Headlamp – The death of oil and diesel engines is greatly overexaggerated.           

September 19, 2017 | Posted in : News

The death of oil and diesel engines is greatly overexaggerated. Judging by some of the headlines we’ve seen recently, you could be forgiven for thinking petrol and diesel engines were about to be consigned to the scrap heap. Yet the reality is rather different. There is no question that the car industry is undergoing a radical change. At this year’s Frankfurt Motor Show – currently under way in the German city – the buzzword throughout the cavernous exhibition halls has been “electrification.” The day before the show, for example, Volkswagen said it would build electrified versions of every model in its range – including those sold under the Audi, Skoda, Seat and Porsche brands – by 2030. The same evening, Mercedes’ parent company Daimler said it would have electrified versions of its own models by 2022. These are undoubtedly ambitious plans – but it is important to recognize their limitations. They are not saying they will get rid of diesel or petrol cars completely. They are simply promising to make electrified versions of them available. It is also important to recognize what “electrified” actually means.

6 Arctic Icebreakers funded. The U.S. Senate on Monday passed a $692 billion defense authorization bill that included provisions to bolster missile defense systems in Alaska and approval for building up to six Arctic icebreakers. The Alaska provisions are a mark of success for the state’s lawmakers, who have long pushed for the provisions. But seeing them through to reality will require Congress to manage the full scope of appropriations bills in the coming year — something that happens rarely. Since 1976, Congress has passed all 12 appropriations bills by Oct. 1, the fiscal year deadline, only four times, according to the Bipartisan Policy Center. This year, Congress has already agreed to kick the process to December, but it is unclear if that will lead to legislative success. Though Congress struggles with appropriations, it has managed to pass the annual National Defense Authorization Act (NDAA) for more than 50 years, and once again Monday. The NDAA directs the Pentagon’s budget and provides general congressional direction to the military. The House of Representatives passed a $696 billion version of the bill in July.

Satre’s sage advice. A local mine executive urged the Juneau Assembly to reconsider a resolution urging federal action on transboundary mining, and the Assembly did on Monday night. The resolution would have urged the federal government to invoke a treaty to enforce protections for Alaska resources from upstream mines in British Columbia. Recently, the borough assemblies of Sitka and Ketchikan passed a similar resolution. In 2015, the Juneau Assembly did, too. Heather Hardcastle of Salmon Without Borders said transboundary mining should be tackled at the highest levels between Ottawa and Washington. “This by no means is an anti-mining resolution,” she said. “This is a chance to get binding protections in place that only come about in an agreement between two nations.” Juneau Deputy Mayor Jerry Nankervis put the brakes on the resolution. “We were all on the Assembly provided a letter by a gentlemen in our community speaking to this resolution and what he believes to be inaccuracies in it,” Nankervis said. “And I am also concerned about the message we’re sending with this.” The letter he referred to was an email from Mike Satre, an executive with Hecla Greens Creek Mine. The email urged the Assembly to work through Gov. Walker’s efforts on transboundary mine safety at the state and provincial levels rather than trying to invoke international treaties.

Private sector prospers…in Juneau. This week, the JEDC released its annual “Economic Indicators and Outlook” report for Juneau and Southeast Alaska. It’s the annual physical for Juneau’s economy — how things are growing (or not) and how they have changed over the past year. You already know the bad news: Alaska remains in a recession, and Juneau isn’t immune. The city’s population fell last year, so did the number of jobs, and so did total wages. The report does have a silver lining. For that, you have to look at the private sector.

First Reads:

Defense bill passes US Senate with provisions for icebreakers, Alaska missile defense
Arctic Now/Alaska Dispatch News, Erica Martinson, September 19, 2017

Why switching to fully electric cars will take time
BBC News, Theo Leggett, September 19, 2017

After mining exec weighs in, Juneau Assembly holds off on boundary mine resolution
KTOO Alaska Public Media, Jacob Resneck, September 19, 2017

JEDC finds economic silver lining in Juneau’s private sector
Juneau Empire, James Brooks, September 19, 2017

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President Trump and the Paris Accord: Should I stay or should I go now?

September 18, 2017 | Posted in : News

ConocoPhillips boosts Alaska’s economy. Defying lackluster crude oil prices, ConocoPhillips is planning an aggressive North Slope exploration program this winter. “We are currently considering up to a five-well winter exploratory drilling program in 2018, four wells in the National Petroleum Reserve–Alaska and one well on State of Alaska acreage, subject to final budget and permit approvals,” spokeswoman Amy Burnett said. At least one other exploration well is planned by Armstrong Oil and Gas. Most of the work is focused on the western North Slope near where recent discoveries have been made by ConocoPhillips and Armstrong.

New sheriff in town. Heidi Hansen will join the Alaska Department of Natural Resources as a deputy commissioner effective Sept. 18. In a Sept. 8 statement, DNR Commissioner Andy Mack noted: “Her knowledge of natural resource issues in Alaska, her legal expertise, and extensive work on federal natural resource policy…”

It’s a bird, it’s a plane… Use of Unmanned Aerial Vehicles in the north is the focus of meetings in Fairbanks this week. The University of Alaska Fairbanks “Alaska Center for Unmanned Aircraft Systems and Integration” is hosting industry representatives to talk about UAV based operations in Alaska and the Arctic (Listen now). “It’s everything from wildlife monitoring to looking at sea ice, infrastructure monitoring, law enforcement support, such as search and rescue, and a bunch of other Alaska focused issues,” Center Director Cathy Cahill said. Cahill said unmanned aircraft opportunities are growing as the technology is well suited to Alaska and the Arctic.

