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Northern Gas Pipelines is your public service 1-stop-shop for Alaska and Canadian Arctic energy commentary, news, history, projects and people. It is informal and rich with new information, updated daily. Here is the most timely and complete Arctic gas pipeline and northern energy archive available 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 suggest others existing before 2001.

 

March 2012 Archives

3-30-12

30 March 2012 5:39am

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 whichSean Parnell, Make it Meaningful, Alaska Governor Parnell, Rally, Photo by Dave Harbour 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.


Gary Stevens, Alaska State Senate President, Oil Taxes, ACES, Photo by Dave Harbour 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."


 
Megan Hermann of Senator Lisa Murkowski's (NGP PhotoLisa Murkowski, U.S. Senator, Photo by Dave Harbour, Senate Energy and Natural Resources Committeeoffice reports that the Senator yesterday  invited President Barack Obama to a “milkshake” summit to discuss a new approach to opening the non-wilderness portion of the Arctic National Wildlife Refuge to responsible oil and gas development. 
 
Murkowski’s invitation was motivated by an exchange at today’s White House Press Briefing, during which Press Secretary Jay Carney was asked about the President’s position on legislation that Murkowski introduced last year.  Carney responded that he hadn’t had a “discussion with [the President] about the milkshake principle.” 
 
“I know that the President and the First Lady enjoy milkshakes, and it would be my honor to treat them as we discuss the innovative technologies that will allow us to put a ‘straw’ into North America’s largest oil field from outside ANWR boundaries,” said Murkowski.  “Without any harm to the surface of the coastal plain, we can produce a huge volume of oil at a time when our nation desperately needs it.”  
 
Murkowski introduced S. 351, the “No Surface Occupancy Western Arctic Coastal Plain Domestic Energy Security Act,” in February 2011.  It is co-sponsored by Senators Mark Begich (D-AK), John Barrasso (R-WY), and John Hoeven (R-ND).  Senator David Vitter (R-LA) joined as a cosponsor to a parallel amendment that Murkowski offered on the Senate floor earlier this week. 
 
Current technology allows horizontal, extended reach drilling to access oil up to 8 miles away from the drilling site.
 
“The White House has indicated its support for safe and responsible oil production, and it doesn’t get more safe and responsible than this,” said Murkowski.
 
The full text of S. 351 is located here. The exchange from today’s press briefing is below.
 
 
QUESTION: Yes, I wanted to ask you about ANWR. When the President was a senator, he helped filibuster it seven years ago. Now we have a new, novel approach from both Alaska senators that would basically allow you to drink ANWR's milkshake from adjacent state lands. (Laughter.) I'm wondering --
MR. CARNEY: I'm not sure I follow that, but okay.
QUESTION: They say you can drill horizontally under ANWR, up to eight miles -- potentially get at a lot of that oil. And they also say, hey, if the President hadn't helped block it a number of years ago, it could have been producing a million barrels a day, which would have maybe not have -- maybe it wouldn't be a silver bullet, but would have been a bullet in dealing with high gas prices, potentially keeping tens of billions of dollars here. Does the President still want -- still say that ANWR is off the table? And is there -- would he be willing to look at something like that, that gets you some additional oil?
MR. CARNEY: Well, I haven't had a discussion with him about the milkshake principle. (Laughter.) But I can tell you that the Department of Interior recently approved Shell's Beaufort Sea oil spill response plan for potential activities off the coast of Alaska that could lead to greater development there. And this President is committed to expanding domestic oil and gas production in a safe and responsible way.
And any suggestion that that's not the case -- I think it's worth noting that in 2011, we held a lease sale in the western Gulf of Mexico that made available more than 21 million acres, equal to an area the size of South Carolina. And yet, just over 1 million acres was leased by industry. Twenty million acres went un-leased.
So there are -- we are making available substantial areas for oil and gas production. We will continue to do that, whether it's Alaska or the announcement -- the step forward that Secretary Salazar announced yesterday that Interior is taking to assess the conventional and renewable energy resource potential in the mid and south Atlantic. We're approaching this holistically and examining every opportunity to further develop oil and gas in this country in a safe and responsible way.
 
I don't have any specifics for you beyond what I just said about Alaska. But the President is committed to the safe and responsible principle, as well as increasing oil and gas production.

