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      This is your public service 1-stop-shop for Alaskan and Canadian Arctic energy commentary, news, history, projects and people. We update it daily for you. It is the most timely and complete northern energy archive 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 name others existing before 2001.  -dh

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Alaska Taxes

8-20-15

20 August 2015 1:39pm

Please note our June 25 commentary on competitiveness.  

Then, bookmark our April 17 commentary.  -dh

Comment: Critical reading of today's events below demonstrates some good news in the form of COP's new drilling at its CD5 property on the Alaska North Slope (ANS).  Then, we note from our Australian and Ohio analysts the increased difficulty faced by an ANS gas transportation project in a low energy price, high production environment.  

ALASKA DECISION MAKERS: Does this not mean Alaska must become even more competitive to market its natural resources, not less?   See this week's August 18 editorial, "Outrageous Decisions"; here are some reviews.  -dh

 


CD5, ConocoPhillips, BLM, EPA, National Petroleum Reserve Alaska, COP Photo

Wilderness Society vs. Institute for Energy Research

Michael Brune doesn’t believe Dan Kish, should speak for the Native people of the North Slope.  Which he wasn’t doing!  

But Brune apparently was trying to speak for Alaska's Native people.  He also suggested that no new oil and gas areas should be developed because climate change (in his opinion) required all new energy to come from alternative energy sources (i.e. wind, solar, etc., we presume).  This is more evidence that, indeed, to enviro-activists the 'end justifies the means,' and intellectual honesty has no role in their strident advocacy.  -dh

Today ConocoPhillips (NYSE:COP) announced that development drilling has begun at its CD5 drill site on the North Slope. CD5 is the first oil development within the boundaries of the National Petroleum Reserve-Alaska (NPR-A), and first oil is expected in the fourth quarter of 2015. Click here to view the full news release.

 


 

​Today's Consumer Energy Alliance links to issues important to NGP readers

Kenai Peninsula Gas/LNG Links important to our readers


THE ENERGY ANALYSTS SPEAK...AND, YOU READ IT HERE FIRST!

Today we bring you two of our favorite private analysts, whose names shall not be revealed.

One writes from the Mid Atlantic interior state area while the other writes us from far across the Pacific.

Today's Aussie O & G Observer writes:  

  • ...the Alaska LNG Project is....(Read more)  
  • The oil market has been smashed again overnight.... (Read more)

Our Ohio Observer says:

  • The highwater mark for rigs operating in the Bakken during the past two years was October 2014 (see below) at 194. Since that time, the number of rigs has fallen 60%. Yet production is almost at record monthly levels, and (Read more)

 

 

AJOC by Elwood Brehmer.

All Alaska Gasline Development Corp. contracts would be open to the public under a draft regulation proposed Aug. 13 at its board of directors meeting.

A contract submitted for board approval would be posted on the Alaska Gasline Development Corp., or AGDC, website at least 10 days prior to the meeting at which it is to be discussed, the draft regulations state.

Overall, the five pages of proposals limit what types of confidentiality agreements the corporation and its directors can enter into.

“If the regulations are adopted in this form it is simply going to be fairly open going forward,” AGDC attorney Ken Vassar said. “We’re not going to enter into any contracts that by their terms are themselves confidential. That’s just not an agreement that would be available to u

    


​Today's Consumer Energy Alliance links to issues important to NGP readers:

Argus Media: States urge dismissal of Oregon LCFS suit
The federal court lawsuit brought by the American Fuel and Petrochemical Manufacturers Association (AFPM), American Trucking Association and Consumer Energy Alliance echoes arguments they made against the California LCFS. The judge in that case said that the AFPM lawsuit could not go any further because of a 2013 decision by the US Ninth Circuit Court of Appeals that said the California program did not explicitly discriminate against out-of-state products in violation of the US Constitution.
 
Alaska Dispatch NewsWith Obama's visit less than two weeks away, details trickle out
Public officials and residents alike, from Anchorage to the 400-person village of Kivalina on the northwest coast, are watching and waiting for more details about President Barack Obama’s upcoming visit to Alaska.
 
