A small request with a big benefit for Alaska.

April 11, 2019 | Posted in : News

This is a small request that will result in a big benefit: you attending the Army Corps hearing concerning Pebble.

While the mine footprint has been greatly reduced and impacts eliminated, the benefits remain huge. You know that everyone in every industry here will benefit from Pebble, which will generate desperately needed jobs in the region and provide an estimated $1 billion in revenue to the state over 20 years.

For Pebble and our state, timing is everything.

As you know there are moments when our state government supports safe and environmentally protective resource development. The same goes for the federal government.

In recent times, both the state and federal governments have been – let’s say – less accepting of resource development.

Right now is that rare moment when the state AND federal administrations see the value in Alaska’s vast natural resources, for the benefit of Alaska and the nation.

This unique moment in time is a moment we cannot squander.

As our resource revenues continue to decline and our state faces serious budget challenges, Pebble could be the first step to turn the state around – letting investors worldwide know Alaska is open for business.

While we’ve long known the tremendous opportunity Pebble holds for Alaskan jobs, tax revenue and economic opportunity, it appeared that politics would keep the project from receiving a fair and full hearing on its merits and science.

Follow this link to let us know you are in, and we will keep you up-to-date.

This is an important moment for our industry and state – a moment that we must seize while it is here.

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Donlin gives hope to the Yukon-Kuskokwim Delta; Trump gives hope to pipelines

April 10, 2019 | Posted in : News

Donlin promises economic development if mine goes through
Krysti Shallenberger, Alaska’s Energy Desk, April 9, 2019

Donlin Gold says that it will bring money and jobs to the Yukon-Kuskokwim Delta with its proposed mine. The company wants to build one of the biggest gold mines in the world, and it promises to employ hundreds of local people to build and operate it. The mine will bring 3,000 jobs to the region during construction, and 800 jobs annually to operate it. The total payroll is $375 million for the construction phase of the mine which, according to Donlin spokeswoman Kristina Woolston, would last roughly four years. The Kuskokwim Corporation, a village corporation, and Calista Corporation own the land and mineral rights, and leased them to Donlin Gold two decades ago. In return, Donlin promised that their shareholders will get preference for jobs.

Trump energy orders to target development snags
Argus, April 9, 2019

President Donald Trump is set to release two directives designed to ease state restrictions on energy projects and avoid “unnecessary red tape” that delays oil and gas production. The two executive orders, which Trump is set to announce tomorrow at an engineering training facility near Houston, will attempt to streamline permitting and encourage investment, a White House official said. The new initiative could help address growing industry concern that permitting delays for pipelines serving Marcellus shale gas producers and the Permian basin have become a key bottleneck to Trump’s push to expand oil and gas production.

Our Take: “industry officials anticipate it could try to limit the circumstances under which states can use “section 401″ water permits to block pipeline construction.” This is great news for Alaska and America, and let’s not forget the lawyers. Headlamp expects numerous lawsuits to be filed immediately.

From the Washington Examiner Daily on Energy:

SENATOR DOES FOR COAL WHAT TRUMP DID FOR OIL: Sen. Steve Daines, R-Mont., wants to codify Trump’s executive orders to stop states from blocking energy projects into law.

Daines introduced a bill on Tuesday that clarifies that Section 401 of the Clean Water Act “cannot be used as a weapon” to prohibit his state, or any other, from exporting coal to Asia, according to his office.

Daines had introduced the bill last year to clear the way for the construction of the Millennium Bulk Terminal to increase Montana coal exports.

“Montana has the opportunity to help keep the U.S. energy dominant and expand our economic opportunities through trade,” Daines said.

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Amazon pursues clean energy with oil & gas – not wind.

