2012 Archives

11-1-12

01 November 2012 8:11am

Graham Smith (NGP Photo) of the Alaska State Graham Smith, Alaska State Pipeline Coordinator's Office, annual report, Photo by Dave HarbourPipeline Coordinators Office Reports TODAY that the agency's Annual Report Is Now Available.  Smith says that, "The State Pipeline Coordinator’s Office is the lead state agency for processing pipeline right-of-way leases, and it coordinates oversight of state-regulated pipelines."

He adds that the annual report provides, "general information for each common carrier pipeline, highlights lessee reported activities, summarizes specific state oversight activities for pipeline construction, operation, and maintenance, and provides an outlook for the next fiscal year, including updates on several proposed natural gas pipeline projects."

Calgary Herald by Dave Cooper.  TransCanada Corp. moved a step closer to shipping Alberta crude east, saying Tuesday that the idea of converting part of its main natural gas pipeline system to carry oil is both technically feasible and makes economic sense.  "So we are now commencing on our stakeholder efforts in the communities that we are going to be in and advancing our commercial deal with potential shippers,” said chief executive Russ Girling....

ADN/AP by Dan Joling.  Royal Dutch Shell PLC announced that it concluded exploratory drilling on Wednesday, its mandatory cutoff date before winter. It completed preliminary drilling at one well at the Burger-A Prospect 70 miles offshore in the Chukchi Sea and one at the Sivulliq Prospect 18 miles offshore in the Beaufort Sea.

 

 Decisions Made by People Thousands of Miles Away From Our Homes Have Devastating Impacts 

Our comment: the following Joint Opinion-Editorial by the North Slope Borough (NSB, Rex Rock, ASRC, Arctic Slope Regional Corporation, Photo by Dave Harbour, Copyright 2012, NPR-A, federal government overreachMayor Charlotte Brower, NGP Photo) Charlotte Brower, Mayor, North Slope Borough, Federal government overreach, Photo By Dave Harbour, NPR-Aand Arctic Slope Regional Corporation (ASRC, President/CEO Rex Rock, NGP Photo) may be the most responsible, powerful and candid policy communication from Alaska's North Slope leadership in recent decades.  It balances economic development with care for the environment and emphasizes the critical importance of federal government consultation and communication with local stakeholders and appropriate elected leaders.  Please click here to see why.  -dh

The recent announcement by the Secretary of the Interior, Ken Salazar, of Preferred Alternative B-2 for the National Petroleum Reserve-Alaska has appalled even the conservation-minded Iñupiat of the North Slope of Alaska.

The North Slope Borough is nearly entirely dependent on the environmentally safe development of natural resources, as are the Native corporations within the region. The rapid decline of oil production is affecting the ability of local governments to provide services to residents often taken for granted in urban communities. In an era of budget cutbacks by the federal and state governments, we cannot afford to cripple the lone economic driver for our communities.
 
The proposed “lockup” of almost half of NPR-A will negatively impact the well-being of every resident on the North Slope. Although the legislation opening NPR-A is explicit in ensuring that the area be managed for oil and gas purposes, the Secretary of the Interior is side-stepping the clear intent of the law to satisfy the agendas of outside environmental groups.
 
The proposed “B-2” alternative in the EIS/Integrated Activity Plan does not represent the desires of the majority of the Iñupiat living within the boundaries of NPR-A. It was not developed in consultation with the North Slope Borough, the Arctic Slope Regional Corporation, or any of the land-owning village corporations within NPR-A.
 
Further aggravating the lack of federal consultation is the practice of environmental groups taking advantage of some Iñupiat to advocate their position in Washington, D.C. They hand pick a few individuals sympathetic to their cause and market them as “Native leaders”; resulting in a widely touted skewed and carefully-orchestrated “Native” perspective, while the voices of actual, elected leaders are ignored. This practice also reveals the fact that these environmental organizations have little to no respect for the perspective of Native people that happen to disagree with their agendas. Even more alarming, the federal government is utilizing the same approach. This practice is dishonest and unacceptable.
 
Over the past four years more efforts have been made by the current administration to limit, restrict, and heavily regulate the lands upon which we have subsisted and currently depend for responsible development. Proposals such as Secretary Salazar’s “Wild Lands” policy, management alternatives for Wild & Scenic River and Wilderness designations, and the establishment of critical habitat area have left our communities feeling besieged by powerful outside interests. How soon will it be when we are considered trespassers on our own land?
 
The proposed B-2 Alternative is a plan to prohibit oil & gas leasing, development, and  infrastructure in large tracts of the NPR-A. An area proposed for closure includes one portion of the NPR-A that the federal government has identified as having the highest potential for oil & gas. Further, this decision comes at a time when the feasibility of a potential pipeline route from offshore OCS development has yet to be determined.
 
Onerous federal land management schemes and regulations have negative impacts on our people. Decisions made by people thousands of miles away from our homes have devastating impacts. Without oil revenues, how will the federal government address the needs of our communities?
 
We are the best judges when it comes to balancing the protection of our subsistence resources and responsible oil & gas development. If the Obama Administration truly cared about Alaska Native people, they would recognize that their current proposed policies are a detriment to our path to self-determination.
 
The North Slope Borough and Native corporations exist in our communities to improve the quality of life for our people. We are standing up for our economic and subsistence freedoms, and rejecting efforts that would relegate us to becoming exhibits in an outdoor museum. If we are to be respected as a people then we must have a seat at the decision-making table when those decisions concern the land that we call home.

