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      This is your public service 1-stop-shop for Alaskan and Canadian Arctic energy commentary, news, history, projects and people. We update it daily for you. It is the most timely and complete northern energy archive anywhere — used by media, academia, government and industry officials throughout the world. Northern Gas Pipelines may be the oldest Alaska blog; we invite readers to name others existing before 2001.  -dh

 

2-9-16 Announcing Calgary Conference

09 February 2016 2:13am

See EIA's "Short Term" Energy Outlook Released A Few Minutes Ago!


Alaska House To Consider Only Budget Legislation Until Budget Is Passed, Re: Alaska Fiscal Crisis!  ADN by Nathanial Herz.


Senator Lisa Murkowski 

Makes Kenai LNG Facility

Announcement Today!

"Hot Off The Press HERE": U.S. Sen. Lisa Murkowski, R-Alaska, today released a report prepared by the Congressional Research Service (CRS) raising key questions about President Obama’s proposal to levy a new $10-per-barrel tax on oil. *   *   *  Also see this House Resources Committee statement, just released!


Having Chaired the Calgary O&G Symposium when the Alaska overland and Mackenzie Valley Pipeline projects were still under active development, we are once again pleased to announce our association with the Arctic O&G Symposium, Calgary, March 16-17.  Here is your .pdf brochure fully describing the event.  If our readers use this brochure to register, they will be able to take advantage of a 10% discount.  -dh  


Alaska U.S. Senator Lisa Murkowski, Photo by Dave HarbourU.S. Sen. Lisa Murkowski, (NGP Photo), today applauded the Department of Energy’s decision to renew authorization for liquefied natural gas (LNG) exports for Alaska’s Kenai LNG facility.

“I welcome the news of this important renewal. For nearly half a century, Alaska has exported liquefied natural gas to our friends and allies overseas. As projects get underway in the rest of the nation, and planning continues for an even larger project here in the State, we should remember that Kenai set the precedent for the historic build-out of export capability now underway in North America. Alaska led the way, Alaskans can now continue to lead the way, and all Alaskans should be proud.”

Murkowski, chairman of the Senate Energy and Natural Resources committee, warned in 2011 that the Kenai plant’s closure highlighted “the urgent need we face to find a way to commercialize our North Slope gas reserves,” and welcomed the reopening of the facility and its export authorization in 2014. She has also successfully pressed the Administration to move expeditiously in its approval process for the AK LNG project, a natural gas pipeline stretching from the North Slope to Southcentral Alaska.  


 

U.S. Sen. Lisa Murkowski, R-Alaska, today released a report prepared by the Congressional Research Service (CRS) raising key questions about President Obama’s proposal to levy a new $10-per-barrel tax on oil.

“This report is only the beginning of the analytical work that my Committee staff will release as we review the administration’s budget proposal,” Murkowski said.

The report, commissioned by the majority staff of the Senate Energy and Natural Resources Committee, assesses the potential effects of the administration’s proposal and suggests impacts on gasoline prices, jobs, and the broader economy.

Among the key passages in the CRS report are the following:

“Analysts are likely to be concerned with the macroeconomic effects of the oil fee. These effects might include those on employment and jobs, economic growth, and inflation.”

“Since it is likely that the oil fee would be shifted forward by the oil companies, and since petroleum products enter into many products, consumers will likely see higher prices, not only directly for gasoline and other consumer products, but, in general, for many products to varying degrees.”

“In general, the fee would likely result in decreased discretionary consumer purchasing power which may translate into lower expected economic growth.”

Murkowski, chairman of the Senate Energy and Natural Resources Committee, noted that as indicated in the report by the White House National Economic Council, the $10-per-barrel oil tax “might result in a gasoline price increase of as much as $0.24 per gallon when fully implemented.” According to theEnergy Information Administration, the average U.S. price for regular gasoline is $1.76 per gallon. A $0.24 cent increase would be result in a 14 percent increase in gas prices.

