September 2010 Archives
ADN by Elizabeth Bluemink: Conoco Phillips said Tuesday it hasn't backed away from its efforts with BP to develop a North Slope gas pipeline.
Monday. Canadian Institute/American Conference Institute's Sixth Annual Oil and Gas Congress. Cook Inlet Regional Corporation Chair Margaret Brown (CIRI Photo) and Northern Gas Pipelines Publisher Dave Harbour (NGP Photo) are Co-Chairs of this year's event --this week-- featuring leaders in U.S., Alaskan and Canadian governments, industry, media and indigenous organizations.
ADN by Tim Bradner. Oil is vital to Alaska. Royalties and oil taxes pay for 90 percent of the state budget, the Department of Revenue says. Overall, the industry supports about a third of Alaska's economy directly and indirectly, according to University of Alaska studies. However, the trends in this vital industry are headed the wrong way. Production is declining, employment is down and new exploration may hit a record low this year. Don't think a gas pipeline will bail us out, either. State revenues generated by gas will be very modest compared with oil and a pipeline is 10 years away, if then.
Tuesday. While the formal session of the Oil and Gas Congress begins today, on Monday, a 'pre-conference' seminar featured a panel dealing with Alaska's own local power supply issues. Chaired by Alaska Energy Authority Executive Director Steve Haagenson, the panel included Dan Coffee, Anchorage Mayor Dan Sullivan's Energy Task Force Chairman, Matanuska Electric Association CEO Joe Griffiths and Chris Rose, Executive Director of the Renewable Energy Alaska Project (REAP). During the opening reception, Alaska State Senate Energy Committee Chair Lesil McGuire told the group that she would be approaching the Legislative Session in January with goals of: reviewing the oil industry tax structure, evaluating regulatory efficiency and analyzing Alaska's competitiveness as an oil and gas investment climate. At noon, Monday, Alberta's Minister of Energy Ron Liepert (an Oil and Gas Conference Speaker) addressed the Anchorage Chamber of Congress, telling the Assembly that, "Capital can move. It's mobile. It can move to a more favorable regime." He said the goal of leasers is to strike a balance between the desire for oil and gas revenue and the need to remain competitive.
Wednesday. Yesterday, your author moderated and today the esteemed Margie Brown takes over. Stories and photos coming. The agenda indicates what a rich array of speakers we enjoyed, but one focus was on gas pipeline players, including Bud Fackrel, Tony Palmer, Larry Persily and Harold Heinze. Federal Coordinator Persily discussed the pipeline projects progress. He began his remarks by delivering a letter from President Obama to the participants. The President acknowledged the role Alaska plays in meeting America’s energy needs today and into the future. “As part of Alaska’s contribution to America’s energy needs, I share with you the anticipation that a North Slope natural gas pipeline could finally be on its way south to serve North American markets... The Office of the Federal Coordinator stands ready to help with permitting for the multibillion-dollar pipeline, and my Administration fully supports that office and its objective of coordinating Federal planning to help advance the project.” The full letter is attached (Copy courtesy of Jennifer Thompson.)
More reports and photos coming....
Last night (9-22-10) the Alaska Chapter of the International Association of Energy Economists sponsored a forum at the University of Alaska-Anchorage to weigh the risks against the benefits of Outer Continental Shelf (OCS) development in the Arctic. (More coming next week....) Comments from: Roger Marks, Michael Carey, Pete Slaiby (NGP Photo-l), John Schoen, Harold Curran (NGP Photo-r), David Ramseur
Lawmakers Struggle With OCS Complexity
Commentary and Report (Planned for completion 9-28)
Dave Harbour (ABM link)
Alaska Senate Resource Co-chairmen, Senators Bill Wielechowski and Lesil McGuire (NGP Photo) presided over a full house at the Anchorage Legislative Information Office yesterday (9-21-10), dealing with the infinitely complex subject of Arctic oil spill preparation and response. They approached the potentially controversial and divisive challenge with tact and courtesy. Invited witnesses seemed cooperative. While appearances can be deceiving, one could observe a common theme that nowhere in the world are oil and gas industry contingencies better anticipated than in the North American Arctic, though, as in all human endeavor constant improvement is both possible and desired.