April 9, 2019 | Posted in : News

Amazon Is Aggressively Pursuing Big Oil as It Stalls Out on Clean Energy
Jim Cooke, Gizmodo, April 8, 2019

In 2014, Amazon announced that it would power its rapidly expanding fleet of data centers with 100 percent renewable energy. Apple, Facebook, and Google made similar pledges two years before that, and pressure from consumers and environmental groups drove Amazon to follow suit. For the next two years, the tech giant made admirable strides toward achieving its goal, bankrolling large solar plants and wind farms. Then, it stopped. Amazon hasn’t announced any new deals to supply clean energy to its data centers since 2016, and it quietly abandoned plans for one of its last scheduled wind farms last year. Meanwhile, in 2017, according to internal company documents viewed by Gizmodo, Amazon undertook a concerted push to win over a new industry, perhaps best summed up by the name of a presentation at Amazon Web Services’ annual company Sales Kick-Off event that February: “Positioning for Success in Oil & Gas.”

Our Take: This is reality. The writer at Gizmodo is upset that Amazon isn’t following a “keep it in the ground” policy with regards to fossil fuels. The writers of Headlamp are not surprised that free market principles are driving Amazon’s business decisions.   Oil and Gas could be the foundation of Amazon’s clean energy future.  

Oil & Gas Discoveries On The Rise As Oil Majors Dive In
Rystad Energy, OilPrice.com, April 8, 2019

Oil and gas exploration is off to a flying start in 2019, with majors taking a bigger bite of the conventional resources discovered in the first quarter, according to Rystad Energy. Global discoveries of conventional resources in the first quarter reached a robust 3.2 billion barrels of oil equivalent (boe). Most of the gains were recorded in February, posting 2.2 billion barrels of discovered resources – the best monthly tally on record since August 2015. “If the rest of 2019 continues at a similar pace, this year will be on track to exceed last year’s discovered resources by 30%,” says Taiyab Zain Shariff, Upstream Analyst at Rystad Energy.

One Question Remains As The US Moves Closer To Drilling In ANWR: How Much Oil Is There?
Michael Bastach, The Daily Caller, April 7, 2019

  • ANWR could hold massive amounts of oil and natural gas, but findings from the only well drilled in the refuge have been kept secret for decades.
  • The New York Times recently reported the test well findings were disappointing, but experts say one test well doesn’t tell the whole story.
  • “I know for a fact it’s an oily area,” said a geologist that’s spent decades exploring the Alaskan Arctic, including ANWR.

Our Take: Opponents of ANWR who use the NY Times article to suggest that there is no oil there will do so disingenuously.

What Does the New Silk Road Mean For Oil and Gas? [GGP]
Natural Gas News, April 9, 2019

China is in the midst of an historic push to tie together at least 65 countries on three continents through new trade and infrastructure projects. Known as the Belt and Road Initiative, the plan encompasses more than 60% of the world’s population and nearly three quarters of its energy reserves. The scope of this ambitious effort, a 21st century version of the famous 7th century silk road that connected China to Europe, was chosen as the overarching theme of the 2019 International Petroleum, Technology Conference (IPTC) being hosted in Beijing this week. The gathering has attracted more than 2,400 professionals from 50 upstream companies to share new technical discoveries and address some of the industry’s most pressing issues. Exactly what the Belt and Road Initiative means for the future of energy supply remains somewhat undefined, but executives from China National Petroleum Corporation (CNPC) and Saudi Aramco—the conference’s two major sponsors and hosts—shed light on how they expect the arrangement to unfold in the years to come during IPTC’s opening session. Amid the backdrop of the initiative, Wang Yilin, the chairman of CNPC and IPTC’s honorary chairman, said the next decade will prove to be “a very critical period for the energy transformation in China.” There are two sides to the coming change as he sees it. The first is a call for hydrocarbon producers to take part in the development of low-carbon alternatives to oil and gas, while the other will demand that these producers continue to increase supplies of fossil fuels to meet the world’s rising demand. Managing this balance will steer the future of CNPC.

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Results not Rhetoric on Budget; Supreme Court for Alaska Offshore Drilling?

April 8, 2019 | Posted in : News, Uncategorized

As the Alaska budget discussion intensifies, so does the need to fact check what is being said publicly.
Headlamp will start today with a chart on where the money comes from to fund our budget. The rhetoric that the oil industry is “held harmless” in the current budget is simply not true.

