2012 Archives

10-6-12

06 October 2012 1:44pm

Calgary Herald by Deborah Yedlin.  Given the issues facing the Enbridge Northern Gateway and TransCanada's Keystone XL pipelines, the increasingly heated rhetoric surrounding the possible takeover of Nexen by the China National Offshore Oil Company and Friday's announcement that the federal government will extend its review of Progress Energy's purchase by Malaysia's Petronas, it's clear the economics of Alberta's oilpatch are more dependent on the vagaries of politics than ever ....

10-5-12

05 October 2012 7:20am

This morning, House Natural Resources Committee Chairman Doc Hastings (NGP Photo) commented on today's September jobs report from the Bureau of Labor Statistics.  Doc Hastings, Chairman, Washington, Jobs Report, US House of Representatives, energy, alaska, oil and gas, Photo by Dave Harbour“When there are 23 million unemployed or underemployed Americans, it’s always welcome news to see people getting back to work. Unfortunately, staggeringly high unemployment rates have become all too common and there are still too many families struggling to make ends meet. Meanwhile, the Obama Administration has continued its assault on American job creators. Nowhere is this more evident than American energy production where government red tape and burdensome regulations have slowed energy production and stopped job creation."

Commentary.  Yesterday (scroll down), we alerted readers of a press conference being hosted by Dan Sullivan, Alaska, Commissioner, Dept of Natural Resources, Alaska Gas Pipeline, Photo by Dave HarbourAlaska Commissioner of Natural Resources, Dan Sullivan (NGP Photo).  We participated via teleconference.  Most of the reporter questions were thoughtful and professionally stated.  However. the Alaska Dispatch's senior editor -- always well intended but increasingly hostile toward efforts to reform oil taxes -- dominated the session asking question after question on the same general subjects.  In a courtroom, the opposing attorney would have objected, saying, "asked and answered".  We respect that journalists can sometimes be persuaded to 'ask the tough questions'.   But we flinch when a 'professional' journalist would become so emotional and ask questions in such a mean-spirited way.  Not suprisingly, the editor produced an editorial today characterized as 'analysis'.  If it analyzes, it does so more by opinion and inuendo than by a close inspection of the facts or dispassionate comparison of the facts.   We care about slanted reporting and poor commentary because public opinion and governmental decisions are affected.  To the extent that we can counter with information and logic that our readers find useful, we will have properly accomplished our mission.   Here is the link to her editorial.  We hope to provide a more detailed review of that piece next week.  -dh

Categories:

10-4-12

04 October 2012 8:03am

Calgary Herald by Steven Ewart.  Keystone XL brings Canada into presidential debate.

ADN by Lisa Demer.  Shell Oil is now drilling wellsShell, Curtis Smith, OCS, Beaufort, Chukchi, Seas, Alaska, Arctic, Photo by Dave Harbour in two Arctic seas off Alaska's northern coast.  Drilling began Wednesday afternoon in the Beaufort Sea after the end of an Inupiat whale hunt, according to Curtis Smith (NGP Photo), spokesman for Shell Alaska.  The company resumed drilling in the Chukchi Sea on Sept. 23 after a two-week suspension due to encroaching sea ice, he said.  But Shell still won't be able to drill deep enough to reach oil this year. An oil spill containment dome, an essential piece of safety gear, was damaged during testing last month in a Bellingham shipyard.

Sean Parnell, Alaska Gas Pipeline, Exxon, BP, ConocoPhillips, TransCanada, LNG, Letter, 60 billion“I’m encouraged that the companies have made significant Dan Sullivan, Alaska, Commissioner, Natural Resources, Alaska Gas Pipeline, LNG, TransCanada, AGIA, ConocoPhillips, BP, Exxon, Governor Parnell letter, Photo by Dave Harbourprogress in advancing a project and an associated schedule for commercializing North Slope gas,” Governor Parnell (NGP Photo-R) said. “Clearly, they have fully shifted their efforts to an Alaska LNG project.”   (Note: this morning, Alaska's Commissioner of Natural Resources, Dan Sullivan {NGP Photo-l} will meet the press to discuss Governor Parnell's announcement.  Check here tomorrow morning for more updates!  -dh)
Randy Broiles, Exxon, Alaska Gas Pipeline, LNG, TransCanada, ConocoPhillips, Parnell, BP, LetterHuffington Post:  A liquefied natural gas project in Alaska could cost morethan $65 billion and would represent a mega-project of "unprecedented scale and challenge," officials behind the project told Gov. Sean Parnell.  In a letter to Parnell released by the governor's office late Wednesday, officials with TransCanada Corp. and the North Slope's three major players saidJohn Minge, BP, Alaska Gas Pipeline, Parnell, Copyright Dave Harbour, letter, Exxon, TransCanada, ConocoPhillips, Alaska Oil Taxes good progress has been made in pursuing a project. But they said "significant environmental, regulatory, engineering and commercial work remains to reach upcoming decisions to bring North Slope gas to market."  They estimated the cost of a pipeline project could range from $45 billion to more than $65 billion, involve up to 1.7 million tons of steel and employ up to 

