“Day-by-day, it looks more and more like ExxonMobil was right and the governor was wrong.” Only a day after the Alaska Gasline Development Corporation blasted bad Alaska press as the problem threatening construction of the 49th state’s longest-lived pipe dream, a high-profile analyst of global markets dumped a bigger and equally negative assessment on the short-term prospects for construction of expensive, new natural gas projects. “Cheap, abundant US supplies of natural gas combined with forecasts of growing global LNG demand early next decade are not enough to ease the uncertainty facing the next wave of LNG,” reported S&P Global Ratings. The problem is simple micro-economics. Supply at the moment exceeds demand, and though demand is expected to grow significantly into the near future, it is going to have a hard time gobbling up all the surplus supply. The International Energy Administration doesn’t expect liquefied natural gas (LNG) prices to rise until sometime well into the 2020s. “We will see massive amounts of new LNG capacity coming to the market … so we will probably continue to have well-supplied markets into the middle of the 2020s,” Keisuke Sadamori, director of energy markets and security at the IEA, told Reuters last week. “It’s not good for us if you have a prayer for this decade,” said Larry Persily, the former director of Alaska Natural Gas Transportation Projects for the federal government and now a natural-gas consultant for the Kenai Peninsula Borough.
AGDC joins Trump in China. U.S. companies involved in the gas, oil and power industry dominate a provisional list of companies going to Beijing in November at the same time that U.S. President Donald Trump visits China for talks with Chinese President Xi Jinping. Alaska Gasline Development Corp (AGDC) said it had no information to release. The company is building a gas treatment plant, an 800-mile (1,287 kilometer) pipeline to south central Alaska for in-state use, and a natural gas liquefaction plant in Nikiski to produce up to 20 million tons of LNG per year for export. In April, Xi visited Anchorage where he met with Alaska Governor Bill Walker and AGDC president Keith Meyer on his way back to China from a visit to Trump’s Florida home. They discussed how Alaska and China are positioned for a long-term LNG trading relationship, according to the company’s website.
FERC is back in the game! Three new pipeline projects in the northeast received approval from the Federal Energy Regulatory Commission (FERC) in October, the first projects to be approved since February. FERC regained its quorum in August after the Senate confirmed two new commissioners. These confirmations ended a six-month period when FERC was unable to issue certificates to allow construction of interstate energy transmission infrastructure, including natural gas pipeline projects. FERC did not have a quorum beginning in February 2017 when the number of commissioners fell below the required minimum of three. The final two commissioners await a floor vote by the Senate. See map and read more…
Oregon lawyer guides Alaskan teens to sue state. Sixteen young Alaskans are suing the state, demanding Gov. Bill Walker’s administration take action on climate change. It’s the second such legal action in the last six years. In 2014, the Alaska Supreme Court dismissed a similar lawsuit, Kanuk v Alaska, from six young people asking the state to reduce carbon emissions, among other recommendations. The justices ruled then that it’s not for the courts to set climate policy and that those decisions must be made through the political process, by the Legislature and the governor. The new lawsuit says, essentially, the state has made its choice, and by encouraging oil development and permitting projects that emit greenhouse gases, Alaska is actively making climate change worse. The plaintiffs argue that violates their constitutional rights to, among other things, “a stable climate system that sustains human life and liberty.”
How far does $200,000 go? A dispute over the cost of cleaning up unused Cook Inlet hydrocarbon wells was settled by a bankruptcy court, which ordered state regulators to reconsider the $6 million clean-up bond they required of Aurora Exploration for its purchase of six gas wells from the bankrupt Aurora Gas. Aurora Exploration had originally offered a $200,000 bond for the six wells. Following Judge Gary Spraker’s order, the Alaska Oil and Gas Conservation Commission dropped the $6 million bond requirement to $3.6 million on Wednesday. Alaska law requires oil and gas operators to bond the cost of plugging their environmentally hazardous unused wells, a cost which may otherwise fall to the state if a bankrupt company can’t meet it. The three governor-appointed Alaska Oil and Gas Conservation Commissioners set bonds for subterranean cleanup — generally, plugging a well with cement. State law requires at least a $100,000 bond for a single well or $200,000 to cover all of a company’s wells.
Teach your children well – about mining! If you have thoughts about the future of mine training at the University of Alaska Southeast, the University of Alaska Board of Regents wants to hear from you. From 4 to 6 p.m. Monday, the Board of Regents will take public testimony on topics that will come up during its November budget meeting. Among those topics is the future of University of Alaska’s mine training program. The board is the university system’s governing body and must approve any changes suggested by the university president. The university is restructuring its programs statewide under the Strategic Pathways program, which is designed to cut costs while affecting classes as little as possible.
Whoops. If Sen. Bill Wielechowski is true to his word, we’ve heard the last from him about changing Alaska’s oil taxes. Back on June 10, 2014, Wielechowski and now-former Sen. Hollis French (who Gov. Bill Walker appointed to the Alaska Oil and Gas Conservation Commission last year) issued a “very simple challenge.” “If SB 21 produces new oil, even ONE additional barrel, and this production results in increased revenue to the state, even ONE more dollar we will drop our support for revising oil taxes,” Wielechowski said. The legislation proposed by Wielechowski and French called for the previous system known as ACES to be retroactively implemented in 2019 “if there is not one new barrel of oil produced compared to the 2013 TransAlaska Pipeline moving average of 531,000 (approx.) and total oil revenues from 2014 to 2018 are not any greater under SB 21 than they would have been under ACES.”