News about the Paris accord: 

Tillerson says U.S. could stay in Paris climate accord
Reuters, Lucia Mutikani, September 17, 2017

The Energy 202: Two things you should know when Trump administration talks about Paris climate accord
The Washington Post, Dino Grandoni, September 18, 2017

Cohn: Trump still planning to withdraw from Paris climate accord
CNN, Kevin Liptak, September 18, 2017

First Reads:

ConocoPhillips bucking low oil prices with increased exploration
The Frontiersman, Tim Bradner, September 18, 2017

Heidi Hansen new DNR deputy commissioner
Petroleum News, September 17, 2017

UAV industry reps discuss the vehicles’ future in Fairbanks
Alaska Public Media, Dan Bross, September 15, 2017

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Headlamp – The fight to open ANWR continues; unemployment rises.

September 15, 2017 | Posted in : News

Note: Governor Walker is holding a press conference at 12:30 today to discuss the special session and there is some indication a crime bill may be added to the call. Watch via livestream at 12:30.

Up is usually good – unless it’s unemployment rates. Alaska’s seasonally adjusted unemployment rate was 7.2 percent in August, up two-tenths of a percentage point from July. The comparable national rate was 4.4 percent. August employment was down by an estimated 1.4 percent, or 4,800 jobs, compared to August 2016. Preliminary estimates show job losses spread across most industries, although the losses remain concentrated in industries closely tied to oil or oil revenue. Oil and gas led employment losses (-1,000 jobs), followed by construction (-1,000), professional and business services (-800), manufacturing (-600), and state government (-600). Health care, local government, and federal government were all up slightly over August 2016 levels. Headlamp would like to remind readers that oil and gas and construction jobs are among the highest paying in our state and the ones suffering the greatest losses.

Perry doesn’t want to touch SPR. Energy Secretary Rick Perry says the United States shouldn’t sell off its emergency crude oil supply to boost the federal budget, breaking with the White House. Perry was asked at a Friday press conference if Hurricanes Harvey and Irma, both of which harmed Gulf Coast infrastructure, have led him to reassess a Trump administration proposal to sell off portions of the Strategic Petroleum Reserve (SPR), a component of the White House’s May budget proposal. “I think this is a good example of why we need a SPR,” Perry said at the Federal Emergency Management Agency. “I didn’t write that budget.” he said. “I’m a big believer that it makes sense for us to have a Strategic Petroleum Reserve.”

Red Team/Blue Team. The Trump administration is looking to create a “red team” to challenge the accepted science on climate change and the impact of carbon dioxide emissions on the Earth’s temperature, but there is no timeline on when that exercise will occur even though it is “very important,” according to Environmental Protection Agency chief Scott Pruitt. The EPA administrator sat down with the Washington Examiner for an interview that included discussion of the proposed red team-blue team process that he says will open up a dialogue over the science behind global warming to see what is true and what is not. “The red team-blue team is still being evaluated,” Pruitt said. “I think it’s very, very important. I think the American people deserve an open, honest dialogue about what do we know, what don’t we know with respect to CO2 and its impact.”

 Is resource nationalism good for the US? Canadian miner Eldorado Gold Corp’s threat this week to freeze investments in Greece after years of frustrating and costly permit delays highlighted the risks the industry faces when it strays away from mining-friendly countries. After moving into higher-risk countries in recent years to mine new deposits, companies are being forced to seek safe havens during a rise in so-called resource nationalism and other political headwinds. From Indonesia and Tanzania to South Africa and Zambia, governments are demanding greater control over mineral riches as metals prices rise, often seeking higher royalty payments. In Eldorado’s case, the company faces a leftist-led Greek government that publicly backs investment but has powerful insiders that oppose privately owned mining projects.

On the rise? Oil ended higher Thursday for a fourth consecutive session, with the U.S. benchmark settling at a more-than-six-week high on expectations for stronger demand and efforts by major producers to maintain a cap on crude output. October West Texas Intermediate oil CLV7, -0.28% on the New York Mercantile Exchange rose 59 cents, or 1.2%, to settle at $49.89 a barrel after hitting a session high of $50.50. Prices settled at their highest since July 31, which was also the last day they finished above $50, FactSet data show.

VOICE calls for economic development and the opening of ANWR. Voice of the Arctic Iñupiat (VOICE) announced its support for opening the Arctic National Wildlife Refuge (ANWR) to drilling. The board of directors passed the resolution last week officially backing safe and responsible development in the refuge – specifically the 1002 coastal plain area that represents eight percent of the total ANWR acreage. With this announcement, VOICE joins the Governor, the Alaska delegation, the leadership of the North Slope Borough, the majority of Arctic Slope village leadership and the overwhelming majority of Alaskans in calling for resource production in a small portion of the Arctic refuge. “The VOICE organization and the villages it represents strongly support economic development in the region,” said John Hopson, Jr., mayor of Wainwright, Alaska and vice chairman of Voice of the Arctic Iñupiat.

First Reads:

Unemployment Rate at 7.2 Percent in August
Alaska Department of Labor, Press Release, September 15, 2017

Bolstered by Trump, Big Oil Resumes Its 40-Year Quest to Drill in an Arctic Wildlife Refuge
Fortune, Bob Reiss, September 14, 2017

Perry rejects calls to sell off emergency oil reserve
The Hill, Devin Henry, September 15, 2017

EPA evaluating ‘red teams’ to challengclimate science despite hurricanes
The Washington Examiner, John Siciliano, September 15, 2017

Gold miners seek safety as political risks rise
Arctic Now/Reuters, Nicole Mordant, September 15, 2017

Oil extends win streak to 4 days, finishes at 6-week high
Market Watch, Myra P. Saefong and William Watts, September 14, 2017

VOICE passes resolution supporting ANWR development
VOICE Press Release, September 8, 2017

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Headlamp – Strong future for fossil fuels in EIA international outlook.