 

Sean Parnell, Alaska Governor, NPR-A, States Rights, Salazar, Federal overreaching jurisdiction, Photo by Dave HarbourIn September, NSB and ASRC leaders Charlotte Brower and Rex Rock, respectively provided Alaska Oil and Gas Congress participants with major policy statements which decisively supported responsible oil and gas exploration and development in Alaska's Arctic region.   Their position is not inconsistent from one adopted by the State's elected leader, Governor Sean Parnell (NGP Photo).

Today's Op-Ed continues and expands upon the theme of a Federal government which coordinates policy to meet extreme environmental demands rather than communicate responsibly with those who live on and subsist within the NSB-ASRC lands.

For our thousands of Canadian and Lower 48 readers, the NSB is the elected, area-wide government of the North Slope and ASRC is the Alaska Native Regional Corporation created by the Alaska Native Claims Settlement Act of 1971.

NSB's goal is to, "create opportunity for the future and to assure continuity with the past."  It does so within the constitutional framework of local government."

ASRC is the largest Alaskan-owned company, according to its public statements, with about 10,000 employees worldwide.   It is a private corporation owned by and representing the business interests of 11,000 Iñupiat Eskimo shareholders in the villages of Point Hope, Point Lay, Wainwright, Atqasuk, Barrow, Nuiqsut, Kaktovik, and Anaktuvuk Pass. Some of the corporation’s shareholders live outside of the region in Alaska and the Lower 48.  The company owns nearly five million acres of land on Alaska's North Slope which contain a high potential for fossil fuels and base metals.  ASRC owns subsurface rights to certain lands, and surface rights to other lands. 

(We suspect more than a few of our faithful readers in Inuvik, Yellowknife, Whitehorse and their other neighbors may share some of the same concerns represented in this report.)

 -dh

 

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10-31-12

31 October 2012 6:15am

Yesterday, the Interstate Oil and Gas Compact Commission (IOGCC) kicked off its 2012 Annual Meeting Sean Parnell, Video, IOGCC, San Antonio, Federal Government Overreach, Photo by Dave Harbourin San Antonio with a video presentation by Governor Sean Parnell (NGP Photo-L).  Alaska Oil and Gas Conservation Commission Chairman Cathy Foerster reported onMichael Geraghty, Alaska Attorney General, Federal Government Overreach, Photo by Dave Harbour the Interior Department's (DOI) failure to obey Alaska's oil and gas environmental and conservation rules and statutes within the National Petroleum Reserve-Alaska (NPR-A).  The Agency has not directed nor funded the Bureau of Land Management (BLM is the federal landlord responsible for NPR-A) to properly plug and clean up drilling sites of several score federal government oil wells in the NPRA-A.  This lack of environmental consciousness is especially hypocritical and frustrating to Alaska in view of the Interior Department's actions to block or delay Alaska oil and gas development in NPR-A and other areas, Foerster said.   Alaska Attorney General Michael Geraghty (NGP Photo) endorsed Foerster's NPR-A  message and briefed the nation's oil and gas conservation officials on other instances of federal government overreaching jurisdiction in Alaska.

10-30-12 Is Alaska Fiddling While Russia Fires Up Arctic Gas Exports?

30 October 2012 3:07am

Scott Jepson, ConocoPhillips Alaska, ACES, Alaska oil taxes, investment climate, Photo by Dave HarbourADN Op-Ed by Scott Jepson (NGP Photo).  ...high taxes on North Slope oil production, in particular the tax increases passed by the Legislature in 2007 under a bill called ACES, are hurting the investment climate on the North Slope and ultimately the long-term health of Alaska's economy.

Calgary Herald by Dan Healing.  Growing competition from oilfields as far away as Colombia and Brazil make it increasingly critical that Canada gain access to new markets for its oil, says a Scotiabank report released Monday.

Alaska Dispatch by Tony Hopfinger and Scott Woodham.  In the Russian Arctic, state-owned oil giant Gazprom is doing what Alaskans have long dreamed of -- tapping vast reserves of natural gas at the top of the planet and shipping them to markets.  Although natural gas has been flowing from the Yamal Peninsula's Bovanenkovo gas field since June, this past week Gazprom hosted a big event to celebrate the official launch of its field and the workers there.  Bovanenkovo, one of the world's three largest conventional natural gas fields, holds an estimated 177 trillion cubic feet of gas. Its official opening featured a giant video monitor that beamed in an address from Russia President Vladimir Putin. The Wall Street Journal described the event like this:  Putin praised Gazprom’s successful launch of the new gas field, expected to produce for the next 28 years. He then suddenly slammed the gas monopoly for not adjusting its policy to what he saw as the risk of growing production of shale gas around the world.  ...  See related Bloomberg story here.

 

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10-29-12 Shell Stops Summer Work; Exxon Starts Point Thomson Winter Work!

29 October 2012 2:16am

 Brad Keithley's Latest Exchange With Critics of Budget Cutting

Shell Stops 'Summer' Work

(Anchorage, AK) – Alaska Natural Resources Commissioner
Note: As we write this, it is still Friday afternoon (10-26), but we wanted those who sign onto the website to find it because this Point Thomson news is hot off the press, just announced at 1:30 this afternoon by the Department of Natural Resources' Elizabeth Bluemink.  The reason we are 'pre-posting' is that we don't know when we'll be able to upload more news.  We are soon to be en route to the Interstate Oil and Gas Compact Commission meeting in San Antonio to hear interesting presentations from Alaskans and other oil and gas producing state leaders.   But our lack of ability to post while on the road shouldn't prevent our loyal readers from having access to this late-breaking news.  -dh
Dan Sullivan, Alaska, Department of Natural Resources, Point Thomson, Corps of Engineers, Photo by Dave HarbourDan Sullivan (NGP Photo) welcomed news that the U.S. Army Corps of Engineers has issued a record of decision (ROD) and Section 404 wetlands permit needed for the Point Thomson Project, a massive North Slope liquid condensate project led by ExxonMobil Corp., to begin construction this winter.
 
