by wp_sysadmin | Jul 31, 2020 | News
As Alaskans prepare to vote on another oil tax ballot measure, it’s a good time for a refresher on the details of our oil industry, what it has done, and will continue to do, for our state.
The oil industry is a key part of Alaska’s economy:
- Alaska is the only state that does not have a state sales tax or a personal income tax.
- Revenues from Alaska’s oil industry have funded most of the state government for several decades.
- Since 1982, every eligible state resident has received an annual dividend that is based on the value of oil royalty revenue in the Alaska Permanent Fund.
- The state’s North Slope contains 6 of the 100 largest oil fields in the United States.
- Alaska’s Prudhoe Bay field is among the 10 largest oil fields in the nation.
There’s more to come:
- Alaska’s proved crude oil reserves—about 2 billion barrels at the beginning of 2018—were the sixth largest of any state.
- Large areas of the state remain unexplored for oil.
- In 2017, oil exploration and drilling were no longer prohibited in the Arctic National Wildlife Refuge (ANWR).
- The U.S. Geological Survey estimates the ANWR coastal plain holds 10.4 billion barrels of crude oil.
- The U.S. Energy Information Administration (EIA) doesn’t expect ANWR oil production to start until 2031 because of the time needed for energy companies to acquire leases, drill exploratory wells, and build the necessary production infrastructure.
We can increase the oil in the pipeline.
- Most of Alaska’s crude oil production occurs on the North Slope.
- The Trans-Alaska Pipeline System, which began operating in 1977, transports crude oil from the frozen North Slope to the warm-water port at Valdez, on Alaska’s southern coast.
- The pipeline can carry more than 2 million barrels per day.
- Actual deliveries have been less than 1 million barrels per day since 2003.
- In 2018, deliveries decreased to 509,000 barrels per day.
- New projects on the North Slope can add barrels to the pipeline and dollars to the state treasury:
- Greater Moose’s Tooth 2 – 35-40,000 BPD
Alaskans have demonstrated time and again that their tenacity and pride can overcome most any obstacle. Meanwhile, the state has benefitted from the responsible development of natural resources for over 60 years. With so many projects on the cusp of production, it seems foolish to implement an onerous tax— one that will surely lead to less investment, production and jobs. As you fill in a bubble this November, consider the legacy these partners have had in Alaska and what bright futures lie ahead.
by wp_sysadmin | Jul 30, 2020 | News
News of the Day: The true cost of renewable energy – is anybody listening?
Instead of a push towards renewable energy, the world should be focused on a push towards clean energy. Those two terms are often used interchangeably especially when green energy advocacy groups are pressuring policymakers to campaign for the use of wind, solar, and electric vehicles. But as the world pushes towards clean energy during the green revolution and begins the transition to renewables, we must ask ourselves: with the shift away from fossil fuels, what is the true cost of clean, green, renewable energy?
OIL
The Cowboy State Looks To Stimulate Oil Drilling With Tax Cuts
Charles Kennedy, OilPrice.Com, July 30, 2020
Wyoming regulators look to stimulate oil production in the state with a new tax relief proposal that calls for a tax exemption until the price of WTI reaches $45 per barrel The Wyoming legislature’s Joint Minerals, Business and Economic Development Committee has sponsored a bill proposing tax relief for oil and gas companies in a bid to stimulate an increase in production. The bill calls for a tax exemption once the price of West Texas Intermediate reaches $45 per barrel for light sweet crude and $38 per barrel for sour grades produced in the state. While the tax exemption will only be temporary, to be in effect no longer than 12 months after the benchmark price of oil reaches the necessary threshold, its sponsors believe it could have a positive effect on the oil and gas industry in Wyoming.
GAS
Trump says export terms for liquefied natural gas extended until 2050
Rachel Frazin, The Hill, July 29, 2020
President Trump announced Wednesday that export authorizations for liquefied natural gas (LNG) will go through 2050 and signed four permits for pipeline and rail transport of fossil fuels. The administration had already proposed extending LNG export terms through 2050, though it finalized the policy on Wednesday. The export terms previously lasted 20 years.