Wielechowski opened by observing that his goal for the hearing was to, avoid controversy and asses Alaska's OCS (Outer Continental Shelf) oil and gas exploration and development with the needs of both the nation and the state in mind. He said that while -- in contrast to deep water Gulf of Mexico (GOM) operations -- Alaska's OCS is primarily focused on shallow water prospects, unlike the GOM, Alaska has ice and other peculiar challenges affecting mammals, humans and the general environment. "We want to do it right," he said, and noted OCS activity is critical to Alaska's economic health.
McGuire stressed the importance of conducting a credible, balanced and informal process for the hearing. "We wanted to wait to give time for the experts in the Gulf to contain that oil spil and respond so that these hearings wouldn’t be a catalyst for more controversy," she said.
Alaska Oil and Gas Association Executive Director Marilyn Crockett (NGP Photo) said that, "Industry capabilities and requirements is an appropriate first step," in approaching the subject, observing that, "Alaska takes the lead in oil spill and clean up response." Representative David Guttenberg (NGP Photo) expressed concern with the history of spills and noted that, "successful outcomes is what we're looking for."
Becky Silves (NGP Photo-lower left) serves as the Alaska Emergency Response Coordinator for ConocoPhillips (HSE Alaska Drills and Training Coordinator). She stressed the importance of satellite tracking capability and that before the first exploration well is drilled in 2012 or 2013 ( or later) that, "Oil spill recovery equipment will be available on-site to provide for immediate response in the event of a spill." When Wielechowski questioned her about spill response in winter, Arctic conditions, Silves noted that while there are challenges associated with oil recovery in icy water, the industry had about a decade to prepare for year-round development. She said that before development could occur, exploration would proceed only on, "open water" and only during the warm months when ice is not present. When McGuire inquired about ice being swept into "open water" exploration areas during the spring and fall "shoulder seasons," Silves emphasized the value of satellite tracking which would enable operators to shut down exploratory operations in threatening ice conditions. Guttenberg expressed concern for the lack of infrastructure referring to all of the hotels and other support services and infrastructure required in the GOM just to, "bring in 100 workers." Silves said the company's initial and "very preliminary" thinking involved -- as in the Exxon Valdez experience -- using barge housing "on the water". Guttenberg observed that 150' of water was probably approaching the limit for divers who could repair underwater assets and wondered about the use of remotely operated undersea vehicles. Silves said that all such alternatives would be "looked at".
Shell's Alaska General Manager Pete Slaiby (NGP Photo-r) then reviewed the ....
...much more coming Friday....comments of Craig Johnson, Jeff Short, Lois Epstein, Nancy Wainwright, Harold Curran, Mike Munger, Mark Swanson, Larry Dietrick, Larry Hartig, Dan Seamount, Cathy Foerster, Kevin Banks. (Note: We always urge readers to offer additions/corrections to our stories. This distinguishes us from mainstream media. While we sometimes opine, we love the facts and urge everyone to help keep us focused on accurate reporting. See related story: KTUU. -dh)
Yesterday. Those trying to develop Alaska's vast natural gas reserves, both for local consumption and export, told the state's business leaders Tuesday that the state is on track, or multiple tracks, to get a natural gas pipeline. Two big pipeline efforts are underway, seeking to build a 48-inch-wide pipeline through Canada, to feed gas into the U.S. Midwest, an industry panel told the Alaska State Chamber of Commerce convention Tuesday. ... Denali's Dave MacDowell (NGP Photo-l) said the company has spent $150 million developing a pipeline plan, and is now out seeking bids from customers who want to ship gas through that line in a process called "open season." ... The state-sponsored Alaska Natural Gas Development Corp. is studying a "bullet line," a small diameter line that would be somewhat cheaper to build but would not provide enough gas for export. "What happens if those big pipes are delayed? There needs to be a backup plan," said Bryan Butcher (NGP Photo-r), the venture's vice president for public affairs. ... Federal Pipeline Coordinator Larry Persily (NPG Photo-l, below) said the bullet line could provide neither the cheap energy nor the revenue to the state that the Denali and TransCanada plans may be able to. "This is why you shouldn't give up on the big pipe," he said. ... Persily said that contrary to some opponents' statements, there is a strong market for Alaska's gas in North America, a stronger market than the export market for liquefied natural gas. Juneau Empire by Pat Forgey.
