Murkowski talks nuclear while Walker declares victory for Alaska’s economy.

June 14, 2018 | Posted in : News

To meet demand for rural power, communities can look to nuclear energy
CNN, Lisa Murkowski and Jay Faison, June 8, 2018

In 1994, the Clinton administration shut down a small sodium reactor that had operated without incident at Idaho National Laboratory for 30 years. This small reactor was termed “walk-away safe” because when the liquid sodium coolant got too hot, it expanded and shut itself down. Now, entrepreneurs are bringing it back from the dead. These sodium and other advanced microreactors could be a godsend for those in Alaska communities who spend up to half of their annual income on energy. Costs are so high in some remote Alaskan villages that mothers have had to choose between heating their homes and buying formula for their babies, a burden that most of the US cannot fathom and a choice that families should not have to make.

Our Take: As noted in the Senate Majority press release, for Alaska, that could mean the opportunity to reliably replace costly diesel fuel with emission-free nuclear, lowering costs that will empower small communities and boost their economic development.

Alaska credit rating receives stable outlook
KTVA, Steve Quinn, June 13, 2018

A major credit rating agency last week raised Alaska’s outlook from negative to stable, citing changes in how it will use Permanent Fund earnings to cover some of the state’s operating budget. On Wednesday, Gov. Bill Walker signed the legislation – Senate Bill 26 – which allows the state to use a portion of the fund’s overall market value for state spending. This change drove Standard & Poor Global Ratings to raise its outlook but not the AA rating, which determines Alaska’s creditworthiness. “The outlook revision to stable reflects recent fiscal reforms that recognize the state’s vast Permanent Fund Earnings Reserve Account (ERA) as unrestricted general fund revenue with provisions for its use,’ the June 8 S&P report said.

Our Take: STOP SPENDING! While Governor Walker declares victory for the economy, “This is independent confirmation of something we already knew: Alaska’s economy has turned the corner,” Headlamp would point out that finding a new source of revenue to feed a bloated state government isn’t a victory for the private sector. The incentive to reduce the size and scope of government has been removed and use of the earnings reserve account could lead to much larger budgets in the future.

Republicans propose penalties for states that oppose offshore drilling
The Hill, Luis Sanchez, June 13, 2018

House Republicans unveiled a draft proposal this week that would place fines on states that block offshore gas and oil drilling. The Republican draft proposal, first reported by The Washington Post, will be discussed at the Natural Resources Committee on Thursday. It would allow states to disapprove of offshore drilling for gas and oil in half of its lease blocks without facing any penalties. However, states with proposed lease sales that disapprove of drilling in more than 50 percent of the blocks would have to pay a fee equal to at least one-tenth the estimated revenue the government would have made if it had leased the blocks.

Our Take: A new take on state’s rights? State’s responsibilities? If you deny the federal government their opportunity to make revenue from lease sales in your state – you can pay a fine.

Committee Seeks Information from Defense Department on Impact of Environmental Litigation on Military Readiness
House Committee on Natural Resources, June 14, 2018

Today, House Natural Resources Committee Chairman Rob Bishop (R-Utah) and Subcommittee on Oversight and Investigations Chairman Bruce Westerman (R-Ark.) sent a letter to U.S. Department of Defense Secretary James Mattis requesting information about foreign entities using U.S.-based 501(c) organizations as proxies in environmental litigation against the United States or to influence domestic environmental and natural resources laws.

Our Take: AK HEADLAMP is sufficiently terrified when thinking about foreign adversaries using U.S. based organizations to engage in environmental “lawfare.” Adding to our fear? The letter specifies China, the Center for Biological Diversity and the Natural Resources Defense Council- all players in Alaska.

Salmon initiative risks Alaska’s economic future
Juneau Empire, Jack Rafusea, June 13, 2018

A niece of mine and her husband have owned a restaurant in Homer for at least 20 years. I worked on energy policy at the White House before and during the Arab Oil Embargo. After that, I often worked on Unocal projects that took me to Alaska; I’ve spent decades on issues involving Alaska’s energy sector. I know that investments in Alaskan oil and gas reserves have helped sustain the economy and meet the nation’s energy demand. I know the business, and like most in Alaska, I believe in the vital role energy has played, and must continue to play in the state’s future.

Our Take: This former energy advisor for the White House during the Arab Oil Embargo does a great job detailing the threat to Alaska’s economy from wealthy outside investors. “It’s never a good sign when single-minded big-money activists from elsewhere want to dictate regulatory policy in a state where they’ve never lived, let alone visited.” Get the facts before you vote. Stand for Alaska.

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3 Oil companies are suing Gov. Walker’s administration

June 13, 2018 | Posted in : News

3 oil companies are suing the state, saying a reinterpretation of Alaska tax law cost them millions
Anchorage Daily News, Nathaniel Herz, June 13, 2018

Three companies in Alaska’s oil and gas industry have sued Gov. Bill Walker’s administration over what they assert is a change in tax policy that could cost companies tens of millions of dollars. Two of the plaintiffs are big oil producers, ExxonMobil and Hilcorp. The third is a company that searches for oil, SAExploration, which says the policy has reduced the value of tax credits it’s earned. Both sides have a big stake in the outcome, with the oil companies protecting their revenues and the state defending its petroleum-based income. Alaska’s oil revenue is expected to be $1.8 billion this year, enough to cover almost half of the $4.4 billion the state spends on its yearly operating budget.

