Headlamp –Tuesday’s Tougher Tailpipe standards; US and China are talking.

November 13, 2018 | Posted in : News

Jason Hopkins, The Daily Caller, November 13, 2018

In what may be the biggest exception yet to its deregulation agenda, the Trump administration is expected to announce tougher tailpipe standards for heavy-duty trucks. Billed as the “Cleaner Trucks Initiative,” Acting Administrator Andrew Wheeler and other Environmental Protection Agency (EPA) officials are due to announce stricter regulations for big trucks, according to sources who spoke with E&E News. The new standards aim to reduce smog-forming nitrogen oxide, better known as “NOx” that is emitted from big rigs. NOx is known to have a number of detrimental effects to the environment and human health, which can exacerbate asthma and cause inflammation of respiratory airwaves.

Our Take: Industry representatives and clean air advocates appear to agree on this. Trucking employs over 13,700 people in Alaska, 1 out of every 19 workers. Trucking pays over 800 million dollars in wages annually with an average industry salary of $56,283.

Opec lowers oil demand growth forecast and warns of oversupply
Anji Raval, Financial Times, November 13, 2018

Opec has again lowered its forecast for 2019 oil demand growth in a further sign Saudi Arabia and its partners inside and outside the cartel could be forced to cut supplies to bring the market into balance. Opec’s research arm said on Tuesday world oil demand was forecast to grow by 1.29m barrels a day next year, which is about 70,000 b/d lower than last month’s forecast and sharply down on the 1.45m b/d it forecast in July. Worries are mounting about a slowdown in the world economy, trade tensions and emerging market countries’ currency weakness, and how these will impact on oil demand.


Factbox: Key oil forecasts from the IEA’s World Energy Outlook
S & P Global Platts, November 13, 2018

The International Energy Agency on Tuesday published its latest World Energy Outlook, containing closely watched, long-term forecasts for energy supply and demand to 2040. Below are some of the key projections for the oil sector:

Big Oil Is Now Thrifty—but That Comes at a Cost
Sarah Kent & Bradley Olson, The Wall Street Journal, November 13, 2018

Oil prices may have weakened recently, but they’re up strongly from lows just a few years back. Few executives, however, at the world’s integrated oil giants have been talking about ramping up spending. That raises a big question: Can companies keep a lid on spending and keep the crude flowing? The oil business works like a treadmill. To maintain production levels, companies have to keep approving new projects and finding, or buying new, untapped deposits. In the industry, this is called replacing reserves. To guarantee output growth, firms have historically tried to at least replace every barrel they take out of the ground and sell.

White House economic advisor Kudlow says US is speaking again with China on trade
Liz Moyer, CNBC, November 13, 2018

Top White House economic advisor Larry Kudlow said Tuesday the U.S. is talking with China again on trade. “I think that’s very, very, very positive,” he said, confirming reports that Treasury Secretary Steven Mnuchin has restarted trade talks with his Chinese counterpart. President Donald Trump said Nov. 1 he had a conversation with China’s President Xi Jinping, and the two sides plan to discuss trade at the Nov. 30-Dec.1 G-20 summit of world leaders in Argentina. Talks between the U.S. and China had stalled this fall amid an escalating tariff battle.

Our Take: Kudlow also highlights the strength of US communications with the EU and Japan. Strengthening our relationships with those allies certainly should get China’s attention and strengthen the US negotiating position. Read the next headline…

First U.S. LNG cargo since 10 percent tariff enacted arrives in China: data
Jessica Jaganathan, Reuters, November 11, 2018

A liquefied natural gas (LNG) cargo from the United States has arrived in China, the first such cargo since Beijing imposed a tariff on U.S. imports, shipping data from Refinitiv Eikon showed on Monday. China, the second-biggest importer of LNG globally after Japan, announced in September a 10 percent tariff on U.S. LNG imports as part of an escalating trade war between the world’s two biggest economies. Since the tariffs were announced, Chinese companies have largely been diverting U.S. shipments to other countries, trade sources said. This is the first U.S. LNG cargo to be shipped to China since Sept. 10, the Eikon shipping data showed. The cargo was shipped on tanker Ribera Duero Knutsen from the Sabine Pass terminal operated by Cheniere Energy.


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More $ for Alaska LNG? The power of the pipeline; Oil Pucks and Pellets

November 12, 2018 | Posted in : News

From the weekly One Alaska Update – Governor Walker’s Budget:

“One of the things we’re working on is a sustainable and strategic budget for the next Governor to work from. It will continue to make Alaska safer by funding troopers, courts, VPSOs, 911 capability, and opioid crisis response programs under the Public Safety Action Plan. It will include a healthy capital budget to drive Alaska’s economy, as well as investment in our tourism and seafood sectors, and the AKLNG project. It will forward fund education, to make sure districts have the resources they need to ensure each of Alaska’s children has a stable, bright, and safe future in our state. The budget should be finalized and made public by the end of the month.