**It is important to note that the total projected contribution to the state from oil revenue for FY 2019 is $3.078 billion – not all oil revenues go to the general fund.

Related:
As Alaska budget tightens, $ 1.2 billion oil tax deduction comes under scrutiny

Supreme Court Could Be Best Shot for Alaska Offshore Drilling
Bloomberg Environment, April 2, 2019

The Trump administration’s best hope to overturn a March 29 lower court decision shutting down oil and gas drilling off the Alaskan coast may lie across the country at the U.S. Supreme Court, environmental lawyers said. All five conservative justices on the high court have shown skepticism about agency claims of authority where Congress hasn’t clearly delegated it—the core issue in the Alaska case. A federal district judge struck down an executive order from President Donald Trump that opened Arctic waters to oil and gas drilling. The Outer Continental Shelf Lands Act can be seen as a “one-way ratchet” that grants the president the right to withdraw certain areas for drilling, but not for revoking prior withdrawals, said Patrick Parenteau, an environmental law professor at Vermont Law School in Royalton, Vt., and currently a visiting professor at the University of New Mexico law school in Albuquerque.   “That would leave it to Congress to decide whether to either amend the OCSLA or revoke or modify any prior withdrawal,” Parenteau said. “That might appeal to the conservative view of the separation of powers doctrine.”

Hilcorp delays seismic exploration in lower Cook Inlet
Aaron Bolton, KBBI, April 6, 2019

Hilcorp said it’s holding off on plans to conduct seismic exploration for oil and gas in lower Cook Inlet because of potential conflicts with halibut and salmon fishermen. The company also lacks a crucial permit to conduct the work, and it’s unclear when it may get the green light to move forward. In Hilcorp’s permit application to the Bureau of Ocean Energy Management, the company said it wants to update 40-year-old seismic data in a 370-square mile lease site offshore from Homer and Anchor Point.

Our Take: “ The company said it’s now delaying the survey until after “the height of fishing and tourist season,” due to concerns raised by fishermen like Maw and Flores.”   Contrary to popular belief, companies do listen to community concerns and respond appropriately.

Blamed for Climate Change, Oil Companies Invest in Carbon Removal
Clifford Krauss, The New York Times, April 7, 2019

Everyone knows an electric fan can make people feel cooler on a steamy day. But could fans moderate the planet’s rising temperatures? Some of the world’s biggest fossil fuel companies would like to find out. Chevron, Occidental Petroleum and the Australian mining giant BHP this year have invested in Carbon Engineering, a small Canadian company that claims to be on the verge of a breakthrough in solving a critical climate change puzzle: removing carbon already in the atmosphere. At its pilot project in Squamish, an old lumber town about 30 miles north of Vancouver, the company is using an enormous fan to suck large amounts of air into a scrubbing vessel designed to extract carbon dioxide. The gas can then be buried or converted into a clean-burning — though expensive — synthetic fuel.

 

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TGIF – White House Trumps Protestors with Executive Order on Pipelines

April 5, 2019 | Posted in : News

White House planning executive order that aims to boost pipeline construction, lower energy prices
Kayla Tausche, CNBC, April 5, 2019

  • The order directs the Department of Energy and the Environmental Protection Agency to clarify Section 401 of the Clean Water Act, the law that gives states authority over permits where water quality is concerned, sources say.
  • The effort is spurred by the blockage of the construction of the 125-mile Constitution Pipeline from Pennsylvania to New York.
  • Officials say the administration’s broader goal is to lower energy prices by accelerating the transport of natural gas and to reaffirm U.S. energy “dominance,” a word that appeared multiple times in an early draft of the order.

Our Take: Great move by the administration! Lowering energy prices shouldn’t be held hostage to politics – natural gas is clean, affordable and available – let’s build some pipelines to transport it!

