Headlamp – EPA down nearly 1000, porcupine caribou up 40,000!

January 9, 2018 | Posted in : News

“Honey I shrunk the EPA!” The Environmental Protection Agency’s (EPA) staffing is now lower than it was in former President Reagan’s final year in office. An EPA spokeswoman said Tuesday that, as of Jan. 3, the agency had 14,162 employees, down from about 15,000 at the beginning of last year. That’s even lower than the 14,400 employees the agency had in fiscal year 1988, Reagan’s final year. The figures come after President Trump and EPA Administrator Scott Pruitt’s pledges to shrink the size of the federal government as part of their efforts to demonstrate that they are saving money and reducing regulatory burdens. “We’re proud to report that we’re reducing the size of government, protecting taxpayer dollars and staying true to our core mission of protecting the environment,” Pruitt said in a statement.

Let’s put it to a vote. Bills introduced ahead of the new legislative session could complicate Gov. Bill Walker’s plans to address Alaska’s budget and tackle infrastructure projects. Two new Senate proposals — from Republican Bert Stedman and Democrat Tom Begich — seek to enshrine a dividend from the Alaska Permanent Fund into the state constitution. Similar measures were introduced last year but pushed aside as legislators delayed action on a plan that would use fund earnings to help pay for state government and change how dividends are calculated.

Is it time for the pendulum to swing? Oil prices rallied in the first week of 2018, supported by increased geopolitical risk and severely cold weather in the eastern U.S., but the ‘perfect storm’ that pushed oil prices higher also raises the risk of a correction and of heightened herd mentality in trade, analysts reckon. Protests in Iran, possible new U.S. sanctions against Tehran, and Venezuela’s economic collapse could be the main geopolitical risks that could drive oil prices up early this year. Oil prices made their strongest start to a year in four years, with both Brent and WTI starting trading in 2018 above $60 a barrel for the first time since January 2014.

From the Washington Examiner’s Daily on Energy:

TRUMP CELEBRATES REPEAL OF WOTUS DURING SPEECH TO FARMERS: President Trump, during a speech to farmers Monday, celebrated the reversal of the Obama administration’s Waters of the United States (WOTUS) rule, which many rural landowners had opposed.

“We are streamlining regulations that have blocked cutting-edge biotechnology, setting free our farmers to innovate, thrive, and grow,” he said at the American Farm Bureau Federation’s annual convention in Nashville. “Oh, you are so happy you voted for me. You are so lucky I gave you that privilege.”

“It sounds so nice,” Trump said of WOTUS. “It sounds so innocent. And it was a disaster.”

However, WOTUS has not been changed yet. The Trump EPA is still working through redefining what constitutes a U.S. waterway under the Clean Water Act.

The Obama administration rule defined drainage ditches and watering holes the same as rivers and streams under EPA’s enforcement authority. That made farmers and ranchers subject to large fines and federal oversight.

Climate change = disease? How will climate change affect health in Alaska? Dangerous travel conditions could cause more accidents, warmer temperatures could spread new diseases and the topsy-turvy weather could worsen mental health. Those are some conclusions from a new state report, released Monday. The report, from the Alaska Division of Public Health, tries to predict the health impacts if current climate change forecasts hold true. (It’s based on the predictions for Alaska in the 2014 National Climate Assessment.) Sarah Yoder is the lead author. She said she was a little taken aback by what they found. “The surprise was just how broad, exactly, all these potential health impacts are,” Yoder said.

Following the herd. The Porcupine caribou herd has a record high number of animals. That’s according to a photo census compiled last summer by the Alaska Department of Fish and Game. The herd has been growing at a rate of about 3 to 4 percent annually since 2010, Northeast Alaska Assistant Area Biologist Jason Caikoski said last week. As of this year, the herd reached an estimated 218,000 animals. That’s nearly 40,000 more caribou than were present during the herd’s last population peak in 1989. However, recent advances in photo census technology have also made estimating the herd’s numbers more accurate over the years. 

First Reads:

EPA staffing falls to Reagan-era levels
The Hill, Timothy Cama, January 9, 2018

Dividend, tax vote bills could complicate governor’s budget
Fairbanks Daily News-Miner, Becky Bohrer, January 8, 2018

Is An Oil Price Correction Overdue?
OilPrice.com, Tsvetana Paraskova, January 8, 2018

State report details potential health impacts of climate change
Alaska Public Media, Rachel Waldholz, January 8, 2018

Porcupine Caribou Herd reaches record high population
Arctic Sounder, Shady Grove Oliver, January 8, 2018

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Headlamp – King of the Road; Dunleavy leaves Senate to campaign full time

January 8, 2018 | Posted in : News

The end of the road to build a road. The city of King Cove says it has reached a deal with the Trump administration to build a road through the Izembek National Wildlife Refuge. King Cove residents argue they need the road to access the all-weather airport in Cold Bay. But environmental groups believe it will ruin critical wildlife habitat. Now, city administrator Gary Hennigh says they have reached an agreement with the Interior Department for a land swap — between the King Cove Corporation and the federal government. He expects the deal to be signed January 22nd in Washington D.C. “The whole community is excited because after 30 years we do believe this can now happen,” Hennigh said. King Cove residents say they need the road because bad weather can leave people stranded during medical emergencies. But the 12 mile gravel road would pass through what now is designated wilderness — the highest level of conservation given to federal lands.

