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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.  -dh

 

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2-2-15 "Alaska's Challenge of Cash & Energy Shortage: Part I"

02 February 2015 1:30am

 "Alaska's Challenge of Cash & Energy Shortage: Part I"

See Part II and Part III

Additional references and historical background In "Alaska LNG Challenges"

by

Dave Harbour

First, there is the Challenge of Cash Shortage.  

In the early 1980s, Alaska was feeling its oats.  

Second, there is the Challenge of Energy Shortage, which we shall more fully address tomorrow in Part II,  and it involves gas pipelines, distribution systems, state funded project competition and more....

To begin that discussion, below is a letter from one of Buzz Otis, Fairbanks, energy shortage, Alliance, HiPow, Photo by Dave Harboura number of good, long-time Fairbanks friends, Buzz Otis (NGP Photo), and my initial response.  In Part II we will examine a State Energy Shortage issue in more detail and provide what we hope are useful questions for decision makers to answer in their quest for solutions.  Read more....

-dh


References:

Elected officials were sitting on a cash dowry created by a decade of about a dozen tax increases levied on Alaska's infant oil industry.  

The tax increases were primarily aimed at the unbelievably productive Prudhoe Bay oil field -- a 2 million barrel per day elephant field, the largest in North America.

But concerned citizens throughout the state were not unaware of this new phenomenon and where it might end if not properly handled.

State leaders and the citizens had in 1976 created the Alaska Permanent Fund in partial response to the question of, "What if we encountered a rainy day".  Since that time the fund has been largely thought of as a source of annual payments to Alaska citizens of a Permanent Fund Dividend rather than a rainy day fund.  The thought of actually using it for the purpose it was created -- to fund government operations on a "rainy day" -- is an anathema to most citizen beneficiaries and their elected representatives.

In the early 1980s a number of business, social, academic and political leaders from all regions of the state assembled for the most important forum of that day, called "The Challenge of Plenty".  There citizens discussed the possibility of a constitutional amendment to control spending based on a population growth/CPI formula, and other ways of wisely preparing for the future.

Your writer played a role in organizing that conference and it was truly heartwarming to see all political parties and regions of Alaska participate courteously, collegially and in a true spirit of joint problem solving.

Suffice to say that while the highly cooperative leaders agreed upon the problem and potential solutions, they were never able to obtain legislation as the group recommended (i.e. though there was a constitutional spending limit effort in the early 90s which fatally eliminated or diluted the most critical provisions; and another effort by a minority of far-thinking legislators in the late 1990s.)

While Challenge of Plenty participants were highly concerned about unsustainable state spending, they also focused on the Federal Government's actions since statehood to steadily remove from the reach of citizens, access to resources on federal lands -- best illustrated by passage of the Alaska National Interest Lands Conservation Act.

A series of federal governments also succeeded in using various environmental Acts of Congress (i.e. ESA, CWA, CAA, NEPA, etc.) to restrict reasonable and traditional multiple use -- and wealth production -- on federal lands as well as reasonable ownership activity on private land.  

Readers can thus appreciate how Alaskans have been caught between the charybdis of over spending and scylla of shrinking opportunity for natural resource revenue generation.  -dh 

Like Joseph of old interpreting the Pharaoh's dream to compel saving during years of plenty for the coming years of drought and famine, Alaska's political leaders were not unaware of the challenge.  Like Pharaoh, they created a "Joseph"--the Alaska Permanent Fund--so savings during good times could allow for a sustainable economy during the lean years coming.  

But the constantly changing demographic profile of voters and elected officials could not enforce management of the savings in modern times as the dictator, Pharaoh did in his era.

The University of Alaska-Anchorage's 50-year-old Institute of Social and Economic Research (ISER) has studied the importance of a "safe landing" for Alaska's economy and the Scott Goldsmith, Institute of Social and Economic Research, Dave Harbour Photodiscipline required to make that happen.  Professor Scott Goldsmith (NGP Photo) has led this effort for over two decades, issuing "Fiscal Policy Paper #1" on August 1, 1989.  That first paper states what has now become a long term, perhaps economically fatal challenge: "Alaska faces a problem that will be very tough to solve but is easy to explain: state government is spending more than it collects."

The challenge of sustainability has worsened over two and a half decades: for, as Prudhoe Bay production declined, spending never sufficiently declined to reach a sustainable equilibrium and, now, oil commodity prices (i.e. at half what they were last summer) are exacerbating the challenge for this highly oil-dependent state.

ISER's most recent analysis of the situation shows how to obtain a sustainable glide path for the Alaskan economy, but so far elected officials have found it impossible to convert that wise counsel into sustainable reality.  (Other Fiscal Policy Papers in archive here)

Alaska now has the greatest debt per capita of any state and the greatest per capita spending along with the greatest dependence on a volatile commodity and the most expensive oil and gas operating area in the country.  Some have tried to make these facts the fault of an oil industry whose productivity has provided Alaska with the opportunity to make its own wise or unwise taxing, debt and spending decisions.

