Where Does All That Oil Go? Heading downstream with Alaska-produced oil
Isaac Stone Simonelli, Alaska Business Monthly, October 4, 2018
The Last Frontier is far more than a raw resource extraction point for North Slope crude oil, according to a manager of one of the three Alaska in-state oil refineries. “Much of Alaska’s crude oil remains in state and is refined into commercial and residential product used across the state,” says Cameron Hunt, who is the vice president of and manages the Andeavor Kenai Refinery. “The remaining crude oil can be shipped elsewhere, such as refineries and other sources along the West Coast of the United States and around the world.”
Our Take: Hats off to Andeavor for their commitment to Alaska “For more than forty-nine years, Andeavor has been committed to utilizing Alaska crude—and refining it in state—to produce the fuels that consumers within the state need to keep their lives moving.”
Global energy bosses send Trump a message: world needs Russian gas
Dmitry Zhdannikov and Denis Pinchuk, Reuters, October 4, 2018
Global energy bosses assembled in Moscow on Wednesday said the world needed Russian gas to keep the lights on, in a clear message to U.S. President Donald Trump who has warned he may impose sanctions on Russian gas export projects. Trump’s administration, citing what it calls Russia’s failure to act as a good global citizen, has said it may take steps to block the Nord Stream 2 gas pipeline, which will increase the volumes Russia can export to northern Europe. The U.S. position has prompted a backlash from the Kremlin, and from business groups in Germany, and on Wednesday leading figures in the global energy industry attending a forum in the Russian capital joined the chorus.
Alaska Airlines to provide service to the North Slope for BP employees
Annie Zak, Anchorage Daily News, October 4th, 2018
BP Alaska has signed a long-term contract with Alaska Airlines to provide charter service to the North Slope for workers, an executive told employees this week. The company’s aviation team “has been looking at ways to maintain our dedicated service to Deadhorse while reducing costs,” Neil Loader, vice president of operations for BP Alaska, said in a Monday email to employees. Currently, BP workers fly to the North Slope on Shared Services, a co-venture between BP and ConocoPhillips. Shared Services transports more than 27,000 employees and contract workers every month between Anchorage, Fairbanks and the North Slope, according to the ConocoPhillips website.
#OutsideMoney Influencing Alaska’s November Election
Online Editor, Alaska Policy Forum, October 1, 2018
If you are a frequent reader of the work of the Alaska Policy Forum, you will know that we highly value government and campaign transparency. To that end, we are pleased to introduce a new series which uncovers the web of Outside money flowing into Alaska in support of Ballot Measure 1. While it is true that there are a few Alaskan players in the “Yes on 1 – Stand for Salmon” campaign, Alaskans deserve to know that most of the money propping up those Alaskans is coming from Outside. Once again, as is so frequently the case at election time, Outsiders are trying to influence what happens in our state.
Red Dog Mine, in hunt for more ore, proposes new road
Nat Hertz, Alaska’s Energy Desk, October 2, 2018
One of Alaska’s largest mines is moving toward a significant expansion, applying for state and federal permits to build a 10-mile road to a pair of new prospects in a remote part of Northwest Alaska. The 30-year-old Red Dog Mine has generated profits for its operator, Canadian mining company Teck. Teck, in turn, pays hundreds of millions of dollars in yearly royalties to the Alaska Native regional corporation, NANA, that owns the land where the mine sits. It also hires hundreds of NANA shareholders. But without a new source of zinc and lead, the money and jobs could disappear in less than 15 years, when Red Dog is expected to run out of ore. Teck’s planned road leads to a pair of new prospects, Anarraaq and Aktigiruq, that could extend the mine’s lifespan.
Our Take: Great news for Red Dog, NANA, NANA shareholders and Alaska! Build the road!
LNG Canada Partners Announce Long-Awaited Final Decision
Irina Slav, OilPrice, October 2nd, 2018
The five companies behind the US$31 billion (C$40 billion) LNG Canada project have made a final investment decision on the project, they said in a press release, ending months of uncertainty and worry that the large-scale project could become the second failed LNG initiative in British Columbia. LNG Canada will be the first liquefied natural gas production and export facility in the country, and according to federal PM Justin Trudeau, it “is the single largest private sector investment project in Canadian history.” LNG Canada is a project of Shell, with a 40-percent stake, Malaysia’s Petronas with 25 percent, PetroChina with 15 percent, Mitsubishi with 15 percent, and South Korea’s Kogas with 5 percent.