Today. Anchorage Mayor Dan Sullivan's (NGP Photo) Energy Task Force Meeting: will include a review and updating of the Energy Transition Report created a year ago.
Tonight. WE URGE ALL ANCHORAGE-BASED NGP READERS TO GO HERE AFTER DINNER TONIGHT: The Future of Offshore Drilling in Alaska: The Risk/Reward Balance. The forum will be at UAA’s Wendy Williamson Auditorium on Wednesday, September 22nd, 7-9pm. The International Association of Energy Economists are sponsoring the event and say the purpose of the forum will be to present a variety of perspectives to the public, and to conduct a deliberative discussion surrounding the benefits and risks of Arctic drilling within the contexts of the following:
Next week. 6th Annual Alaska Oil & Gas Congress. Conference co-chairs: Dave Harbour, Publisher, Northern Gas Pipelines and Margaret Brown, President & Chief Executive Officer, Cook Inlet Region Incorporated • Larry Persily, Federal Coordinator, Alaska Natural Gas Transportation Projects ... Alaska Gas Pipeline ü Key insights from the Joint In-State Gas line Development Team on in-state gas development ü Global natural gas supply/demand trends and impact on Arctic gas ü How the state of Alaska is expediting the ... Latest News - http://www.prlog.org/page1.html
ALERT: SUPPORT OCS Tomorrow Night In Anchorage - Alaska Legislators Convene OCS Spill Response Panel Today - Canadian and American Business and Government Leaders Have Oil Congress - Mackenzie Project Delayed Again?
(The author admits and laments the human frailty that produced a typographical error in this morning's email alert! -dh)
Today: The Alaska State Senate Resources Committee will hold a hearing (10 a.m. - 4 p.m. ) today at the Anchorage Legislative Information Office. The hearing will deal with spill response systems in Alaska and include four panels: 1. Industry, 2. Environmental, 3. Community, and 4. Agency. * Join the Alliance in Kenai on Sept. 21 for a luncheon featuring guest speaker David Hall of Cook Inlet Energy... more...
Yesterday: ADN by Lisa Demer. Republican Gov. Sean Parnell (NGP Photo) and Democratic nominee Ethan Berkowitz(NGP Photo-l) faced off Monday before the Anchorage Chamber of Commerce with questions about a gas pipeline, oil taxes, income taxes, federal health care reform, the economy -- and the race for U.S. Senate.
- CALL TO ACTION. Dealing with the 'Risk-Reward' balance of OCS activity in Alaska, a distinguished panel will assemble at the Wendy Williamson Auditorium tomorrow evening at 7 p.m. for what will undoubtedly evolve into a review of facts and perceptions, with some audience interaction. We urge all NGP readers in the area to attend and participate as time permits. Please sit at the front of the audience area, close to the microphones. The panel -- moderated by retired Anchorage Daily News editor Michael Carey, will include:Pete Slaiby, Vice President, Shell Alaska; John Schoen, Senior Science Advisor, Audubon Alaska; Edward Itta, Mayor, North Slope Borough; David Ramseur, Chief of Staff, Office of Senator Mark Begich
- Mayor's Energy Task Force Meeting: will include a review and updating of the Energy Transition Report created a year ago.
- Energy Guardian (9/21, subs. req’d) reports, “Interior Secretary Ken Salazar and Energy Secretary Steven Chu plan to co-host a public forum on offshore oil drilling safety reforms Wednesday, but no new announcements about the administration’s policies are expected.
Thursday: Join the Alliance on Thursday, Sept. 23 for breakfast with Dave Dittman, Dittman Research & Communications Corp.... more...
- The 6th Annual Alaska Oil & Gas Congress. Conference co-chairs: Dave Harbour, Publisher, Northern Gas Pipelines and Margaret Brown, President & Chief Executive Officer, Cook Inlet Region Incorporated • Larry Persily, Federal Coordinator, Alaska Natural Gas Transportation Projects ... Premier Floyd Roland, Government of the Northwest Territories ... Ron Liepert, Alberta Minister of Energy ... Alaska's Lieutenant Governor Craig Campbell, State Senator Lesil McGuire and House Speaker Mike Chenault * Key industry executives * Key insights from the Joint In-State Gas line Development Team on in-state gas development * Global natural gas supply/demand trends and impact on Arctic gas * How the state of Alaska is expediting the ...