Our Take: Governor-elect Dunleavy will inherit this budget. With former Governor Sean Parnell leading the transition on Alaska LNG – expect a serious review of any proposed funds for Alaska LNG.

OPEC and partners ‘will do what it takes’ to keep oil market balanced: Saudi energy minister Falih
S & P Global Platts, November 12, 2018

OPEC and its 10 non-OPEC partners would need to cut 1 million b/d from October oil production levels to avoid a supply glut in early 2019, according to the group’s analysis, Saudi energy minister Khalid al-Falih said Monday. But because market conditions could change by the time the coalition meets December 6-7 in Vienna, a key monitoring committee that met Sunday did not recommend specific cuts, he said. “We are going to be flexible,” Falih said at the ADIPEC conference in Abu Dhabi, a day after co-chairing the OPEC/non-OPEC monitoring committee meeting. “There are a lot of assumptions that may change in two to three weeks time.” But, he added, OPEC and its partners “will do what it takes” to keep the market balanced, with Saudi Arabia leading the way but cutting its crude exports by about 500,000 b/d in December.

Oil pucks and pellets; Canada eyes new ways to move stranded crude
Rod Nickel, Reuters, November 11, 2018

Canada’s biggest railroad says it is attracting interest from oil producers in its effort to move crude in solid, puck-like form, as clogged pipelines divert more oil to riskier rail transport. Congested pipelines have stranded much of Canada’s crude in Alberta, driving discounts to record-high levels. Canadian heavy crude traded on Friday for less than one-third of the U.S. benchmark light oil price. The latest blow to the sector landed on Thursday, when a U.S. court ruled construction must stop on TransCanada Corp’s (TRP.TO) Keystone XL pipeline.

Our Take: Necessity is the mother of invention.


                  Canada’s Crude Problem: Lots of Oil With Nowhere to Go

From the Washington Examiner Daily on Energy:

TRUMP LEVERAGES U.S. ENERGY FOR BIG GAINS ON THE GLOBAL STAGE: The tip of the spear when it comes to Trump’s diplomacy is not the tongue of the diplomat, but the power of the pipeline.

The United States is now the world’s No. 1 producer of oil and natural gas, eating away at Washington’s past dependence on foreign producers and oil cartels — that is, petrostates like Iran and Russia and autocracies around the world.

Trump calls it “energy dominance,” and the freedom it provides has undergirded many of the president’s decisions, from moving the U.S. embassy to Jerusalem to re-imposing sanctions on Iran, according to administration sources.

“It allows us to impose these sanctions and not upset the world oil market very much,” said Deputy Energy Secretary Dan Brouillette. “It’s a fundamentally different posture to be in, in regard to our foreign policy. … It just gives us leverage.”

In negotiations with European, Chinese, and other world leaders, the president has made energy a central theme. Earlier this year, Trump even taunted NATO members at a summit in Brussels, calling them “captives” to Russian energy.

Above all, the comment was aimed at Germany, which is working with the Russian state-run energy firm Gazprom to build the Nord Stream 2 pipeline.

Cramer: ‘We are at war against the Chinese,’ and it’s not just over trade
Matthew J. Belvedere, CNBC, November 12, 2018

CNBC’s Jim Cramer said on Monday he does not expect a trade deal between the United States and China any time soon. “I think we are at war against the Chinese, and it’s not over. And the war is not just trade,” Cramer said on “Squawk on the Street,” taking cues from the hardline speech that White House trade advisor Peter Navarro delivered last week. Navarro, a longtime China critic, said Friday any agreement between Washington and Beijing to end their trade dispute, which resulted in back-and-forth tariffs, will be on “President Donald J. Trump’s terms, not Wall Street terms.” Cramer said the tone of Navarro’s speech on economics reminded him of the kind of rhetoric that then-President Ronald Reagan used decades ago during the Cold War with Russia over nuclear arms. “That’s a speech that Reagan gave against the Soviet Union. And that didn’t end well for the Soviet Union,” said Cramer, the host of “Mad Money.” “The G-20 is going to be so important.”


China calls for open world economy but work remains on landmark trade pact

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Combating climate change or boosting oil and gas production? How about BOTH!

November 9, 2018 | Posted in : News

In Washington, politics around oil, climate change in flux
James Osborne, The Houston Chronicle, November 7, 2018

After almost a decade of oil-friendly Republicans controlling Congress, the energy sector faced a dramatically different political landscape Wednesday. Where Republicans pushed an end to the oil export ban and the relaxing of environmental regulations around drilling, the new Democratic-led House is expected to be more interested in combating climate change than boosting oil and gas production.

