Bad Bill of the Week: It’s good to know that Alaskans can count on Senator Scott Kawasaki to be consistent in his behavior – introducing legislation that wastes time and resources. He perfected the practice while in the house. SB 28 – “An Act renaming the state bird as the Common Raven.” is Headlamp’s choice for this week’s bad bill. Two committee referrals – state affairs and resources.
‘Under siege’, oil industry mulls raising returns and PR game
Dmitry Zhdannikov, January 24, 2019
When the global oil industry held its biggest annual gathering this week in the Swiss town of Davos, it invited banking bosses and fund managers to discuss two key topics – climate change and pressure from investors. The conclusion of the discussions was worrying for those present – pressure is rising and the industry is losing a battle not to be seen as one of the world’s biggest evils. The answer? Lure investors with higher returns and raise the PR game. “There is no doubt – and there is a consensus coming here in various meetings in Davos – that our industry is literally under siege and the future of oil is at stake,” said Mohammed Barkindo, secretary-general of oil producer group OPEC.
Our Take: Headlamp agrees. The industry has a fantastic story to tell – raising the standard of living for people worldwide and leading the charge in reducing emissions globally with new technology.
Trump Eyes Action to Limit States’ Powers to Block Pipelines
Ari Natter & Jennifer A. Dlouhy, Bloomberg, January 25, 2019
The Trump administration is considering taking steps to limit the ability of states to block interstate gas pipelines and other energy projects, according to three people familiar with the deliberations. The effort, possibly done through an executive order, is aimed chiefly at states in the Northeast U.S., where opposition to pipeline projects has helped prevent abundant shale gas in Pennsylvania and Ohio from reaching consumers in New York and other cities. New York used a Clean Water Act provision to effectively block the construction of a natural gas pipeline being developed by Williams Partners LP to carry Marcellus shale gas 124 miles (200 km) to New England. The project got the green light from the Federal Energy Regulatory Commission but ran into obstacles in New York, where regulators denied a water quality permit.
EIA Sees Continued US Energy Growth
Natural Gas News, January 24, 2019
The US Energy Information Administration (EIA), in its Annual Energy Outlook 2019 released January 24, is projecting robust energy growth in the US, led by shale and tight oil and natural gas and renewables. In its Reference case (there are also six side cases which examine the robustness of certain assumptions), the EIA projects the US will be a net energy exporter in 2020 – for the first time in more than 70 years – and will remain so through 2050. The export growth is driven largely by crude oil and products, but also reflects additional exports of LNG. “The US has become the largest producer of crude oil in the world, and growth in domestic oil, natural gas, and renewable energy production is quickly establishing the US as a strong global energy producer for the foreseeable future” EIA administrator Linda Capuano said. “For example, the US produced almost 11mn b/d of crude oil in 2018, exceeding our previous 1970 record of 9.6mn b/d.”
From the Washington Examiner, Daily on Energy:
REPUBLICANS SCHEDULE CONFIRMATION VOTE FOR EPA’S WHEELER: Republicans of the Senate Environmental and Public Works Committee announced Thursday the panel will vote Feb. 5 on EPA Acting Administrator Andrew Wheeler’s nomination to stay on leading the agency.
The announcement came after Senate Majority Mitch McConnell, R-Ky., met with Wheeler.
“He is an impressive, experienced nominee and I look forward to supporting his nomination,” McConnell said in a Twitter post.
Wheeler, a former energy lobbyist and Senate Republican staffer, has led the EPA since July after former Administrator Scott Pruitt resigned from the post amid numerous scandals over his misuse of federal funds.
U.S. copper projects gain steam thanks to electric vehicle trend
Ernest Scheyder, Reuters, January 23, 2019
Once seen as a laggard in the global mining industry, U.S. copper deposits have quietly drawn more than $1.1 billion in investments from small and large miners alike as Tesla and other electric carmakers scramble for more of the red metal.