From One Alaska Update: Keeping up with Gov. Bill Walker:
This week, after months of effort and engagement with stakeholders, the Administration is preparing to release its Climate Change Strategy. We are excited about what this will do to create a durable framework that will help Alaska be a leader in the battle against climate change going forward. This summer, Governor Walker spent time in Kaktovik and Utqiagvik, and saw first-hand some of the impacts the changing climate is having on Alaskan communities.
FACTBOX-U.S. gas firms line up to join China trade delegation
Reuters, Reuters Staff, October 27, 2017
Craig Medred News, Craig Medred, October 30, 2017
Federal Energy Regulatory Commission regains ability to certificate natural gas pipelines
US Energy Information Administration, October 30, 2017
Young Alaskans sue the state, demanding action on climate change
Alaska Public Media, Rachel Waldholz, October 27, 2017
Bankruptcy court strikes down $6 million oil and gas bond
Peninsula Clarion, Ben Boettger, October 29, 2017
UA takes public comment on proposal to change mine training program
Juneau Empire, James Brooks, October 30, 2017
AJOC EDITORIAL: Game over for Wielechowski
Alaska Journal of Commerce, Andrew Jensen, October 27, 2017
Another one bites the dust. Another independent oil and gas company in Alaska is blaming the state’s scaled-back tax-credit payments for upsetting drilling plans. Furie Operating Alaska said it has conducted “substantial well and pipeline work” at its offshore Kitchen Lights Unit in Cook Inlet this year, according to paperwork filed Oct. 6 with the Alaska Oil and Gas division. But Furie hasn’t been able to drill “additional exploration or development wells” this year because of reduced tax-credit payments from the state, according to its development plan for the unit in 2018. The state government, slammed with a $2.5 billion deficit brought on by low oil prices, has in recent years paid oil and gas operators the bare annual minimum allowed under the tax credit program. The Legislature appropriated payment of $77 million to oil and gas companies this year, but that left $390 million unpaid to the industry, Furie’s plan said.
Looming oil shortages? For more than three years the oil market has been strangled by a persistent supply glut, but next year there’s the opposite issue to be concerned about: an outright supply shortage. In a range of notes out on Wednesday, analysts at Allianz Global Investors, Jefferies and RBC Capital Markets all expressed optimism that recent efforts to balance the market are working, which could mean the world will be short of oil in 2018. “An abundance of oil, thanks largely to U.S. shale, has pushed down oil prices and sector sentiment. But since that means less investment in new production sources, the bearish market may soon rebalance from fears of oversupply to concerns over shortages — which would push prices higher,” Neil Dwane, global strategist at Allianz, said in a note.
Comment period nears end for North Slope project. Hilcorp project manager Mike Dunn solicited support for his company’s Liberty project — which would drill wells from 9.3-acre artificial gravel island six miles offshore in the Beaufort Sea — in a presentation to members of the Kenai and Soldotna Chambers of Commerce on Wednesday. The privately-owned Houston, Texas-based Hilcorp has been a familiar name locally since it became Cook Inlet’s largest oil producer after buying up leases and facilities of major producers Marathon and Chevron in 2012. Three years ago, Hilcorp ventured into the North Slope by acquiring a 50 percent share in the undeveloped Liberty field from BP. The April 2014 deal with BP also gave Hilcorp a 50 percent share in the Milne Point field and control of the Endicott and Northstar fields — also drilled from artificial Beaufort Sea islands, in a way similar to the Liberty plans, in 1987 and 2000, respectively. BP remains a 40 percent partner in the Liberty project, and the Native corporation Arctic Slope Regional Corporation holds a 10 percent share.
From the Washington Examiner’s Daily on Energy:
NATIONS STRUGGLE TO MIND THE ‘TRUMP GAP’ AT CLIMATE MEETING: The big question going into next month’s U.N. climate meeting in Bonn, Germany, is monitoring the effects of what is being called the “Trump Gap” from the U.S. pulling out of the Paris climate deal. Leonardo Martinez-Diaz, global director for finance at the World Resources Institute, told reporters Friday morning that one of the key challenges will be meeting the funding goals in the Paris Agreement now that President Trump has decided to withdraw from the deal. The World Resources Institute is a global environmental think tank that will be at the meeting in Bonn as countries come together to discuss moving forward on Nov. 11. Less money: The “Trump Gap” refers to the need to fill the Green Climate Fund, which is a financial mechanism that funnels money to smaller, developing nations to help them cope with the effects of climate change. Although with the U.S. out of the picture, it’s “not disastrous,” said Martinez-Diaz. But it is a challenge. The gap means there’s “more work and more effort” on getting to the $100-billion-per-year goal of the fund by 2020.
Keep on truckin’. A federal appeals court Friday halted implementation of a portion of an Obama administration regulation that set emissions-reduction standards for big trucks’ trailers. In a brief order regarding the Environmental Protection Agency’s (EPA) rule, the Court of Appeals for the District of Columbia said that a trailer industry group “has satisfied the stringent requirements for a stay pending court review.” At issue is a 2016 regulation that increased fuel efficiency and greenhouse gas standards for heavy-duty trucks. For the first time, the EPA asserted authority to regulate the design of trailers. The trailers do not have engines, but their aerodynamics can significantly impact the efficiency of the truck-trailer combination. The standards were due to take effect Jan. 1. The Trump administration is considering repealing the trailer portion of the rule, among other pieces.