Our Take: Communication is key. Having open dialog with both parties could have prevented either from being in this situation. Click here to read the 19-page complaint.

Fort Knox expansion to extend mine life to 2030
Fairbanks Daily News-Miner, Rod Boyce, June 12, 2018

Kinross Gold Corp. announced Tuesday that it will proceed with an expansion of its Fort Knox gold mine northeast of Fairbanks, extending the mine’s life to 2030. The company expects the expansion will produce 1.5 million gold equivalent ounces, a term that includes byproducts mined along with the gold. Kinross possessed mineral rights to 709 acres immediately west of the Fort Knox in December but could not exercise the rights until the land came into state ownership.

Our Take: This is great news for Alaska. Developing our resources responsibly is one of the things we do best. This is also great news for anyone (which is everyone) who uses products produced from mining. Click here to view some of the everyday products in your life thanks to mining.

IGU approves final purchase of Pentex
Fairbanks Daily News-Miner, Robin Wood, June 12, 2018

Within the next two days, Interior Gas Utility’s general manager will fly to Anchorage and sign the final paperwork approving the roughly $60 million purchase of Pentex Natural Gas Company. The Alaska Industrial Development and Export Authority currently owns Pentex and is providing IGU the loan to purchase the company. IGU’s board of directors voted 4-1 on Tuesday night to give IGU General Manager Jomo Stewart authority to sign the final paperwork.

Our Take: Hopefully this is a step towards more affordable energy for Fairbanks.

From today’s Washington Examiner, Daily on Energy:

SENATE APPROPRIATORS SAY NO TO TRUMP, AGAIN: Senate appropriators reversed Trump-proposed cuts to the EPA and Energy Department budgets on Tuesday to advance a $35.85 billion spending bill.

The Appropriations Committee’s subcommittee on EPA and related agencies rejected many of the fiscal 2019 budget proposals put forth by the president with wide-ranging cuts that neither GOP and Democrats could support.

Up, up, up: The proposed funding level that the subcommittee passed is 26.7 percent higher than what was proposed. The funding represents about a $600 million increase from the funding Congress approved for fiscal 2018.

Trump’s ‘unwarranted decreases’: The bill admonished the “unwarranted decreases proposed in the budget and [makes] investments in our highest priorities, especially infrastructure investment for the land management agencies, Indian country and wastewater and drinking water improvements,” said Sen. Lisa Murkowski, R-Alaska, the chairwoman of the appropriations subcommittee.

Our Take: A $600 million increase from last year’s budget makes us question the need for such a large increase.

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Headlamp – 3% of Alaska’s ANWR revenue share could shift to native corporations.

June 12, 2018 | Posted in : News

Bill would shift 3% of state’s ANWR revenue to Native corporations
KTOO Public Media, Liz Ruskin, June 12, 2018

At the request of Alaska U.S. Rep. Don Young, a bill pending in the U.S. House would reduce Alaska’s share of revenues from oil drilling in the Arctic National Wildlife Refuge and give that money to Alaska Native corporations. Last week Rep. Tom Cole, R-Okla., proposed to reduce the state’s share to 47 percent and direct 3 percent to Alaska Native corporations. “It’s fitting that I should offer the amendment under the larger than life picture of Don Young that’s staring down on us,” Cole told the House Appropriations Committee. “Because to be fair to everybody, this is an amendment that Don Young asked me to offer.”

Our Take: The congressional delegation and our Governor support this move and see it as a good first step to make up for past failures to honor promises made to Alaska by the federal government. Senator Murkowski will have a tougher time in the Senate with the amendment. AKHEADLAMP knows she is up to the challenge!

OPEC will squeeze oil buffer to historic lows with an output hike
Reuters, Ahmad Ghaddar, June 12, 2018

The oil industry will face the biggest squeeze on its spare production capacity in more than three decades if OPEC and its allies agree next week to hike crude output, leaving the world more at risk of a price spike from any supply disruption. Spare capacity is the extra production oil producing states can bring onstream and sustain at short notice, providing global markets with a cushion in the event of natural disaster, conflict or any other cause of an unplanned supply outage. That buffer could shrink from more than 3 percent of global demand now to about 2 percent, its lowest since at least 1984, if the Organization of the Petroleum Exporting Countries, Russia and other producers decide to increase output when they meet on June 22-23, U.S. bank Jefferies said.

