March 2012 Archives
ADN/AP. A federal judge has ordered representatives of Greenpeace USA to stay a kilometer away from Shell Oil's drilling vessels destined for Arctic Ocean waters off Alaska's northern shores.
We are approaching the end of March, the deadline by which Governor Sean Parnell had hoped the three Alaska North Slope Producers would reach agreement on alignment of the various gas pipeline interests in pursuit of a single, realistic project. Today is the last business day of the month. Therefore, we will expect today to hear a major gas pipeline announcement from producers and possibly the Governor's office. Failing that, many in Alaska, Canada and throughout the Lower 48 will be asking what the government and private decision makers plan next. Any way we slice it, this day is likely to be remembered in the archives of Northern Gas Pipelines. Keep checking below, today, for late breaking news. We had a call from a Canadian publication on this matter yesterday and for benefit of our friends everywhere please note that the very latest information is liable to occur today at noon with the presentation by the State's Alaska Gasline Inducement Act (AGIA) manager, Kurt Gibson. Click here to see how you can participate in person or via teleconference. -dh, 5:15 a.m.
Wall Street Journal by Tom Fowler. Exxon Mobil Corp., BP PLC, ConocoPhillips and the governor of Alaska have agreed to settle a long-running dispute on developing a key North Slope natural-gas field, clearing the way for a future gas pipeline and gas-export terminal.
Governor's Statement: March 30, 2012, Anchorage, Alaska - Governor Sean Parnell announced today that two major milestones have been met in the state’s effort to bring Alaska’s natural gas to Alaskans and markets beyond. First, the State of Alaska resolved its long-running litigation with ExxonMobil and other leaseholders regarding the Point Thomson field, which holds a quarter of the North Slope’s known natural gas. And, second, the three major producers – ExxonMobil, ConocoPhillips and BP – delivered a letter today to the governor announcing that they are now aligned with the Alaska Pipeline Project (APP) parties, and working on a gasline project focusing on bringing North Slope gas to tidewater in Alaska.
Senator Lisa Murkowski's Statement: “It’s encouraging that the major leaseholders are once again talking about a single pipeline project to commercialize Alaska’s North Slope natural gas. This is the first time in many, many years that there’s been alignment among the leaseholders, TransCanada and the state. That in itself is good news. “Japan is aggressively looking to sign a long-term supply contract for natural gas, as are other Asian markets. Alaska should seize this opportunity to get its gas to a market that is currently paying up to $16 per thousand cubic feet. It’s imperative that all of the players involved do everything possible to accelerate the decision-making process to ensure that the window of opportunity doesn’t close on us.”
Senator Mark Begich's Statement: “A Point Thomson settlement is good news. As nearly 40 years of effort has shown, all of Alaska is going to have to pull together if we are to commercialize the enormous natural gas resources of the North Slope. “Any large scale project, whether it’s an Alaska-only route with LNG export or a highway route to the Lower 48, will bring thousands of jobs and lower-cost energy to Alaskans. “I stand ready to work with the rest of the Alaska delegation to help bring Alaska’s enormous natural gas resources to market. Much of that groundwork at the federal level has already been laid for the highway route. “As the producers examine an LNG project, I’ll continue to work to smooth the path for speedy federal review that can shave time and costs such as my legislation, the Alaska Natural Gas Pipeline Improvement Act.”
("Our Own Worst Enemies" commentary postphoned until next week)
Alaska Dispatch by Alex DeMarban. When Gov. Sean Parnell on Wednesday said the clock is ticking on the legislative session and a lot can change in 18 days, he might have been thinking of a possible huge deal in the works that could give leverage to Alaska's oil companies seeking a massive tax break. An Associated Press story Thursday could lead one to think that the state may be on the cusp of such a deal with Exxon Mobil Corp. and other major oil companies over a massive but long-fallow gas field called Point Thomson. That’s because the Alaska Supreme Court earlier Thursday dismissed the epic lawsuit over Point Thomson at the request of the state and oil companies, according to the AP.
Juneau Empire/AP by Becky Bohrer. The Alaska Supreme Court on Thursday granted a request by the state and energy companies to drop its review of a case involving disputed leases on the Point Thomson gas fields. Fairbanks News Miner Editorial by Dermot Cole. Our legislators are considering plans to back the plan to truck natural gas to Fairbanks from the North Slope, which is the best option on the table for reducing electric rates and lowering the cost of heating. With fuel oil now priced at more than $4 a gallon, the need for more affordable energy in Interior Alaska is clear.