Anchorage Chamber of Commerce. Monday, September 27, 11:30 - 1 p.m., Dena'ina Center, 2nd Floor, Anchorage. The province of Alberta is an energy hub for much of North America, developing energy resources, creating new jobs, and sustaining an integrated economy for Alberta. Ron Liepert, Minister of Energy for the Province of Alberta, will discuss the Alberta Oil Sands project and how Alberta is handling its natural resource development.
HQ Yellowknife. Has the Mackenzie project been delayed again? * The Canadian Press by Lauren Krugel. Even if the National Energy Board gives it the thumbs up this month, the project's lead partner, Imperial Oil Ltd. (TSX: IMO.TO) has said the pipeline would start up in 2018 at the earliest. Many in the North have been eagerly awaiting this project for decades, which they say will bring a much-needed economic boost to the region. "We would encourage these parties to resolve the matter quickly to avoid further delay to this important project," said Bob Reid, president of the Aboriginal Pipeline Group, which has an equity stake in the pipeline.
Calgary Herald by Peter Tertzakian. Canada’s natural gas production has been in steady decline for about three years now.
AP by Joan Lowy. The Obama administration called for tighter federal oversight of oil and gas pipelines Wednesday in the wake of a deadly California gas explosion that raised alarms about the safety of the nation's aging infrastructure.
Journal of Commerce by Tim Bradner (NGP Photo). The state's team working on a possible 24-inch "bullet" gas line from the North Slope to Southcentral Alaska has selected a Canadian consulting firm to do a study of a gas-to-liquids plant that could be a major industrial purchaser of gas for the pipeline. Toronto-based Hatch Corp. was notified Sept. 10 that the Alaska Gasline Development Corp. will award a $500,000 contract to do the study. Six firms bid to do the study, according to Brian Butcher (NGP Photo-r), public affairs vice president for the Alaska development group.
On Friday Commonwealth North's Energy Action Coalition, chaired by Mary Ann Pease (NGP Photo-r), heard Executives with Enstar Natural Gas update members on the status of the Cook Inlet Natural Gas Storage Alaska, LLC (CINGS) project.
Enstar Regional Vice President, Colleen Starring (NGP Photo-l) said adequate natural gas storage is critical to Enstar's mission of providing energy to homes and businesses at all times of the year, particularly during the coldest days of winter. "We're in a situation when we need the storage now," she said, "and expect our situation will be particularly critical by the winter of 2012."
The new storage facility in Kenai is adjacent to existing gas pipelines. Since demand for home heading is low in the summer and high in the winter Enstar could accumulate natural gas when it was plentiful in warm months and release it from storage as needed.
CINGS Project Manager Richard Gentges (NGP Photo) said the company screened about 50 possible storage sites in Southcentral Alaska, looking for just the right combination of attributes: location, level of existing reservoir depletion, reservoir porosity, and other factors. He said about two dozen state and federal permits were required for the project, but noted that, "The permitting process here looks to be as streamlined as anywhere else in the country."
Starring said the proposal is now before the Regulatory Commission of Alaska. She said the Commission is expected to approve CINGS' request for a Certificate of Public Convenience and Necessity by year-end with Commission action on consumer rates to be ordered by the end of January. Starring added that while several parties have intervened in the process, she expects the parties to all be supportive of the certificate petition. Assuming that regulatory process moves as anticipated, Starring hopes for the storage facility to be ready to support reliable deliverability of winter gas by late 2012. -dh (More CWN photos below.)
The Alaska Standard, By Victor John Yannacone Jr. (B&W Photo) "A Hope and A Prayer". The prayer for relief in the lawsuit filed by the State of Alaska and Governor Sean Parnell against Ken Salazar, United States Secretary of the Interior, is just that, a prayer. The sovereign people of the State of Alaska “pray” to a federal judge for judgment against an unaccountable appointed federal cabinet official not elected by the people of the United States. And what is it that the State is praying for?
Late Friday, David and Mary Ann Pease (NGP Photo) hosted a party for Cathy Giessel (NGP Photo). We would encourage all NGP readers to engage in such social and political events as with every exposure, one's knowledge of the energy landscape improves
Other guest photos below:
and Rick Mystrom
Today Is BOEM's Comment Deadline - Canada Seeks To Resolve Arctic Boundaries - Does the Alaska Legislature Seek To Attract or Distract Oil and Gas Investors?