 

From Senate Energy CommitteeRobert Dillon, Senate Energy Committee, Senator Lisa Murkowski commuinications officer, Robert Dillon (NGP Photo) comes this fascinating analysis of Obama's Rose Garden attack on the oil industry yesterday:

 

Pinocchio Alert!

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.     

 



 

 
Houston Business Journal: Natural gas prices continue dive, may be headed for equilibrium **David Holt and CEA mentioned in article**
Natural gas prices have hit a second 10-year low in a matter of weeks, but market conditions appear prepared to weather the storm even if we’ve not yet hit the bottom. The Financial Times reports that natural gas has fallen to a decade-low $2.176 per million cubic feet; that’s down 2.2 percent from the previous decade low of $2.20 set earlier this month.
 
Natural gas prices tumbled to a 10-year low Thursday after a surprising jump in U.S. supplies. The futures price dropped sharply in New York after the government reported that natural gas inventories expanded well beyond what analysts expected. The country’s total supply grew by 57 billion cubic feet last week to a level that’s now 59 percent above the five-year average.
 
Nebraska lawmakers moved forward with a proposal that would let TransCanada review the Keystone XL pipeline in the state but the Sierra Club expressed concern. Nebraska lawmakers, by a 35-to-2 vote, approved a preliminary measure that would let TransCanada move ahead with a $2 million study to find a new route for the Keystone XL pipeline through the state.
 
President Barack Obama on Thursday urged Congress to end subsidies for oil and gas companies despite repeated criticism from Republicans that such a move will add to already sky-high gasoline prices. "Right now, the biggest oil companies are raking in record profits--profits that go up every time folks pull up into a gas station," the president said from the White House Rose Garden.
 
The Houston ChronicleBig Oil keeps 5 tax breaks in vote
The Senate on Thursday decided against advancing a measure to repeal five tax incentives for the nation's biggest oil and gas companies and use the money to extend alternative energy and energy-efficiency tax credits. The measure failed, as had been expected, just after President Barack Obama implored senators to slash incentives that he argued subsidize major companies that don't need them.
 
With a two-week recess starting today, lawmakers leave Washington in a political pickle, with few if any practical options for dealing with pump prices edging ever closer to $4 per gallon. Their arsenal short of weapons that can bring down oil prices, incumbents in both parties are still reckoning with the conclusion of the experts who visited the Senate Energy and Natural Resources Committee yesterday and said geopolitical turbulence is perhaps the lone factor assured to be driving oil costs higher.
 
Total working gas in storage rose by 57 Bcf last week, to 2.44 Tcf, according to Energy Information Administration estimates. Stocks were 816 Bcf higher than last year at this time and 900 Bcf above the five-year average of 1.54 Tcf, Gas Business Briefing notes.
 
Natural gas output in the US Lower-48 states rose 0.5% in January, or 360 MMcf/d, compared with December, the Energy Information Administration said Thursday in its monthly natural gas production report. Total Lower-48 gas production in January was 72.85 Bcf/d, up from a revised 72.49 Bcf/d in December.

 


 

CWN Energy Action Coalition
Friday, March 30 from 12-1pm
ANGDA located at 411 West 4th Avenue

Click to Edit

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....

 

 

 

Categories:

3-29-12

29 March 2012 7:03am

Tomorrow we hope to present more thorough comment on anSean Parnell, Make it Meaningful, Alaska Governor Parnell, Rally, Photo by Dave Harbour 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.)

The Importance of Commenting -- Especially by Elected Leaders (dfh commentary)

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 Cathy Giessel, Alaska State Legislature, Alaska Senate, Photo by Dave Harbourmatter.   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

Lisa Murkowski, U.S. Senator, Photo by Dave Harbour, Senate Energy and Natural Resources Committee

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, Senate Energy Committee, Senator Lisa MurkowskiRobert 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 

Like many Northeastern and Mid-Atlantic states, New York relies heavily on natural gas during the typically cold winters. More than half of households in the state use natural gas as their primary energy source for heating. With this winter's above-average temperatures, most New Yorkers are seeing stark reductions in their heating bills.
 
Inside Climate NewsNortheast Markets Eyed for Oil Sands as Clean Fuels Standard Fades **CEA mentioned in article**
In New Jersey, Gov. Chris Christie's administration pulled out of a proposed pact to cut global warming emissions in transportation fuels. In New Hampshire, the House passed a bill to leave the same regional initiative. And in Maine, the government opted to continue to engage in the program, but not to apply the rules to its own transportation sector.
 