Russia and Canada may lose their legal claim to Arctic seaways as ice melts, experts say
Melody Schreiber, Arctic Today, April 4, 2019

As the Arctic changes rapidly, a key legal justification for Russian and Canadian control of Arctic seaways may change as well. At two different D.C. events recently, experts discussed Article 234 of the United Nations Convention for the Law of the Sea (UNCLOS), which grants coastal nations the right to “adopt and enforce non-discriminatory laws and regulations” in order to reduce and prevent marine pollution in ice-covered areas of those countries’ exclusive economic zones. The law applies strictly to places covered by ice for most of the year, because the ice creates extreme environments and exceptional navigation hazards that could result in ecological damage from ships. Both Russia and Canada have interpreted the article to support their control over the Northern Sea Route and the Northwest Passage, respectively.

Related:

Russia stakes its hold on the Arctic with a new military base

U.S. LNG to China will increase despite trade tension: Cheniere
David Stenway, Meng Meng, Reuters, April 4, 2019

Shipments of liquefied natural gas (LNG) from the United States to China will increase over the long term despite ongoing trade tensions, senior executives of Cheniere Energy, the biggest U.S. exporter of the super-chilled fuel, told Reuters.   “It’s clear that the U.S. LNG trade with China is just beginning because U.S. LNG has just started,” Cheniere Vice President Robert Fee told Reuters on the sidelines of the LNG2019 conference in Shanghai on Thursday.   “U.S. LNG to China will increase and that will happen organically. We are thinking long-term and Chinese demand is long-term.”

Our Take: AGDC, BP and Exxon are currently working on an economic analysis of the Alaska LNG project. Having a strong market in Asia certainly is a factor in the economic viability of the project.

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Thumbs Up, Thumbs Down on Budget Battle; Cheers for Oil Search

April 4, 2019 | Posted in : News

Budget Battle: Thumbs Up, Thumbs Down – some observations from the House Finance hearing to amend the budget yesterday:

Thumbs Up: Representative Tilton for attempting to reduce discretionary travel that didn’t affect a departments ability to provide core services. (most of her motions were voted down)

Thumbs Down: Representative Josephson for supporting a federal pass-through grant that required a state match because it was a 10 to 1 match…to be clear, the state puts up the money for the match and then passes the funds on to other organizations.

Thumbs Up: House Minority members who stuck together on reasonable amendments to reduce the size and scope of government.

Thumbs Down: Representative LeBon, who ran as a fiscal conservative, consistently voting to maintain the size and scope of government.

Thumbs Up: Representative Carpenter for his amendments to reduce funding for public broadcasting.

Thumbs Down: Representative Ortiz for suggesting that reducing the state funds for public broadcasting meant an end to public broadcasting.

Lawmakers amend budget to stop reimbursing municipalities for school bond debt
Andrew Kitchenmann, KTOO, April 3, 2019

Oil Search cheers North Slope flows
Reuters, April 4,2019

Australia-listed Oil Search has flowed oil from two wells at its Pikka unit on Alaska’s North Slope. Oil Search confirmed Thursday the Pikka B well flowed last month at a stabilised rate of 2410 barrels of oil per day during testing, while adding the flow had been restricted by the capacity of the testing equipment. Based on the productivity index calculated during the final flow test, which was carried out over a two-hour period on natural flow with no artificial lift, Oil Search calculates the well flow rate potential for Pikka B at roughly 3800 bpd. Oil Search also commenced a flow test programme last month on the Pikka C well which included testing of six stimulation stages within the 3800-foot-long horizontal section of the well.

Petitioners get OK, will seek to move Alaska Legislature to Anchorage
James Brooks, Anchorage Daily News, April 3, 2019

Lt. Gov. Kevin Meyer and the Alaska Department of Law have approved a proposed ballot measure that would permanently move sessions of the Alaska Legislature from Juneau to Anchorage. In a certification message sent to the measure’s three Anchorage sponsors late Wednesday, the lieutenant governor said the sponsors had enough support to begin gathering signatures in earnest and that the Department of Law did not find any legal problems with the measure. The proposal is sponsored by Republicans David Bronson of Anchorage, Camille Carlson of Fairbanks and Leona Oberts of Soldotna. “It’s real straightforward: We’re going to get our signatures and move forward from there,” Bronson said.