BC FIRST NATIONS SEE BIG BENEFITS FROM LNG CANADA FID
Dale Lunan, Natural Gas News, October 2, 2018
After lean years, Big Oil is under pressure to spend
Ron Bousso, Reuters, October 2, 2018
Executives at the world’s biggest oil and gas companies are under growing pressure to loosen the purse strings to replenish reserves, halt output declines and take advantage of a crude price rally after years of austerity. With oil at a four-year high of $85 a barrel, exploration departments are urging company boards to drill more, wages are creeping higher, service companies say rates will have to rise and some investors say Big Oil must start growing again soon. For the heads of companies such as BP (BP.L), Chevron (CVX.N) and Royal Dutch Shell (RDSa.AS) who have pledged to stick to lower spending after slashing budgets by as much as 50 percent since 2014, the pressure may become hard to resist.
State wants dismissal of lawsuit challenging bonding proposal to pay oil tax credit obligations
Becky Bohrer, AP, October 1, 2018
A judge said Monday that he wants both sides to submit additional briefs before deciding whether to dismiss a lawsuit challenging the constitutionality of Gov. Bill Walker’s plan to pay Alaska’s oil and gas tax credit obligations. The state wants the case brought by Juneau resident Eric Forrer to be dismissed. Superior Court Judge Jude Pate said a decision probably would not be made until early November. The Legislature earlier this year passed a bill, proposed by Walker, to establish a new state corporation that would be empowered to sell up to $1 billion in bonds to pay off the state’s remaining tax credit obligations. Lawmakers had previously voted to end the tax credit program, which had been geared toward small producers and developers, because they said it had become unaffordable.
Our Take: When the state’s AG argues that paying the tax credits from bonds that have been issued is “subject to appropriation”, AKHEADLAMP gets a chill up their spine. Instability is the enemy of investment.
House lawmakers sent a letter Monday to the environmental group Earthjustice demanding documents regarding its ties to foreign officials and environmental activists, The Daily Caller News Foundation has learned. The letter from top Republicans on the House Committee on Natural Resources is the fourth sent to environmental groups over their ties to foreign governments. It’s the second letter related to environmental opposition to the U.S. military presence in Okinawa, Japan. Lawmakers say Earthjustice’s political activities may require them to register as a foreign agent, according to a copy of the letter obtained by the DCNF. Earthjustice is an environmental law firm often represents environmental activists in litigation.
Our Take: Three strikes and your out? How many environmental groups with ties to foreign nations have to be exposed before we say STOP IT?
A sampling of what people are saying about Trump’s Trade deal:
Oil and gas industry praises Trump’s new NAFTA deal
Josh Siegel, The Washington Examiner, October 1, 2018
Trump’s new trade deal is better for workers than NAFTA was
Alexia Fernandez Campbell, Vox, October 2, 2018
Here are some key differences between Trump’s new trade deal and NAFTA
John Schoen, CNBC, October 1, 2018
Trump Renames NAFTA, But What’s So Great About New Trade Deal
Kenneth Rapoza, Forbes, October 2, 2018
From Politico’s Morning Energy, Darrius Dixon, October 2, 2018:
CATCH ME IF YOU CAN: Major oil and natural gas companies are open to regional collective monitoring for methane emissions to help smaller companies cut back on waste, BP executives said at a meeting with reporters Monday. The industry is split between BP, ExxonMobil and other leading companies that have sophisticated — and relatively expensive — emissions measurement technology and a host of smaller, independent companies that do not. The larger companies, via organizations like the Oil and Gas Innovation Center, can help invest in projects that could monitor where leaks are coming from in the Permian Basin and other areas with heavy drilling activity, and even “fingerprint” the gas to analyze which company is responsible, said Gordon Birrell, BP’s chief operating officer for production, on the sidelines of a symposium at the Center for Strategic and International Studies. “It makes sense for us and others,” Birrell said. “Collaboration in this space is something we’re up for.”