No budget fix in 2018. Gov. Bill Walker is an optimist, but even he thinks Alaska’s multibillion-dollar budget deficit won’t be resolved this year. Walker spoke to the Empire in an interview Friday, a little over one week before the start of the 2018 Alaska Legislature. “I don’t anticipate we’ll completely close the gap this year,” Walker said. In the budget proposal he released to lawmakers in December, Walker plans to use a portion of the Alaska Permanent Fund’s investment earnings to pay for government services and reduce the deficit. Accountants from the Legislature and the state Office of Management and Budget each expect the deficit to stand at $2.7 billion when the state’s new fiscal year starts July 1. That could be reduced to about $700 million, if lawmakers pass a law tapping the Permanent Fund.

Governor’s race getting real – Dunleavy steps down from Senate. Mike Dunleavy, R-Wasilla, plans to announce Monday that he will resign from the Senate to run for governor, according to Republican Party Chairman Tuckerman Babcock. The senator, who represents a large district that stretches from Talkeetna to Valdez and Whittier, informed his local districts early Saturday and told his colleagues Saturday night at a fundraiser in Anchorage, Babcock said. “He let people know that he would like to focus entirely on the race for governor,” Babcock said. It makes strategic sense for Dunleavy to resign now, because legislators are prohibited from fundraising during the legislative session that begins Jan. 16, Babcock said. Walker has also been apt to call special sessions, which would further limit Dunleavy’s fundraising opportunities if he didn’t step down.

Three-year high for oil prices. Oil prices rose on Monday, coming close to three-year highs on a slight decline in the number of U.S. rigs drilling for new production and sustained OPEC output cuts. U.S. West Texas Intermediate (WTI) crude futures had risen to $61.67 a barrel by midday in London, 23 cents above their last settlement. WTI last week reached $62.21, the highest since May 2015. Brent crude futures were at $67.78 a barrel, 16 cents above their last close. Brent hit $68.27 last week, the highest since May 2015. Traders said the gains were due to a slight decline in the number of U.S. rigs drilling for new production. The rig count eased by five in the week to Jan. 5 to 742, according to data from oil services firm Baker Hughes. Despite this, U.S. production is expected soon to rise above 10 million barrels per day, largely thanks to soaring output from shale drillers. Only Russia and Saudi Arabia produce more. “The U.S. oil price is now into a range that is anticipated to attract increased shale oil production,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.

From today’s Washington Examiner Daily on Energy:

SUPREME COURT WON’T HEAR CASE FOR COAL JOBS: The high court on Monday refused to hear a case brought by Trump supporter and coal magnate Bob Murray of Murray Energy. Murray had petitioned the Supreme Court last year to take up a lower court ruling that the Environmental Protection Agency did not need to report how its regulations would affect coal jobs and the industry. Monday’s decision means the 4th Circuit Court’s decision stands.

Pebble proceeds. The U.S. Army Corps of Engineers (USACE) has published a notification that the permit application submitted by the Pebble Limited Partnership (PLP) has been accepted. This formally begins the permitting process under the rigorous National Environmental Policy Act (NEPA) review process and other permitting efforts associated with the project. PLP’s application incorporates more than a decade of extensive third-party environmental research. The application and supporting documentation can be viewed via the USACE website. To read the press release in its entirety, click here.

First Reads:

Interior Department reaches deal with King Cove for controversial road
Alaska Public Media, Zoe Sobel, January 7, 2018

Governor says Alaska’s deficit will not be fixed in 2018
Juneau Empire, James Brooks, January 7, 2018

Wasilla state Sen. Mike Dunleavy to resign from Senate and run for governor
Anchorage Daily News, Julia O’Malley, January 7, 2018

Price of crude oil rebounds to near 2015 highs, but can it stay there?
Anchorage Daily News/Reuters, January 8, 2018

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Headlamp – One of Obama Administration’s Greatest Wrongs is Righted Under President Trump 

January 5, 2018 | Posted in : News

Trump pushes the camel’s nose out of the tent! The Trump EPA, under Administrator Scott Pruitt, has undone one of the most egregious actions taken by the Obama administration, which was then-EPA Administrator Gina McCarthy’s 2014 decision to preemptively veto the mining of Pebble deposit. Pebble deposit, which is located on state land in southwest Alaska, contains an estimated $400 billion worth of copper, gold, and molybdenum. In 2014, the Obama EPA took the unprecedented step of preemptively vetoing the project before Pebble Partnership, the group seeking to develop the deposit, had even submitted an application for permit. When that unprecedented action was still under consideration, a coalition of more than 20 nonpartisan, nonprofit organizations from all regions of the country sent the Obama EPA a letter warning that such a preemptive veto “would have a dramatic chilling effect on investment in America and show that many Third World countries have more regulatory certainty than the U.S.” One doesn’t have to be a mining proponent to be opposed to the unprecedented action taken by the Obama EPA with their preemptive veto of Pebble Mine before an application was even submitted. If the EPA is allowed to preemptively shut down Pebble before the finalization of a mine plan and the submission of an application, then the EPA can unjustifiably and preemptively shut down any development project in any state in the nation, whether it be a hydroelectric plant in Washington state, a natural gas well in Ohio, or a wind farm in Wyoming.

