Make Coal Great Again. Turf wars over Alaska LNG. DNC will take oil $.

August 13, 2018 | Posted in : News

From the Washington Examiner, Daily on Energy:

DNC REVERSES POLICY, ACCEPTS CONTRIBUTIONS FROM FOSSIL FUEL WORKERS: The Democratic National Committee on Friday reversed its ban on taking financial contributions from fossil fuel companies, after an outcry from union workers that said it was alienating a major part of the Democratic base.

‘Draw the line’: “We have to draw the line that we are indeed a party of a big tent where all working people are welcome,” said DNC Chairman Tom Perez on a conference call Friday night. “We’re not a party that punishes workers simply based on how they make ends meet.”

Resolution: Perez sponsored the Friday resolution that allows the DNC to accept contributions from workers that are employed by fossil fuel firms, such as those that mine coal, drill for and refine natural gas and oil.

Our Take: How very magnanimous of them NOT to punish workers in the fossil fuel industry by taking their money…

Alaska’s North Slope Hit by Strongest Quake Ever Recorded in the Region
Associated Press, August 12, 2018

Alaska’s North Slope was hit Sunday by the most powerful earthquake ever recorded in the region, the state’s seismologist said. At 6:58 a.m. Sunday, the magnitude 6.4 earthquake struck an area 42 miles (67 kilometers) east of Kavik River Camp and 343 miles (551 kilometers) northeast of Fairbanks, the state’s second-biggest city. The U.S. Geological Survey says the earthquake had a depth of about 6 miles (9.9 kilometers.) State seismologist Mike West told the Anchorage Daily News that the earthquake was the biggest recorded in the North Slope by a substantial amount. “This is a very significant event that will take us some time to understand,” he told the Daily News. The previous most powerful quake in the North Slope was in 1995 at magnitude 5.2, West told the newspaper.

Our Take: No impact on pipeline operations and nothing wrong at the Prudhoe Bay field according to statements from Alyeska, the pipeline operator and BP, the field operator for Prudhoe.

Borough, Nikiski seek to have greater participation in LNG export project
Ben Boettger, Peninsula Clarion, August 12, 2018

The Kenai Peninsula Borough is seeking an official role in federal permitting of plans to export North Slope natural gas to Asia via an 806-mile pipeline to a liquefaction plant and export terminal planned for Nikiski — where the Kenai Peninsula Borough intends to keep it, countering efforts by other local governments to propose other locations. At their Tuesday meeting, the Kenai Peninsula Borough Assembly voted to petition the agency leading the LNG project’s environmental permitting — the Federal Energy Regulatory Commission (FERC) — for intervenor status in the gasline’s environmental impact statement, which would allow the borough to request rehearing of FERC decisions or appeal them to a U.S Circuit Court.

Our Take: With Valdez and Mat-Su “hemming and hawing” for the project, it’s no surprise that the Kenai Peninsula Borough wants to be at the table to protect their interests.

Novatek’s Yamal LNG project doubles its production capacity ahead of schedule
Malte Humpert, High North News, August 13, 2018

Russian natural gas major Novatek and its French partner Total announced the commissioning of the second production line at their Yamal Liquefied Natural Gas facility on the Arctic Yamal peninsula. The doubling of capacity comes six months ahead of schedule and follows the opening of the first production line, or train, in December 2017. The second train began operating on July 12 when the first natural gas was fed into the plant and the first LNG was placed into storage tanks on July 21. “Following the successful start-up of Yamal LNG in December last year, the first shipment from the second train ahead of schedule is another major milestone for this world-class LNG project,” commented Patrick Pouyanné, chairman and CEO of Total.

Forget Trump — coal seeks new life in high tech
Amy Harder, Axios, August 13, 2018

Randy Atkins is trying to make coal great again, but not how President Trump has promised. The intrigue: Atkins’ company, Ramaco Carbon, is working to open what would be Wyoming’s first coal mine devoted not to electricity, but to high-tech products like carbon fiber or 3D printing material. Atkins represents the leading edge of what could be a new, high-value market for coal after decades of being America’s cheapest power source. The big picture: Coal’s share of U.S. electricity mix has plummeted from nearly 50% to 30% in just the past decade, fueled by growth in cheap, cleaner-burning natural gas and tougher environmental regulations. Trump has promised to revive coal and is directing his Energy Department to bolster economically struggling coal plants (and similarly challenged nuclear reactors).

Climate Action Leadership Team: Janet Weiss
From Alaska Governor Bill Walker, August 8, 2018

Listen to BP President Janet Weiss discuss her participation in the Governor’s Climate Action Leadership Team and the need for data driven discussions.

ExxonMobil Adds Support to Permian Gas Pipe Project
Dale Lunin, Natural Gas World, August 10, 2018

Kinder Morgan said August 10 that US super-major ExxonMobil has agreed to support the proposed Permian Highway Pipeline (PHP) project, a 430-mile intra-state conduit designed to transport up to 2bn ft3/day of associated gas from the Permian Basin in Texas to connections that would move it to markets in the US Gulf Coast region and Mexico. Under a letter of intent signed by ExxonMobil, its unconventional oil and gas subsidiary, XTO Energy, may contract for up to 450mn ft3/day of capacity on the $2bn pipeline project. “We are committed to supporting development of the infrastructure needed for our planned production growth in the Permian Basin,” XTO Energy president Sara Ortwein said. “The Permian Highway Pipeline will provide additional capacity for reliable transportation of natural gas to the US Gulf Coast.”