Federal offshore drilling regulators on Wednesday approved Shell Oil's spill response plan for exploratory drilling in the Beaufort Sea, drawing strong criticism from environmental groups that claim oil companies cannot clean up oil in ice-choked waters. The announcement by the Interior Department's Bureau of Safety and Environmental Enforcement said the decision followed the agency's thorough review of the plan for Arctic Ocean waters off Alaska's north coast.
 
A new legislative memo suggests that about $2.2 million was spent on lobbying last year by the oil and gas industry and three affiliated organizations. Lobbying by industry and the Alaska Oil and Gas Association, Alaska Support Industry Alliance and Resource Development Council last year came as lawmakers debated an oil tax cut. Just the industry portion of that — excluding the affiliated groups — was about $2 million. Spending by the three groups totaled $185,319, the memo shows.
 
The Obama administration today announced a plan to allow companies to survey the Atlantic Ocean for oil and gas and other resources, an important first step in deciding whether, and where, to allow drilling, it said. In an election year in which the president has been under pressure to address rising gasoline prices, today's decision signals the beginning of a long road to developing new oil and gas in the Atlantic from Delaware south to Florida.
 
U.S. and Canadian oil producers and shippers are concerned that the owners of a pipeline that could compete with Keystone XL may hike prices for transporting crude oil from Cushing, Okla., to the Gulf Coast. At issue is Enbridge Inc. and Enterprise Products Partners' request to set rates for how much shippers must pay to transport oil on the Seaway pipeline system from the U.S. oil trading hub at Cushing to the Texas Gulf Coast.
 
New technologies in shale oil drilling, and the Alberta oil sands means that there is a glut of oil in Canada and the northern US with very few transportation options. This has led to trade prices far lower than world crude prices, and therefore there is an eagerness to get this oil to the coast for refinement and shipping.
 
The Wall Street JournalOffshore Drilling Receives Twin Boost
With higher gasoline prices holding steady, the Obama administration on Wednesday took steps that could pave the way for oil and gas exploration off the coast of Alaska and in the Atlantic Ocean as it sought to combat criticism it is hostile to fossil-fuel development. The Department of Interior approved Royal Dutch Shell's plan for responding to oil spills in Alaska's Beaufort Sea, news the company called "another major milestone" toward drilling there this summer.
 
Alberta oil producers are making a lot of crude gestures — many of them pipeline proposals — these days, and for good reason. They’re losing billions of dollars because of depressed prices from a glut of Alberta crude at U.S. refineries. The latest monthly report from respected Scotiabank commodities analyst Patricia Mohr says the Canadian crude-oil “discount” has now reached above $30 CDN a barrel. That’s largely because of regulatory and political bottlenecks.
 
Stocks of oil at the delivery place for US crude futures are nearing record levels as production grows and refineries undergo seasonal maintenance. The inland tank complex of Cushing, Oklahoma, contained 39.6m barrels last week, up 1.1m barrels from a week before and close to peak levels of one year ago, the US Energy Information Administration reported yesterday. The rise was part of an unexpectedly big 7.1m barrel increase in overall US crude stocks.
 
With rising gasoline prices fueling election-year political rhetoric, the Obama administration is accelerating moves it can paint as energy-friendly while putting the brakes on some environmental initiatives that opponents could blame for raising costs. Among the stalled proposals is a requirement that refiners make gasoline that emits 67 percent less sulfur - 10 parts per million down from the 30 ppm permitted now.
 
Rising gasoline prices have become a source of finger-pointing and political rhetoric – yet the economic reality for some refiners is that the price isn’t high enough.They say that gasoline prices, particularly on the East Coast, have been too low for them to operate successfully. Already, two refineries there have shut down completely and a third has gone idle as prices for fuel haven’t kept up with the surging cost of the raw material, crude oil.

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. 



Robert Dillon, Senate Energy Committee, Senator Lisa Murkowski

There are no taxpayer dollars handed out to oil companies, but it is revealing of the president’s mindset when he refers to not taking even more of a company’s earnings as a “subsidy” and “handing out taxpayer dollars.” The attached article at the bottom of this email details what companies actually pay.
 
