Headlamp – Don’t add bad policy to Alaska’s recession

August 21, 2017 | Posted in : News

Don’t add bad policy. While the American oil and gas sector was in the midst of its renaissance over the last decade, it was difficult to imagine a situation in which profits, jobs, and domestic energy production would slow down in any significant way. The energy industry, like any commodity producer, is accustomed to coping with business cycles and market price fluctuations. That resilience is threatened, though, by ill-conceived, counterproductive energy tax policies – like those on the table in Alaska.

Questions linger…The Alaska Gasline Development Corporation (AGDC) has committed to providing more information in January 2018 about its plans to relocate a Nikiski portion of the Kenai Spur Highway. They will analyze in October and November how this project may affect Cook Inlet commercial fisheries and examine other long-lingering questions of how the 807-mile natural gas pipeline it proposes to build from the North Slope to a liquefaction facility and export terminal in Nikiski could impact local employment, public services and industries.

Feige in the House! The Umiat oil field, now with a new owner after the previous one went broke, remains as promising yet as challenging as ever, with hopes to tap it facing daunting problems by its 100-mile distance from the nearest supply road. Even Umiat’s owner says the field will face “risks and challenges” never before encountered on the North Slope, or anywhere in the world for that matter. But Malamute Energy of Golden Valley, Minnesota, has one edge in developing the field that wouldn’t be apparent outside the industry — it’s got Corri Feige working for it.

A future so bright? Alaska, the final frontier, may be the next oil industry goldmine thanks to aggressive drilling, changing environmental policies, and a bullish administration. Not all Alaskans, however, are on board with the transition, and the issue is now more divisive than ever. In the past, Alaska has encouraged small companies to explore for oil within their state with incentives like a cashable oil tax credit program, implemented under Sarah Palin in 2007. However, just last month the state legislature voted to end the program, some voters citied that the program was, by any other name, a tax hike, and some stated that the incentive and its subsequent draw of prospectors in Alaska had gone too far. In fact, in the last few years after the bottoming out of oil prices, the state has made very minimal payments on outstanding tax credits. The State of Alaska owes almost $1 billion to oil companies, a staggering sum that comprises nearly a quarter of the entire state budget. Already this summer, two different oil companies announced that they’re freezing projects in Alaska because the state has failed to pay them for promised reimbursables. While Alaska has damaged its reputation as a worthy business partner in the oil industry, it’s likely that drilling won’t decline much. In fact, it will probably continue to boom. In May, Donald Trump announced that opening the vast Arctic National Wildlife Refuge to oil and gas drilling is among his top priorities, and was featured prominently in his 2018 budget proposal.

Ice, ice baby. On Monday, the Chinese icebreaker Xue Long was conducting research in the Norwegian Sea, sailing a back-and-forth path half-way between Bjørnøya and Jan Mayen. It is not known what specific research the vessel is doing in the Norwegian Sea. The vessel’s path can be tracked via the portal MarineTraffic.com. There are 96 crew members on board, including teams of Arctic and oceanographic researchers. This is the eighth Arctic expedition for Xue Long (which translates as Snow Dragon), but the first time the icebreaking research vessel has attempted to sail the Arctic rim, China’s state CGTN channel reports.

Mallot files with APOC. Lieutenant Governor Byron Mallott has officially filed a letter of intent to run for re-election. Mallott has previously said he intends to run as Governor Bill Walker’s running mate. Walker has still not officially filed his own letter of intent with the Alaska Public Offices Commission.

More than just names on the ballot. While Congress has debated repealing the Affordable Care Act, some doctors want to make sure that at least parts of the law remain in place in Alaska. They’re sponsoring two initiatives that could be on the ballot next year. One initiative would enshrine in state law the Medicaid expansion that Gov. Bill Walker executed. The other initiative would include several other provisions of the Affordable Care Act in state law. Anchorage Dr. Graham Glass is one of the sponsors of the Medicaid expansion initiative. His neurology and sleep medicine practice has seen a difference from the expansion.

Actions have consequences. An oil and gas company is suing the state over $5.3 million dollars in unpaid cash credits. Miller Energy Resources wants anything that happened before it went bankrupt in 2015 to be off-limits to state tax auditors, according to the lawsuit and the company’s bankruptcy filings. And, until the lawsuit is resolved, it wants the state to set aside a chunk of the cash credit payments it’s owed — so it won’t be paid to other companies in the meantime. The lawsuit is a new snarl in the complicated knot of the state’s controversial — and now disappearing — cashable oil and gas tax credits program.

First Reads:

Don’t add bad policy to oil industry headwinds
Washington Examiner, William F. Shughart II, August 21, 2017

AGDC to answer long-running questions
Peninsula Clarion, Ben Boettger, August 19, 2017

A big North Slope oil field remains alive despite bankruptcy, isolation
Alaska Dispatch News, Alex DeMarban, August 20, 2017

Alaska has a choice to make regarding its oil future
Investment Digest, August 19, 2017

Chinese icebreaker navigates across central Arctic
Arctic Now/The Barents Observer, Thomas Nilsen, August 21, 2017

Lieutenant Governor Byron Mallott files letter of intent for re-election
KTUU, Sean Maguire, August 20, 2017

Potential initiatives would enshrine Medicaid expansion, ACA provisions in state law
KTOO, Andrew Kitchenman, August 20, 2017

Oil company sues over Alaska’s beleaguered cash-for-credits program
KTOO, Rashah McChesney, August 18, 2017

 

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Headlamp – Greenpeace: Illegal and Irresponsible. Give me Liberty!

August 18, 2017 | Posted in : News

Congressional Western Caucus in Alaska. Rep. Don Young has spent the week guiding some of his fellow Republican members of Congress around some of Alaska’s natural resources, and the group said they’re ready to act to make drilling and mining more accessible in Alaska. Young and four other members of the congressional Western Caucus joined with representatives of oil, gas, timber, fish, Alaska Native corporations and other industries in Anchorage on Thursday to discuss just what Congress could do to encourage more production in Alaska.

foggy islandGive me liberty!! The Bureau of Ocean Energy Management (BOEM) today announced a draft Environmental Impact Statement (EIS) analyzing the possible environmental impacts of the activities proposed in an offshore oil and gas development and production plan (DPP) submitted to BOEM by Hilcorp Alaska LLC. on Sept. 18, 2015. In its DPP, Hilcorp proposes to build a small artificial gravel island in the shallow (19 feet) federal waters of the Beaufort Sea, about 20 miles east of Prudhoe Bay. To be located about five miles off the coast in Foggy Island Bay, the 9-acre site would be similar in nature to the four oil- and gas-producing artificial islands currently operating in the area’s state waters (Spy Island, Northstar Island, Endicott Island, and Oooguruk Island).