But state leaders are now seriously facing the cash shortage issue as a matter of imminent, not theoretical, danger.  ISER has clearly demonstrated that the cash flow runs into default in a few years, without dramatic budgetary changes. 

Furthermore, from a balance sheet viewpoint, the picture is somewhat more bleak when citizens realize that the unfunded state employee retirement fund is short just under $10 billion, balancing out a similar amount of non-Permanent Fund savings accounts acting as subsidies for annual operating budget deficits.

So, in effect, the day of reckoning is not a few years 'down the pike', but is here TODAY.

In Parts II and III (Scroll up), you will be considering whether increased state government debt (even AIDEA revenue bond debt) or use of depleted savings for a Fairbanks gas utility is either rational or necessary.

 

 


 
Buzz Otis, Fairbanks, energy shortage, Alliance, HiPow, Photo by Dave Harbour

Email received yesterday, 2-1-15, from Buzz Otis, Fairbanks businessman and community volunteer:

 

On Feb 1, 2015, at 2:33 PM, Buzz Otis <buzz@xxxxx> wrote:

Morning Dave, I wrote this late last night....  Any suggestions are welcome.  With respect, Buzz

Good evening Dave,

(Answering Buzz's email, received yesterday.  How can anyone with a heart not be drawn to his heartfelt and articulate description of Fairbanks' Energy Challenge?  Tomorrow, we'll go into much more detail, in Part II.)


Buzz:

You've written a thoughtful, compelling piece.  Thank you for sharing it with me.  I will run your message Monday. 

As a former regulator I try to look at all sides of issues like this and believe my best role is to help educate fellow citizens without becoming an advocate or project opponent before all the facts are known. 

I also urge you and our very smart mutual and respected friends there to think strategically about the long term, and answer to your satisfaction every possible question--including those both identified and inferred in the News Miner article.  I'll try to help by providing some of my own questions in Part II, tomorrow. 

I will make two more observations to you and my Golden Heart friends.

1.  I completely understand the gravity of the situation.  We agree that where possible the private sector is best equipped to respond to economic supply and demand issues.  While Alaska has many examples of failed government projects, it also has a number of public facility projects that are in the public interest.  Bradley Lake Hydro, certain roads and bridges come to mind--although a stable energy supply project like hydro is hard to compare to an energy supply governed by commodity pricing and variable costs subject to regulatory 'cost of service' reviews.

2.  The trick for those requiring (and may I even say, "desperately needing") a successful Interior energy project not fully appreciated by private investors, is to make sure government applies the same due diligence discipline as you would apply to a new company project before you stake family and company money on it.  The questions the News Miner and I and others have raised seem mostly like simple due diligence questions to me.  They are the type of questions your banker might ask you about your proposed project.  And, they are the type of questions th which the Governor and Legislature will likely wrestle as the initial and continuing due diligence phase begins.

That said, we all agree Fairbanks is in dire need of an efficient energy remedy.  Many would also agree that the solution could merit government assistance.  In support of these propositions, it might be helpful if:

1.  Project advocates approached all questions and concerns as you have: eagerly, positively and non defensively.  Successfully doing one's homework, cheerfully and knowledgeably answering all concerns would avoid conflict and best prepare for statewide consensus.  Having the other party's (Hilcorp's) concerns quickly addressed are probably also in Fairbanks' interest due to that company's significant investment in production that supplies gas (for both heating and power generation) to both South Central and to Interior Alaska consumers in household, business and commercial sectors.

2.  As questions are answered, it might be well to encourage public forums -- not for the purpose of beating the drums for or against the project--but for the purpose of helpfully answering all reasonable questions and concerns.

I join others who would love to see Fairbanks' longstanding energy needs responsibly met, quickly.  If it is wholly or partly done with public funds, I am sure Fairbanks would agree that those in charge of turning the dream into reality will best encounter public consensus when they've done sufficient due diligence to face the public confidently, with well studied answers.

Since the due diligence stage is not complete, it would be to everyone's advantage if the questions that are answerable at this early date -- and future mileposts -- are timely addressed. 

Dave

Sent from my iPhone 

I do hope this finds you and your family well.  I appreciate your correspondence on a regular basis and yesterday’s article that the state of Alaska, through AIDEA would purchase Pentex Alaska Natural Gas Company, LLC and its assets which include Fairbanks Natural Gas for 52.5 million. 

I would like to applaud Governor Walker for taking such bold and quick action to address interior Alaska’s energy needs.  Being a private businessman in the interior since 1976, this may come as a surprise to my friends and colleagues, so I will attempt to explain my position in the hopes that you and others can understand the strangle hold we have had on our economic neck with the outrageous costs of energy here in Fairbanks and the surrounding area.