Alaska Dispatch News, Alex DeMarban, October 26, 2017
Oil is escaping from ‘purgatory,’ as supply fears shift from glut to shortage
Market Watch, Sara Sjolin, October 26, 2017
Comment period nearing end for first Hilcorp North Slope development
Peninsula Clarion, Ben Boettger, October 26, 2017
Court halts EPA rule regulating big trucks’ trailers
The Hill, Timothy Cama, October 27, 2017
Production! Production! Production! Lawmakers got some good news in Juneau on Tuesday, as the state’s Department of Natural Resources unveiled the fall production forecast. Oil production is up. And they expect it rise again next year. It was a difficult year for the North Slope in 2016. After the drop in oil prices, operators cut 44 percent of their spending. They let drilling rigs go idle and laid off hundreds of workers. At Alaska’s Division of Oil and Gas, Ed King said they were surprised when they started putting together this year’s production forecast. “When we read the news of rigs getting laid down and kind of this global contraction of the industry, we kind of expected that to manifest itself in reduced production,” King said. “So, yeah, it is a little bit surprising to see how much they’ve been able to do in this low-price environment.” For the year, King said production was up about 3 million barrels, and the state is predicting that it’s going to be up next year too. King said a big part of that prediction is coming from the companies. “You know, last year they told us, the Prudhoe Bay operator (BP) at least, they told us that they were expecting to be able to hold production relatively flat and we were a little bit skeptical and this year they told us the same thing – now we have a tendency to want to believe them a little bit more,” King said. Headlamp agrees with AOGA President and CEO Kara Moriarty when she says: “Oil production increases don’t happen by accident — they require a lot of work, commitment, and investment in exploration and development,”
Keeping an eye on the LNG competition: New York-listed Tellurian’s new financing model can deliver US-produced LNG to Japan at $6/MMBtu, $2/MMBtu lower than it had claimed earlier this year, the company’s vice chairman Martin Houston said Monday.
- New model gives buyers equity stake and offtake volume
- Expected to lower final costs
The new sales pitch from the operator of the planned Driftwood LNG plant in Louisiana comes after its previous offer of a delivered price of $8/MMBtu for Japan fell flat with no takers as the LNG market becomes more liquid and averse to signing long-term contracts. Tellurian Chairman Charif Souki in May said the company was making the innovative marketing offer, saying the company would offer 7 million mt of LNG for five years, for deliveries starting in 2023, at a fixed price of $8/MMBtu. But said recently that the company had found no takers for this offer. Souki, the former chief executive of Cheniere Energy who is credited with opening up US LNG export markets, is now testing new business models to develop US LNG projects in the absence of long-term customers.
From the Washington Examiner Daily on Energy:
HOUSE PASSES BUDGET, PAVING WAY FOR DRILLING IN ARCTIC REFUGE: Republicans are one step closer to fulfilling a long-time goal of allowing oil and natural gas drilling in the Alaska National Wildlife Refuge after the House approved a budget resolution Thursday paving the way for it to happen. What the budget does: The budget resolution, passed narrowly by a 216-212 vote, contains instructions for lawmakers to create filibuster-proof legislation to open ANWR to drilling, as a way to raise revenue to help pay for tax reform.
For the first time! The Trump administration said Wednesday that it is offering a record 900 tracts for an upcoming lease sale within the National Petroleum Reserve-Alaska, a region that has attracted renewed interest from the oil industry and geologists. At 10.3 million acres, the tracts being offered for the lease sale in December represent about half of the 22.8-million-acre reserve. “(The) unprecedented sale in Alaska will help achieve our goal of American energy dominance,” said U.S. Interior Secretary Ryan Zinke, adding that he had pledged to help fill the trans-Alaska pipeline during a visit to see the line and Alaska fields in May.
Curbing regulatory burdens that don’t serve the American people. The U.S. Environmental Protection Agency said on Wednesday it will review how bedrock laws like the Clean Air Act and Clean Water Act affect energy industry job losses, one of several measures U.S. agencies will take to “reduce unnecessary regulatory burdens” on business. The measure was one of four initiatives proposed by the EPA to help carry out an executive order issued by President Donald Trump in March. He directed cabinet chiefs to identify ways to ease regulatory burdens on energy development. EPA Administrator Scott Pruitt, Energy Secretary Rick Perry and Interior Secretary Ryan Zinke each announced separate lists of measures they sent to the president to carry out his order. “We are working to curb unnecessary and duplicative regulatory burdens that do not serve the American people,” Pruitt said in a statement.
Bringing the real world to the classroom through STEM advocates. Holding the attention of tomorrow’s scientists and engineers can be tricky. Fortunately, Juneau is rife with professionals who work in those fields every day. A group of local STEM — or science, technology, engineering and math — advocates is working on a database to make it easy for teachers to connect bookwork with real world work and find those professionals. Jordan Watson is a fisheries scientist at National Oceanic and Atmospheric Administration, or NOAA. Watson and other members of Southeast Exchange, or SEE, wanted to find a way to bring all of those resources to teachers. They hosted a networking event recently to help bridge that gap. “From mining expertise and engineering, kind of geology, we have the glacial, we have University of Alaska Southeast, University of Alaska Fairbanks has fisheries here, we have NOAA fisheries, we have all the state organizations,” Watson said. “We have so many different expertise here and in such a small town, it would seem a shame to not be using it in the classrooms.” About 150 educators and STEM professionals came to network and register in SEE’s directory.