ADN/AP by Becky Bohrer. JUNEAU -- Senate President Gary Stevens (NGP Photo) on Thursday called Gov. Sean Parnell's plan to cut oil taxes a "historic gamble" with Alaskans' money that would give away billions of dollars in revenue to industry on "a wing and a prayer."
From Senate Energy Committee commuinications officer, Robert Dillon (NGP Photo) comes this fascinating analysis of Obama's Rose Garden attack on the oil industry yesterday:
Drilling Down on the Dry Holes in the President’s Latest Energy Speech
President Obama spoke in the Rose Garden this morning about his desire to increase taxes on the largest American oil and gas producers. We believe there are bipartisan solutions to our nation’s energy challenges, but unfortunately his remarks were again filled with mistaken and misleading claims that will do nothing to reduce prices at the pump.
Rhetoric: “…oil companies are also getting billions a year in taxpayer subsidies – a subsidy they’ve enjoyed year after year for the last century.”
Reality: The industry subsidizes the federal government, not the other way around. In 2010, the five largest oil companies alone paid $55 billion in local, state, federal, and foreign taxes – not including rents, royalties, fees, and bonus payments. So while wrong, this statement does reveal the president’s mindset – that not taking even more of a company’s earnings is somehow a “subsidy” and the same as “handing out taxpayer dollars.” By the White House’s logic, any dollar earned, but not seized by the government is a subsidy. Remember, too, that in Treasury’s official budget explanation the administration claimed the current tax code somehow results in the “overproduction” of domestic oil, and declared that both “detrimental to long-term energy security” and “inconsistent” with its preferred cap-and-trade program.
Rhetoric: “We can’t just drill our way out of this problem. We use more than 20% of the world’s oil, but we only have 2% of the world’s known oil reserves. That means we could drill every drop of American oil tomorrow – but we’d still have to buy oil from other countries to make up that difference. We’d still have to depend on other countries to meet our energy needs.”
Reality: Yet again. The president has been awarded two Pinocchios by The Washington Post’s Fact Checker for repeatedly making this highly misleading claim. In truth, we are an oil-rich country, with more than 220 billion barrels of recoverable resources, according to the Energy Information Administration’s latest oil and gas model. To make it seem like the U.S. is both running out of oil and using it at an unsustainable rate, the president purposely excludes all lands that have not been drilled. For more on this, see either Washington Post column (here and here), or the op-ed Senator Murkowski published last year.
Rhetoric: “…one analysis shows that every time gas goes up by a penny, these companies usually pocket another $200 million in quarterly profits.”
Reality: Perhaps then, it’s time to focus on policies that would actually bring prices down. Oil prices have risen because of strengthening demand, supply disruptions in certain parts of the world, and instability in the Middle East. But prices do not always have to go up – with the right policies in place, prices would also go down, and this talking point would become a moot point. Instead the effort to increase taxes would reduce investment and, ultimately, supply. In any case, it’s better to have revenue remain in the U.S., where it can be invested in research and pay down the debt, than in the hands of OPEC.
Rhetoric: “Under my administration, we’ve opened up millions of acres of federal lands and waters to oil and gas production.”
Reality: The Obama administration is operating under a Five-Year OCS plan developed by the Bush administration, and has actually cancelled both onshore leases and offshore lease sales. As a result, less acreage is available now than when President Obama took office. He has recently touted a lease sale in the Central Gulf of Mexico that was already scheduled under the current plan. He’s also trumpeting steps that his administration is taking that may lead to a lease sale off of the East Coast after 2018, even though he cancelled the sale that was already scheduled to take place in 2011. That’s not “opening” anything.
Rhetoric: “We’ve added enough oil and gas pipeline to circle the Earth and then some.”
Reality: Most new pipelines do not require approval from the president – and only some require approval from any federal agency. That’s probably why the president said “added” instead of “approved.” Only a few pipelines have required presidential approval in recent years, most notably the Alberta Clipper and Keystone XL. Rather than remind his audience that he just rejected a pipeline that would require no subsidy, create thousands of jobs, and improve our nation’s energy security, the president has resorted to this questionable statistic to try and deflect blame.