Our Take: Morning Logic: The world needs copper; Pebble Mine has copper; The world needs the Pebble Project
The transit system of the future in the Fairbanks North Star Borough will be run on compressed natural gas, if the assembly approves the idea today. Administrators at the borough want to build a compressed natural gas distribution system as part of a new transit garage, which is in the design phase, and begin phasing in buses that run on CNG starting next year. Officials are pondering a system in which they could offer the fuel to paying customers. It would be the first large-scale compressed natural gas distribution system for vehicles to be constructed in Fairbanks, and it would serve as an anchor customer for the borough-owned Interior Gas Utility, said Glenn Miller, transportation director at the borough.
U.S. Oil Prices Get Boost from Venezuelan Political Crisis
Dan Molinski and Christopher Aless, The Wall Street Journal, January 24, 2019
- S. oil prices rose Thursday as a political crisis in Venezuela and possibly more U.S. sanctions threatened to cut the OPEC-member’s oil exports, which are used extensively by some refiners in the U.S.
- West Texas Intermediate futures, the U.S. oil standard, were up 0.7% at $53.00 a barrel on the New York Mercantile Exchange.
- Brent crude, the global benchmark, was down 0.3% at $60.94 a barrel on London’s Intercontinental Exchange.
Russia’s Wealth Fund: Oil Price War with U.S. Would Hurt Russian Economy
Tsvetana Parasakova, January 23, 2019
Russia shouldn’t try to bring U.S. shale production down with an oil price war, because Moscow would also be hurt in such an event, according to Kirill Dmitriev, chief executive at the Russian Direct Investment Fund (RDIF) and the first Russian official to publicly hint three years ago that there might be an alliance with OPEC to lift oil prices. “For U.S. shale production to go down, you need oil prices at $40 per barrel and below. That is not healthy for the Russian economy,” Reuters quoted Dmitriev as saying at the World Economic Forum in Davos on Wednesday. “We should not take competitive action to destroy U.S. shale production,” the head of the Russian wealth fund said.
Alaska jobs report shows some growth in oil, gas industry
Associated Press, January 23, 2019
Alaska’s oil and gas industry experienced modest growth last month as some sectors of the economy have continued shedding jobs, according to a state jobs report. December employment numbers released Friday by the state Department of Labor and Workforce Development show some losses from the recession are slowing, Alaska’s Energy Desk reported. “The negatives have, generally speaking, gotten considerably smaller, especially in negatives like oil and gas, which was a big, big loser,” said state economist Neal Fried.
Our Take: It’s been a long time, four years to be exact, since we’ve seen a headline like this. #wereback
Major producers building carbon pricing into future plans
Elwood Brehmer, Alaska Journal of Commerce, January 22, 2019
The list of oil and gas companies with global influence that support some form of carbon pricing continues to grow. Alaska’s “big three” producers — BP, ConocoPhillips and ExxonMobil — are all now a part of that group. ExxonMobil announced in October that it would be donating $1 million to Americans for Carbon Dividends, a campaign led by former U.S. Sens. John Breaux, a Democrat, and Trent Lott, a Republican. ConocoPhillips doubled down on that donation in December with a $2 million pledge to Americans for Carbon Dividends over the next two years. BP executives have been trumpeting the expression “dual challenge” for several years, referencing the company’s belief that worldwide energy production will need to continually increase at the same time global carbon emissions must be drastically reduced. “In decades to come there needs to be 2.5 billion people lifted out of poverty and there’s going to be another 2 billion added to our planet, so there is a deep need for energy, and we need to do it better with less emissions,” BP Alaska President Janet Weiss said during a Jan. 18 speech at the Meet Alaska contractor trade show in Anchorage.
Our Take: This is a very well written piece that highlights differing views on carbon tax and other issues related to climate change policy. It also highlights the difference between those who are doing something about the issue with their own money (private sector companies) and those who want to tax them to get funding to subsidize their projects and policies that don’t work (Rose colored glasses at REAP).
