How much gold is in a gold medal? Ask Kikkan Randall. Jessie Diggins and Kikkan Randall came from behind to win a surprise cross-country gold medal in Wednesday night’s team sprint freestyle, ending one of the United States’ longest-running Olympic droughts with a dramatic upset. The American skiers overtook a pair of more heralded teams to finish the final in a time of 15 min, 56.47 sec, edging Sweden for the gold by 0.19 seconds and coming in nearly three seconds ahead of Norway, who added a bronze to their overflowing cross-country medal haul in Pyeongchang. “I just felt unstoppable,” Diggins said. “I am in the best shape of my life right now for sure. That feeling of crossing the line and having Kikkan tackle me was the coolest thing ever.” Diggins and Randall became the first ever American women to win any medal in cross-country skiing, much less a gold. They join Bill Koch, a silver medalist in the 30km event at the 1976 Winter Games in Innsbruck, as the only US skiers to make an Olympic podium in a sport dominated by athletes from Scandinavia. Each gold medal is made up of 92.5 percent silver and 1.34 percent gold, with the remainder copper. The International Olympic Committee stipulates that each gold medal must have six grams of gold (as well as 92.5 percent silver). Mining Matters!
Hilcorp CEO Hildebrand steps down and Lalicker moves up. Jeffery Hildebrand, founder of the Houston oil company Hilcorp Energy, recently stepped down as chief executive of the company he started nearly 30 years ago, but he will remain in the executive chairman position. Hildebrand, a prominent Houston billionaire, handed the day-to-day CEO reins over to Greg Lalicker, who previously served as chief operating officer. Lalicker joined the Hilcorp leadership team 12 years ago. Hilcorp isn’t yet commenting on the changes except to confirm the transition. Hildebrand, who Forbes says is worth nearly $4 billion, rarely speaks publicly about his company, which is one of the nation’s largest privately-owned oil and gas producers. Hilcorp gained notice last year when it bought ConocoPhillips’ holdings in New Mexico’s San Juan Basin for nearly $3 billion. The move was consistent with Hilcorp’s business of taking mature fields and squeezing out oil and gas that other companies may leave behind. Hilcorp, which has oil and gas operations from Texas to Alaska, recently expanded into the new Hilcorp Tower building in downtown Houston.
From today’s Washington Examiner, Daily on Energy:
OBAMA INTERIOR OFFICIAL BROKE LAW TO ENRICH FAMILY MEMBER, INSPECTOR GENERAL FINDS: An Interior Department official in the Obama administration violated the law to benefit a family member affiliated with a global animal welfare group, the department’s inspector general said Tuesday.
- What the investigation showed: The results of the investigation showed that Richard Ruggiero, international conservation chief with the U.S. Fish and Wildlife Service, violated federal ethics laws by participating in a federal cooperative agreement that financially benefited a family member.
- Hidden relationship: Neither Ruggiero nor his family member “disclosed their relationship in writing” to the Fish and Wildlife Service. Ruggiero also shared confidential, “nonpublic” information about the agreement with his family member.
- The agreement was with the nonprofit organization International Fund for Animal Welfare, of which Ruggiero’s family member was a member.
Billionaire founder of Hilcorp hands off CEO job
Houston Cornicle, Jordan Blum, February 20, 2018
US skiers Jessie Diggins, Kikkan Randall stun field for historic cross-country gold
The Guardian, Bryan Armen Graham, February 21, 2018
Biggest ever in our country’s history. The Interior Department is planning to hold the largest sale of oil and gas leases in the country’s history. The plans, announced Friday, would auction off 77.3 million acres of offshore waters to drilling, covering coastal waters in Texas, Louisiana, Mississippi, Alabama and Florida. The auction will take place March 21. Areas protected under a 2006 congressional moratorium, which bans drilling within 125 miles of the Florida coast until 2022, will be excluded from the lease. Interior largely credited strong offshore lease sales from 2017 for raising U.S. revenues by $1 billion dollars compared to 2016. “Responsibly developing our offshore energy resources is a major pillar of President Trump’s American Energy Dominance strategy,” Deputy Secretary David Bernhardt said in a statement. “A strong offshore energy program supports tens of thousands of good paying jobs and provides the affordable and reliable energy we need to heat homes, fuel our cars, and power our economy.”
Any skeletons in your closet? On Sunday night, the Democrats of House District 38 selected three potential nominees to replace Representative Zach Fansler, who resigned earlier this month following assault allegations. Two of their three choices are Alaska Native women, and all three candidates have deep ties to the Yukon-Kuskokwim Delta. The party’s nominating committee interviewed a total of five applicants yesterday, then voted on their top choices and ranked them in the order that they preferred. The committee’s first choice is Tiffany Zulkosky, an executive at Bethel’s Yukon-Kuskokwim Health Corporation. When she was in her twenties, Zulkosky was also elected to serve as the youngest mayor in Bethel’s history. The committee’s second choice is Yvonne Jackson. She grew up in the Y-K Delta’s villages and now manages job training programs at the Association of Village Council Presidents (AVCP), the regional Native non-profit corporation. Their third choice is Raymond “Thor” Williams, a former Bethel Mayor and current city council member. According to Diane McEachern, a professor at the University of Alaska’s Kuksokwim University Campus who serves on the nominating committee, the seven-person committee was looking for someone with the experience to hit the ground running when they arrive in Juneau. In a series of 30 to 40-minute interviews, they asked applicants about their views on tribal sovereignty and subsistence priority. They also asked them whether anything of concern might come up after a thorough background check.