Rhetoric: “The fact is, we’re producing more oil right now than we have in eight years, and we’re importing less of it too. For two years in a row, America has bought less oil from other countries than we produce here at home – for the first time in over a decade. Simply put, American oil is booming.”
Reality: This is happening in spite of, and not because of, President Obama’s policies. Production is up on state and private lands but fell significantly on the federal lands under the president’s control last year. Our source? The Energy Information Administration, which found that federal oil production fell 14 percent between 2010 and 2011.
Rhetoric: “Meanwhile, these companies pay a lower tax rate than most other companies on their investments – partly because we’re giving them billions in tax giveaways every year.”
Reality: We’re not sure how the president came up with this. According to the American Petroleum Institute, the effective tax rate paid by oil companies was 41.1 percent in 2010 – far higher than the average rate of 26.5 percent paid by other manufacturers. According to a study cited by the Wall Street Journal, oil development projects also face far higher tax rates than other forms of energy.
Rhetoric: “Investments in wind power and solar power and biofuels; in fuel-efficient cars and trucks and homes and buildings. That’s the future. That’s the only way we’ll break this cycle of high gas prices that happens year after year after year.”
Reality: The president should know that wind and solar power, as well as efficient homes and buildings, have nothing to do with “high gas prices.” And he should also know that a bipartisan majority in Congress supported both advanced biofuels (through the 36-billion gallon Renewable Fuel Standard) and higher vehicle efficiency (through higher CAFE standards in the 2007 energy bill). What he may not know is that GAO recently found 94 ‘green building’ programs and nearly 700 renewable energy initiatives scattered throughout the federal government. Republicans are not stridently opposed to renewable energy, but we have asked that policies be paid for and that American oil and gas production be included as part of the solution.
Commonwealth North's Energy Action Coalition will meet this Friday, March 30 from 12-1 at ANGDA located at 411 West 4th Avenue in the Yellow Sunshine Mall on the lower level across from the Saturday Market parking lot. We will be joined by Kurt Gibson, Alaska Gas Pipeline Project Director, who will give an AGIA update specifically touching on the current status of the project and what movement the State hopes to see made this year. If you would like to participate via teleconference the call in number will be 907-276-4900. Commonwealth North has been leading an effort to study, highlight, and identify challenges and opportunities in Alaska's energy future in order to bring informed Alaskans to the table and come to solutions that will benefit all Alaskans and ensure these complex energy issues are understood. If you are interested in the public policy issues facing Alaska you should to be a member of Commonwealth North. Membership information is available on our website at www.commonwealthnorth.org or call Joshua Wilson at 258-9522.
Today's news and commentary in process....
|Tomorrow we hope to present more thorough comment on an extraordinary community turn out of citizens in Anchorage, following a similar event in Fairbanks, supporting tax reform. Governor Sean Parnell (NGP Photo), Governor Tony Knowles, Teamster Barbara Huff Tuckness and representatives of Native and small Alaska businesses united to offer one message to legislators: Don't come home without meaningful tax reform. We are most disappointed in the uncharacteristically misleading and acidic report on that event appearing in today's Alaska Dispatch and will have more to say about that tomorrow. -dh (ADN story.)|
Calgary Herald by Tony Seskus. Most Albertans believe the government should actively promote pipeline projects that would boost oil exports, but they're divided on whether tax dollars should be given to industry to increase the amount of bitumen refined in the province, a new poll reveals.
Fairbanks News Miner by Max Buxton. House lawmakers on Wednesday approved a bill aimed at developing a natural gas pipeline... but Fairbanks legislators were divided on the measure.