First of all, I am a staunch private enterprise advocate and will continue to fight for the freedom that private enterprise gives to so many Americans until the good Lord decides it is my time to leave here.  I have been proactive over the years, encouraging various plans, through my involvement in the Fairbanks Chamber, Fairbanks and North Pole Economic Development Corporations, and the Support Industry Alliance, that promised to lower the cost of energy in Alaska and particularly Fairbanks, to no avail. 

When I worked on the Alyeska Pipeline in 1975 we were told the next big project was a gas line that would surely start within a year or two of the oil lines completion. 

I remember many gas line projects starting and stopping as you have.  I remember when Ray Latchem came to Fairbanks with Fairbanks Natural Gas, I remember touring Point McKenzie with Ray and looking at his small plant there and him telling me how we were going to have lower energy costs in Fairbanks as a result, and we did.  However, that only lasted a short while and as the economics of shipping small amounts of gas north by truck, gas contracts renegotiated out of Cook Inlet, and the cost of doing business always having an upward bias, plus wanting to maximize profitability, our natural gas prices came up to par with fuel oil.

In the Fairbanks area, we are heating our homes 7 to 8 months out of the year.  Up until recently, we were paying close to $4.00 per gallon for # 2 heating oil.  Even today with the price of crude dropping 50 to 60 % our price of heating oil only dropped 25 to 30 %. 

As a result, folks here are burning wood, coal, or pellets trying to make it by.  Many of our residents are using state of the art wood or coal burning stoves or boilers, with clean dry fuel.  Others aren’t doing that.  Many oil fired boilers aren’t tuned correctly which when added together, and coupled with our geography, it puts Fairbanks and North Pole air quality out of compliance with EPA on certain days throughout the winter.  Not particularly attractive for business or personal health.

I remember Bill Popp, at ADEC, telling me a few years ago that he likes to see a prosperous Fairbanks because it is great for Anchorage’s economy, after all, just about everything that comes to Fairbanks comes through the port of Anchorage!  Bill Popp gets it!

*     *     *

Dave,  on top of the high cost of fuel can you believe the cost of electricity for my small commercial buildings is over .21 per kilowatt hour?!

Unfortunately, private enterprise hasn’t delivered low cost energy to Fairbanks!  Our energy costs are some of the highest in the nation.  It is costing us economic opportunity and causing people to leave our community!  We have a US Air Force base that we have had to fight to keep open on two separate occasions, in the past 7 years.  Even though we enjoy an extremely strategic location, the military costs are driven by outrageous energy prices.  Next month we will be doing our best to keep our Army troops here.  I can’t help but believe that if we enjoyed low cost energy like our neighbors to the south we would be in a better position to grow business here.

Our past and present legislative members and past governors, many of which question Governor Walkers intentions, when he put forward the proposal to have AIDEA purchase Fairbanks Natural Gas, are the same individuals that have insisted that every barrel of crude oil is monetized, rather than using some of our royalty oil to ensure economic stability in Alaska.  Fairbanks has a crude oil line and until recently had two refineries in North Pole and we pay some of the highest energy prices?  Just think what a lower cost of refined product, done through proper negotiations with the refiners, could do for our industry here.  Marginal projects become viable.  Citizens have disposal income to spend elsewhere!  Abundance and positivity would be on every business person’s tongue!

To sum up we need low cost natural gas to fuel our homes, businesses, schools, mines, and military installations while providing  a lower cost for electrical generation.  PRIVATE ENTERPRISE HAS NOT PROVIDED LOW COST ENERGY!  WE CAN’T WAIT ANY LONGER                                                                                                                                                                                                                                             Personally, I have built energy efficient buildings, burn coal at one facility and burn wood in my home and in my shop.  These buildings also have oil backup for security.  Without  energy efficient buildings and burning alternative fuel sources our bottom line would be negligible. 

This is no time to divide and conquer.  We need your support.  Please consider helping Interior Alaska find its way out of these high energy costs and support a more timely solution.  I believe the only way forward in a timely manner, if at all, is with state participation.  We don’t have such a fiscal crisis that we can’t invest in the future of Alaska.  Please find a way to support the governor.

Respectfully,

Buzz Otis

Categories:

1-29-15 Shell To Explore Chukchi Sea This Summer!

29 January 2015 10:06am

Shell Plans To Explore The Chukchi This Summer!


Dan Fause, ASAP, Alaska Gasline Development Corporation, AGDC, Photo by Dave HarbourRelated Photo Cutline, Journal of Commerce, by Tim Bradner.  Alaska Gasline Development Corp. President Dan Fauske (NGP Photo) said the change in the Alaska Stand Alone Pipeline project to increase the capacity to a 36-inch diameter and use high-strength steel could allow up to 2.6 billion cubic feet per day to be shipped. That improves the economics of the project compared to previous restrictions that limited it to no more than 500 million cubic feet per day.  (Bradner's is one of the most informative, thorough, readable gas pipeline updates we have seen.  Kudos!  -dh)

Journal of Commerce by Tim Bradner.  A year ago there was a lot of complaining about state money being wasted on the Alaska Stand Alone Pipeline project, the little brother to the big North Slope gas pipeline project.  ... But a funny thing has happened. The project has morphed. Little Brother pipeline isn’t little anymore. It has grown up.