A rose by any other name. The National Petroleum Reserve-Alaska (NPR-A) is a region in the Arctic bigger than many U.S. states. But it’s flown under the radar for years, unlike a different chunk of federal land located just to the east: the Arctic National Wildlife Refuge (ANWR). That’s likely to change. A series of promising oil discoveries and a recent move by the Trump administration mean this vast, remote area is about to get a lot more controversial. In the 1920s, President Warren G. Harding set aside NPR-A specifically for its oil potential. Today, the federal government manages the petroleum reserve as a “multiple use” area — a place with room for both habitat and oil drilling. But Melanie Smith, director of conservation science with Audubon Alaska, thinks the name is misleading.

Greenpeace: Illegal and irresponsible. Norwegian coast guards stopped Greenpeace from protesting at a site of the country’s northernmost exploration well drilled by Statoil, the environmentalist group said on Thursday. A number of activists entered a 500-meter safety perimeter around Songa Enabler rig with rubber boats and kayaks on Thursday, seeking to stop the drilling of the Korpfjell well, situated more than 400 kilometers from the mainland. Statoil said entering the safety zone was “illegal and irresponsible,” and it called the police to intervene. The coast guards reacted to the call shortly. “The Arctic Sunrise is currently being towed away from the drilling site, to the mainland in Tromsoe, Northern Norway,” Greenpeace said in a statement late on Thursday. There were 35 activists and crew members on board, it added. Norwegian police said Greenpeace activists were ordered to leave as they were disturbing the oil drilling, in violation of Norwegian interests according to the Petroleum Act.

A familiar name. Ben Stevens, the former Republican Alaska Senate president who federal authorities investigated for political corruption, says he’s thinking about running for governor in next year’s election. “I’ve lived through a few storms in my life, and I think I know what it takes to survive and I know what it takes to move into the future,” Stevens said in a phone interview Thursday. “Alaska’s facing some difficult times, and we’re just contemplating whether we can make a contribution or not in a public position,” he said, using the third person “we” instead of “I.” “When we make a decision, people will know.”

Muni gas tax proposed. A 10-cent per gallon gasoline tax in Anchorage was proposed to members of the assembly Thursday afternoon during a meeting at City Hall. The proposal was submitted by the chairman of the Budget Advisory Commission, a group of citizens that provides advice to the assembly and the school board. Al Tamagni, chairman of the commission, said the proposal calls for property taxes to be offset by the amount of revenue raised by the gasoline tax. Tamagni also said the proposed tax would generate about $14-million a year and the commission is recommending that 100 percent of that be used for property tax relief. The tax would also apply to diesel fuel sales. The proposal was made Thursday to the Budget & Finance Committee of the Anchorage Assembly.

Big Borough Ballot. Kenai Peninsula Borough voters will have a hefty ballot to go through at the Oct. 3 regular election. With five Kenai Peninsula Borough Assembly seats up for grabs and the borough mayor’s seat coming open, the borough administration and the majority of the assembly will change after Oct. 3.

Seward City ballot set. The ballots haven’t been cast, but the names that will appear on the upcoming General Election have been penciled in. A total of seven candidates filed their intentions with the Seward City Clerk earlier this week to seek spots on the Seward City Council in the upcoming election. Among those filing for seats on the city council are two incumbents, Sue McClure and Deborah Altermatt. A longtime political figure, McClure is a former member of the Kenai Peninsula Borough Assembly and was elected to the city Like McClure, Altermatt is no stranger to the local government scene. Before being elected to the city council in 2015, she served nine years on the Port and Commerce Advisory Board. Three newcomers, Jeremy Horn, Suzanne Towsley and Katie Cornwell, will also be on the ballot.  Two noticeable absences from the filing period were Mayor Jean Bardarson and Vice-Mayor Marianna Kiel.

First Reads:

Congressmen hear pitches on how to open up Alaska’s natural resources
Alaska Dispatch News, Erica Martinson, August 17, 2017

BOEM Publishes Draft Environmental Impact Statement for Hilcorp Liberty Oil and Gas Project in Beaufort Sea
Bureau of Ocean Energy Management, Press Release, August 17, 2017

There’s a new Arctic drilling battle brewing…and it’s not in ANWR
KTOO Public Media, Elizabeth Harball, August 17, 2017

Norway authorities stop Greenpeace protests at Arctic well
Arctic Now/Reuters, Nerijus Adomaitis, August 18, 2017

Ben Stevens, former Alaska Senate president once investigated for corruption, ponders bid for governor
Alaska Dispatch News, Nathaniel Herz, August 17, 2017

10-cent per gallon gas tax in Anchorage proposed
KTUU, Mike Ross, August 17, 2017

A look at the borough assembly and mayor races
Peninsula Clarion, Elizabeth Earl, August 17, 2017

Seven file for spots on October city ballot
Seward Phoenix Log, Tommy Wells, August 17, 2017

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Headlamp – Not so fast on the ADN sale and coal makes a comeback! 

August 17, 2017 | Posted in : News

“Demonstrated interest in leasing and developing.” More than 100 lawmakers are urging the Trump administration to consider allowing oil and natural gas drilling in more areas off the coast of the United States. In a Wednesday letter to Interior Secretary Ryan Zinke, the members said officials should consider a more expansive drilling program when it rewrites a five-year leasing outline, a key goal for Zinke and President Trump. “Just as today’s energy security is the result of production set in motion by decisions made years ago, the decisions on [Outer Continental Shelf] leasing and development facing the department today will lay the groundwork for our energy and national security for decades,” said the letter, led by House Natural Resources Chairman Rob Bishop (R-Utah) and signed by 118 members. “There is demonstrated interest in the leasing and development of previously excluded areas and we must consider these areas for development to optimize our nation’s resource potential.”

Largest lease sale in Gulf of Mexico. A sale of oil and gas leases in U.S. waters in the Gulf of Mexico generated $121.14 million in high bids for 90 tracts covering 508,096 acres (205,619 hectares), Interior Secretary Ryan Zinke said on Wednesday. The sale, the first by the Trump administration, offered 76 million acres (30 million hectares) and reduced royalty rates for shallow-water leases to encourage drilling at a time of low oil prices. Twenty-seven companies participated, submitting 99 bids totaling $137 million, the Interior Department said in a statement. The sale was the largest in terms of acreage in the history of the federal offshore program in the Gulf and included parcels off Texas, Louisiana, Mississippi, Alabama and Florida, it said.

Stop exporting LNG – put consumers first. A U.S. industrial trade group said Washington’s domestic focus should prioritize the retention of natural gas, rather than target it for the export market. As a candidate, Donald Trump ran under the slogan of “Make America Great Again.” As president, he’s steered efforts to put U.S. national interests first. Paul Cicio, the president of the Industrial Energy Consumers of America, said in a letter to U.S. Energy Secretary Rick Perry that stance should extend to liquefied natural gas.  “It is time for the U.S. Department of Energy to put American residential and industrial consumers first by establishing a moratorium on further LNG export approvals to non-free trade agreement [NFTA] countries, and put consumer safeguards in place,” he said in a statement.