ADN/AP by Dan Joling. Federal offshore drilling regulators on Wednesday approved Shell Oil's spill response plan for exploratory drilling in the Beaufort Sea.... (Note: we encourage NGP readers to repress sighs of relief until all permits are in hand, until threats of court injunctions diminish and until drilling is actually in progress. The federal administration, so comfortably aligned with environmental activists and act passively aggressive, agreeing to this on one hand while stopping that with the other. -dh)
Comment: Over the last three "Obama years" not one federal decision affecting Alaska resource development has fairly, honorably or reasonably benefited Alaska or the nation's economy, for that matter. This administration has, in our unchallenged opinion, perverted the regulatory process and rule of law and regularly circumvented the jurisdiction if not the intent of Congress. Yet, had we not turned out in droves at federal hearings over the last few years, the legal record of those proceedings would have given the enviro-governmental cabal more reason to shut Alaska down (i.e. "The record clearly shows that Alaskans did not support further development"). As it is, the record clearly shows Alaskans know their Constitution and the Statehood Act are based on resource development and support reasonable development. Whenever an elected official appeared at a hearing or commented in writing, the jurisdictional agency has shown particular deference. One would think that every elected leader over the last few years would have turned out to testify or comment in writing on every federal issue affecting our Constitutional dependence on resource development. Yet only a handful have appeared. The Resource Development Council (RDC) for Alaska -- to its great credit -- keeps elected leaders and other citizens informed on the status of these critical federal comment periods here. The U.S. Fish and Wildlife Service and FERC, respectively, have two open comment periods now, on Cook Inlet Region's Kenai natural gas project and on Alaska's big hydroelectric project. Attached are the gas and the hydro comments we found from Alaska State Senator Cathy Giessel (NGP Photo), one of the few legislators who regularly participates in federal comment periods. All of our Congressional Delegation, our legislators and our mayors and assembly members can join with the few frequent elected official commenters and respond to the RDC call for comment. How better can elected officials defend Alaska's constitution TODAY? (P.S. If we were doing a 'report card on the performance of public officials, we would include the degree and vigor with which they defend Alaska's Constitutional reliance on resource development at federal and state hearings and public comment periods. High on that list would be only a few, beside Senator Giessel: Governor Sean Parnell and his staff; Senator Lesil McGuire; Representatives Charisse Millett, Lance Pruitt, Dan Saddler, Bob Lynn and Craig Johnson; Mayor Dan Sullivan; Assembly Member Chris Birch. While we have seen others from time to time attend hearings, most are AWOL (Away without leave) on this important Alaska issue. Let this be a wake up call. Citizens are depending on elected officials to defend them against federal attacks on Alaska's constitution. Let 2012 be a year in which elected officials of both parties--not just one--turned out en masse to represent Alaska. All citizens and elected officials who do participate may send their comment/testimony here and we will be delighted to feature it and archive it for future reference.) -dh
Comment: This morning, Senator Lisa Murkowski (NGP Photo) said at the Senate Energy and Natural Resources Committee, "the federal government controls access to millions of acres of federal lands with oil potential. Of all the factors I’ve just listed, access is the only factor that this committee has direct jurisdiction over. Our decisions help determine whether companies have access to the Outer Continental Shelf, the non-wilderness portion of ANWR, and much of the Rocky Mountain West. So if I seem eager to focus on access to federal lands and waters, it’s because that is the area where we have the most direct authority to help." See this morning's video here.
We further appreciate Senator Murkowski's fight against increased taxes on the oil industry, which would further hinder the economy and job market and energy security of both Alaska and the United states. Here is her floor speech from yesterday. Those considering tax reform in Alaska would do well to listen to the wisdom of Senator Murkowski's rationale for reasonable tax policies. -dh
Robert Dillon (NPG Photo) of Senator Lisa Murkowski's Energy Committee staff has produced this well thought out piece on President Obama's continuing attack on America's oil industry job producers which we are delighted to provide for your information and future reference, here. -dh
Syracuse.com: Shale gas has benefits for New York
3-29-12 opinion by Robert Dillon (NGP Photo). President Obama is doubling down on his bash-oil-companies rhetoric this morning, and reportedly plans to urge “Congress to vote to end the billions in taxpayer dollars handed out to oil companies every year” in his morning address from the Rose Garden.
ADN by Lisa Demer. A bill to develop a natural gas pipeline from the North Slope to Southcentral Alaska passed the state House early Wednesday despite efforts of Democrats to kill or revamp the measure. House Speaker Mike Chenault, (NGP Photo), is the prime sponsor of House Bill 9, which gives a subsidiary of the Alaska Housing Finance Corp. the power to get a $7.5 billion pipeline built or become a partner in a bigger line or a spur.