Trond-Erik Johansen, ConocoPhillips, Alaska Gas Pipeline, LNG, Letter, Parnell, BP, TransCanada

15,000 people during peak construction and more than 1,000 in Alaska permanently. The project concept description lists capacity for a large-diameter line at 3 billion to 3.5 billion cubic feet of natural gas a day. It does not specify the terminus for any line, only that it would 

Tony Palmer, TransCanada, Alaska Gas Pipeline, LNG, Exxon, BP, ConocoPhillips, Parnell, Copyright Dave Harbour

run from the North Slope about 800 miles to south-central  Alaska.  "We will continue to keep you advised of our progress and stand committed to work with the state to responsibly develop its considerable resources," the officials said in their letter.  The letter was signed by Randy Broiles (NGP Photo, above left) of Exxon Mobil Production Co., Trond-Erik Johansen  (NGP Photo-L) of ConocoPhillips Alaska,John Minge (NGP Photo) of BP Exploration Alaska and Tony  Palmer (NGP Photo) of TransCanada.
 
Just for fun: The Center for Biological Diversity's environmental activism on relatively benign pipelines is just as active in Puerto Rico as in Alaska:  
 
The U.S. Fish and Wildlife Service announced today it will protect a rare, recently discovered Puerto Rican frog, the coquí llanero, as an endangered species under the Endangered Species Act. The protection includes 615 acres of freshwater wetland as critical habitat in northern Puerto Rico. The tiny frog " about 15 millimeters long, the span of a dime " has been waiting for federal protection since 2007. The decision was made in accordance with a landmark settlement agreement with the Center for Biological Diversity requiring the agency to expedite protection decisions for 757 species.
 

 

Categories:

10-3-12

03 October 2012 7:29am

...from the American Energy Alliance this morning:

I'm pretty sure it wasn't the best of times.  But everyone is entitled to their opinion. IER (10/3/12) reports: “The Energy Information Administration just released its Annual Energy Review 2011 that provides U.S. energy data trends from 1949 through 2011. In short, it was a year that might be called “the best of times and the worst of times.” Production is up for oil, natural gas and hydroelectric power, but the largest landholder in the country — the federal government — is suffering from restrictive policies that are driving energy production to record lows and gas prices to record highs.”

Wind turbines don't work when the wind blows.  Solar panels burst into flames when the sun shines.  The problem is not that the government picks winners and losers.  The problem is that government always picks losers. Daily Caller (10/2/12) reports: “In October of 2010, the company discovered that their panels were catching fire. One source said that this problem was brought to the company’s attention during a meeting in October 2010 with some company executives present and the suggestion was made to shut down the factory in order to address the problem.”
 
Good for them, and about time too. National Journal (10/2/12) reports: “With Mitt Romney and President Obama courting voters in coal battleground states like Ohio and Virginia, one of the industry's most powerful interest groups is launching a new ad campaign Wednesday that encourages viewers to vote against Obama, though it doesn't mention either the president or Romney by name.”
 
Only a Cuomo could say with a straight face that requiring more time to do something won't delay it. National Review (10/2/12) reports: “Gov. Cuomo claims that his decision to impose yet another review of fracking won’t delay the process further, but speed it up.”
 
Ten? We’d probably use our toes and count to 20, but this is the right start. Heritage (10/1/12) reports: “The President has doubled down on wasting billions of dollars to subsidize politically preferred energy sources. Although he has aimed to save or create jobs, in the energy sector he is destroying jobs, threatening to destroy jobs, or failing to create them… Here are 10 of the most troubling energy and environmental regulations implemented or proposed by the Obama Administration.”