Early opposition to sale of ADN by US Trustee. A proposed financing agreement to allow a potential buyer to loan money to the Alaska Dispatch News is already facing an objection by a federal official. Acting U.S. Trustee Gail Geiger filed court documents on Wednesday, citing several issues with the motion to approve the $1 million loan agreement and use by The Binkley Company. It comes a day before there will be a hearing in Anchorage where a judge will decide the fate of this financing agreement. The U.S. Trustee Program is the component of the U.S. Department of Justice that oversees the administration of bankruptcy cases.  Geiger said most parties in interest “have not been given notice of the case or the first day motions.” “Hence, the United States Trustee will oppose action that substantively affects parties’ rights on a final basis,” Geiger wrote.

Trump’s policies and exports helping coal industry. From the Wall Street Journal Editorial Board: Not long ago liberals hailed the demise of coal as inevitable while the Obama Administration strangled the industry with regulation. But don’t look now, Tom Steyer, because coal is showing signs of a revival and breathing economic life into West Virginia and other coal states. Former Environmental Protection Agency Administrator Gina McCarthy proclaimed in 2015 that coal “is no longer marketable.” She planned to be the lead undertaker.

First Reads:

Lawmakers push Interior to expand offshore drilling
The Hill, Devin Henry, August 16, 2017

U.S. Gulf of Mexico oil, gas lease sale yields $121 million in high bids
Reuters, Eric Walsh, August 16, 2017

Clouds developing over U.S. LNG export potential
UPI, Daniel Graeber, August 17, 2017

U.S. Trustee files objection to proposed loan by The Binkley Company to Alaska Dispatch News
KTVA, Steffi Lee, August 16, 2017

Coal Makes a Comeback
The Wall Street Journal, The Editorial Board, August 16, 2017
 

 

 

 

 

 

 

 

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Morning Headlamp – Resource Development 1, Sierra Club 0

August 16, 2017 | Posted in : News

Colville River UnitConoco Phillips commits to investing more in Alaska. ConocoPhillips has agreed to comply with a long list of contingencies demanded by Natural Resources Commissioner Andy Mack to allow the company to control a prized parcel of North Slope oil acreage. ConocoPhillips Alaska Land Manager John Schell Jr. wrote to Mack in a brief Aug. 11 letter that the company accepts DNR’s terms to expand the Colville River Unit to include 9,100 acres of the now-defunct Tofkat Unit. Mack sent a 21-page decision to the company Aug. 1, which lays out a strict drilling and payment schedule the oil major must meet in order to retain control of the area. In it, he required ConocoPhillips to drill an oil exploration well into the Nanushuk geologic formation by May 31, 2018, and make a total of $7 million in payments to DNR. The $7 million is in lieu of the money the department could expect to receive in winning bids if the area were to be put up for bid in the state’s annual North Slope lease sale. Further, ConocoPhillips must also decide by Aug. 15, 2018, if it wants to continue exploration and commit to drilling another well by June 2020. It operates the large Colville River oil field, commonly known as Alpine.

Trump, pipeline reviews and permitting. President Trump was expected to sign an executive order Tuesday afternoon that the oil and gas industry sees as essential to speeding up pipeline reviews and permitting, in addition to other energy infrastructure projects, according to senior representatives of the oil and gas industry and unions. “We also look forward to President Trump as he signs an executive order aimed at streamlining the permitting process for infrastructure projects,” said Jack Gerard, the president and CEO of the American Petroleum Institute. “There is over a trillion dollars that is expected to be invested just in building energy infrastructure that’s separate and apart from building highways, bridges, etc.” Gerard previewed the president’s action while discussing a new report that showed the enormous benefit from pipeline development to jobs creation and the economy. Moving “permits in a timely fashion” will only increase the benefits of opening up private investment in the nation’s pipeline infrastructure, he said. Gerard said the oil and natural gas industry employs close to 10.3 million Americans in the U.S., and “it’s critical that we have this infrastructure … and pipelines are essential.” The oil and gas industry ships 99.9 percent of all its raw and refined products through pipelines, Gerard said.
Inflating Alaskan assets leads to fine. A nationally respected account firm will pay $6.2 million in federal fines for helping a failed Knoxville oil company inflate its value by more than a hundredfold. The agreement reached Tuesday settles the U.S. Securities and Exchange Commission’s case against KPMG, which “grossly overstated” by hundreds of millions of dollars the worth of Miller Energy Resources’ oil assets in a 2011 audit, according to a SEC news release. The unfounded appraisal – nearly $480 million for a remote Alaskan oilfield bought for just $2.25 million – helped fuel Miller’s rise up the stock market charts, along with its crash into bankruptcy in 2015 after SEC regulators determined the value to be bogus. KPMG and John Riordan, the managing partner of KPMG’s Knoxville office at the time, “failed to properly assess the risks” and either overlooked or ignored issues “that should have raised serious doubts,” according to the SEC.

 

Responsible Resource Development 1 – Sierra Club 0. A federal court has rejected a challenge to a major liquefied natural gas (LNG) export terminal in Texas. In its Tuesday decision, the Court of Appeals for the District of Columbia ruled that the Department of Energy (DOE) conducted the necessary environmental and economic reviews before it approved the Freeport LNG export terminal project. The Sierra Club had challenged DOE’s review of the project, saying the agency didn’t comply with federal environmental laws before approving the Freeport terminal in 2014, and that its determination that the terminal is in the “public interest” was flawed.

David vs. Goliath – Shale beats OPEC? U.S. shale oil will prevail over OPEC as the two rivals compete in an oversupplied world market, Citigroup Inc.’s head of research said. The Organization of Petroleum Exporting Countries and its allies may have boosted oil prices by cutting production, but they’re losing revenue in the process and their position “is not sustainable over a long period,” Citigroup’s Ed Morse said in a Bloomberg television interview on Tuesday. On the other hand, U.S. shale drillers have adapted to survive prices as low as $40, he said. Markets are going to win, and it’s going to be shale,” Morse said. “If we’re in a $40 to $45 world, we’ll have enough drilling to add to the surplus in the world as a whole.” Oil prices have lost 12 percent in London this year, trading near $50 a barrel, as output curbs by OPEC, Russia and other partners fail to drain a global surplus. U.S. shale explorers have boosted drilling and are poised to reach a record output next month, plugging some of the gap left by OPEC’s cutbacks. The steadiness of crude prices on the forward curve at about $50 a barrel suggests that U.S. oil producers are active in using futures contracts to lock in — or “hedge” — their output for this year and next, according to Morse. Despite some weaker guidance from operators, the oil-rich Permian Basin “is going to grow at a hefty rate this year, and probably the same rate next year,” he said.

Enshrining the Affordable Care Act in Alaska law. A group of Alaska doctors, with help from a union-backed organization in Washington, D.C., is proposing a pair of ballot initiatives to establish state-level health insurance requirements like those in the federal Affordable Care Act. With the Affordable Care Act — also known as “Obamacare” — under attack by President Donald Trump and congressional Republicans, one of the initiatives would enshrine many of the federal legislation’s most popular provisions into state law. The 11-page proposal would bar insurers from denying coverage based on pre-existing conditions, require family plans to cover children until they turn 26 and ensure that all plans offer 10 different “essential health benefits” like prescription drugs, emergency services and mental health care. The second initiative aims to bolster the Medicaid health care program for the low-income and disabled Alaskans that Gov. Bill Walker expanded under “Obamacare.” The expansion covered an additional 35,000 Alaskans.

