October 2009

Canada News - Cap and Trade News - Gas Pipe Competition: Shale

30 October 2009 7:25am

General Northern Gas Pipeline-related News From Canada

More on Mackenzie - Climate Legislation - ANS Lease Sale

29 October 2009 8:39am

 Fairbanks News Miner, by Dermot Cole.  The Calgary newspaper quoted Doug Matthews, a Calgary energy consultant, as saying the latest news is not good for the pipeline.  “The way the feds have handled this hasn’t exactly basked themselves in glory,” he said.

Summing Up Mackenzie Progress

28 October 2009 7:27am

Calgary Herald, by Don Martin.   This is the Mackenzie Valley pipeline route, connecting the motherlode of Arctic gas deposits in the Beaufort Sea to the northern Alberta gas-dissemination network.  But no pipeline equals no pipe dream--and the $16-billion megaproject to create another energy frontier and give aboriginal communities an economic lifeline is now apparently dead.      *      CBC.  Environment Minister Jim Prentice declined to comment on a National Post article that raised questions about the future of the N.W.T.-based pipeline project, which has been plagued by ballooning costs and regulatory delays.  Citing unnamed sources, the Post said a federal cabinet committee rejected a financial assistance package he proposed for the project, based on concerns about the project's high pricetag.  "The Mackenzie Valley Pipeline Project, as I have said previously, is a private-sector investment that needs to make sense on an economic basis under market principles. That's what I've said repeatedly, and that continues to be the case," Prentice told reporters Tuesday in Ottawa.

Governor Sean Parnell Reaffirms Energy Commitment

27 October 2009 7:50am

QUICK REPORT: Appearing today before the Alaska Black Chamber of Commerce, Governor Sean Parnell said Alaska's Attorney General would remain vigilant in defending Alaskan energy interests against anti-development lawsuits.  The basis for Alaska's position on energy issues, he said, would be 'science' as opposed to political positioning.

 

See this Department of Law Video last week documenting Parnell's position:

 

State of Alaska to challenge misuse of Enandgered Species Act from State of Alaska on Vimeo.

Are Alaskans "Citizens" or "Sovereigns"?

26 October 2009 10:39am

 

 

Bill Walker is the sort of man I would like to have as a next door neighbor: kindly, thoughtful, a good listener, slow to anger, and, he loves Alaska.  Just because a person has attractive personal qualities, does not qualify him to dictate Alaska state policies.  If Bill were elected, be sure that he would do all within Alaska's "sovereign" power to dictate gas pipeline policy to the free market.  And, if he were my neighbor, we'd likely agree to keep the peace by not discussing politics.  -dh