Survey says? $10 million for seismic. The administration of Gov. Bill Walker is asking the Alaska Legislature for permission to spend $10 million on seismic surveying in the coastal plain of the Arctic National Wildlife Refuge. The seismic survey funding was included as part of a supplemental spending request delivered by the state to the Legislature last week. The request, which totals $26 million in additional costs, is to be folded into ongoing work on the state’s operating and capital budgets for fiscal year 2019. The Senate Finance Committee heard a presentation Monday on the supplemental request, including the funding. State officials said the money would be used to provide better information about the oil and gas below the surface of the little-surveyed coastal plain. The request comes at a critical time for ANWR, the federal government, and for the state, which is grappling with a $2.5 billion annual deficit.
Mexico becomes first Latin American member of IEA. Mexico has become the 30th member of the International Energy Agency, the latter announced, welcoming its first Latin American member as part of an open-doors policy aimed at strengthening the ties between the IEA and emerging economies. The policy itself is part of a strategy to modernize the authority through closer engagement with the emerging economies as well as key energy industry players in regions such as Latin America, Asia, and Africa “towards a secure, sustainable and affordable energy future.” The strategy also aims to expand the reach of the IEA since the share of its members’ production in global energy supply had shrunk to 40 percent in 2015. Now, after the addition of Mexico, this share has gone up to 70 percent. The agency praised the world’s 12th largest producer of crude oil for the speed with which it covered the requirements for joining. These include crude oil and/or products reserves equal to 90 days of net imports as of the previous year that could be used quickly in case of a global supply disruption, and a program seeking to restrain demand for oil by up to 10 percent.
FERC to AGDC – more details please. Federal regulators have told the Alaska Gasline Development Corp. (AGDC) that the state agency is falling short in providing all the information, construction and operation plans needed to prepare an environmental impact statement for the proposed Alaska LNG project. “Incomplete responses and the reissuances of requests for information will affect the schedule for completing the environmental review,” the Federal Energy Regulatory Commission (FERC) said in its Feb. 15 letter to AGDC. “To date, only minimal drafts, and in most cases just outlines, of these plans have been provided, and/or the development of the plans have been deferred to a later date,” FERC said, referring to its past requests of AGDC for proposed mitigation plans for wildlife avoidance, marine mammal monitoring, vegetation and soils restoration, groundwater monitoring, and invasive plants. “Rather than providing specific avoidance and mitigation measures to be adopted … AGDC has deferred providing information to future plans or the permitting phase,” FERC said. “It is imperative that the information provided in AGDC’s responses include definitive commitments to implement specific avoidance, minimization and mitigation measures. Incomplete information or ill-defined commitments by AGDC may compromise our ability to adequately assess and disclose the full impact of the project.”
Debbie Brown to staff Alaska LNG office in Nikiski. The state-sponsored corporation working to advance a major gas line project is opening a field office in Nikiski. It will be the Alaska Gasline Development Corp.’s third satellite office. The corporation also has a presence in Houston, Texas and Tokyo. Rosetta Alcantra, a corporation spokeswoman, says the new office will allow Nikiski residents to have in-person contact with an agency representative. Nikiski is the proposed site for the project’s liquefaction plant. Alcantra says the community has long asked AGDC to open an office there. She says the office lease will cost about $1,250 a month and the salary for office staff will be $6,700 a month. The office will be staffed by Debra Holle Brown. Alcantra says the money will come from the Alaska liquefied natural gas project fund.
Interior to hold largest oil and gas lease sale in US history
The Hill, Miranda Green, February 16, 2018
Dems Select Three Candidates For Rep. Fansler’s Seat
KYUK Public Media, Teresa Cotsirilos, February 19, 2018
State asks Legislature for $10 million to survey ANWR for oil
Juneau Empire, James Brooks, February 20, 2018
Mexico Joins The IEA
Oil Price, Irina Slav, February 19, 2018
FERC advises state it is falling short in providing information on Alaska LNG
Mat-Su Valley Frontiersman, Larry Persily, February 17, 2018
Alaska gas line corporation opening Nikiski office
KTOO Public Media, February 18, 2018
U.S. coal production, exports, and prices increased in 2017. EIA expects total 2017 U.S. coal production to be 773 million short tons (MMst), 45 MMst higher than in 2016 and the largest year-over-year tonnage increase since 2001. Coal prices across the United States rose as well, especially for Central Appalachian coal. An increase in demand for U.S. coal exports more than offset a slight decline in U.S. coal consumption, contributing to higher coal production in 2017.
Asia preferred destination for US LNG. Mexico, South Korea and China are the biggest buyers of liquefied natural gas (LNG) produced from US shale gas, according to the data from the Department of Energy. These three countries took almost half of the total LNG volumes that have been produced at Cheniere’s Sabine liquefaction plant in the period from February 2016 to December last year, the data shows. For the year of 2017, US LNG exports surged to 13.1 million tonnes from 3.1 million tons in 2016 as Train 3 and 4 started producing the chilled fuel at Sabine Pass. There are currently four 0.6-Bcfd liquefaction trains operating at Sabine Pass, and a fifth is under construction and expected to enter service in mid-2019. Last year also saw Asia becoming the preferred destination of US LNG. Asia Oceania absorbed the largest share or 43% percent of US LNG volumes in 2017 while nearby markets of South America and Mexico still accounted for 31% of US LNG deliveries, the international association for natural gas, Cedigaz said in a report.