Russian Moratorium Not Going Anywhere.  The Russian Ministry of Natural Resources introduced a moratorium on oil and gas licenses in Arctic waters in August 2016. And it is unlikely to be ended any time soon.  According to Minister Sergey Donkey, the moratorium has an indefinite time limit and will last “at least until year 2020.” “The moratorium was introduced on the recommendation of the Government […], it allows state companies to focus on their existing obligations and cut development time in new projects,” the minister says in an interview with Interfax. ”The resources will not vanish and the financial burden on the companies will not increase.”  The introduction of the moratorium came as the country’s two state major oil and gas companies Gazprom and Rosneft were fighting each other tooth and nail over the rich hydrocarbon fields on the shelf. At the same time, western sanctions and low oil price increasingly had its toll on the two companies’ capacities to follow up the increasingly heavy burden of offshore license obligations.

Murkowski on Ferry Funding. U.S. Sen. Lisa Murkowski, R-Alaska, responded to a recent report by the Juneau Empire that says state plans to build a new oceangoing ferry may be being put at risk by federal policies. President Donald Trump signed an executive order that included a provision requiring all steel and iron products be produced in the United States at every stage of the process – even if there is nowhere in the U.S. to produce those products. The Ketchikan Daily News reports Murkowski said Monday that although she supports the provision, she thinks there needs to be flexibility for projects like this.

Five loaves and two fish? Fairbanks Feeds 5000? More than 5,000 people may come to the Fairbanks area over the next four years as part of the move to base two squadrons of F-35 fighters at Eielson Air Force Base. The latest estimate announced Monday is well above the previous estimate of 3,500. The bigger population increase is expected to place a greater burden on local services. he new population-growth projections were announced at a meeting Monday in Salcha by consultants hired by the Fairbanks North Star Borough to study how the area can accommodate Eielson’s expansion. Shelly Wade is a member of the Arcadis project team that’s conducting the study. She says the higher projections include 400 or so additional personnel the Air Force will likely bring to Eielson, along with their family members. “It’s highly likely the additional positions that’ve been requested by the Air Force will be approved,” Wade said.

First Reads:

ConocoPhillips accepts state terms to obtain leases
Alaska Journal of Commerce, Elwood Brehmer, August 15, 2017

New Trump executive order will hasten oil and gas pipeline permits: Industry officials
The Washington Examiner, John Siciliano, August 15, 2017

Auditor fined $6.2 million for inflating Miller Energy’s value
Knoxville News Sentinel, Matt Lakin, August 15, 2017

New Alaska ballot propositions would put Obamacare insurance provisions in state law
Alaska Dispatch News, Nathaniel Herz, August 15, 2017

Moratorium on offshore Arctic licenses will continue, says Russian minister
Arctic Now/The Independent Barents Observer, Atle Staalesen, August 16, 2017

Shale Will Beat OPEC as U.S. Oil Thrives at $40, Citigroup Says
Bloomberg, Alix Steel, David Westin and Grant Smith, August 15, 2017

Court rejects greens’ challenge to Texas natural gas export project
The Hill, Devin Henry, August 15, 2017

Murkowski responds to federal flap over state ferry
KTVA, The Associated Press, August 15, 2017

With F-35 squads set for Eielson, thousands of people may come up with them
Alaska Public Media, Tim Ellis, August 15, 2017

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Morning Headlamp – Oil prices on a three week low; Manchin at Energy?

August 15, 2017 | Posted in : News

oil chartHow low will we go? Oil prices continued to fall on Tuesday morning, following a sell-off on Monday triggered by a stronger U.S. dollar, concerns over growing supply from non-OPEC producers, and signs of potential slowed oil demand growth in China.

Cruising the Northwest Passage. When the CCGS Amundsen breaks through a 10-foot (or thicker) piece of ice, it rides on top of it first, the whole front of the ship sliding onto the sheet as the boat comes to a stop. Then the ship, 100 yards long and weighing 6,000 tons, crushes down, and its sharp hull splits the ice and pushes the fragments to either side.  Here in the ice-clogged Victoria Strait, there’s much crushing to do. These are the icy waters that famously claimed the ships of Sir John Franklin in the late 1840s, even though he set out with Britain’s strongest steam-powered vessels of the time — and, climate change or not, they don’t feel so different today.

Port’s poor condition. At 7 a.m. June 26, the Holland America cruise ship MS Amsterdam docked at the port. Waves kicked up by the ship while it was docking broke the severely corroded underwater base of two columns holding up the port — causing a 57,000-pound dock fender to break off and sink into the adjacent berth. The fender narrowly missed the cruise ship. There was no damage or injuries reported. But the incident prompted an Alaska maritime organization to send a worried letter to Mayor Ethan.

More than one way to skin a cat. Some White House and Republican officials are exploring the idea of putting West Virginia Democratic Senator Joe Manchin in charge of the Energy Department, according to four people familiar with the discussions, a move that could boost President Donald Trump’s stalled legislative agenda. If Manchin were offered and accepted the position, that would allow West Virginia’s Governor Jim Justice — a newly minted Republican — to appoint a GOP successor and bring the party a vote closer in the Senate to being able to repeal Obamacare. The idea is in the early stages of consideration, and it’s unclear whether it has support within the administration, according to the people, who described the conversations under condition of anonymity.

Challengers for all Juneau Assembly seats. The three Juneau Assembly incumbents whose terms expire this year are seeking re-election and each race will be contested. Election day is Tuesday, Oct. 3. The first Juneau Assembly debate is scheduled for 6 p.m. Sept. 14 in Assembly Chambers. The League of Women Voters is sponsoring it.

Soldotna Annexation Round 2. The city of Soldotna is continuing its research into the annexation of nearby areas currently outside of city boundaries by creating a forum for public engagement. The city hired The Athena Group, a consulting agency based in Olympia, Washington, to design and facilitate a process that “will allow everyone to be heard and to hear each other,” according a release from the city.  In December, the Soldotna City Council approved an ordinance to appropriate $50,000 to spend on gathering public input on the hotly contested issue, which, for years, has continued to appear on the agenda and ignite debate.

A “Fortress” for data. A small town in the remote north of the Arctic Circle is set to be home to the world’s largest data center. The Kolos facility is being developed by a US-Norwegian partnership, also called Kolos, who say the site will eventually draw on a record-setting 1000 megawatts of power. On their website, Kolos claim Ballangen’s cold climate and access to hydropower will help trim energy costs by as much as 60 percent.