 

10-2-12

02 October 2012 4:48am

Here are the latest Alaska natural resource messages from a natural resource Dan Fagan, Alaska, Radio, Photo by Dave Harbourorganization including 400 employers of over 35k Alaskans 

 

Dan Fagan (NGP Photo) has asked your publisher to be on his show this morning at 7 a.m. Alaska time with co-host Elizabeth Giordano.  For those interested, we'll try to find a podcast to post later.  -dh

 

See our earlier commentary regarding the Alaska Northern Waters Task Force:  Now for our current Small Alaska State Seal, Northern Waters Task Force, Alaska Arctic Policy Commissionupdate and opinion:  Alaska's legislature appears to overreach its constitutional authority by establishing an entity, under its own aegis, with a mission to represent the state on many Arctic matters/issues.  We believe this is the proper role of the elected Governor and his cabinet, not legislative appointees.  Nevertheless, a task force, more fully described in our earlier commentary, successfully recommended approval during the last session of an "Alaska Arctic Policy Commission".   The activities of this peripatetic commission will be little influenced by the Governor and members of his Administration (i.e. both the Administration and environmental community will each have one appointed member).  Today, as noted in the Roger Marks column below, the confusion and conflict over Alaska's unstainable tax and spend policies are dividing our people.  In addition, we now see prospects for a chaotic management issue arising as an independent, legislatively appointed ambassadorial group seeks to represent Alaska to the world in spite of whatever policy the Administrative branch of government has established as 'the State's policy'.   We predict that the major contribution of this Commission will be to inject more uncertainty into the plans of potential and current Alaska natural resource investors.  Without more, massive natural resource development, the Trans Alaska Pipeline System's chances for an extended life are doomed.  Here is the latest news release from the legislature and here is more on the resolution creating the Commission.  (We always invite additions or corrections to facts presented; we'll also reprint reader reactions which may be sent here.)  -dh

Ted Morton(The following opinion is no doubt supported by Obama's blocking of the Keystone XL Pipeline.  -dh)  Calgary Herald Opinion by Ted Morton (CH Photo).  Today, the alignment of Alberta’s energy policies and the principle of provincial rights is less certain. The same principles that animated Lougheed’s defense of Alberta’s energy sector have become a potential liability: the threat by British Columbia to block any new bitumen pipelines to the West Coast. These proposed pipelines are critical to opening new Asian markets and reducing Alberta’s debilitating and expensive dependence on a single customer—the United States—for our oil and gas exports.

ADN Opinion by Roger Marks (NGP Photo).  My father used to tell a joke: A man is down to his last Roger Marks, Alaska, Economist, ACES, AGIA, Oil Taxes, Progressivity, Anchorage Daily News OpEd, Photo by Dave Harbour$10. He goes to the track and puts all his money on the horse with the longest odds. The race starts and his horse is dead last. The man drops to his knees and starts praying to God. As he prays the horse starts to gain. The more he prays the more the horse gains. By the home stretch the horse is well ahead. At that point the man stands up and says, "Thanks, God. I'll take over from here."  The "It's Our Oil" perspective, which advocates retaining the current production tax, ACES (Alaska's Clear and Equitable Share), is like this gambler.  ...  Oil investment has soared worldwide in recent years, but has been lethargic on the North Slope, despite abundant reserves. It is hard to see how staying the course, the "I'll take over from here" attitude, will benefit the state in the long-run. Like the horseplayer, once you succeed it is easy to forget the actual source of your prosperity.

 

 

Categories:

10-1-12 Wall Street Journal Weighs In On Pebble

01 October 2012 7:14am

logoCommentary:  We have editorialized on how the Obama Administration has violated the spirit and rule of law.  One recent example deals with EPA's preemptive efforts -- not to regulate based on law -- but to stop development on the lands of a state though leases have been properly approved by a state and no permit applications have even been filed for development of those leases.  We appreciate that the Wall Street Journal now weighs in.  -dh

USA Today, by Tim Mullane.  Of all the places that America's new jobs are, the emerging energy business, directly or indirectly, might be responsible for more of them than almost anything else.  Since 2002, the exploration of natural gas deposits embedded in shale, followed by oil drilling that began in earnest late in the decade, has created more than 1 million jobs, says Moody's Analytics economist Chris Lafakis. That's out of 2.7 million the whole country created.  "It's really huge,'' Lafakis says. "And the jobs pay very well.''  Jobs directly in the oil and gas extraction business pay an average of just under $150,000 a year....

