Sinopec drops interest in managing AK LNG construction
Elwood Brehmmer, Alaska Journal of Commerce, August 1, 2018
A Chinese oil giant is still in line to be a major buyer from, but not builder of, the $43 billion Alaska LNG Project. Alaska Gasline Development Corp. President Keith Meyer said Sinopec Corp. is still interested in 75 percent of the LNG produced from the project but is no longer being considered as a construction manager for Alaska LNG. Gov. Bill Walker and Meyer signed a non-binding joint development agreement, or JDA, with Sinopec, the Bank of China and China Investment Corp. Nov. 8, 2017, in Beijing in front of President Donald Trump and China President Xi Jinping. The framework agreement set the foundation for further negotiations over LNG purchases, project financing and possible construction involvement by the government-owned Chinese companies. Sinopec is generally considered the world’s largest oil and gas company.
Our Take: Alaskans will be much more comfortable with the prospect of Sinopec as a buyer, not a builder. AKHEADLAMP wonders why the delay in sharing this information? When Sinopec officials visited Alaska in March, they made it clear they weren’t interested in being a construction manager.
LNG projects ramp up in response to growing market
Larry Persily, Petroleum Planet for the Alaska Journal of Commerce, August 1, 2018
Oil and gas companies are responding to the growing market for liquefied natural gas by ending their hiatus from new projects, while more liquefaction capacity is coming online in Russia, Australia and the U.S. Gulf Coast. LNG projects under construction or anticipated to reach a final investment decision within the next 12 months total more than 125 million tonnes of annual output capacity — more than a one-third boost to global capacity as reported by the International Gas Union’s 2018 annual report.
Senate GOP bill would amend key section of the Clean Water Act
Nick Snow, OGJ Washington Editor, August 1, 2018
The US Senate Environment and Public Works Committee Chairman John A. Barrasso (R-Wyo.) and three other Senate Republicans introduced legislation on July 31 to change requirements and establish limits for individual states under Section 401 of the Clean Water Act. “The water quality certification process is being abused by a few states in order to delay important projects,” said Barrasso. “The State of Washington has hijacked this authority and blocked Wyoming coal from being exported overseas. The coal terminal project would create jobs and directly benefit families in Wyoming, Washington, and other Western states. The State of New York has taken similar steps to slow the construction of natural gas pipelines. “This kind of obstruction is about politics, not water quality,” he said. “This legislation returns the process to what it was originally designed for—protecting America’s water.” Sens. Shelly Moore Capito (W.Va.), Steve Daines (Mont.), and James M. Inhofe (Okla.) cosponsored the legislation.
Our Take: Process not politics will protect America’s water and allow important projects to move forward.
Alaska’s draft climate action plan includes carbon tax on page 43
Elizabeth Jenkins, Alaska’s Energy Desk, August 1, 2018
Governor Bill Walker’s Climate Action Leadership Team has been discussing a robust draft plan to tackle climate change. The draft mentions a number of ways to go about that: from beefing up efforts to monitor ocean acidification to better educating the public on the causes of warming. But the state is going to need a way to pay for it all, and the plan addresses that, too: Alaska should consider a carbon tax.
Our Take: Spoiler alert – the usual suspects want to tax the oil and gas industry in order to pay for their policies that will have minimal impact at best. A shout out to Division of Oil and Gas director Chantal Walsh for pointing out the need for a global strategy that can really make an impact.
National Defense Act has heavy Arctic focus
KTVA Web Staff, August 1, 2018
Wednesday, Congress passed a bill that will bring more resources to Alaska’s Arctic, where receding sea ice is opening new areas for shipping and exploration. It’s attracting the interest of Russia– which has 46 icebreakers, according to the federal government. The U.S. Coast Guard has only two– and one of them is 10 years beyond its intended use. The bill passed Wednesday authorizes six new icebreakers.
Our Take: $286 million for Alaska military construction sure helps our economy! AKHEADLAMP hopes the calls for an updated Arctic strategy, with specific roles for each branch of the military and the requirement that Alaska’s state and local governments be consulted, happens sooner rather than later.
Norton Sound Communities Look To Build Commercial Reindeer Economy
Gabe Colombo, KNOM, July 31, 2018
Reindeer herding is becoming an increasingly attractive economic option for communities in the Norton Sound region. As winter sea-ice cover becomes more unreliable, the traditional practice of hunting for marine mammals is more dangerous. Some community leaders hope reindeer herds, originally imported from Scandinavia in the late 19th century, could now fill a growing gap in ensuring economic security.
Our Take: Necessity is the mother of invention: A coalition of reindeer-herding tribes that sell meat with a processing plant and freezer in Nome in response to a changing environment.
From today’s Washington Examiner’s, Daily on Energy:
SAUDIS AND RUSSIANS BOOST OIL PRODUCTION IN JULY TO LOWER PRICES: Saudi Arabia and Russia are making good on their pledge to boost oil production to help lower rising global oil prices.
OPEC countries increased output in July, led by near-record production from Saudi Arabia, Bloomberg reported Thursday. The Saudis oil production rose by 230,000 barrels a day in July, to 10.65 million barrels per day.
Group think: The group’s 15 members collectively produced 32.6 million barrels per day, offsetting continued losses from Venezuela and Libya, and the expected onset of U.S. sanctions against Iran.
Russia, a non-OPEC member, produced oil at its highest level since it joined the group’s effort last year to cut output to raise prices.
How we got here: In June, the oil cartel and nonmember countries, including Russia, agreed to increase output by 1 million barrels per day
The Trump administration had pressured OPEC to boost production after 18 months of cuts because higher global oil prices have led to rising gasoline prices for U.S. drivers.