Saudi cuts oil output as OPEC points to 2019 surplus
Alex Lawler, Reuters, August 13, 2018

OPEC on Monday forecast lower demand for its crude next year as rivals pump more and said top oil exporter Saudi Arabia, eager to avoid a return of oversupply, had cut production. In a monthly report, the Organization of the Petroleum Exporting Countries said the world will need 32.05 million barrels per day (bpd) of crude from its 15 members in 2019, down 130,000 bpd from last month’s forecast. The drop-in demand for OPEC crude means there will be less strain on other producers in making up for supply losses in Venezuela and Libya, and potentially in Iran as renewed U.S. sanctions kick in.

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Make no mistake – Salmon initiative is bad news for Alaska.

August 10, 2018 | Posted in : News

Republican Resource Committee Members Respond to Salmon Initiative Decision

After thoroughly reviewing the Alaska Supreme Court’s decision to remove unconstitutional sections of Ballot Measure #1 and allowing it to appear on the November statewide ballot, three House Republicans on the House Resources Committee issued the following statements. “While the most obvious unconstitutional portions have been removed, this remains a poorly written measure,” said Rep. Chris Birch (R-Anchorage). “If passed, certain provisions could still face constitutional challenges and will result in the loss of jobs and investment. These are consequences Alaskan’s take seriously and our economy can’t afford.”

Our Take: It’s good to hear from someone on the resources committee. It would be nice to hear whether the co-chairs, Reps Josephson and Tarr, share the sentiment of these members – that the initiative is a job-killing, economy-killing nightmare.

EU Urges End to ‘US LNG Red-Tape
Mark Smedley, Natural Gas News, August 9, 2018

The European Commission (EC) said August 9 that increasing imports of US LNG into the European Union since April 2016 are welcome, but that US red tape over their export should be scrapped. It said that since the first US LNG arrived in the EU (at Sines, Portugal) in April 2016, more than 40 US LNG cargoes have been imported, amounting to the equivalent of 2.8bn m3 gas. But US legislation still requires prior regulatory approval for LNG to Europe, it added: “These restrictions need to be addressed and US rules made easier for US LNG to be exported to the EU.”

With warming Arctic, Russian navy gets larger areas to patrol
Thomas Nilsen, The Independent Barents Observer, August 9, 2018

Eight vessels from Russia’s Northern Fleet set sail from the fleet’s main base in Severomorsk on the Kola Peninsula Wednesday heading northeast on a long-distance Arctic voyage, according to the press service of the fleet. “The main goal for the vessels in the Arctic expedition of the Northern Fleet is to ensure safety of maritime navigation and other types of Russia’s maritime economic activity in the Arctic zone,” the announcement reads.

From the Washington Examiner, Daily on Energy:

SEN. RON JOHNSON DEMANDS TRUMP EXPLAIN ‘ARBITRARY’ STEEL TARIFF EXEMPTION PROCESS: Sen. Ron Johnson, R-Wis., demanded on Thursday that the Trump administration better explain its process for how some companies are granted exemptions to steel tariffs, claiming that businesses in his Midwest state find decisions to be “arbitrary.”

Johnson, whose state hosts the second most manufacturing-heavy job market in the U.S., wrote to Commerce Secretary Wilbur Ross that the administration’s denial of an exemption request for one Wisconsin business cost it $2.6 million.

Shared ‘frustration’: “Across the country, many businesses share the same frustration about the difficult and time-consuming process,” wrote Johnson, the chairman of the Homeland Security Committee.

Our Take: Follow the rules, follow the process, don’t grant exemptions to your friends and arbitrarily deny them to others. It seems pretty basic.

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Latest move in tit for tat trade war; Tax Credit program wasn’t all bad.

August 9, 2018 | Posted in : News

Alaska puts chunks of North Slope up for single bids in unprecedented lease sale
Elwood Brehmer, Alaska Journal of Commerce, August 9, 2018

Attention oil explorers: Alaska officials have three flavors of SALSA they would like you to try. Painful puns aside, Department of Natural Resources officials for the first time have put together large chunks of available North Slope acreage that will each be auctioned off with a single bid during the state’s annual fall lease sales held by the Division of Oil and Gas. The three Special Alaska Lease Sale Areas, or SALSAs, are some of the only remaining swaths of unspoken-for acreage in the middle of one of the country’s preeminent hydrocarbon basins; and they come with a starter kit of data to inform drilling that any wildcatter should love.

Our Take: The refundable tax credit program provided the state with 3D – seismic data that they can now use to attract new explorers to the North Slope. HEADLAMP is anxious to see the results of this sale.

With tweaks, Alaska Supreme Court rules Yes for Salmon can go on ballot
Elizabeth Harball, Alaska’s Energy Desk, August 8, 2018

The Yes for Salmon initiative — or at least most of it — will be on the November ballot. The Alaska Supreme Court today ruled that only certain provisions of the controversial ballot initiative are unconstitutional. Whether the rest becomes state law will be up to Alaska voters. The decision guarantees a big fight ahead. The initiative is aimed at putting in place a much tougher permitting regime for projects built in salmon habitat and is fiercely opposed by a coalition of mining and oil companies, Alaska Native corporations and other groups.

Our Take: Alaska’s Constitution states that ballot initiatives can’t prioritize one state resource over another. HEADLAMP is glad the court required those provisions to be removed from the ballot but the fight to responsibly develop our resources and have a strong economy continues until November.

China hits US oil products, LPG with new tariffs but backs off crude for now
S & P Global Platts, August 8, 2018

China announced Wednesday retaliatory tariffs on an additional $16 billion worth of US imports, including oil products, LPG and coal in a new list of affected goods but leaving off widely-expected import duties on US crude. The Chinese Ministry of Commerce’s latest list imposes 25% tariffs on a swathe of energy commodities from August 23 including “asphalt shale, oil shale and tar sand.” But the ministry said the latest tariffs remove a previous reference to US crude in earlier proposals announced on June 16. Naphtha, propane and butane all remain on the new list which also covers waste metals, petrochemical products and cars.