September 14, 2017 | Posted in : News

Today the Energy Information Administration, the non-partisan research arm of the federal government, released its annual International Outlook. The International Outlook presents an assessment by the U.S. Energy Information Administration of the outlook for international energy markets through 2050. Of note:

  • World natural gas consumption increases by 43% from 2015 to 2040.
  • China accounts for two-thirds of the net increases in world installed nuclear capacity from 2015 to 2040.
  • Petroleum and other liquid fuels consumption grows by 18% between 2015 and 2040.
  • Economic growth will be greater in non-OECD countries and drive energy demand.
  • The industrial sector continues to account for the largest share of energy consumption through 2040.
  • Energy and carbon intensity are projected to continue to fall.

Doing more with less. Alaska’s oil workforce has been hit hard by low prices, yet the companies in the state have managed to buck a longstanding trend and increase production for the last two years. So what gives? For state Labor Department Economist Neal Fried, the curiosity in the numbers goes back further than when oil prices started tumbling from the $100-plus per barrel plateau in August 2014. “The whole trend in oil production and employment has been very interesting just because in 2015 we reached a record number of employees in oil and gas in the state’s history, which is pretty amazing given the fact that we were producing significantly less than our peak in 1988 or for many years before that,” Fried noted. He said that the decade-long run-up in oil and gas sector jobs exceeded the generally accepted notion that oil fields — the three primary North Slope fields are 17 to 40 years old — require more investment as they age.

Slow and steady wins the race. Efforts to drill for oil in the Arctic Ocean put Alaska at the center of an international debate. It’s a highly political topic, one both former President Barack Obama and President Donald Trump weighed in on. And to this day, there hasn’t been any oil produced from Arctic waters solely owned by the federal government. So today, when it comes to drilling for oil in Alaska’s Arctic Ocean, you’d be forgiven for thinking not a lot is happening. Yes, Shell’s multi-billion dollar effort to find oil in federal Arctic waters is a thing of the past. And yes, the Obama administration then took several steps to cut back on drilling in Arctic waters — actions the Trump administration is now working to undo. But it turns out there is movement to get oil out of federally-owned parts of the Arctic Ocean. It’s happening slowly, steadily and without a lot of fanfare. Two companies’ efforts to drill for oil in the Beaufort Sea are chugging forward and, at least for now, they’ve largely avoided the national spotlight.

House votes down job-killing regulation. Lawmakers voted Wednesday to block implementation of a key Environmental Protection Agency (EPA) pollution rule. The House voted 218-195 to strip funding for an Obama-era EPA effort to limit methane emissions from new oil and gas drilling sites. Eleven Republicans voted against the amendment, and 3 Democrats voted to block funding for the regulation. “This rule is currently facing litigation and uncertainty, and Congress must act to block this job-killing regulation estimated to cost the U.S. economy $530 million annually,” Rep. Markwayne Mullin (R-Okla.) said during debate on the measure last week.

China confuses Canada with new trade route. China’s state news agency Xinhua reported last week that a Chinese ship had conducted a successful test of a trading route along the long-fabled Arctic Northwest Passage. This was a milestone, according to the agency, which proclaimed that “a new channel” between North America and Northeast Asia had been opened. The trip, which had seen a ship called the Xue Long (or “Snow Dragon”) travel for 2,293 nautical miles through the Canadian Arctic, had lasted for eight days and would provide “a wealth of navigation experience” for future Chinese ships, Xinhua reported. But if the announcement caused celebration in Beijing, it provoked confusion in Canada — the nation that claims sovereignty over the waters containing the Northwest Passage. The Globe and Mail reported Monday that the Canadian government considered the Snow Dragon trip a scientific research trip and that Canadian scientists were also on board. Though the Canadian government said that the trip was purely for science, some experts viewed it differently. China is “preparing for a very substantial increase in the amount of shipping,” Arctic expert and professor Rob Huebert told the Globe and Mail. “It is obvious this is going into the planning to a degree that we don’t see in Western shipping companies.”

First Reads:

International Energy Outlook 2017
U. S. Energy Information Administration, September 14, 2017

Slope producers doing more with less
Alaska Journal of Commerce, Elwood Brehmer, September 13, 2017

Beneath political firestorm on Arctic Ocean drilling, two projects make steady progress
Alaska Public Media, Elizabeth Harball, September 13, 2017

House votes to block funding for EPA methane pollution rule
The Hill, Devin Henry, September 13, 2017

China sent a ship to the Arctic for science. Then state media announced a new trade route.
Arctic Now/The Washington Post, Adam Taylor, September 13, 2017

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Headlamp – Save Our Salmon denied; a victory for responsible resource development.

September 13, 2017 | Posted in : News

Save Our Salmon isn’t saved. Lt. Gov. Byron Mallott denied an application on Sept. 12 to put a voter initiative on the 2018 statewide ballot that would have tightened the state’s permitting requirements for development projects with the potential to impact salmon streams. Assistant Attorney General Elizabeth Bakalar wrote a Sept. 6 letter to Mallott recommending he not certify the initiative because it would strip the Legislature of its power to allocate resources — in this case salmon habitat — and thus violate the Alaska Constitution.

What lies beneath? State entices investment. Somewhere in Anchorage, the state is hiding four giant suitcases, filled with top-secret pictures of the ground. The Deputy Commissioner of the Department of Natural Resources, Mark Wiggin, said they weigh about 150 pounds apiece. “…And in there are stacked blocks. These seven to eight terabyte-per-block basically floppy drives,” Wiggin said. Add them all up and those drives hold about 300 terabytes of valuable information from seismic testing and exploratory wells — essentially a map of what lies beneath the surface of Alaska. It’s just one of the data sets the state has slowly been collecting from oil and gas companies since 2003. That’s when it launched a tax credit program that required companies to turn over that data if they wanted to redeem the credit. Alaska’s Oil and Gas division is releasing valuable oil exploration data from leases on the North Slope and Cook Inlet.