“The year-and-a-half delay in issuing this decision has been frustrating for the State of Alaska, but we are encouraged by the issuance of this permit, which is critical to finalizing so many other state and North Slope Borough permits for this multibillion-dollar project,” Sullivan said.
  
“The Point Thomson Project is a strategic investment for the state because it will increase the flow of hydrocarbons through the Trans-Alaska Pipeline System (TAPS) and open the eastern North Slope to new hydrocarbon exploration, development and production with a 70,000-barrel-per-day common-carrier pipeline. This project should also serve as a pre-investment for large-scale North Slope gas commercialization, and critically, is expected to create hundreds of jobs throughout the state and more than 1,000 jobs at peak employment. The state negotiated a strong Alaska hire provision for this project and we’re already seeing the benefits of that for Alaskans,” Sullivan said.
 
Sullivan also complimented Col. Christopher Lestochi, Commander of the Alaska District, for his leadership in the final stages of the 404 permitting process. “While the target date for issuing the ROD did slip again this year, Col. Lestochi and his team worked hard to finalize the Corps’ decision. In the last several months, DNR has been working on almost a daily basis with the Corps and other federal agencies, as well as the North Slope Borough, to make sure that our permitting efforts are well coordinated and construction proceeds this winter without another year’s delay.”
 
Point Thomson is the state’s largest undeveloped oil and gas field, containing 25 percent of the North Slope’s known conventional natural gas. ExxonMobil is seeking to build an initial production system at the Point Thomson Field that will send 10,000 barrels per day of liquids condensate through TAPS. This is the project that the Corps has now approved.
 
In a legal settlement between Exxon, other Point Thomson leaseholders, and the State of Alaska, the initial production system was required to be online by the winter of 2015-2016, with additional provisions for full-scale development of the Point Thomson field. The startup date for the initial production system is a full year later than previously agreed to by the state and Exxon due to federal delays in issuing the ROD. The settlement also includes deadlines for full-scale development of the Point Thomson field.
 
This fall, the state and the North Slope Borough have moved forward with more than 100 permits and authorizations for the initial production system. Many of those permits depended on and could not be finalized without issuance of the ROD.
 

To advance the Point Thomson project, Exxon has hired nearly 50 contractors, including many Alaska-owned firms. In briefings, Exxon has told state officials that this project will create an estimated 600 to 700 jobs from 2013 to 2016, with up to 2,400 jobs during peak construction.

 

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10-27-12 More Weekend Reading

27 October 2012 2:55am

Comment:  Dear readers usually tip us about northern energy news quickly and we try to get it out immediately, if justified.  Last week, we were first to report that the Alaska Stand Alone Gas Pipeline (ASAP) Environmental Impact Statement had been completed.  We noted it as a historical event, a great achievement which still leaves the project and decision makers with many unanswered questions.  OUR READERS HEARD IT HERE FIRST AND HERE IS THE LINK, TO SAVE ONE FROM SCROLLING DOWN.  We note as an additional reference that yesterday, Emily Schwing's Alaska Public Radio note mentioned ASAP's EIS publication in the Federal Register yesterday, as follows:  The Alaska Gasline Development Corporation has completed the final Environmental Impact Statement for a standalone gas pipeline project in Alaska. The EIS was added to the Federal Register today. Scoping meetings on the project’s environmental impact have been ongoing since 2009. If built, the 24 inch, high pressure pipeline will span nearly 740 miles between Prudhoe Bay and Port Mackenzie.  -dh

We remind weekend readers to scroll down to Congressman Doc Hastings' good work below.

 

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10-26-12 - U.S. Congressman Doc Hastings Focuses On Alaska's Energy Potential!

26 October 2012 2:18am

 Note Canadian Energy Challenges Below

Friday Alert and Comment:  U.S. House of RepresentativesDoc Hastings, US Congress, House of Representatives, Western Washington, Alaska, House Resources Committee, Obama Administration, Photo by Dave Harbour Natural Resources Committee Chairman Doc Hastings (NGP Photo) has been one of the top two advocates in the entire United States Congress for adopting a reasonable national energy policy--in our studied opinion.  Since Alaska composes 3/4 of America's coastline, 20% of her total land mass and holds, arguably, the preponderance of America's potential oil, gas, coal and strategic metals reserves, his voice is as critical to Alaska as it is to the nation.  Here is a statement Chairman Hastings issued just today, featuring Alaska Energy Policy issues which we hope you will find useful reading over the coming weekend.  Readers will also find links on his webpage to earlier, important policy statements on OCS, coal and hydraulic fracturing issues.  As always, feel free to send us your comments and suggestions.  -dh
 