Greenpeace loses, again. The government acts in accordance with the law when awarding new petroleum exploration licenses for the Barents Sea, Oslo District Court ruled Thursday, in response to a lawsuit challenging the licenses on climate change grounds. Greenpeace, one of the three organizations which filed the landmark suit, has published the court’s 49-pages comprehensive ruling. The lawsuit challenged Norway’s 23rd oil licensing round, arguing that opening up the Arctic continental shelf would violate the country’s Paris agreement commitments to limit temperature rise to 1.5 degrees Celsius. “Whether Norway is doing enough for the environment and climate and if it was sensible to open fields so far north and east, are questions depending on composed assessments that are better assessed through political processes that the courts are not eligible to test,” the ruling says.

If we build it, will they come? On Thursday, conservation groups hammered the Trump administration’s proposal to put the U.S. Arctic Ocean back on the table for future leasing, but history suggests that oil exploration there will proceed cautiously, if at all. Roger Marks, a private petroleum economist in Anchorage, said two major rounds of exploratory drilling in the region, one in the 1980s and another in more recent years, led to a string of failures and uneconomic discoveries. “Unless they find a new prospect or reinterpret the seismic data they have, it’s unclear to me (whether) there would be a lot of zeal for going back in there,” Marks said. Oil companies punched more than 30 wells into the region starting in the 1980s, primarily in the Beaufort Sea. And about a decade ago, Shell launched a massive Arctic Ocean exploration program, after snatching up more than $2 billion in federal leases in the Beaufort and Chukchi seas.

Energy Weakness vs. Energy Dominance. The Trump administration is proposing to greatly expand the areas available for offshore oil and natural gas drilling, including off the Pacific and Atlantic coasts.  In the first major step toward the administration’s promised expansion of offshore drilling, Interior Secretary Ryan Zinke said nearly all of the nation’s outer continental shelf is being considered for drilling, including areas off the coasts of Maine, California, Florida and Alaska. The proposal, which environmentalists immediately panned as an environmental disaster and giveaway to the fossil fuel industry, is far larger than what was envisioned in President Trump ’s executive order last year seeking a new plan for the future of auctions of offshore drilling rights. That order asked Zinke to consider drilling expansions in the Atlantic and Arctic oceans.

First Reads:

Arctic Drilling Not The Only Alaska Resource Development Project Poised For Green Light Under Trump
Forbes, Patrick Gleason, January 4, 2018

If the Arctic Ocean is reopened to drilling, will the industry come?
Anchorage Daily News, Alex DeMarban, January 4, 2018

Climate activists lose landmark lawsuit challenging Arctic oil drilling in Norway
Arctic Now/The Barents Observer, Thomas Nilsen, January 5, 2018

Trump proposes massive expansion of offshore drilling
The Hill, Timothy Cama, January 4, 2018

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Headlamp – Big Green Guns Ablazing

January 4, 2018 | Posted in : News

Low LNG Prices in China – supply meet demand. Chinese liquefied natural gas (LNG) prices have slipped from record highs as the industrial users were cut off the supply and turned to cheaper LPG and coal. Reuters cites Li Ruipeng, manager at Tangshan Huapu Gas Co a company delivering liquefied natural gas via trucks, as saying that some industrial users were unable to afford the LNG as it reached 9,750 Yuan ($1,500) in Inner Mongolia region. Since December 24, the prices have dropped over 40 percent according to the data from the industry publication yeslng.com, Reuters reports. The prices dropped as China’s National Development and Reform Commission (NDRC) ordered state-owned companies to cut gas supplies to industrial users by 15 million cubic meters per day. In addition, the prices of domestically produced fuel also had a major impact on the price drop.  Not only were the industrial users turning away from natural gas but even residential users opted for cheaper liquefied petroleum gas or coal.

Judge sides with Baker Hughes. An Anchorage Superior Court judge has ruled against a group of men seeking a punitive-damage award from Baker Hughes for neurological illnesses they say arose after they were exposed to toxic gases during a construction project. Judge Eric Aarseth on Tuesday issued a single-page “final judgment” favoring “prevailing party” Baker Hughes, one of the world’s largest oil-field services companies, with headquarters in Houston, Texas. The decision came on the heels of a Dec. 22 order in which Aarseth granted a motion for summary judgment that had been filed by Baker Hughes. In that decision, Aarseth said there were “no further matters to litigate.” He vacated a trial that had been set for early January. The “alleged toxic gas exposure,” Aarseth wrote in the December order, took place near a chemical transfer facility outside Kenai, where drilling chemicals are packaged for shipment to oil fields.

Kowalke files for Dunleavy Senate seat. For the past few months, questions have swirled over who could fill the Alaska Senate seat held by Wasilla Republican Mike Dunleavy, who’s running for governor.  Would it be David Eastman, the first-term Republican House member who represents the west side of Dunleavy’s district, which includes Willow, Talkeetna and parts of Wasilla? Or George Rauscher, the first-term Republican House member who represents the east side of Dunleavy’s district — a huge swath stretching 200 miles from Delta Junction in the Interior to Valdez on Prince William Sound? But with those two still undecided about whether to run, a new candidate has jumped into the race: Randall Kowalke, the Mat-Su Borough Assembly member from Willow.