A Texan headed south with an Okie under each arm. Happiness. Alaska’s journey began in 1968, when ARCO and Humble Oil & Refining Co. discovered the largest oil field in North America on Alaska’s frigid North Slope. After overcoming years of legal battles, eight companies joined forces to build an 800-mile pipeline from northern Alaska to the ice-free port of Valdez. The last section of the Trans-Alaska Pipeline System (TAPS) had been welded into place, and a steady flow of Alaska crude was being shipped to market. Across the state, tens of thousands of pipeline workers drawn to Alaska by the promise of adventure and large paychecks were beginning to scatter.

First Reads:

What it’s like to ride a 6,000-ton icebreaker through Arctic waters
Actic Now/Washington Post, Chris Mooney, August 15, 2017

Anchorage’s port is already falling apart. With the clock ticking, who will pay to fix it?
Alaska Dispatch News, Devin Kelly, August 14, 2017

Manchin Emerges as Possible Pick for Energy Department
Bloomberg, Kevin Cirilli, Jennifer Jacobs and Steve T. Dennis, August 11, 2017

Soldotna hires consultants to open annexation conversation
Peninsula Clarion, Kat Sorensen, August 14, 2017

Oil Prices Fall To 3-Week Lows On Flurry Of Bearish News
OilPrice.com, Tsvetana Paraskova, August 15, 2017

World’s largest data center to be built in Arctic Circle
CNBC, David Reid, August 15, 2017

Disaster, decline and hope for an aging mega project
EE News, Margaret Kriz Hobson, August 14, 2017

 

 

 

 

 

 

 

 

 

 

 

 

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Morning Headlamp – Out with the old, In with the New

August 14, 2017 | Posted in : News

What People are saying about the sale of the Alaska Dispatch News:

New Owners: “The ADN can’t be allowed to go away. It’s too important to the city of Anchorage and to the state of Alaska,” the group said. “Alaska deserves and needs a robust and healthy paper of record as much as it needs any other public utility or infrastructure, particularly in these uncertain times.”

Old Owner: “We’ve worked hard to help illuminate the issues of our day and provide a platform for points of view from across Alaska,” Rogoff said Saturday. “Yet like newspapers everywhere, the struggle to make ends meet financially eventually caught up with us. I simply ran out of my ability to subsidize this great news product. Financial realities can’t be wished away.”

Craig Medred: “The new company faces big hurdles, but is now being driven by a new, younger generation with a can-do Alaskan attitude of an older Alaska. The Zak story in the ADN  optimistically had Binkley and Christianson saying that no layoffs are planned and that the newspaper will try to protect the jobs that are there  now. But those familiar with the ADN costs say significant cuts in staffing are unavoidable”

Must Read Alaska:  “The implications of the Dispatch bankruptcy filing are enormous. For the first time in a quarter century, Anchorage just might end up with a daily newspaper that does not slant hard to the left.”

AKHeadlamp: We wish the Binkley-Evans group well as they begin what we hope will be a positive transition for the city and state.  

Back on track. ConocoPhillips Alaska has launched drilling to unlock a stubborn pool of slow-moving viscous oil at a new site on the North Slope, the company announced Friday with a tweet. “We’ve got NEWS (1H)!” the oil giant said on Twitter, in a reference to the field’s unusual name. The so-called 1H NEWS project was delayed last year after oil prices plunged. But company officials in July told Wall Street investors the $460 million project was back on track. Oil should be flowing by year’s end, said Al Hirshberg, a ConocoPhillips executive vice president. The field is expected to produce about 8,000 barrels of oil daily, adding to the 530,000 barrels of oil produced daily on the Slope so far this year.

Norwegian NIMBY’S. Norway’s oil industry has been salivating for years over the Arctic Lofoten islands, which could hold billions of barrels of crude. It will likely have to keep dreaming. The general election next month is unlikely to lift a deadlock that’s keeping a ban on drilling off the environmentally sensitive archipelago as more Norwegians are turning their backs on the industry that helped make the country one of the world’s richest. “It’s a dead issue,” said Frank Aarebrot, a professor of political science at the University of Bergen. Backed by unions and business, Norway’s two biggest parties, Labor and the Conservatives, have long favored steps that could open up the area for exploration. But so far they have had to compromise with smaller parties that are determined to keep Lofoten oil-free.

Distillate demand. U.S. refiners such as PBF Energy and Valero Energy are heading into the winter season on their best footing in years, as months of surprisingly robust distillate demand has eaten away at stubbornly high inventories and boosted margins. Inventories of diesel, heating oil and jet fuel are approaching their lowest seasonal levels in three years, fueling expectations among refining executives, traders and analysts that strong margins will help the bottom line for refiners through year-end.

“With the distillate inventory correction at a somewhat speedier pace than gasoline, we expect distillate to come close to or even fully correct the imbalance by the end of the year,” Barclays said in a research note on Wednesday.

Fed funding fleeting for ferry. The design and funding for a new Alaska state ferry are ready to go, but the federal government is not. The Juneau Empire reports Alaska Department of Transportation Commissioner Marc Luiken Friday warned members of the state Marine Transportation Advisory Board that an effort to build a new oceangoing ferry may run into trouble with the federal government. Under federal law, “all steel or iron products that are permanently incorporated in a federal-aid highway construction project” must be made in a “domestic manufacturing process.” That law holds true even if no one in the United States builds a particular part. The only way to get around the law is to request a waiver from the administrator of the Federal Highway Administration, and President Trump has yet to appoint one.

It takes a village. The Trump administration has moved to dismantle climate adaptation programs including the Denali Commission, an Anchorage-based agency that is crafting a plan to safeguard or relocate dozens of towns at risk from rising sea levels, storms and the winnowing away of sea ice. Federal assistance for these towns has been ponderous but could now grind to a halt, with even those working on the issue seemingly targeted by the administration. According to the Army Corps of Engineers, 31 Alaskan communities face “imminent” existential threats from coastline erosion, flooding and other consequences of temperatures that are rising twice as quickly in the state as the global average. A handful – Kivalina, Newtok, Shishmaref and Shaktoolik – are considered in particularly perilous positions and will need to be moved.

First Reads:

Alaska Dispatch News files for bankruptcy; new publishers emerge
Alaska Dispatch News, Annie Zak, August 12, 2017

Dispatch in Bankruptcy
CraigMedred.news, Craig Medred, August 13, 2017

End of an error? Alaska Dispatch bankruptcy, sale details emerge
Must Read Alaska, Suzanne Downing, August 13, 2017

ConocoPhillips launches drilling at a North Slope oil field
Arctic Now/Alaska Dispatch News, Alex DeMarban, August 14, 2017

Big Oil’s dream of $65 billion hidden off Norway is fading away
Arctic Now, Bloomberg, Mikael Holter, August 14, 2017

Distillates to boost U.S. refiners’ bottom line through year-end
Reuters, Devika Krishna Kumar and Jarrett Renshaw, August 11, 2916

Federal government stalling construction of new Alaska ferry
KTVA, Associated Press Writers, August 14, 2017

Alaskan towns at risk from rising seas sound alarm as Trump pulls federal help
The Guardian, Oliver Milman, August 10, 2017

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Morning Headlamp – Millennials and Gen Z Making the Moral Case for Fossil Fuels