Simplify rules, attract investment. The Indonesian government has scrapped dozens of regulations hampering investment flow into the energy sector as the government expects to boost investment in the sector. Indonesian Energy and Mineral Resources Ministry said on Monday that it has abandoned 22 out of 51 rules for business license in the sectors of oil and gas, mineral resources and electricity. “Hopefully this can help luring more investment in the sector by twice this year,” Indonesian Minister for Energy and Mineral Resources Ignasius Jonan told a news conference at the ministry. “The ministry has set a 51 billion dollar target of investment in the energy sector this year,” the minister said. Indonesia is the world’s largest exporter of thermal coal and home to the world’s second biggest copper mine. However, production of the country’s oil has been dwindling in recent years due to aging wells, thus the government is trying to attract more investment for exploration in an effort to raise outputs.
Triple Tax Credits for Carbon Injection. A little-noticed addition to the U.S. budget deal approved last week will help Occidental Petroleum Corp and other oil producers by more than tripling a tax credit for injecting carbon dioxide back into the earth to increase crude output. The tax-credit expansion, although supported by environmentalists and energy producers, had failed to move out of Congress during the 2016 presidential election. Its passage now likely will further boost already surging U.S. oil output in a year that production is forecast to hit 11 million barrels per day. The injection process, used for more than 40 years to prolong output from traditional oil wells, also is being tested by Oxy and others as a way to speed more oil production from shale wells.
U.S. coal production, exports, and prices increased in 2017
U.S. Energy Information Administration, Brian Park, February 16, 2018
Mexico, South Korea and China are the biggest buyers of US LNG
O&G Links, LNG World News Staff, February 14, 2018
Indonesia Simplifies Rules In Energy To Attract Investment
O&G Links, Daily Independent Nigeria, February 13, 2018
U.S. spending bill expands carbon tax credit, boosting oil producers
Reuters, Ernest Scheyder, February 16, 2018
If you encourage something you get more of it…A handful of Wyoming lawmakers say a tax cut for the oil and gas industry could help with depleted fossil fuel revenue and the large deficit that’s left in the state budget. Senate File 98 is an attempt to entice developers to drill in the Cowboy State by offering a tax break in the third year of production, said one of the bill’s sponsors, Senate President Eli Bebout, R-Riverton. The bill could also keep operators around longer after the amount of hydrocarbons they are collecting slows down, he said. Those opposed to the bill question whether a tax cut would increase revenue and argue that the responsible development of Wyoming’s natural resources does not involve a tax cut for oil and gas operators. Seeking a tax cut for oil and gas while Wyoming is staring at an imposing budget deficit may seem like a tough sell. However, Bebout’s sponsorship is likely to ensure a meaningful hearing from other lawmakers. “If we pass this through, I think you will see more drilling rigs,” Bebout said. “It helps our revenue picture.”
If you discourage something…with industry support? Colorado oil and gas regulators are raising taxes on energy developers to help pay for the environmental impacts of drilling. The Colorado Oil and Gas Conservation Commission approved a plan on Monday to raise $4.8 million more in taxes by charging 0.11 cents on every dollar of oil and gas produced. The industry supported the increase. Local governments and environmentalists had urged commissioners to raise taxes by at least $7 million a year to address more public health and safety issues. The commission is almost totally funded by industry taxes. The tax hike will compensate for a projected drop in separate severance taxes charged to drillers partly because of a court ruling allowing companies to deduct the cost of some capital expenditures.
1380 applicants for 280 jobs. Alaska has the highest rates of unemployment in the nation, according to a report from December 2017, from the United States Department of Labor. The state’s seasonally adjusted unemployment rate in December 2017 was at 7.3 percent, according to the United States Department of Labor. The national rate in December was at 4.1 percent. That’s a lot of groundwork to say that when a new business comes to down, like Dave & Buster’s, it gets a massive amount of applicants. Oso Adams, Dave and Buster’s general manager said the company has received 1,300 applications for 280 positions. “I’m glad we can turn around and say I am looking for 280 employees to work for us so they have a paycheck and they can continue to move and live as well,” said Adams. Neal Fried, an economist with the Alaska Department of Workforce and Labor Development said Alaska’s unemployment rate has risen. “In some ways, our job market is softer, we are entering our third year of a rescession our unemployment rate here is a little higher than it was a year ago,” said Fried. Fried said there are more people looking for jobs than this time last year. “There are fewer people employed today than there was a year ago. So that tells us to some extent that the market is going to be softer,” said Fried.
Silver, gold and zinc…oh my! 2017 report shows mines added more to mineral reserves than it mined. Exploration work at Greens Creek Mine has yielded results that could extend the mine’s life, it announced this week in a press release. Greens Creek wrapped up its 2017 exploration work and reported finding more minerals than it mined last year, making Greens Creek officials optimistic the mine can stay open past its 10-year timeline. “The exploration results that we released are extremely encouraging as we continue to find more material adjacent to and within our existing ore bodies,” said Mike Satre, spokesman for Hecla Greens Creek Mining Co. The 839,589 tons of rock processed at Greens Creek last year contained 10.8 million ounces of silver, 78,245 ounces of gold, 60,858 tons of zinc and 22,870 tons of lead — a lot to take out of the ground.