Read the full text of the Trump-Kim agreement here
CNBC, Everett Rosenfeld, June 11, 2018

President Donald Trump and North Korean leader Kim Jong Un signed an agreement at the end of Tuesday’s historic summit. Here’s what it says, according to a photo of Trump’s signed document:

  1. The United States and the DPRK commit to establish new U.S.-DPRK relations in accordance with the desire of the peoples of the two countries for peace and prosperity.
  2. The United States and the DPRK will join their efforts to build a lasting and stable peace regime on the Korean Peninsula.
  3. Reaffirming the April 27, 2018 Panmunjom Declaration, the DPRK commits to work toward complete denuclearization of the Korean Peninsula.
  4. The United States and the DPRK commit to recovering POW/MIA remains, including the immediate repatriation of those already identified.

Our Take: While the mainstream media spends days analyzing what happened at the summit and what it means – AKHEADLAMP looks at China’s reaction – since they have the potential to be our business partner on Alaska LNG: China is having a ‘big day’ after Trump-Kim summit: Ex-diplomats

From today’s Washington Examiner, Daily on Energy:

REPORT: NATURAL GAS, NOT TRUMP, WILL KILL THE PARIS DEAL: The Group of 20 industrialized nations are expected to invest more than $1.6 trillion in natural gas production, which will jeopardize the goals of the Paris Agreement. That’s according to a report issued Tuesday by the anti-fossil fuel group Oil Change International that favors moving to 100 percent renewable energy. As the G20 meets: The report was released as G20 energy ministers gather in Argentina this week. The advocacy group says it has “debunked” most industrialized nations’ belief in the “Clean Gas Myth.”

Bridge myth: “The concept of fossil gas as a ‘bridge fuel’ to a stable climate is a myth,” according to the group. “Emissions from existing gas fields, alongside existing oil and coal development, already exceed carbon budgets aligned with the Paris Agreement.”

Coal vs. gas: The report finds that even if coal were phased out tomorrow, the natural gas and oil from already developed fields would break the global carbon budget needed to keep the climate from rising 1.5 degrees over the next 20 years.

Global gas boom: The U.S., Russia, Australia, China, and Canada will be responsible for 75 percent of capital expenditures in natural gas production in G20 countries from 2018-2030, according to the report.

South America eyes fracking: Argentina is vying to open its own shale deposits to produce natural gas, which the report says, “risks undermining its commitment to the Paris Agreement and the work of the Energy Transitions Working Group during its G20 Presidency.”

Our Take: We question the validity of a report issued by an anti-fossil group that wants 100% renewable energy. We applaud the industrialized nations who are investing in natural gas production!

Administration looks offshore for wind energy boom
The Washington Examiner, Josh Siegel, June 12, 2018

The Trump administration is “bullish” about offshore wind, working with governors in the Northeast to transform what was once a fringe and costly investment into America’s newest energy-producing industry. “When the president said energy dominance, it was made without reference to a type of energy,” Interior Secretary Ryan Zinke told the Washington Examiner in an interview. “It was making sure as a country we are American energy first and that includes offshore wind. There is enormous opportunity, especially off the East Coast, for wind. I am very bullish.” Facing widespread opposition from politicians in states fearful of oil spills along their tourist-drawing coasts, Zinke is likely to scale back a draft plan to open nearly all federal waters for drilling, which he says has attracted “modest interest at best.”

Our Take: An “all of the above” energy policy is good for Alaska and good for America. Secretary Zinke’s recognition of market forces that are moving towards offshore wind is refreshing.

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Headlamp – Is Fairbanks one step closer to low-cost energy? Obama-era WOTUS take another hit.

June 11, 2018 | Posted in : News

Alaska gas utility deal set to close this week
KTUU, June 10, 2018

A multimillion-dollar business deal with ramifications for the cost of energy in Fairbanks is set to close this week. The Fairbanks Daily News-Miner reports the deal is between the Fairbanks North Star Borough and the State of Alaska to expand natural gas availability. The Interior Energy Project says the deal will “bring low-cost energy to as many residents and businesses of Interior Alaska as possible, as quickly as possible.” The borough-owned Interior Gas Utility is purchasing Fairbanks Natural Gas and other assets from the state-owned Alaska Industrial Development and Export Authority, which is financing the purchase along with major expansions to natural gas piping and storage for $330 million. The Interior Gas Utility board is set to meet Tuesday. The deadline to close the deal is midnight Thursday.

Our Take: If this deal brings “low-cost energy, as quickly as possible” to Fairbanks – AKHEADLAMP will be thrilled. We are always skeptical of a government entity pushing aside the private sector to “make” something happen instead of letting the free market work. Cautiously optimistic.

New LNG contract framework to spur oil-like trading model
Reuters, Oleg Vukmanovic, June 7, 2018

A new umbrella contract meant to streamline trading of liquefied natural gas (LNG), bogged down in red tape and wrangling over terms, could boost liquidity, draw in new entrants and speed up the market’s transition to an oil-like model. Already a mainstay of crude oil and pipeline gas trading, general terms and conditions (GTCs) provide a framework that traders can opt into by reference, scrapping the cumbersome system which currently sees LNG bought and sold through a web of bilateral master sales agreements (MSAs).