Our Take: With a new administration in Alaska that is more interested in boosting oil and gas production and the Trump administration and the US Senate feeling the same way – this could get interesting. The notion that you have to choose on path over the other is wrong. US house democrats would be wise to recognize that.


After defeat in West, U.S. carbon tax push looks East
Gregory Scruggs, Reuters, November 8, 2018

Federal judge blocks Keystone XL pipeline, saying Trump administration review ignored ‘inconvenient’ climate change facts
Fred Barbash, Allyson Chiu and Juliet Eilperin, The Washington Post, November 9, 2018

December oil lease sale scheduled for federal lands in Arctic Alaska
Yereth Rosen, Arctic Today, November 9, 2018

About 2.85 million acres of federal territory in Arctic Alaska will be offered next month for oil and gas exploration, officials announced in a Federal Register notice. The annual oil and gas lease sale for the National Petroleum Reserve in Alaska, a 23 million-acre swath of land on the western side of Alaska’s North Slope, will be held on Dec. 12, the Bureau of Land Management said in the notice. The lease sale will put 254 tracts on the auction block, the notice said. That’s much less land than was offered in last year’s NPR-A lease sale. That sale offered 900 tracts spread over 10.3 million acres, the most ever put up for action in the reserve’s history. Despite the vast amount of land offered, the 2017 lease sale attracted only seven bids.

Our Take: The investment climate has changed since 2017- Headlamp hopes to see a healthy lease sale!

From the Washington Examiner, Daily on Energy:

MEANWHILE… PROGRESS ON TRUMP’S ENERGY DOMINANCE AGENDA: Poland’s state-run oil company signed a 24-year contract on Thursday to buy liquefied natural gas from the U.S.-based company Cheniere, a transaction hailed as a victory for Trump’s energy dominance agenda meant to move Europe from dependence on Russian energy. “This LNG deal with Poland is a major step forward for our ally’s effort to become less reliant on Russian natural gas, which Vladimir Putin has used to bully and intimidate the Polish people,” said Republican Sen. Bill Cassidy of Louisiana, where Cheniere is based. The company is the largest LNG exporter in the country.

Cheniere signed the deal with Polish Oil and Gas Company with Energy Secretary Rick Perry and Polish President Andrzej Duda present, according to a tweet by the company with photos of Perry and Duda presiding over the signing, saying it was “honored” to announce the deal in their presence.

Trump’s energy dominance agenda hinges on increasing natural gas exports to make the U.S. a bigger player in the global energy market, while diversifying supplies away from hostile regimes.

Our Take: Love to see the efforts to increase natural gas exports – good for Alaska LNG!

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Dunleavy announcing team; Around the world in oil & gas – Canada, Africa, Russia

November 8, 2018 | Posted in : News

Governor-elect Dunleavy set to announce members of leadership team
Tegan Hanlon, Annie Zak, Anchorage Daily News, November 7, 2018

Dunleavy will announce “several members of his transition team, and cabinet appointments” on Thursday, according to an email from his team Wednesday. With Dunleavy’s win, the Alaska Republican Party will take back the governorship after four years of an independent in office. Republicans are also poised to hold the majority in the state House and state Senate. With Alaska U.S. Rep. Don Young notching yet another re-election Tuesday, Alaska’s congressional delegation remains all Republican.

Our Take:   If we had to bet, expect to see more private sector folks than life-long bureaucrats. #electionsmatter

Republicans organize Alaska House, choose Talerico as speaker
Devin Kelly, Anchorage Daily News, November 7, 2018

A Republican-controlled Alaska House of Representatives next session will be led by Rep. David Talerico, a retired miner from Healy, as part of a sweeping leadership shake-up in the chamber after Tuesday night’s election. Talerico announced the changes Wednesday afternoon at a news conference at the headquarters of the Associated General Contractors of Alaska in South Anchorage. He was flanked by 19 other members of the Republican House caucus, many wearing huge smiles.

Our Take: So great to see Reps Pruitt and Wilson – true budget hawks – co-chairing House Finance. This is the best shot Alaska has at getting it’s government spending reduced to a sustainable level.

Trudeau’s Reforms Won’t Break Pipeline Logjam, Oil Groups Warn
Josh Wingrove, Bloomberg, November 8, 2018

It’s a rough time in Canada’s oil patch, and the energy industry is warning that Justin Trudeau is about to make it worse. The bottom has fallen out of Canadian heavy crude prices, with their discount relative to the U.S. benchmark near a record amid a supply glut and persistent transport constraints. Trudeau’s government, meanwhile, is both trying to complete a pipeline expansion project it bought this spring and pass a series of legislative reforms on the approval process for major projects.