Video: Today, U.S. Senator John Barrasso discussed the LNG Permitting Certainty and Transparency Act (S. 33), that will speed up the approval process for exports of liquefied natural gas (LNG) to countries which do not have free trade agreements with the United States.  Additionally, the U.S. Chamber of Commerce and the American Petroleum Institute issued letters of support for S. 33 in advance of today’s hearing.   


Calgary Herald by Dan Healing.  A consortium including Calgary-based midstream and energy firm Altagas Ltd. has taken possession of the proposed Douglas Channel LNG project through a plan of arrangement that ends a Companies’ Creditors Arrangement Act process.   (Alaskans will note the consortium includes investors from Asian and European market areas.  -dh)

Shell Gears Up For 2015 Chukchi Exploration Season!

World Energy News by Joseph Keefe.  Oil major Shell wants to revive its Arctic oil drilling programme this year after a near two-year suspension, angering environmentalists who say the risk of an oil spill is too high.

Robert Dillon, U.S. Senate Energy and Natural Resources Committee, Shell to Drill Chukchi 2015, Dave Harbour PhotoRobert Dillon (NGP Photo) of the Senate Energy and Natural Resources Committee reports this afternoon that, "Shell CEO Ben van Beurden today told a conference in London that Shell would drill in Alaska’s Chukchi Sea this summer.

(Photo: Shell), ocs drilling platform"Shell has invested nearly $6 billion in leases and exploration in the Chukchi and Beaufort seas off Alaska’s northern coast," Dillon said.  "The Arctic holds 13 percent of the world’s undiscovered oil reserves, and 30 percent of undiscovered natural gas deposits, so the potential for Alaska is immense. Arctic waters off Alaska’s northern coast contain an estimated 30 billion barrels of oil and 221 trillion cubic feet of natural gas, according to the federal government."

Dillon said the resources are "critically important to the nation, state and continued operations of the Trans Alaska Pipeline System (TAPS)" in terms of domestic oil supply and jobs. 

Shell aims to restart Arctic drilling this year – CEO (Reuters)

LONDON Thu Jan 29, 2015 5:25am EST

Jan 29 (Reuters) - Royal Dutch Shell is planning to restart oil drilling in the Arctic this year, Chief Executive Ben van Beurden said on Thursday.

The oil company suspended its Alaskan drilling programme in 2014 to rein in costs and in the face of fierce environmental opposition.

Van Beurden said he aimed to restart the campaign this year, pending approval of the necessary permits and the conclusion of various legal challenges.

"Yes, we are minded to drill in the Chukchi Sea," he told reporters at a conference in London.


 

Categories:

1-11-15 Governor Orders Public Disclosure For Sensitive\Confidential Industry Interactions

11 January 2015 2:18am

Houston Chronicle.  The board of the state corporation expected Dan Fauske, ASAP, AGDC, In state gas pipeline, confidentiality agreements, reduce budget, Dave Harbour Phototo be a key player in efforts to advance a major liquefied natural gas project in Alaska is trying to determine how it can operate if members do not sign confidentiality agreements.  ...  Dan Fauske (NGP Photo), president of the gas-line corporation, also known as AGDC, said a confidentiality pledge is needed because information is shared between the two gas-line projects being pursued by AGDC — the liquefied natural gas project and a stand-alone in-state gas pipeline — to reduce costs.

 

Categories:

11-7-14 Alaska Governor Acts On Gasline And Legislators React - President Makes Preemptive Attack On Keystone XL

07 January 2015 9:07am

See Our Earlier Commentary: "Is Alaska Beginning A New Year Of Accomplishment or Acrimony?" (Other references)


Alaska Governor Bill Walker, Photo by Dave Harbour, AGDCADN by Dermot Cole.  Gov. Bill Walker (NGP Photo) took a major step toward revising the way the state is dealing with a proposed gas pipeline by removing three members of the Alaska Gasline Development Corp. board and instructing two commissioners not to sign a secrecy pledge proposed by the Parnell administration. (Comment: We do not know enough about all the circumstances to comment on the rightness or wrongness of the Governor's action or legislative reactions.  We do observe that decision makers in a time of fiscal crisis would probably be well advised to bend over backwards to be cordial and considerate in their interactions.  The fiscal challenge descending upon Alaska and her citizens will be difficult enough to confront with a united team and much harder to resolve successfully if we are divided.  -dh)

*   *   *

Mike Hawker, Alaska Gasline Development Corporation, Governor fires board, Photo by Dave HarbourMike Chenault, Speaker of the House, Alaska Gasline Development Corporation, Governor fires board, Mike Hawker, Photo by Dave Harbour