Lawmakers propose tax cut for oil and gas in Wyoming
Casper Star Tribune, Heather Richards, February 14, 2018
Colorado raising taxes on oil, gas drillers by $4.8M
AP News, February 13, 2018
More people looking for jobs, according to the Alaska Department of Workforce and Labor Development
KTUU, Kalinda Kindle, February 14, 2019
New finds at Greens Creek promise to extend mine’s life
Juneau Empire, Kevin Gullufsen, February 15, 2018
When Hladick helping hurts…The U.S. Environmental Protection Agency (EPA) has a big part to play in some very controversial issues in Alaska and beyond, from the proposed Pebble Mine to national climate policy. The Trump administration recently appointed Chris Hladick to lead EPA Region 10. Hladick will oversee EPA’s work in Alaska, as well as in Washington, Oregon and Idaho. Alaska’s Energy Desk got a chance to catch up with Hladick at the Alaska Forum on the Environment conference in Anchorage this week. In a wide-ranging interview, Hladick answered questions about the agency’s recent Pebble Mine decision, EPA’s budget and climate change. Before landing his federal post, Chris Hladick spent a lot of time at various levels of government in Alaska. Most recently, Hladick was a member of Governor Bill Walker’s cabinet, serving as commerce commissioner. Before that, he worked for the cities of Unalaska, Dillingham and Galena. Hladick thinks that experience will come in handy: “I bring to the table local knowledge of how things can actually work on the ground here in Alaska,” Hladick said. Hladick said his boss — EPA administrator Scott Pruitt — recently called him up seeking some of that local knowledge, on a hot topic for many Alaskans: the proposed Pebble Mine. “He was interested in knowing how many people the commercial fishing out there employs, as opposed to what the mine will employ. I think he went through a process in his mind of weighing all the issues together,” Hladick said.
Southeast Conference says “NO!” to Stand for Salmon. Southeast Conference speakers on Tuesday took a stance against the “Stand for Salmon” initiative, a proposed change to habitat protections which could see a statewide ballot in November. It was one of several policy stances the group of Southeast business, municipal and Alaska Native corporation leaders took on proposed changes to natural resource law at their mid-session summit. Those stances took the form of draft letters and resolutions that the influential group will forward to legislators if approved at an upcoming fall meeting. The Stand for Salmon initiative and the similar House Bill 199 both create a more stringent process for approving projects on salmon-bearing waters in Alaska. Under the initiative, any proposed project on salmon habitat would have to prove it could restore the area before receiving the go-ahead.
“Hail Shale, but deepwater oil fights back.” Penguins, Royal Dutch Shell’s (RDSa.L) latest oil and gas development in a remote corner of the British North Sea, epitomizes the new doctrine for deepwater projects — keep it cheap and simple. Shunned during the oil price crash of 2014-2016, deepwater projects are being embraced again, a challenge to the surge in onshore U.S. shale output. Penguins, the first new major deepwater project this year, will rejuvenate the 44-year-old field by drilling 8 new wells 165 meters (541 feet) underwater and connecting them to a new production vessel. Due for completion in 2021 at a cost of around $1 billion, Penguins will cost a fraction of the average of giant developments earlier this decade, producing a modest 45,000 barrels of oil equivalent a day.
From today’s Washington Examiner, Daily on Energy:
MURKOWSKI PRODS REPUBLICANS ON CLIMATE CHANGE: Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski challenged her party Wednesday morning to take climate change more seriously. “We have to have a better discussion about climate change and the responses to it,” the Alaska Republican said during an address at the National Association of Regulatory Utility Commissioners’ Winter Policy Summit. “We have to not be afraid to use terms that some might say, that’s politically charged. Why is it politically charged to say climate change? I see in my state the impact we have from warming temperatures.”
- Warming facts: Murkowski said it is “fact” that global temperatures are warming in response to man-made emissions of carbon dioxide, as most climate scientists say. The Trump administration and many Republicans downplay the impacts of climate change and say the science on the warming of the planet is imprecise. “It is a fact when we see habitats changing because temperatures are warmer,” Murkowski said. “It is fact when sea ice that is multi-year ice is no longer in place where it has historically been. Working towards our energy future, we must be reducing emissions that contribute to climate change.”
- ‘Stop making it harder’: Murkowski said policymakers are making it more difficult to combat climate change by not acknowledging the extent of the problem. “This conversation is difficult,” Murkowski said. “We all know it’s difficult. We have to stop making it harder. Let’s stop making it harder.”
- ‘Balance’ over dominance: Murkowski says politicians should continue to promote the use of fossil fuels, because she says removing them from the grid entirely is unrealistic and costly. But she said energy leaders should pursue “balance,” a contrast to the “dominance” agenda flouted by the Trump administration.
New EPA head for Alaska talks Pebble, budget cuts and climate change
Alaska Public Media, Elizabeth Harball, February 13, 2018
Stand for Salmon initiative bad for business, says Southeast Conference
Juneau Empire, Kevin Gullufsen, February 14, 2018
Hail shale, but deepwater oil fights back
Reuters, Ron Bousso, February 14, 2018
Court “Seals” the deal for polar bears. An ice seal that’s the main prey of Alaska’s polar bears will receive threatened species protection. The 9th U.S. Circuit Court of Appeals on Monday overturned a District Court decision and said the National Marine Fisheries Service acted properly in listing ringed seals. Ringed seals thrive in completely ice-covered Arctic waters by digging and maintaining breathing holes. Females create ice caves on sea ice and give birth to pups that are susceptible to freezing until they grow a blubber layer. The decision to list ringed seals follows closely a decision to list bearded seals because of their dependence on sea ice and a projected loss of sea ice due to climate warming. The judges said the listing decision based on climate models was proper because it’s the best available science.