MINING
US appoints coordinator for Arctic policy as mineral race heats up
Reuters, July 29, 2020
The Trump administration appointed a coordinator for policy in the Arctic on Wednesday, as Washington prepares to compete with Russia and China on resource extraction in a region quickly melting due to climate change. The State Department said Jim DeHart, a 28-year diplomat who most recently served as a senior adviser in South Korea, is now US coordinator for the Arctic region. Washington has not had a top policy maker for the Arctic since Robert Papp, a retired Coast Guard admiral, served as the first US special representative from 2014 until early 2017.
POLITICS
What Would A Joe Biden Win Mean For Oil And Gas?
Wood Mackenzie, Forbes, July 28, 2020
As Biden nudges ahead in the polls, the US oil and gas industry should prepare for far-reaching potential changes, says Wood Mackenzie’s Justin Rostant. Much can change between now and the election in November. But Biden’s broader clean energy plans could be a watershed moment for US energy, and his agenda could have a profound and direct impact on offshore oil and gas production.
The most eye-catching of his proposals for the offshore industry is a promise to ban “new oil and gas permitting on public lands and waters.” He also plans new protections for the Arctic National Wildlife Refuge and other areas President Trump has sought to open up for oil and gas development, including the eastern Gulf of Mexico (GoM). Operators and the administration itself will need to think carefully about the implications of what could be one of the most far-reaching changes in the US offshore industry’s history.
by wp_sysadmin | Jul 29, 2020 | News
News of the Day: A guide to spotting lies using data….aka fact checking promoters of the oil tax initiative
A criticism recently leveled at Alaska’s current oil tax by some people promoting the Fair Share Act, the ballot initiative to raise oil taxes, is that the total royalty plus production tax rate in Texas is higher than Alaska. Like much of the discussion marketing the initiative, it sounds good until examined in detail.
OIL
Oil rises after surprise drop in U.S. inventories offsets demand concerns
Oil & Gas 360, July 29, 2020
Oil prices rose on Wednesday after an industry report showed that crude inventories in the United States fell against expectations, giving the market a boost amid record increases of coronavirus infections in the U.S. and elsewhere.
GAS
Record U.S. LNG output jump lifts exports in weak market
Oil & Gs 360, July 29, 2020
A sharp increase in U.S. liquefied natural gas (LNG) output in the past year has protected the country’s status as the world’s third largest exporter of the chilled fuel, despite multiple cargo cancellations this summer.
MINING
Americans Concerned About Paying Household Bills, Unwilling to Pay More for Electricity
National Mining Association, July 28, 2020
Fifty-six percent of Americans say they are unwilling to pay more in their electricity bills to support energy and climate plans that have been debated in the presidential race. The polling, conducted by Morning Consult for the National Mining Association (NMA), also found that nearly half of Americans say the pandemic has increased their concerns about their ability to pay those very bills. “The unprecedented circumstances stemming from the pandemic have created heightened financial stress for many American families that simply didn’t exist just months ago,” said Rich Nolan, NMA president and CEO. “While paying the bills may not have been high on the list of voter concerns six months ago, the world is now markedly different. As summer heat broils across the country and with more Americans increasingly finding themselves at home, keeping families safe and cool costs more than ever. Coal generation not only plays an outsized role in propping up the grid and providing reliability during extreme weather, but it underpins affordability.”
POLITICS
TODAY, Wednesday, July 29, President Trump is visiting Double Eagle Energy in Midland, Texas to deliver remarks on his Administration’s efforts to reduce regulations, streamline the permitting of projects, and incentivize private investment in energy infrastructure that have helped make the United States a dominant energy power.