The legislators who 
sponsored the bill creating the Alaska ​Gasline Development Corporation (AGDC) today released statements in light of Governor Bill Walker’s action firing three board members and ordering his appointees to not participate in the confidentiality process.  Alaska Speaker of the House Mike Chenault, (NGP Photo-Right), and Rep. Mike Hawker, (NGP Photo), believe the three key AGDC board members were critical in ... (Read more here)
*     *     *
Brad Keithley, Alaska Gasline Development Corporation, AGDC, Governor Bill Walker, Fire Board Members, Photo by Dave HarbourOil and gas attorney Brad Keithley (NGP Photo) reacts to AGDC on his Facebook Page and to general spending issues on his blog, here.  "Wrong direction. Alaska is part owner of a commercial enterprise competing in a very challenging environment. You and I wouldn't disclose our commercial strategy in our businesses; neither should the state. And you and I would want all hands important to the success of our business in the information loop; we wouldn't want to blind key players by keeping them in the dark about our strategy. Neither should the state. Taking this position on confidentiality is two significant steps backward in the success of this venture. Treat it like the Permanent Fund (which regularly enters into confidentiality agreements) and give the LNG project the tools necessary to be successful."   http://ow.ly/GWUwe

Calgary Herald by Stephen Ewart.  

Commentary: Preemption of Due Process and Erosion of the Rule of Law.

We have seen the current, Administration consistently erode the rule of law.

The EPA has acted to preemptively kill an Alaska mining project, on valid Alaska state leased ground, before the proponents filed for the first permit, on the basis of an EPA-imagined development scenario, before any public hearings, findings of fact or legal record could be assembled.  

This is a horrible infringement on America's constitutional protection of due process and the rule of law which it protects.

The precedent the EPA is trying to establish could provide hostile federal agencies with a new tool for stopping state, municipal, agricultural, recreational, mining, commercial fishing, manufacturing, transportation, home building projects on federal, state, municipal or private land...anywhere, anytime.

Similarly, the Administration has sought, unsuccessfully, to block development in Alaska by proclaiming vast areas should be protected for certain species when the populations of those species are increasing (i.e. Steller Sea Lion, Polar Bear.)

Other federal abuses abound and also work against a predictable and protected due process, though they are more subtle (See "Conversation With Ibrahim",  Fuel StandardsArmed EPA Hits Alaska)

In the case of Keystone, the President has blocked State Department approval of the project following valid, due processes which cleared the project.

Now, when the Congress seems poised to introduce Keystone enabling legislation, the President announces intent to veto any such legislation.  This is more clear and present evidence of willful disdain for the spirit if not the precise definition of due process.

Through such action in the energy business, together with evidence in other federal jurisdictions (i.e. Overreaching Executive Orders, Justice Department-selective enforcement, IRS-targeting non-profits, State Department-Benghazi, etc.), one must conclude the country is dangerously close to losing constitutional freedom and the rule of law reputation for which it was once so well regarded.

Energy company shareholders are among the most affected by a dilution of due process when the rule of law is replaced by rule of men with political agendas.

-dh

The White House warned Tuesday that U.S. President Barack Obama would veto a new Congressional bill to have the Keystone XL pipeline built arguing there is a well-established process to review the controversial cross-border project.

Almost seven years after filing its application for a 830,000 barrel a day oil pipeline, TransCanada chief executive Russ Girling expressed exasperation over the latest setback.

“The review process for Keystone XL has been anything but well-established. We are well over the six-year mark reviewing the final phase of Keystone with seemingly no end in sight,” Girling said in a statement after...  (More here)


Canadian Press/Global News. Jim Prentice, Alberta, Premier, Keystone XL, pipeline, Photo by Dave Harbour Alberta’s premier remains hopeful about the Keystone XL pipeline despite word that U.S. President Barack Obama may veto the project.  Prentice says he will travel to Washington within the next month to let people know that Keystone is in the best interests of Canadians and Americans alike.

Jim Prentice (NGP Photo) says there is broad public and political support in the United States for the pipeline that would carry Alberta bitumen to the U.S. Gulf Coast.


Globe & Mail.  Quebec’s energy regulator is giving the thumbs-up to TransCanada Corp.’s Energy East pipeline, calling the plan “desirable.”

The $12-billion pipeline between Alberta and New Brunswick aims to connect western crude with eastern refineries and new markets across the Atlantic.

It would make use of under-used natural gas pipe already in the ground for about two thirds of the way, with new pipe being constructed in Quebec and New Brunswick.


The Alaska Gasline Development Corporation today released statements in light of Governor Bill Walker’s action firing three board members and ordering his appointees to not participate in the confidentiality process.
 
Alaska Speaker of the House Mike Chenault, (NGP Photo-above), and Rep. Mike Hawker, (NGP Photo-above), believe the
three key AGDC board members were critical in advancing a natural gas commercialization project, and brought valuable perspective and acumen to the Board. AGDC was designed to bring gas to Alaskans and more revenue to the state via its Alaska Stand Alone Pipeline (ASAP) project working parallel to the AK LNG project, which it was facilitating for the State.
 