8 ways to move a road. The Alaska Gasline Development Corporation (AGDC) will be hosting a community meeting at the Nikiski Recreation Center this evening. The meeting is an open community discussion to look at the alternatives for the proposed realignment of the Kenai Spur Highway between MP 18 and MP 21. The meeting will begin at 6:00 p.m., with an open house followed by a presentation at 7:00 p.m., to review and discuss the alternatives. The community will have the opportunity to provide feedback and offer comments. The AGDC in April 2017 provided the Federal Energy Regulatory Commission (FERC) with a site map of the LNG plant in Nikiski, showing locations for the three liquefaction trains, two LNG storage tanks, material offloading facility and north and south plant entrances. Following the site map, the AGDC filed a map of eight possible alternatives for relocating the Kenai Spur Highway around the LNG plant site to FERC. In December, the AGDC narrowed those possibilities down to the final two. Download ADGC’s Spur Highway reroute filing
Voice of the Arctic Iñupiat, the Native group organized to provide a unified representation and leadership of Arctic Native interests to state and federal policymaking efforts, has raised objection to the inclusion of critical subsistence whaling waters in a recently proposed gas lease draft for the Outer Continental Shelf. In a letter written to Interior Secretary Ryan Zinke, the group voiced its opposition to the gas lease draft, which includes waters that have long been held out of such lease proposals because of their importance to subsistence whaling. Voice in particular raised concerns about the Chukchi Sea 25-mile coastal buffer, the Barrow Whaling Area and the Kaktovik Whaling Area, which it said should be preserved even in a draft. “We recognize that the balance between subsistence and resource development activities can and does occur because we have worked diligently to establish it,” Voice President Sayers Tuzroyluk Sr. said in the letter. “For this reason, we were alarmed that subsistence use areas, which are critical to northern Alaska food security and have been identified and agreed to through previous planning processes, resulting in exclusion from earlier leasing programs, were not upheld in the Option 1 of the Gas Leasing Draft Proposed Program.” Voice, which formed in 2015, is a 20-member nonprofit corporation representing Alaska’s North Slope tribal councils, municipal governments, Alaska Native corporations, a regional nonprofit and the tribal college for the North Slope. Some have been critical of the group’s efforts, saying its pro-development stance was not supported universally by the region. Some have questioned surveys the group has conducted, while others have disagreed with the group’s support of the opening of the Arctic National Wildlife Refuge to oil and gas leasing and development.
From today’s Washington Examiner, Daily on Energy:
TRUMP GUTS OBAMA-ERA METHANE RULES FOR FRACKING: The Interior Department on Monday proposed a revised version of Obama-era methane rules that favors President Trump’s “energy dominance” agenda over duplicative and punishing regulations, according to the Interior Department’s land management regulator. Goodbye ‘punitive’ rules: “In order to achieve energy dominance through responsible energy production, we need smart regulations, not punitive regulations,” said Joe Balash, assistant secretary for land and minerals management. “We believe this proposed rule strikes that balance and will allow job growth in rural America,” he said. The Obama administration in 2016 imposed strict regulations on oil and natural gas drillers that the Trump administration saw as duplicative with other federal regulations and state requirements that also regulated methane emissions.
Appeals Court: Arctic ringed seals are threatened species
KTUU News, Dan Joling, February 12, 2018
AGDC Hosting Community Meeting In Nikiski On Kenai Spur Reroute, Tonight
KSRM Radio Group, Jennifer Williams, February 12, 2018
Native group opposes whaling area inclusion in offshore leases
Anchorage Daily News, Carey Restino, February 12, 2018
After a year of Trump, most energy prices now ahead of Obama’s last day: It took nearly 12 months for several key commodity prices during President Donald Trump’s first year to surpass their levels on President Barack Obama’s final day in office. Commodity prices had bumped along mostly sideways until a late rally in fourth-quarter 2017. Some are now up sharply in recent weeks, lending support to the broader economic debate around inflation. The US Federal Reserve’s mid-range inflation forecast is at 1.9% for this year and 2% for 2019; however, many material and feedstock prices are up 2%-12% compared with this time a year ago. S&P Global‘s latest US economic outlook forecasts the Consumer Price Index to rise 2.2% this year. High wages and low unemployment are generally viewed as the key drivers of higher inflation, but the pass-through impact of basic commodity prices to consumers is also a factor. For example, increases in the prices of steel and aluminum generally get passed along to consumers in the form of higher prices for cars and appliances. Seven of the 11 benchmark commodity prices being tracked by S&P Global Platts since Trump took office are now an average of 5% higher compared with when Obama left.
Honoring veterans and improving ANCSA. A proposed bill would give 100,000 acres of federal land in total to Native groups in five Southeast Alaska towns, according to Alaska Republican Sen. Lisa Murkowski. Murkowski discussed the proposed legislation Wednesday during a hearing of the Senate Subcommittee on Public Lands, Forests and Mining, saying a major component of the legislation involves the formation of Native corporations in Ketchikan, Wrangell, Petersburg, Tenakee and Haines. The proposed legislation — also called the “Alaska Native Claims Improvement Act of 2017” — looks to mitigate issues with the original Alaska Native Claims Settlement Act that was passed almost a half century ago, the Ketchikan Daily News reported. The five Alaska communities were never granted village or urban corporations, Murkowski said upon incorporation, each of the five new corporations would receive “one township of land (23,040 acres),” according to the text of the bill, which is co-sponsored by fellow Alaska Republican Sen. Dan Sullivan. According to the bill’s text, the revised act: “Shall give preference to land with commercial purposes; may include subsistence and cultural sites, aquaculture sites, hydroelectric sites, tideland, surplus federal property, and ecotourism sites; and shall not include land within a conservation system unit.” Another component of Murkowski’s bill would give land to Alaska Natives who fought in the Vietnam War but didn’t receive land allotments under a federal measure passed in 1998.
Florida loves offshore drilling. Industry supporters in Florida kicked back against opposition to offshore drilling, saying the state has emerging opportunities to capitalize on U.S. momentum. The U.S. Bureau of Ocean Energy Management, a division of the Interior Department, is holding state hearings on a proposed five-year lease plan that would open nearly all of the U.S. territorial waters to oil and gas drillers. Florida Petroleum Council Executive Director David Mica said putting Florida on the map could bring in new sources of revenue and create a new economic segment. “The Atlantic Outer Continental Shelf has not been surveyed in more than thirty years, and with rapid advancements in safety and assessment technologies in the past decade, we can safely and accurately determine what energy potential exists off our coasts,” he added in a statement. The proposed program, opened for public comment, called for 19 lease sales offshore Alaska, seven in the Pacific Region, 12 in the Gulf of Mexico and 9 in the Atlantic.