Back to basics with the EPA. Few Trump administration agency chiefs have moved as decisively to implement an agenda as Scott Pruitt, the administrator of the Environmental Protection Agency, and he’s quite clear about what he wants to do. He calls it a “back to the basics” agenda, removing the government from what he considers extraneous activity — namely, the climate change battle taken up by former President Barack Obama, who he questioned as an “environmental savior.” Asked to define his early legacy, Pruitt, in a wide-ranging interview with the Washington Examiner at EPA headquarters Monday, reached for his coffee mug, leaned his small, stout frame forward in his chair, and embarked on a lengthy denunciation of the Obama administration.

Chenault tests the water. Nikiski’s state legislator is looking for support for a run for state governor. Rep. Mike Chenault (R-Nikiski) announced his intention to run in October 2018 in a letter of intent filed with the Alaska Public Offices Commission Tuesday. Though he did not list the office for which he intends to run in the letter of intent, he said he’s testing whether there’s adequate support for him to run for the governor’s seat. “We’d been looking and talking about it for a while, so I decided to put a letter of intent in, try to gauge how much support I have across the state, and then we’ll make a final decision in the next few weeks,” he said.

The team of Elliott and Pearce at PHMSA. The White House intends to nominate Howard R. Elliott, who presently leads public safety, health, environment, and security operations for CSX Transportation in Jacksonville, Fla., to serve as the new administrator of the US Pipeline & Hazardous Material Safety Administration, it announced on Sept. 8. Elliott is a 40-year US freight rail industry veteran. “[Elliott’s} portfolio of responsibility included hazardous materials transportation safety, homeland security, railroad policing, crisis management, environmental compliance and operations, occupational health management, and continuity of business operations,” the White House said. It called Elliott “a pioneer and leading advocate in developing and implementing computer-based tools to assist emergency management officials, first responders, and homeland security personnel in preparing for and responding to a railroad hazardous materials or security incident.” Headlamp reminds readers that former Alaska legislator Drue Pearce was recently appointed Deputy Director of the agency.

Finland and Russia collaborate on Arctic Oil Spill Response. The Finland-based Lamor company is establishing a joint venture with the Russian oil company Rosneft in Roslyakov, the formerly closed military town outside Murmansk. The cooperation between the companies will include the manufacturing of equipment for oil spill preparedness, response and recovery. It will unfold in the premises of Shipyard No 82, an object over which Rosneft secured control in 2013.

First Reads:

Mallott rejects salmon habitat ballot initiative
Peninsula Clarion/Alaska Journal of Commerce, Elwood Brehmer, September 12, 2017

Seeking investment, Alaska goes open source with oil & gas data
Alaska Public Media, Rashah McChesney, September 12, 2017

Scott Pruitt criticizes Obama as ‘environmental savior,’ moves EPA away from climate change
Washington Examiner, Josh Siegel, September 13, 2017

Chenault tests waters for gubernatorial bid
Peninsula Clarion, Elizabeth Earl, September 12, 2017

White House plans to nominate Elliott for PHMSA administrator
Oil & Gas Journal, Nick Snow, September 11, 2017

Finnish company comes to Murmansk, sets up Arctic oil spill response unit with Rosneft
Arctic Now/Independent Barents Observer, Atle Staalesen, September 13, 2017

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Headlamp – BREAKING NEWS: Dunleavy is out, Huggins is in.

September 12, 2017 | Posted in : News

Governor’s race gets interesting. On the Rick Rydell Show this morning, former Sen. Charlie Huggins announced his run for governor. His wife, Becky Huggins, made the call on his behalf, since Huggins is hunting this week on a long-scheduled trip. Huggins has filed his letter of intent, which allows him to raise money and explore how strong support would be for his candidacy. Huggins is a Republican who served in the Alaska Senate, representing District E, the Wasilla area. He was Senate president during the 28th Alaska Legislature, with a caucus of 13 Republicans and two Democrats.

New owners for ADN. A federal bankruptcy judge on Monday approved the sale of Alaska Dispatch News to the Binkley family of Fairbanks for $1 million, the amount the Binkley family company has already loaned the news operation. The decision means Alaska’s largest newspaper and news website will avoid a sudden shutdown, and that the Binkleys acquire Alaska Dispatch News for what they’ve spent. “The balance of the purchase price is zero,” U.S. Bankruptcy Court Judge Gary Spraker said in an order signed Monday. In front of a packed downtown Anchorage courtroom full of lawyers, reporters and onlookers, Spraker said the sale price of $1 million was fair and reasonable, especially since ADN would be unable to continue operations otherwise. Headlamp again wishes the Binkley Co. well as they try to right the ship they’ve pulled off the rocks.

Second verse, same as the first. The Alaska Dispatch News will be able to stay in business under the new ownership of the Binkley Co. after a federal bankruptcy judge on Sept. 11 gave the go ahead despite concerns that the sale price of $1 million seemed a giveaway to those owed money from former owner Alice Rogoff. After hearing arguments lasting most of the day, Judge Gary Spraker of U.S. Bankruptcy Court, Division of Alaska, acknowledged the accelerated pace from filing to sale. Rogoff filed for Chapter 11 bankruptcy on Aug. 12, contending she suffered a revenue shortage of $125,000 per week and didn’t have cash on hand to pay vital bills such as employee insurance premiums and the newspaper carriers that deliver the paper. She came, she saw, but certainly didn’t conquer. Instead, she left debts unpaid, While the deal has gone through, Headlamp would remind readers that Ms. Rogoff stiffed hundreds of creditors including Alaska businesses. Not what we would call neighborly.