First Reads –
Oil production is up, and DNR expects it to keep climbing
Alaska Public Media, Rashah McChesney, October 25, 2017
NY-listed Tellurian claims new model can deliver US LNG to Japan at $6/MMBtu
Platts, Eric Yep, October 23, 2017
For the first time, all available tracts in Alaska’s National Petroleum Reserve are up for lease
Alaska Dispatch News, Alex DeMarban, October 25, 2017
EPA to review how clean air, water laws affect energy sector jobs
Reuters, Valerie Volcovici, October 25, 2017
STEM advocates build network for Southeast classrooms to connect with local experts
Alaska Public Media, Adelyn Baxter, October 25, 2017
Murkowski looking at rolling back Obama policies. Sen. Lisa Murkowski said Tuesday she could begin rolling back another of the Obama administration’s midnight regulations that sought to limit industrial activity and renewable energy development in the Tongass National Forest in Alaska. Murkowski, who is the Republican chairwoman of the Senate Energy and Natural Resources Committee, had asked the Government Accountability Office, the government’s federal watchdog group, to determine if the Obama administration’s amendment to the Tongass federal management plan could be defined as a regulation and thereby subject to congressional repeal.
Any port in a storm. The Port of Anchorage will now be known as the Port of Alaska. On Tuesday night the Anchorage Assembly approved the name change after a public hearing. Assembly Chair Dick Traini introduced the ordinance, saying not all lawmakers in Juneau are aware of the port’s role in making goods available outside of the city. “I just think this is something that really reflects reality,” said Assembly member Amy Demboski.
I’m keeping my name. One Obama administration action may be safe under President Donald Trump — the long-sought renaming of North America’s tallest peak to Denali. U.S. Sen. Dan Sullivan said the Alaska mountain came up during an hour-long meeting he and fellow Republican Sen. Lisa Murkowski had with Trump and Interior Secretary Ryan Zinke in March. Sullivan said during a weekend speech to the Alaska Federation of Natives that Trump asked if the senators thought the name change from Mount McKinley to Denali should be reversed, the Alaska Public Radio Network reported. Sullivan said both senators emphatically said no. Trump asked why.
Another EPA nominee moves forward. A Senate Committee voted Wednesday to approve the nomination of President Trump’s controversial nominee to lead the Environmental Protection Agency’s (EPA) chemical safety office. The Senate Environment and Public Works Committee voted 11-10 to advance Michael Dourson’s nomination. The vote fell along party lines, with all Republicans in favor and all Democrats opposed. By the same 11-10 party-line vote, the panel approved William Wehrum, a lawyer for industry clients, to lead the EPA’s important air and radiation office, which oversees air pollution, climate change regulations, car pollution standards and other major programs.
LOI, LNG, OMG. We would offer a comment that “LOIs” — especially those with long terms and huge uncertainties and many conditions — are not very useful. They are not relatively straight forward gas sales contracts with take-or-pay or ship-or-pay provisions. LOIs can be called, “binding”, but an “agreement to maybe agree someday” is full of problems no matter what you call it. In short, more public money should not be poured into this socialized, politically-controlled, bureaucrat-run LNG/800 mile pipeline scheme until: 1) gas prices recover sufficiently to support the many more economic LNG projects, plus this one, and 2) the private sector is enamored enough with the project to take it over and develop it properly. Furthermore, we’re tired of hearing bureaucrats saying that negative media reports and blogs are ‘harming’ the project’s marketing effort. If the project were economically feasible, had a Final Investment Decision-grade financing plan and were run by a world-class private sector, marketers would not have to worry about project critics.
Lisa Murkowski ponders repeal of Obama’s last-minute changes to Alaskan forest plan
The Washington Examiner, John Siciliano, October 24, 2017
Anchorage Assembly gives the Port of Anchorage a new name
KTUU, Dan Carpenter, October 24, 2017
Alaska senators tell Trump they want mountain’s name to stay Denali
Fairbanks Daily News-Miner/AP, Becky Bohrer, October 24, 2017
Senate panel advances Trump’s controversial EPA chemical pick
The Hill, Timothy Cama, October 25, 2017
Alaska Gasline Development Corporation Rests Hopes On “Letters of Intent”
Northern Gas Pipelines, Dave Harbour, October 24, 2017
Back at it in Juneau. Alaska House members are already so divided over the legislation to scale back last year’s big criminal justice reform overhaul that they can’t even agree on a schedule for debating it — let alone on what’s in it. Monday was the first day of the Legislature’s special session in Juneau, which Gov. Bill Walker convened to take up a tax proposal and the criminal justice legislation, Senate Bill 54. Before the House even gaveled in for its 11 a.m. floor session, Republican minority members who want more substantial revisions to the original overhaul were already sparring with members of the largely-Democratic majority, who set a tight schedule for public testimony and amendments to SB 54.
Jousting over Pt. Thomson? A new round of jousting could be underway between Gov. Bill Walker’s administration and ExxonMobil over the big Point Thomson natural gas project on the North Slope. Fierce legal battles raged between 2007 and 2012 between the state and the Point Thomson lease owners, which include BP as well as ExxonMobil, but a settlement of the dispute was negotiated in 2012, when Sean Parnell was governor. Walker, who defeated Parnell’s bid for reelection in 2014, was head of the Alaska Gasline Port Authority, a municipal group attempting to build a North Slope gas pipeline. He opposed the settlement along some other prominent Alaskans, such as former state resources commissioner Mark Myers. Walker filed a personal lawsuit to block the deal, but it was unsuccessful.
Internet for the Arctic! A communications company announced Tuesday that the final piece of physical cable running along the ocean floor has been installed in preparation of providing internet connectivity to several remote Alaska communities by the end of the year. In a news release, Quintillion said the subsea cable system is on schedule to deliver internet to the arctic this December. The communities poised to be brought online with the fiber optic network will include Utqiaġvik, Wainwright, Point Hope, and Kotzebue, the company said.
Unity ice cream for everyone. Gov. Bill Walker and Lt. Gov. Byron Mallott’s re-election campaign kicked off Sunday afternoon in Juneau. About 100 community members showed up to Elizabeth Peratrovich Hall for music, face painting and food, including a new ice cream flavor from Coppa made specially for the campaign, called Unity. The independent governor took a few of questions from KTOO’s Adelyn Baxter about his outlook for the upcoming 2018 campaign.