Cheniere to send Texas LNG to China thru 2040. The largest natural gas exporter in the U.S. announced two major deals with China on Friday to sell U.S. natural gas through the 2040s. Cheniere Energy agreed to supply China’s state-owned energy company with 1.2 million tons of liquefied natural gas, or LNG, per year. The long-term supply and purchase agreements were built on a Memorandum of Understanding the company signed with China’s energy authority in November. Cheniere will begin shipping a portion of the fuel from its LNG export facility at Sabine Pass, La., later this year. The rest of the fuel will be made from its second facility being built in Corpus Christi, Texas, beginning in 2023. The supply and purchase agreements extend through 2043. The company is in the middle of completing its Corpus Christi facility, which now will include a third natural gas export station as an addition to its original design. Each export station is able to serve one LNG shipping vessel.
Big Oil Beauty Contest. With years of austerity in their rear-view mirrors, the world’s biggest oil companies are locked in a beauty contest to lure investors with promises of growth and greater rewards. Royal Dutch Shell and Total are emerging as frontrunners after a three-year slump thanks to strong growth projections. Exxon Mobil, the biggest publicly traded oil company, has largely disappointed with a weaker outlook. Major oil companies slashed spending and cut costs after oil prices collapsed in 2014 and can now generate as much cash with crude at $50-$55 a barrel as they did when the price was around $100 earlier in the decade. Cash flow at oil companies in 2017 rose to its highest since before the slump, helped by the drastic cost cutting plans and a recovery in oil prices, and executives are once again turning their attention to growth. With crude expected to hold above $60 a barrel into the end of the decade, major oil companies are confident they can boost already attractive payouts to shareholders. Total sent the strongest signal, announcing plans to increase dividends by 10 percent, buy back $5 billion of shares by 2020 and abolish its so-called scrip policy introduced in the lean years of offering shares instead of cash dividends. Analysts at Bernstein hailed the French company, which reported a 28 percent rise in fourth-quarter profit on Thursday, as “the new benchmark in shareholder returns” and upgraded their share recommendation to “outperform”. “Clearly the U.S companies disappointed more whereas Total cheered everyone up together with Shell, even if it had a small miss,” said Alasdair McKinnon, portfolio manager at The Scottish Investment Trust.
OPEC’s Oil Price Nightmare Coming True. The latest surge in U.S. oil output will probably hasten the country’s rise to the top of the producer pile. More important, it’s starting to look as though at least half of OPEC’s nightmare scenario for 2018 — a surge in shale output and slowdown in demand growth — is coming true. Last week’s avalanche of releases from the U.S. Department of Energy showed daily oil production above 10 million barrels a day for the first time since 1970. A massive week-on-week jump of 332,000 barrels a day must be treated with caution, though. U.S. drillers didn’t have a sudden rush of enthusiasm as WTI prices broke through a psychological $65 ceiling. Rather, the weekly data, which aren’t revised retrospectively, are catching up with monthly estimates that give a more accurate picture of output. For much of last summer, the weekly data were heavily criticized for over-estimating U.S. output growth. Now, the reverse is true. Assessments of the output in October and November based on the weekly data were about 370,000 barrels a day lower than the monthly figures, which are published with a two-month lag. There was probably a discrepancy too in December and January. The production surge shown in the monthly data is unprecedented. Output rose by almost 850,000 barrels a day between August and November. It makes the first shale boom of 2014-15 look sluggish.
After a year of Trump, most energy prices now ahead of Obama’s last day: Of Presidents and Prices
S&P Global Platts, Joseph Innace, February 12, 2018
Murkowski: Bill would create new Native corporations
AP News, February 11, 2018
Industry talks up Florida oil and gas potential
UPI, Daniel J. Graeber, February 9, 2018
US’ largest natural gas exporter announces huge deal with China
Washington Examiner, John Siciliano, February 9, 2018
Big Oil takes stage for post-austerity beauty contest
Reuters, Ron Bousso, February 11, 2018
OPEC’s Oil Price Nightmare Is Coming True
Bloomberg, Julian Lee, February 10, 2018
Koniag purchases Glacier Services, Inc. Alaska Native regional corporation Koniag Inc. acquired oil field automation services firm Glacier Services Inc. Glacier Services is the largest Alaska-owned oil field automation services operation. It has clients and projects across the state, from the Kenai Peninsula to the North Slope, the Kodiak Daily Mirror reported Thursday. Koniag’s board chairman and interim CEO Ron Unger said the addition will strengthen the corporation’s oil field services capabilities. The corporation also owns Dowland-Bach, an oil field equipment manufacturing firm. The corporation hopes to operate the two companies in tandem. “We believe this acquisition to be strategic in that it leverages our past success with Dowland-Bach and takes advantage of synergies with clients to create a more comprehensive solution for oil companies in Alaska,” Unger said. Koniag said in a news release that the corporation has shown four years of continued profitable growth, with revenues of $270 million in fiscal year 2017 and assets of $170 million.
