though AKHEADLAMP appreciates this decision, the likely appeal will delay payments that are owed and continue to create an environment of instability. Instability is the enemy of investment “When the earned credits weren’t paid off in full in the fiscal years 2016-18 state budgets, as had previously been done, the banks holding them mostly stopped lending into the Alaska oil sector.” Enough said.

Alaska gives Chinese firms more time to consider LNG deal
Carl Surran, Seeking Alpha, January 4, 2019

Alaska’s government says it extended a deadline for Sinopec (NYSE:SNP) and other Chinese companies to agree on liquefied natural gas purchases and financing for the $43B Alaska LNG project. State-owned Alaska Gasline Development Corp. says it is typical in negotiations on large energy projects to see deadlines extended – by six months, in this instance – but that the current U.S.-China trade dispute has added complications. If built, the project would export up to 20M metric tons/year of LNG, with 15 tons/year reserved for China in the deal now being discussed and 5M available for other potential customers such as Japan and Vietnam.

Related:

China’s Sinopec says losses at trading arm Unipec under audit

China looks to LNG as cold weather sweeps in
Xu Yihe, Upstream Online, January 3, 2019

China is again relying on liquefied natural gas imports to meet peak energy demand this winter but is expected to see fewer spot cargoes coming in as major importers have already secured enough long-term supplies. Industry officials said that in the winter season running from November 2018 to March 2019, China’s LNG purchases from the spot market or based on short- term supply contracts will be down by 30% to about 3.4 million tonnes versus the last winter season. “Chinese buyers are well prepared for the possible supply crunch this winter and therefore have tried to secure more supplies based on long-term contracts in order to cushion against possible price hikes in spot cargoes,” said one official from China National Petroleum Corporation (CNPC).

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It’s not easy being green.  Eni buys out Caelus – more oil for Alaska. 

January 3, 2019 | Posted in : News

Happy 60th Birthday Alaska!

 

Democrats lay out green goals in rules package
Kelsey Tamborrino, Politico, January 3, 2019

The House is expected to agree to a 60-page set of rules in the first set of votes today that would establish a new select committee on climate change, even as some liberals worry it could get in the way of a Green New Deal. Republican Jim Sensenbrenner wants to be ranking member on the new climate panel, a title he held on a previous iteration, but he may face competition this time.  Progressive Rep. Ro Khanna and Rep.-elect (for a few more hours) Alexandria Ocasio-Cortez say they’ll vote against the first House Democratic legislative action — a rules package that will be taken up today. But their objections are unlikely to sink the overall package, and the debate is largely theoretical, as House leaders regularly waive rules that stand in the way of top priorities.  A key concern: The rule would make it harder to bring major progressive priorities like a Green New Deal from getting a vote due to their enormous cost, POLITICO’s Rachael Bade and Heather Caygle report.  Warren Gunnels, staff director for Sen. Bernie Sanders, asked whether “enough progressives” will “have the courage to vote no on the first roadblock to #MedicareForAll, #GreenNewDeal & #CollegeForAll?”

Our Take:   Reality check. The enormous cost of “everything for everybody” makes the majority of the new house priorities DOA, not to mention a Senate and a President that don’t support their priorities.  #checksandbalances. 

Eni buys out partner in Alaska
Anamaria Deduleasa, Upstream Online, January 3, 2018

Eni has entered into agreement to buy out its Alaska project partner Caelus Natural Resources.  The company said on Thursday that it reached a deal, with an undisclosed value, to acquire a 70% interest in, and take over operatorship of the offshore Oooguruk oilfield from the Alaskan business group.

Our Take:  Eni will be able to immediately increase its Alaska production by 7000 bpd,  drill further production wells at Oooguruk and Nikaitchuq,  and work towards increasing their total Alaska production beyond 30,000 bpd.  Good for Alaska!  Good for Eni! 

Renewables overtake coal as Germany’s main energy source
Reuters, January 3, 2018

Renewables overtook coal as Germany’s main source of energy for the first time last year, accounting for just over 40 percent of electricity production, research showed on Thursday.  The shift marks progress as Europe’s biggest economy aims for renewables to provide 65 percent of its energy by 2030 in a costly transition as it abandons nuclear power by 2022 and is devising plans for an orderly long-term exit from coal.