Russia eyes exporting LNG to Asian-Pacific countries. Russia’s second biggest natural gas producer Novatek on Monday signed a cooperation agreement with the regional government of Kamchatka to build a new terminal on the peninsula’s east coast. “The building of the terminal will allow us to optimize our transport logistics, more efficiently deliver LNG from the Arctic, stimulate the development of the Northern Sea Route and create a hub for deliveries of LNG to consumers in the countries of the Asian-Pacific region,” the company’s owner and CEO Leonid Mikhelson says. It will be a reloading terminal where LNG from ice-class carriers are moved into conventional tankers, the company said.
From the Washington Examiner’s Daily on Energy:
INTERIOR PROPOSES LARGEST OIL AND GAS LEASE SALE IN US HISTORY: Interior Secretary Ryan Zinke Tuesday said his department is proposing the largest oil and gas lease sale ever held in the U.S. Region-wide offer: The proposed region-wide lease sale covers 77 million acres in federal waters of the Gulf of Mexico, off the coasts of Texas, Louisiana, Mississippi, Alabama, and Florida. The offer is scheduled for March and includes all available unleased areas on the Gulf’s Outer Continental Shelf, the department said.
Alaska House’s special session debate over crime bill starts with focus on schedule
Alaska Dispatch News, Nathaniel Herz, October 23, 2017
Governor, ExxonMobil at odds over Point Thomson
The Frontiersman, Tim Bradner, October 23, 2017
Last segment of cable installed for internet in remote Alaska communities
KTUU, Leroy Polk, October 24, 2017
On re-election bid, Gov. Walker says he’s made difficult decisions that he must own
Alaska Public Media, Adelyn Baxter, October 23, 2017
Novatek orders more Arctic tankers, announces plan to build new LNG terminal
Arctic Now/The Independent Barents Observer, Atle Staalesen, October 24, 2017
Alliance Board President weighs in on ANWR debate. The Senate’s budget vote on Thursday was the opening salvo in what’s likely to be a bitter fight over drilling in the Arctic National Wildlife Refuge (ANWR). President Trump, key officials in his administration and leading Republicans support drilling in the ANWR, an expanse of 19 million acres of land — about the size of South Carolina — above the Arctic Circle in Alaska, 1.5 million of which was set aside for potential oil exploration and development. But greens uniformly oppose any effort to produce oil in the refuge, which they consider a pristine frontier of American landscape. Here’s what to know about ANWR and how this debate will play out. What’s at stake?
What are the odds? As Alaska lawmakers prepare to convene Monday for their fourth special session of the year, two of them had a surprising message: Don’t rule out the idea that the House and Senate could approve a tax bill. “It’s not dead on arrival,” said Anchorage Republican Sen. Kevin Meyer, a member of Senate leadership as chairman of the rules committee. “I’d give it a 50-50 chance, I guess.” And one House majority member, Nome Democratic Rep. Neal Foster, also said there was “more potential than was previously thought” that lawmakers could reach a compromise on a tax proposal during the special session in Juneau.
State continues to fight ballot measure on grounds it’s unconstitutional. State attorneys are appealing a judge’s decision to allow a controversial ballot initiative to move forward. The Department of Law filed a notice of appeal on Friday, asking the Supreme Court to reverse the lower court’s opinion. In a media release, State Attorney General Jahna Lindemuth said the question of whether the ballot initiative is unconstitutional should be answered by the Supreme Court. The initiative would go on the 2018 ballot, and would ask voters to strengthen the state’s permitting requirements for projects that could interfere with salmon streams.
Working to make King Cove road a reality. Opponents of a longtime effort to build a road from King Cove to Cold Bay — through the Izembek National Wildlife Refuge — say they are struggling to illuminate the Interior Department’s current legal path toward allowing the road. The Interior Department is considering an administrative process that would allow a land swap between the King Cove Corp. and the federal government so that the road can be built. At the same time, members of Alaska’s congressional delegation are still seeking a legislative solution, which would exchange land between the federal and state governments.
It keeps growing and growing and growing…US petroleum product demand averaged more than 20.2 million b/d in September, 2.4% more than a year earlier and the highest level for the month since 2007, the American Petroleum Institute reported. Deliveries, which API uses to measure demand, rose 2.1% year-to-year to an average of 20.4 million b/d during this year’s third quarter, and climbed 1.2% in the first 9 months to an average of 19.9 million b/d from the comparable 2016 period, API said in its latest monthly statistical report. “Strong petroleum demand is good news for the overall economy, which grew for the 100th consecutive month, and economic activity in the manufacturing sector expanded in September,” said API Statistics Director Hazem Arafa.
From The Washington Examiner’s Daily on Energy:
OIL REFINERS STRIKE BACK AT PRUITT AFTER BIOFUELS REVERSAL: The oil industry is striking back at Pruitt after he reneged on the EPA’s biofuels proposal. Oil companies charged that Democratic and Republican senators from Midwestern states unfairly intervened in the regulatory process, and pressured the EPA to keep the Renewable Fuel Standard intact.
Everything you need to know about the coming Trump Arctic drilling debate
The Hill, Devin Henry, October 22, 2017
Could Alaska lawmakers approve a tax in their special session? Some think so.