Laid off workers will have opportunity to work for new contractor. A contractor at Alaska’s largest oil field will lay off 261 mostly union employees, after BP, in a cost-conscious move, hired a new contractor that will employ a non-union workforce. Mistras Group and subsidiary Quality Services Laboratories will exit Prudhoe Bay and lay off the workers on March 31 or shortly thereafter, according to a letter to state officials from Julie Marini, vice president of human resources for Mistras. Of Mistras’ 261 workers, 182 are union employees represented by the Quality Control Council of the United States, said the letter, dated Jan. 23. Mistras has provided integrity inspections of pipeline and infrastructure, said Dawn Patience, a spokeswoman with BP in Alaska. Mistras is based in New Jersey. Kakivik Asset Management will take over the contract, said Sheila Schooner, a spokeswoman for the Anchorage-based company owned by Bristol Bay Native Corp. Kakivik is now looking for workers and plans to employ “more than 200” people to inspect the pipelines, Schooner said in an email.
There’s no place like Nome – “it’s important, it makes sense and Alaska really needs it.” More than two years since it shelved the project, the U.S. Army Corps of Engineers will take a new look at a deep-draft port in Nome. The Army Corps and the City of Nome entered into a formal agreement last week to split the cost of a new study of the regional benefits of a port expansion in Nome. A deep-draft port able to handle large ships would be the first of its kind in US Arctic waters. According to Nome’s mayor Richard Beneville, that’s significant. “It’s important, it makes sense and Alaska needs it,” Beneville said. “The world needs it, but Alaska really needs it.” Beneville’s vision for a maritime Arctic starts in Nome but would eventually see ports throughout the region. He says it will help diversify Alaska’s economy, beyond dependence on oil and gas extraction. And he sees it as a way to make the most of record-low sea ice levels. It’s a vision shared by Alaska’s congressional delegation. One of the loudest voices in Washington calling for a Nome deep-draft port is Senator Dan Sullivan. “There’s challenges of course, but there’s also opportunities opening up in the Arctic as the sea lanes become more prominent and the shipping traffic increases,” Sullivan said. “The way in which we can take advantage of them is to have more infrastructure in place to do that.”
Goliath vs. Goliath. Halliburton Co. isn’t content to limit its battle for market share with Schlumberger Ltd. to the oil field these days. It’s opened a new front in an unlikely place: the patent office. The Houston-based provider of drilling services is waging an aggressive campaign to persuade the U.S. Patent and Trademark Office to cancel some of Schlumberger’s fracking-related patents, telling the agency they’re not inventions but old ideas repackaged. At the same time, Halliburton is pursuing more patents and was awarded 35 percent more in 2017 compared to the previous year. “They’re the two big dogs in the space,” said J. David Anderson, an analyst at Barclays. “Halliburton and Schlumberger have been battling for that top spot in North American services for a decade, so the fact they’re going after each other with patents is not surprising.” Halliburton has long been the top North American contractor while Schlumberger has dominated international markets, but they’ve been increasingly encroaching on each other’s turf as crude recovers from its worst crash in a generation. In North America, Schlumberger is directly challenging Halliburton’s title as the top fracker after recently acquiring roughly 1 million horsepower-worth of rock-crushing pumps from Weatherford International Plc. Meanwhile, Halliburton grew at a faster pace in all international markets than Schlumberger in the final three months of last year.
Alaska Native corporation acquires oil field automation firm
AP News, February 9, 2018
Mostly union force of 261 to be laid off in Prudhoe Bay contract change
Anchorage Daily News, Alex DeMarban, February 9, 2018
Nome deep-draft port back on the table
Alaska Public Media, Zoe Grueskin, February 8, 2018
Halliburton Takes Fracking Fight From Oil Field to Patent Office
Bloomberg, Susan Decker, David Wethe, and Christopher Yasiejko, February 6, 2018
In Alaska, the year was more mixed for BP. While BP Alaska leaders are celebrating the success of stemming production decline from the aging Prudhoe Bay oil field despite belt-tightening in the industry, the company’s global executives on Feb. 6 celebrated the announcement of a $3.4 billion profit in 2017. The $3.4 billion in earnings last year comes after the London-based oil super major managed to net just $115 million in 2016. The entire industry was boosted by a gradual return to oil prices of about $70 per barrel by the end of the year, but the fact that BP’s settlement payments related to the 2010 Deepwater Horizon oil spill have started to shrink also helped the company. It paid out $6.9 billion in spill payments in 2016 and $5.2 billion in 2017, according to the fourth quarter earnings report released Feb. 6. “2017 was one of the strongest years in BP’s recent memory,” CEO Bob Dudley said in a formal statement. “We delivered operationally and financially, with very strong earnings in the downstream; upstream production was up 12 percent; and our finances rebalanced. And we did all this while maintaining safe and reliable operations.” However, the company netted just $27 million in the fourth quarter after a $1.7 billion profit in the third quarter. That was primarily due to non-operating expenses accounted for in the quarter, according to the report.
Oil dominates 2018 construction spending forecast. Construction spending in Alaska this year will be around $6.6 billion, up 4% from 2017. But that overall increase is due just to a recovery in spending by the petroleum industry, which is expected to be up about 15%, to nearly $2.6 billion. Without petroleum, overall construction spending in 2018 is likely to be down about 2%, to $4.1 billion. But even though a number of sectors will spend less, some kinds of spending—particularly for national defense—will be up. These estimates are from the newly released 2018 construction forecast, prepared by Scott Goldsmith, professor emeritus of economics at ISER, for the Associated General Contractors of Alaska and the Construction Industry Progress Fund. He has made these forecasts of construction spending every year since 2004.