Larry Persily (NGP Photo), Alaska Gas Pipeline Federal Coordinator. China has tremendous shale gas resources, Russia wants to move aggressively into the LNG export business, and the potential for North American LNG projects to sign up customers in Asia "may not be open indefinitely," said Ian Nathan, manager for global gas and LNG research at Energy Intelligence.
Mining. The Canadian government will disclose new guidelines this week to reduce the time it takes for environmental reviews of major energy and industrial projects, in a move that Reuters qualifies as an attempt to help the oil industry. Appearing Tuesday at the House of Commons Natural Resources Committee, federal Natural Resources Minister Joe Oliver confirmed the government aims to speed up test for industrial projects that he said are dragging on far too long — several years in some cases. “It’s possible to make regulatory decisions in a reasonable amount of time without compromising the rigor or the standards of the process […] Our ultimate goal is simple but not necessarily easy to achieve: one project, one review, in a clearly defined time frame,” said Oliver, as quoted by Reuters. As Mining.com reported last week, Prime Minister Stephen Harper is particularly keen to speed up development of the Alberta oil sands, the third-largest proven crude oil reserve in the world, as the country tries to build oil-exporting capacity.
Arctic Gas Links:
3-27-12 Amid Alaska-Alberta Oil Tax Debates, Shell's Pete Slaiby and Louisana's Gary Chouest Create Advanced Arctic Icebreaker
Fairbanks News Miner by Max Buxton. As the clock ticks down to the end of the legislative session, lawmakers are quickly giving shape to a proposed natural gas pipeline from Cook Inlet to Fairbanks.
Houma Today by Nate Monroe. In a matter of weeks, the largest and most advanced ship EdisonChouest Offshore has ever constructed will depart for the frigid Alaskan coast where it will service the oil-and-gas giant Shell Oil. The ship, 360 feet long, took 2 million man hours and two years of construction to complete. Shell awarded the contract for the Arctic supply vessel in 2009 in anticipation of recently won permits to drill in Alaskan waters. Chouest christened the ship at a ceremony Saturday that attracted federal and local officials, including U.S. Rep. Steve Scalise, R-Metairie, Sen. Lisa Murkowski, R-Alaska, Sen. John Hoeven, R-N.D., several members of the Greater Lafourche Port Commission and Shell executives. “What a boat, huh?” said Gary Chouest (NGP Photo-R), president and CEO of the Galliano-based shipbuilding company, in a rare public appearance. ... Elizabeth Itta, a 12-year-old from Nuiqsut, a city in North Alaska, won an essay contest selecting the ship's name. Aiviq, from the Inupiat language, means walrus. Natives of the Alaskan northwest region speak Inupiat. ... Itta and her family were flown to Port Fourchon, a service hub for the Gulf of Mexico oilfield, to attend the ceremony, where she christened the ship. The federal government has granted Shell tentative approval to drill four exploratory wells in July off the Alaskan coast. Aiviq can hold 10,000 barrels of oil, and its thick steel hull is designed to cut through thick ice. It will help supply Shell rigs with food, equipment or any other support needed, said Lonnie Thibodaux, Chouest's spokesman. The project cost more than $200 million. The ship is longer, wider and deeper than any other Edison Chouest has constructed. Shell's drilling operations will begin sometime in July, said Pete Slaiby (NGP Photo-L), vice president of Shell Alaska. ... “This shows our region's importance,” said Chett Chiasson, executive director of Port Fourchon. ... Bill Soplu, a 26-year-old Aiviq crew member from northwest Alaska, said he is excited to depart on the new ship. During his 60-day tour on the ship, Soplu will do just about anything needed. “I saw this boat being built in the shipyards,” he said. “It's pretty remarkable.”
Alaska Oil Tax Issue:
ADN Editorial by Rex Rock Sr. As Alaska Native people, we have an acute understanding of sustainability. We have made this land our home for thousands of years but the atmosphere in Juneau is not creating a responsible path for subsequent generations. Without oil-tax reform, our state, businesses and communities will suffer. We need more oil in the trans-Alaska pipeline to protect our future.
Consumer Energy Alliance-Alaska's Steve Pratt (NGP Photo) transmitted CEA-A's Alaska oil tax policy position to decision makers: Consumer Energy Alliance – Alaska, an advocate for the interests of energy consumers, believes that meaningful tax reform is necessary to provide appropriate marketplace incentives to enable the large capital investments Alaska requires to bring domestic energy supplies to market. On March 21, 2012, the attached Resolution was unanimously passed by our Board of Directors requesting that the Alaska State Legislature pass meaningful reform this session. Watered down tax reform such as exists in recent versions of SB 192 does little to enable companies to make the large capital investments we need. Please pass meaningful, incentivizing tax reform this session.