August 11, 2017 | Posted in : News

There is hope! From our friend and author Alex Epstein: Lately I’ve been writing about the need to teach millennials the moral case for fossil fuels, how well it works , and our new “energy ambassador” program specifically designed for millennials in the energy industry. But the moral case for fossil fuels is just as effective–and crucial–for the post-millennial generation: Gen Z. Here’s an email I got last week:

“I know you probably won’t see this but I hope you do. I am a 14 year old very politically inclined and very interested in fossil fuels and the “global warming issue”. My class was subjected to watching “Before the Flood” biggest pile of propaganda on earth. My class was emotionally abused and sunk underwater by this horrible film. I am currently reading your book and learning a lot from your great work and knowledge. I am currently planning my 8th grade speech to be about industrial progress and fossil fuels, to sort of rebound the “Before the Flood” movie and give my views a fair chance. I feel like I have some leverage over my opposition just like you because neither of our parents or selves worked in the fossil fuel industry. Which means these climate people can’t just point and say “this is how they make money just selfish money makers”. Anyway, I truly appreciate your work and any pointers and extra facts I should know before I give my presentation. Keep up the great work!” -Owen P.

New Year’s Resolution. The Alaska Gasline Development Corp. has started responding to federal regulators’ July 5 data requests for preparation of the project’s environmental impact statement, reporting that it will submit most of the requested information September through December this year — though some data will not be available until January 2018. The January responses will include more information about geologic hazards along the 807-mile pipeline route from Prudhoe Bay to Nikiski; separate, detailed timelines for construction and restoration work in each of six pipeline construction spreads along the mainline and the 63-mile Point Thomson pipeline; and a response to assertions made by the city of Valdez and Alaska Gasline Port Authority that Valdez would be a better site for the project’s gas liquefaction plant and marine terminal than Nikiski. The Federal Energy Regulatory Commission (FERC) will not set a timeline for the Alaska LNG project’s environmental impact statement (EIS) until it is confident it has sufficient information to predict its work schedule and that of other federal agencies involved in the review process.

The Postman Rings Twice. Oil started flowing down the Trans-Alaska pipeline some 40 years ago. Every summer, thousands of workers come to work in the oil fields in and around Deadhorse, Alaska, transforming this small town and keeping postal worker Les Dunbar very busy. From Alaska Public Media, Eric Keto has this profile.

Domestic LNG. Dominion Energy has announced that the 750 million cubic feet per day (MMcf/d) Cove Point Liquefaction Project is in its final stages of construction, confirming with EIA that it is 95% complete as of August 2 and expected to be in-service in the fourth quarter of 2017. Located on the Chesapeake Bay in Lusby, Maryland, it will be the second large-scale liquefaction export facility to begin operations in the Lower 48 states and the first on the East Coast. In addition to construction of the liquefaction terminal, which began in October 2014, this project includes the installation of additional compression at Dominion’s Pleasant Valley compressor station in Fairfax County, Virginia, as well as upgrades to the Cove Point pipeline in Loudon County, Virginia. These projects were necessary to allow for sufficient injection of feedstock natural gas from the Marcellus and Utica shale gas plays, which can be supplied by either the Transcontinental pipeline, the Columbia Gas pipeline, or the Dominion Transmission pipeline.

First Reads:

A postcard from where Alaska’s oil industry and wilderness meet
PBS News Hour/Alaska Public Media, Eric Keto, August 10, 2017

State advises FERC some answers will take until January 2018
Oil & Gas News Briefs, Larry Persily, August 10, 2017

Dominion Energy Cove Point liquefaction project
Natural Gas Weekly Update, U.S. Energy & Information Administration, August 10, 2017

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Morning Headlamp – Walker: you can’t always believe what you read?

August 10, 2017 | Posted in : News

Gov. Walker at White HouseHe loves me, he loves me not. Governor Bill Walker reached out to the Trump Administration to correct the record and reaffirm relations with the White House after a Politico Magazine article implied he’s “anti-Trump.” The story, released on Tuesday, included Gov. Walker’s face superimposed against a title that reads, “Anti-Trump Independents are Starting to Organize.” In an interview with Channel 2 News on Wednesday, Walker said he has “a very good relationship with the Trump administration,” and is willing to work closely with any administration as long as “it’s good for Alaska.” “It’s very clear, I’m not an anti-Trump person,” said Walker. “I was appointed to the Governor’s Council, one of ten governors, by the president some months ago on military issues, and about a month ago I was invited to the White House with three other governors to talk about energy projects in their respective states.” The governor’s Director of Communications Grace Jang said Walker’s office has asked Politico Magazine to correct the story.

The Alaska Risk Factor. Just this summer, two oil companies have announced they’re halting work on projects in Alaska because the state hasn’t reimbursed them for credits owed. Last month, legislators and the governor agreed to end the cash credit program completely. But for the last three years, the state has made only minimal payments on outstanding oil tax credits. It now owes nearly $1 billion to oil companies — almost a quarter of the entire state budget. The current cashable amount is close to $700 million, according to state tax director, Ken Alper, but other claims are still under review and set to be issued later this year. How did the state get to this point?

Headlamp believes the bigger question is “where do we go from here?” Continuing to explore and develop on the North Slope is critical to Alaska’s economic future. If “Alaska’s reputation has taken a hit,” and we can’t afford to pay incentives, how do we attract investment?

First bar of gold. A new gold mine has gone into production near British Columbia’s border with Southeast Alaska, one of several prospects under exploration near creeks or rivers that flow into the region. The Brucejack Mine had what’s called its “first pour” — or when refined ore is melted down to make a project’s first bar of gold — this summer. The high-altitude mine is about 25 miles from the Alaska border and about 80 miles east of Wrangell. It’s within the watershed of the Unuk River, which drains into the ocean northeast of Ketchikan.

Spiro Agnew saves TAPS. In 1968, ARCO and Humble Oil and Refining Co. announced the discovery of 21 billion barrels of oil in place at Alaska’s Prudhoe Bay field, 300 miles north of the Arctic Circle. Independent analysts concluded that as much as 10 billion barrels could be recovered from the reservoir. It was and remains the biggest oil find in North America. Four thousand miles away, a young ARCO petroleum engineer was riveted by the thought of bringing the elephant field to life. Harold Heinze wanted in. “I immediately agitated to come to Alaska,” recalled Heinze, who went on to be president of ARCO Alaska. “I would wear a parka to the office in Midland, Texas, in September. I won. I got here in February 1969.”

Russian LNG Part 2. As the Russian gas company is preparing for launch of the Yamal LNG, the large natural gas project in the Yamal Peninsula, it is actively proceeding with ground work for its second major project in the Arctic. The Arctic LNG-2 will be based on gas resources from the Gydan Peninsula and have an annual production capacity of 18 million tons. It will have a price tag of $10 billion and be ready for production late 2022, Neftegaz reports.