Alaska Dispatch News, Nathaniel Herz, October
State appeals controversial ballot initiative decision to Supreme Court
Alaska Public Media, Rashah McChesney, October 20, 2017
Izembek road opponents struggle to shine light on Interior Department plans
Alaska Dispatch News, Erica Martinson, October 22, 2017
API: US petroleum product demand hits 10-year September peak
Oil & Gas Journal, Nick Snow, October 20, 2017
One step closer…The U.S. Senate passed a budget resolution Thursday that could provide Alaska’s congressional delegation its best shot in four decades to open part of the Arctic National Wildlife Refuge to oil and gas drilling. The Senate voted 51-49 to pass the budget resolution, along party lines. Republicans defeated a Democratic amendment to strip the ANWR-allowing provision from the budget resolution, by a vote of 52-48. It’s not a slam-dunk yet. But Alaska Sen. Lisa Murkowski has been granted the opportunity to attach an ANWR drilling provision to a tax reform bill that is considered “must-pass” legislation if Republicans want to retain their control of Congress in 2018. That bill — known as “budget reconciliation” — will only require a simple 51-senator majority vote. House and Senate leaders have said they hope to pass tax legislation before the end of this year, though that may be an overly optimistic timeline.
Could outside investment be the key? Alaska is pursuing foreign investors for its oil and gas industry, hoping to advance recent discoveries while struggling to compete with lower-cost shale projects and reverse a decades-long output decline. Sovereign wealth funds, banks and state-owned energy companies have met with Alaskan officials, John Hendrix, chief energy adviser to Alaska Governor Bill Walker, said in an interview. China Investment Corp (CIC) and state-owned Chinese energy company Sinopec held talks with state officials last month, he said.
Russia is full speed ahead! Neither sanctions nor persistently low oil prices are hindering Russia’s ambitions or plans to develop oil resources in its sections of the Arctic. In April, state-controlled oil giant Rosneft started drilling the northernmost well on the Russian Arctic shelf in the Khatangsky license area in the Laptev Sea. In June, Rosneft struck first oil in the Eastern Arctic in this license. Earlier this month, the oil firm said that recoverable reserves at the field exceed 80 million tons of oil, which is equal to around 586.4 million barrels. Geological data point to reserves at the field at 298 million tons of oil, or some 2.184 billion barrels, and the oil is high quality—light and low-sulfur, according to Rosneft.
EPA’s new biofuels deal. Environmental Protection Agency chief Scott Pruitt assured Republicans Thursday night that he would keep the Renewable Fuel Standard intact, and would even work with them to allow more ethanol to be blended into the gasoline supply year-round. The assurances come amid a major pressure campaign by both Republicans and Democrats on President Trump and Pruitt to scrap an EPA proposal to significantly curtail the program’s biofuel targets while allowing ethanol exports to qualify as part of the annual production goals.
From the Washington Examiner’s Daily on Energy:
PRUITT ASSURES QUICK PERMITTING APPROVALS: Pruitt, speaking Thursday at the Texas Oil and Gas Association’s Lone Star Energy Forum, said the EPA will cut response times for permitting requests to six months or less. “Regulatory uncertainty is the biggest reason why the U.S. economy isn’t growing faster,” Pruitt said, according to Reuters. “It can be done. It’s just a matter of having the process in place to achieve results.”
Alaska Airlines reminds us we #weflyalaska. Alaska Airlines has renewed its partnership with the Alaska Native Science and Engineering Program (ANSEP) to provide a brighter future for middle school students from rural communities across the state of Alaska. The second, three-year $1 million grant brings Alaska Airlines’ total investment in ANSEP to $2 million. Over the next three years, funds will help transport nearly 2,000 Alaska students in sixth, seventh and eighth grades to Anchorage to attend ANSEP’s award-winning Middle School Academy education program at the University of Alaska Anchorage.
U.S. Senate passes bill that offers a chance to open Arctic National Wildlife Refuge to drilling
Alaska Dispatch News, Erica Martinson, October 19, 2017
Cash-poor Alaska eyes foreign capital to jump-start energy projects
Reuters, Rod Nickel, October 20, 2017
Russia Goes All In On Arctic Oil Development
OilPrice.com, Tsvetana Paraskova, October 19, 2017
Scott Pruitt assures Republicans he won’t harm ethanol mandate
The Washington Examiner, John Siciliano, October 20, 2017
Alaska Airlines pledges additional $1 million to support STEM education in rural Alaska
PR Newswire, October 20, 2017
Headlamp – Respected Alaskans fighting for Resource Development: Minich, Rock and Merrick telling it like it is.
CIRI and ASRC heads tell Alaskans not to fall for Stand. Starting during the Alaska Federation of Natives Annual Convention this week, Alaskans will be confronted by signature gatherers asking them to sign a controversial new ballot initiative that claims to “Stand for Salmon.” As leaders of Alaska Native regional corporations, we urge you not to sign it. If you read nothing more, please remember this: We already stand for salmon. In July, the ANCSA Regional Association, an organization representing the 12 land-based Alaska Native regional corporations, voted unanimously to oppose this initiative. If passed, this measure could prevent our people from developing the lands conveyed to us under the Alaska Native Claims Settlement Act, or ANCSA, and restrict our ability to create a sustainable future for Alaska Native people. Existing laws and regulations are working and this initiative is a disproportionate response to a problem that does not exist.
Walker weighs in again. A bipartisan group of governors, including Governor Bill Walker, is urging congressional leaders to support a plan to calm health insurance markets after President Donald Trump blocked federal subsidies to insurers. The letter, signed by Walker and 9 other governors, says, “Stabilizing insurance markets is one of the primary areas where Congress can take action to ensure that consumers have affordable health care options.”