Related:

Texas has enough sun and wind to quit coal, Rice researchers say

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Headlamp – Outlook 2019:  Alaska oil good, Alaska LNG – broken engagement?  Caribou-boo

January 2, 2019 | Posted in : News

Outlook 2019: Upstream oil exploration, development set to surge in Alaska
S & P Global Platts, December 28, 2018

Alaska’s upstream oil industry is expecting to see a surge in exploration and development in 2019 as companies drill to delineate new North Slope and National Petroleum Reserve-Alaska discoveries.  But some are concerned that high-profile federal initiatives, like exploration in the Arctic National Wildlife Refuge and the opening of prospective parts of NPR-A, could get bogged down by increased opposition as Democrats gain a majority in the US House of Representatives, slowing production growth down the road.  Alaska oil production is expected to increase in 2019 and 2020 thanks to new North Slope oil discoveries being brought online.

State gasline corporation to miss key deadline with Chinese partners
Rashah McChesney, Alaska’s Energy Desk, December 31, 2018

The state’s gasline corporation was supposed to have a deal with three Chinese partners, a buyer, an equity partner and a lender by Dec. 31.  But this is a deadline the Alaska LNG project is likely to miss.  In late 2017,  Alaska Gasline Development Corporation head Keith Meyer and then-Gov. Bill Walker flew to Beijing and inked a deal with three entities in China to explore options for financing, building and buying gas from the Alaska LNG project.  At the time, Meyer told a group of reporters that they had been trying to woo the Chinese companies for months.  “So we’ve been through the courtship. We are now engaged,” Meyer said.  The “engaged” phase was supposed to last about a year, and the parties would come to a decision by Dec. 31, 2018 on whether to get hitched.  Now, the state corporation wants a six-month extension on that original agreement.

Related:

Early 2019 will see flurry of LNG activity

OPEC-led cuts should rebalance oil market in first quarter: UAE energy minister
S & P Global Platts, January 2, 2019

The OPEC-led deal to cut 1.2 million b/d from the start of January should bring balance back to the oil market in the first quarter of 2019, the UAE’s energy minister Suhail al-Mazrouei said Tuesday.  “As we start a new year, I remain optimistic toward achieving the market balance during the first quarter after [the] OPEC and Non-OPEC production cut.  At this time last year we remember the same pessimistic views which we disagreed with and as we expected 2018 was a good year,” he said in a tweet Tuesday.  The minister said last month that OPEC and non-OPEC producers would consider “deeper cuts” if the reduction wasn’t enough to restore balance.

Caribou-boo
Craig Medred, December 28, 2018

Why is it that reporters with a good story to tell sometimes can’t seem to avoid the pit of embellishment that makes journalism look so bad?  Here’s Hillary Rosner writing in The Atlantic about the plight of the woodland caribou, a subspecies on the verge of extinction in the lower 48 and a cousin of Alaska’s barren ground caribou:  “Though that news barely registered with the American public, it was powerful: the imminent disappearance of a large mammal species from the Lower 48. And the Selkirk caribou are only the tip of the melting iceberg. Across a broad swath of Canada and Alaska, caribou populations have been plummeting for decades. The main cause: industrial development in their habitat.”

From the Washington Examiner, Daily on Energy:

ZINKE’S DEPUTY IS THE FAVORITE TO REPLACE HIM, BUT NO DECISION YET: Trump’s search to replace departing Interior Secretary Ryan Zinke did not conclude last month as it was expected to and could stretch well into the new year.

Trump had promised on Dec. 15 to name Zinke’s replacement the following week, but the president has been preoccupied with the government shutdown fight, the resignation of Defense Secretary Jim Mattis, and the fallout from his decision to remove U.S. troops from Syria.

The favorite is familiar: David Bernhardt, the Interior Department deputy who is expected to be named acting secretary as soon as Zinke leaves office today, is still viewed as Trump’s safest bet to run the agency on a permanent basis, according to allies of his and sources close to the White House.

But Bernhardt has competition for the job:  At least two more candidates, Cynthia Lummis, a former congresswoman from Wyoming, and Rep. Steve Pearce, R-N.M. are expected to receive interviews for the job, sources tell Josh.

Pearce is leaving Congress after failing in a bid for governor of New Mexico, where he lost in November to Democrat Michelle Lujan Grisham, and is actively pursuing the role, a congressional staffer familiar with the process told Josh.

Others like Rep. Jeff Denham, R-Calif. and Sen. Dean Heller, R-Nev., both of whom recently lost re-election, are interested in the job, but it’s unclear whether they are serious contenders.

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Headlamp will return January 2nd!

December 31, 2018 | Posted in : News

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Final Friday 2018: ANWR seismic delayed;  Russia’s marriage to OPEC over. 