U.S. Sanctions Russian Firms for Energy Grid Cyberattack
Bloomberg Politics, Saleha Mohsin, June 11, 2018

The U.S. imposed new sanctions Monday on Russian firms and individuals for helping the country’s state security service conduct cyberattacks targeting the American energy grid and other key infrastructure. Russian hackers conducted a broad assault on the U.S. electric grid, air transportation facilities and other infrastructure since at least March 2016, the Homeland Security Department and FBI warned in March. The attacks are still ongoing, according to a person familiar with the matter. At least a dozen U.S. power plants – including one nuclear facility – have been breached as part of the coordinated attacks, Bloomberg reported last year.

Former Alaska senator, Mark Begich, runs for governor
KMXT, Kayla Desroches, June 8, 2018

Former Alaska U.S. senator and Anchorage mayor, Democrat Mark Begich, is running for governor. Begich says, as governor, he’d boost his role in the area of climate change. He says the state is “ground zero” when it comes to climate change and says the transition to renewable energy is one possible move forward.

From today’s Washington Examiner, Daily on Energy:

HOUSE GOP BLOCKS OBAMA-ERA RULES ON COST OF CLIMATE CHANGE: The House GOP on Friday took a step forward in reining in the Obama administration’s method of assessing the cost of carbon dioxide pollution when developing regulations. The House voted 212-201, along party lines, to include a rider blocking the use of the climate change cost metric to an energy and water spending bill. The amendment offered by Texas Republican Rep. Louie Gohmert bars any and all funds from being used under the bill to “prepare, propose, or promulgate any regulation that relies on the Social Carbon analysis” devised under the Obama administration on how to value the cost of carbon.

Our Take: How did we get to the point of using “social carbon analysis” as a cost metric on energy projects? Credible science should be the metric. Kudos to the House for blocking the use of this crazy climate change metric.

FEDERAL JUDGE GRANTS INJUNCTION AGAINST WATER RULE IN 11 STATES: A federal judge granted on Friday a preliminary injunction against the Obama administration’s Waters of the U.S. rule in 11 states. Judge Lisa Godbey Wood for U.S. District Court for the Southern District of Georgia, a George W. Bush appointee, said the states have a strong chance of winning their arguments against the 2015 rule, known as WOTUS, so she stayed it.

Half and half: The ruling applies to Georgia, Alabama, Florida, Indiana, Kansas, North Carolina, South Carolina, Utah, West Virginia, Wisconsin and Kentucky. The rule has now been halted in 25 states, after a previous court ruling against it. It may have little lasting impact, however, as Pruitt’s EPA has already finalized a rule delaying the rule until 2020 and is writing a new version. Chasing waterfalls: The rule seeks to expand which U.S. waterways are considered part of the national water system to be regulated by the EPA.

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Headlamp – Friday’s Financial Foray: Trust but Verify what candidates say about the budget

June 7, 2018 | Posted in : News

Election season truly is a testament to the adage “if you say something often enough it will become true.”  As Alaskans are bombarded with sound bites from candidates this summer and throughout the fall, they will inevitably hear: 

  • We cut the budget
  • We didn’t cut the budget
  • We didn’t cut enough
  • We cut too much
  • We fully funded education
  • We underfunded education
  • We added more money to public safety
  • We didn’t add enough to public safety
  • There is NO MORE room to cut

Trust but verify.  Every Alaskan should be familiar with this page from the Office of Management and Budget: Division of Finance

You will find the state checkbook online, a report on the compensation and travel for executive positions and state savings account balances.

The state checkbook is worth the time and effort to read.  We promise that after reading a few pages you will be able to argue for or against many of the statements listed above. We can say this with confidence about the 213-page report as the first 18 ¾ pages are all checks written for travel…

Full Report for FY 2018

 

Enjoy! 

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AGDC needs more transparency, not less, to gain confidence of AKLEG

June 7, 2018 | Posted in : News

Student Success Stories
ANSEP, Shannon Williams, June 6, 2018

Shannon Williams, a Yup’ik from Anchorage, has dreamed of becoming a paleontologist since she was five years old. Last year, a friend told Shannon about an opportunity to jumpstart her STEM career, and that’s when she became involved with the Alaska Native Science & Engineering Program. Even though she just completed the eighth grade, as a full-time student at ANSEP’s Acceleration Academy High School, Shannon is already earning credits towards her college degree.  Next year, Shannon is transferring to ANSEP’s newest high school component, the full-time Acceleration Academy (UAA), where she will attend classes and earn college credits as a student on the University of Alaska Anchorage campus.

Our Take:  AKHEADLAMP is a big fan of ANSEP.  They are preparing Alaskans for science and engineering careers, among other things, with a rigorous academic standard- and succeeding. To understand just how successful they are – click here.