“I spoke to Gov. Walker after hearing that he had fired AGDC board members Dick Rabinow, Drue Pearce, and Al Bolea,” said Chenault. “The governor certainly has the power to do that; the Legislature granted the governor that power in House Bill 4, which created and directed AGDC. I’m disappointed that Gov. Walker has chosen to eliminate these board members, who have proven their worth and commitment to Alaska in the progress made already.
 
“It’s going to be hard to replace the 60 years of knowledge that these three board members bring – and in particular, the expertise of Dick Rabinow, who is the only board member to have actual gasline construction experience under his belt.
 
“My greatest concern is what delay is this action going to cost the AK LNG and ASAP projects? With a substantial turnover in leadership, how much longer will Alaskans wait for natural gas?”
 
“I am disappointed in the Governor's action gutting the top quality board that was working diligently for Alaska,” said Hawker. “I’m deeply concerned that this signals a wholesale change of course for Gov. Walker on gas commercialization. An overwhelming majority of legislators approved creation of AGDC, and of its mission, which is clear in law – to pursue a natural gas project that delivers gas to Alaskans first,
then to markets beyond.
 
“In creating AGDC, the Legislature carefully weighed the need for confidentiality in some issues with the need for public accountability. The legislature struck a balance between transparency to Alaskans, and the need to protect commercially sensitive information, third-party private company information, and information that, if known, could adversely impact the price Alaskans receive for its gas.
 
“I, too, am gravely concerned that this action by Gov. Walker will result in significant delays to the AK LNG and ASAP projects. All the key business agreements crafted by the State under confidentiality agreements will, by law, be brought back to the legislature for a fully transparent, public vetting and approval.”

TODAY'S Energy In Depth News Links:

Weds., January 7, 2015 

  • EID-National: API’s State of American Energy address and report underscore bright future ahead – if policy-makers do their job (1/6)
  • EID-Illinois: Unlike New York, Illinois is helping its economically challenged regions by moving forward with shale (1/6)
  • Guest post from BakerHostetler: Cuomo’s decision on HF doesn’t appear to be based on science – or the law (1/6)

NATIONAL

API chief focuses on oil exports, KXL in annual addressE&E News (subs. req’d). Throughout his remarks, Gerard touched many times on the need to move forward in approving construction of the Keystone XL pipeline from Canada. Describing that approval as "low-hanging fruit," he expressed disappointment at news that the White House said it would likely veto a KXL approval bill introduced yesterday by Sens. John Hoeven (R-N.D.) and Joe Manchin (D-W.Va.). "The American public is frustrated and confused by this indecision," Gerard said. "They say to themselves, 'Wait a minute, there's 42,000 jobs here and we can't make a simple decision?' So, longer-term, I believe Keystone is ultimately going to get done."
 
Democrats must respect the power of oil and gasHouston Chronicle, op-ed. Oil and gas is no longer a game reserved for Texas wildcatters. Shale can be found easily in blue states and red states, and politicians all along the aisle should have trouble finding bad news in fracking's gifts of job growth, affordable fuel and strength abroad.
 
Industry benefits from transparency about HF fluidsThe Oklahoman, op-ed. Baker Hughes, an energy firm in Houston, is about to make history. It just pledged to disclose the chemical makeup of its hydraulic fracturing fluid. Fracking fluids are safe. And the public deserves to know what goes into them. That’s why I firmly support fracking disclosure laws.
 
Oil prices will recover, but market could behave chaoticallyHouston Chronicle. In a balanced market, however, the oil industry simply cannot produce all of oil the world needs for $50 a barrel or less. That's the good news for Houston, but the bad news is that companies will be under intense pressure to produce oil as cheaply as possible because, since November's OPEC meeting, the world lacks a regulator, or swing producer, to stabilize the market. If left to its own devices, the invisible hand of the market will be stirring a pot of chaos in 2015.
 
U.S. oil production will be falling by end of 2015Reuters, column. In the short term, U.S. oil production is set to continue rising because there is still a backlog of wells waiting for fracturing crews and completion after the record drilling during the first ten months of 2014. In North Dakota, for example, there were around 650 wells waiting on completion services at the end of October 2014 because drillers had outpaced completion crews, according to the state's Department of Mineral Resources.
 
Low oil prices leave U.S. shale players cautiousUPI. Energy companies working in U.S. shale basins announced plans to trim capital programs for 2015 because of the steep decline in oil prices. The price for West Texas Intermediate crude oil, the U.S. benchmark, dipped below the $50 mark for the first time in more than five years Monday. Globally, oil prices have lost half of their value since mid-June 2014, forcing major oil and gas companies to cut back on spending for this year.