State of Alaska issues two key permits for Donlin mine
Ravenna Koenig, Alaska’s Energy Desk, January 21, 2019
On Friday the state of Alaska issued two key permits for the proposed Donlin Gold mine in the Yukon-Kuskokwim Delta. One is the reclamation plan approval, which outlines how Donlin Gold would clean up the mine site after the project is over. The other is a waste management permit, detailing how the company plans to deal with tailings, waste rock and wastewater related to the mine. Along with the reclamation plan, the state also increased the amount of money Donlin Gold will be required to put down ahead of time for the mine’s cleanup. That figure — which appeared in an earlier draft as $317 million — has been bumped up to $322 million. The state says the revision was made to cover the cost of maintenance for a permanent road that would be built to access to the mine.
Our Take: Great news for Donlin! This is just one example of the level of commitment this company has to responsibly develop Alaska’s resources for the benefit of all Alaskans – more than 20 years and hundreds of millions of dollars spent just to get to a final investment decision.
BP CEO Bob Dudley sees solid oil demand growth despite fears over global economy
Tom DiChristopher, CNBC, January 22, 2019
BP is expecting solid growth in oil demand this year despite growing concerns about a global economic slowdown, CEO Bob Dudley said Tuesday. The British energy giant forecasts the world’s appetite for oil will grow by another 1.4 million barrels per day in 2019. That compares with demand growth of 1.3 million bpd last year, according to the International Energy Agency, a policy advisor to developed nations. The 2019 projection puts BP’s view in line with the latest forecast from the Paris-based IEA, but ahead of OPEC, which sees demand growing at a more tepid 1.29 million bpd. “We’re not actually seeing this worrying thought that it’s all going to start falling,” Dudley told CNBC in an interview at the World Economic Forum in Davos, Switzerland.
Our Take: The world needs, and wants, more oil. #deathoffossilfuelsisgreatlyexaggerated
Billionaire investor David Rubenstein says US-China trade talks are likely to end in months and the government should reopen in days
Brian Schwartz, CNBC, January 22, 2019
Carlyle Group founder David Rubenstein said Tuesday that U.S.-China trade negotiations are likely to end in months and the U.S. government shutdown will probably conclude in the next few days. “My view on the China negotiations is that it is likely something will come to pass in the next few months. I think both sides recognize that’s it’s not in either sides interest to have this go on,” Rubenstein said in an exclusive interview with CNBC on the sidelines of the World Economic Forum in Davos, Switzerland.
Our Take: Rubenstein is the former husband of former ADN owner Alice Rogoff – you know – the one who came to town to interfere in Alaska elections and failed to pay her debts to Alaska businesses?
Enviros granted legal status to fight proposed LNG project at Port of Brownsville
Sergio Chap, The Houston Chronicle, January 21, 2019
Federal regulators have granted environmental activists’ legal status to challenge Texas LNG, one of three liquefied natural gas projects proposed at the Port of Brownsville. In a Friday notice, Federal Energy Regulatory Commission Deputy Secretary Nathaniel Davis granted Save RGV From LNG a motion to intervene in a permit application filed by Houston liquefied natural company Texas LNG. “SaveRGV states that it has an interest in the proceeding because SaveRGV and its members have environmental, aesthetic, and economic interests that are directly affected by the project,” Davis wrote in the notice. “SaveRGV’s motion is unopposed.”
Our Take: This is a disturbing decision. At a time when there is record private investment in resource development allowing ENGO’s to intervene in projects adds an element of instability that is the enemy of investment.
– Martin Luther King Jr.
Finally, some fairness in global reporting of greenhouse gas
George David Banks, The Hill, January 14, 2019
A few weeks ago, the Trump administration scored a major diplomatic victory in international climate policy in the industrial city of Katowice, Poland. While this win won’t receive much attention in the headlines, Trump’s State Department achieved a decades-old foreign policy goal that helps protect U.S. manufacturing and levels the playing field against major economic competitors, particularly China. At stake was transparency in the reporting of greenhouse gas (GHG) emissions and the creation of a single set of rules for all countries. Under the United Nations Framework Convention on Climate Change (UNFCCC), the United States faced more stringent reporting requirements than its competitors in the developing world. The Katowice agreement now requires others to do the same as the United States — report their GHG emissions across all sectors, including trade-sensitive industries like steel, chemicals and aluminum.