Oil cruises from Texas to the Emirates. The United Arab Emirates, a model Persian Gulf petro-state where endless billions from crude exports feed a giant sovereign wealth fund, isn’t the most obvious customer for Texan oil. Yet, in a trade that illustrates how the rise of the American shale industry is upending energy markets across the globe, the U.A.E. bought oil directly from the U.S. in December, according to data from the federal government. A tanker sailed from Houston and arrived in the Persian Gulf last month. The cargo of American condensate, a type of very light crude oil, was preferred to regional grades because its superior quality made more suitable for the U.A. E’s processing plants, a person with knowledge of the matter said, asking not to be identified discussing a commercially sensitive matter. “As a member of OPEC and a large crude producer, I would imagine they would be very self-sufficient in their own crude supply,” said Andy Lipow, president of Lipow Oil Associates LLC. The purchases of U.S. oil aren’t likely to continue, given the U.A.E.’s own supply, Lipow said.
Judge orders EPA to act now. A federal judge is ordering the Environmental Protection Agency to take steps that could lead to sanctioning a coal-fired power plant in Pennsylvania for increasing air pollution in Connecticut. Judge Warren Eginton for the district court in Connecticut is giving the EPA 60 days to make a decision based on the state’s request for the agency to act under the Clean Air Act, according to a Wednesday decision. The EPA missed the deadline for responding to the state’s formal claims to petition for relief as a downwind state. Connecticut argued in its petition that the power plant has harmed its ability to meet ozone regulations while raising harmful air pollution in the state. The petition has been lingering for nearly two years, which Eginton wrote “is clearly at odds with period of time that Congress deemed appropriate” for the EPA to review a Clean Air Act petition.
BP bounces back from 2016 with $3.4B profit in 2017
Alaska Journal of Commerce, Elwood Brehmer, February 7, 2018
Alaska’s 2018 Construction Spending Forecast
Alaskanomics, February 7, 2018
Oil World Turns Upside Down as U.S. Sells Oil in Middle East
Bloomberg Markets, Sheela Tobben and Wael Mahdi, February 7, 2018
Judge’s order could force Trump’s EPA to sanction coal plant
Washington Examiner, John Siciliano, February 7, 2018
Sheldon Fisher: “clear the decks” on tax credits. This week, the Walker Administration introduced a bill to pay off up to $1 billion of outstanding oil and gas tax credits by issuing bonds to pay for them at a fair discount. By purchasing these tax credits held by small oil and gas exploration companies, the bill will free up frozen credit markets to allow new exploration and development to continue. This bill is part of Gov. Bill Walker’s economic stimulus plan calculated to put Alaskans back to work, and will ultimately result in increased production, leading to increased revenue for the benefit of all Alaskans. Some Alaskans are asking hard but good questions about why we are doing this. First some background. Last year, we worked with the Legislature to end the cashable oil and gas tax credits program. In many cases the program had worked — it brought small oil and gas exploration companies to Alaska to look for new fields. In Cook Inlet, the tax credit program largely solved the serious problem of disappearing gas supplies — gas that Alaskans need for electricity to light and heat their homes. And there have been new large oil discoveries on the North Slope, like the Pikka field, that have promise to put substantial volumes into the pipeline and bring new revenues to the State. With the passage of House Bill 111 last year, we have ended the program of cashable oil and gas tax credits. The tax credits had quickly added up to a huge sum, and given the collapse in oil prices, the state was simply unable to continue paying them immediately. The point of this bill is to be able to “clear the decks” and put the saga of cashable oil and gas tax credits behind us. Alaskans are asking, why provide a bail-out to large oil and gas companies? We aren’t. The point of the tax credits was to encourage small oil and gas companies to explore for new oil and gas reserves. We promised cash and they came. Not only that, they employed Alaskans. They borrowed hundreds of millions from banks and attracted capital from investors. They spent this money and hired Alaskans. In many cases they found new oil and gas. The production from these new finds will create new revenues for all Alaskans. We need to fulfill our side of the bargain.
Surprise! Unexpected decline in US crude supply. The American Petroleum Institute reported Tuesday that U.S. crude supplies fell by 1.1 million barrels for the week ending Feb. 2, according to sources. The API data also showed a decline of 227,000 barrels in gasoline stockpiles, while inventories of distillates saw a surprise climb of 4.6 million barrels, sources said. Supply data from the Energy Information Administration will be released Wednesday morning. Analysts polled by S&P Global Platts expect the EIA to report a climb of 2.8 million barrels for crude inventories. They also forecast a rise of 200,000 barrels for gasoline, but a decline of 800,000 barrels for distillate supplies. March crude CLH8, -2.43% was at $63.80 a barrel in electronic trading, up from the settlement of $63.39 on the New York Mercantile Exchange.
We’ll see you in court! Washington Attorney General Bob Ferguson (D) warned Interior Secretary Ryan Zinke that he will sue the Trump administration if the state isn’t removed from a plan to expand offshore drilling. Ferguson in a letter sent to Zinke on Monday demanded that Washington be exempt from the plan to expand oil and gas drilling off the U.S., including off the state’s coast. The attorney general argued that the plan would damage the state’s economy, including the fishing and shipping industries, and that it could hurt ecosystems on Washington’s coast. “The proposal to open the Pacific Region Outer Continental Shelf to oil and gas leasing is unlawful, unsafe, and harmful to the economy and natural beauty of Washington’s coastline. As Attorney General, my job is to enforce the law and protect the people, natural resources, and environment of my state, and I will use every tool at my disposal to do so,” Ferguson wrote.
GUEST COMMENTARY: Bill to pay off credits fulfills state side of bargain
Alaska Journal of Commerce, Sheldon Fisher, February, 7 2018
API data reportedly show an unexpected weekly decline in U.S. crude supplies
Market Watch, Myra P. Saefong, February 6, 2018
Washington state threatens to sue over Zinke offshore drilling plan
The Hill, Jacqueline Thomsen, February 6, 2018