Pebble ripples
Craig Medred, April 4, 2019

A group of commercial fishermen from Bristol Bay have gone to court to challenge a decision by the Bristol Bay Regional Seafood Development Association (BBRSDA) to spend about a quarter million dollars on efforts to block development of the proposed Pebble Mine. The six plaintiffs from three Iliamna Lake villages and Anchorage contend the BBRSDA, a quasi-state entity, is misusing state tax revenue. The organization was established to market Bristol Bay salmon, not lobby against mining, argues the suit filed in Anchorage Superior Court on Monday.

Our Take: Using tax money taken from fisherman to lobby the state instead of marketing Bristol Bay salmon?   Sounds fishy…

Related:

At Iliamna Lake hearings, residents speak out on Pebble Mine

 

 

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NY Times fishing expedition is a flop; House Finance Budget Amendments Today

April 3, 2019 | Posted in : News

Officials: News report on secret well results in Arctic refuge doesn’t change potential for big discovery
Alex DeMarban, Anchorage Daily News, April 2, 2019

A federal geologist and an oil industry representative said a news report on Tuesday digging into the secrets of the lone well drilled in the Arctic National Wildlife Refuge, and suggesting the well results were uneconomic, does not alter the potential for a profitable discovery in the region. Kara Moriarty, head of the Alaska Oil and Gas Association, said the U.S. Geological Survey has estimated the refuge’s coastal plain could contain 10 billion barrels of oil. If in fact the 34-year-old well contained little to no oil, that doesn’t mean other sections of the 1.6-million-acre coastal plain are dry, she said. “This doesn’t change our support for having a lease sale in the coastal plain,” said Moriarty. “And the reason is the (oil) estimates from the U.S. Geological Survey … shows this is the most significant opportunity on federal land onshore anywhere in the U.S.”

Our Take: Good clarification after the fishing expedition from the New York Times in an effort to support the Democrats’ efforts to repeal the ANWR provision in the tax reform law.

Will House Finance members increase or reduce the budget today? Watch live here at 9am!

Brent nears $70 as oil prices rise for 4th day
Reuters, April 3, 2019

Oil prices rose for a fourth day on Wednesday, pushing Brent towards $70 a barrel as support from Opec-led supply cuts and US sanctions overshadowed a report showing an unexpected rise in US inventories. Brent futures rose 36 cents, or 0.5%, to $69.73 a barrel by 0554 GMT, after earlier reaching $69.87, the highest since 12 November, the last time they traded above $70. US West Texas Intermediate crude rose 26 cents, or 0.4%, to $62.84 cents a barrel, earlier rising to $62.90, the highest since 7 November.

From the Washington Examiner’s Daily on Energy:

MURKOWSKI SAYS EPA CUTS DON’T FIT WHEELER’S ‘BACK TO BASICS’ AGENDA: Sen. Lisa Murkowski, R-Alaska, Wednesday warned Environmental Protection Agency Administrator Andrew Wheeler that the fiscal 2020 budget, as proposed, won’t survive congressional scrutiny.

“Many of the cuts, in my view, would be inconsistent with the ‘Back to Basics’ approach” of the agency, she said in chairing a budget hearing of the Appropriations Committee’s environmental subcommittee.

She objected to the proposed cuts to many of EPA’s state revolving funds, which communities rely upon to support drinking water projects and sanitation infrastructure.

“While I do understand the tough budget environment this proposal was crafted in, the final budget for EPA as crafted by Congress will look substantially different,” Murkowski said.

Murkowski said several key programs that have reduced pollution in Fairbanks and other communities in her state are completely eliminated in the new budget.