LINK: Alaska is home to some of the most abundant energy resources in this country. These resources, if responsibly harnessed, hold the potential to significantly strengthen American energy independence, create thousands of American jobs and generate billions of dollars in new revenue. Unfortunately, the Obama Administration continues to lock-up vast amounts of Alaska’s energy resources.
  • The Obama Administration has delayed permits in the National Petroleum Reserve-Alaska (NPR-A) and is proposing to put over half the reserve off-limits to American energy production.
    • The NPR-A was set aside as a petroleum reserve and remains specifically designated for the purpose of providing oil and natural gas resources to the people of the United States. According to the U.S. Geological Survey, the NPR-A contains 2.7 billion barrels of oil and 114 trillion cubic feet of natural gas, and there is broad, bipartisan support for developing its resources.
    • The Obama Administration’s Interior Department this year proposed a land management plan that would withdraw half of the 23.5 million acres in the NPR-A to American oil and natural gas production. This would represent the largest wholesale land withdrawal by the federal government in decades.
    • Bureaucratic delays imposed by the Obama Administration continue to block the construction of necessary roads, bridges and pipelines needed to transport the energy out of the Reserve once it is produced. For example, ConocoPhillips waited over four years for a permit to build a bridge and pipeline in order to transport oil and natural gas out of a ready-to-produce field.
  • The Obama Administration opposes opening a small portion of the Arctic National Wildlife Refuge (ANWR) to responsible energy production.
    • The North Slope of ANWR, which is not designated as Wilderness, was specifically set aside in 1980 by President Jimmy Carter and Congress for oil and natural gas development. New technologies would allow the full energy potential of ANWR to be accessed by opening up less than 3 percent of its 19 million areas.
    • According to U.S. Geological Survey estimates, ANWR contains approximately 10.4 billion barrels of oil and at peak production could supply the U.S. with up to 1.45 million barrels of oil per day. This is more than the U.S. imports daily from Saudi Arabia.
    • House Republicans have passed legislation to open less than 3 percent of ANWR to energy production, which would create tens of thousands of new jobs and strengthen our economy.
  • The Obama Administration has delayed offshore leases in the Arctic and continues to keep areas off-limits to new offshore drilling.
    • President Obama’s five-year offshore leasing plan only includes two lease sales off the Alaska coast in the Chukchi and Beaufort Seas. These lease sales are scheduled to happen in 2016 and 2017 – imposing years of delays from when they were originally supposed to take place. Other areas offshore of Alaska remain closed to new energy production.
  • By blocking increased energy production in Alaska, the Obama Administration is also putting the future of the Trans Alaskan Pipeline System (TAPS) at risk.
    • TAPS is the conduit for transporting oil from the far north across Alaska for shipment to Washington state and California for refining and use in the lower 48 states. TAPS at one time conveyed over 2 million barrels of oil a day, but reduced production has left the pipeline at less than half capacity, threatening a shutdown that would impact thousands of good paying jobs.
    • TAPS is one of the most important pieces of energy infrastructure in our nation. Unfortunately, federal policies and inaction are threatening to starve TAPS into destruction.
To learn more about how the Obama Administration has blocked, delayed and hindered American energy production, visithttp://naturalresources.house.gov/roadblocks
Part 1: Offshore Drilling
Part 2: Hydraulic Fracturing on Federal Lands
Part 3: War on Coal
###
 
 
Colleen Starring, Cook Inlet Storage, Enstar Natural Gas, Alaska, AGIA, ACES, RCA, CINGSA, Photo by Dave HarbourCommonwealth North's (CWN) Energy Action Coalition will meet next Friday in Anchorage with Colleen Starring (NG Photo), President, ENSTAR, who will speak about the CINGSA project status and the benefits to the utility customers that will be realized this winter.  The goal of this group is to continue discussion on CWN's most recent energy reports Energy for a Sustainable Alaska: The Railbelt Predicament &The Rural Conundrum and highlight and identify challenges and opportunities in Alaska's energy environment 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 would like to be added to this distribution list please contact Joshua Wilson at:
 

 

NYT by Ian Austen.  OTTAWA — AND you thought pipeline politics in the United States were treacherous. Rebuffed by Washington on bringing the Keystone XL pipeline down through the western United States, Canada now finds that its Plan B — to build a pipeline to its west coast for shipping to Asia — has become mired in domestic politics thick enough to rival the tarlike oil it hopes to sell.  Getting the oil to the Far East first requires building a $5.5 billion, 730-mile pipeline from landlocked Alberta over a series of mountains to the coast of northern British Columbia. About 220 tankers a year would then navigate some of Canada’s most scenic yet treacherous waters to complete the trip.

WSJ.  Prime Minister Stephen Harper likes to advertise Canada as a market-friendly destination for capital. But at three minutes to a midnight deadline on Friday, Ottawa announced that it won't allow the $5.2 billion purchase of Progress Energy Resource Corporation by Malaysia's state-owned oil and gas company Petronas. Investors are left to wonder if Mr. Harper has had a change of heart about attracting global capital to develop Canada's vast oil and gas resources.  Unlike President Obama, Mr. Harper views fossil-fuel deposits as something to be exploited for faster economic development. Recognizing that Canada lacks the domestic capital to do so....

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10-25-12

25 October 2012 4:49am

Calgary Herald by Dan Healing.   The Montney resource play that has sparked several recent takeover bids is the driver behind a $258-million all-stock bid by Tourmaline Oil Corp. for private Huron Energy Corp.  
 
Alaska House of Representatives Natural Resources Press Office: Obama Administration American Energy Roadblocks Part 2: Hydraulic Fracturing on Federal Lands 

 

 

 

 

 

Our friend, Brad Keithley (NGP Photo) alerts readers of his blog:Brad Keithley, Alaska, Attorney, Oil Taxes, Government Spending, Tariff, RCA, Photo by Dave Harbour In addition to the 59 legislative races that have been — and will continue to be — widely discussed between now and election day, there also are two statewide measures that will appear on the election day ballot.  One is the question, required by the Alaska Constitution to be included on the ballot every ten years, of whether there shall be a new Constitutional Convention called.  The second is “Bonding Proposition A,” which asks the question “Shall the State of Alaska issue its general obligation bonds in the principal amount of not more than $453,499,200 for the purpose of paying the cost of state transportation projects?”  I intend to vote “no” on Bonding Proposition A.

Alaska Dispatch by Van Williams.  “Frankly, Bert Stedman, Sitka, Petersburg, Alaska State Senate, Ball Field, fiscal conservative, government spending, budget, alaska oil taxes, Photo by Dave Harbourit was a third-class baseball field,” said Sen. Bert Stedman (NGP Photo) of Sitka. “Some of us thought it was appalling.”
 