One step forward for Alaska LNG? The state-owned Alaska Gasline Development Corporation (AGDC) said it took a step forward in the development of its planned $40 billion LNG export project with the completion of the project’s capacity solicitation process. Alaska LNG project has three major components, a gas treatment plant located at Prudhoe Bay, an 800-mile pipeline to Southcentral Alaska with up to five offtakes for in-state use, and a natural gas liquefaction plant in Nikiski authorized to process 20 million tons of LNG per year. The capacity solicitation process that ran from June 15 through August 31 enabled AGDC to secure foundation customer status on the transportation and liquefaction system in an open and non-discriminatory process, said AGDC President Keith Meyer.

Tax cuts, job creation win Norway’s election. Norway’s tax-cutting Conservative Prime Minister Erna Solberg declared victory on Tuesday after a parliamentary election, narrowly defeating a Labour-led opposition with her promises of steady management of the oil-dependent economy. The win is historic for Solberg, whose supporters compare her firm management style to that of German Chancellor Angela Merkel, because no Conservative-led government has retained power in an election in Norway since 1985. “It looks like a clear victory,” for the center-right, a beaming Solberg told cheering supporters in Oslo just after midnight, following Monday’s voting.

New bill gives states control over oil and gas development. Rep. Liz Cheney is co-sponsoring a bill that would hand more control of oil and gas development on federal lands to the states, stoking fears from environmental groups that the range of access and protections from federal agencies is narrowing. The Federal Land Freedom Act allows states to prove they have the enforcement muscle and regulatory infrastructure to oversee oil and gas permitting, leasing and production on available federal land. The bill’s proponents, including the congresswoman from Wyoming, say states have faced a decline in leasing on federal land in recent years under the Obama Administration. The bill would reverse that trend.

First Reads:

Breaking: Charlie Huggins files for governor
Must Read Alaska, Suzanne Downing, September 12, 2017

Sale of Alaska Dispatch News to Binkley group is approved by judge
Alaska Dispatch News, Annie Zak and Michelle Theriault Boots, September 11, 2017

ADN sold after no other bidder surfaced
Alaska Journal of Commerce, Naomi Klouda, September 11, 2017

Alaska LNG export project wraps up capacity solicitation
LNG World News, LNG World News Staff, September 12, 2017

Norway’s right-wing government wins re-election fought on oil, tax
Reuters/Arctic Now, Henrik Stolen and Joachim Dagenborg, September 12, 2017

Cheney bill seeks to put oil and gas development in state hands
Casper Star Tribune, Heather Richards, September 10, 2017

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Headlamp – September 11, 2001 – WE WILL NEVER FORGET.

September 11, 2017 | Posted in : News

Tax cuts for economic growth or tax hikes for government growth? Norwegians voted on Monday on the second and final day of a knife-edge parliamentary election in which Prime Minister Erna Solberg’s center-right bloc and a center-left opposition are vying to rule Western Europe’s top oil and gas producer. Solberg’s Conservatives want to cut taxes in a bid to boost growth, while opposition Labour leader Jonas Gahr Stoere wants tax hikes to improve public services such as education and healthcare for Norway’s 5 million citizens. The outcome could impact Norway’s oil industry, as either Solberg or Gahr Stoere is likely to depend on one or more small parties that want to impose limits on exploration in Arctic waters off the northern coast. The tension is so high in this election that the Norwegian government has chosen to hand count ballots to avoid any voter fraud.

The whole enchilada. The fate of Alaska’s largest newspaper and news website will be decided in a U.S. Bankruptcy Court on Monday morning. The stakes for Monday’s hearing are high, according to attorneys for the seller and potential buyers: If a federal bankruptcy judge does not approve a sale of the Alaska Dispatch News to the Binkley family of Fairbanks over the objections of some creditors, the newspaper will no longer have a buyer. Absent another buyer emerging Monday morning, the company could be forced to shut down within a week. The Binkley family has put $1 million into operating the newspaper since it filed for Chapter 11 reorganization last month and doesn’t want to delay taking ownership, said Erik LeRoy, an Anchorage attorney representing the ownership group. “If we don’t get the whole package done tomorrow I don’t know what choice there is but the paper closes down,” LeRoy said.

Locking out your competition? The world’s largest oilfield services company, Schlumberger NV, is spending billions of dollars buying stakes in its customers’ oil and gas projects – investing in the same ventures it supplies with equipment and expertise. The new business model gives Schlumberger a say in drilling decisions, oilfield management and even on hiring other Schlumberger units for service contracts, the company has told investors. The expanded operational authority saves Schlumberger from bidding for each of the many jobs that typically require separate contracts on a large drilling project – effectively locking out the firm’s competitors.

Money from miners for education – again. Hecla Mining Company Aug. 31 donated another $300,000 to the University of Alaska Southeast as part of the Greens Creek Mine owner’s ongoing support of the campus’ “Pathways to Mining Careers” program. This program was created in 2011, when Hecla made an inaugural US$300,000 donation to develop a unique approach to engage local high school students and to educate and train them for future employment in the mining industry. Since that time, the program has been expanded to include adults new to mining.

Cognitive Computing Considered. The oil and gas industry was considered conservative when it came to technology changes. However, the need to reduce costs in an era of lower oil prices prompted change, delegates were told during the O&G TechWeek Conference in Rio de Janeiro. During the conference held in late August, executives from major oil together with supply and technology companies met to discuss technology trends that can benefit the oil and gas industry. According to a report from the World Economic Forum, digital transformation in the oil and gas industry could unlock about $1.6 trillion of value for the industry, its customers and wider society. If existing organizational and operational constraints are relaxed and the impact of “futuristic” technologies such as cognitive computing are considered, the amount could rise to about $2.5 trillion.