It’s not simple altruism: Companies want to keep natural gas in the conversation as countries in Europe mull how to meet their Paris Accord targets, and U.S. states look at low- to zero-emission energy sources. Countries in Europe are also weighing whether to add a “carbon intensity” price to gas imports. “The risk is stakeholders and customers lose confidence in natural gas as a product for the long term,” Birrell said. “That’s the big risk if we don’t go after this very quickly.”
Experts agree: Alaska’s fish habitat management model works
Randy Bates, Ed Fogels, Kerry Howard, Thomas E. Irwin, Bill Jeffress, Doug Vincent-Lang, Bob Loeffler, Ginny Litchfield, Slim Morstad, Marty K. Rutherford, Anchorage Daily News, September 29, 2018
We, the signatories, are Alaska fisheries managers, scientists, regulators and former state officials. We have spent our careers working on fisheries management, science and resource management. For more than 60 years, Alaska has responsibly balanced resource development and the protection of our state’s natural resources — including our fisheries. As topic experts, our interest in supporting that balance makes us question the viability of Ballot Measure 1. Ballot Measure 1 replaces Alaska’s scientific process for identifying, studying and permitting fish habitat with new and untested regulations. Today, when a project is on the horizon, we go out to the area in question and conduct numerous studies, including water turbidity, fish counts, escapement rates, temperature, water levels and so on. Multiple state and federal agencies collaborate to make this all happen. And when it comes time to evaluate a permit, the data collected is scrutinized and carefully considered before any decisions on how to move forward, or even if to move forward, are made.
Our Take: 10 experts who have intimate knowledge of how our current system works agree – this ballot measure is bad.
Siemens says it has new gas supply for Fairbanks LNG production
Alan Bailey, Petroleum News, September 30, 2018
During its meeting on Sept. 18 the board of the Interior Gas Utility in Fairbanks continued a discussion of a proposal by Knik Tribe and Siemens to build a new liquefied natural gas plant for an increased LNG supply for Fairbanks and the surrounding Interior. The board is figuring out how to further the objectives of the Interior Energy Project, an Alaska Industrial Development and Export Authority project to enable an increased supply of affordable natural gas in Fairbanks. Kelly Laurel, director for energy and infrastructure for Siemens Government Technologies, told the board that, in a recent development, Siemens has an offer of a gas supply from a Cook Inlet gas producer, involving a long term fixed and competitive gas price.
U.S. and Canada Reach Trade Deal to Keep Nafta Trilateral
Jenny Leonard, Josh Wingrove, Jennifer Jacobs, Bloomberg, September 30, 2018
The U.S. and Canada have agreed on a trade deal that would save the North American Free Trade Agreement as a trilateral bloc, according to three people familiar with the matter. President Donald Trump has approved the developments and the expectation is that an agreement will be announced on Sunday night, according to the people, who spoke on the condition of anonymity. U.S. Trade Representative Robert Lighthizer and Canadian officials are working on the final touches. U.S. and Canadian negotiators have been negotiating around the clock this weekend to make a Sunday midnight deadline that would allow the countries to sign the deal as the final act before Mexico’s outgoing President Enrique Pena Nieto leaves office at the end of November.
From the Washington Examiner, Daily on Energy:
OIL AND GAS INDUSTRY KEEPS INVESTOR PROTECTION IN NEW NAFTA DEAL: The Trump administration’s new NAFTA deal announced Sunday night provides a big win for the oil and gas industry, keeping in place investor protections for energy projects in Mexico.
The energy industry had worried that U.S. Trade Representative Robert Lighthizer would succeed in his push to eliminate NAFTA’s Investor-State Dispute Settlement process, which allows businesses to take legal action through third-party arbitration if a foreign government harms their investment in that country.
Critics of the process say the settlement provision encourages U.S. companies to invest internationally and move jobs overseas.