So he stepped up the plate and hit a home run with the development of new Moller Field, the only all-turf field in Alaska.
 
Stedman was the MVP of the multimillion-dollar project, identifying the need for a new turf field, driving home the point with other legislative leaders and securing the funding through the capital budget.

(Commentary:  Keithley is right and we will be joining him with our 'no' vote.  New readers can scroll down to our editorial yesterday and likely agree that Alaska has more of a 'spending problem' than a 'tax problem'.  While the latter runs a close second in importance the former attracts almost no attention.  This is because attacks on government spending -- even frivolous spending -- seldom accrue to the specific economic gain of any one special interest.  Bloating the budget, project by project attracts a withering array of aggressive forces to the army of lobbyists.  In a democracy, it is almost impossible for even the stoutest fiscal conservatives to face that onslaught head-on.  Likewise, it is egotistically and politically rewarding to bask in glory at the head of the Army, when it marches through city streets announcing large budgets for great projects.  Ballot spending initiatives, are one small way in which citizens can, in the privacy of that aluminum voting booth, take a stand against the tsunami tide of uncontrolled spending and government growth.  -dh)

Here is Dan Fagan's Important "Alaska Under Siege" Production!

Here is how Houston Celebrated 'Energy Day' last Saturday!

 

Murkowski Discusses Alaska Natural Gas “Window of Opportunity” with Producers

 

HOUSTON, TEXAS – U.S. Senator Lisa Murkowski, R-Alaska, met this week with executives from the North Slope’s three major producers to discuss the current state of plans and next steps for a liquefied natural gas (LNG) project for commercializing Alaska’s gas resources.

 

“I wanted to hear directly from the companies about where they are in the planning and design process, and what they see as the next step to advance the project,” Murkowski said. 

 

Murkowski said she was encouraged by the level of cooperation that now seems to exist between Exxon Mobil, ConocoPhillips, and BP around a single export project to monetize the North Slope’s 35 trillion cubic feet of natural gas.

 

Monday’s meeting included Lamar McKay, chairman and president of BP America; John Minge, president of BP Exploration Alaska; Matt Fox, executive vice president of exploration and production for ConocoPhillips; and Rich Kruger, president of Exxon Mobil Production Co.

 

The biggest hurdle facing the project, according to the producers, is the uncertainty of Alaska’s fiscal regime, an issue they have repeatedly testified about before the Alaska State Legislature.

 

Murkowski said it’s important that Alaska price its gas competitively in the world market to ensure development of a project that’s estimated to cost as much as $65 billion. But she also pressed the executives of all three companies on the importance of moving quickly to seize the opportunity to ship Alaska gas to the energy hungry markets of Japan, South Korea and the rest of the Pacific Rim.

 

“Alaskans have waited for four decades to see some benefit from their North Slope gas. While Lower 48 markets may be oversupplied because of the shale boom, places like Japan and South Korea are willing to pay a premium for long-term supply contracts,” Murkowski said. “But that window of opportunity will not remain open indefinitely.”

 

Murkowski continues to promote the development of Alaska’s North Slope gas reserves as the state’s senior U.S. senator and as the top Republican on the Senate Energy and Natural Resources Committee. Over the past year, Murkowski has held a number of meetings with Japanese and South Korean officials to discuss the benefits of a securing a long-term supply of gas from Alaska. This summer, she brought her Senate Energy Committee colleagues, Sen. Ron Wyden, D-Or., and Sen. John Hoeven, R-N.D., to the state on separate trips to show them Alaska’s vast energy resources.

 

###

 

For further information, please contact Robert Dillon at 202.224.6977 or Robert_Dillon@energy.senate.gov or Megan Moskowitz at 202.224.7875 or Megan_Moskowitz@energy.senate.gov.

Visit our website at http://energy.senate.gov/public/

 

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10-24-12 ASAP's Final EIS Released For Public Comment

24 October 2012 6:51am

 

On Wednesday November 14, 2012, Paul Ziff (NGP Photo), CEOPaul Ziff, Calgary, Natural Gas, Oil, Photo by Dave Harbour, Ziff Energy Group of Ziff Energy Group will be giving a presentation entitled "Natural Gas Under Siege” at the BMO Centre in Calgary, Alberta.  "Can natural gas production be competitive under the status quo?  The North American natural gas producing industry is “under siege”.  Natural gas prices have descended to a low not seen since the 1990’s and the current price is far below the full cycle cost to replace gas that is produced and sold."
 
 

 FEDS Release Final Environmental Impact Statement on the Alaska Stand Alone Gas Pipeline Project 

(Or, "Falling in Love With Our Own Molecules")

by 

Dave Harbour

We received news from the BLM this morning that The Final EIS for the Alaska Stand Alone Gas Pipeline Project (ASAP) is open for public comment. The 30-day comment/review period begins on October 26, 2012, and ends on November 26, 2012. The Record of Decision on the proposed action will be issued after the public interest review is complete.  