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Good news for oil prices; Shell quits over climate disagreement

April 2, 2019 | Posted in : News

Banks Lift Oil Price Forecasts for 2019
Christopher Alessi, The Wall Street Journal, April 2, 2019

Banks raised their forecasts for the price of Brent crude, the global oil benchmark, in 2019, as the market continues to be supported by production cuts led by the Organization of the Petroleum Exporting Countries, as well as geopolitical risks to supply. Brent crude is expected to average just over $68 a barrel this year, according to a poll of 12 investment banks conducted by The Wall Street Journal in March, compared with a forecast of $67 a barrel in February. The banks predicted prices will continue to rise through April-June this year, before falling back toward the end of 2019 

Shell to quit U.S. refining lobby over climate disagreement
Ron Bousso, Reuters, April 2, 2019

Royal Dutch Shell on Tuesday became the first major oil and gas company to announce plans to leave a leading U.S. refining lobby due to disagreement on climate policies. In its first review of its association with 19 key industry groups, the company said it had found “material misalignment” over climate policy with the American Fuel & Petrochemical Manufacturers (AFPM) and would quit the body in 2020. The review is part of Shell’s drive to increase transparency and show investors it is in line with the 2015 Paris climate agreement’s goals to limit global warming by reducing carbon emissions to a net zero by the end of the century.

Related:

              Overnight Energy: Pompeo says Paris accord ‘didn’t change a thing’

Secretary of State Mike Pompeo said the Paris climate agreement that more than 170 countries have committed to has failed to “change a thing” on global emissions. “Go look at the countries that are still in the Paris agreement and see what their CO2 emissions were. It’s one thing to sign a document; it’s another thing to actually change your behavior,” Pompeo told reporters Monday.

Our Take: Actions speak louder than words. Signing an agreement doesn’t do anything to reduce emissions. The US leads the world in emissions reductions and hasn’t signed the Paris Agreement.

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Alaska Center shocks Alaska – drops opposition to resource development, jobs, revenue;

April 1, 2019 | Posted in : News

Breaking:   Monday, April 1 – In a stunning reversal, leaders from the Alaska Center…for the environment announced that they can no longer keep up the charade of pretending that responsible resource development, jobs and revenue for the state are villains that must be stopped. “We’ve reached a point where we can no longer say with conviction that resource development is the enemy of the people or that thousands of high paying jobs are not the sign of a strong economy.”  

Alaska Center for the Environment drops environment from name. So what is it for?

Federal judge declares Trump’s push to open up Arctic and Atlantic oceans to oil and gas drilling illegal
Juliet Eilperin, The Washington Post, March 30, 2019

A federal judge in Alaska declared late Friday that President Trump’s order revoking a sweeping ban on oil and gas drilling in the Arctic and Atlantic oceans is illegal, putting 128 million acres of federal waters off limits to energy exploration. The decision by U.S. District Judge Sharon Gleason is the third legal setback this week to Trump’s energy and environmental policies. The judge, who was appointed to the federal bench by President Barack Obama in 2012, also blocked on Friday a land swap the Interior Department arranged that would pave the way for constructing a road through wilderness in a major National Wildlife Refuge in Alaska.

Our Take: Rebecca Logan, a spokeswoman for the Alaska Support Industry Alliance, said in an email that members of her oil and gas trade group did not see the decision as the final word. “Anything done by administrative action can be undone by administrative action,” Logan said. “This question will work its way through the courts, and eventually I expect Judge Gleason’s decision will be reversed.”

New Reports Offer Solutions to Protect Against “Recent Surge” of Climate Liability Lawsuits
Lea Giotto, Energy In Depth, March 28, 2019

It’s not only problematic that climate liability lawsuits are being pushed by financially motivated lawyers and spotlight-seeking politicians, but they are doing so in spite of the lawsuits’ long-shot odds of success. Federal judges in both California and New York have already tossed public nuisance climate cases brought by cities on the basis that courts are not the appropriate place to handle issues that spread beyond a single city’s borders, but rather these issues should be addressed by the other two branches of government. The Litigation Monster report sums this point up nicely, stating: “Unlike the discrete, localized interferences that public nuisance was designed to address, local government plaintiffs have sought to expand the tort’s reach to include public policy matters that implicate much more widespread interests. In many cases, these interests reach the national, and even international, level. These large-scale societal challenges are better dealt with by the legislative and executive branches, which, unlike courts, are uniquely capable of balancing all of the competing needs and interests in play.”