White House economic advisor Larry Kudlow says discussions with China over trade aren’t progressing. On Sunday, the U.S. and Canada reached a new trade deal to replace the North American Free Trade Agreement. Kudlow was asked about the implications of the new deal to the trade conflict with China. “It sends an important message to China, where we’re trying to negotiate on trade, North America is together,” he said in a Fox Business interview Monday. But Kudlow said a deal with the Asian country is not close.
Conservative British politicians warn Russia over its military expansion in the Arctic
Reuters, October 1, 2018
Two top British politicians speaking at a political conference over the weekend said the nation would push back firmly against Russian military encroachment in the Europe and the Arctic. British Foreign Secretary Jeremy Hunt warned Russia on Sunday that it would pay a high price for its actions if it sought to intimidate Britain and flout international rules. Britain has accused two men it says are officers from Russia’s GRU military intelligence service of carrying out an attack on a former Russian double agent and his daughter in Britain earlier this year using a military-grade nerve agent. British Defense Secretary Gavin Williamson told the governing Conservative Party’s annual conference that Britain will be launching a new defense strategy in the Arctic to respond to Russia’s increasing military activity in new shipping routes in the region.
Permanent Fund managers to look for in-state investment opportunities
Rashah McChesney, Alaska’s Energy Desk, September 27, 2018
Alaska’s Permanent Fund Corporation has a new mandate to increase the amount of the Permanent Fund that is invested in the state. The fund’s Board of Trustees adopted the new policy Thursday during a meeting in Anchorage. It sets a goal of increasing the amount of the Permanent Fund assets invested in-state to at least 5 percent in five years. Permanent Fund CEO Angela Rodell told the board what that would look like in dollars. “…By 2023, at least $2.4 billion of the fund — if the fund stays flat — would be invested in state,” she said.
Our Take: In other Permanent Fund news – Former Attorney General Craig Richards (former law partner of Governor Walker) was elected Chairman of the board.
Poll: Dunleavy has huge lead on Walker, Begich
Steve Quinn, KTVA, September 27, 2018
Republican gubernatorial candidate Mike Dunleavy has strong polling lead over Independent Gov. Bill Walker and Democratic challenger Mark Begich, according to a survey released Thursday by pollster Ivan Moore. Dunleavy has put 21 points between himself and incumbent Walker, who also trails Begich, a late entry just five months ago and whose candidacy essentially created a three-way race. Conducted Sept. 21-25, the poll has Dunleavy with 44 percent support; Begich gained 29 percent backing and Walker earned nearly 23 percent.
Our Take: Begich is the only candidate supporting the job-killing Ballot Measure 1.
Future US LNG plants set to face gas supply issue
Caroline Evans, Upstream Online, September 27, 2018
Future US liquefied natural gas facilities may have a more difficult time sourcing feedstock than previous projects, despite an abundance of resource. Following the completion of the “first wave” of US LNG projects by 2022, developers in the “second wave” of US LNG projects – including Freeport LNG, Sempra’s Cameron LNG and Cheniere’s Sabine Pass LNG – could find themselves competing for pipeline capacity to serve their facilities. “At a high level, the US Gulf Coast is getting crowded,” said Kristy Kramer, Wood Mackenzie’s head of Americas gas research. “There’s a lot more activity now than there was when the first wave was going on, and that means the pipeline capacity that’s needed to reach the facilities will be harder to come by.” Wood Mackenzie estimates that there will be 70 million tonnes per annum of US LNG capacity online by 2022, with an additional 50 million tpa expected by 2030.
From the Washington Examiner, Daily on Energy:
CHINA REDUCING OIL IMPORTS FROM IRAN AHEAD OF U.S. SANCTIONS: Even China is reducing its imports of oil from Iran ahead of U.S. sanctions set to start in November.
Chinese refiner Sinopec is cutting in half its imports of crude from Iran this month, Reuters reported Friday. The Trump administration has said that starting Nov. 4, it will block countries from using the U.S. financial system if they continue buying oil from Iran. The zero-tolerance policy has contributed to rising oil prices, because Iran is a major supplier.
But experts have predicted it could be difficult to wean China off Iranian oil.
Most of Iran’s oil exports go to Asia, with China, India, South Korea and Japan being the largest purchasers. China and India combined buy 60 percent of Iran’s total exports. The U.S. imports no Iranian crude.