This Oil Boom Is Going Under The Radar
Irina Slav, OilPrice.Com, November 7, 2018

If anyone needed any further proof that Africa is shaping up as the next major hot spot in oil and gas, this year’s edition of Africa Oil Week will provide it. The event launched amid higher oil prices and booming exploration activity across the continent with supermajors and independents both upbeat about their prospects there. If we ignore the waywardness of oil prices, which served as the basis for Africa’s oil and gas recovery, and which can once again plunge local oil producers into recession should they drop, prospects are bright. A PwC report on the state of the oil industry of Africa, released on the first day of the event, noted how local oil and gas field operators had adjusted to the lower-price environment and are now in a position to reap the benefits of higher international prices for oil while their costs remain low.

Up to 9 million tons of Russian LNG will be reloaded in Norwegian waters during 2019
Malte Humpert, High North News, November 8, 2018

The Norwegian Coastal Administration (Kystverket) has released new information about the location, duration, and scope of Tschudi’s ship-to-ship transfer operation of liquefied natural gas in cooperation with Novatek’s Arctic Yamal project. According to regulatory documents the transshipments will be conducted in the Sarnesfjord and Outer Kåfjord area in the Nordkapp municipality, to the southwest of Honningsvåg. Operations are expected to begin before the end of the month and the company expects to reload up to 140 shipments between November 2018 and June 2019, or on average one every 36 hours. Tschudi Arctic Transit (TAT), a subsidiary of the Tschudi Group, will conduct up to 16 reloading operations in 2018 and 21 each month between January and June 2019. Each shipment will consist of around 80,000 tons of liquefied natural gas. Novatek’s Yamal LNG plant can produce up to 16.5 million tons of LNG annually. The permitted number of 140 shipments would be sufficient to reload the production output of the facility during the first six months of 2019. Neither Novatek nor Tschudi have made any public statements about their plans for the operation.

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With great power comes great responsibility; Russia wants new ice zones.

November 7, 2018 | Posted in : News

ELECTION RESULTS: Republicans set to control executive, legislative branches
Steve Quinn, KTVA, November 7, 2018

Republicans are poised to control the executive branch and both chambers of the legislative branch for the first time since 2014. That’s when Mike Chenault served as House Speaker and Charlie Huggins served as Senate President during the Sean Parnell administration.   Former state Sen. Mike Dunleavy, a Wasilla Republican, held a decisive lead over Democratic challenger Mark Begich early Wednesday morning and is poised to succeed incumbent independent Gov. Bill Walker as the state’s 14th governor. “I’m going to hire the right people to do the best job possible, and we’re going to implement our agenda,” Dunleavy said. “Public safety is number one.”

Our Take: Now the real work begins.

Big Oil Wins Ballot Initiatives In Colorado, Washington
Tsvetna Paraskova, OilPrice.Com, November 7, 2018

Big Oil has poured a lot of money to defeat energy-restricting ballot initiatives in various states in the midterm elections, and it succeeded in two key votes. Voters in Colorado were asked to vote on a ballot proposition to increase the setback distance for drilling oil and gas wells by five times to 2,500 feet, which would have put a lot of land off limits for new developments. Voters in Washington State voted on a proposal to instate a U.S. first state-wide carbon tax. Both initiatives failed, and both ‘no’ camps were supported by Big Oil.

Our Take: In Alaska, Colorado & Washington, voters chose not to support “energy-restricting ballot initiatives.”   Using the term “big oil” downplays the most important message in these victories – voters, aka people, don’t support a keep-it-in-the-ground approach to resource development.   Congrats to all three states!!

Here is a map to show how Alaskans voted, by precinct, to defeat Ballot Measure 1

Russia looks to reduce ice-class demands for Arctic shipping
Atle Staalesen, The Independent Barents Observer, November 7, 2018

The Russian Transport Ministry aims for a revision of shipping regulations in Arctic waters. In a new normative act, the ministry calls for the introduction of new zones with lower ice-class requirements. Currently, the Arctic sea route is divided into seven parts with different ice-class requirements. The new regulations will diversify those areas. “It is necessary to specify criteria for the ships’ access to the waters of the Northern Sea Route and add several areas to the currently existing seven areas,” the ministry says. “This will enable us to create regions with homogenous ice conditions and provide access of ships to parts of the Northern Sea Route with light ice conditions.” The new regulations are described by RIA Novosti and also referred to by the ministry itself. The regime is due to come into effect in May 2019.

From the Washington Examiner Daily on Energy:

EPA TAKES CONTROVERSIAL NEW STEP TO MAKE THINGS EASIER FOR COAL PLANTS: The Environmental Protection Agency took steps Wednesday morning to clarify federal regulations that have in the past made it harder for coal power plants to make efficiency upgrades without triggering environmental reviews.