First Reads:

Alaska ended cash credits to oil companies, but still owes nearly $1 billion
KTVA, Liz Raines, August 9, 2017

Gov. Walker disputes article implying he’s “anti-Trump”
KTUU, Travis Khachatoorian, August 9, 2017

How Spiro Agnew helped save the Trans-Alaska project
EE News, Margaret Kriz Hobson, August 8, 2017

Novatek sheds light on its next major Arctic gas project
Arctic Now/The Independent Barents Observer, Atle Staalesen, August 10, 2017

Another mine opens close to the Alaska border
KTOO Public Media, Ed Schoenfeld, August 9, 2017

North Slope well leak estimated at over 7,000 gallons
KTOO Public Media, Elizabeth Harball, August 9, 2017

Alaska Highway open after clean up of spilled oil from overturned tanker
Alaska Public Media, Henry Leasia, August 9, 2017

 

 

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Headlamp: Increased taxes hurt people. Alaska is betting on Tourism.

August 9, 2017 | Posted in : News

shale wellsRead our lips – no new taxes. Pennsylvania business groups are warning a state Senate-passed proposal to increase energy taxes will hurt the industry’s competitive standing, cause higher bills for consumers and scare off investment. The groups said Tuesday the proposal will hit some large industrial users very hard. The bill would bring in about $100 million annually from a new severance tax on Marcellus Shale natural gas drilling. It also calls for about $400 million from a gross receipts tax on natural gas, electric and telecommunications bills. Democratic Gov. Tom Wolf supports the plan to plug a $2.2 billion revenue gap. Wolf’s spokesman says if lawmakers don’t act to fully fund spending that’s already been approved, the state will teeter on the verge of bankruptcy and schools and local municipalities will be harmed.

IRS helps Alaska – no, really. The Alaska Gasline Development Corp. has cleared another of many hurdles in its effort to monetize the state’s North Slope natural gas resources. The state-owned corporation announced Tuesday morning it qualifies as a federally tax-exempt political subdivision of the State of Alaska, according to a ruling it received from the Internal Revenue Service. AGDC President Keith Meyer said in a press release that the ruling will give the organization “significant maneuvering room” in how it can shape the financing structure for the $40 billion LNG export proposal. “This is great news for the corporation and the Alaska LNG Project. Receiving a favorable tax ruling from the IRS was one of the expectations of the transition of the Alaska LNG Project to state leadership,” Meyer said. Being labeled a “political subdivision” of the state means potential profits to the corporation from the project will not be subject to federal income taxes and AGDC can issue tax-exempt debt, according to the Tuesday release. Headlamp applauds AGDC for securing this significant exemption.

Want gas? Your input is needed. A federal agency is asking for input on an in-state natural gas pipeline. The Alaska Standalone Pipeline would bring gas from the North Slope to Wasilla.  It’s designed to deliver gas to communities like Fairbanks and throughout Southcentral Alaska. The Army Corps of Engineers is the lead agency working on an Environmental Impact Statement for the gasline project — a requirement for the National Environmental Policy Act. The current version of the statement — released in June — is updated from a 2012 version. It covers things like environmental consequences of the project footprint, transporting the gas, new access roads and the 13 construction camps needed to build it. The Corps is focused on the parts of the project that could impact people.

More OPEC production – lower oil prices. Oil prices slipped on Tuesday, pulling back from recent gains as exports from key OPEC producers rose and despite news of lower crude shipments from Saudi Arabia. The oil market has been in consolidation mode after a sharp rally between mid-June and late July pushed U.S. crude futures above $50 a barrel for the first time in several weeks. The price slipped back below $50 and has traded around that number as world supply has been slow to draw down.

How much is too much? EPA Chief Scott Pruitt’s attacks on mainstream climate science are causing discomfort in a surprising corner – among many of the conservative and industry groups that have cheered his efforts to dismantle Barack Obama’s environmental regulations. The U.S. Chamber of Commerce, political groups backed by the Koch brothers and the top lobbying organizations for the coal, oil, natural gas and power industries are among those so far declining to back Pruitt’s efforts to undermine the scientific consensus on human-caused climate change, according to more than a dozen interviews by POLITICO. Some advocates privately worry that the debated would politically harm moderate Republicans, while wasting time and effort that’s better spent on the EPA’s regulatory rollback.

New owners for Juneau, Homer and the Peninsula. Three Alaska newspapers have been sold to a New York-based media company, among nearly a dozen papers and U.S. media properties involved in the same deal. Atlanta, Ga.-based Morris Communications announced the sale of the Juneau Empire, the Homer News and the Kenai Peninsula Clarion to GateHouse Media Inc., in a statement on its website. The cost of the acquisition, which also includes newspapers in Arkansas, Florida, Georgia, Kansas and Texas, was not disclosed.

Hunters and Trappers need $. Clyde River’s hunters and trappers group is in urgent need of money to fund its participation in the federal government’s assessment of potential offshore oil and gas development east of Baffin Island, the group said Aug. 4 in a letter to the Nunavut Impact Review Board. “Oil and gas is clearly very controversial in our community and we have many concerns that need to be addressed. However, we require significant funding to meaningfully participate,” the Clyde River Hunters and Trappers Organization said in the letter, signed by its current chair, Jerry Natanine. Furthermore, “deep consultation” with Indigenous people, as defined by the Supreme Court of Canada, includes participant funding and that means Ottawa must provide the money to Clyde River, the letter said.

Alaska is betting on tourism. Facing a multibillion-dollar deficit, declining revenue and a public generally opposed to new taxes, the state has cut back on most services. In this year’s capital budget, there’s at least one area that’s getting some extra help. Tourism marketing is expanding. In December, Gov. Bill Walker proposed a grant of $3 million to market Alaska to tourists. That’s up from $1.5 million last year, and while the Legislature cut plenty of items from Walker’s budget proposal, it didn’t cut tourism dollars. “We thought we weren’t going to have any funding, then we got the good news that we received $3 million,” said Jillian Simpson, vice president of the Alaska Travel Industry Association, which manages the state’s marketing efforts.

Proposal would make Juneau hotel tax third-highest in state. One topic on the agenda at tonight’s City and Borough of Juneau Finance Committee meeting has some hotel owners nervous. The committee is examining a proposed increase in the hotel bed tax for the first time since 1988 and whether to put it on the ballot for the Oct. 3 election. The proposal is also to use funds from the tax increase to help the new Juneau Arts and Culture Center (JACC). Though tonight’s meeting — at 5:30 p.m. in the Assembly Chambers at City Hall — is open to the public, there will be no public comment. The Finance Committee will vote on whether to forward this and the extension of the 1 percent sales tax increase to the Assembly. The Assembly will vote on whether to put the ordinances on the ballot at its next meeting, Aug. 21, which will be open for public comment.