First Reads:

Norwegians split over oil and tax as they vote in tight election
Arctic Now/Reuters, Terje Solsvik, September 11, 2017

Monday bankruptcy hearing will decide future of Alaska Dispatch News
Alaska Dispatch News, Michelle Teriault Boots, September 10, 2017

The next oil major? Service firm Schlumberger’s big bet on production
Reuters, Liz Hampton, September 7, 2017

Mining News: Hecla continues support of UAS program to train local miners
Petroleum News, Shane Lasley, September 10, 2017

Digital Era Revolutionizes Oil, Gas Industry
E&P Magazine, Bruno Braga, September 8, 2017

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Headlamp – Federal law says: Kenai freight haulers shouldn’t be taxed.

September 8, 2017 | Posted in : News

Federal law says: Kenai freight haulers shouldn’t be taxed. If the Kenai Peninsula Borough Assembly approves an ordinance amending the sales tax code, freight haulers will again be exempt from paying. Freight haulers like Lynden Transport were exempt from paying sales taxes in the Kenai Peninsula Borough up until last year, when the borough assembly passed a an ordinance containing a raft of changes to the borough sales tax code. The ordinance, proposed by Borough Mayor Mike Navarre’s administration as part of a complete review of the borough’s property and sales tax codes, reasoned at the time that buses and taxis pay taxes and “there is no public policy justification to treat the moving of goods differently than moving people,” according to a memo with the ordinance. However, it turns out there may have been a good reason. Federal law prohibits the taxation of freight moving between states and the borough sales tax only applies to the final consumer, so intermediate movers are exempt anyway.

The $64 million-dollar question. At a Resource Development Council meeting Thursday morning, Walker told the crowd he’s doubtful about how much longer the state will continue to pay for the project. AKLNG is one of the most expensive projects of its kind in North America, with an estimated price tag between $45 to $65 billion. Right now, AKLNG is advancing on funds previously set-aside for the project, but Walker said he would be hard-pressed to ask the Legislature for new money once that’s gone. “I don’t allow myself to get optimistic anymore, I’m hopeful. And I am hopeful. But can we continue on after this funding? I’m – I’m doubtful honestly if we could,” Walker said. “If there’s a customer out there willing to take long-term contracts which would underpin the long-term financing, then there will be a project. If there is not, then there won’t be of that nature.” According to the Alaska Gasline Development Corporation, there’s about $64 million left in funding for AKLNG. That’s expected to last through this year.

Alaskan Consensus Builder. If confirmed by the Senate, former Alaska Natural Resources commissioner Joe Balash will be assistant Interior secretary for land and minerals management. He would oversee a wide swath of Interior, including the Bureau of Land Management and the Bureau of Ocean Energy Management. At his confirmation hearing Thursday, Balash said his perspective on resource extraction formed early, and was shaped by his love of salmon. Balash now works as Sen. Dan Sullivan’s chief of staff in Washington. Balash said he’s a consensus builder, a guy who likes to bring all sides to the table. He said he’s fully committed to listening to people affected by the Department’s decisions and really taking what Governor Bill Walker has expressed his waning optimism for the state’s gas pipeline project, Alaska Liquid Natural Gas.

Taking care of people, the priority. Not discussing climate change. The head of the Environmental Protection Agency (EPA) said that talk about how climate change has played into hurricanes like Irma and Harvey is “misplaced.” Scott Pruitt, who has expressed skepticism on the degree to which human activity causes global warming, told CNN that the country’s focus should be squarely on the immediate effects of the hurricanes for the time being. He continued: “What we need to focus on is access to clean water, addressing these areas of Superfund activities that may cause an attack on water, these issues of access to fuel. Those are things so important to citizens of Florida right now, and to discuss the cause and effect of these storms, there’s the… place (and time) to do that, it’s not now.”

Double Duty for Icebreakers. The state-owned Finnish shipping company Arctia broke a new record this summer with the earliest crossing of the Northwest Passage by its multipurpose icebreaker MSV Nordica. But the trip was not aimed at a new record transit; the expedition was meant to showcase the opportunity of shared use of icebreakers for polar research. “Arctia had an innovative idea: their multipurpose icebreaker Nordica participated in a conference in the Republic of Korea and the ship had to be transferred back to the Atlantic,” explains Daria Gritsenko, Postdoctoral Researcher at the University of Helsinki and a member of the Arctic 100 crew. “So they had the idea to get the ship back via the Northwest Passage and to organize an international expedition.” This became the “Arctic 100 Expedition,” which transited through the Canadian Archipelago from Vancouver to Greenland’s capital Nuuk during July 2017.

Could a cross-boundary mining battle lead to a trade war with Canada? A Southeast Alaska tribal organization is using that possibility to push federal officials into providing stronger protections for regional fisheries. A coalition of 16 Southeast tribal governments has filed paperwork that could lead to trade sanctions against British Columbia, which borders the region. Southeast Alaska Indigenous Transboundary Commission chairman Frederick Olsen Jr. said about half the region’s tribal governments have signed a petition to the federal Department of the Interior. “The goal is to get federal involvement in our transboundary mining issue,” he said. “So, we are getting some more of our member tribes to sign on.”

One step closer…The state of Alaska is considering a renewed effort to answer the decades-old question of how much oil is actually available in the Arctic National Wildlife Refuge. Alaska Department of Natural Resources Commissioner Andy Mack said the state is likely to ask the Trump administration to allow advanced 3-D seismic studies on the 1.5-million-acre northern plain of the Arctic refuge. Alaska couldn’t afford the multimillion-dollar studies on its own due to the state’s severe budget problems caused by continued low oil prices. But Mack said the studies might be underwritten jointly by the state and a private-sector partner, possibly one of Alaska’s Native corporations. “It has to be partially privately funded,” he said. “I don’t want to get ahead of myself here, but it could be a state – Alaska Native corporation partnership. We think that’s the best, strongest application to the federal government.”