Gasline corp. seeks loan from AIDEA
Alaska Journal of Commerce, Elwood Brehmer, June 6, 2018

Alaska Gasline Development Corp. leaders are asking the state’s development bank for help in financing the Alaska LNG Project, but neither side is willing to say as much. Multiple sources within the state confirmed AGDC has applied for a loan from the Alaska Industrial Development and Export Authority to fund work on the $43 billion LNG export plan; however, when asked if the state-owned gasline corporation had sought help from its fellow state-owned financing authority, an AGDC spokesman provided neither a “yes” or a “no.” “AGDC is actively developing financial and business arrangements that are beneficial to moving the Alaska LNG Project forward,” spokesman Jesse Carlstrom wrote in an email. “Due to the confidentiality and competitive nature of these efforts, AGDC cannot publicly disclose any information at this time.”

Our Take:  The Alaska legislature feels like the questions they are asking AGDC are not being answered and are reluctant to give them receipt authority (the ability to accept funds from sources other than the state) until they feel their questions are being answered.    More transparency, not less, will be necessary for the legislature to have confidence in the way the project is progressing.   

The market for LNG is getting tighter
UPI, Daniel J. Graeber, June 7, 2018

Growing demand from China should soak up some of the spare capacity of LNG to the modest relief of emerging suppliers like the United States, analysis finds. Chinese economic policy makers are focusing on qualitative growth as the pace of growth in gross domestic product cools. Meanwhile, China is shifting to a low-carbon economy and the super-cooled liquefied natural gas could be used as a bridge fuel.

From today’s Washington Examiner, Daily on Energy:

EPA TO ANNOUNCE ‘COST-BENEFIT’ REFORM PROPOSED RULE: The EPA is set to introduce a proposed rule Thursday adjusting the agency’s consideration of costs and benefits when it writes regulations.

The agency will produce an advance notice of proposed rulemaking, allowing it to weigh public input on a potential new rule, the Wall Street Journal editorial board reported. The EPA will propose a rule establishing an agency-wide standard for how regulations are assessed.

What’s at stake: Some conservatives have argued that the EPA in the past has overstated the benefits of cutting carbon emissions when making regulations. But critics of Pruitt say his agency purposely downplayed the benefits of reducing carbon emissions to justify his repeal of the Clean Power Plan, for example.

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Headlamp: Russian LNG lands in Boston. Alaska’s draft Climate Change Policy is light on detail.

June 6, 2018 | Posted in : News

June 4th was the deadline for comments on the draft Climate Change Policy developed by Governor Walker’s Climate Action Leadership Team (CALT). Response, research, mitigation and adaptation are the four categories covered in the policy.

Take a look at what some of Alaska’s business partners are already doing:

Advancing the energy transition
BP

Reducing, improving, creating. We’re reducing emissions in our own operations; we’re improving our products to help customers lower their emissions; and we’re creating low carbon businesses.

2017 Sustainability Report
ConocoPhillips

We are committed to providing the natural gas and oil necessary to support global economic development while addressing concerns related to greenhouse gas (GHG) emissions. Creating secure and affordable energy, while achieving the goals of the 2015 Paris Agreement will require collaboration between the natural gas and oil industry and governments, citizens and businesses.

In their comments to the team, the Alaska Oil and Gas Association (AOGA) pointed out:

  • The draft policy is an early work-in-progress and not ready for detailed public comments
  • The policy should be informed by robust scientific and economic analyses
  • A carbon-pricing mechanism in Alaska could result in negative unintended consequences to Alaska’s economy and environment

Our Take: The draft policy is lacking in specifics. Setting goals and targets with no detail on how they will be achieved doesn’t lead to good policy. There is much research and work to be done before a policy can be drafted and put out for public comment. Pro tip: look at what is already being done by our partners.

Russian Gas Addiction Problem No Problem for Those Willing to Address It
Natural Gas Now, Tom Shepstone, June 6, 2018

Russian gas addiction is a very real problem for Europe (and soon Boston?) but the solution is no mystery. It’s fracking here, LNG and development of UK gas. CNN Money has a fascinating story about Russian gas addiction in Europe. It’s a problem that’s come to our shores as well with Russian LNG entering Boston this past winter. What’s most interesting about the CNN Money article is that it ignores the obvious root of the addiction problem and the obvious solution. The problem is failure to develop natural gas resources in Europe (and pipelines to Boston). The solution is a combination of more natural gas development here and in the UK, for instance, and LNG.

Our Take: When political correctness is chosen over practical solutions… As the author notes, there is enormous potential in the UK’s Bowland Shale. “It is, in a word, humongous.” The best solution to breaking the Russian gas addiction is to develop your own resources – but political correctness demands that you choose to reduce your reliance on gas and move towards less reliable, more expensive renewable energy. Governor Walker’s climate action leadership team – take note.

Donlin Gold Advances In Permit Process
KYUK Public Media, Krysti Shallenberger, June 5, 2018

Last week, Donlin Gold received a state permit that regulates wastewater discharge. The mine is located in the Yukon-Kuskokwim region and is poised to be one of the biggest gold mines in the world. The company expects to obtain at least a dozen state and federal permits this year, says Donlin spokesperson Kurt Parkan. Those includes a combined record of decision from the Bureau of Land Management and the Army Corps of Engineers. The Army Corps spearheaded the Environmental Impact Statement, a study that calculates all the impacts to the environment from the mine. The Department of Transportation is set to issue a record of decision for the mine this year as well.