First Reads:

Business groups punch back against energy tax legislation
Pittsburgh Post-Gazette, Mark Scolforo, August 8, 2017

State gasline corp. gets favorable ruling from IRS
Alaska Journal of Commerce, Elwood Brehmer, August 8, 2017

Feds seek comments on Alaska’s in-state natural gas pipeline
KTOO Public Media, Rashah McChesney, August 8, 2017

Pruitt climate science challenge splits conservative allies
Politico, Emily Holden, August 9, 2017

U.S. oil prices slip as some OPEC producers export more
Reuters, David Gaffen, August 7, 2017

Juneau, Homer, Kenai newspapers get new owner in sweeping sale
KTVA, Chris Klint, August 9, 2017

 

Clyde River group says it needs funding to participate in Nunavut oil-gas study
Arctic Now/Nunatsiaq News, Jim Bell, August 9, 2017

 

State doubles tourism funding in capital budget
Juneau Empire, James Brooks, August 8, 2017
Hotel owners wary of possible bed tax increase
Juneau Empire, Alex McCarthy, August 8, 2017

 

 

 

 

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Independent Hopefuls Following Walker’s Lead; Look before you leap

August 8, 2017 | Posted in : News

walker mallottIndependents banding together. The model, they hope: Alaska Gov. Bill Walker, a lifelong Republican who quit the party two months before the 2014 election, picked a Democrat as his lieutenant governor/running mate, and squeaked out a win against the Republican incumbent. Walker recently announced he’s running for reelection, and he says he never looked back at his decision to leave the GOP—and that was before Trump split the party with a working-class message and heretical stances on entitlement programs, trade and basic decorum. Being an independent has its advantages, Walker says. “If a candidate comes up and says, ‘I’m a Republican’ or ‘I’m a Democrat,’ people know within probably 70 percent of where they stand. With an independent, it’s like, ‘OK, tell me about you,’” Walker told me during an interview for POLITICO’s Off Message podcast. But, he allows, “those that are running as independent have to work a little harder. We have to be a little bit more creative and figure out how to get it done.”

“Lots of revisiting and additional analysis…” The Trump administration on Monday said the entirety of Alaska’s petroleum reserve, including the half that had previously been unavailable for leasing to oil companies, is on the table for discussion as an area of future development. The Bureau of Land Management said Monday it will take public comments to gauge interest in potentially holding lease sales for all of the 23 million-acre National Petroleum Reserve in Alaska, the nation’s largest petroleum reserve. The announcement is a first step in a potential rollback of protections for the reserve under an administration that wants to open up federal lands to development. 

Mom and Pop investors. Low oil prices that have paralyzed some North Slope oil producers haven’t deterred a visionary batch of small-time investors from remaining optimistic that an Alaskan can still strike it rich in a field of oil giants. But they say a state decision in 2011 that sharply hiked bidding and lease costs has priced many of the “little guys” out of the market, making it too expensive for them to acquire and hold new oil and gas leases. They say that’s a problem in oil-dependent Alaska, where the mom-and-pop investors have aggressively promoted their leases, looking for companies with capital to buy them and develop fields.

Back in the saddle again. Congratulations to Former Alaska legislator Drue Pearce who has a new job in the Trump administration. She is now the deputy administrator of the Pipeline and Hazardous Materials Safety Administration, part of the U.S. Department of Transportation. The agency, created in 2004, oversees the nation’s network of pipelines, some 2.3 million miles, and the transportation of hazardous materials in general, by road, rail or air. Pearce was sworn in Monday morning. Pearce represented Anchorage in the Alaska Senate and served as Senate president. She resigned her seat in 2001 to be a senior adviser at the Interior Department. Headlamp is thrilled to see yet another extremely qualified Alaskan working in the Trump administration!

Lucky number 6. The Kenai Peninsula will get a few projects funded in the Legislature’s fiscal year 2018, the majority of which are in Seward. The Legislature approved an approximately $1.4 billion capital budget for the coming year in a brief special session in late July, which lays out funding for each state department’s projects. This year’s budget is greatly pared down from previous years and relies in large part on federal funds.

All eyes on Venezuela. The economic, political and security situation in Venezuela has been frightening for quite a while, but things continue to grow worse. The new “constituent assembly,” put together to rewrite the constitution, is seen by most as an attempt to erode the nation’s democracy and consolidate power in the hands of the president. In an ominous sign, more than a dozen soldiers reportedly attacked a Venezuelan military base on Sunday, and although the assault was put down, it highlights the increasing fragility of the state. “The significance lies in whether this suggests that Maduro is losing his grip on the military and whether we can expect to see more mutinies to come, or if this is just an isolated incident,” said Stuart Culverhouse, Global Head of Macro & Fixed Income Research at Exotix Capital in London. “Details are sparse and it’s probably too early to say either way at this stage.”

For the good of the order – Nigeria. The world oil market is making progress toward rebalancing crude oil supply-demand levels, concluded a joint OPEC and non-OPEC Ministerial Monitoring Committee (JMMC). The group met in St. Petersburg, Russia, on July 24. Libya and Nigeria were exempted from the existing production-cut targets. On July 24, Nigeria voluntarily agreed to submit to production adjustments as soon as its output levels sustainably reach 1.8 million b/d, said a JMMC statement. “The continued strengthening of the global recovery is under way with stability in the oil market remaining a key determinant,” JMMC said. “The market volatility has been lower in recent weeks and investment flows have visibly started to improve,” for oil and gas activities. Oil demand is expected to increase during this year’s second half, JMMC said in a statement, adding that major producers have a 98% conformity level with the production-cut targets of 1.8 million b/d through first-quarter 2018.

China brings Trump and Schumer – Together? Tensions between the U.S. and China are escalating, and it could have a negative impact on clean energy policies that the two countries had previously agreed to. Over the past week, three Democratic Party senators backed President Donald Trump’s stance opposing China’s moves on intellectual property and trade relations. Since running for president last year, Trump had taken an aggressive stance on China relations and has since carried it out. Senate Democratic leader Chuck Schumer wants to see the Trump administration bypass an investigation and go straight into trade sanctions against China. “We should certainly go after them,” said Schumer in a statement reflecting rare bipartisanship in Washington.

walker mallott

Anti-Trump Independents Are Starting to Organize
Politico, Edward-Issac Dovere, August 8, 2017

Should all of NPR-A be on the table for oil development?
Alaska Dispatch News/Arctic Now, Alex DeMarban, August 8, 2017

North Slope’s small-time investors try to make a buck despite higher bidding costs
Alaska Dispatch News, Alex DeMarban, August 7, 2017

Drue Pearce appointed to U.S. pipeline safety agency
KTOO/Alaska Public Media, Liz Ruskin, August 7, 2017

Trump administration signals it could open more of the Arctic to drilling
KTOO, Elizabeth Harball, August 7, 2017

Kenai Peninsula gets 6 projects in capital budget
Peninsula Clarion, Elizabeth Earl, August 5, 2017

Venezuela Rebellion Could Send Oil To $80
OilPrice.com, Nick Cunningham, August 7, 2017

How U.S.- Chinese Tensions Could Impact Energy Policy
OilPrice.com, Jon LeSage, August 7, 2017

Nigeria agrees to limit future production as OPEC, non-OPEC producers meet
Oil & Gas Journal, Paula Dittrick, July 24, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

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