Our Take:   China blinked first. Import duties on US crude would have hit them hard, leaving them with few options to purchase oil from someone else.

Exxon Seeks Long-Term Deals for U.S. Oil Exports
Catherine Ngai, Serene Cheong and Sharon Cho, Bloomberg, August 8, 2018

Exxon Mobil Corp. is courting refiners with rare long-term U.S. crude export deals, according to people familiar with the matter, as the company expands its trading scope. The oil giant has approached several refiners to discuss contracts for exports of light, sweet crude from the prolific Permian Basin starting as early as this year, said the people, who asked not to be identified because the discussions are private. The talks are in early stages, with volumes, timing and price still to be determined.

China tariffs create headache for next wave of US natural gas export projects
Tom DiChristopher, CNBC, August 9, 2018

China’s threat to slap tariffs on U.S. natural gas exports is injecting uncertainty into a construction boom for the multibillion dollar facilities that ship American shale gas around the world. By the end of next year, six facilities in the United States are expected to be exporting liquefied natural gas. During that same period, several companies are slated to decide whether they’ll move forward with another wave of American LNG export terminals. Many of those projects are looking to line up buyers in China, which is poised to surpass Japan as the world’s largest consumer of LNG, a form of natural gas super-chilled to its liquid form for export by sea.

Our Take: Alaska LNG is noted in this article

Former state senator appointed to Interior Gas Utility board
Robin Wood, Fairbanks Daily News Miner, August 8, 2018

Fairbanks city Mayor Jim Matherly has nominated former state Sen. Gary Wilken to replace Frank Abegg on the Interior Gas Utility board of directors’ city-appointed seat. Abegg resigned from the position Tuesday in protest of IGU’s purchase of Pentex Natural Gas. Wilken will need to be confirmed by the Fairbanks City Council at its Aug. 20 meeting. Wilken resigned from the Alaska Industrial Development and Export Authority board of directors in order to accept Matherly’s nomination. He was first appointed to the board in 2010 and was serving his fourth term. AIDEA was the entity that sold Pentex to IGU and provided the loan.

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Headlamp – Interior Gas Utility and AIDEA – you have some splaining to do.

August 8, 2018 | Posted in : News

Pentex purchase prompts IGU board member to resign
Robin Wood, Fairbanks Daily News Miner, August 8, 2018

Claims of unfair business practices from a state entity, incomplete information, crippling debt and unrealistic growth projections were among a long list of grievances cited in the resignation letter of Interior Gas Utility board member Frank Abegg. In the five factors Abegg expands upon, he claims Pentex was too expensive, a consistent supply of liquefied natural gas is at high risk, gas rates are too high, growth projections are too optimistic and that AIDEA dealt unfairly with IGU.

Our Take: Abegg’s claim that Golden Valley Electric serves 35,000 customers for about $20,000 per customer compared to IGU’s $70,000 per customer for the 1100 existing customers is startling. His grievances should not go unanswered. AIDEA would do well to be specific in a response to Abegg’s claims. The Fairbanks community and the state of Alaska can’t afford another boondoggle.

ConocoPhillips’ Willow prospect advances with review effort by federal government
Alex DeMarban, Anchorage Daily News, August 7, 2018

The federal government announced Tuesday that it will launch the regulatory process and start taking public comments for a major oil discovery on Alaska’s North Slope, in a statement that drew swift criticism from conservation groups. The Bureau of Land Management said it will begin taking steps to conduct an environmental review of ConocoPhillips’ Willow prospect in the National Petroleum Reserve-Alaska, according to a notice in the Federal Register.

U.S. crude exports to India surge as China intake fades
Clyde Russell, Reuters, August 7, 2018

U.S. crude oil producers appear to have found an alternative buyer for cargoes no longer heading to China, with India on track to import record volumes in August. India has booked a total of 9.94 million barrels of crude, about 319,000 barrels per day (bpd), to arrive from the United States this month, according to vessel-tracking and port data compiled by Thomson Reuters Oil Research and Forecasts. This would be almost triple the 119,000 bpd India imported from the United States in July, and well above the 190,000 bpd for November last year, the previous record for a month.

Saudi-Canada Fight Shows Need for More Pipelines, Oil Group Says
Kevin Orland, Bloomberg, August 8, 2018

The escalating trade battle between Canada and Saudi Arabia highlights the need for more pipelines to move oil and natural gas around the northern nation to improve its energy security, according to the Canadian oil industry’s largest trade group. Canada’s energy producers could supply a greater portion of their domestic market and satisfy more of world demand if they could move supply from producing regions to both coasts, said Ben Brunnen, vice president of oil sands operations and fiscal policy for the Canadian Association of Petroleum Producers. Canada imported 71,300 barrels of crude a day from Saudi Arabia as of 2014, accounting for about 11 percent of the country’s imports, according to Natural Resources Canada.

Donlin Gold Helps Green Star Remove Thousands of Pounds of Hazardous Waste
Alaska Business Monthly, August 8, 2018

Donlin Gold teamed up with Green Star this summer to collect almost 30,000 pounds of hazardous material and special wastes from five villages that were safely transported back to Anchorage for recycling or disposal. The pilot program is designed to remove the most hazardous legacy material from local landfills to improve human health and the environment.

Our Take:   Like a good neighbor…

From the Washington Examiner, Daily on Energy:

FINAL ACTION ON REPEALING OBAMA-ERA METHANE RULE COMING SOON: The Trump administration will soon finalize its repeal of the Obama administration’s “venting and flaring” rule to manage emissions from fracking, Joe Balash (DOI’s lands and mining chief) said.