Fox NewsClinton hit for breaking with Obama on Arctic drilling, staying mum on Keystone
Hillary Clinton is taking heat from Republicans for breaking with the Obama administration on Arctic drilling while continuing to hedge on her position on the Keystone XL Pipeline.
 
National PostKelly McParland: Obama’s Arctic drilling rationale doesn’t even convince supporters
Barack Obama is a curious individual. The U.S. president has delayed making a ruling on Canada’s Keystone XL oil pipeline for seven years, seeking to burnish his environmental credentials and please supporters in the green movement. The refusal upset Ottawa no end, but the White House deemed Canada’s vexation less crucial than making a point about the importance of battling climate change.
 
Town Hall: Poll: Americans Think Obama’s Climate Change Plan Will Increase Energy Costs – They’re Right
The Obama administration’s plan to cut carbon dioxide emissions by nearly 30 percent from 2005 levels by 2030 has a majority of Americans feeling their wallets since electrical costs are projected to go up. The increase specifically places fixed-income seniors in the cross hairs. Moreover, the projected job losses are will hit rural America the worst.
 
Real Clear EnergyOne Loser in Obama's Climate Plan? Existing Nuclear
Right now, the biggest source of clean energy in the United States is nuclear power. The country's 99 commercial reactors provide 20 percent of our electricity, all without emitting carbon dioxide. Compare that with wind at 4.9 percent or solar at 0.6 percent.
 
Heartland InstituteHouse Cuts EPA Budget, Would Block Clean Power Plan
The House Appropriations committee cut funding for the Environmental Protection Agency (EPA) by 9 percent, or $718 million, and blocked key Obama administration climate rules when they approved a $30.17 billion Interior and Environment spending bill.
 
Fuel FixCommentary: Fossil Fuels are the Solution, Not the Problem
The George C. Marshall Institute has recently released a study on fossil fuels and the economic well-being. It describes why energy is an essential input to economic activity. Because fossil fuels are such a large part of the world’s energy supply, they play a dominant role in enabling people everywhere to enjoy a higher standard of living and greater personal freedom.
 
ForbesPennsylvania and Truth in the Incidence of a State Severance Tax
Pennsylvania policymakers are nearing a two-month budget stalemate between Governor Tom Wolf and state GOP leadership, at least part of which can be attributed to their divergent views on the implications of a proposed severance tax on the production of unconventional natural gas.
 
Economic TimesOil prices hit 6-1/2-year low as US crude supplies rise
Oil prices in New York sagged to a new six and a half year low Wednesday following data showing an increase in US petroleum stocks. US benchmark West Texas Intermediate for delivery in September dropped $1.82 to $40.80 a barrel on the New York Mercantile Exchange. The contract fell as low as $40.46 a barrel earlier in the session.
 
New York TimesOil Companies Sit on Hands at Auction for Leases
With oil prices collapsing and companies in retrenchment, a federal auction in the Gulf of Mexico on Wednesday attracted the lowest interest from producers since 1986. It was the clearest sign yet that the fortunes of oil companies are skidding so fast that they now need to cut back on plans for production well into the future.
 
San Antonio Express-NewsLow crude prices affect offshore drilling auction
Oil and gas companies are set to pay $22.7 million for drilling rights in the Gulf of Mexico following a lackluster government auction Wednesday that reflected low crude prices. With just five companies participating and only 33 leases sold, the turnout marked the smallest western Gulf of Mexico lease sale since area-wide auctions began in 1983.
 
Fuel FixOil and gas cos. among most profitable per employee, analysis finds
Oil and gas companies were among the best at squeezing the most revenue from a small number of employees last year, according to data collected by a business research website. Researchers from FindTheCompany calculated profits per employee among companies on the S&P 500 in 2014. Among the top 25 companies ranked according to that metric, 15 were oil and gas exploration and production companies.
 
UPIWood Mackenzie: Mexico oil swaps only slight U.S. move
Approval for oil swaps with Mexico opens the spigot for U.S. crude oil, but might not be the export indication supporters are hoping for, an industry analyst said. The U.S. Commerce Department last week granted a request from Mexican energy company Petroleos Mexicanos, known also as Pemex, to swap as much as 100,000 barrels of U.S. crude oil per day for Mexican refining. The deal forbids the re-export to other nations.
 