Tax cuts have fingerprints on employment numbers. U.S. businesses wrapped up 2017 with another month of robust hiring while congressional Republicans and the White House signed off on a sweeping tax package. Companies added 250,000 jobs in December, up from 185,000 in November, the most jobs in a month since March, according to the payroll processor ADP’s latest report released on Thursday. The job gains were spread across all sectors and industries with retail and professional services seeing a surge bolstered by consumer spending over the holidays. “My sense is that tax cuts probably have their fingerprints on the employment numbers,” said Mark Zandi, chief economist of Moody’s Analytics, who helps oversee the ADP data.

Alaska will continue to lose jobs.  A recently released employment forecast for 2018 indicates that Alaska is expected to lose jobs for the third year in a row. However, the state labor department also expects the losses to taper off to a more moderate level, compared to earlier in the recession. “We’re forecasting job losses statewide – in Anchorage and most places [for 2018],” said Neal Fried, economist with the Alaska Department of Labor & Workforce Development. “The one exception is Fairbanks.” Across the state, ADOLWD forecasts employment to decline by 0.5 percent – or 1,800 jobs – in 2018. Overall, this is a brighter employment outlook, compared to declines of 1.1 percent in 2017 and 1.9 percent in 2016. Last year, Alaska lost approximately 3,600 jobs. And in 2016, an estimate of 6,300 jobs were lost. Additionally, economists forecast Anchorage employment to decline by 0.7 percent, and the Southeast to decline by 0.6 percent. Meanwhile, Fairbanks – an outlier – is expected to increase by 0.8 percent. The report attributes this comeback due to a “big jump in military construction.”  During the state’s recession, the report claims that a majority of these losses took an especially heavy toll on a few specific industries, including:

  • Construction
  • Oil and Gas
  • Professional and Business Services
  • State Government

From Washington Examiner’s Daily on Energy:

BIG GREEN GUNS ABLAZING.  ZINKE TO ANNOUNCE BIG OFFSHORE DRILLING PLAN THURSDAY: Interior Secretary Ryan Zinke on Thursday afternoon is expected to release what could be the largest five-year offshore drilling program ever proposed.
Drill, baby, drill: The plan is expected to allow offshore drilling for crude oil and natural gas on the Atlantic Coast and in the Arctic, reversing the Obama’s administration’s block. It also is expected to address drilling opportunities on the Pacific Coast as well as more possibilities in the Gulf of Mexico.
The plan would span the years 2019 to 2024, replacing the Obama administration plan that ends in 2022.  The big guns of the environmental community began attacking the plan ahead of Zinke’s announcement.

First Reads:

China’s LNG prices slide as industrial users cut use
LNG World News, Staff, January 4, 2018

Judge backs Texas company over workers’ claims of toxic gas exposure in Alaska
Anchorage Daily News, Alex DeMarban, January 3, 2018

As state House members eye Dunleavy’s Senate seat, Mat-Su assemblyman jumps into race
Anchorage Daily News, Nathanial Herz, January 3, 2018

US businesses added 250,000 jobs in December
The Hill, Vicki Needham, January 4, 2018

Alaska will see modest job losses in 2018, new report says
KTUU, Sidney Sullivan January 3, 2018

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Headlamp – Things are looking UP in TAPS! Way to go Alyeska!

January 3, 2018 | Posted in : News

Alyeska kicks off the New Year with great news! For the second year in a row, there was an increase in the amount of oil flowing down the trans-Alaska pipeline. That’s according to its operator, Alyeska Pipeline Service Company. Alyeska announced that the pipeline’s average throughput went up by about 10,000 barrels per day in 2017 compared to 2016, a 1.5 percent increase. “When we see two years in a row of increase, it gives us lots of optimism for the state of Alaska and also for pipeline operations going forward,” Michelle Egan, a spokesperson for Alyeska, said. North Slope oil production declined steadily starting in the late 1980s, when throughput peaked at over two million barrels per day. Before 2016, the last uptick in pipeline throughput was in 2002. Back then, it carried over one million barrels per day. In 2017, throughput averaged 527,323 barrels daily. Congratulations to all at Alyeska for the fantastic job they do to keeping TAPS flowing safely every day!

Beast of burden? Many rural communities in Alaska have been experimenting with renewable energy systems in recent years, trying to reduce the amount of costly fuel they have to ship in. In late December, researchers at the Alaska Center for Energy and Power, in Fairbanks, published a series of articles looking at how those technologies are doing and what challenges remain in making them more cost effective. The analysis includes data from wind, solar electric, biomass, and several other energy technologies in use in more than 100 rural communities around the state.

Russian air patrols increasing. New and upgraded air bases will allow Russia’s Northern Fleet to extend the scope of its Arctic flights. In the course of 2017, more than 70 air patrols with aircrafts Tu-142 and Il-38 were conducted over Arctic waters, according to the press service of the Northern Fleet. This year, the patrols will be continued and the geographical scope “significantly expanded,” the fleet said. “It is expected that the Navy pilots of the Northern Fleet in 2018 will significantly expand the geography of the Arctic flights, including with the use of the polar airfield of Temp in the New Siberian Islands,” a press release reads. The pilots and air crews are being carefully trained in maneuvering in difficult Arctic weather. The involved aircraft help monitor ice conditions and provide more secure shipping for vessels in the area, the Navy says.