December 28, 2018 | Posted in : News

Shutdown delays oil exploration plans in the Arctic National Wildlife Refuge
Alex DeMarban, The Anchorage Daily News, December 27, 2018

President Donald Trump last year said opening the Arctic National Wildlife Refuge to drilling was a top Republican accomplishment.  But the partial government shutdown over his demand for $5 billion in border-wall funding is delaying exploration plans there.  Two shuttered Interior Department agencies, the Bureau of Land Management and the U.S. Fish and Wildlife Service, can’t advance the process to issue permits for seismic activity until the shutdown ends.  “Every day delayed now is a delay to collecting seismic activity,” Jeff Hastings, chief executive of SAExploration, said Thursday, referring to the shutdown.

Related:

                ANWR DEIS published

Russia dashes plans to make its oil market alliance with OPEC permanent
Tom DiChristopher, CNBC, December 28, 2018

The marriage between Russia and OPEC is off.  Russian Energy Minister Alexander Novak on Friday poured cold water on long-simmering plans to make Moscow’s alliance with OPEC and other oil producers permanent. The group of roughly two dozen producers has been managing global petroleum supply for the last two years in order to rebalance the market after a prolonged and punishing oil price downturn.

Tammie Wilson talks oil prices, budget cuts
Erin McGroarty, Fairbanks Daily News Miner, December 28, 2018

Republican Rep. Tammie Wilson of North Pole seems undaunted by the possibility of dropping oil prices, noting that production is set to go up and the state could use additional budget cuts in certain areas.  Wilson was named co-chair of the House Finance Committee when House Republicans announced their victory and subsequent leadership team less than 24 hours after the polls closed Nov. 6.  The House leadership team could still change. The remaining uncertainty of the House District 1 race and the recent departure of Kenai Republican Gary Knopp from the Republican caucus leave the House majority up in the air.

Our Take:   No meaningful reductions will be made if Reps Pruitt and Wilson are not co-chairs of House Finance.   Rep Knopp and those who claim that a bi-partisan coalition will keep things running smoothly without impasse are actually charting a course for gridlock since 10 of those interested in the coalition aren’t interested in budget reductions, want a larger PFD and want more taxes from working people and business to feed their frenzy.  Apparently  they didn’t learn anything from the last session. 

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Hoffman gives clues to Senate approach to Alaska LNG? Thursday Trade Talks

December 27, 2018 | Posted in : News

Sen. Lyman Hoffman Looks Ahead
Johanna Eurich, KYUK, December 26, 2018

“The other third rail that is going to receive a lot of attention is what are we going to do with the gas line. Over the last eight years, we spent over $1 billion in studies and working towards permits. So, we have the Alaska LNG line that I think we need to make sure we get permits for. We’re really close to that, and it’s going to take some $20 million in order to accomplish that.”

Our Take:   Is the Senate planning to add money to the budget for Alaska LNG?   Is the new Governor on board with this approach?  Governor Walker’s final budget included $10 million for the project. 

China says direct trade talks with U.S. in January, pledges more opening
Yawen Chen, Ryan Woo, Reuters, December 27, 2018

China and the United States have made plans for face-to-face consultations over trade in January, the Chinese commerce ministry said on Thursday, as the world’s two biggest economies advanced efforts to resolve a months-long trade war. Consultations through “intensive” telephone calls will continue in the meantime, Gao Feng, spokesman at the commerce ministry, told reporters, adding that talks have been steadily moving forward despite the Christmas break in the United States.

Only One Company in S & P’s 500 Energy Index is Up for the Year
Simon Casey, Bloomberg, December 26, 2018

In a measure of how badly U.S. energy equities have fared this year, only one company in Standard and Poor’s 500 Energy Index has posted a year-to-date gain.  ConocoPhillips is up 3.9 percent this year through Monday’s close, while the other 29 members of the index are in negative territory.

In Booming Oilfield, Natural Gas Can Be Free
Rebecca Elliott, The Wall Street Journal, December 27, 2019

American energy companies have spent billions of dollars in the past decade exploring for natural gas. But in parts of Texas and New Mexico, there is now so much of it that it is sometimes worthless. Some companies have even had to pay buyers to take it away.  Shale drillers in the Permian Basin are producing vast amounts of gas as a byproduct of prospecting for oil. But there aren’t enough pipelines to take all the gas to market, causing some of it to become landlocked, and sending local prices into free fall.

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Oil price prophesy and pipeline protesters. 