TODAY IS THE LAST DAY TO COMMENT. HERE'S THE BACKGROUND AND HERE'S HOW TO COMMENT. THE VOLUME OF CITIZEN COMMENT IS IMPORTANT; ELECTED OFFICIAL COMMENT IS CRITICAL
1. The U.S. Department of Interior’s Bureau of Ocean Energy Management (BOEM) hosted a public meeting in Anchorage to discuss the Obama Administration’s offshore oil and gas drilling ban. BOEM Director Michael Bromwich (NGP Photo-r) didn't announce the time or place of the meeting until a few days before, took no public testimony and refused to grant legislators' requests to be heard. He conducted the Anchorage and other meetings similarly, as we reported. You will find the official BOEM information on these forums here. While the forums have been open to the public, members of the public were only permitted to comment by way of comment cards completed at the forum, submitted online or sent in by mail. Click here to submit a comment online. The comment period closes TODAY, September 17, 2010. (Photo-l, the Resource Development Council for Alaska's Jason Brune attends Anchorage event and urges attendees to fill out comment cards. If you haven't, click above to submit a comment. -dh
2. IF YOU WERE AN OIL AND GAS INVESTOR WOULD THIS ALASKA STATE LEGISLATURE ACTION BE ATTRACTIVE OR DISTRACTIVE? IF YOU WERE A STATE WHOSE ECONOMY WAS 1/3 SUPPORTED BY OIL AND GAS AND YOUR STATE OPERATING BUDGET WAS 90% DEPENDENT ON OIL PRODUCTION, WOULD YOU SEEK TO ATTRACT OR DISTRACT OIL AND GAS INVESTORS? Read about this upcoming -- interim -- legislative meeting and ... you be the judge:
Alaska Northern Waters Task Force. Friday, October 1, Anchorage Legislative Information Office, Room 220, 8 a.m. We editorialized on this new administrative agency created -- not within the Administration but within the Legislature. We believe that this 'harmless' task force is the first step toward passage of SB 4 (See our editorial), supports Senator Mark Begich's RCAC concept and seeks to have the Legislative Branch unconstitutionally usurp Administrative Branch responsibilities. What say you? -dh
3. Calgary Herald, by Randy Boswell. Recent efforts by Canada and other polar nations to avoid Arctic territorial conflicts got a major boost on Wednesday with the signing of a "historic" agreement between Norway and Russia establishing a new offshore boundary in the long-contested waters of the Barents Sea. ... The ongoing thaw in relations among the Arctic's five coastal states -- Canada, Russia, Norway, the U.S. and Denmark -- was also in evidence in recent weeks when Canadian and American officials met in Ottawa for talks aimed at resolving a 40-year-old dispute over the maritime boundary in the Beaufort Sea north of Alaska and the Yukon. ... Disputes over offshore boundaries in the Arctic had become more pronounced earlier in the decade as melting polar ice began fuelling visions of increased northern shipping and potentially lucrative oil and gas development. But after a Russian scientific team planted a flag on the North Pole sea floor in 2007 -- a purely symbolic act that nevertheless ignited outrage in Canada and elsewhere -- northern governments began moving to tone down the belligerent rhetoric and seek to reassure international bodies such as the UN and European Union that Arctic territorial issues could be worked out peacefully and without intervention by outside organizations. The Barents Sea dispute was a particularly significant one because both Russia and Norway had been coveting possible petroleum deposits in the area of overlapping claims. (We must opine here that every single Obama Administration action affecting Alaska has been negative to Arctic Oil and Gas exploration and development, from ANWR to NPR-A to Beaufort and Chukchi; from ESA to EPA, from USFWS to NOAA; from Salazar to Bromwich and from the Corps of Engineers to BOEM to White House Ocean Policy to Walrus to Beluga to Polar Bear. Many of Alaska's own governmental actions have been a distraction if not a disincentive to oil and gas investment. Meanwhile, adjacent Arctic countries are moving forcefully in to fill the leadership void, resolving border disputes that will later lead the way to accessing wealth producing Arctic oil and gas reserves. We remind gentle readers that this trend carries with it other implications dealing with national defense and economic strength. -dh)
Associated Press. The oil and gas industry says an Obama administration plan to double fees charged for inspections of offshore operations could cost jobs. The industry recognizes the need for improved inspections and oversight following the massive BP oil spill, American Petroleum Institute president Jack Gerard said. But doubling the fees is not appropriate, especially during a recession, he said. "This is not the time to go back and impose additional costs on industry," Gerard said Tuesday in a conference call with reporters. The oil and gas industry contributes billions of dollars to the U.S.