Alberta's Tax/Royalty Debate Heats Up: Calgary Herald. Alberta had its fifth-straight deficit this year, although it's supposed to be the last. The province projects surging oilsands royalties will erase the red ink in coming years. Opposition parties deride these forecasts as fantasy and have blasted the Tories for financial mismanagement.
Anchorage Daily Planet by Tom Brennan (NGP Photo). I know it’s too early to consider the fight lost, but it’s difficult to be optimistic about chances the Legislature will make an intelligent business decision on oil taxes this year - if ever.
ADN by Lisa Demer. House Speaker Mike Chenault's bill to create a natural gas pipeline from Alaska's North Slope to Southcentral is moving through the Legislature even as oil producers talk about moving ahead on a $40 billion project that would make the small line all but irrelevant.
Alaska Dispatch by Ben Anderson. Air Force One made a brief stop in Alaska in the early morning hours of Saturday, according to the Fairbanks Daily News-Miner. President Obama is on his way to South Korea to discuss the threat of nuclear terrorism with a number of other countries, with continued uncertainty over nuclear programs in North Korea and Iran hanging overhead. The News-Miner reports that Air Force One touched down at Joint Base Elmendorf-Richardson at about 3 a.m. Saturday, departing at 4:15 a.m. Meanwhile, reporters on board Air Force One said that Obama took the opportunity to call for opinions on oil and gas development in Southcentral Alaska's Cook Inlet region, with the administration requesting input from developers on the potential for the area.
Three Stories in Today's News: Alaska, Canada and North Dakota. Here's a question for our NGP readers: Which elected and appointed leaders of which jurisdictions seem to be caring most for the sustainability of their economies and the future of their children? Which seems to be succumbing more to the greedy demands of current constituencies? -dh
Researching oil, gas, flora, fin, fauna and fine Southern culture in Houston, but not so intently that we don't think constantly of our Arctic energy brothers and sisters...and the frigid, local and federal regulatory and statutory challenges they daily face. Is it true we have allowed at least some sociopaths to take control of government? (Of course, we can't speak for Canada.) -dh
ADN by Richard Mauer. The Senate bill's "minimal decrease" from the current tax program on oil and gas, known as ACES, "has an immaterial impact" for industry, said Bob Heinrich, vice president of finance for Conoco Phillips Alaska. "That's not to say that the numbers don't seem big on a dollar basis -- our industry works in big numbers," he added. If oil were selling at $130 a barrel, about $25 more than now, "the reduction is almost $300 million to producers, but in the context of the total taxes paid at that price point of nearly $15 billion, it's immaterial," Heinrich said.
Drillers, environmentalists not buying Obama's energy pitch. msnbc.com. President Barack Obama speaks at the TransCanada Stillwater pipe yard in Cushing, Okla., on Thursday.
U.S. gas pump prices vary based on oil locale Calgary Herald. Crude oil production has been rising briskly in North Dakota and Canada, but there aren't enough pipelines to transport it to Gulf Coast refineries. That leaves surpluses that have slashed North Dakota and Canadian prices, benefiting mid-Continent ...
Yesterday, CEA President David Holt appeared before the House Natural Resources Committee to provide a national overview on the impacts rising gasoline prices are having on American consumers and businesses.
Read David Holt’s (NGP Photo) submitted testimony here. Watch the Archived Hearing Webcast here. Watch YouTube Footage here.