Gov accepts climate change plan
Kevin Gullufsen, Juneau Empire, September 26, 2018
Gov. Bill Walker on Wednesday approved a wide-ranging list of recommendations to address climate change impacts in Alaska and announced a series of “early actions” the state could take. The Alaska Climate Action Plan is the product of 10 months of work by a group of Alaskans representing the oil and gas industry, science, tribal entities, conservation and development, among others. After Walker signed an administrative order last year calling for the plan, the team of 21 Alaskans developed the 38-page document and a shorter list of Alaska Climate Policy Recommendations
Our Take: Non-binding plan, Governor says “no” to the carbon tax that would pay for implementation, where does it go from here? Our prediction? Nowhere. In the meantime, industry will continue to do the work they’ve been doing to reduce emissions. Don’t confuse activity with results.
From the Washington Examiner, Daily on Energy:
SECRETARY GENERAL SAYS CLIMATE CHANGE IS THE ‘ABSOLUTE PRIORITY’ OF THE UNITED NATIONS: UN Secretary General Antonio Guterres said Wednesday that combating climate change is the “absolute priority” of the international organization and underscored the need for faster action.
“Climate change is the defining issue of our time – and we are at a defining moment,” Guterres at the Informal Leaders Dialogue on Climate Change, held on the sidelines of this week’s General Assembly meeting.
“We have many priorities in the UN – peace and security, human rights, and development – but I would say that this is the absolute priority.”
Our Take: Climate Change is more important than human rights? A cynical person would see this as a political statement meant to gain more money form other countries as the US reduces their financial support.
Petrobras in $853m settlement of bribery case that rocked Brazil
Andres Schipani, Financial Times, September 27, 2018
Petrobras has agreed to pay $853.2m in penalties over the “Lava Jato” bribery scandal that rocked Brazil’s establishment and led to a jail sentence for Luiz Inácio Lula da Silva, the former president. The deal, announced on Thursday, is one of the biggest ever corruption-related settlements. It resolves US Department of Justice claims that Brazil’s state-run oil company violated the Foreign Corrupt Practices Act as well as related cases with the US Securities and Exchange Commission and Brazilian authorities. Former Petrobras executives and board members “facilitated the payment of hundreds of millions of dollars in bribes to Brazilian politicians and political parties and then cooked the books to conceal the bribe payments from investors and regulators”, Brian Benczkowski, US assistant attorney-general, said.
A Silver Lining on Alyeska Layoffs
Ed King, King Economics Group, September 26, 2018
Earlier this month, Alyeska Pipeline announced that they were going to lay off 130 people, as part of a reorganization effort to cut costs. As much as I hate to see people lose their jobs, there is a silver lining for the rest of us. When the cost of transporting oil goes down, the value of our royalty and taxes go up.
Our Take: Even though this is better for the state – the job losses hurt. Good reminder for Alaskans that when producing companies achieve efficiencies all Alaskans benefit.
Andeavor, Marathon shareholders approve merger that would create largest refiner
Rye Druzin, Houston Chronicle, September 24, 2018
The shareholders of two of the largest U.S. refiners have voted to approve the merger to create the country’s largest oil refiner. Shareholders of San Antonio-based Andeavor and Findlay, Ohio-based Marathon Petroleum Corp. voted Monday during separate meetings, Andeavor said. Marathon, which is currently the second largest U.S. refiner, will pay $23.3 billion for Andeavor, which is No. 5. Including debt, the deal is valued at $35.6 billion. The combined company would make the largest U.S. refiner, surpassing San Antonio-based Valero Energy Corp., and retain the Marathon name.
From the Washington Examiner Daily on Energy:
MACRON CALLS FOR BOYCOTT OF TRADE DEALS WITH US TO PUNISH TRUMP OVER REJECTING PARIS DEAL: President Emmanuel Macron of France on Tuesday called for countries to refuse to sign trade deals with countries that don’t comply with the Paris climate change accord, a not-so-subtle dig at Trump, whose administration is the only one in the world to reject the deal.
“Let’s stop signing trade agreements with those who don’t comply with the Paris agreement,” Macron said during a speech at the UN General Assembly in New York.
