News of the Day:
North Slope oil production shows gradual decline, but Prudhoe Bay bucked the trend with increased output
Tim Bradner, The Frontiersman, February 3, 2021
North Slope production is holding generally steady but trending slightly down, according to January reports by the state Department of Revenue, which tracks daily and monthly production. While most of the slope’s producing fields showed continued gradual declines the large Prudhoe Bay field was up in January, continuing a modest upward trend since Hilcorp Energy became field operator last summer.
Prudhoe Bay is important because it produces over half of the oil flowing through the Trans Alaska Pipeline System.
Total slope production averaged 498,176 barrels per day in January, compared with 514,887 barrels per day in January 2020 and 525,075 barrels per day in January 2019, according to the revenue department reports.
Hilcorp increased January output at Prudhoe to 309,440 barrels per day, up from 299,380 barrels per day in the same month a year earlier, in January 2020, and 305,372 barrels per day in January 2019, when BP was field operator.
Canada may seek U.S. payback via NAFTA after Biden cancels Keystone XL
Robert Tuttle, World Oil.Com, February 5, 2021
The oil-rich Canadian province that was hit hard by Joe Biden’s move to kill the Keystone XL pipeline is considering seeking compensation from the U.S. through an old free-trade rule that’s still in place.
Alberta, which spent C$1.5 billion ($1.2 billion) to help jump start construction of the project, may resort to a North American Free Trade Agreement provision allowing compensation claims for lost investments, Alberta Premier Jason Kenney said. While NAFTA was replaced by the United States-Mexico-Canada Agreement during the Trump administration, the rule remains in place during a phase-out period.
OIL:
Biden administration cancels public comment period for Alaska offshore oil lease sale amid review of program
Alex DeMarban, Anchorage Daily News, February 4, 2021
A federal agency on Thursday said it is canceling a public comment period for a proposed oil and gas lease sale in Cook Inlet. The announcement comes after President Joe Biden signed a Jan. 27 order pausing new oil and gas leases on federal lands and waters during a review of the program.
The Bureau of Ocean Energy Management said it won’t hold the public comment period, scheduled to last through March 1, and three online virtual meetings scheduled for next week.
The cancellation delays the process to hold the 2021 sale, said John Callahan, a spokesman with BOEM in Anchorage.
“If a decision is made to restart the lease process, then we’ll reopen the comment period,” he said Thursday.
The lease sale, covering 1 million acres in federal waters in Cook Inlet west of the Kenai Peninsula, was proposed by the Trump administration to be held later this year. The comment period was meant to inform an environmental study of the impacts of the lease sale there.
GAS:
Hilcorp eyes gas exploration near Anchor Point
Sabine Poux, Alaska Public Media, February 4, 2021
Hilcorp Alaska is looking to build two gas exploration wells near Anchor Point later this year.
The Texas-based company has requested approval from the Alaska Department of Natural Resources to build an oil-gas combination well and a gas-only well in Whiskey Gulch, three miles northeast of Anchor Point. It also wants to build a gravel pad and access road on the privately-owned property above the lease.
The proposal is for a gas prospect: An ENSTAR Natural Gas line runs past the site down the peninsula.
Hilcorp is the biggest oil and gas producer in Cook Inlet. The Texas-based company owns several onshore gas wells, including the Seaview Unit south of Anchor Point, and operates most of the inlet’s offshore platforms.
Hilcorp drilled five test wells to assess the geology in Whiskey Gulch last summer, including two on the lease involved in its current proposal. All were plugged and abandoned in July, according to data from the Alaska Oil and Gas Conservation Commission.
In its application, the company proposed constructing the gravel access road and pad in April. The Department of Natural Resources says the company could start drilling June 1. Any future production would need to be approved in a separate permitting process.
You can find Hilcorp’s application here. Send comments to DNR by March 4 at dog.permitting@alaska.gov.
MINING:
Editorial counterpoint: Buy American? Block Minnesota mining? Choose one.