From Washington Examiner’s Daily on Energy:

TRUMP READIES NEW FIVE-YEAR DRILLING PLAN: The task force’s report comes as the Trump administration is expected to issue its updated version of the Interior Department’s five-year offshore drilling plan any day. The plan is expected to include expanded drilling off the Atlantic coast and the Arctic, as well as additional opportunities in the Gulf. The Obama administration had excluded a number of areas, such as the Atlantic Ocean, from its drilling plan, which went into effect last year. Offshore drilling in wake of tax law: The new report’s recommendations also come as the new tax law gives Gulf states a bigger share of offshore drilling revenue from federal leases. The bipartisan measure would help fund the Gulf’s expensive restoration and maintenance efforts. Show me the money: That increased revenue could be necessary to fund the National Academies’ high-tech policy recommendations, which include maintaining a fleet of drone ships to serve as deployment and data retrieval platforms, the release of 20 devices called gliders that fly through the water table using the ocean current to collect data, as well as underwater drones with their own propulsion systems.

Climate and credit? In late November, one of the world’s largest credit rating agencies announced that climbing global temperatures and rising sea levels would have an economic impact on the U.S. In short, climate change could become a credit rating problem for some U.S. cities and states. But even though Alaska is warming nearly twice as fast as the rest of the United States and dozens of towns and villages are at risk of destruction — the state’s credit might not be affected. From rising sea levels, to droughts and flooding, to wildfires and more frequent hurricanes — Moody’s makes it clear that the changing climate can have a very real impact on a budget.

Asia is OK with coal in their stocking. The one question that I get asked every other day is “What’s the future of coal in Asia?” Especially after the Paris Climate agreement a couple of years ago, where 196 countries signed a pact to reduce carbon emissions by 2022. No doubt renewable energy capacity additions have picked up pace since then, but is it so easy to displace King Coal from the energy mix? My answer is no. Millions of people in Asia do not have access to basic electricity and several countries still subsidize electricity tariffs as a populist measure. Coal is omnipresent in Asia, particularly in India, Indonesia, China and, to some extent, the Philippines and Vietnam. Countries that don’t have domestic production import it.

Who doesn’t love a good ice breaker? Mitsui O.S.K. Lines, Ltd. has announced that on 21 December, a naming ceremony for an ice-breaking LNG carrier, which was jointly ordered by MOL and China COSCO Shipping Corporation Limited (China COSCO Shipping), was held at Daewoo Shipbuilding & Marine Engineering Co., Ltd. (DSME). As a crowd of VIPs and personnel related to the project looked on, the newbuilding vessel was named the ‘Vladimir Rusanov’ by Ms. Veronika Makeeva of PAO Novatek, the major shareholder of the Yamal LNG project. The name is derived from Russian Arctic explorer and geologist. The Vladimir Rusanov is the first of three newbuilding vessels for MOL and China COSCO Shipping’s fleets in the Yamal LNG Project. The vessel is slated to go into service at the end of March 2018, following delivery at the end of December and ice trials (ice-breaking sea trials) in Arctic waters.

First Reads:

North Slope oil production ticked up again in 2017
Alaska Public Media, Elizabeth Harball, January 2, 2018

New analysis out on renewable energy costs in rural Alaska
Alaska Public Media, Ravenna Koenig, January 2, 2018

Russian Navy announces it will significantly expand Arctic air patrols
Arctic Now/Independent Barents Observer, Atle Staalesen, January 2, 2018

Is Alaska’s climate risk, a credit risk?
Alaska Public Media, Rashah McChesney, January 2, 2018

Coal’s future in Asia is far from bleak
S&P Global Platts, Deepak Kannan, January 3, 2018

Ice-breaking LNG carrier for Yamal LNG project named Vladimir Rusanov
LNG Industry, Will Owen, January 2, 2018

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Headlamp – 2018 “crucial” for resource development in Alaska.

December 28, 2017 | Posted in : News

Arctic sees some action. Exploration drilling began this week for a record-length oil well planned by Eni that targets a formation beneath federal waters of the U.S. Arctic Ocean, regulators said Wednesday. Eni U.S. Operating, an Italian multinational company, in a partnership with Shell, plans to drill the well from a man-made island in shallow state waters near Alaska’s North Slope shore. The well is expected to extend 6.5 miles into rocks beneath federal waters of the Beaufort Sea. ConocoPhillips last year announced it had set a long-distance drilling record in Alaska with a 5-mile well at its CD5 field. Inspectors from the Bureau of Safety and Environmental Enforcement were on hand Monday, Christmas Day, to oversee compliance as operations began, the agency said in a statement. Joe Balash, an Alaskan and a new top official in the Interior Department, said in the statement that the Arctic is important to the Trump administration’s national energy strategy.

2018 make or break time. The upcoming year will be a telling year for several of Alaska’s prospective development projects, starting with the biggest: the $40 billion-plus Alaska LNG Project. That’s not to say the state-owned Alaska Gasline Development Corp. did not produce any accomplishments in 2017. After taking control of the LNG export effort to start the year, AGDC promptly submitted its environmental impact statement application — nearly 60,000 pages of scientific and socioeconomic information — in April. Agency officials believe it to be the largest single EIS filing in the history of the National Environmental Policy Act review process. AGDC leaders have stressed their desire for Federal Energy Regulatory Commission, or FERC, to have a final EIS published by the end of the year, with a record of decision following shortly thereafter.