‘Final stages’: He told the Heartland Institute that the agency is in the “final stages” of working with the White House Office of Management and Budget to prepare the final rule on updating and revising the venting and flaring regulations in the coming weeks.

Obama’s ‘cloak’ and ‘cover’ rule: The rule “upset decades of precedent on how we count waste” from the oil and natural gas sector, he said. It was a “cloak, just a cover, to use federal land management and royalty policy to regulate emissions.”

He said the U.S. is missing out on billions of dollars in revenue by restricting energy development on public lands.

“If production on federal lands had grown at the same rate as overall U.S. production from 2009 to 2015, total royalties would have been 31 percent higher,” he said. “We would have had an additional 20 billion dollars in the Treasury. And that would have helped across the board.”

SEVENTY NEW COAL MINES, SEVEN NEW COAL LEASES: “From Jan 2017 to March 2018, we’ve issued seven new coal leases by application, we’ve approved 70 new coal mine plans and these approvals positively impact 1,900 employees with those associated mines,” Balash told the Heartland Institute.

 

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How about a salmon tax?

August 7, 2018 | Posted in : News

Oil rises ahead of US sanctions
Reuters, August 7, 2018

Oil prices rose on Tuesday ahead of the introduction of US sanctions against major crude exporter Iran. Spot Brent crude futures were at $73.88 per barrel at early on Tuesday, up 13 cents, or 0.2%, from their last close. US West Texas Intermediate crude futures were up 1 cent at $69.02 barrel. US sanctions against Iran, which shipped out almost 3 million barrels per day (bpd) of crude in July, are set to begin at 12:01 am US Eastern time on Tuesday.

Letter: How about a salmon tax?
Don Johnson, Anchorage Daily News, August 6, 2018

The Stand For Salmon group has a desire to restore Alaska’s salmon populations, but it wants to do it by only addressing salmon habitat. Alaska’s salmon bust problems are not that simple. Unfortunately, there are many offenders to blame for our current salmon bust problems.

Blaming only habitat issues for salmon bust, while ignoring user groups, is like trying to catch a serial murderer by regulating the park the murders are committed in. You catch a murderer by going after the murderer, not by regulating the environment they are murdering in. User groups are busy slaughtering hordes of salmon while Stand for Salmon is busy trying to regulate only salmon habitat. Our salmon bust problems are local and foreign user groups slaughtering our salmon, period. We can end our salmon bust problems by directly addressing the people who are overharvesting our salmon.

Alaska could address these people by charging a straight salmon tax for each salmon killed by anyone. A solution can be reached by increasing the tax until users either cannot afford to kill salmon or pay enough tax to finance a real salmon solution. A salmon tax would guarantee a salmon solution either way. Minor habitat impacts could then be addressed after reducing major user group impacts.

Our Take: While tongue in cheek, this letter makes some good points. Headlamp would like to add that a salmon tax will also capture wages that are going out-of-state with the fishermen who don’t live in Alaska.

New Coast Guard commandant sees the Arctic as an urgent concern
Melody Schreiber, Arctic Today, August 7, 2018

Less than two months into his new job, Adm. Karl L. Schultz, the new commandant of the U.S. Coast Guard, encountered a surprise. The House of Representatives unexpectedly zeroed out the budget for a long-anticipated heavy icebreaker. Schultz was taken aback, but still has hopes the icebreaker — and five other polar-class vessels like it — will still find funding in Congress, and soon. “We need six icebreakers, three of them need to be heavy icebreakers, and we really need one today,” Adm. Schultz said at a recent event at the Center for Strategic and International Studies in Washington. “I am guardedly optimistic, but things change quick,” he said. “It’s a dynamic environment.”

Our Take: Headlamp shares Admiral Schultz’s concern. The U.S. needs icebreakers, today.

Chinese newspaper mocks Trump’s claim of winning trade war as ‘wishful thinking’
Engen Tham, Reuters, August 6, 2018

Chinese state media kept up their criticism of U.S. President Donald Trump’s trade policies, with a newspaper on Tuesday describing as “wishful thinking” Trump’s belief that a fall in Chinese stocks was a sign of his winning the trade war. As the world’s two biggest economies remained locked in a heated tariff dispute, Beijing and Washington have kept up a blistering rhetoric with threats and counter-threats of more punitive trade measures.

Russia says ‘deeply disappointed’ by US sanctions on Iran
AFP, August 7, 2018

Russia on Tuesday said it was “deeply disappointed” by US President Donald Trump’s decision to re-impose unilateral sanctions on Iran. “We are deeply disappointed by US steps to reimpose its national sanctions against Iran,” the Russian foreign ministry said in a statement. The ministry said it will do “everything necessary” to save the historic 2015 Iran nuclear deal and protect its shared economic interests with Tehran.

Our Take: Russia promising to do “everything necessary” to protect its economic interests while China mocks President Trump about the trade war – lots of rhetoric and threats.

Trafigura plans US deepwater oil export terminal
David Sheppard, Financial Times, August 6, 2018

Swiss commodity trader Trafigura has submitted plans to build the first deepwater US oil export terminal capable of loading some of the world’s largest supertankers, with crude shipments expected to soar in coming years. The plan would see the commodity house build an offshore deepwater port facility in Corpus Christi, Texas, on the Gulf of Mexico, with a view to accommodate very large crude carriers capable of carrying more than 2m barrels of crude.

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Headlamp – “Hey do you mine?” Trump better for mining than Obama.

August 6, 2018 | Posted in : News

The Trump jobs era really is different
Dan Kopf, qz.com, August 2, 2018

In terms of job creation, if nothing else, Donald Trump seems quite similar to his predecessor. When you look closer, a lot has changed for certain industries. Under Trump, the situation for certain mining and manufacturing industries has greatly improved. Work in the category “Support activities for mining”—which includes jobs exploring mining sites—grew by almost 28% under Trump, compared to losses of about 23% in the last 16 months of Obama.