 

Lisa Jackson's Environmental Protection Agency keeps losing in court, but that doesn't mean she's at all deterred from expanding her authority. Witness her agency's assault on an Alaska mining project before the developers have even submitted their plans for government approval.
 
The Pebble Partnership—a joint effort by Anglo-American and Northern Dynasty Minerals—has spent a decade and $132 million exploring the potential to dig North America's largest copper and gold mine on state-owned land in southwest Alaska. The deposit is vast and could be among the world's largest supplies of both minerals, creating upwards of 1,000 high-paying jobs.
 
The Partnership is planning to apply for permits later this year, and in the normal course this would trigger extensive state and federal reviews. The federal review is done by the U.S. Army Corps of Engineers, which under the Clean Water Act has primary authority for deciding whether to issue permits for wetlands. The EPA can later review and revoke the Corps-issued permits with cause.
And there is the regulatory rub. The EPA has long chafed at this secondary role in permitting,
 
though it has learned to use its veto threat to extract concessions from developers along the way. In the Pebble case, however, Mrs. Jackson is moving to supersede the Army Corps and make the EPA the only regulator, notwithstanding the plain language of the Clean Water Act.
 
Specifically, the EPA launched a preliminary study of what a mine would do to the Bristol Bay watershed, a spawning ground for sockeye salmon. Our sources say the EPA has never before undertaken such an exercise, for the simple reason that it is impossible to determine the environmental impact of a project before it has been proposed.
 
But Mrs. Jackson's EPA is nothing if not creative. The agency invented a hypothetical Pebble mine, with its own engineering standards that industry claims are antiquated and show limited concern for the environment. Voila, the EPA found that its nonexistent mine would harm the watershed. The clear message: Don't even bother submitting a proposal, because even if it passes Army Corps review, the EPA will kill it.
 
The problem is that Mrs. Jackson's study has been roundly ridiculed—not least by the EPA's own peer-review experts. In a public meeting in August, the 12 peer reviewers lambasted the study for its rushed, "unsatisfactory" and "hypothetical" nature, and for numerous errors. One reviewer, University of Idaho hydrology expert Charles Slaughter, called some of the study's key parts "pure hogwash."
 
The EPA's response? It may go even further and veto the Pebble mine before the Army Corps does its assessment. Asked specifically by House Oversight Chairman Darrell Issa if the EPA is contemplating a pre-emptive veto, EPA Associate Administrator Arvin Ganesan didn't deny it in a May letter. He said the statute gives Mrs. Jackson "broad authority" to prohibit a project "whenever" necessary—including "prior to the submittal of an application."
The courts are unlikely to agree. This spring a federal court in D.C. slammed the EPA for revoking an Army Corps permit four years after it was issued for a West Virginia mining project. District Judge Amy Berman Jackson noted that the EPA's view that it could "unilaterally modify or revoke" a Corps permit "at any time" was a "stunning power for an agency to arrogate to itself when there is absolutely no mention of it in the statute."
 
The EPA's actions with Pebble are no less stunning and are likely to be economically damaging. The Brattle Group, a consulting firm, estimates that some $220 billion in U.S. investments—resource extraction, farming, energy, manufacturing and more—go through the Corps permitting process. Were the EPA to seize power to wall off entire areas to development—before projects are even proposed—much of that investment would go outside the U.S.
 
The EPA's power grab is an insult to the Army Corps and especially to the state of Alaska, which has every reason to evaluate the Pebble project carefully so it doesn't damage the state's lucrative fishing and tourism industries.
 
Under Mrs. Jackson, the EPA has become less a regulator following the law and more an ideological vanguard that will push its limits-to-growth agenda as long and as far as the courts and Congress allow. Watch out in a second Obama term.

 

 

9-28-12

28 September 2012 9:23am

Parnell, Sullivan promote Alaska LNG in Asia -  Alaskajournal.com - Sean Dan Sullivan, Alaska Commissioner, Department of Natural Resources, Attorney General, Gas pipeline, Arctic, LNG, JapanParnell (NGP Photo-R) and state Natural Resources Commissioner Dan Sullivan (NGP Photo) have been in Japan and Korea in the last two weeks, drumming up interest in a large Alaska liquefied natural gas project. North Slope producers and TransCanada Corp., a gas pipeline ...