Through Russia? No love! Russian lawmakers have passed legislation earlier this month banning most fossil fuel shipments along the Arctic shipping route that links the nation’s Pacific coast with its western Arctic ports—and with Europe. The amendment in the federal shipping code comes after Putin in mid-November announced that all shipments of oil and natural gas along the Northern Sea Route would be nationalized. A law from the State Duma, the lower house in the country’s legislative assembly, came only four weeks later. On Dec. 20, the legislators adopted the amendments, which ban foreign petroleum shipments along the Russian Arctic route, information from the Duma shows. In addition to oil products and liquefied natural gas, the legislation also includes coal. The amended law comes into force on Feb. 1, 2018.

Another Trump rollback. The Trump administration on Thursday began dismantling safety rules created after the Deepwater Horizon offshore oil rig disaster in the Gulf of Mexico. The Interior Department’s Bureau of Safety and Environmental Enforcement, which regulates offshore oil and natural gas drilling, says its proposed changes to the rules are intended to reduce “unnecessary burden” on the energy industry and would save $228 million over 10 years without compromising safety. “By reducing the regulatory burden on industry, we are encouraging increased domestic oil and gas production while maintaining a high bar for safety and environmental sustainability,” said BSEE Director Scott A. Angelle in a statement Thursday. The bureau officially will publish its proposed rule changes Friday in the Federal Register, opening a 30-day public comment period.

First Reads:

Company begins drilling 6.5-mile Arctic oil well set to be Alaska’s longest
Anchorage Dispatch News, Alex DeMarban, December 27, 2017

Major Alaska resource projects face crucial year in 2018
Alaska Journal of Commerce, Elwood Brehmer, December 27, 2017

Russian legislators ban foreign shipments of oil, natural gas and coal along Northern Sea Route
The Independent Barents Observer, Atle Staalesen, December 27, 2017

Trump administration starts rollback of offshore drilling rules imposed after Deepwater Horizon spill
The Washington Examiner, Josh Siegel, December 28, 2017

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Headlamp – Pruitt tries to redefine environmentalism; Walker approves Pt. Thomson plan.

December 27, 2017 | Posted in : News

Governor Walker’s present to Exxon. Gov. Bill Walker’s administration has approved a plan to possibly expand a massive gas field east of Prudhoe Bay. The Point Thomson gas field currently produces a diesel-like fluid. But it’s sitting on a giant natural gas reserve that is a crucial part of the state-led gasline project. In a press release, Walker said the Point Thomson field expansion adds momentum to the state’s Alaska LNG project. But, it has been a struggle to get the field developed. The state’s fight with the field’s operator, ExxonMobil stretched out into a years-long legal battle that was settled in 2012. That settlement laid out a legal plan for developing the field. After the field came online last year, Exxon released a plan that included upping natural gas production from the field and potentially arranging to pipe it to Prudhoe Bay if the state’s gasline project had not been approved by 2019.

“All aboard?” Alaska Gov. Bill Walker wants to advance a proposal for commuter rail service between Anchorage and the Mat-Su — a project that’s eluded planners even after being studied and talked about for decades. Walker tucked a $4.5 million earmark for the project into his capital budget proposal, which he released earlier this month. The budget, if approved by the Legislature, would transfer that cash from pots of money previously set aside for Glenn Highway repairs and the proposed bridge from Anchorage across the Knik Arm. To proponents, rail service offers an alternative to the sometimes-treacherous drive between Anchorage and the Mat-Su — and it’s an increasingly appealing proposition given the Mat-Su’s booming population.

China’s market still growing. China’s imports of liquefied natural gas from the U.S. jumped last month as the country snatched up a record volume of the fuel to meet surging demand for heating and industrial use. Shipments from the U.S. totaled 407,325 metric tons in November, up from nothing the same month a year earlier and 57 percent from October, placing one of the world’s newest LNG sellers as the third-biggest supplier to China, behind stalwarts Australia and Qatar. “U.S. exports are ramping rapidly up, while China is the fastest growing importer,” said Kerry Anne Shanks, a Singapore-based analyst at Wood Mackenzie Ltd. “LNG trade between the two countries will continue to grow.”

Pruitt wants “Environmental stewardship, not prohibition.” When it comes to environmentalism, Scott Pruitt thinks environmentalists have it all wrong. The head of the Environmental Protection Agency (EPA) under President Trump has been on a quest to redefine the mission of the agency and, in the process, redefine what it means to be a guardian of the environment. Pruitt, the former Republican attorney general of Oklahoma, has said in recent public appearances and interviews that environmentalism ought to mean using natural resources like fossil fuels and agricultural products to their fullest potential, while being mindful of their impact. It’s meant as a sharp contrast, and perhaps a direct conservative challenge, to the established environmentalism of the last few decades, which has been largely dominated by the left. Green activists have long fought to reduce the use of fossil fuels, noting their impact on climate change and air quality.

First Reads:

State approves ExxonMobil’s expansion plan for Point Thomson, ending months-long fight
Alaska Public Media, Rashah McChesney, December 26, 2017

Alaska Gov. Walker eyes dormant Mat-Su-to-Anchorage commuter rail plan
Anchorage Daily News, Nathanial Herz, December 26, 2017

U.S. Gas Sales to China Boom as Buyers Seek to Avoid Pinch
Bloomberg, Jing Yang and Stephen Stapczynski, December 25, 2017

EPA’s Pruitt: Bring back ‘true environmentalism’
The Hill, Timothy Cama, December 27, 2017

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Headlamp – Team Alaska! Team Pebble! Team Dunleavy?