Global LNG glut dwindling? The global glut plaguing liquefied natural gas markets may start to dwindle in five years, threatening to spur a deficit equivalent to twice the output of leading producer Qatar. New projects are needed to fill the shortfall, with demand for the super-chilled fuel forecast to double in the 20 years to 2035, Cedigaz, a Paris-based industry research group, said in its LNG Outlook. Buyers in Asia are boosting use of the fuel at a “staggering” pace, Jack Fusco, chief executive officer of U.S. exporter Cheniere Energy Inc., said in a Bloomberg Television interview. While plants currently in operation or being built will add to global oversupply, aging facilities and shrinking resources in some areas mean capacity will start declining after 2021. That’s a boon for companies from Royal Dutch Shell Plc to Tellurian Inc. and Novatek PJSC looking to invest in new production in the next decade to meet demand. “The continuous growth of the LNG market will leave a large margin for the implementation of new projects,” Cedigaz said in the report emailed Thursday.

Fischer new Department of Revenue Commissioner. Gov. Bill Walker on Thursday announced he’s appointed Sheldon Fisher to be Alaska’s Department of Revenue Commissioner. Fisher is moving from being the Department of Administration Commissioner. Fisher said he didn’t lobby to replace Randall Hoffbeck. “The whole reason I’m working for the governor is because I believe in what he’s trying to do, and I think this is an opportunity for me to serve,” he said. Fisher is an Anchorage resident who plans to commute to Juneau. Fisher worked as a business executive before becoming commissioner of administration after Walker’s election in 2014. His most recent private sector position was as chief operating officer of McKinley Capital Management and he previously worked for Alaska Communications. The administration position was his first public sector job.

First Reads:

Alaskan says he’ll build consensus in Interior post
Alaska Public Media, Liz Ruskin, 09/07/2017

Walker ‘doubtful’ about further funding AKLNG
KTVA, Liz Raines, 09/07/2017

Sharing icebreakers between industry and research
Arctic Now, Kathrin Stephen, High North News, 09/08/2017

EPA Head on Irma: Now isn’t the time to talk about climate change
The Hill, Timothy Cama, 09/08/2017

Can a Southeast mine battle lead to a trade war?
KTOO Public Media, Ed Schoenfeld, 09/07/2017

Alaska may ask Trump to allow ANWR studies
E&E News, Margaret Kriz Hobson, 09/08/2017

LNG Glut May Flip to Deficit as Cheniere Sees China Growth
Bloomberg Markets, Anna Shiryaevskaya and Naureen S Malik, 09/07/2017

Sheldon Fisher appointed Alaska revenue commissioner
KTOO Public Media, Andrew Kitchenman, 09/07/2017

Ordinance would exempt freight hauling from sales tax
Peninsula Clarion, Elizabeth Earl, 09/07/2017

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Headlamp – Murkowski uses gavel to silence protestors. Differing Opinions on Alaska LNG.  

September 7, 2017 | Posted in : News

Pulling the plug would be irresponsible? Last September, Gov. Bill Walker gave himself a year to decide if the $43 billion Alaska LNG project should survive, a decision he said he’d make based on whether the project had sufficient interest from potential gas buyers and pipeline investors. On Wednesday, after the year had passed, he said in an interview that the project should live for now based on the “unprecedented” level of interest it has received from potential gas buyers, investors and top Asian leaders. Support from a newly installed presidential administration in Washington that says it is anxious to develop the nation’s resources is also key. “If a year ago someone had told me about all the things that would have changed in our world by this time, I would have been pretty excited,” he said.

Not everyone agrees with the Governor:

  • In an article entitled “No Gas Guv”, Craig Medred writes “Over the past year, there has been little real progress on the gasline project, but plenty of public spin. Click here to read the entire article.
  • In a presentation to the Fairbanks Chapter of the Alliance yesterday, Larry Persily discussed the challenges that contradict Governor Walker’s statements – noting the need for a market, for contracts that will attract investors and a fiscal plan for the state. Click here to review the presentation.
  • In his blog “Thoughts on Alaska Oil and Gas”, Brad Keithley says: Not what we had hoped to hear. While there are commitments, the bulk appear to be made up of AGDC, as a gas buyer, committing to ship on AGDC, the pipeline. While state ownership of the pipeline offers some cost-reduction related advantages, acting as a gas buyer offers none and, in addition, puts the state at considerable financial risk throughout the life of the project. To be honest, in our opinion, we assess this as a failed open season which should trigger significant reassessment of the current strategy.
  • State Sen. Cathy Giessel, R-Anchorage and chair of the Senate Resources Committee, said MOUs such as the one signed with Korea Gas “aren’t worth the paper they’re written on.” Giessel sent a request to the AGDC to determine if it has received “viable” offers, particularly from LNG buyers or traders. Interest from those parties would help assess the interest in the market for the project, she said. From her email communications, including with AGDC President Keith Meyer, she understands no offers came from LNG buyers or traders, she said. “I want to know who is offering to buy this gas and who is willing to go in this with us,” said Giessel. “Unless something significant has changed, this is the same situation we were in a year ago, when the major oil companies said this (project) just isn’t viable at this time.”

Law of the Sea: In defense of tax deductions. Norway’s plan to shield oil companies from U.N. fees if they produce oil far from land in environmentally sensitive Arctic regions is in line with long-standing tax policies, the Oil and Energy Ministry said on Wednesday. Opposition parties accused the right-wing government on Tuesday of failing to inform parliament clearly about a plan to let companies deduct any U.N. charges for Arctic production more than 200 nautical miles (370 km) from land against tax. The Oil and Energy Ministry said the deductions promised were consistent with Norwegian tax policies for oil companies.