Our Take: For those who believe that our permitting system isn’t stringent – read on. According to Parkan “this is only a drop in the bucket compared to the potentially more than 100 permits that the Donlin Gold project needs to begin operating.” Parkan also notes “We’ve been saying about 100 general permits to operate, but in fact it’s a lot more than that because of the permits we need to operate the pipeline.”


Giving thanks to those who gave the ultimate sacrifice 74 years ago today.


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Breaking News: US resource development foe meeting secretly with Chinese?

June 5, 2018 | Posted in : News

Bishop, Westerman Probe NRDC on Relationship with China
House Committee on Natural Resources, June 5, 2018

WASHINGTON, D.C., June 5, 2018 –

Today, House Natural Resources Committee Chairman Rob Bishop (R-Utah) and Subcommittee on Oversight and Investigations Chairman Bruce Westerman (R-Ark.) sent a letter to Natural Resources Defense Council (NRDC) President Rhea Suh seeking information on the nature of the organization’s relationship with the People’s Republic of China and clarification on its status as a foreign agent under the Foreign Agents Registration Act. “The Committee is concerned about the NRDC’s role in aiding China’s perception management efforts with respect to pollution control and its international standing on environmental issues in ways that may be detrimental to the United States… “The NRDC’s relationship with China has many of the criteria identified by U.S. intelligence agencies and law enforcement as putting an entity at risk of being influenced or coerced by foreign interests… “The NRDC’s ability to work in China is dependent on the goodwill of the Chinese Government. The NRDC leadership regularly meets with senior Chinese and Communist Party officials.”

Our Take: The NRDC is no friend to Alaska resource development. Their involvement with senior Chinese and Communist Party officials could be harmful to Alaska in their efforts to export our resources to China.

China is Using This, Not Renewable Energy, to Replace Coal
Yahoo Finance, Maxx Chatsko, June 4, 2018

That’s because renewable energy is one of the least efficient ways to go about replacing coal consumption in a short period of time. Instead, China is hurriedly building natural gas and liquefied natural gas (LNG) import infrastructure to replace coal in the near-term. In fact, the country is single-handedly shifting global markets, having imported 58% more LNG in the first four months of 2018 than in the year-ago period, with American supply playing a central role. Energy investors shouldn’t overlook the opportunities this creates.

Our Take: AGDC and Alaska LNG haven’t overlooked this opportunity. Dealing with China obviously adds a new type of risk. (read the story above)

Could China Save The U.S. Coal Industry?
Oil Price.com, Haley Zaremba, Jun 04, 2018

China may soon be buying a lot more coal from the United States as part of a larger plan to narrow its trade deficit with Washington, according to reporting by Bloomberg. The coal would largely be sourced from West Virginia in what would be a major boon for the state’s ailing economy. Last month China pledged to increase spending on U.S. energy and agricultural exports to begin reducing its merchandise trade deficit of $375 billion, in the interest of de-escalating the warning signs of a trade war of massive proportions. If coal makes up a significant portion of these purchases, it will be a big, unanticipated turnaround for West Virginia.

China’s demand for cleaner LNG fuels pipeline partnership, but is it a pipe dream?
KTUU, Blake Essig, June 4, 2018

A liquefied natural gas pipeline through Alaska has been talked about for decades, and while some have called the project a pipe dream, the proposal continues to gain traction as the result of a relatively new partnership forged between Alaska and China. As it stands now, 75 percent of the financing for the development of the roughly $43 billion gas line project would come from China, and once the project is completed, 75 percent of the pipeline’s capacity would be sold to China.

Our Take: Structuring the Alaska LNG project with China as the main financer and the main customer leads to many questions for Alaskans. What revenue will Alaska see from this project under this new structure? What changes for municipalities expecting large property tax payments? Could the state be left to simply selling their royalty gas with no other financial benefits? These are just a few of the questions to be answered in order for Alaskans to get on board with significant Chinese involvement.

From today’s Washington Examiner, Daily on Energy:

FERC CHAIRMAN SAYS POTENTIAL ENERGY DEPARTMENT ACTION ‘NOT A DILEMMA’: Kevin McIntyre, chairman of the Federal Energy Regulatory Commission, said Tuesday that Energy Secretary Rick Perry has the authority to act to save coal and nuclear plants, and conceded his panel of independent energy regulators would not necessarily have a role in approving or implementing an executive order.

“Under the law as it’s written and regulations of DOE there are scenarios that could develop that would not involve a rate proceeding before FERC,” McIntyre said at the EIA Energy Conference. “We are looking at those details now.”

What the law says: McIntyre was referring specifically to Perry potentially using Section 202(c) of the Federal Power Act.

FirstEnergy Solutions, an Ohio utility with coal and nuclear plants facing closure, has asked Perry to use that authority, which the Energy Department can invoke to order certain power facilities to stay open in a crisis.