The change to the New Source Review permitting program has been “long-delayed” for nearly a decade, EPA said in its announcement.

“Previously, New Source Review regularly discouraged companies from employing the latest energy-efficient equipment,” said EPA Acting Administrator Andrew Wheeler. “Our updates will remove undue regulatory barriers, provide greater certainty to America’s job creators and energy providers, and incentivize upgrades that will improve air quality.”

What the change does: The change seeks to clarify “project aggregation” under the permitting requirements, which has been a sticking point for coal and other fossil power plants in making efficiency upgrades. Aggregation can take individual changes to a plant to count as a new power plant altogether, making it harder for plants to get permits to operate under the Clean Air Act.

Our Take: Making it easier for coal power plants to run more efficiently seems like a no-brainer.

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Round 2: Sturgeon, the Supremes and States Rights. Phaseout of fossil fuels?

November 6, 2018 | Posted in : News

Justices sound favorable to Alaska hunter with hovercraft
Associated Press, November 5, 2018

The Supreme Court sounded skeptical Monday of the National Park Service’s authority to prevent an Alaskan moose hunter from using his motorized rubber boat to access remote areas of the state. The justices heard arguments in a case that tests the limits of the federal government’s authority in a state in which more than 60 percent of the land is federally owned. The state and moose hunter John Sturgeon are arguing that the Park Service cannot enforce a national ban on amphibious vehicles known as hovercraft on a river in Alaska for which the state claims ownership, even though it runs through a national conservation area. Sturgeon won an earlier round at the Supreme Court.

Our Take: Hooray for John Sturgeon! Headlamp hopes for the best. As you consider who to vote for today for Governor, remember that Mike Dunleavy supports Sturgeon and states rights, while Mark Begich does not. Dunleavy is also a “No on One” while Begich is a “Yes”.

More and more Democrats are running on a total phaseout of fossil fuels
Josh Siegel, October 25, 2018

Democrats from all walks of political office are going for broke in the midterm elections on transitioning the U.S. electricity system away from fossil fuels to more quickly combat climate change.   More than 1,400 candidates running for every level of government office this November have committed to some form of a goal to mandate 100 percent clean, zero-emissions electricity in their state by 2050, according to the environmental group League of Conservation Voters.

Our Take: Campaign rhetoric or an achievable goal?

Oil tumbles 2%, briefly enters bear market, after Trump grants Iran sanctions waivers
Reuters, November 6, 2018

Oil prices tumbled more than 2 percent on Tuesday, briefly entering a bear market, after the Trump administration granted sanctions waivers that will allow some of Iran’s biggest customers to continue importing its oil. U.S. West Texas Intermediate (WTI) crude futures dropped $1.33, or 2.1 percent, to $61.77 a barrel by 11:30 a.m. ET (1630 GMT), after six straight days of losses. International Brent crude oil futures were down $1.50, or 2.1 percent, at $71.67 a barrel, after breaking a five-day losing streak on Monday. The United States on Monday restored sanctions targeting Iran’s oil, banking and transport sectors and threatened more action to stop what Washington called its “outlaw” policies, steps Tehran called economic warfare and vowed to defy.

Iran Sanctions Won’t Fuel Oil Prices for Long
Sarah MacFarlane, The Wall Street Journal, November 3, 2018

Rosneft in stand-off with oil buyers as it seeks sanctions protection
Olga Yagova, Reuters, November 6, 2018

Rosneft wants its Western oil buyers to accept new terms and pay penalties from 2019 if they fail to pay for supplies in the event that new U.S. sanctions on the Russian energy major disrupt its oil sales, according to trading sources and Rosneft’s draft contracts. The buyers — including some of the world’s biggest oil companies and traders such as BP, Royal Dutch Shell, Total, Vitol and Gunvor — are fiercely opposing the move, according to trading sources. The stand-off is likely to force Rosneft to soften its demands, the sources said, adding that the development shows the extent to which the state-owned oil giant is concerned about widening U.S. sanctions on Russia. “It is all very uncertain with the sanctions and Rosneft is clearly worried and is trying to minimize possible risks,” said a trading source with a European major. “We said no, we couldn’t accept this,” he added.

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739,795 Reasons to Vote No on One

November 5, 2018 | Posted in : News

Every Alaskan has the potential to be negatively impacted if Ballot Measure One passes. That is why leaders who represent Alaskans from all walks of life are opposing the measure.

Here is what they have to say about why they are voting “No on One!”