Governor Candidate Bill Walker (NGP Photo) says in the Alaska Dispatch: "We, the people of Alaska, own the resources of the state. For far too long we have relied on others to develop our resources and move them to market. Over the years we have witnessed other countries move their valuable resources to market while Alaska's resources remain in the ground. That must change! Now is the time for us to take charge of our resources; now is the time to seize control of our future for the lasting benefit of all Alaskans."
Attorney Brad Keithley (NGP Photo) responds (Scroll down for give and take): "With all due respect, this approach will not further Alaska. Alaska works best when it enables and incentivizes private efforts, not displaces them (e.g., grain terminals in Valdez). Or, as a long time Alaskan puts it, when "government acts as the gentle breeze behind industry's back, rather than a gale force wind in the face." The real problem here is that Alaska tax and regulatory policy has become an impediment to the development of the State's oil and gas resources (http://bit.ly/oGFGO). Alaska cannot reverse that by "commanding" different results and dividing the world into "us" and "them." Instead, Alaska is best served by creating the "price signals" which cause the investment of private dollars in Alaska over other resource locations."
Our view:  In these tight, competitive circumstances all thinking Alaskans should consider every reasonable North Slope gas marketing angle to be on the table--including the Alaska Highway Pipeline, LNG, GTL and the Northern Gas Pipeline Route.  We should all wish buyers and sellers well and do everything possible to make Alaska economically competitive with producing areas that don't suffer Alaska's geographical and economic burdens.  Then, politicians should stand back and let the market work--if they are truly supporters of a free market.
One commenter, as you will read in the links above, dismissed Mr. Keithley's logic, calling it 'idiotic' and 'silly' and not offering support for that characterization.  But name calling has long been the main technique LNG Advocates have used for thirty years, fighting logic as they have every step of the way using faux-pro-LNG, anti-Canadian, and anti-producer name calling and slogans.   Lower 48 shale gas may indeed be a tough Lower 48 competitor to Alaskan gas, but Alaska's tax and regulatory policies have contributed to Alaska's economic challenges, not lessened them.  LNG cheerleaders seem to think that as long as Lower 48 markets are now less likely to attract Alaska gas, LNG is automatically more competitive in the world.  That is not a "given", as our friends in science would say.  It may be a political thesis or hope, but should not be a factual assumption upon which to base a multi-billion dollar, state-funded gas pipeline investment.  
Here's why. Just as Alaska's policies and geography work against gas sales in the Lower 48, so do they work against international LNG sales.  Perhaps the advent of gas shale in North America is a negative to Alaska gas sales, but the advent of new discoveries and favorable investment climates elsewhere is a negative to Alaska oil and gas sales, as well.  In addition, the fundamental negatives below can only be overcome with more attractive incentives than producers encounter elsewhere…
  • …because we are among the most expensive producing regions of the world (the Arctic), to begin with, and
  • because we are among the highest taxing governments of the world (Alaska + U.S.), and
  • because many/most of our competitors have oil and gas products available at tidewater locations, and  
  • because many/most of our competitors find and produce their oil/gas in low cost temperate zones, and
  • because many/most of our competitors have lower environmental/regulatory costs, and
  • because many/most of our competitors have lower labor costs.
Like substance dependency, political tomfoolery can only be changed when one first admits fault and then acts to correct the fault.  The great disservice that populist candidates offer is attempting to lead followers by strength of slogans like "All Alaska", as if such populism could create good economics out of thin air.  
At one point in Walker's article, he says, "It's time to act as the sovereigns we are."  He thus invokes citizens to rise up as "Sovereigns."  Whether a political group sets itself up to be 'Sovereigns' or any other 'special' class is immaterial.  What is material, is that Americans have rebelled against and rejected 'sovereigns' and other masters in favor of freedom, including the free enterprise system.  One is sad to see that Walker's campaign message supports our 'shoot ourselves in the foot' investment climate, sustains populism, denies logic, rejects the free market and tries to lead Alaskans away from a life of intellectual sobriety.
-dh

 

 

P.S.  In Pennsylvania, with severe budget challenges, leaders kept taxes low to provide high incentives to gas shale explorers.  See this Philadelphia Inquirer article, Mario F. Cattabiani and Amy Worden:

The natural-gas industry's leaders and lobbyists beat back Rendell's proposal to tax gas as it is pulled to the surface from the rich black-rock reservoir known as the Marcellus Shale.  So, as drilling rigs are sprouting in the state's northern tier and southwestern corner, the gas those rigs are extracting still isn't taxed. That makes Pennsylvania unique among the 15 states that produce the most natural gas.  What's more, the industry persuaded Harrisburg to lease more public land to gas drillers - even as the state's budget for environmental protection was being sharply cut

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Governor Sean Parnell and NEB Chairman Gaétan Caron: Resource Development Council for Alaska Releases "Who's Who In Northern Energy/Resources" Agenda

23 October 2009 6:35am

Register Before Seats Disappear!

 
 
With Governor Sean Parnell (NGP Photo-l) and National Energy Board Chairman Gaétan Caron (NGP Photo-r), RDC Conference Features Energy Who's Who.
 
 
RDC’s 30th Annual Conference Agenda (as of 10/20/09)
Alaska Resources 2010
 

November 18-19
Dena'ina Civic & Convention Center
Wednesday – November 18th
 
8:00 Opening Remarks
Governor Sean Parnell
The North Slope: 2010 Forecast
John Mingé, President, BP Exploration (Alaska) Inc.
Ken Sheffield, President, Pioneer Natural Resources Alaska (NGP Photo-r)
Helene Harding, Vice President, North Slope Operations, ConocoPhillips Alaska, Inc.
David Moles, Vice President Operations and Development, Eni Petroleum
Lee Bruce, Senior Project Manager, Point Thomson, ExxonMobil
Alaska OCS 2010
Peter Slaiby, General Manager, Shell Exploration Alaska
 