There’s no doubt that the Menendez bill will fail, as it did last year. Even Senate Democrats agree that their tax hike proposal will do nothing to lower the price at the pump. As the bill’s sponsor, Sen. Menendez, made clear: “Nobody has made the claim that this bill is about reducing gas prices.”
So why are we wasting time on it when high gas prices are putting the squeeze on Americans? The administration’s own words show that this is about politics and not good policy: after taking office, it justified tax hikes on oil companies by claiming that the current tax code somehow led to the “overproduction” of domestic oil, and was therefore “detrimental to long-term energy security” and “inconsistent” with the administration’s preferred cap-and-trade program.
 
When the president talks about “subsidies,” he’s apparently talking about the Manufacturing Tax Credit (the “199” provision). U.S. manufacturers of all types use this credit. By an overwhelming bipartisan vote of 92-5, the provision became law in 2004 after the Senate passed the Jumpstart Our Business Strength (JOBS) Act. .
 
The president repeatedly conflates not taking even more money from oil companies through higher taxes with actual subsidies such as the government giving cash to Solyndra. By this logic, any dollar earned but not seized by the government is a “subsidy” for which we should feel grateful.
This is surprising since in his State of the Union earlier this year, the president said: “if you’re an American manufacturer, you should get a bigger tax cut.” Apparently, he meant only certain favored manufacturers should get a tax cut – and it’ll be called a “subsidy” if you’re not on the list.
 
This isn’t about addressing gas prices. This is about President Obama and Majority Leader Reid trying to gain political advantage by claiming that by promoting increased supply and acknowledging basic economics, Republicans are defending Big Oil. That’s frustrating and disappointing because it reveals that Democrats have no real energy policy solutions to offer. Given the magnitude of the strain that rising energy prices are placing on American families – that’s downright scary.
 
This is the first and only time in this Congress that the Senate has taken up energy legislation on the floor. Republicans have not been allowed a single amendment to grant access to a single drop of oil – even though both the president and the bill’s sponsor have publicly conceded that increased domestic oil supply can help lower prices. 
 
I’m sending along The Wall Street Journal opinion piece from earlier this month on the amount of money the oil industry pays the government. I sent this out previously, but it’s a good piece and a relevant one given today’s cloture vote on the Menendez bill and this morning’s hearing on gas price trends before the Senate Energy and Natural Resources Committee. The takeaway from the article is that the oil and gas industry paid some $35.7 billion in corporate income taxes in 2009. That alone is about 10 percent of non-defense discretionary spending. That figure also doesn't count excise taxes, state taxes and rents, royalties, fees and bonus payments. The overall take-away is that we owe it to the American consumer to increase supply, reduce demand, and hold down costs.
 
The industry sends more money to Washington than to shareholders
Wall Street Journal editorial 
March 14, 2012
President Obama says he wants to end subsidies for what he calls "the fuel of the past," but lucky for him oil and gas will be the fuels of the future too. His budget-deficit blowout would be so much worse without Big Oil, because the truth is that this industry is subsidizing the government.
 
Much, much worse, actually. The federal Energy Information Administration reports that the industry paid some $35.7 billion in corporate income taxes in 2009, the latest year for which data are available. That alone is about 10% of non-defense discretionary spending—and it would cover a lot of Solyndras. That figure also doesn't count excise taxes, state taxes and rents, royalties, fees and bonus payments. All told, the government rakes in $86 million from oil and gas every day—far more than from any other business.
Not paying their "fair share"? Here's a staggering fact: The Tax Foundation estimates that, between 1981 and 2008, oil and gas companies sent more dollars to Washington and the state capitols than they earned in profits for shareholders.
 
Exxon Mobil, the world's largest oil and gas company, says that in the five years prior to 2010 it paid about $59 billion in total U.S. taxes, while it earned . . . $40.5 billion domestically. Another way of putting it is that for every dollar of net U.S. profits between 2006 and 2010, the company incurred $1.45 in taxes. Exxon's 2010 tax bill was three times larger than its domestic profits. The company can stay in business because it operates globally and earned a total net income after tax of $30.5 billion in 2010 on revenues of $370.1 billion.
 