Permanent Fund Defenders:
Larry Cash, Permanent Fund Trustee, 2013-2017:

“Ballot Measure 1 threatens to devastate economic growth in our state, which is just starting to recover from the dramatic drop in the price of oil of 2016. Proposition 1 creates unnecessary and undefined regulations that are not needed and are overreaching. This will negatively impact growth of the Permanent Fund, reducing Permanent Fund payments to our citizens immediately and long term. “

Our Take: If we have learned anything this election cycle, it is how strongly Alaskans feel about keeping their PFD and increasing the payments, not reducing them.

Native Corporations:
Rex Rock Sr, whaling captain, President and CEO of Arctic Slope Regional Corporation:

“The passage of Ballot Measure 1 would be catastrophic when it comes to its adverse impacts on rural Alaska. Burdensome and unnecessary regulations when it comes to infrastructure maintenance and improvements would either cause a lag in completing important projects across my region or make them economically unfeasible altogether.”

Our Take: No sewer improvements, no reliable affordable sources of energy, like natural gas, for rural Alaska.

Outdoor Enthusiasts:
John Sturgeon, Craig Compeau, Rick Rydell, Frank and Sue Entsminger, Kevin Kehoe, and Eddie Grasser:

“As written, Ballot Measure 1 works to restrict Alaskan outdoor enthusiasts’ access to lands and waters.”

Many areas and outdoor activities would be subject to new permitting criteria, public comment periods, public meetings, and increased potential for lawsuits by Outside environmental groups. Areas and activities potentially affected:
– Nearly all waters in Alaska, potentially including coastal marine waters
– Landing small planes on lakes, river beds, and along the coast of Alaska
– Crossing streams, rivers or lakes in boats or all-terrain vehicles
– Access to boat launches, docks, river banks and special areas
– Any onshore activity that affects areas in close proximity to waters that may have fish”

Our Take: This would be disastrous for those who love to fish, hunt and trap.

Fisheries Managers, Scientists and Regulators:
Randy Bates, Ed Fogels, Kerry Howard, Thomas E. Irwin, Bill Jeffress, Doug Vincent Lang, Bob Loeffler, Ginny Litchfield, Slim Morstad and Marty K. Rutherford:

“Ballot Measure 1 replaces Alaska’s scientific process for identifying, studying and permitting fish habitat with new and untested regulations. Ballot Measure 1 proposes a system that is unworkable, unmanageable and unaffordable.”

Our Take: Alaska is recognized for its current permitting system around the country and the world. Replacing that system with something that is vague and confusing will not improve the current system, nor will it protect salmon.

Labor Unions:
Vince Beltrami, President, AFL-CIO:

“Ballot Measure 1 is wrong for Alaska and is bad for jobs. It’s that simple,”

Our Take: We couldn’t agree more.



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Uncertainty is the enemy of investment- a good reason to Vote No on 1!

November 2, 2018 | Posted in : News

To carry out the salmon habitat measure, Alaska must decide what ‘significant’ means
Elizabeth Harball, Alaska’s Energy Desk, November 1, 2018

Alaskans will soon vote on Ballot Measure 1, the controversial initiative aimed at protecting Alaska’s salmon habitat. Companies behind big proposed mines and oil developments have helped raise millions of dollars to campaign against it. But beyond big resource development projects, opponents say Ballot Measure 1 could hinder projects like road improvements. Supporters counter that it was specifically written to allow vital infrastructure projects to go forward. So how will the ballot measure affect mid-sized projects used by everyday Alaskans? The answer isn’t clear-cut. Part of the uncertainty on how the salmon habitat initiative could affect things like small-scale hydro projects or mom-and-pop placer mines hinges on a single phrase in the ballot measure: “significant adverse effects.”

Our Take:   Uncertainty is the enemy of investment. Even the proponents of BM1 acknowledge that critical elements of this proposed new law will be determined AFTER Alaskans vote on the initiative.   Can you imagine how many lawsuits can be filed over three simple words “significant adverse effects?” Headlamp can. Read Ed Kings’ piece below on the status of our economy. We are not out of a recession yet. Why would we do anything to harm our economy?

Alaska by the Numbers – November Edition
Ed King, King Economics Group, November 1, 2018

Read about the big news that broke last month, and how it impacts Alaska’s economy.

Exxon, Chevron Profits Soar as Big Oil Returns to Dominance
Bradley Olson, The Wall Street Journal, November 2, 2018

Exxon Mobil Corp. and Chevron Corp. each reported their highest third-quarter profits in four years as the world’s largest oil companies appeared to have finally shaken off the malaise of a years long oil price crash. Exxon’s net income rose 57% to $6.24 billion as improved operations helped the company reap the benefits of higher prices for drilling and better refining margins. Chevron’s profits doubled to $4 billion and its production in the red-hot Permian basin in West Texas and New Mexico surged 80%.