Blog, Speaker of the House. Under the headline “Increasing gas prices threaten recovery of economy,” the Associated Press reports that if gas prices continue soaring “experts fear Americans could pull back on spending, and job growth could stall, posing a potentially serious threat to the recovery.” The constant refrain from the White House is that little can be done to bring down gas prices, but according to experts at today’s Natural Resources Committee hearing on “Harnessing American Resources to Create Jobs and Address Rising Gasoline Prices,” that’s simply not the case. Here are three steps – all part of the Republican Plan for America’s Job Creators and the American Energy Initiative - that President Obama could take to help address skyrocketing gas prices
While we are tethered to our faithful readers this morning via sattelite from a boat near Cozumel, we neverthe less think of you and provide this investment climate update courtesy of Resource Development Council for Alaska. -dh
Yesterday, the Senate Finance Committee heard public testimony on CSSB 192, which made only minor, inconsequential changes to Alaska's current punitive oil tax structure. Of the Alaskans who testified, an overwhelming majority opposed CSSB 192 and voiced their support for meaningful reform to the tax structure that will result in the investment needed to reverse the production decline and put new oil into the pipeline.
RDC would like to thank the following for testifying at the hearings in opposition to the CSSB 192 and in support of meaningful tax reform:
Ted Baran, Chuck Becker, Joe Beedle, Richard Beneville, Deborah Brollini, Jason Brune, Winston Burbank, Blythe Campbell, Kati Capozzi, Steve Castle, Jim Christian, Brad Clarke, Bryan Clemenz, Tim Coe, Karen Cowart, Emily Cross, Eric Downey, Cathy Duxbury, Frank Flavin, Kim Griffith, Krista Gonder, Ken Hall, Tom Hendrix, Lisa Herbert, Dave Hopkinson, Coral Howe, Brian Hove, Michael Jesperson, Lynn Johnson, Ginger Kane, Rada Khadjinova, Cliff Kilhenny, Jeff Lentfer, Brad Lipscomb, Warren Lucas, Peter Macksey, Tom Maloney, Heather March, Joe Morrison, Jim Neeley, Beau Obrigewitch, Frank O'Connor, Ben Packa, Rachael Petro, Jim Plaquet, Lora Reinbold, Andy Rogers, Keith Silver, Renee Scofield, Brent Senette, Mary Shields, David Stieren, Eli Stine, Pete Stokes, John Stutzman, Tara Sweeney, Maynard Tapp, Aves Thompson, Jim Udelhoven, Mila Umanskaya, Jean Woods, and RDC Staff.
RDC will continue to keep its members posted on this critical issue and future opportunities to testify. In the meantime, for those who were unable to testify today, please consider emailing your views to members of the Senate Finance Committee:
Co-Chairman Senator Bert Stedman:
Co-Chairman Lyman Hoffman:
Senator Dennis Egan:
Senator Johnny Ellis:
Senator Lesil McGuire:
Senator Donald Olson:
Senator Joe Thomas:
To further support meaningful oil tax reform, RDC and many of its sister
organizations are sponsoring a 'Rally for Reform' next Wednesday, March 28.
For more information, please visit:
Calgary Herald by Dan Healing. With output of 1,200 barrels of oil equivalent per day and 5,500 boe/d behind pipe, Athabasca Oil Sands Corp. is considering joint venture deals on its light oil and gas assets as well as its oilsands, says its CEO. On a conference call to discuss year-end results Thurs-day, president and chief executive Sveinung Svarte said the company is committed to using partnerships to develop its assets wherever they are.
Wall Street Journal. April 1 is a date that every politician and business executive in America should circle on the calendar. That's when Japan cuts its corporate tax rate to 36.8% from 39.5%. The United States will then hold the title of highest corporate tax rate, with average combined federal and state profit levies of 39.2%. Yes, that's higher than Sweden. Higher than Russia. And China, Mexico, Denmark and even France. Doesn't it make you want to break out in a chant: U-S-A, U-S-A? Tokyo's move is striking because its political class has long behaved as if tax rates don't matter.... (Comment: Major news in the last month: North Dakota is rapidly moving to replace Alaska as the #2 oil producing state. Japan has moved back to let Alaska's national government win the prize for highest corporate taxes. Perhaps we have not put adequate thought into the anti-competitive position Alaska achieves after noting the high Federal tax rate in addition to the state's high, unpredictable and complex tax burden, our high logistical rates, or challenging climate, our remote and hostile geography (however beautiful), our high labor rates and separation of our major producing area from tidewater shipping and connection to energy and transportation grids. We've been very proud of our oil and gas over the years, but not modest enough to appreciate the obstacles private investors must overcome to monetize them. -dh)
ADN by Becky Bohrer. John Minge (NGP Photo), president of BP Exploration Alaska, told The Associated Press "great strides" have been made toward alignment by BP, Conoco Phillips and Exxon Mobil Corp. "We have more alignment today than certainly we had eight months ago, because we're all working together," he said, adding later: "We're actually working together with an aligned view of how Alaska gas can compete in the world marketplace." Alignment, to Minge, means being on the same page, interested in the same project: in this case, a liquefied natural gas line that would allow for overseas exports.