McIntyre said if the Energy Department were to act using that law, regional grid operators would work with the plants to arrange a payment agreement. If the parties could not reach an agreement, FERC then would get involved to figure out a payment structure.

Previous rejection: FERC last year rejected a proposal from Perry to provide special payments to coal and nuclear plants.

 

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Headlamp – “Eighty percent of a pipeline doesn’t do us any good. It’s like building half a bridge.”

June 4, 2018 | Posted in : News

Alaska’s 2018 Primary election:

The deadline has come and gone. Here is the detail of who is running.


PIPELINE CEO SAYS STEEL TARIFFS UNJUST

Greg Armstrong, the CEO of Plains All American Pipeline, said Monday morning that Trump’s steel tariffs are “unjust,” and warned that higher costs could stall projects. “Steel tariffs in our view are unjust,” Armstrong said at the Energy Information Administration’s annual energy conference.

No domestic source: The type of steel used in pipelines is a niche market, and most domestic steel producers have left the pipeline market because of its high cost. Armstrong said Trump’s 25 percent tariff could drive up the cost for U.S. oil and natural pipelines because pipeline makers rely on steel from overseas that will be more expensive to import.

“We don’t think we should pay steel tariffs for something we can’t buy in the U.S.” Armstrong said.

Nervous over quotas: But Armstrong, who is chairman of the National Petroleum Council, said pipeline producers can “tolerate” the tariffs. He’s more worried about the possibility of import quotas of steel.

The Trump administration announced last week it is imposing steel tariffs on the European Union, Mexico and Canada, after previously giving those allies an exemption. The administration has said it could ease up on tariffs if countries agree to quotas, restricting how much steel they export to the U.S. The Trump administration has already reached deals with South Korea, Brazil, Australia and Argentina, which agreed to limit their steel shipments. “We can tolerate the tariffs, but the quotas are a problem,” Armstrong said. “Eighty percent of a pipeline doesn’t do us any good. It’s like building half a bridge.”

Big Oil teeters between enemy and ally in climate fight
Axios, Amy Harder, June 4, 2018

The new flashpoint in the climate change debate is over the role of oil companies — whether they’re culprits, allies, or something of a frenemy. Why it matters: The burning of fossil fuels these companies produce is a big reason Earth’s temperature is rising, yet their products are also foundations of the global economy. Whether you love or hate them, what role these companies play is inherent to addressing climate change, particularly in the absence of presidential leadership on the issue.

Our Take: It’s good to see someone who considers fossil fuels an enemy acknowledging their role in the global economy. Comments are due today on the draft action plan prepared by Governor Walker’s climate action leadership team. Click here for more information and to provide comments.

Schlumberger in OneLNG exit
Upstream, June 4, 2018

Schlumberger has decided to pull the plug on its OneLNG joint venture with Golar LNG due to the failure of efforts to find funding for the proposed Fortuna liquefied natural gas project off Equatorial Guinea. Golar confirmed in its first-quarter results statement that “it has not been possible to finalize an attractive debt financing package” after concerted efforts by the partnership together with project operator Ophir Energy.

Rising oil prices bring hope to gloomy Canada sector
Reuters, Rod Nickel and Julie Gordon, May 31, 2018

Years of low oil prices and high costs spurred a stampede by multinational majors out of Canada’s oil sands last year, leaving the remaining crude producers struggling to weather painful drops in profit. Environmentalists derided the “tar sands” as too dirty for investment, and analysts said the region’s high production costs made little sense in a world of $50-a-barrel oil. But this month, global benchmark prices rebounded to $80 per barrel, cheering oil executives in the Canadian energy capital of Calgary, Alberta, who are shifting from survival mode to cautious expansion to capitalize on healthier cash flow expected this year.

Our Take: Even “cautious expansion” produces jobs and boosts the economy.

Former Alaska senator jumps into governor race
The Hill, Max Greenwood, June 2, 2018

Former Sen. Mark Begich (D-Alaska) is throwing his name into the race for the Alaska governor’s mansion. Begich, who served in the Senate from 2009 until 2015, made his plans official on Friday just before the candidate filing deadline. The announcement throws up an obstacle to Gov. Bill Walker, an independent, who is seeking reelection this year.

Our Take: The governor’s race is critical to the future of responsible resource development in our state. It’s important to know who will help the oil, gas and mining industries and who will hurt them. Governor Walker and Senator Begich have both clearly stated their opposition to the Pebble Mine, prior to the project going through the permitting process. #nothelping

 

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Headlamp – Thou “shall” hold lease sales in ANWR. Chenault out. Begich in?

June 1, 2018 | Posted in : News

Interior asking public not ‘if’, but ‘how’ to allow drilling in ANWR
KTOO Public Media, Elizabeth Harball, May 31, 2018

Public meetings on oil lease sales in the Arctic National Wildlife Refuge are drawing intense interest from Alaskans across the state. Last night over 100 protesters gathered outside the Anchorage meeting. At the meeting, officials said the Trump administration must move forward with oil lease sales in ANWR. The Department of Interior’s Joe Balash said that’s because of specific language in the law Congress passed last year allowing drilling in ANWR. “The statutory provisions say, ‘DOI shall’,” Balash said.