Mike Chenault, Speaker, ACES, AGDC, ASAP, AGIA, Bullet Line, Cook Inlet natural gas, shortage, Photo by Dave Harbour, Alaska House of RepresentativesThis is good news for those who have been advocating a so-called 'bullet line' Mike Hawker, Alaska House of Representatives, ACES, AGDC, ASAP, AGIA, Bullet Line, Cook Inlet natural gas, shortage, Photo by Dave Harbourto bring currently stranded Alaska North Slope (ANS) Gas volumes to gas and electric utilities in Interior and Southcentral Alaska.  In particular, Alaska House of Representatives leaders including Speaker Mike Chenault (NGP Photo-r) and Representative Mike Hawker (NGP Photo-L) have provided primary legislative support for this local energy alternative, along with Senator Lesil McGuire (NGP Photo) in the Senate.  Governor Sean Parnell (NGP Photo-L)Lesil McGuire, Alaska State Senate, Senator, ACES, AGDC, ASAP, AGIA, Bullet Line, Cook Inlet natural gas, shortage, Photo by Dave Harbour has supported the effort.  Alaska Housing and Finance Corporation CEO Dan Fauske (NGP Photo-R) is also CEO of the Alaska Gasline Alaska Governor Sean Parnell, ACES, AGDC, ASAP, AGIA, Bullet Line, Cook Inlet natural gas, shortage, Photo by Dave HarbourDevelopment Corporation (AGDC), responsible for development of the ASAP Project.  Together with his technical and external affairs staff he has provided regulators with the significant support needed to successfully reach the Final EIS stage.  
 
One should also note that this is a singular, historical event: the first Alaska North Slope intrastAGDC CEO Dan Fauske, AHFC, ACES, AGDC, ASAP, AGIA, Bullet Line, Cook Inlet natural gas, shortage, Photo by Dave Harbourate gas pipeline to receive a Final EIS.
 
While kudos all around are justified for the work accomplished to date, celebration time will be brief as decision makers continue pondering the longer term realities and challenges.  
  • EIS Not Yet Reality.  Until a 'Record of Decision' is issued following the current 30 day comment period, the prize is still not locked in.  So, parties will take a deep breath and await the final, final, final result following receipt and evaluation of comments.  The EIS is granted for a specific project not for a hybrid or different project.  So, anything different than the specifically proposed 24", 737 mile pipeline is not necessarily covered by the pending EIS adoption.
  • Final EIS adoption is a requirement for gas pipeline construction but not a guarantee of construction.
    • By the end of the 2012 3rd quarter, Governor Parnell had expected the producers, TransCanada and the ASAP sponsor, AGDC, to "complete discussions to examine consolidation prospects", and "to have selected a project concept and developed an associated work schedule with a timeline for completion."
    • In a sponsor statement of his bill, HB 9, earlier this year, Chenault said, "Nearly two years ago, the Legislature passed House Bill 369 advancing an instate natural gas pipeline. Since that time, the Alaska Gasline Development Corporation has made tremendous progress developing a project along a solid timeline. It is imperative to maintain that momentum in pursuit of instate gas for Alaskans, while keeping open all options for participating in an aligned project.  Committee Substitute for House Bill 9 (FIN) will refine a solid, early proposal into a plan. This legislation does not call for construction of an instate gas pipeline, but allows AGDC to advance a commercial project to that stage. The bill also provides AGDC the tools to be a strong, participating partner on behalf of Alaskans in a large-diameter export gasline project.   Since HB 9 did not pass the Senate or become law, a number of expediting features it embraced are not in place to support the planning timeline.  
    • Even if the Legislature passes useful enabling legislation next session, will the producer/TransCanada consortium want to use the ASAP Route?  If not, a new EIS will be required.  Even if the same ASAP route is used, should a larger pipeline be desired, the FEDS will require a new or revised EIS approval.  
  • Selecting a project concept, as noted in the Governor's linked page above, involves a high degree of cooperation and consensus:
    • Will the majority of legislators -- and leaders in critical positions -- come together to expedite and support progress?
    • Will private sector parties want to work with a government pipeline entity that could involve unknown, future regulatory, legislative and/or administrative complexities?
    • Does anyone yet know what kind of pipeline will be proposed?
      • Depending on composition of the gas in the pipeline, does anyone know how the Alaska Oil and Gas Conservation Commission will rule.  That is, will AOGCC be convinced that extraction of gas is more valuable to the state and conserving to the resources than using natural gas and gas liquid injection to enhance oil recovery?   Are we right to assume this big inch line will move all available 'wet' gas with AOGCC approval or some combination thereof.  Without knowing the composition, how should the pipeline and conditioning facilities be correctly designed and properly financed?
      • Will proponents want a 42" to 48" line from the ANS to tidewater in Cook Inlet (i.e. Beluga or Nikiski?) or to Valdez?     
      •  If the big inch line goes to Valdez, what about Southcentral consumers?  Will the southern section of ASAP's project evolve from an ANS 'bullet line' to a Fairbanks 'spur line', moving gas from Interior Alaska  to Southcentral?  Will that be a separate project not involving producers/TransCanada?   Will it involve a state subsidy?  If so, will other parts of the state demand compensating subsidies?  Would the new ASAP 'spur line' move gas to consumers and industries requiring gas liquids?  This is a big deal, for if no liquids would be moved on the spur line from Fairbanks to Southcentral, a conditioning plant at Fairbanks would be required that would also produce pipeline quality residential gas for Fairbanks.  Who would pay for the conditioning plant?  Who will be paying for an expanded Fairbanks distribution system?  How would development of this project affect Enstar's investment into its CINGSA storage facility (Note: Scroll down to note Enstar's presentation this Friday in Anchorage)?  If CINGSA costs are paid by Southcentral consumers, how would consumer rates be affected when ANS spur line rates are added?  Or will those be subsidized?  And, at what cost?  To whom?
      • We observe that these questions are merely the tip of a big iceberg of a challenge for those drafted to meet the mandates of elected officials, but mercifully stop in deference to brevity.
  • Natural Gas Shortage.  Long before Anchorage Mayor Dan Sullivan's Energy Task Force began educating Alaskans about the growing shortages of gas for industry, business, home heating and electric power generation, decision makers were aware of Cook Inlet's declining supplies.  The Regulatory Commission of Alaska failed to capture a unique window of opportunity for stabilizing both the supply and price of Cook Inlet Gas through 2016, as we recall here (i.e. costing Southcentral consumers as much as $1/2 billion or more in rates -- to date -- than the rejected Enstar/Marathon contract would have provided).  Legislators have created incentives for Cook Inlet exploration and production.  So far, no discoveries capable of offsetting the huge decline in both deliverability and supply have materialized.  The CINGSA storage project will help once it is filled to capacity, hopefully by next fall.  Delivery during the coldest months is a current threat that will be partially accommodated by CINGSA, but not in the long run.  Soon, supplemental supplies will be needed from either the North Slope or LNG imports.  Remember that while the CINGSA project helps with winter deliverability problems it cannot overcome overall supply shortages.  Meanwhile, the Cook Inlet shortage is forcing Fairbanks entrepreneurs to look direct to Prudhoe Bay for their own unique supply of gas, by trucking liquefied natural gas (LNG) south on the dangerous Haul Road, at someone's expense.  Readers can see how this local gas shortage reality contributes to the complexity of the larger ANS gas pipeline concept challenge.
We love to be characterized as being 'optimistic'.  We are optimistic...as long as public officials signal to industry, "tell us what we might do to help," rather than, "here is what we are going to do to help our constituents and we demand your cooperation."
 