Lisa Rudstrom, Star Tribune, February 3, 2021
On Jan. 30, the Star Tribune Editorial Board applauded President Joe Biden’s “Buy American” push (“Biden gets serious on ‘Buy American’ “), welcoming his call for “domestic alternatives” and writing that “the need to protect American-made supplies was made abundantly clear at the outset of the pandemic.”
Twenty-four hours later, in “Renew the push to protect BWCA” (Jan. 31) the Editorial Board contradicted its support for domestic supply chains with a passionate call to turn our backs on a tremendous domestic resource of strategic minerals in northeast Minnesota.
This series of pronouncements was dizzying in its self-contradictions and huge intellectual leaps. As an Iron Ranger and a lifelong science teacher and educator perusing the articles on her lunch break, I struggled to follow the logic.
The proposed Twin Metals copper-nickel mine, located between the cities of Ely and Babbitt, targets a unique deposit that holds 95% of the country’s known domestic nickel reserves, 88% of the cobalt, 75% of the platinum group metals and 34% of copper reserves. These minerals — which can only be mined — are not only key for our national economic security and reducing our overreliance on foreign sources, but they’re also critical to our nation’s transition to a low-carbon future.
The supply chain starts here. We simply can’t power the new green economy without them. Iron mined from northeast Minnesota helped build our country and win wars. Copper and nickel can be the elements that propel our nation into the future.
POLITICS:
Alaska House picks freshman Patkotak as temporary speaker
Associated Press, February 4, 2021
The Alaska House voted Thursday to elect freshman Rep. Josiah Patkotak as temporary speaker but remained unorganized, with no majority in charge, more than two weeks into the legislative session.
Patkotak, an independent from Utqiagvik, took over for Lt. Gov. Kevin Meyer, who had been presiding over House floor sessions for the purpose of electing a temporary speaker. Prior nominations of other members leading to Thursday had failed.
Patkotak was elected 39-0, with Democratic Rep. Geran Tarr of Anchorage shown as absent.
Patkotak has been voting with a 20-member bloc, largely composed of Democrats but that also includes independents and Republican Rep. Louise Stutes of Kodiak. There also is a 20-member Republican group. Rep. Mike Cronk of Tok, a member of the Republican group, nominated Patkotak on Thursday.
CLIMATE CHANGE:
Can the Oil and Gas Industry Lead on Climate? with Tisha Schuller
Tisha Schuller, Daniel Raimi, and Elizabeth Wason, Resources Radio, February 2, 2021
In this episode, host Daniel Raimi talks with Tisha Schuller, the founding principal at Adamantine Energy and the former president and CEO of the Colorado Oil & Gas Association. Elaborating on her new book, The Gamechanger’s Playbook, Schuller identifies several key “disruptors” that could pose existential threats to oil and gas companies, such as the increasing economic influence of environmental activism and growing calls for businesses to do more around racial justice. For these energy companies to be successful in the future, Schuller recommends that industry leaders engage the more climate-conscious millennial generation and meaningfully commit to decarbonization.
Notable Quotes
- Fossil fuel companies need to contend with activism as an economic force: “Environmental activism is now completely influencing mainstream business risk. I encourage companies to stop thinking about [activism] in terms of political identity and start thinking about environmental activism as a hurricane off the coast. When you prepare your facilities for an incoming hurricane, you don’t ask yourself if you believe it’s coming or not. You look at the percentage of risk that it creates.” (8:35)
- Climate literacy is essential for the modern oil and gas industry: “Companies need to immediately share aspirations with the public for a decarbonizing energy future. At this point, I can say with confidence that this is just nonnegotiable … If companies can’t speak about climate fluently and about their role in addressing climate, then [they have no space] to talk and negotiate and think about what those steps mean in the interim. That has to happen at the board and executive level.” (15:10)
- If the oil and gas industry could innovate before, it can do so again: “The most important resource that we as an industry bring to this is 150 years of entrepreneurial spirit … We have reinvented ourselves time and time and time again, and really transformed geopolitics with our success here in the United States. That entrepreneurial spirit is what we want to tap into, to think about: How are we going to invent the next 50 years of the energy future? It’s going to look nothing like the past 50. But that’s okay; that’s what we’ve always done. This is the opportunity for our generation to create the energy future.” (19:34)