Meanwhile, Mr. Obama's 2013 budget—like its 2012, 2011 and 2010 vintages—includes a dozen-odd tax increases that would raise the industry's liability by $44 billion over the next decade, according to the White House, and by $85 billion, according to the trade group the American Petroleum Institute (API). At any rate, the President's economists ought to be weeping for joy for the revenue windfall from an industry that grew 4.5% in 2011, compared to overall GDP growth of 1.7%.
Crunching Compustat North America numbers, API estimates that the average effective tax rate for oil and gas companies is 41.1% for 2010—i.e., taxes as a share of net income. That is broadly in line with the Energy Information Administration's estimates for "major energy producers." By the same measure, other manufacturers on the S&P Industrial index pay an effective rate of 26.5%.
Specific oil and gas investments are also taxed at higher rates than other energy plays, which were surveyed in a 2009 paper by economist Gilbert Metcalf, now a deputy assistant Treasury secretary. He found that oil drilling (for an integrated company) clocks in at a 15.2% tax rate, refining at 19.1% and building a natural gas pipeline at 27%.
 
For comparison, nuclear power comes in at minus-99.5%, wind at minus-163.8% and solar thermal at minus-244.7%—and that's before the 2009 Obama-Pelosi stimulus. In other words, the taxpayer loses more the more each of these power sources produces.
 
As for the "subsidies" that Mr. Obama says the oil industry receives, these aren't direct cash handouts like those that go to the green lobby. They're deductions from taxes that cover the cost of doing business and earning income to tax in the first place. Most of them are available to other manufacturers.
 
What Mr. Obama really means is that he wants to put the risky and capital-intensive process of finding, extracting and producing oil and gas at a competitive disadvantage against other businesses. He does so because he ultimately wants to make them more expensive than his favorites in the wind, solar and ethanol industries.
 
Why he would still want to do this amid the political panic over $4 per gallon gasoline is a mystery. Even Mr. Obama now claims to want lower gas prices, commenting recently that "Do you think the President of the United States going into re-election wants gas prices to go up higher?" Too bad his every policy choice, and especially his tax agenda, would lead to higher prices.
###

 

Categories:

3-28-12

28 March 2012 6:56am

ADN by Lisa Demer.  A bill to develop a natural gas pipeline from the North Slope to Southcentral Mike Chenault, Speaker of the House, Representative, Nikiski, gas pipeline, hb 9, Photo by Dave HarbourAlaska 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, Alaska Gas Pipeline, Federal Coordinator, Photo by Dave HarbourLarry 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

27 March 2012 6:40am

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 willGary Chouest, RDC, Edison Chouest Offshore,Aiviq, advanced Arctic icebreaker vessel, Shell Oil, Beaufort, Chukchi, Photo by Dave Harbour 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 Pete Slaiby, Shell Oil Alaska, Arctic OCS, Edison Chouest Icebreaker, Photo by Dave HarbourAlaska, 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: Steve Pratt, Consumer Energy Alliance, Alaska, Oil Taxes, OCS, ANWR, NPR-A, Photo by Dave Harbour   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.

Categories:

2-26-12

26 March 2012 5:52am

Anchorage Daily Planet byTom Brennan, Alaska Oil Taxes, ARCO Building, Anchorage Daily Planet, Photo by Dave Harbour 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.Mike Chenault, Alaska Speaker of the House, Representative, Photo by Dave Harbour  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. 

The Houston ChronicleFeds seek input on drilling off Alaska coast.  The Obama administration is asking the oil and gas industry to weigh in on a possible sale of drilling leases in the Cook Inlet off the coast of south-central Alaska. The move is designed to gauge the industry’s interest in exploring for oil and gas in the area, but it doesn’t guarantee the government will sell drilling leases in the region. 

 National Journal: All-of-the-above **Editorial Comment by David Holt**
With the average price per gallon in the U.S. reaching $3.86 this month, it’s no wonder President Obama is talking about energy issues. The increase of 49 cents a gallon over the past two months alone translates to a $35 billion price tag for the broader economy – that’s just in direct costs that do not include related cost increases for transportation and other goods.
 
The American Petroleum Institute recently called on President Obama to immediately approve the entire Keystone XL project to bring more secure and reliable oil from Canada to the United States and help American consumers at the pump. "We are encouraged to see the president speed up approval of the southern leg of the Keystone XL pipeline," said API Executive Vice President Marty Durbin. "We now hope he will speed up the approval of the entire pipeline.
 