Alaska has become too socialized.  Our state spends too much, way to much.  We have become a Mecca for those who wish to be Alaskans, not to be pioneers but to profit from government program spending.  When this Army of  public dependents grows to the extraordinary size it has, it develops a sizeable elected official cadre of defenders.  It is an addiction with a death spiral, for as spending becomes greater, the demand for taxes increases.  Elected officials then will characterize increasing taxes or maintaining high taxes as 'necessary'.
 
Overcoming addiction requires the admission of addiction.
 
Today Alaska is addicted to big government and predatory taxation of the private enterprise that sustains us, but too proud to admit it.  Our defication doesn't smell badly and our molecules are heavenly.  High spending, high taxes, diminishing pipeline throughput to fund 90% of the government's operating budget is the proof of our addiction.  It is unsustainable.  For the most part the addiction results from elected officials who are either well intentioned or whose calculus leads them to spend more on the constituencies that will reelect them to positions of power.
 
Meanwhile, because the pressure for taxing and spending grows so strong, it is difficult to glean a clear path through the gas pipeline labyrinth we have discussed today.  With elected officials striving so hard to out think the private enterprises, those who might have exercised their initiative must be saying, "Fine, Senator; you want to make all the decisions.  O.K.., you win.  I'm out of here."
 
Critics will say this is too harsh, that industry is still here, still prospering.  But consider this, if you had billions invested here and were subject to the vilification and abuse heaped on you by elected officials, what would you do?  Well, you'd probably just smile, grit your teeth and take it until you had maximized your investment.  You wouldn't overreact.  You'd try not to invest more, to put more at risk.  You'd bide your time until there was a change in policy, or until you could transfer yourself to friendlier venues--as Chevron and Marathon have done.  Then, also remember that as early as 2002 producers noted in virtually every public and private meeting that "Alaska Fiscal Certainty" would be an essential ingredient to an Alaska gas pipeline, yet in the succeeding decade, officials have enacted no fiscal certainty required for huge gas pipeline investments.  An essential ingredient in fiscal certainty is reform of Alaska's currently, predatory oil tax policy and putting into place a reasonable natural gas taxing policy.  Without these minimal actions, big energy investments will be subject to further predatory taxation and regulatory abuse.  One would additionally expect some sort of constitutional protection from greedy officials who might in 2013 say, "Your taxes are reduced and your investment is safe with me," then in 2016 say,"Oh sorry, things have changed and we need/want the money after all".  The reality or threat of such behavior is historically part of Alaska's DNA now and is being calculated into all Alaska investment decisions.  Unfortunately, Alaska's greedy and unpredictable reputation will be hard to overcome absent a major leadership initiative, like constitutional protection against arbitrary and capricious taking of property through taxation.  
 
So yes, we are optimistic that public officials will see the light and better pursue their important roles.  As Clint Eastwood counsels, "A man's got to know his limitations."  If Alaska decision makers get a grasp on their human limitations, we are optimistic.  If public officials begin asking, "how can we help" rather than demonizing the creators of wealth, we are optimistic that the thousands of brilliant minds laying in wait throughout the private sector energy community will respond and do what they do best: provide a service for a profit for this and future generations.
 
Lastly, in our optimism, we caution ourselves not to be too much in love with our own molecules.  As residential gas consumers, we all want gas for home heating and electricity produced from gas-fired generators to be as inexpensive as possible.  That's rational.  We have 35 trillion cubic feet (Tcf) of natural gas on the ANS and it SOMEHOW seems right that we build a pipeline and burn our own gas, right?  That's seeking to be objective but being irrational.  Listen.  Prudhoe Bay to Anchorage is about the same distance as Williston to Denver.  But no one would blink if Denver found it cheaper to bring gas in from Mexico than from North Dakota.  If Alaskans can get LNG delivered from British Columbia or Sakalin or Indonesia cheaper than from Prudhoe Bay, why would we torment ourselves with all of the political gyrations discussed above?  Why would we not just leave Cook Inlet supply and how ANS gas is marketed to the responsible utilities (i.e. who would likely import LNG) and producers?  Why wouldn't we forget subsidies or costly government controls and make taxes competitive with other regions that are seeking to seduce our 40-year legacy investors to their more attractive boudoirs?  Why?  If we fall in love with our own molecules, we are liable to lose sight of what is most attractive to consumers: price  and supply.
 