INTERNATIONAL

Anti-Cuadrilla group's leaflet misleading, says watchdogThe Independent. In a setback for the anti-fracking lobby, the Advertising Standards Authority (ASA) found that sections of the leaflet from the Residents Action On Fylde Fracking (Raff) protest group misinterpreted scientific data around shale gas extraction and exaggerated the size and scale of planned fracking operations in the region.
 
Junior explorer pulls plug on UkraineUPI. The economic climate in Ukraine is no longer conducive to continue investing in shale natural gas opportunities, producer JKX Oil & Gas said Wednesday. "The board of JKX has decided that the combination of Ukrainian Government-imposed restrictions on selling its gas to industrial clients and the punitive rate of gas production tax requires the company to suspend its planned 2015 capital investment program in Ukraine until the economic parameters for investment improve," it said in a statement.
 
Protests Hit Southern Algeria Over ShaleAssociated Press. Protests in Algeria's remote and sparsely populated south over efforts to exploit the country's vast shale gas reserves spread to the regional capital Tuesday, the state news agency reported.

CALIFORNIA

New report calls for better oversight of injection wellsBakersfield Californian. In a report with strong implications for Kern County's oil industry, an environmental activist group called Tuesday for changing the process for exempting aquifers from federal groundwater protections. An oil industry trade group, the California Independent Petroleum Association, was dismissive of the report, noting there is no evidence of waste being injected into drinking water supplies.
 
COLORADO

5 things to know as the Colorado legislative session beginsAssociated Press. Colorado lawmakers begin the 2015 session on Wednesday. Here's a weekly look at what's coming up: Fracking - Another big debate involves whether any new regulations are needed over hydraulic fracturing, or fracking. Gov. John Hickenlooper assembled a task force to look at how to settle land-use clashes among homeowners, local governments, and the energy industry. The task force's charge is to give lawmakers recommendations, but whether anything happens remains to be seen.
 
Windsor braces for industry slowdownThe Coloradoan. While many Northern Colorado residents are enjoying the country’s falling gas prices, Windsor officials say the anticipated slowdown in tax revenue from oil and gas companies will hamper them this year. Those companies will likely scale back their operations around Windsor, Town Manager Kelly Arnold said during a work session Monday. Fracking activity in the area may not pick back up until 2016.
 
What new fines would have meant in Windsor spillThe Coloradoan. An oil and gas operator who spilled 7,500 gallons into the Poudre River last year would have faced 15 times the financial penalty under a new fine structure passed this week. The Colorado Oil and Gas Conservation Commission approved a maximum penalty of $15,000 a day for "the most egregious violations" in a Monday hearing — up from a previous maximum fine of $1,000 per day. 
 
LOUISIANA

Oil price plunge imperils La. jobs — but when? The Advertiser. In Louisiana, initial claims for unemployment insurance in mining — many oil and gas jobs are recorded as mining — totaled 227 in December, higher than in any previous month but not much higher than claims recorded in January 2014. Guarisco said oil and gas employment appeared to remain robust in December, as many oil and gas jobs must be done no matter the price per barrel.

Denton anti-HF activists to make appearances in St. Tammany ParishTimes-Picayune. Two people whose efforts helped enact a ban on fracking in Denton, Texas, will be in St. Tammany Parish this weekend for a party and a symposium about hydraulic fracturing. The citizens group Tammany Together is putting on the events. 
 
NORTHEAST

Penn students jump into the shale fray with a new technologyNPR. One of the pressing questions regarding fracking is whether or not the chemicals used to help pry the gas from tight rock formations like the Marcellus Shale leaks or migrates to drinking water supplies. Imagine if you could determine whether fracking caused ground water contamination using a thin strip of single carbon atoms. That’s what two seniors studying at both the University of Pennsylvania’s Wharton school and its bioengineering department, are trying to do. Teddy Guenin and Ashwin Amurther are finalists for a $5000 prize through the University.
 
Analyst predicts gasoline rebound despite oil's plungeTribune-Review. Gasoline prices likely will rebound over the next few months and rise above $3 per gallon by May, despite the continuing drop in global oil prices, a national analyst predicted Tuesday. Oil prices driving much of the pump price dropped by half because of increased supply from shale producers, tepid global demand and a decision by exporters such as those in the OPEC cartel to push prices down by maintaining production.
 
US Forest Service accepting comments on Va. pipeline pathAssociated Press. Friday's the deadline to comment on a proposed natural gas pipeline whose route includes the George Washington National Forest. The multi-billion-dollar pipeline is proposed by Dominion Resources and other energy companies. It would run from West Virginia, through Virginia and into North Carolina. The proposed $5 billion, 550-mile pipeline would transport natural gas collected through hydraulic fracturing, or fracking, from Pennsylvania, Ohio and West Virginia.
 
Shale is proving beneficialThe Star Democrat, LTE. In her guest comment, “Fracking may prove to be harmful to public’s health,” Rebecca Rehr presents the potential hazards of hydraulic fracturing without balancing them with the benefits. Of course there are health and environmental hazards to extracting oil and gas from tight shale and other rock formations. However, horizontal drilling and fracking have dramatically increased U.S. production of oil and gas, leading to benefits both here and globally.
 