Our Take:   Good for Alaska. Good for America! Headlamp will take 28% job growth over 23% job loss every day. Check out the chart in this article showing the industries gaining jobs under President Trump.

North Korea urges U.S. to drop sanctions as Seoul probes illicit coal shipments
Hyonhee Shin, Reuters, August 5, 2018

North Korean state media on Monday urged the United States to drop sanctions, as South Korea said it was investigating nine cases of coal shipments that potentially violated U.N. resolutions. Pyongyang had demonstrated good faith by ending nuclear weapons testing and returning the remains of U.S. troops killed in the 1950-53 Korean War, and the resolutions had lost a reason to exist, said the Rodong Sinmun, a mouthpiece of the ruling Workers’ Party. The statements came days after a confidential United Nations report concluded that North Korea had not halted nuclear and missile program, in breach of U.N. resolutions, and continued illegal trade in oil, coal and other commodities

Our Take: Drop sanctions? You haven’t stopped your nuclear program and are continuing to illegally trade other commodities. Survey says? No.

Amid tariff jitters, Alaska leaders say China-Alaska LNG relationship is a long-term ‘win-win’
Yereth Rosen, Arctic Today, August 6, 2018

With escalating trade tensions prompting China to threaten tariffs on U.S. liquefied natural gas, Alaska officials on Friday worked to calm fears that such a move would scuttle progress on the long-desired North Slope natural gas pipeline project. “Alaska’s vast reserves of natural gas can satisfy market demand for nearly a century, and short-term trade tensions do not change this long-term value proposition,” Gov. Bill Walker said in a statement. “Alaska LNG would be the largest job-creating infrastructure project in the country and would generate billions of dollars in revenue. My team and I will continue our work with the Trump Administration to ensure that Chinese and U.S. officials strike a fair compromise so that Alaska’s natural gas reaches the Chinese market”

As Alaska’s climate team floats carbon pricing, not everyone jumps on board
Elizabeth Harball, Alaska’s Energy Desk, August 3, 2018

Gov. Bill Walker’s Climate Action Leadership Team met Thursday in Anchorage to discuss its draft climate action plan, which recommends Alaska consider a carbon tax — a fee paid by entities that produce or burn fossil fuels, like oil companies, aimed at reducing carbon emissions. But the plan is not a consensus document, and not every member of the team agrees that pricing carbon is a good idea.

Our Take: Headlamp shouldn’t be surprised that those who want carbon pricing have the least ability to make an impact on carbon emissions. Shout out to Lorali Simon, an ex-officio member of the team, for her comment “I think a carbon tax is a horrible idea”. Simon expressed concern for the potential impact to the economy and jobs.

Threat of cyber-attack prompts change in Alaska primary
Mary Simton, KTVA, August 5, 2018

Early voting for the state’s primary elections starts Monday. However, there is a slight change to the process this year due to the current threat of foreign cyber-attacks. The Alaska Division of Elections (DOE) said it is suspending the return of ballots online until security advancements can be made to the state voting system.

From the Washington Examiner’s Daily on Energy:

SEC ENDS ITS CLIMATE CHANGE PROBE OF EXXON MOBIL: The Securities and Exchange Commission has dropped its investigation of Exxon Mobil over whether the oil and gas giant misled investors by not accounting for the impact that climate change has on its business.

Exxon confirmed on Friday that the SEC told the company it is ending the two-year investigation.

Law says: Under U.S. law, public companies must tell shareholders about risks or uncertainties related to their business. In Exxon’s case, its oil and gas operations lead to greenhouse gas emissions when consumers use their products. The companies have been accused of concealing the fact that warming could significantly disrupt their ocean energy exploration activities in Arctic regions.

Our Take: Cities and states should stop wasting their time and money. The courts have thrown out most of these cases, reasoning that climate change is a political question.

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Accelerate Alaska greatly exaggerates the death of resource development in Alaska. 

August 3, 2018 | Posted in : News

“Oil & mining are the future of our state!”  I couldn’t believe it – another politician was suggesting that our economy’s future was resource extraction.  Don’t get me wrong.  Resource development has been good for Alaskans, but it needs to be viewed as a runway, not a destination.”

Our Take:   AKHEADLAMP was surprised to read this opening paragraph from a group named “Accelerate Alaska”, planning a conference in Anchorage to create a road map for the future of Alaska that doesn’t include resource development.  Even more intriguing?   The list of supporters that includes many organizations who receive funding from resource development companies.  The group promises that “you’ll walk away with a road map and some actions”.   AKHEADLAMP anxiously awaits the plan that takes Alaskans away from prosperity and 6 figure jobs…

Price surge propels Big Oil bounce back
Upstream’s Oil and Gas News Editorial, August 2, 2018

While oilfield services companies seem unable to convince investors they are out of the mire, Wall Street has over-egged some oil majors. Disappointing analysts, as some oil companies did with their second-quarter results, is regrettable but of secondary importance. The underlying financial results from ExxonMobil and other industry heavyweights showed more welcome financial improvement. The industry is far better placed to move ahead, now the damage of the oil price downturn has worked its way through the system.

ExxonMobil’s profits rose 18%, while underlying cost of supply earnings at Shell were up by 30%.  Chevron doubled its earnings while BP, which is coming to the end of financial hits from the 2010 Macondo tragedy, saw underlying profits quadruple. These are the kind of financial performances, propelled by Brent crude prices back at $75 per barrel, which underpin future growth.