Our Take: You don’t have to be a part of the Paris Accord to make progress. George David Banks, the author of this piece, will be speaking at Meet Alaska in Anchorage on Friday, January 18th.
DIVIDED: Major Green Groups Not Endorsing Green New Deal Because It Goes Too Far
Power the Future, January 17, 2019
The left is growing increasingly divided over whether to support Alexandria Ocasio-Cortez’s socialist-inspired “Green New Deal.” While Ocasio-Cortez pushes a reluctant Nancy Pelosi to embrace her far-left agenda, organizations on the left, including major environmentalist groups, aren’t so sure they like Ocasio-Cortez’s plan. The New Republic reports that while 626 environmental groups have backed the “Green New Deal,” submitting a letter to Congress voicing their support, “six of the largest, most influential environmental advocacy groups didn’t sign it.”
Our Take: If you can’t get the Sierra Club, the National Resources Defense Council and the Audubon Society on board with your plan – you might be too radical. Daniel Turner, Executive Director of Power the Future, will be speaking at Meet Alaska in Anchorage on Friday, January 18th.
State says it will answer FERC’s engineering questions by June
Larry Persily, January 16, 2019
Alaska Gasline Development Corp. (AGDC) has told federal regulators it will be late June before the state-led project team can provide all the detailed engineering data requested in December for the proposed Alaska LNG project’s gas treatment plant at Prudhoe Bay and gas liquefaction plant in Nikiski. AGDC on Jan. 15 responded to 76 technical engineering data requests submitted Dec. 26 by the Federal Energy Regulatory Commission (FERC), which is preparing the project’s environmental impact statement. The state corporation answered five of the requests. It said it would provide responses to 43 of the questions by March 1, 22 by May 3 and the last six by June 28. However, that is not the end of the data requests.
Our Take: What to watch for – additional state funding from the legislature. With only about $15 million left going into the new fiscal year, the agency will need more money to continue.
Alaska House remains disorganized as Senate prepares for session ahead
Sean Maguire, KTUU, January 15, 2019
The Alaska House of Representatives gaveled into session Tuesday afternoon, but members were unable to organize a functional coalition or elect a House Speaker. For weeks, members from both parties have been working behind the scenes to establish a majority in the House without a result. Lt. Gov. Kevin Meyer gaveled the House into session and began swearing lawmakers in after the pledge of allegiance and state song. A controversy erupted when Meyer tried to deliver a note from Gov. Mike Dunleavy to House Republicans regarding the vacant seat for House District 13.
Our Take: Representative Gary Knopp must have an incredible plan in mind to allow this to continue. Thank goodness the Senate is organized and working.
U.S.-Qatar Energy Partnership Has Russia On Edge
Tim Daiss, OilPrice.Com, January 15, 2019
It’s been well noted on my OilPrice.com posts over the past year that President Donald Trump isn’t happy with where and even how much of Europe procures its natural gas. It’s still been less than a year when Trump shocked media both at home and abroad with his tongue lashing of EU members and more poignantly Germany over its continued reliance on geopolitically charged Russian natural gas. As a refresher, in early July Trump lashed out at long-time, strategic ally Germany for supporting the Russian-backed Nordstream 2 gas pipeline, stating that Berlin had become “a captive to Russia”, while he criticized German leaders for failing to raise defense spending more. In fact, Trump unashamedly jabbed Germany in front of an international audience and a host of media just before a NATO summit in Brussels, adding that it was “very inappropriate” that the U.S. was paying for European defense against Russia.
First U.S. crude cargoes head to China since trade breakthrough: sources
Collin Eaton, Reuters, January 15, 2018
The vessels left Galveston, Texas, last month and are scheduled to arrive at Chinese ports between late January and early March, according to shipbrokers and vessel tracking data. The shipments mark a change since Chinese buyers largely began avoiding U.S. oil during the trade dispute that flared last summer. “It looks like China has resumed purchasing U.S. crude,” one U.S.-based shipbroking source said. The person, who declined to be identified because he was not authorized to speak publicly about the matter, said the destination data could yet change. China is the world’s biggest crude importer and became a top buyer of U.S. crude after Washington lifted a 40-year ban on shipments in late 2015. It imported 325,000 barrels per day (bpd) of U.S. crude in the first nine months of 2018, customs data showed.