From today’s Washington Examiner, Daily on Energy:

OIL INDUSTRY ‘DEEPLY DISCOURAGED’ BY TRUMP’S NEW TARIFFS

The oil industry’s lead trade group said it is “deeply discouraged” by President Trump’s Thursday decision to impose tariffs on steel and aluminum imports from Canada, Mexico and the European Union. “We are deeply discouraged by the administration’s actions to impose tariffs on our three closest trading partners,” said Jack Gerard, president and CEO of the American Petroleum Institute. The industry views the decision “as a step in the wrong direction,” he said. The oil and natural gas group has been pushing hard against tariffs proposed by Trump, including those imposed on $150 billion of Chinese products, because of the industry’s dependence on dozens of imports

Our Take: Senator Sullivan’s opposition to this speaks volumes “right strategy, wrong target.”  

US Senate Democrats ask Trump to act on rising gasoline prices
Oil and Gas Journal, Nick Snow, May 25, 2018

Four US Senate Democrats, including Ranking Minority Member Charles E. Schumer (NY) and Energy and Natural Resources Committee Ranking Minority Member Maria E. Cantwell (Wash.), have asked President Donald Trump to act in response to rising gasoline prices as the summer driving season gets under way. “Today, we call on you to use all your authority to take timely action to pressure the Organization of Petroleum Exporting Countries and cooperating countries to increase world oil supplies to lower prices at the pump,” they said in a May 23 letter, which also was signed by Sens. Edward J. Markey (Mass.) and Robert Menendez (NJ).

Our Take: Go Senator Murkowski!! “This is pretty simple. If you don’t support access, leasing, production, pipelines, refineries, or the reasonable regulation of all of those, you’ll be left at the mercy of countries that don’t like us,” Murkowski maintained in her response to the group.

Sen. Cantwell presses Army Corps to add Pebble hearings in Washington state
Anchorage Daily News, Erica Martinson, May 31, 2018

Sen. Maria Cantwell wants the Army Corps of Engineers to expand its public meetings discussing the potential scope of Pebble mine to include events in her state, Washington. Cantwell wrote a letter to Assistant Secretary of the Army for Civil Works R.D. James on Thursday asking for additional meetings in Washington so that her constituents can weigh in on the proposed gold and copper mine planned for the headwaters area of Bristol Bay.

Our Take: Maria Cantwell still leads the field in “Enemy Number One” to Alaska: If her good friend, Mark Begich, files for Governor today, perhaps he can be convinced to ask her to stay out of Alaska’s business, or better yet, stop inviting her here for fundraisers?

Is A Natural Gas Pipeline Between Alaska And China Realistic?
Oil Price.com, Irina Slav, May 31, 2018

When Alaska’s governor Bill Walker headed with a trade delegation to China earlier this week, he must have hoped to bring back good news about an 800-mile gas pipeline project that would see the state’s gas reserves flow into an increasingly gas-hungry Chinese economy. However, the only news the delegation brought home was that Sinopec and Bank of China were still interested in the project.

AOGA’s Great Debate Conference highlights key issues in Governor’s race
KTUU, Derek Minemyer, May 31, 2018

At an event foreshadowing the continued role of energy production in Alaska politics, the Alaska Oil and Gas Association held its Great Debate Conference at the Dena’ina Center Thursday, where gubernatorial candidates squared off against each other for screen time, armed to the teeth with well-rehearsed, pro-development talking points.

Our Take: AKHEADLAMP attended the event – when the candidates were asked if they would commit to opposing any increases in oil taxes, Dunleavy and Hawkins said “yes” immediately – Governor Walker wouldn’t make the commitment.

Natural Gas Weekly Update
U.S. Energy Information Administration, May 31, 2018

In April 2018, Bangladesh became the newest country to begin imports of liquefied natural gas (LNG). In the next two years, six more countries—Panama, Gibraltar, Russia, Philippines, Ghana, and Bahrain—are expected to start importing LNG, adding a combined 2.1 billion cubic feet per day (Bcf/d) of new regasification import capacity

Our Take: 7 new countries importing LNG is good news for the Alaska LNG project – the more the merrier.

Mike Chenault for Govern

It is with the deepest regret that I am announcing my withdrawal from the 2018 Republican race for Governor. There are several factors that led to my decision not to pursue the Governor’s office, most are personal and there are other reasons I would rather not discuss. I enjoyed the time I spent traveling around the state, making new acquaintances and meeting so many Alaskans who love our state and share the same passion I have of seeing our state become prosperous once again. Again, I truly appreciate those who lent their support to my campaign and thank those who spent the time to let me know of their concerns and ideas.

Our Take: Best wishes! Thank you for all that you have done for Alaska. It will seem strange in Juneau without you there.

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