Sinopec Is Said to Delay U.S. Oil Purchases Amid Tariff Concerns
Sheela Tobben, Bloomberg, August 2, 2018

China’s largest refiner, Sinopec, will hold off on buying U.S. crude as an escalating trade war between Beijing and Washington threatens to make American imports more expensive, according to a person familiar with the matter. The state-run firm will delay buying any U.S. oil for September shipment until it is clear when China’s 25 percent tariff threat on U.S. crude imports might begin, the person said. The move comes as President Trump has directed U.S. Trade Representative Robert Lighthizer to consider increasing proposed tariffs on $200 billion in Chinese goods to 25 percent from 10 percent.

Our Take:   They aren’t building our LNG pipeline, they aren’t buying our oil, they are threatening tariffs on US LNG and they may be more fragile economically than they appear.  With friends likes this…

From the Washington Examiner Daily on Energy:

CHINA THREATENS TARIFFS ON US LNG TO RETALIATE AGAINST TRUMP: China proposed a list on Friday of $60 billion worth of tariffs on U.S. goods, including liquified natural gas.

The move to tax American LNG would be a major setback for the Trump administration’s ambition to flood the world with cheap natural gas as a key component of its energy dominance agenda.

Right back atcha: China is threatening to impose new tariffs on 5,207 kinds of American imports if the U.S. makes good on its pledge to impose a 25 percent tax on $200 billion worth of imported Chinese goods, up from an initial 10 percent rate.

As part of that, China says it would impose a 25 percent tariff on U.S. LNG.

Major stakes: Experts have warned that Trump’s trade war with China is threatening to discourage the world’s fastest growing LNG market from signing long-term contracts with American developers.

China’s demand for LNG is soaring, and it is relying more on the U.S., becoming the third largest destination for American gas behind Mexico and South Korea. Chinese imports of U.S. LNG increased from zero in 2015 to 17 billion cubic feet in 2016, to 103 billion cubic feet last year

China’s Influence
qz.com opinion, August 3, 2018

As America retreats, China is striving for global leadership on everything from trade to climate change to advanced technology. It has the capital to fund infrastructure spending across the globe, and the economic clout to freeze out trade partners and corporations who offend its sense of national identity. But the country may be more fragile than it looks, with a shifting economic model, changing demographics, lots of risky debt, and an aging population.

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Reindeer games or serious economic option? No Chinese builder for AKLNG

August 2, 2018 | Posted in : News

Sinopec drops interest in managing AK LNG construction
Elwood Brehmmer, Alaska Journal of Commerce, August 1, 2018

A Chinese oil giant is still in line to be a major buyer from, but not builder of, the $43 billion Alaska LNG Project. Alaska Gasline Development Corp. President Keith Meyer said Sinopec Corp. is still interested in 75 percent of the LNG produced from the project but is no longer being considered as a construction manager for Alaska LNG. Gov. Bill Walker and Meyer signed a non-binding joint development agreement, or JDA, with Sinopec, the Bank of China and China Investment Corp. Nov. 8, 2017, in Beijing in front of President Donald Trump and China President Xi Jinping. The framework agreement set the foundation for further negotiations over LNG purchases, project financing and possible construction involvement by the government-owned Chinese companies. Sinopec is generally considered the world’s largest oil and gas company.

Our Take: Alaskans will be much more comfortable with the prospect of Sinopec as a buyer, not a builder. AKHEADLAMP wonders why the delay in sharing this information? When Sinopec officials visited Alaska in March, they made it clear they weren’t interested in being a construction manager. 

LNG projects ramp up in response to growing market
Larry Persily, Petroleum Planet for the Alaska Journal of Commerce, August 1, 2018

Oil and gas companies are responding to the growing market for liquefied natural gas by ending their hiatus from new projects, while more liquefaction capacity is coming online in Russia, Australia and the U.S. Gulf Coast. LNG projects under construction or anticipated to reach a final investment decision within the next 12 months total more than 125 million tonnes of annual output capacity — more than a one-third boost to global capacity as reported by the International Gas Union’s 2018 annual report.

Senate GOP bill would amend key section of the Clean Water Act
Nick Snow, OGJ Washington Editor, August 1, 2018

The US Senate Environment and Public Works Committee Chairman John A. Barrasso (R-Wyo.) and three other Senate Republicans introduced legislation on July 31 to change requirements and establish limits for individual states under Section 401 of the Clean Water Act. “The water quality certification process is being abused by a few states in order to delay important projects,” said Barrasso. “The State of Washington has hijacked this authority and blocked Wyoming coal from being exported overseas. The coal terminal project would create jobs and directly benefit families in Wyoming, Washington, and other Western states. The State of New York has taken similar steps to slow the construction of natural gas pipelines. “This kind of obstruction is about politics, not water quality,” he said. “This legislation returns the process to what it was originally designed for—protecting America’s water.” Sens. Shelly Moore Capito (W.Va.), Steve Daines (Mont.), and James M. Inhofe (Okla.) cosponsored the legislation.

Our Take: Process not politics will protect America’s water and allow important projects to move forward. 

Alaska’s draft climate action plan includes carbon tax on page 43
Elizabeth Jenkins, Alaska’s Energy Desk, August 1, 2018

Governor Bill Walker’s Climate Action Leadership Team has been discussing a robust draft plan to tackle climate change. The draft mentions a number of ways to go about that: from beefing up efforts to monitor ocean acidification to better educating the public on the causes of warming.  But the state is going to need a way to pay for it all, and the plan addresses that, too: Alaska should consider a carbon tax.

Our Take: Spoiler alert – the usual suspects want to tax the oil and gas industry in order to pay for their policies that will have minimal impact at best. A shout out to Division of Oil and Gas director Chantal Walsh for pointing out the need for a global strategy that can really make an impact. 