Industry responds to Macron: Industry officials were quick to criticize Macron for his attack on Trump, noting that countries are not fulfilling their Paris commitments.
“I find it funny and kind of ironic that Macron says he won’t deal with folks that aren’t following Paris,” said Frank Maisano, a communications specialist with Bracewell LLP. “Since most of the world isn’t cutting their emissions nearly as much as the U.S. is already. Is anybody really following Paris in deeds rather than words?”
Our Take: Headlamp loves irony and would encourage Macron to stop signing trade agreements with all the folks who signed the Paris agreement and aren’t complying with it. Meanwhile, back in the US, we will continue to lead the world in reducing emissions…without having signed the Paris agreement.
Report: Status quo state service levels will cost $200 million more next year
Andrew Kitchenman, KTOO and Alaska Public Media, September 25, 2018
Some candidates for governor and the Legislature say they’ll cut the state budget next year. A recent report by the Legislature’s analysts shows why that may be difficult — the state will have to pay more next year for the same level of services as this year. The state budget this year includes several items that will raise costs by $200 million next year, according to the Legislative Finance Division. They’re the experts who provide nonpartisan budget analysis for lawmakers. David Teal, the division director, said the report lets lawmakers know that some of the things the Legislature did this year can’t be repeated. “It’s a heads-up to the finance chairs and to other legislators that what they did with one-time money, etc., in the prior session can leave some holes,” he said.
Our Take: Headlamp would like a two-minute rebuttal on the claim that Leg Finance is non-partisan – they are state employees who benefit from no reductions in the size and scope of government. As noted by Senator Stedman – it’s not that reductions can’t be done “So the likelihood of the Legislature going in and removing required expenditures … well, it’s going to be politically challenging – put it that way,” he said. We get it – doing the right thing instead of doing what’s right for you politically isn’t really a priority in Juneau.
What would Brett Kavanaugh’s confirmation to the US Supreme Court mean for the Arctic?
Melody Schreiber, Arctic Today, September 25, 2018
Justice Anthony Kennedy, who is retiring, was a well-known swing vote on environmental issues. But Kavanaugh may not be. Because Kavanaugh comes from the D.C. Circuit Court, he has a long record on environmental issues, especially concerning the Environmental Protection Agency (EPA). Perhaps surprisingly, Kavanaugh does acknowledge the role of humans in climate change. “The earth is warming. Humans are contributing,” he said in a 2016 hearing on the Clean Air Act — a major climate change initiative from the Obama administration. “There is a moral imperative. There is a huge policy imperative.”
Our Take: An interesting mix – Kavanaugh believes humans contribute to climate change but also believes that federal agencies DO NOT have unlimited authority to address the issues and must have congressional approval for many actions.
Oil bulls cheered by the prospect of $100 oil beware. A rally in prices may be short-lived. That’s according to Janet Kong, who heads energy giant BP Plc’s trading business in Asia. Any spike on the loss of Iranian supply due to U.S. sanctions probably won’t be sustainable in the long run, she said. That’s because the negative impact on demand from a trade war between the world’s two biggest economies hasn’t been priced into crude yet.
Don’t Underestimate the Trade War Impact on Oil Demand
Irina Slav, OilPrice, September 25, 2018
A squeeze on oil demand is looming as a result of the U.S.-China trade war, a senior BP executive told Reuters. Acknowledging the bullish effect of U.S. sanctions on Iran in the short term, Janet Kong, BP’s chief executive of oil trading operations in Asia, said this effect will be short-lived as the market absorbs the shock and moves on to other concerns. “Going into 2019, I worry about the impact of the U.S.-China trade war, manifesting itself slowly,” the executive said. “The trade war impact has not really shown up in the data anywhere, but it will show up gradually over time. So the supply shock is very sharp and prompt, while the impact from trade war is boiling over slowly.”
Trump is relying on OPEC to tame oil prices, but analysts say that’s a mistake
Tom DiChristopher, CNBC, September 25, 2018
- President Donald Trump is calling on OPEC to tame oil prices, but analysts say the cartel’s sway over markets is limited in the near term.