Alaska Dispatch by Patti Epler. The second half of the gubernatorial campaign game kicked off in earnest Tuesday when Republican Gov. Sean Parnell (NGP Photo-l) and Democrat challenger Ethan Berkowitz (NGP Photo) met up in Kenai at a debate hosted by the Kenai and Soldotna chambers of commerce. Observers called it "heated." And Parnell was quick to send out a press release touting his own performance.
Boding badly for Alaska, Interior's BLM is developing rules for the National Petroleum Reserve-Alaska that are based on 'climate change and the recent listing of polar bears as a threatened and endangered species...."
We urge Anchorage citizens to attend the September 23 meeting! -dh
The Bureau of Land Management seeks public input as it begins to develop its integrated activity plan and environmental impact statement for the National Petroleum Reserve-Alaska. Previous NPR-A plans dealt with portions of NPR-A. The new plan will cover all of the more than 22 million acres in NPR-A The comment period began July 28, 2010 and ends October 1.
Emerging issues such as climate change and the recent listing of polar bears as a threatened and endangered species will be addressed. The planning effort will identify areas to be made available for oil and gas leasing and measures to mitigate impacts to resources from oil and gas activities.
Meetings will occur in the following locations throughout the state:
Community Date Location
Barrow Thurs., Sept. 9, 2010 North Slope Bor. Assembly Rm
Fairbanks Mon., Sept. 13, 2010 Noel Wien Library
Anaktuvuk Pass Tues., Sept. 14, 2010 Community Center
Nuiqsut Thurs., Sept.16, 2010 Kisik Community Center
Wainwright Mon., Sept. 20, 2010 Community Center
Atqasuk Tues., Sept. 21, 2010 Community Center
Anchorage Thurs., Sept. 23, 2010 Campbell Creek Science Center
In Anchorage and the North Slope communities, an open house will begin at 6:30 PM followed by the scoping meeting at 7 PM.
In Fairbanks, the open house will begin at 6 PM followed by the scoping meeting at 6:30 PM. For more information and other ways to comment, see www.blm.gov/ak or contact Jim Ducker at 907-271-3130.
Boding badly for Alaska shallow water exploration, Interior's BOEM shows its deceptive colors in the GOM! -dh
The Hill (9/13) reports, “Oil-and-gas companies that drill in shallow Gulf of Mexico waters on Monday said they’re at an “impasse” with the Interior Department over permitting policies they allege are bringing the industry to a standstill. The Shallow Water Energy Security Coalition met Monday morning in Louisiana with Michael Bromwich (NGP Photo), who directs Interior’s Bureau of Ocean Energy Management, but the meeting failed to produce reassurances about speeding up permits the group is seeking. “With 15 of the total of 46 available shallow water rigs now idle without permits, and only five permits for new wells issued since April, we are clearly at an impasse with the regulators. While we share Director Bromwich's commitment to safety, BOEM must recognize that it cannot continue to shove a square peg into a round hole by treating all offshore drilling operations the same, disregarding history and geological facts,” said Jim Noe, the group’s executive director who is also a top executive with Houston-based Hercules Offshore Inc.
Petroleum Economist Dissects ACES - ADN OCS Editorial - Economist Raises Red Flag - International Energy Economists Host Energy Debate
The ADN Opined on Importance of OCS to Alaska
The forum will be moderated by Michael Carey, host of Anchorage Edition and Running on KAKM public television, and guest columnist for the Anchorage Daily News. The IAEE is an organization of corporate, government, academic, and scientific economists dedicated solely to the education of the public on energy economic issues. Parking will be free in the lot east of the Wendy Williamson Auditorium and west of the Professional Services Building (formerly Building ‘K’). For a campus map go to http://www.uaa.alaska.edu/map/. For information, contact Roger Marks at 907-250-1197 or firstname.lastname@example.org