ADN/AP. In a presentation for the Senate Finance Committee, Gerald Kepes says existing mature fields remain profitable for companies, and the state extracts maximum "rent" from a declining production base. However, he says, this system inhibits development of new projects and resources that might help stem or reverse the trend of declining production. Among other things, he says progressivity can have a detrimental effect on break-even prices for high-cost projects at current oil prices.
Bloomberg by Gene Laverty. Canadian natural gas rose amid signs that producers are drilling less and shutting some wells to ease a glut of the fuel. Alberta gas for April delivery gained 3 percent. The U.S. gas rig count dropped to 670 last week, a 32-month low, according to data compiled by Baker Hughes Inc (BAKEGAS). Encana Corp. and Talisman Energy Inc., two of Canada’s largest gas producers, said they will shut some gas production and shift exploration efforts to oil and natural-gas liquids.
One also notes Senator Lisa Murkowski's (Photo) words today on the floor of the Senate, identifying three areas where greater energy supply is possible: the Keystone XL Pipeline, expanded OCS exploration and better access to federal lands in Alaska. -dh
Congressman Doc Hastings (NGP Photo) over in the House, today released updated federal energy production data showing fossil fuel production is down 7 % since Obama took office. -dh
Juneau Empire by Pat Forgey. ...House Speaker Mike Chenault said he was “frustrated” with some of the critics of the plan, who have questioned its route, cost to the state, cost to consumers, and other attributes of the multi-billion-dollar plan. “Maybe it’s not the right color,” Chenault quipped at a meeting of in-state gasline supporters Tuesday evening. Chenault said a state gasline was insurance against Southcentral running out of natural gas, but some critics said the pipeline could actually cause that to happen. New drilling and gas discoveries in Cook Inlet have led to what Gov. Sean Parnell called a “renaissance” of the state’s oldest oil and gas field, but Sen. Joe Paskvan, D-Fairbanks, warned that a state-subsidized line bringing twice the volume of gas to Anchorage that the city uses would depress prices, and exploration. “It’s important that we not destroy the incentive to explore Cook Inlet,” he said. It would likely be cheaper to bring Cook Inlet gas to Fairbanks than from the North Slope with a small diameter pipeline, he said. And Rep. Scott Kawaski, D-Fairbanks, didn’t like the pipeline’s route. “The AGDC line misses Fairbanks by 37 miles,” he said. The additional cost to ship that gas east to Fairbanks and its military bases will increase the city’s costs. “We have to have an in-state gasline that actually works,” he said. What the state really needs, said Rep. Les Gara, D-Anchorage, was a high-volume export gasline that would bring much cheaper gas to residents and revenue to the state at the same time. “A big export line, either to Asia or the Lower 48, provides substantial revenue to Alaska,” he said. Locking in the high prices of a small line for decades won’t benefit anyone,” he said. “The worst thing we can do is build a gasline that produces the most expensive gas, and then build a big line that goes right by them” that they can’t access,” Gara said. The state is working to develop a big gasline under the Alaska Gasline Inducement Act that would bring Alaskan gas to export markets. It has options to go the Lower 48, or to a LNG export terminal, an option that Parnell said he now favors. Rep. Mike Hawker dismissed those concerns, and said the state needed to get moving on ASAP. “The Alaska public is tired of us screwing around, the Alaska public wants an Alaskan gasline,” he said. He said he doubted the ability of the big AGIA line to succeed. “It would seem to me that the economic viability of that project in the face of the development of shale gas is somewhat compromised at this time,” he said. AHFC Executive Director Dan Fauske, heading up the gasline efforts, said many of the criticisms he’d read of the ASAP plan in the newspaper were simply not true. “Some of that stuff, I just get furious when I read,” he said. Fauske voiced a version of the “If we build it, they will come” argument. Suppliers and business and industrial consumes will come forward when they see “crazy Alaskans welding pipe together” and will want to make sure they’ve got a part of it, he said.