Merrick: Give me Liberty! Hilcorp’s Liberty oil field is home to the largest undeveloped light oil reserve on the North Slope and presents an exciting opportunity for economic growth at a time when Alaska’s economy is struggling. With Alaska’s economic woes on our minds, Alaskans are ready for good news. And with the opportunity for boosting oil production, Hilcorp’s Liberty project is our good news, bringing jobs and increased state revenue. Hilcorp estimates that the Liberty oil field contains around 150 million barrels of recoverable, high-quality crude oil. The oil field is located 19 feet deep in federal offshore waters. The project will require a 9-acre island, generating construction jobs for Alaskans. Once built, the Liberty project could boost oil production by 50,000-70,000 barrels per day. This will help offset the decline in oil flowing through the trans-Alaska pipeline, which is now running at three-quarters empty. The pipeline has been Alaska’s economic engine for decades, and filling the pipeline will recharge Alaska’s economy.
Senators want LNG exports on the fast-track. A pair of Republican senators is proposing to fast-track the approval process for companies wishing to export relatively small-scale volumes of liquefied natural gas. Under the bill from Sens. Bill Cassidy (R-La.) and Marco Rubio (R-Fla.), applications to export up to 51.1 billion cubic feet of natural gas per day to nearly any country would get Energy Department approval “without modification or delay.” Currently, all natural gas exports from the contiguous United States must be extensively reviewed and certified by the Energy Department as being in the “public interest” before they can proceed.
From Washington Examiner’s Daily on Energy:
ARCTIC DRILLING FIGHT COULD CHALLENGE SENATE BUDGET DEBATE: The Senate is set to vote on its 2018 budget resolution, an important step for Republicans to achieve tax reform. But the vote could be challenged over a long-standing fight over drilling in an Alaskan wildlife refuge.
Democrats act: Democrats Wednesday night filed an amendment that would remove language in the budget that would allow oil and natural gas drilling in the Arctic National Wildlife Refuge.
Vote-a-rama: The amendment will get a vote as part of a marathon series of votes that could go into Friday morning.
The drilling proposal: The budget contains instructions for the Senate Energy and Natural Resources Committee to recommend policies to save $1 billion over the next decade, likely to be served by drilling in the refuge, a longstanding Republican goal.
Broader context: Republicans in Congress have long pressed to allow energy exploration in a 1.5 million-acre section of the Alaskan refuge, where billions of barrels of oil lie beneath the refuge’s coastal plain. But Democrats have blocked those efforts.
Don’t sign the ‘Stand for Salmon’ initiative
Alaska Dispatch News, Sophie Minich, Rex A. Rock Sr., October 18, 2017
Alaska governor voices support for new health insurance reform deal
KTUU, KTUU Staff and AP, October 18, 2017
State revenue, Alaska workers stand to gain by Liberty oil project
Alaska Dispatch News, A.J. “Joey” Merrick, October 18, 2018
Senate bill would fast-track ‘small-scale’ natural gas exports
The Hill, Timothy Cama, October 18, 2017
Alaskan taking the reins of Region 10. A member of Governor Bill Walker’s cabinet is taking a key position at the Environmental Protection Agency. The agency confirmed Tuesday that Chris Hladick will become the regional administrator overseeing EPA’s work in Alaska, Idaho, Oregon and Washington. Hladick is currently commissioner for the Department of Commerce, Community and Economic Development. The Walker administration announced that Hladick will step down from that post on November 1. He will take the reins at EPA Region 10 in December.
Navarre back to state service. Mike Navarre has been tapped for the lead role at the Alaska Department of Commerce, Community and Economic Development. Navarre has served as the Kenai Peninsula Borough mayor for the last six years. He will leave office in early November, after borough voters elect a new mayor in the upcoming runoff election on Oct. 24. In public comments, he has said he planned to take a role assisting Gov. Bill Walker in fixing the state’s ongoing fiscal crisis, but has not specifically said what that role is to be.
Democratic Party wins in court. A Juneau Superior Court judge’s ruling Tuesday could pave the way for Alaska Gov. Bill Walker, an independent, to run in the state Democratic Party’s primary and get the party’s support for his re-election campaign next year. Judge Philip Pallenberg, in a 33-page decision published Tuesday morning, invalidated a state law barring independent candidates from contesting partisan primaries. The Alaska Democratic Party had sued to overturn the law, arguing that it unconstitutionally restricted the party’s freedom to associate with its favored candidates. Pallenberg agreed, writing that political parties’ ability to run their chosen nominees, regardless of party affiliation, is an “essential associational right” established by the U.S. Supreme Court.
Making deals on ethanol. Environmental Protection Agency (EPA) chief Scott Pruitt met with a handful of Midwestern senators on Tuesday, aiming to reassure them about support for the federal biofuels mandate. Pruitt met with lawmakers for nearly an hour in Sen. Chuck Grassley’s (R-Iowa) Senate office. The gathering comes as lawmakers of both parties raise concerns about proposed changes to Renewable Fuel Standard (RFS). Grassley had suggested he could hold up several EPA nominees if Pruitt and the agency don’t provide more support for ethanol, a major industry in states his state and elsewhere.
Up, up, up! U.S. shale production for November is forecast to rise for a 11th consecutive month, the U.S. government said on Monday, as U.S. prices CLc1 stabilize around $50 a barrel. U.S. oil output is expected to increase by 82,000 barrels per day (bpd) to 6.12 million bpd, according to U.S. Energy Information Administration’s drilling productivity report. North Dakota’s Bakken output is set to rise by 7,600 bpd to 1.1 million bpd, the most since March 2016, while Eagle Ford oil output in Texas is set to rise by 2,500 bpd to 1.2 million bpd. Permian production is forecast to rise by 50,000 bpd to 2.7 million bpd, a new record, the EIA said.