December 21, 2017 | Posted in : News

Team Alaska at the podium. Alaska’s members of Congress celebrated their success Wednesday in opening the Arctic National Wildlife Refuge to oil drilling. The measure passed in the Republican tax bill with a final vote in the House. President Trump also applauded a victory for the Alaska delegation that was 37 years in the making. Little of the congressional debate was about the refuge. For hours at a time, no one mentioned it. But ANWR got big play on the South Lawn of the White House. “And ANWR … Oh, congratulations!” President Trump told the Alaska delegation. He invited each of them to take the mic.

Click here to watch KTUU’s video of “the team that can’t be beat” at the podium yesterday.

Trump and Alaska’s oil revival? Drilling for crude in the Arctic National Wildlife Refuge may be just the start as President Donald Trump seeks to revive Alaska’s beleaguered oil industry. Republicans in Congress handed the industry a long-sought victory on Tuesday, approving exploration in the vast Arctic preserve as part of their tax overhaul. The legislation, which Trump is expected to sign into law, would lift an almost 40-year old ban on prospecting for oil and natural gas in the refuge’s coastal plain, where endangered polar bears, caribou and other species roam.

Pebble wants a permit. A controversial proposed mine in southwest Alaska is taking another significant step forward. Pebble Limited Partnership has announced that tomorrow, it will apply for a federal Clean Water Act permit from the U.S. Army Corps of Engineers. It’s the first of many permit applications Pebble needs to file before it can build the proposed copper and gold mine. But it’s still a triumph for its backers. With this, Pebble will have checked off all three goals it wanted to accomplish this year: a settlement with the Environmental Protection Agency, a new partner and a permit application. Tom Collier is Pebble’s CEO. “We said we intended to accomplish all three of those this year and we think we’ve got the hat trick here, we think we got all three done and we’re pretty pleased,” said Pebble CEO Tom Collier.

Timing is everything. President Trump signed an executive order Wednesday to develop a national strategy to boost domestic production of critical minerals and reduce dependence on foreign imports of them. The order, directed toward Interior Secretary Ryan Zinke, came a day after Zinke released an in-depth report concluding that the United States depends entirely or almost entirely on foreign imports for many important non-fuel minerals like titanium, fluorine, cobalt and manganese. Some of the minerals are essential to national security needs or common commercial products.

What’s on Dunleavy’s mind?






First Reads:

Trump lauds ANWR passage; Young: ‘We finally got it done’
Alaska Public Media, Liz Ruskin, December 20, 2017

Arctic Refuge Just the Start of Trump’s Move to Unlock Alaska Oil
Bloomberg, Alex Nussbaum, December 20, 2017

Pebble announces federal permit application
Alaska Public Media, Elizabeth Harball, December 21, 2017

Trump calls for strategy to boost domestic mineral production
The Hill, Timothy Cama, December 20, 2017

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Headlamp – Historic day for Alaska!

December 20, 2017 | Posted in : News

Uncle Ted is smiling down. After 40 years of fighting about it, Congress is on the verge of opening the Arctic National Wildlife Refuge to oil development. The U.S. House passed an ANWR measure Tuesday in its tax bill. The Senate is likely to pass it shortly. Then the bill goes back to the House for one more vote Wednesday before heading to the president for his signature. Assuming all goes as expected, this is a major win for Alaska’s congressional delegation, and a big loss to environmental groups. Conservationists were able to defeat all previous ANWR drilling bills. Why were they powerless to stop this one?

ANWR is IN! Congressional Republicans on Tuesday came close to passing a sweeping tax reform with its historic measure to open the coastal plain of the Arctic National Wildlife Refuge to drilling, but a procedural hiccup delayed a final vote. Alarmed conservation groups, acknowledging that passage was likely delayed just for a day, vowed to step up the attack to protect the 19-million-acre refuge. Republicans are handing a “fat lump of coal” to Americans who worry about wildlife in the refuge or climate change caused by burning fossil fuels, said Brett Hartl, government affairs director with the Center for Biological Diversity.

Murkowski’s Big Day. Republicans will claim victory in their “multigenerational fight” to open up oil drilling in the Arctic, once the Senate passes tax reform legislation, Sen. Lisa Murkowski, the author of the bill’s energy provision, declared on the Senate floor Tuesday evening. The Alaska Republican called it the “single most important step” for energy independence and wealth creation in the country. The Senate was expected to vote on the tax bill Tuesday night before it goes back to the House for a revote Wednesday and then to President Trump.

Not so fast Keystone. Nebraska regulators on Tuesday denied TransCanada Corp’s request to amend its route application for the proposed Keystone XL pipeline through the U.S. state, a potential setback for the company as it seeks to head off legal challenges. The Nebraska Public Service Commission (PSC) issued an approval for the line in late November, removing what appeared to be the last big regulatory obstacle for the long-delayed project, which has been backed by U.S. President Donald Trump.

EIA’s crystal ball. In EIA’s latest Short-Term Energy Outlook (STEO), total U.S. crude oil production is forecast to average 9.3 million barrels per day (b/d) in 2017, up 0.5 million b/d from 2016. In 2018, EIA expects crude oil production to reach an average of 9.9 million b/d, which would surpass the previous record of 9.6 million b/d set in 1970. EIA forecasts that most of the growth in U.S. crude oil production through the end of 2018 will come from tight rock formations within the Permian region in Texas and from the Federal Gulf of Mexico. In the July STEO, the Permian region is expected to produce 2.9 million b/d of crude oil by the end of 2018, about 0.5 million b/d more than the estimated June 2017 production level, representing nearly 30% of total U.S. crude oil production in 2018. The Permian region covers 53 million acres in the Permian Basin of western Texas and southeastern New Mexico.