WATCH LIVE: You can view the President’s remarks live HERE at 4:20 PM Eastern (note time subject to change; remarks will be recorded)
by wp_sysadmin | Jul 28, 2020 | News
OIL
Groups divided over Alaska oil tax ballot measure
Joe Vigil, KTVA, July 27, 2020
Scott Jepsen, vice president of External Affairs and Transportation for ConocoPhillips Alaska, recently discussed investment plans on the North Slope during a media briefing. “When you take a look at the plans that have been talked about for Prudhoe, Kaparuk and Alpine, there’s about $10 billion on a gross basis of new investment that’s planned for these fields. It’s going to add hundreds of thousands of barrels a day of new production and generate obviously thousands of jobs in support of that, support thousands of jobs,” said Jepsen.
He also discussed what might happen if the Fair Share Act passes. “If you pass a huge tax increase on these three core fields, we will act like rational investors. And we’ll invest where it makes the best returns for us. And if Alaska doesn’t make sense, which it won’t under this tax initiative, you can expect we’ll be sending our money to other places and it’s going to be significant,” said Jepsen.
Our Take: Robin Brena’s claim in this article that the new tax would bring in a billion dollars annually to the state is grossly inaccurate. At current oil prices, which are projected to stay low for 18-24 months, the number is closer to $250 million.
GAS
First ice-breaking LNG carrier calls Japan from Yamal
Bob Jacques, Seatrade Maritime News, July 27, 2020
Mitsui OSK Lines (MOL) reports that the ice-breaking LNG Carrier Vladimir Rusanov, has made its maiden call at the LNG Terminal in Ohgishima, Tokyo Bay, becoming the first ice-breaking LNGC to call at Japan. MOL jointly owns and operates the Vladimir Rusanov with Cosco for the Yamal LNG project. The vessel departed the Yamal LNG plant at Sabetta port on 29June, sailing eastwards along the Northern Sea Route (NSR) via the Kara Sea, the Laptev Sea, the East Bering Sea, the Chukchi sea, and the Bering Strait.
Meanwhile in the U.S…
Trouble Ahead As Builder Of USCG Heavy Icebreaker Abruptly Changes Leadership
Craig Hooper, Forbes, June 30, 2020
Is the Coast Guard’s new Heavy Icebreaker Program in trouble? On June 9, the White House issued a somewhat unusual memo, emphasizing that “the United States requires a ready, capable, and available fleet of polar security icebreakers” by Fiscal Year 2029. Four days later, Ronald Baczkowski, President and CEO of VT Halter Marine, the contracted builder of America’s first new polar security icebreaker, abruptly resigned. Two days after that, ST Engineering North America, VT Halter Marine’s parent company, announced the appointment of a third shipyard president in the space of four years, Robert Merchent.
MINING
It’s a start – processing heavy rare earths in America
Bruno Venditti, MINING.COM, July 27, 2020
Lynas Corp (LYC.AX) announced on Monday it has signed a contract with the US Department of Defense to begin initial design work for its heavy rare earth separation facility in Texas that the Pentagon is providing initial funding for. The funding will allow the company and US partner Blue Line to complete a market and strategy study for the construction, the company said in a press release. Lynas expects the work to be completed in the 2021 financial year. The facility will process heavy rare earths sourced from Lynas’ flagship Mt Weld mine in Western Australia.
From the Washington Examiner, Daily on Energy:
CRITICAL MINERALS MEASURE INCLUDED IN GOP PANDEMIC BILL: Senate Republicans’ latest pandemic relief bill, which Majority Leader Mitch McConnell and other top GOP senators unveiled Monday, includes Senate Energy Committee-led efforts to boost domestic production of critical minerals.
The inclusion comes as Republican lawmakers in both chambers have raised increasing concerns about U.S. reliance on other countries, especially China, for critical minerals used in everything from military equipment to electric cars. Murkowski’s American Mineral Security Act, introduced last year, seeks to speed permitting for critical minerals mining, identify U.S. critical mineral deposits, and invest in research and development of recycling and alternatives.
“The COVID-19 pandemic has brought renewed attention to the fact that our nation is heavily dependent on imports for a wide array of goods and technologies that are essential to our health, economy, and security,” Murkowksi said in a statement, adding the U.S. must “reverse our damaging dependence on China and other nations and rebuild domestic supply chains” for those materials.