Petroleum News by Alan Bailey.  Great Bear’s results so far from its Alcor No. 1 shale oil test well on Alaska’s North Slope have met expectations for finding oil in North Slope source rocks, Ed Duncan (NGP Photo), the company’s president and CEO, told the Alaska Oil and Gas Congress on Sept. 19.  “I can tell you with absolute confidence that where we thought we would find oil in these source rocks, we found oil,” Duncan said.

 

Petroleum News by Alan Bailey.  Apache Corp. has secured a suitable drilling rig and is preparing to drill its first Cook Inlet exploration well, the company said Sept. 17. The drilling location is near the village of Tyonek on the west side of the inlet — Apache has scheduled a meeting with village residents on Oct. 10 to discuss the drilling operation, which should start before the end of the year.
Apache has been conducting a major 3-D seismic program in the Cook Inlet basin, to identify exploration drilling targets in the company’s approximately 1 million acr es of Cook Inlet leases. The company is primarily interested in finding oil.   “This is an important step in Apache’s  exploration program in Cook Inlet,” said John Hendrix (NGP Photo), general manager of Apache’s Alaska operations, when announcing the drilling operation. “First, we started building a large  acreage position in a proven hydrocarbon basin with material oil potential; then, we initiated a 3-D seismic program to image the subsurface. Now we are preparing to drill our first wells.”  The  section is very thick in the Cretaceous; it’s very thick in the Jurassic; it’s a little thicker than expected in the Triassic Shublik, Duncan said. The Shublik is the source rock thought to have the highest shale oil potential on the North Slope, with the two other main source rocks, the HRZ/GRZ and the Lower Kingak, occurring in the Cretaceous and Jurassic sections.

 

 

9-27-12

27 September 2012 8:43am

 

Japanese consortium scouting Alaska LNG project - Sean Parnell, Japan, LNG, Alaska Natural Gas, arctic pipeline, Photo by Dave HarbourAlaska Dispatch - As part of the decades-long quest for Alaska to get its vast reserves of North Slope natural gas to market through a pipeline, Alaska Gov. Sean Parnell (NGP photo)  is currently visiting Asia on the eve of an expected announcement involving Alaska's major oil and ...

Parnell in Asia Promoting Alaska Natural Gas -KTVA CBS 11 News Alaska - FAIRBANKS — As the state nears what is expected to be a major announcement on the future of a large-diameter natural gas line for foreign export, Governor Sean Parnell announced he's on an economic trade mission to Japan and South Korea to promote the ...

Chinese pipeline leaders invite Calgary dealmakers - Calgary Herald - By Dan Healing. Two branches of China National Petroleum Corp. were front and centre ... China plans to more than double its 93,000 kilometres of oil and gas pipelines over the next decade and Canada's ...

Homer News/ADN by McKibben Jackinsky. First there was a bad fishing season. Then, a series of destructive storms hit the Kenai Peninsula and other portions of Southcentral Alaska, resulting in Gov. Sean Parnell declaring a state disaster. Now, Apache Corp. has called a "pause" in its Ninilchik-based three-dimensional seismic work, halting a much-needed economic boost locals welcomed. Apache's area of oil and gas exploration include leases of approximately 850,000 onshore acres, tidal acres and offshore in the Cook Inlet Basin. The decision to call a time-out in the related seismic work is due to a lack of necessary permits, said Lisa Parker, manager of Apache's government relations.

 

9-26-12

26 September 2012 8:25am

ADN/AP by Becky Bohrer. It is Sean Parnell's (NGP Photo) second state-sponsored overseas trip as governor, and it comes asAlaska Governor Sean Parnell, Beringia, Letter to Hillary Clinton Alaska awaits word on progress toward advancing a liquefied natural gas project that would allow for exports to the Pacific Rim. Parnell said he plans to make a "compelling case" for Alaska gas in meetings with government officials, and utility company and business leaders in South Korea and Japan. He said he will explain the progress that's been made toward commercializing Alaska's North Slope gas and emphasize the comparative advantage Alaska holds over others, noting a more-than-40-year history of liquefied natural gas exports to Japan from a plant in Nikiski.

9-25-12

25 September 2012 11:41am

Peninsula Clarion/ADN by Brian Smith.   Peninsula Clarion/ADB by Brian Smith.  In a report released to the Peninsula Clarion last week, David Erikson, senior biologist with URS Corp., concluded that the Endeavour's time in dry dock and aboard a transport ship for its month-long trip was largely responsible for killing the attached marine organisms, thus "substantially reducing the potential for any non-indigenous or invasive species" to be introduced into Kachemak Bay, where the rig is currently parked.