Full text of the CRS report is available on the Senate Energy and Natural Resources website.  


Bishop: President’s Budget Stubs Out Hardworking Americans

Washington, D.C. – Today, the Obama Administration released its budget proposal for the 2017 fiscal year. Chairman Bishop (R-UT) issued the following statement:

“To defend this budget would require spin with dexterity that only a Las Vegas contortionist can accomplish,” Bishop said.

On Energy:

“President Obama stubs out the last bit of leverage the country has from our recent energy renaissance and told low-income American families to foot the bill on this budget. Levying this tax on affordable energy is a fantasy for President Obama and his pathetic and tiresome attempt to build a legacy with the far left. As he seeks to eliminate opportunities for American citizens with his $10-a-barrel scheme, we lose our competitive edge and are forced to rely upon countries like Iran to meet our energy needs.”

On Federal Land Management:

“This is a missed opportunity for strong stewardship of the land and taxpayer dollars. I expected more from Secretary Jewell’s department. She deserves better material to give Congress than what has been provided to her by the department. Her staff let her down.”

On Lack of Creativity:

“We need creative solutions to sustain and expand a strong and affordable domestic energy portfolio. We need innovative ideas to solve catastrophic wildfires destroying millions of acres of federal forests and severe droughts across the West—not more campaign slogans and regulatory red tape. Our resources present an opportunity for economic growth and energy independence, but the Administration would rather send those jobs overseas and further tax the American people.”

Silver Lining:  

“The only comfort in the president’s budget is knowing it will be his last.”

 

  


Thanks to the good work of Timothy Hess and Tyler Hodge of EIA, we have this, "Short-Term Energy Outlook"

February 9, 2016 Release

Highlights   

·         North Sea Brent crude oil prices averaged $31/barrel (b) in January, a $7/b decrease from December and the lowest monthly average price since December 2003. Brent crude oil prices averaged $52/b in 2015, down $47/b from the average in 2014. Growth in global liquids inventories, which averaged 1.8 million barrels per day (b/d) in 2015, continues to put downward pressure on Brent prices.

·         Brent crude oil prices are forecast to average $38/b in 2016 and $50/b in 2017. Forecast West Texas Intermediate (WTI) crude oil prices are expected to average the same as Brent in both years. However, the current values of futures and options contracts continue to suggest high uncertainty in the price outlook. For example, EIA’s forecast for the average WTI price in May 2016 of $36/b should be considered in the context of recent Nymex contract values for May 2016 delivery suggesting that the market expects WTI prices to range from $21/b to $58/b (at the 95% confidence interval).

·         The U.S. retail regular gasoline price is forecast to average $1.98/gallon (gal) in 2016 and $2.21/gal in 2017, compared with $2.43/gal in 2015. In January, the average retail regular gasoline price was $1.95/gal, a decrease of 9 cents/gal from December and the first time monthly gasoline prices averaged below $2/gal since March 2009. EIA expects the monthly average retail price of U.S. regular gasoline to reach a seven-year low of $1.82/gal in February 2016, before rising during the spring.

·         U.S. crude oil production averaged an estimated 9.4 million b/d in 2015, and it is forecast to average 8.7 million b/d in 2016 and 8.5 million b/d in 2017. EIA estimates that crude oil production in January was 70,000 b/d below the December level, which was 9.2 million b/d.

·         Natural gas working inventories were 2,934 billion cubic feet (Bcf) on January 29, 20% higher than during the same week last year and 18% higher than the previous five-year average (2011-15) for that week. EIA forecasts that inventories will end the winter heating season (March 31) at 2,096 Bcf, which would be 41% above the level at the same time last year.Henry Hub spot prices are forecast to average $2.64/million British thermal units (MMBtu) in 2016 and $3.22/MMBtu in 2017, compared with an average of $2.63/MMBtu in 2015.

http://www.eia.gov/forecasts/steo/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contact:

Timothy Hess

Timothy.Hess@eia.gov

phone: 202-586-4212

or

Tyler Hodge

tyler.hodge@eia.gov

phone (202)  586-0442

 

 

 

 

 

 

 

Categories:

2-8-16 We prefer good news but cannot ignore reality....