Kenai Mayoral Candidates Stress Experience. The three candidates for borough mayor are leaning hard on their past experience to garner votes in next month’s election. With less than a month to go until the municipal regular election, Dale Bagley and Linda Hutchings, both of Soldotna, and Charlie Pierce of Sterling, are getting their names out there with signs around the borough, advertisements and community meetings. At a packed luncheon of the joint Kenai and Soldotna chambers of commerce Wednesday, they each pitched their experience in management and politics as making them the best fit for the job. Headlamp sends best wishes to Alliance member Linda Hutchings in her election efforts!

Three Cheers for Alaskan Joe Balash!!!! Protesters failed to shut down a Senate confirmation hearing on Thursday where President Trump’s energy appointees were being vetted to lead the Federal Energy Regulatory Commission and staff the Interior Department. They chanted “no eminent domain for private gain” before the nominees were sworn in to answer questions, prompting the committee chairman, Sen. Lisa Murkowski, to slam the gavel to silence them. Capitol Police escorted the protesters out. Other nominees being considered at Thursday’s hearing included Joseph Balash to serve as assistant secretary of the interior for land and minerals management.

French fantasy – no fossil fuels. To meet its carbon neutral goal by 2050, the French government plans to phase out all oil and gas production in the country and its overseas territories by 2040. President Emmanuel Macron is introducing legislation to the French Cabinet with the hope of passing the measure by the end of 2017. If the bill passes, France would be the first country in the world to ban all fossil fuel production.

First Reads:

Walker: Market interest in Alaska LNG plan is ‘unprecedented’
Alaska Dispatch News, Alex DeMarban, 09/07/2017

Norway defends tax deductions on Arctic drilling
Arctic Now, Alister Doyle, 09/07/2017

Mayoral candidates tout experience at forum
Peninsula Clarion, Elizabeth Earl, 09/07/2017

Protesters fail to stall hearing on Trump’s energy nominees
Washington Examiner, John Siciliano, 09/07/2017

France aims to become the first country to ban all fossil fuel production
Inhabitat, Amanda Froelich, 09/06/2017

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Headlamp – Dear Congress: Stop picking winners and losers between energy sectors and EPA trims the fat.

September 6, 2017 | Posted in : News

Congress: Stop picking winners and losers between energy sectors. While President Trump promotes a much-needed agenda of lower taxes and job creation, Congress must do its share by addressing a critical issue regarding tax incentives. In 2015, Congress decided to change course on tax incentives for promising energy technologies by picking winners (primarily solar businesses) while taking away incentives from other industries, including fuel cells powered by refined natural gas and hydrogen. This was a very short-sighted decision, as fuel cell technology could revolutionize the way American power is generated within a few years. The time has come for Congress to fix the practice of arbitrarily picking winners and losers between energy sectors such as solar at the expense of an even more promising energy future.

Taxpayers pay for Tax Breaks? Norway’s government plans to make taxpayers rather than oil companies pay special U.N. fees for any offshore production from remote Arctic regions, according to letters sent to oil firms and seen by Reuters. The plan could serve as an example for other nations looking to fund exploration of the seabed ever further from land. It was criticized by opposition parties that want tighter limits on exploration in the fragile Arctic environment, just days before an election in which the future of Norway’s big offshore oil and gas sector is a major issue.

The calm AFTER the storm. Reconstruction in the aftermath of Hurricane Harvey’s deadly gash through Texas could prove positive for the oil market in a few months, according to Goldman Sachs Group Inc. More than half of the U.S. oil refining capacity that was shut down because of Harvey’s winds and rain will be back online by Thursday, Goldman analysts including Damien Courvalin said in a Sept. 5 report. Dry post-storm weather should help minimize the loss of demand for gasoline and diesel, according to the bank.

Kenai loses jobs and business sales. Although most of the Kenai Peninsula’s demographic metrics stayed level in 2016 — population grew slightly and schools performed well — overall business activity fell about 10 percent and employment fell about 3.2 percent. The Kenai Peninsula Economic Development District’s 2017 Situations and Prospects report, released Tuesday, noted that personal and per capita income increased, but gross business sales dropped about 10 percent between 2015 and 2016, from almost $3.7 billion in 2015 to approximately $3.3 billion in 2016.

A drop in the bucket. The Environmental Protection Agency’s (EPA) workforce is expected to dip to levels not seen since Ronald Reagan was president, an agency official confirmed on Wednesday. Between retirements and a buyout program the EPA instituted earlier this summer, the agency is expected to lose more than 500 employees by October, Reuters reported Tuesday. An agency official confirmed the numbers to The Hill. The EPA employs about 15,000 people. The tally after the fiscal year ends at the end of the month could decline to 14,428 staffers. That’s a level not seen since the 1988 fiscal year, when the EPA employed 14,440 officials.

There is no “I” in team. President Donald Trump and Senate Majority Leader Mitch McConnell met privately on Tuesday in a bid to repair their badly frayed relationship, according to sources familiar with the meeting. Trump and McConnell huddled privately for roughly 20 minutes ahead of a larger gathering of Republican leaders and officials working on tax reform. The meeting was an apparent attempt to clear the air after a contentious August recess between the two, mostly fueled by the Senate’s failure to repeal Obamacare.

First Reads:

Exclusive: Norway plans tax breaks for remotest Arctic oilfields – letters
Reuters, Alister Doyle, September 5, 2017

Goldman Sees Oil Gloom Clearing as Demand Rises in Harvey’s Wake
Bloomberg, Dan Murtaugh, August 5, 2017

By the numbers: KPEDD delves into economic data
The Peninsula Clarion, Elizabeth Earl, September 5, 2017

EPA: Agency staffing on pace to dip to 1980s levels
The Hill, Devin Henry, September 6, 2017

The federal government’s myopic energy strategy is still picking winners and losers
The Washington Examiner, Colin Hanna, September 6, 2017

Trump, McConnell meet after monthlong standoff
Politico, John Bresnahan and Burgess Everett, September 6, 2017

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