White House officials are pushing back on the idea that a trade deal with China is imminent
CNBC, November 2, 2018

For a brief moment Friday, there was optimism in the market that the Trump administration was getting closer to a trade deal with China. But administration officials are telling CNBC that there is no indication of an imminent agreement. On Friday, a report that said President Donald Trump had asked U.S. officials to prepare a draft trade agreement with China sent the market higher. Then, after it became clear that the reported progress might not materialize, the Dow went negative. Three senior administration officials told CNBC on Friday that there is no indication of an imminent trade deal, despite some progress being made behind the scenes. Later Friday, Trump’s top economic advisor Larry Kudlow told CNBC’s “Halftime Report” that Trump had not asked his Cabinet to put together a draft trade deal.

From the Washington Examiner, Daily on Energy:

RICK PERRY IS OFF TO EUROPE NEXT WEEK TO SECURE LNG DEAL: Energy Secretary Rick Perry is off to Europe next week to continue discussions on energy security with Poland, Ukraine, Hungary and Czech Republic “to build on his recent efforts to elevate American energy partnerships in the region.”

Perry is also expected to announce a new liquified natural gas deal with Poland, Axios first reported on Thursday. The deal is part of the Trump plan to diversify the region’s energy supply away from Russia.

Our Take: Good for America and for Alaska LNG. China may have the demand, but the trade war and China’s questionable business practices don’t make them the best partner for Alaska LNG.

Cities Threatened by Climate Risk Still Getting AAA Bond Ratings
Christopher Flavelle, Bloomberg, November 2, 2018

Last fall, after a trio of deadly hurricanes, ratings companies warned vulnerable coastal cities to get ready for climate change — or face higher borrowing costs on the $3.9 trillion municipal bond market. Climate advocates cheered, hoping the prospect of downgrades would push local officials to better protect their residents from the effects of global warming. Twelve months, two catastrophic storms and thousands of credit ratings later, those companies have yet to downgrade a single city because of climate change. The companies, which include Moody’s Corp. and Fitch Ratings Ltd., say that’s because cities are taking steps to protect themselves.

Our Take: “climate advocates cheered” at the thought of their communities facing higher borrowing costs. Nothing says “I care” about my community more than hoping bad things happen to it. SMH.

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Just the facts at FERC; D’s get an F for lack of climate change plan.

November 1, 2018 | Posted in : News

New energy commission head pledges to avoid political influence
Timothy Cama, The Hill, October 31, 2018

The newly minted chairman of the Federal Energy Regulatory Commission (FERC) says he is committing to keeping the agency neutral and avoiding political influence. Neil Chatterjee , a Republican, was tapped last week by President Trump to succeed Kevin McIntyre , another Republican, atop FERC. McIntyre will remain as a commissioner on the body, which has five spots but only four commissioners. FERC and the companies and organizations that deal with it say they value the agency’s independence and neutrality — something which Chatterjee echoed Wednesday. “No one was more committed to ensure the depoliticization of the agency and not allowing political interference than Kevin McIntyre,” Chatterjee told reporters Wednesday at FERC’s Washington, D.C. headquarters, adding that he wants to maintain the example McIntyre set.

Interior gas officials agree to explore Siemens’ plan
Elwood Brehmer, Alaska Journal of Commerce, October 31, 2018

Utility officials have signed a one-year agreement with Siemens Government Technologies to further investigate the company’s plan to get more and cheaper natural gas to Interior Alaska. The Interior Gas Utility board of directors voted 4-2 on Oct. 23 to enter into a memorandum of understanding with Siemens. Company representatives have said for more than a year that they, leading a consortium, can put together an LNG supply chain that is competitive with the Interior Energy Project plan IGU and the Alaska Industrial Development and Export Authority have already agreed to.

Our Take: This project has been floundering. Can a private sector company move the project forward, where the government has failed?   Rhetorical question.

Two offtake contracts already signed for LNG Canada
Nelson Bennett, Biz, October 26, 2018

The $40 billion LNG Canada project is not the only large liquefied natural gas project proposed in the world, several of which involve some of the same partners involved in the Canadian project. It’s expected final investment decisions on some of those other projects could come in 2019. But the Kitimat project is “the most competitively advantaged project” of all of them, LNG Canada CEO Andy Calitz told a group of more than 200 businessmen and women at a Greater Vancouver Board of Trade (GVBOT) event Friday October26.

Our Take: Actually, the viewpoint of a loyal reader – A good lesson for new state leaders considering oil taxes- “Ultimately, Dakers said the NDP government’s decision to scrap the previously Liberal government’s special LNG taxes and approve a new “competitive tax structure” was what allowed the partners to pull the trigger and sanction the project.”