08 February 2016 5:52am

Alaskans Have Not Found Common Ground With Industry In the Midst of Fiscal Crisis -- But Canadians Are Getting There

We prefer good news but cannot ignore reality....  Below is a comment from a longtime Kenai Peninsula, Alaska reader.  It refers to our commentary last Friday.  Perhaps a good way to start the week, absent wonderful news, is to consider what steps must be taken to create good news.  After all, isn't the first step in a 12 step recovery program simply to admit fault?  -dh


From our Mid-Atlantic energy analyst friend:

As we mentioned recently, our information from sources has underscored an apparent concern on the part of the Fed regarding capitalization levels of the nation’s banks. It is perhaps self-serving to the Fed (at least to a cynic such as this writer) that it keeps pushing the notion that interest rates could rise perhaps four more times this year. Such moves, if implemented successfully, could serve to raise the earnings potential of the banks and provide an opportunity for increased capital levels through operations. However, a quick glance at the 10-year bond yield (1.85%, lower than a year ago), gold (up 10.7% since the December rate rise), the 4Q GDP (0.7%), and the trend of job numbers indicates there is not a snowball’s chance in hell of the economy supporting a series of interest rate increases as of now.

 

Thus, the current economic morass in the Oil Patch presents the overseers of the banking system with a growing major problem. While not talking much about it publicly, there are solid drum beats coming out of the brush that the regulators (the Fed and the OCC) are very focused on the growing debt problems being created by the E&Ps and market participants related to them. This is no small dilemma: theoverseers do not want act is such a way that elevates public concern, but they are being pushed hard to DO SOMETHING. As noted in the third article below about the actions being taken by the credit agency Moody’s (and others), they also are focused on the credit situation of Energy companies; our conversations with those who have interfaced with the ratings agencies would indicate the raters are getting external pressure, likely including from the Fed.

From a reader email received this morning:

Referencing 2nd of Your paragraphs:    We see no such cooperative efforts on behalf of the Alaska and U.S. Federal administrations.  We see hostility, demonizing, lack of due process, land access restrictions, constricting regulations and higher energy tax rhetoric.  

In a low price environment like this, we can only observe today that history will show such acts -- West and South of Canada's border -- to be either, "intentionally anti-development or downright unintelligent".

Dear Dave –  Went to lunch after church and thought I’d check my emails when I saw your Friday report and  I was especially SAD to read the 2 paragraphs at the beginning of our email.    I REALLY  hope it changes because I NEVER LIKE HOSTILITY AND RESTRICTIONS that are imposed by our government when our businesses are trying so hard to succeed. 

And it is quite inspirational that you shared that we actually received this offer =è=è that politically liberal Canadian Provincial and Federal governments are extending olive branches to oil industry executives.  They are asking, "What can we do to help you be successful in a low price environment?"  

I will keep the Northern Gas Pipelines and its STAFF and LEADERS - -  in our daily prayers.  I will ALSO pray that our Alaska and U.S. Federal Administrations become COOPERATIVE AND SUPPORTIVE.  OH MY GOSH. . . YOU ALL TAKE CARE!  I will be printing this for my husband to read. . . I know he’s going to wonder what is going on with our government!  We look forward to hearing GOOD NEWS!


CBC, by Andrea Ross. Canadian Government and Industry Are Reaching Common Ground On Pipeline Policy....

Alberta energy companies and the NDP government don't always see eye to eye, but they seem to agree on one thing - the province needs more pipelines to carry its most valuable commodity to global markets.

A consistent problem facing the industry is that most of Alberta's oil — around two and a half million barrels per day — is sold to U.S. customers at prices well below that of global crude oil, resulting in billions of dollars in lost revenues every year, according to Natural Resources Canada.