Natural Gas Price Plummets, But Tax Still a Wolf PriorityPhiladelphia Magazine. States that depend on energy resources to power their economies and budgets are tightening their belts as the prices of oil and natural gas fall, but that won’t — and maybe shouldn’t — stand in the way of a new fracking tax in Pennsylvania, officials say.

OHIO

Natural-gas home-heating rates low for JanuaryCleveland Plain Dealer. Cold January weather has arrived, but rates for natural gas have fallen. Both Dominion East Ohio and Columbia Gas of Ohio are posting standard rates that are lower than those in December and lower than year-ago January prices.
 
Small earthquakes in Mahoning CountyAkron Beacon Journal. Shawn Bennett, of the Ohio Oil and Gas Association, said, “There is no reason for hysteria” regarding the new report. Ohio is working closely with researchers in other states on how “best to mitigate such events from happening in the future,” he said. NOTE: Houston Chronicle/Fuel Fixalso reports.

TEXAS

4 mild earthquakes startle North Texas; no damage reportedExpress-News. Four small earthquakes have rattled North Texas hours apart. No damage was reported from Tuesday temblors. The U.S. Geological Service plotted the epicenters of the four quakes to northeast Irving, a Dallas suburb. At least two could be felt throughout the Dallas-Fort Worth area.
 
Low gas prices means job lossesKENS5. The output of the Eagle Ford Shale, recently slipped for the first time in more than a year. The state reports production at the shale dropped by about 2,000 barrels in December. A local economics professor from UTSA said cheap gas prices could mean job losses since a significant part of the economy is driven by oil and gas production.


Other references "A Deal Is A Deal", etc.:

Do we want to be a place where "A Deal Is A Deal?" (Reference 12345)
Did we elect a Governor and Legislature to solve problems or throw darts at each other (Today's KFQD; pls. advance to Harbour interview: 1520 - 2630)
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1-1-15 The New Year Begins!

01 January 2015 2:52pm

Tim Bradner, Alaska Journal of Commerce, Photo by Dave HarbourBill Walker, Governor, Alaska, budget cuts, Photo by Dave HarbourAlaska Journal of Commerce by Tim Bradner (NGP Photo-L).

 

Gov. Bill Walker (NGP Photo, above) and his new administration are still settling in as state legislators are packing up to head to Juneau for the 2015 session.

Mike Chenault, Speaker of the House, Alaska, budget, Dave Harbour PhotoKeven Meyer, Alaska State Senate, Senate President, ConocoPhillips, Photo by Dave Harbour

The annual political poker game begins Jan. 20 when the state Legislature convenes.

 

Walker will be at the table. So will House Speaker Mike Chenault (NGP Photo-Far R)​; Senate President Kevin Meyer (NGP Photo-R)​; House Democratic Minority Leader Chris Berta Gardner, Alaska State Senate, Senate Minority Leader, State Budget, Democrat, Anchorage, Photo by Dave HarbourChris Tuck, House Minority Leader, Alaska State House of Representatives, Alaska State Legislature, State Budget, Photo by Dave HarbourTuck (NGP Photo-R)​; and Senate Democratic Minority Leader Berta Gardner (NGP Photo)​.

 


Alaska Dispatch/AP by James MacPherson.  

Forget South Dakota. North Dakota's most similar sister state these days is some 2,000 miles away.

Alaska and North Dakota — which once had little more in common than wintry weather and elbow room — have for the past several years been locked in a state sibling rivalry ....

"It shocks me how much we have in common with Alaska, and it's not just the cold," said Kevin Iverson, manager of ....

North Dakota is bettering Alaska on crude production and the number of residents now....  The United States' unlikely economic darling that is North Dakota comes in contrast to slipping crude production on The Last Frontier.

...North Dakota recaptured the 47th most populous state from Alaska, which .... North Dakota had an estimated 739,482 residents in 2014, up more ....

Alaska lost more than ....  (Read more)

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12-28-14 Walker Takes Year-End Steps To Cut Spending

28 December 2014 3:07pm

Alaska Governor Bill Walker, State Spending Cuts, AGDC, Susitna Dam, Mega projects, gasline, Photo by Dave HarbourWalker orders new spending on Alaska megaprojects stopped.  Alaska Dispatch.  Following Governor Bill Walker's (NGP Photo) order, the state agency responsible for the smaller pipeline, the Alaska Gasline Development Corp., plans to only continue work ...


 
 
Walker halts bridge and dam spending.  Mat-Su Valley Frontiersman ... Road, the Kodiak Launch Complex, and the Alaska Stand Alone Pipeline Project — are also ... Notably absent from the list is the larger of the state's two natural gas pipeline projects, which would bring gas from the North Slope to ... Gov. Walker halts megaprojects - Juneau Empire (subscription)
 
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