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Supermajors to the rescue for AKLNG? Mining rocks for Alaska!

March 29, 2019 | Posted in : News

Supermajors Set Out To Save Alaska LNG
Tim Daiss, OilPrice.com, March 28, 2019

Technical teams from the Alaska Gasline Development Corp. (AGDC) and supermajors BP and ExxonMobil will meet next week in Houston to begin a review of the proposed $43 billion Alaska LNG project in an effort to find potential cost reductions so the massive capex project can move forward, Tim Fitzpatrick, an AGDC spokesman said on Tuesday. Discussions will begin on April 2 and last for most of the month, he said, adding that about “25 technical folks from ExxonMobil, BP and AGDC will meet in Houston on the cost reduction workshop.”

Our Take: The return of the private sector to the project will make a big difference in how the state legislature and the public view the legitimacy of the project. A very good move by the Dunleavy administration.

US LNG sector on track for a big year ahead
Caroline Evans, Upstream, March 28, 2019

THIS year is bound to be a red-letter one for the US liquefied natural gas industry, which is expected to see an unprecedented number of final investment decisions and a big production boost as more export facilities come online. The US Energy Information Administration (EIA) projects US LNG export capacity will reach 8.9 billion cubic feet per day by the end of 2019, more than double the level at the end of 2018. The increase would make the nation the third-largest LNG exporter in the world, behind Australia and Qatar.

Infected U.S. Shale Oil Is Being Turned Away by Asian Buyers
Serene Cheon, Sharon Cho & Alfred Cang, Bloomberg, March 27, 2019

The complex web of U.S. pipelines, tanks and export terminals that’s helped make America the world’s top oil producer is causing a headache for some crude buyers. As various types of crude pass through the supply chain from inland shale fields spanning Texas to North Dakota, they risk picking up impurities before reaching Asia — the world’s biggest oil-consuming region. Specifically, refiners are worried about the presence of problematic metals as well as a class of chemical compounds known as oxygenates, which can affect the quality and type of fuel they produce. Two refiners in South Korea — the top buyer of U.S. seaborne supply — have rejected cargoes in recent months due to contamination that makes processing difficult.

Our Take: A trend worth watching for Alaska. Shale is a tough competitor for us.

From our friends at the Alaska Miners Association:

Court rules in favor of NEPA process at Palmer Project – A federal court recently ruled that BLM does not have to consider future impacts of mining development when considering exploration plan of operations applications. This stems from a 2016 plan to expand exploration activity at the Palmer Project in which BLM approved; upon which environmental groups and the Chilkat Indian Village of Klukwan sued. The Southeast Alaska Conservation Council (SEACC), Lynn Canal Conservation, and Rivers Without Borders complaint alleged that issuance of an Environmental Assessment supporting construction of the mineral exploration road in 2016 violated NEPA because they failed to describe the environmental impacts. Judge Burgess disagreed, ruling that mineral exploration and development are not “inextricably intertwined” because mineral exploration does not always lead to development. Therefore, it is inappropriate from BLM to review potential future impacts from development before approving exploration plans.

Our Take: Good news! The benefits of mining to Alaska should never be underestimated.

  • $120m in government revenue in 2017 and $48.4m to municipalities through fees, rents, sales, royalties and taxes
  • 3,392 full-time jobs in 2017, up 5% from 2016
  • Average wage for these jobs? $107,820, more than twice the average private-sector wages
  • The Alaska Permanent Fund earned $5.2m from the mining industry in 2017
  • Mining companies purchased $580m of goods and services from Alaska vendors in 2016
  • The mining industry paid $276.5m in royalty payments to Native Corporations in 2017
  • More than $2.9m in charitable donations was given to Alaska communities by the mining industry in 2017

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