Walker cabinet member to oversee EPA’s Northwest office
Alaska Public Media, Elizabeth Harball, October 17, 2017
Mike Navarre to take commissioner role
Peninsula Clarion, Elizabeth Earl, October 17, 2017
New court ruling could allow Alaska Gov. Walker, an independent, to run in Democratic primary
Alaska Dispatch News, Nathaniel Herz, October 17, 2017
Overnight Energy: Pruitt huddles with GOP senators on ethanol
The Hill, Timothy Cama and Devin Henry, October 17, 2017
U.S. shale output seen posting 11th straight rise in November: EIA
Reuters, Reuters Staff, October 16, 2017
Good news for the United States, great news for Alaska! A longtime Alaska Native corporate leader is being nominated by President Trump to oversee Indian Affairs for the U.S. Department of Interior. Tara Sweeney is executive vice president of external affairs for Arctic Slope Regional Corp. — the largest Alaska-owned business — and is a previous co-chair of the Alaska Federation of Natives, which is holding its annual convention in Anchorage this week. She’s from Utqiaġvik, previously known as Barrow, and is Inupiaq. The Trump administration announced Sweeney’s nomination as assistant Interior secretary for Indian Affairs around 6:30 p.m. Alaska time, way after hours on the East Coast. Within minutes, the Alaska congressional delegation responded with strong praise. AFN leaders and Gov. Bill Walker soon did the same. Headlamp congratulates Tara on her appointment! Like the other Alaskans working in the Trump administration, we look forward to celebrating your accomplishments.
Let’s agree to disagree? A 40-year battle over oil drilling in an arctic wildlife refuge in Alaska could become the latest political irritant in a growing list of disagreements between U.S. President Donald Trump and Prime Minister Justin Trudeau. U.S. plans to lift a decades-old ban on exploring and drilling for oil in the Arctic National Wildlife Refuge are underway, with both the White House and Congress working on regulations and legislation to make it happen. Trump campaigned on getting the U.S. to produce more oil on its own and his sights now are set on the refuge, a protected area in the northeast corner of Alaska which covers an area bigger than New Brunswick.
House and Senate divided, yet again. Members of the Alaska Senate do not plan to spend all their time in Juneau when the fourth special session this year convenes in the capital city next week. Senate President Pete Kelly told The Associated Press that after starting the session Oct. 23 in Juneau, the Senate plans to hold hearings in Anchorage on budget and tax issues. The Senate will return to Juneau when there’s something to act on, he said. House Speaker Bryce Edgmon said the House plans to conduct its work in Juneau. Edgmon said the Capitol has the infrastructure in place to host the session and that meeting in Juneau will allow for lawmakers’ work to be broadcast on a statewide public affairs channel. Headlamp appreciates efforts to have hearings in Anchorage where government is more accessible to the people.
Details, details, details – that’s what Legislators want. The Alaska gas line agency in charge of the proposed natural gas pipeline megaproject is spending about $3 million a month and is not planning to ask the Legislature for more money in the next fiscal year, project officials said Monday in a tense meeting with skeptical lawmakers. Lawmakers said they weren’t happy with the limited financial information the Alaska Gasline Development Corp. had provided for the joint House and Senate Resources committee meeting, part of a regular update to lawmakers about the $43 billion Alaska LNG project. Legislators and citizens need detailed expenditure breakdowns of the sort lawmakers have received in the past, said Sens. Cathy Giessel and Natasha von Imhof, Republicans from Anchorage.
Santa and deadlines…Coming in December! Corporation Senior Vice President Frank Richards told lawmakers in Anchorage on Monday that the corporation’s board is operating under a December 31, 2017 deadline to find a customer for Alaska’s natural gas. It has been ten months since the state took the lead on the mega-project that would transport natural gas from Prudhoe Bay to Cook Inlet, then ship it to buyers in Asia. Members of finance and resources committee in both the state House and Senate met to hear a quarterly report on the progress of the project. Corporation President Keith Meyer was not at the meeting, Board Chairman Dave Cruz said he is in Asia marketing the state’s gas. So, Cruz started the meeting and began by asking lawmakers to consider the impact that their discussions with members of the media can have on the corporation’s efforts to market the project.
Still trying to build the road. The Interior Department is preparing to set aside a decades-old ban on development in federally protected wilderness areas by pursuing a controversial proposal to build a nearly 12-mile road through a wildlife refuge in Alaska. The project in the Izembek National Wildlife Refuge has long been a priority for Alaska officials, who say it is a “lifesaving” link needed to connect a remote Aleutian Islands town of 925 people with the rest of the state. The proposal, which entails turning federal land over to a tribal corporation, fits neatly with the Trump administration’s broader goal of giving more control to local communities like King Cove.
Alaska Native corporate leader tapped by Trump for top Indian Affairs job
Alaska Dispatch News, Lisa Demer, October 16, 2017
Yukon chief seeks Trudeau’s help to stop U.S. oil drilling in caribou habitat
CBC News, The Canadian Press, October 16, 2017
Alaska Senate to split session time in Juneau, Anchorage
Fairbanks Daily News-Miner/AP, Becky Bohrer, October 16, 2017
The Alaska gas line agency spends $3M a month. Lawmakers want more details about its future.
Alaska Dispatch News, Alex DeMarban, October 16, 2017
State corporation sets December deadline to find customers for Alaska’s gas
Alaska Public Media, Rashah McChesney, October 16, 2017
Interior looks at behind-the-scenes land swap to allow road through wildlife refuge
The Washington Post, Juliet Eilperin, October 15, 2017