What might be called the four pillars of partisan positioning on gasoline prices -- more domestic drilling, stronger limits on oil-futures speculators, tapping the Strategic Petroleum Reserve, and building new infrastructure for Canadian crude -- are set to top the agenda in the Senate Energy and Natural Resources Committee this week.
Categories:

3-23-12

23 March 2012 4:43am

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

NYT by Ann Carrns.  Here is one of the best stories we've seen on the personal side of work within the Williston, N.D. oil shale phenomenon.  See the report of our own Williston trip last year!  -dh
 
Financial Post Editorial: History is littered with the wreckage of past plans to develop Canada’s North. Diefenbaker’s 1958 election platform envisioning a “Canada of the North” never amounted to much, and he was soon tossed out of office. Charles Hays ran a rail line to the northern tip of B.C.’s coast in 1905, earning Prince Rupert its derisive nickname of “Hays’ Orphan” for most of the 20th century (Hays did not have to endure these taunts, having gone down with the Titanic in 1912). The Mackenzie Valley pipeline has been stuck in the planning stages for decades.
 
Alaska Dispatch Op-Ed by Senator Donny Olson, Alaska LegislatureAndrew Halcro Andrew Halcro, Alaska oil taxes, Photo by Dave Harbour(NGP Photo).  Sen. Donny Olson (NGP Photo-R) said the committee should remember what oil from state lands provides for the people of Alaska through oil taxation, especially for its poorest citizens and especially as oil prices rise.  Nonsense. The state's fair share is the royalty, everything else is just a tax and simply because Olson's constituents feel government owes them more, that shouldn't ruin the future of Alaska's economy.
 
Homer News by Tim Bradner.  With less than four weeks left in the 2012 legislative session, state senators are on the slow track in their work on changes to the state's oil production tax.

 

 

Categories:

3-22-12 Are Sociopaths Taking Control?

23 March 2012 2:41am

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
 
 

 

 

 

Categories:

3-20-12

20 March 2012 3:43am

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:
Senator_Bert_Stedman@legis.state.ak.us

Co-Chairman Lyman Hoffman:
Senator_Lyman_Hoffman@legis.state.ak.us

Senator Dennis Egan:
Senator_Dennis_Egan@legis.state.ak.us

Senator Johnny Ellis:
Senator_Johnny_Ellis@legis.state.ak.us

Senator Lesil McGuire:
Senator_Lesil_McGuire@legis.state.ak.us

Senator Donald Olson:
Senator_Donald_Olson@legis.state.ak.us

Senator Joe Thomas:
Senator_Joe_Thomas@legis.state.ak.us

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:

http://www.akrdc.org/membership/events/special/

Categories:

3-16-12

16 March 2012 3:53am

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.

Check out the Gas Pipeline Federal Coordinator's history of gas pipeline projects

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 John Minge, BP Alaska, Gas Pipeline, Liquids, LNG, oil taxesAssociated 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.

 
Categories:

3-15-12

15 March 2012 7:55am

 

A READER WRITES REGARDING YESTERDAY'S "DISCOVERY DAY" CELEBRATION:  Thank you Dave,  this is a great reminder of that great time made possible by many Alaskans and those from Government and from many states, who finally saw the beginning of a new era for the State and the world, and also ended the tough times in getting the TAPS line started and constructed.  I was hired by Alyeska as an HR Operations Supervisor line wide and had the opportunity to drive the road from Pump Station #1 on the North Slope to Valdez every week for 7 years and then was moved into Corporate.   I cherished those days and am proud of everyone who worked for the system and made it as great as it is even today.  Thanks, Paul Richards
 
Commentary:  
Yesterday's Investor's Business Daily gives evidence Obama is misleading citizens

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 Doc Hastings, Congressman, Photo by Dave Harbourfederal 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

about the effect of energy supply on prices and about America's potential to impact supply.  -dh
 
Investor's Business Daily by John Merline.  When he was running for the Oval Office four years ago amid $4-a-gallon gasoline prices, then-Sen. Barack Obama dismissed the idea of expanded oil production as a way to relieve the pain at the pump.  "Even if you opened up every square inch of our land and our coasts to drilling," he said. "America still has only 3% of the world's oil reserves." Which meant, he said, that the U.S. couldn't affect global oil prices.  It's the same rhetoric President Obama is using now, as gas prices hit $4 again, except now he puts the figure at 2%.  "With only 2% of the world's oil reserves, we can't just drill our way to lower gas prices," he said. "Not when we consume 20% of the world's oil."  The claim makes it appear as though the U.S. is an oil-barren nation, perpetually dependent on foreign oil and high prices unless we can cut our own use and develop alternative energy sources like algae.  ....

 

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.

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