First Reads:

Long ANWR battle ending quietly
Alaska Public Media, Liz Ruskin, December 19, 2017

Senate passes tax bill with ANWR drilling measure
Anchorage Daily News, Alex DeMarban, December 19, 2017

Lisa Murkowski: Tax bill marks GOP victory in 38-year fight to open Arctic drilling
Washington Examiner, John Siciliano. December 19, 2017

Nebraska regulators deny TransCanada request on Keystone XL route
Reuters, Kevin O’Hanlon, December 19, 2017

U.S. crude oil production forecast expected to reach record high in 2018
U.S. Energy Information Administration, December 20, 2017

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Headlamp – Governor’s plan may be better than nothing; early Christmas present for Pebble.

December 19, 2017 | Posted in : News

“Sorry we took so long to pay you…here’s less than what you’re owed.” Gov. Bill Walker released the state budget on December 15. Tucked in there is a proposal to pay off nearly $900 million in tax credits owed to oil companies. Currently, the state is making minimum payments on those cashable oil and gas tax credits. It’s not scheduled to pay them off fully until 2025. Walker and the Department of Revenue are proposing to speed up that process. “What we’re proposing is to find a way to pay them all off in the very near term, using bonds,” Department of Revenue Tax Division Director Ken Alper said. The details of the proposal are not fully fleshed out, but essentially the state would offer oil and gas companies the opportunity to get reimbursed for credits by 2019, at a discount. That discounted rate could be somewhere between 90 to 94 cents for every dollar owed.

Merry Christmas Pebble! The proposed Pebble copper and gold mine in Southwest Alaska has gained a new business partner, First Quantum Minerals, and analysts say a potential $1.5 billion investment sharply boosts Pebble’s odds of success. Canadian company First Quantum is one of the world’s top 10 copper mining companies and has projects around the world, said John Tumazos of John Tumazos Very Independent Research in New Jersey. First Quantum could help finance the Pebble project using annual revenue at its other mining operations, Tumazos said. Its presence could attract additional investors.

Will we get ANWR across the finish line? This week, Republicans in the U.S. Congress will likely pass a bill that, for the vast majority of Americans, has to do with tax reform. For Alaskans, however, it has as much to do with increased state revenue as it does potential reductions in their federal tax burdens. That is because the bill, due to come up for a vote on Tuesday, includes a provision that would permit oil drilling in a part of the Arctic National Wildlife Refuge, a vast federally controlled area. The state’s three representatives in Congress are hoping that allowing drilling in much of the coastal portion of ANWR, a section known as the 1002 Area, making up 8 percent of refuge’s total area, will earn $2.2 billion over the next 10 years to be split equally between state and federal authorities.

From Washington Examiner’s Daily on Energy:

ENVIRONMENTAL GROUPS RAISE LAST-MINUTE ALARMS OVER TAX BILL: Ahead of Tuesday’s vote in the House on the final tax overhaul, a coalition of environmental groups is making sure lawmakers know the harm it would cause if passed.
“The Congress is voting on handing over the Arctic National Wildlife Refuge for oil drilling. And this bill keeps massive subsidies for fossil fuel production in place,” said the Environment America, a coalition of environmental and conservation groups.
“After months of global warming-fueled extreme weather and wildfires, and decades of air and water pollution from burning coal, oil and gas, it has never been more important to shift our country — wholesale and quickly — toward renewable energy,” the group added.

Inventories drop. Crude bumped higher as traders braced for a U.S. government report that’s expected to show a fifth straight week of shrinking American inventories. Futures rose as much as 0.8 percent in New York. Oil stored in U.S. tanks and terminals last week probably dropped to the lowest in more than two years, according to a Bloomberg survey. If the decline is confirmed in an Energy Department tally scheduled to be released on Wednesday, it will aggravate tightening supply conditions stemming from the shutdown of a key North Sea crude pipeline. Traders are contending with “a slightly tighter physical market at the moment,” Brad Hunnewell, senior equity analyst at Rockefeller & Co., said by telephone.

One fish, two fish. The debate over whether the state’s salmon habitat permitting laws are enough has a lot of grey areas, both for those for and against. Across the state, salmon habitat advocates and development advocates have been struggling for more than a year over whether to strengthen the Alaska Department of Fish and Game’s policies on how and when to issue permits for projects in anadromous fish habitat. Advocates for revising the law say the current law is vague and defaults to granting permits; opponents say the permitting requirements are already protective enough and any further restrictions will hamper economic development.

First Reads:

Walker wants to borrow money to pay $900 million in oil tax credits
Alaska Public Media, Rashah McChesney, December 18, 2017

Pebble gets a new funding partner, bringing mine closer to reality
Anchorage Daily News, Alex DeMarban, December 18, 2017

The Week Ahead: Mixing oil and taxes
Arctic Now, Kevin McGwin, December 18, 2017

Crude Propelled Higher on Strengthening Signs of Dwindling Glut
Bloomberg, Jessica Summers, December 18, 2017

Panel opens up conversation on salmon habitat policy reform
Peninsula Clarion, Elizabeth Earl, December 17, 2017

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