In September, Premier Rachel Notley told an audience at an Alberta Urban Municipalities Association convention that she wants at least one new "drama-free" pipeline built to carry Alberta's oil to world markets.

Her comments came after premiers signed a Canadian Energy Strategy in July, with the intended goal, at least in part, to help energy producers reach wider markets.

Categories:

2-7-16 Scroll Down For Last Week's Commentaries

07 February 2016 4:52am

 
 
Low energy prices a double-edged sword for industry
Low energy prices may help Alaska LNG compete against other ... BP Business Development Director for Alaska LNG, Damien Bilboa says the ...
 

2-6-16 Scroll down for this week's commentary....

06 February 2016 7:07am

 
 
NEB orders operators to report 'substandard' materials used inpipelines
In Canada, poor quality fittings were considered a possible cause of a 2013 leak in an Alberta natural gas pipeline operated by TransCanada Corp.
 
Categories:

2-5-16 Can Alaska And Washington Learn From Alberta and Ottawa?

05 February 2016 7:36am

Can Alaska And Washington Learn From Alberta and Ottawa?

Yes.  But Are They Likely To Learn.  No.

1.  Calgary Herald by James Wood.  As Prime Minister Trudeau and Premier Notley hosted a roundtable meeting (Video) in his first visit to Calgary since becoming prime minister, he told a group of top energy executives the government wanted to hear ways Ottawa “can be a better partner in helping you through this difficult time.”

2.  Alaska Headlamp.  ... Rep. Mike Hawker, asked why Governor Bill Walker wants the Legislature to completely reverse its tax credit policy. A Senate working group convened last year by Sen. Cathy Giessel, recommended careful adjustments to protect advancing projects.  Headlamp agrees with Sen. Giessel—protecting ongoing projects should be a principal goal of any tax plan the Governor puts forward this session. Pulling the rug out from....


3.  Politico by Michael Grunwald.  ...the president will propose more than $300 billion worth of investments over the next decade in mass transit, high-speed rail, self-driving cars, and other transportation approaches.... To pay for it all, Obama will call for a $10 “fee” on every barrel of oil, a surcharge ... paid by oil companies but ... presumably ... passed along to consumers.

In the sidebar (1.), readers will first note that Canadian provincial and federal leaders are asking the oil industry how the two interests can cooperate in the current low-price environment.

Farther down (2.), readers will appreciate Alaska Headlamp's viewpoint; Alaska officials who have created a more oil-dependent government than Alberta are less inclined to support the rejuvenation of that economic engine.

At the bottom of the sidebar (3.), we note that the U.S. federal administration continues its harsh and hostile attack on America's principal, bedrock creator of wealth.

The Canadian politicians, though liberal and heavily biased in favor of 'climate change energy policies', seem at least to realize that without fossil fuel wealth producers, the entire Canadian economic infrastructure is threatened.

Alaska's governor, in contrast, has shown a propensity to attack and dictate to the oil industry -- even in a low oil price environment -- rather than reaching out to identify areas of cooperation.

And the U.S. president's whole term of office has been identified with blocking access to energy exploration, over regulating energy and natural resource wealth production in general and disapproving the massive, multi-billion dollar job producing Keystone XL Pipeline.  And now, as if that assault were not sufficient economic assault to totally kill the traditional energy industry -- the president proposes a $10/barrel oil tax increase, thus increasing the current per barrel cost by a third -- a new, de facto fuel tax on consumers that will actually make American crude oil less competitive on the world market.

We don't know whether Canadian provincial and federal outreach efforts will produce workable policies going forward for the oil and gas industry. But we and Canada's oil and gas producers are hopeful.

On the U.S. side, we are less hopeful.  With the type and intensity of opposition and hostility aimed at America's oil and gas industry, the current Alaska and Washington leadership legacies can only be characterized by historians as "intentionally anti-development or downright unintelligent".

Kudos, Canada!  

Wake up, U.S.!

 

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