10:30 Emerging Energy Policy: Where Does Alaska Stand?
Kim Elton, Senior Advisor for Alaska Affairs, U.S. Department of the Interior
Tom Irwin, Commissioner, Alaska Department of Natural Resources
Common Sense Energy Policy: Short-term Needs, Long-term Solutions
David Holt, President, Consumer Energy Alliance (Photo)
 

TransCanada Taps AGIA Subsidy - News Miner Supports Fair Treatment for Shell - Rattie Attacks "Most Asinine Piece of Legislation in U.S. History"

22 October 2009 8:48am

Alaska Dispatch by Rena Delbridge.  The state is getting ready to write its first check to TransCanada Corp., its partner in pursuit of a natural gas pipeline from the North Slope to North American markets.  The state's licensee under the Alaska Gasline Inducement Act, TransCanada filed an invoice earlier this month for expenditures it made through the end of the first quarter 2009. TransCanada vice president Tony Palmer (NGP Photo) confirmed his company turned in expenses from December 2008, just after receiving the state's license under AGIA, through the first quarter of 2009, which ended March 31. The state will have to decide how much of the $2.6 million total is eligible for reimbursement.  State Revenue Commissioner Pat Galvin said he's requested additional information and formatting changes from TransCanada, and is expecting resubmission soon. The state will pick out qualified expenditures and send 50 percent back....    *     National Journal (10/22, subs. req’d) reports, “Starting today and through the end of next week, the American Energy Alliance is running radio ads in Graham's state "to make sure Mr. Graham's stance is well known throughout South Carolina," the group's spokesman Patrick Creighton said. The group's 60-second radio ad mentions the state's near-12 percent unemployment rate. "South Carolinians are struggling, " according to the ad. "This recession has pushed local businesses to the brink." The ad continues, "So why would Sen. Lindsey Graham support new energy taxes, called cap and trade, that will further harm our economy and kill millions of American jobs?"   (NGP opposes climate change legislation that increases energy costs for consumers and decreases marketability of Alaska's energy resources.)   *    The Shreveport (La.) Times (10/22) reports, Keith O. Rattie "{...was the keynote luncheon speaker at the Gulf Coast Prospect and Shale Expo Wednesday at the Shreveport Convention Center.

Now to Recognize Good News - Canada's Energy Man of the Year!

21 October 2009 6:40am

Thanks, Alaska Standard and Dan Fagan, For Caring About Alaska's Future!

Blog Reviews Prentice's Mackenzie Commitment - Gimarc Cites Benefits of AGIA Delay - MMS Apporves Shell Drill Permit But Other Delays Are Possible

20 October 2009 6:07am

 Brett Chandler's Blog.  Jim Prentice intimates here that the Mackenzie Valley Gasline is a national environmental priority.     *   Figure 1. Region within the Arctic Circle (North America is to the left and Eurasia is to the right. Need help, contact the National Energy Information Center at 202-586-8800.  Scott Heyworth alerts us of a New EIA Arctic Report examining the discovered and undiscovered Arctic oil and natural gas resource base with respect to their location and concentration.  The paper also discusses the cost and impediments to developing Arctic oil and natural gas resources, including those issues associated with environmental habitats and political boundaries.       *        The Alaska Standard, by Alex Gimarc.  "Warning to the readership; this is a contra-logical article. I want to explore the notion that the Sarah Palin (NGP Photo) Administration’s AGIA process may have just delayed the natural gas pipeline to the extent that we are not going to lose our shirt on it as a state as we create a multi billion dollar white elephant."    *     House Special Committee on Energy Co-Chair Charisse Millett, R-Anchorage, released the following statement today regarding the federal Mineral Management Service's conditional approval of Shell Oil's Beaufort Sea exploration plans:  "This is welcome and important news for Alaska workers and families," Millett said. "I ... 

Thousands of Alaskans and Lower 48 Folks Commented on the Administration's Lease Sale Program, EPA Permitting and Misguided Oceans Policy: Here Are a Few Examples....

19 October 2009 12:42am

 
Comment by
Dave Harbour, Publisher,
 

The good news is that about a half-million Alaskans and Lower 48 citizens have commented on three Administration initiatives that could strengthen or cripple America's economy and decisively affect Alaska's future.  The overwhelming majority of those commenting on the Department of Interior's Minerals Management Service (MMS) request for comment on a proposed 2010-2015 lease sale program commented in favor of developing America's Outer Continental Shelf (OCS) energy potential.  