- Brent crude prices hit four-year highs this week as the market braces for the impact of U.S. sanctions on Iran, OPEC’s third biggest oil producer.
- Analysts say oil prices could continue to bubble up until the market sees evidence that OPEC can fill the gap left by falling Iranian exports.
Enable plans $550m US Gulf LNG pipeline
Caroline Evans, Upstream, September 24, 2018
Enable Midstream has unveiled plans for a $550 million pipeline to provide natural gas from northern Louisiana to be used as feedstock in the second wave of US liquefied natural gas exports. A non-binding open season launched Monday for the proposed 165-mile Gulf Run pipeline, which is expected to be placed into service in 2023. The project will run from Westdale to Starks, Louisiana and extend to Gillis. It will also use existing Enable infrastructure to provide access to most of the major US gas basins, including the Haynesville, Marcellus, Utica and Barnett shales and the Midcontinent region. Enable said the Gulf Run project is underpinned by a precedent agreement with a “cornerstone” shipper for a 20-year, 1.1 billion cubic feet per day of capacity firm transportation service. The agreement is significant, since sourcing LNG feedstock is expected to be a challenge for developers in the coming years as more projects move forward and competition for supply increases.
Our Take: Encouraging to see a 20-year agreement with a cornerstone shipper….based on supply and demand.
China Is Adding More Coal Capacity
Jing Yang, Bloomberg, September 23, 2018
For all its talk about cutting coal mining capacity, China actually plans to add more. The world’s biggest producer and user of the fuel may see net annual capacity additions of as much as 400 million tons by 2020, according to estimates from analysts including Wood Mackenzie Ltd. That’s about 10 percent of its current capacity and almost as much as Indonesia, the world’s biggest exporter, sells each year.
TARIFF ON US LNG WILL BE MILDER THAN EXPECTED: WOODMAC
Shardul Sharma, Natural Gas News, September 24, 2018
The impact of 10% tariff imposed by Beijing on US LNG on Chinese LNG demand in the short-term is likely to be less than previously indicated, Wood Mackenzie said September 24. The trade war between the US and China escalated overnight September 17-18, with US president Donald Trump imposing, effective September 24, 2018, a 10% tariff on $200bn of imports from China and Beijing responding September 18 with tariffs on $60bn of US goods, including LNG imports. “The impact on the short-term market, is likely to be less than we previously indicated. This is partly because the level of the tariff is lower than initially proposed, 10% now vs 25% in August, but also because we think China has already completed the majority of its procurement for winter,” WoodMac said.
Creating Policy Calling Cards to Attract Business to Ontario
Ben Eisen, Senior Fellow the Fraser Institute, September 19, 2018
Weak business investment has been one cause of Ontario’s comparatively weak economic performance over the past decade. A topical Fraser Institute report described Ontario as having experienced a “lost economic decade” from 2008–2017, as the province ranked near the bottom of the Canadian pack on a variety of economic measures. Reversing these outcomes and getting Ontario back on track towards robust, long-term economic growth will require the province to attract more business investment. Achieving this objective will likely require substantial policy change across several different areas of provincial public management.
Our Take: A new governor in Alaska could re-energize Alaska’s Oil and Gas Competitiveness Review Board to make policy recommendations about how to attract more investment. Alaska doesn’t need to “lose an economic decade” like Ontario did.
From the Washington Examiner’s Daily on Energy:
U.S. TO BEGIN ‘DISRUPTING’ NORTH KOREA OIL SMUGGLING: An international coalition of American allies will start “detecting and disrupting” North Korean oil smuggling operations at sea, a top U.S. diplomat announced Saturday.
“The United States has deployed aircraft and surface vessels to detect and disrupt these activities,” State Department spokeswoman Heather Nauert said in a news release.
That comes on the heels of a pledge by three U.S. allies to enhance the surveillance of North Korean oil tankers. Japan, Australia, and New Zealand, announced Friday they would aid “monitoring and surveillance activities against illicit maritime activities,” with a particular focus on ship-to-ship transfers of oil.
That sets the stage for a confrontation with Russia and China, who persist in selling oil to North Korea despite western assessments that they’ve breached an annual cap imposed by the United Nations Security Council.