Democrats have no broad climate plan even as they prepare to win the House
The Guardian, November 1, 2018

Democrats don’t have a plan to address climate change comprehensively – or even to a significant degree – if they regain control of the US government in the near future, despite criticizing Republicans as the party of pollution. After failing to get conservatives on board to limit planet-warming gases through legislation or regulation, Democratic leaders in Washington are now wary of wading into another tough political fight, despite an intensifying environmental crisis. If Democrats win back the House in Tuesday’s midterm elections, their strategy is to hold oversight hearings on Donald Trump’s environmental rollbacks and pursue more incremental and popular measures, according to close observers and a senior Democratic aide.

Related: From the Washington Examiner Daily on Energy:

CHAMBER MAKES MIDTERMS ABOUT VOTING ON ENERGY: The Chamber of Commerce launched an 11th-hour campaign this week to get voters to cast their support behind energy jobs.

“In order to continue to harness our abundant natural resources and spur innovation, we need elected officials who support forward-looking energy policies,” said an email sent to supporters a week before the Nov. 6 midterm elections by the Chamber’s Global Energy Institute.

It explains that “Pro-energy” elected officials will help to ensure the energy industry is able to “improve all Americans’ access to abundant, affordable energy and to provide hundreds of thousands of good-paying jobs.”

It doesn’t say who to vote for in specific races, but links to their website where voters can research how both Senators and House members voted on key issues to see for themselves.

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Headlamp’s Halloween Horror – “I’m from the government and I’m here to help.”

October 31, 2018 | Posted in : News

What’s so special about the Mustang Field?
Rashah McChesney, Alaska’s Energy Desk, October 30, 2018

The Mustang Field is pretty unremarkable — in that it looks like the rest of the North Slope. Flat tundra stretches as far as the eye can see — and on top, all the signs of the oil industry. There’s a long gravel road, a big pad and some equipment. What is remarkable about this field is the type of investment it has gotten in the past decade. Specifically, about $95 million dollars in state or state-backed loans. Instead of being operated by one of the major players on the North Slope, it is run by a small, 13-year-old, independent oil company — Brooks Range Petroleum Corporation.

Our Take: “I’m from the government and I’m here to help.” There are so many scary aspects of this story, not the least of which is the government lending itself money before the law was changed to allow the transaction.

RPT-Next-wave LNG race hits hurdles in U.S.-China trade war
Julie Gordon, Scott DiSavino, Reuters, October 30, 2018

The delay of a U.S. Gulf Coast liquefied natural gas (LNG) export project has crystallized fears that the U.S. trade battle with China is hampering efforts to line up buyers needed to move ahead with multi-billion-dollar builds. The United States is positioning itself as the dominant provider of the supercooled fuel as Asian nations shift away from dirtier power sources like coal, and this month’s approval of a giant Canadian project led by Royal Dutch Shell bolstered enthusiasm for the sector overall in North America.

Our Take: Companies new to the LNG world “face a range of challenges from financing to contract pricing to pipeline access…” “This favors energy giants like Shell, Exxon Mobil Corp and Qatar Petroleum, all of which have projects in the works, along with Cheniere Energy, the leading independent U.S. LNG company.” If only the energy giants got involved with Alaska LNG again…


China Signals More Support Needed Amid Pressure on Economy
Bloomberg News, October 31, 2018

Crude oil is doing something it hasn’t done in years
Stephanie Landsman, CNBC, October 31, 2018

Energy expert John Kilduff sees an unusual phenomenon affecting crude oil and beaten-down stocks. According to the Again Capital founding partner, oil and stocks have embarked on the closest trading relationship since early 2016 and during the financial crisis sell-off. “This has been the highest correlation that I’ve seen in quite some time,” he said Tuesday on CNBC’s “Futures Now.” His latest thoughts came with U.S. benchmark West Texas Intermediate crude on track for its worst month in more than two years. WTI closed at $66.40 a barrel on Tuesday, while Brent crude settled at $76.23. “A lot of folks like to trade crude oil and other commodities to get away from the correlations you have in the stock market,” said Kilduff, a CNBC contributor. “But over the past 20 days, you can see where stocks peak out in early October. Crude oil peaked out in early October.”

BP post strongest quarter in 5 years
Josh Lewis, Upstream Online, October 30, 2018

UK supermajor BP saw profits rise during the third quarter of the year, posting its strongest underlying performance in more than five years. BP posted a profit of more than $3.35 billion for the three months to 30 September, an increase on last year’s $1.77 billion third quarter profit. “Our focus on safe and reliable operations and delivering our strategy is driving strong earnings and growing cash flow,” BP chief executive Bob Dudley said. “Operations are running well across BP and we’re bringing new, higher-margin barrels into production faster through efficient project execution.”

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