National Defense Act has heavy Arctic focus
KTVA Web Staff, August 1, 2018

Wednesday, Congress passed a bill that will bring more resources to Alaska’s Arctic, where receding sea ice is opening new areas for shipping and exploration.  It’s attracting the interest of Russia– which has 46 icebreakers, according to the federal government. The U.S. Coast Guard has only two– and one of them is 10 years beyond its intended use.  The bill passed Wednesday authorizes six new icebreakers.

Our Take: $286 million for Alaska military construction sure helps our economy! AKHEADLAMP hopes the calls for an updated Arctic strategy, with specific roles for each branch of the military and the requirement that Alaska’s state and local governments be consulted, happens sooner rather than later. 

Norton Sound Communities Look To Build Commercial Reindeer Economy
Gabe Colombo, KNOM, July 31, 2018

Reindeer herding is becoming an increasingly attractive economic option for communities in the Norton Sound region. As winter sea-ice cover becomes more unreliable, the traditional practice of hunting for marine mammals is more dangerous. Some community leaders hope reindeer herds, originally imported from Scandinavia in the late 19th century, could now fill a growing gap in ensuring economic security.

Our Take: Necessity is the mother of invention: A coalition of reindeer-herding tribes that sell meat with a processing plant and freezer in Nome in response to a changing environment. 

From today’s Washington Examiner’s, Daily on Energy:

SAUDIS AND RUSSIANS BOOST OIL PRODUCTION IN JULY TO LOWER PRICES: Saudi Arabia and Russia are making good on their pledge to boost oil production to help lower rising global oil prices.

OPEC countries increased output in July, led by near-record production from Saudi Arabia, Bloomberg reported Thursday. The Saudis oil production rose by 230,000 barrels a day in July, to 10.65 million barrels per day.

Group think: The group’s 15 members collectively produced 32.6 million barrels per day, offsetting continued losses from Venezuela and Libya, and the expected onset of U.S. sanctions against Iran.

Russia, a non-OPEC member, produced oil at its highest level since it joined the group’s effort last year to cut output to raise prices.

How we got here: In June, the oil cartel and nonmember countries, including Russia, agreed to increase output by 1 million barrels per day

The Trump administration had pressured OPEC to boost production after 18 months of cuts because higher global oil prices have led to rising gasoline prices for U.S. drivers.

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Headlamp – Hump-day hypocrisy with Greenpeace.  The return of the Caspian Sea Monster

August 1, 2018 | Posted in : News

Greenpeace Launches Propane-Fueled Blimp to Protest Fossil Fuels, Steps on Rake
Dave Quast, Energy in Depth, July 31, 2018

Early Monday morning, radical activist group Greenpeace launched an ill-conceived stunt over the Taft-Kern County Airport in Taft, Calif. in the form of a…dirigible. Yes, Taft is a town that literally exists because of oil production. And, yes, the blimp is powered by propane and made of petroleum-based polyester. Yes, the tires, O-rings and controls of the airship are made of petroleum-based rubber and plastic. Greenpeace isn’t much for optics, it seems.

Our Take: The “ irony of using a large, fossil fuel-powered, petroleum-based polyester airship to protest the production of fossil fuels.”, is not lost on AKHEADLAMP😊 

Russia eyes reviving Cold War-era ground-effect vehicles to patrol the Arctic
Thomas Nilsen, The Independent Barents Observer, August 1, 2018

Russian officials are considering bringing back an unusual vehicle from the late Cold War era to extend the nation’s ability to protect infrastructure in the Arctic. A Lun-class ekranoplan, or wing-in-ground-effect vehicle, first flew in 1987. The massive missile-carrying half-boat, half-plane construction, with a wingspan of 38 meters, was nicknamed the “Caspian Sea Monster” and flew for just a few years before being at the end of the cold war. It’s now stored in Kaspiysk in Dagestan.

Our Take:  While Russia pulls out all the stops to strengthen their presences in the Arctic, the U.S. House of Representatives wipes out funding for a new icebreaker for America. 

Using data as a carrot, Alaska hopes to entice interest in oil lease sale
Elizabeth Harball, Alaska’s Energy Desk, July 31, 2018

The state of Alaska is offering oil companies a sneak preview on three North Slope areas it’s putting up for bid at this year’s oil and gas lease sale. Under a tax program enacted in 2003, oil companies agreed to release exploration data to the state in exchange for tax credits. Now, the state is offering some of that data on three North Slope areas to other oil companies for a fee. It also has pulled together a wide range of other public data on the areas, like a historical record of bids from previous oil and gas lease sales and compiled it for companies to peruse on the state’s website.

Protestors at Wheeler’s first hearing call him a ‘Pruitt puppet’
Miranda Green, The Hill, August 1, 2018

A group of protestors attending Andrew Wheeler’s first Senate hearing on Wednesday likened the newly appointed acting Environmental Protection Agency (EPA) administrator to his predecessor, Scott Pruitt. The group of protestors silently held up signs calling Wheeler a “Pruitt puppet.” They were promptly asked to leave without incident.

Coal-fired power plant in Healy accused of violating the Clean Air Act
Jill Burke, KTUU, July 31, 2018

Golden Valley Electric Association and the U.S. Environmental Protection Agency have reached a settlement agreement over accusations a troubled coal-fired power plant owned by the rural utility exceeded lawful mercury emissions while operating in 2015 and 2016. More than $300 million dollars have gone into construction and upgrades of the 50MW plant, a coal-fired boiler which creates steam to drive electricity-producing turbines. Built in the 1990s with money from the Department of Energy and the State of Alaska, it has never operated correctly and remained unused for nearly 16 years until 2015.

Our Take:  Most important information in the story:  Regulators told KTUU while mercury is a serious air pollutant, the violations at Healy Unit 2 — likely did not have a significant public health impact. The complaint makes no mention of known health problems stemming from the problem emissions.”