December 26, 2018 | Posted in : News

Wall Street sees a recovery for oil prices in 2019 — but there’s plenty of risk to that forecast
Tom DiChristopher, CNBC, December 26, 2018

The oil market will be a tale of two halves in 2019, according to Wall Street forecasters. Oil analysts see prices recovering in the first six months of 2019, following a sell-off that has slashed the cost of crude by about 40 percent since October. But in the back half of the year, commodity watchers anticipate new headwinds for the oil market.  The upshot is Wall Street expects a moderate recovery for oil in 2019. Investment banks see Brent crude, the international benchmark for oil prices, averaging about $68-$73 a barrel next year. Forecasts for U.S. crude mostly fall in a range between $59-$66 a barrel.

Our Take:  The budget currently proposed for Alaska has a $1.6 billion deficit based on a projected price of $64 a barrel. 

Related:

                Oil rises to $51 after steep slide; growth fears weigh

Protesters Aren’t Stopping US Pipeline Network Growth
Steve Goreham, Master Resources, June 27, 2018

“With the exception of the New England region, pipeline opponents have failed to halt the growth of US pipeline systems. Oil and gas pipeline networks continue to expand with improving safety, while delivering increasing amounts of petroleum, petroleum products, and natural gas to US residents and businesses.”

Opposition to oil and gas pipelines produces sensational headlines. Protests of the Keystone XL, Dakota Access, and numerous smaller projects are well-covered by the media, creating the impression of an industry halted by public outcry.

Our Take:  Steve Goreham will be speaking at Meet Alaska 2019, a one-day energy conference and tradeshow hosted by the Alaska Support Industry Alliance, January 18, 2019.  Details below. 

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Dunleavy acknowledges reality.   Exxon says “no” to Canadian LNG.

December 20, 2018 | Posted in : News

Dunleavy budget forces Legislature to face reality
Andrew Jensen, Anchorage Daily News, December 20, 2018

When former Gov. Bill Walker swooped into the weekly Anchorage Chamber of Commerce luncheon on Nov. 26 the only thing he forgot was a “Mission Accomplished” banner. A week before leaving office, Walker revealed the budget he planned to hand off to incoming Gov. Michael J. Dunleavy (who has traded Mike for Michael J. on official communications since taking office). Walker and his budget director Pat Pitney, since replaced by Donna Arduin, declared the budget for the next fiscal year “balanced” and former Revenue Commissioner Sheldon Fisher promised a “surplus” for the current fiscal year. That’s a stark change from the picture legislators faced last session when the projected deficit for the current year would be about $700 million at a price of $63 per barrel. It also strains credulity.

Our Take:   Acknowledging the reality of oil prices is a great first step for Governor Dunleavy! His critics will blame him for the larger deficit instead of pointing out the fantasy land oil price used by the former administration to declare victory.   Headlamp predicts lots of fake news coming from his critics over the next four years.

EXXONMOBIL DROPS CANADIAN LNG PLANS
Dale Lunan, Natural Gas World, December 20, 2018

Affiliates of US super-major ExxonMobil revealed December 19 they have withdrawn their 30mn metric tons/year WCC LNG Project near Prince Rupert, on BC’s northern coast, from a provincial environmental review process, effectively ending the project. In a December 5 letter to Nathan Braun, executive project director with the oil and gas sector of the BC Environmental Assessment Office (EAO), Scott Pinhey, vice-president of WCC LNG Project, requested that, “as per recent discussions”, the project be withdrawn from the EAO’s existing environmental assessment process. A similar request was also to be made to the Canadian Environmental Assessment Agency (CEAA), Pinhey’s letter said. WCC LNG Project is a Canadian corporation owned by ExxonMobil Canada and Imperial Oil, affiliates of US-based ExxonMobil. Consisting of up to five barge-mounted liquefaction units each rated at 6mn mt/yr, the project was to have been located at Tulk Inlet, within the corporate limits of Prince Rupert.

Oil Demand Flashes Red, Sending Crude Prices Even Lower
Georgi Kantchev, The Wall Street Journal, December 20, 2018

It isn’t just that there is too much oil sloshing around the world. All of a sudden, there are fears of too little demand for the stuff too. Oil prices continued to tumble Thursday, falling as much as 4%, with Brent crude, the international benchmark, falling to its lowest levels in 15 months. The U.S. benchmark, West Texas Intermediate, traded for $46.61 early Thursday and is down almost 40% since a high in October. The vertiginous decline in oil prices has been largely attributed to an oversupply shock of oil, caused by U.S. shale production, timid production cuts by OPEC nations and generous sanctions waivers by the U.S. for Iranian oil. But also creeping into the picture: the demand side of the crude equation is starting to flash red. Some analysts say oil demand next year could grow at its slowest pace in eight years.

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