Colorado Supreme Court rules in favor of oil and gas regulators in Martinez environmental case
Blair Miller, KMGH-TV, January 14, 2019
The Colorado Supreme Court on Monday overturned a lower court’s decision that said the Colorado Oil and Gas Conservation Commission was required to weigh the impact of oil and gas development on public health and the environment in deciding whether to approve new drilling permits and rules pertaining to the oil and gas industry in Colorado. Colorado Supreme Court Justice Richard Gabriel wrote the unanimous 7-0 decision that was released Monday, which found that the COGCC “properly declined to engage in rulemaking to consider a rule” proposed in 2013 by Xiuhtezcatl Martinez and a group of Boulder teenagers.
Gas board moving ‘one step at a time’ after shake-up
Margaret Kriz Hobson, E & E News, January 15, 2019
Alaska Gov. Mike Dunleavy (R) last week shook up the Alaska Gasline Development Corp. leadership by appointing four new members to the agency’s seven-person board of directors. Days later, the new agency board held its first meeting, electing Dunleavy appointee Doug Smith as board chairman. Then the new team promptly fired AGDC President Keith Meyer, who had been hired by Dunleavy’s predecessor, Bill Walker (I). In Meyer’s place, the board named Joe Dubler as interim president beginning Feb. 1. AGDC isn’t planning to hire a new, full-time president for the immediate future, according to board President Smith (Energywire, Jan. 11).
OPEC Weighs a First-Ever Influence Campaign in the U.S.
Benoit Faucon and Timothy Puko, January 11, 2019
OPEC is debating an aggressive public-influence campaign aimed at U.S. lawmakers and the White House, a first in its six-decade history, according to officials at the organization. The proposed message is simple: OPEC plays a vital role in helping the U.S. economy. Although officials at the Organization of the Petroleum Exporting Countries don’t plan to meet directly with politicians and policy makers, the case for a lobbying effort has taken on new urgency. Members fear OPEC could fall under U.S. antitrust laws amid threats from the Trump administration and a barrage of tweets from President Trump accusing the group of inflating oil prices.
Oil slipped to around $60 a barrel on Monday after data showed weakening imports and exports in China, the world’s second-largest oil consumer, raising the prospect of a slowdown in fuel demand. China’s exports fell by the most in two years in December while imports contracted, official figures showed, pointing to further weakness in what is also the world’s second-largest economy.
Memo: Staff would be affected by unorganized Alaska House
Associated Press, January 11, 2019
The Alaska Legislature’s human resources manager says legislative staff will be affected if the House does not organize a majority. Legislative Affairs Agency Human Resource Manager Skiff Lobaugh, in a memo, says the current speaker, Democrat Bryce Edgmon, temporarily approved staff using interim funding that extends through Tuesday, when the new session begins. But Lobaugh says if the House does not organize, session staff would not be considered authorized starting Wednesday, and having them work could raise liability issues.
Our Take: #leadershipnow. Not paying staff who moved to Juneau is a bad way to start the session, not to mention the impact this will have on the ability of the Governor to advance his priorities – like strengthening public safety.
What’s Happening to Alberta’s Oil?
Petro Industry News, January 2, 2019
It’s no secret that the state of Alberta’s oil economy is turbulent, with a recent price collapse triggering fears of economic contagion. In the face of a downturn the Liberals aren’t holding back on scaling down operations, launching a series of strategic moves designed to curb production. This includes the introduction of new regulations and energy-hostile bills, as well as the withdrawal of tax incentives and abandonment of pipeline options.
Our Take: Policy matters. As Senator Wielechowski, once again, introduces legislation that is meant to reduce production, and thereby reduce income to the state, Alaska can learn from Alberta. Their “hostile” policies could cost Alberta $5 billion. Let’s not go there Alaska.