-End-
 
(Note: Regular readers know it is our practice to put up breaking news and commentary as it occurs, complete with blemishes.  Throughout the day, the material is refined until we are satisfied that it can take its rightful place in our archives.  Readers are always invited to suggest additions/corrections or provide comment, here.  -dh)
 
 
Colleen Starring, Cook Inlet Storage, Enstar Natural Gas, Alaska, AGIA, ACES, RCA, CINGSA, Photo by Dave HarbourCommonwealth North's Energy Action Coalition will meet again next Friday in Anchorage with Colleen Starring (NG Photo), President, ENSTAR, who will speak about the CINGSA project status and the benefits to the utility customers that will be realized this winter.  The goal of this group is to continue discussion on our most recent energy reports Energy for a Sustainable Alaska: The Railbelt Predicament & The Rural Conundrum and highlight and identify challenges and opportunities in Alaska's energy environment 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 would like to be added to this distribution list please contact Joshua Wilson at events@commonwealthnorth.org
 

 

Nov 11th, 2012 8:00 AM EST
The 124th Annual NARUC Meeting brings together all the major players in the utility sectors under one roof. Hear from experts on cyber security, hydraulic fracturing, new environmental rules, emergency response, and much, more more. Featured speakers include Maryland Gov. Martin O'Malley, Exelon Executive Vice President Mayo Shattuck III, Environmental Protection Agency Assistant Administrator for Air and Radiation Gina McCarthy, and members of the Federal Energy Regulatory Commission. In addition, the nation's State utility commissioners will set new policies on numerous crucial issues facing the utility industries. You can't miss this event!  Your author will be there.  -dh
 
The industry's first post-election briefing addressing the uncertainties of a national energy policy. Join EnergyBiz editor-in-chief Martin Rosenberg, Clarence "Bud" Albright, CenterPoint Energy SVP; Dan Reicher, former member of the Obama transition team; Rep. Rick Boucher, former chair of house subcommittee, for a candid panel discussion on the anticipated course of action of our nation's oval office following the presidential election.

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10-23-10 - LNG and State Spending

23 October 2012 8:53am

Alaska Dispatchby Scott Woodam.  At the end of Sean Parnell, LNG, Alaska Natural Gas, AGIA, Governor of AlaskaSeptember, the major North Slope gas producers notified Gov. Sean Parnell (NGP Photo) of their new agreement toward an Alaska liquefied natural gas project. Depending whom one asks, the new agreement pertained to either hijacking the state-subsidized Alaska Gasline Inducement Act (AGIA) and using it as a lever to pry oil tax reductions out of the Alaska Legislature, or to finally building a long-discussed liquefied natural gas transportation project leading from Alaska's North Slope to tidewater somewhere in Southcentral.

Brad Keithley, Alaska Oil & Fiscal Policy, Sustainable Budget, Alaska oil taxes, ACES, blog, Photo by Dave HarbourThoughts on Alaska Oil and Gas, Op-Ed by Brian Hove.  Brad Keithley’s (NGP Photo) September 19th blog entry poses the question “What is Alaska’s fiscal plan…” for which he offers a good working definition: “an outline of the government’s long term revenue and expense projections, designed to achieve balance.”  The term “projections” is key, for if we truly intend to create a useful budgeting tool we will have to get better at forecasting three critical inputs: (1) State expenditures; (2) ANS crude oil prices, and; (3) ANS crude oil production.  With the possible exception of Oil Industry execs, who could have predicted State spending would take the aggressive trajectory it has over the last five years? Maybe Representative Mike Hawker’s efforts to implement long-term budgeting within the State’s various cost-centers will prove beneficial. Time will tell.

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10-22-12

22 October 2012 10:06am

Platts by Tim Bradner.  A group of Japanese CompaniesMary Ann Pease, Resources Energy, Japan, LNG, Alaska North Slope Natural Gas, gas pipeline, AGIA, Port Authority, Japan Petroleum Exploration, Idemitsu Kosan,k JX Nippon Oil and energy, Mitsubishi Gas Chemical, Nippon Telephone and Telegraph, Photo by Dave Harbour has opened an office in Alaska in hope of working with the state, North Slope producers and TransCanada on a large natural gas liquefaction project, an official for the group said Monday.  The Consortium, Resources Energy, is proposing to build and own an LNG plant at a south Alaska tidewater port, but also could invest in the pipeline needed to bring North Slope gas south to the proposed plant, the company's Alaska manager, Mary Ann Pease (NGP Photo), said.  ...  Members of the Japanese consortium inlcude Japan Petroleum Exploration, Idemitsu Kosan, JX Nippon Oil and Energy, Mitsubishi Gas Chemical and Nippon Telephone and Telegraph.

 

David Holt, President, Consumer Energy Alliance, Federal Overreach, energy day, houston, alaska, Photo by Dave HarbourHOUSTON, Texas – 15,000 Houstonians joined Consumer Energy Alliance (CEA) and the City of Houston in celebrating the city’s second annual Energy Day Festival at Hermann Square on Saturday, October 20th.  Attendees included students, educators, and families who saw a a range of exhibits highlighting energy sources and technologies that help shape Americans' everyday lives and the Houston economy.  Guests were also treated to live music, as well as numerous interactive games and displays.  Consumer Energy Alliance, University of Houston and the City of Houston organized and supported the 2nd annual event. At the conclusion of Saturday’s festivities, CEA President David Holt (NGP Photo) said:  "Energy Day celebrated the importance of all forms of energy in our daily lives and helped educate students about the exciting opportunities that science, engineering and technology can provide for their future."  (Find an overview of Energy Day 2012 provided by ABC 13 visit here and photos from the event are available to view here.  More about Energy Day 2012  information and Energy Day 2013, here.   (Note:  your author is a CEA Board Member.  The organization has chapters from Florida to Anchorage.  -dh)

 

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