From the Washington Examiner, Daily on Energy:

EMISSIONS OF POLLUTANTS DRAMATICALLY FALL SINCE 1970, EPA SAYS: Emissions of six key pollutants have declined by more than 70 percent since 1970, the EPA said in a report Tuesday, even as the economy grew and Americans used more energy.

The report shows the air is has become cleaner by several measures.

Measuring stick: Since 1990, pollution in several categories have fallen: Sulfur dioxide has dropped by 88 percent; lead by 80 percent; carbon monoxide is down 77 percent; nitrogen dioxide has fallen 56 percent; and ozone pollution is 22 percent lower.

Alaska House primary has the most candidates in 22 years
 Andrew Kitchenman, KTOO and Alaska Public Media,July 30, 2018

Alaska is headed toward an unusually competitive primary in just over three weeks. And that competition is mostly within the Republican Party.  At the top of the ticket, both of the competitive primaries for governor and lieutenant governor are in the Republican Party. There are seven Republican candidates to be governor and six from the party running to be lieutenant governor. Most of the attention right now is focused on the leading candidates for governor: former Wasilla Sen. Mike Dunleavy and former Lt. Gov. Mead Treadwell of Anchorage. In the House, there are 109 primary candidates running, the most since 1996. Twenty-four of the 29 competitive primaries in the Senate and the House are on the Republican side.

 

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Headlamp – Big news for Hilcorp. Bad news for tariffs.

July 31, 2018 | Posted in : News

Houston’s Hilcorp paying over $1B for San Juan assets from Williams
Chron, Jordan Blum, July 30, 2018

An affiliate of Houston’s Hilcorp Energy will pay more than $1.1 billion to acquire the San Juan Basin gas pipeline and processing facilities in New Mexico and Colorado from Oklahoma-based Williams Partners. Hilcorp’s Harvest Midstream business will buy the system in the nation’s Four Corners region that includes more than 3,700 miles of pipeline, two gas processing plants, and one carbon dioxide treatment facility in an area stretching from New Mexico’s San Juan and Rio Arriba counties to La Plata County in Colorado.

Our Take: Good for Hilcorp! Providing jobs and more affordable energy is something we can all get excited about. “We believe this will be a significant economic benefit for the community. Our focus is on becoming the premier midstream services provider in the San Juan by reliably serving all of our customers,” said Harvest CEO Jason Rebrook.

Governor Walker believes steel tariff issue will get resolved
KTVA, Scott Gross, July 30, 2018

Governor Bill Walker on Monday said he doesn’t feel steel tariffs will have a big effect on Alaska or the oil industry. “All the pipe for the pipeline came from Japan,” Gov. Walker said. “I helped unload it off a ship in Valdez and I saw Nippon steel thousands of times.” Gov. Walker says steel could come from a different country if the tariff issue is not resolved. “I do believe it will be resolved, I really do,” Gov. Walker said. “Both sides want to resolve this issue, so I feel it will get done. In the interim, there are going to be some challenges.”

Our Take: Going into a multi-billion dollar project with a “fingers crossed” approach is an interesting way to handle it. Read story below.

From today’s Washington Examiner, Daily on Energy:

TRUMP’S VISION FOR LNG EXPORT DOMINANCE UNDER THREAT: The Trump administration is facing threats to its ambition to flood the world with cheap natural gas as a key component of its energy dominance agenda. And some of the damage is self-inflicted.

Slow approvals: Most immediately, the U.S. has a shortage of facilities along the coasts to export liquefied natural gas, or LNG — the chilled, liquid form to which gas must be converted for shipment in giant tanker vessels across the sea.

The U.S. has two major LNG export facilities in operation today, with another four set to enter service by the end of 2019. Four others have earned regulatory approval, and their developers are making final investment decisions on whether to build their planned facilities based on whether they can secure contracts for the gas they hope to provide.

But more than a dozen other facilities are awaiting permit approval from the Federal Energy Regulatory Commission (FERC), a backlog that the panel is struggling to meet because of a manpower shortage and other issues. In fact, it’s been three years since FERC approved a new LNG export terminal.

Trade war disruption: In the longer run, President Trump’s trade war with China is threatening to discourage the world’s fastest growing LNG market from signing long-term contracts with American developers, experts say.

ConocoPhillips says steel tariffs increasing drilling, production costs
KTUU, Cameron Mackintosh, July 30, 2018

Energy giant ConocoPhillips says tariffs on steel caused a “fairly significant” rise in drilling and production costs during the firm’s second quarter. “We have been and are going to continue to see some inflation pressure, including the steel tariffs in the U.S., which is turning out to be a fairly significant item for us,” Al Hirshberg, executive vice president of production, drilling and projects, told investors on a conference call last week. Hirshberg said Conoco spends about $300 million a year on pipeline, valves and fittings, all of which are made from steel. The firm expects the price tag to continue rising into next year.

Our Take: The tariffs are having both positive and negative affects throughout the US. Unfortunately, Alaska is seeing mostly negative.

China’s Belt and Road Initiative is falling short
The Financial Times, July 29, 2018

China’s Belt and Road Initiative is commonly seen as a program to fund and build infrastructure in some 78 countries around the globe. It is also Beijing’s bid to reshape the world by offering an alternative developmental vision to the US-led world order. In the Chinese context, it is the linchpin of President Xi Jinping’s grand design to create a “community with a shared future for mankind”. As such, the Belt and Road (BRI) is officially intended to showcase an open, inclusive form of development which benefits all countries that participate. To criticize BRI, therefore, is to censure a rising China’s proposition to the world. Yet there is growing evidence that the infrastructure projects are falling short of Beijing’s ideals and stirring controversy in the countries they were intended to assist.

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