POLITICS
Where Alaska’s congressional delegation stands on the new $1 trillion COVID-19 aid package
Alex DeMarban, Anchorage Daily News, July 28, 2020
Members of Alaska’s all-Republican congressional delegation have indicated they want to balance continued high unemployment levels with the nation’s debt and other concerns, as Republican senators released a new $1 trillion relief package to combat COVID-19′s economic fallout. The measure released Monday by Senate Republicans, known as the “Heals Act” package, included proposals reducing a weekly federal unemployment boost from $600 to $200, issuing a second round of stimulus checks and adding an additional $100 billion to the Paycheck Protection Program that has helped businesses cope with the pandemic.
Alaska House Republicans seek to unseat fellow Republican Rep. David Eastman
James Brooks, Anchorage Daily News, July 27, 2020
To take control of the Alaska House of Representatives, several Republican legislators are saying they first need to get rid of Rep. David Eastman, R-Wasilla. Over the weekend, members of the House’s Republican minority went door-to-door in Eastman’s district, trying to garner support for his Republican primary challenger, Jesse Sumner. The primary is Aug. 18, and since the state’s current House districts were put into place, the Republican primary winner has won the district every time.
by wp_sysadmin | Jul 27, 2020 | News
OIL
How Big Oil’s M&A targets have changed
Simon Flowers, Wood Mackenzie, July 24, 2020
No one has experienced an M&A market as bad as this. The collapse in oil and gas prices and Covid-19 killed deal activity, with 2020 so far recording the smallest number of deals in any month, any quarter and any half-year. There was no transaction in H1 over US$1 billion, the first time this has happened in a six-month period since our records began early this century. The monthly average spend on deals has been just 5% of the run rate of the last 15 years.
Chevron’s US$13 billion bid for Noble Energy is a welcome sign that things may be starting to get back to normal.
GAS
Russia Overtakes U.S. In LNG Exports To China
Irina Slav, OILPRICE.COM, July 27, 2020
Russia exported more LNG to China in June than the United States did, at 396,000 tons versus 340,000 tons, Russia’s Sputnik reports, citing data first quoted by Bloomberg. According to the data, from Chinese customs authorities, Russia LNG imports were 20.7 percent higher than a month earlier, while U.S. imports of LNG were just 2.4 percent higher. Separately, Natural Gas World reported that China’s liquefied natural gas imports in June were 29 percent higher than a year ago, at 5.79 million tons. January to June imports of LNG were also higher. The data refutes earlier reports suggesting that China’s LNG imports in June were down 7 percent on the year as the heating season ended, reducing demand. China recently became the largest LNG importer in the world, turning into a battleground for producers amid tanking prices driven by an oversupply similar in gravity to the oversupply in crude oil markets.
MINING
COVID slows mineral plans in NANA region
Shane Lasley, North of 60 Mining News, July 24, 2020
The COVID-19 pandemic has led NANA Corp. and its mining partners, Teck Resources Ltd. and Ambler Metals LLC, to adjust their mineral exploration and mine development plans in order to meet the ever-evolving health and safety mandates to keep shareholders, employees and residents of Northwest Alaska as safe as possible. “Although the pandemic was unexpected, learning to adapt is nothing new for the region and Iñupiaq people. For 40 years, NANA shareholders have supported responsible resource development, even during times of uncertainty,” NANA inked in a July 17 mining update.
POLITICS
Almost 100 Days Out, Democrats Are Favored to Take Back the Senate
Jessica Taylor, Cook Political Report, July 23, 2020
With just over 100 days until Election Day, the political climate appears dire for Republicans across the board. President Trump is the decided underdog against former Vice President Joe Biden in our Electoral College ratings and Democrats could end up expanding their House majority. That leaves the Senate as Republicans’ firewall—the final barrier to unified control for Democrats in 2021. While GOP incumbents are trying to run races independent of the president, if Trump’s polling numbers remain this dismal come November, that’s an unenviable and likely unsuccessful strategy, according to several top party strategists. As of now, Democrats are a slight favorite to win the Senate majority.