Then a White House Ocean Policy Task Force visited Anchorage for a hearing and conducted a comment period ending Saturday, which seems to have attracted quite a number of anti-domestic energy commenters.  Next Tuesday (tomorrow), will end a comment period provided by the EPA for input on its plan to issue (after much delay) a Clean Air Act air quality permit to Shell for its Chukchi Sea project.  Please comment if you have not done so.    (Rep. Charisse Millett {l} and Mary Shields {lower left} testifying on 9-25-09)

 
With no bright prospects for ANWR, no big new oil discovery, or gas pipeline income in the next decade (at least) Alaskans should soberly realize that their State's 90% dependence on oil revenue is threatened by a 4-6% annual decline in Trans Alaska Pipeline throughput...even as beneficiaries of state entitlement programs, municipal revenue sharing, and education are demanding more. 
 
Therefore, the one straw for which Alaskans can grasp, is the medium-term hope of OCS exploration and production.  Senators Mark Begich and Lisa Murkowski with help from such friends as Louisiana Senator Mary Landrieu, are attempting to obtain for Alaska a Federal authorization for a 37.5% share of revenues from 'rents, royalties, and bonuses' resulting from OCS activity adjacent to Alaska.
 
But if anti-domestic energy activists, to whom the Obama administration is indebted, succeed in imposing a restrictive new 'ocean policy' or can deny air quality permits to Shell for activating exploration on its Chukchi Sea leases, it doesn't really matter what kind of lease sale program MMS eventually approves or what kind of OCS revenue sharing provision Congress enacts.  100% of nothing is still nothing.  In short, there are a number of ways the Obama White House and its supporters can bring wealth-producing domestic energy production to its knees, and I have only alluded to several of them here.
 
What Americans in general probably do not know is that bringing domestic energy exploration and production to its knees results in more dependence on foreign oil produced with less environmental care, more foreign job outsourcing, more transfer of wealth abroad, more debt at home, a compromised national security and the realization of a new, multi-trillion dollar anti-stimulus program.
 
For those more selfishly concerned about Alaska's survival, an end to OCS jobs and revenue sharing hopes could result in Alaska's evolution into a late-1980s depression at best or, more probably, a pre-pipeline population and economy by the next decade.
 
But Alaska has state-owned oil and gas potential, doesn't it?  Yes, but existing reserves are incapable of sustaining our huge government structure and entitlement culture.  From now on, the State will be spending its reserves, like a young man without sufficient employment spending his retirement accounts and paying huge penalties to do so.
 
One could mate the threatening OCS news with the realization that Alaska is becoming uncompetitive with other oil producing provinces.  Why?  
  • Because we are among the most expensive producing regions of the world (the Arctic), to begin with.
  • Because we are among the highest taxing governments of the world (Alaska + U.S.)
  • Because many/most of our competitors have oil and gas products available at tidewater locations and our companies have to pay the additional penalty of 800 miles of pipeline to transport our oil to tidewater.  (Gas shale could make our gas uncompetitive in the Lower 48 and an 800 mile gas pipe will make it less competitive with tidewater LNG sellers.)
  • Because many/most of our competitors find and produce their oil/gas in low cost temperate zones.
  • Because many/most of our competitors have lower environmental/regulatory costs.
  • Because many/most of our competitors have lower labor costs.
So, OCS is important.  Our Governor, every Legislator and all three Members of our Congressional Delegation have been aware of this week’s deadlines for commenting on an 'Oceans Policy' and on 'Chukchi Clean Air' Permits and we are confident many of them did provide written comments.  Our Northern Gas Pipeline articles have covered Governor Sarah Palin, Governor Sean Parnell, State Representative Millett, State Senator Lesil McGuire, and U.S. Senators Begich and Murkowski as they spoke to the various tribunals and/or provided earlier comment.   
 
One could still comment on the Oceans Policy, albeit two days late, and one could still timely comment on the Chukchi permit.
 
One wonders how many Alaskans, in all, commented.  One wonders who among our elected leaders commented.
 
One wonders, "Do enough of us care enough in this battle of wills?"