Houston ChronicleSenators ask SEC to review oil companies' disclosure on offshore risk
A dozen senators are asking the Securities and Exchange Commission to probe whether oil and gas companies are fully disclosing the risks associated with their offshore operations.
 
Alaska Journal of CommercePaper: Cooperate rather than lead on AK LNG
A leading U.S. economist says a large natural gas pipeline project is vital to the state’s economic future and that the state should cooperate with experienced large companies in developing the project rather than attempting a plan for the state to lead the project.
 
Orange County RegisterObama's Clean Power Plan is bad news for California
The White House recently released its Clean Power Plan, which aims to reduce the nation’s carbon dioxide emissions by 32 percent by 2030. Almost immediately, California Gov. Jerry Brown praised the plan, claimed it should be the model for international agreements and touted California’s own statewide plans. But California’s carbon control program should be a warning to the rest of the country, not an endorsement of the president’s plan.
 
The Argus LeaderMy Voice: Getting Washington working again for Americans
When Republicans campaigned for the Senate majority in 2014, we made a simple, yet important pledge to the American people: If you elect Republicans to the majority, we will get the Senate, which has been dysfunctional for years, working again. That was not a half-hearted campaign slogan; it was a commitment on which we intended to deliver.

The City WireArkansas severance tax revenue set fiscal-year record, pace falls in new year
Arkansas severance tax collections tumbled nearly 59% in the first month of the state’s fiscal year 2016 as Fayetteville Shale drillers were unable to sustain production levels due to continued weak natural gas prices, spending cuts and fewer operating rigs.
 
Lincoln Journal StarLocal View: Five seasons Nebraska should reject the EPA’s mandate
The EPA’s “Clean Power Plan” would drastically increase energy costs for all Nebraskans without achieving its stated goal of combating climate change.
 
Milwaukee Journal SentinelEnbridge claim hard to swallow
None of us should be surprised when fossil fuel company executives tell a whopper or two in order to promote their interests, protect their massive government subsidies or avoid regulation of the deadly carbon pollution they freely loose upon Earth's increasingly damaged atmosphere.
 
Chicago TribuneColorado already put methane caps on drillers, and it worked
For an idea of how the U.S. government's proposed methane rules will affect drillers, look no further than Colorado. The state became a test case for similar controls last year when a coalition of energy companies and environmental groups agreed on measures to cut the pollution. In a bid to address smog, regulators there adopted the nation's first requirements for oil and natural gas companies to find and fix methane leaks.
 
Wheeling IntelligencerW. Va Leaders Bash Clean Power Plan
For better or for worse, depending on one's perspective, President Barack Obama's Clean Power Plan will significantly change America by the year 2030 - if its goal of cutting 32 percent of CO2 emissions from electricity plants becomes reality.
 
Andover TownsmanNatural gas pipeline could add $950K to tax coffers
Andover could rake in nearly $1 million in new property tax revenue if a plan by energy giant Kinder Morgan to build a high-pressure natural gas line through town ever comes to fruition. Kinder Morgan officials said last week that Andover would get $950,000 in tax revenue while Methuen would earn $700,000 for being hosts to a portion of the gas pipeline. Dracut, meanwhile, could earn more than $2 million for hosting some of the key infrastructure for the pipeline system.   


Observer #2 (Ohio).  The highwater mark for rigs operating in the Bakken during the past two years was October 2014 (see below) at 194. Since that time, the number of rigs has fallen 60%. Yet production is almost at record monthly levels, and has increased in the past two months. Part of this has to do with the number of uncompleted wells dropping by 77, leaving 848 still in the inventory of uncompleted wells. This volume can apparently be maintained for some time. According to the monthly report from the North Dakota DMR,

At the end of June there were an estimated 848 wells waiting on completion services, 60 less than at the end of May.

The current rig count plus NC well inventory is sufficient to  maintain 1.2 million barrels of oil per day for 24 months

Bottom Line: If this carries over to other oil shales, it is going to be difficult to see any drop in domestic crude oil production in coming months.

 

   


Observer #1 (Australia)  The oil market has been smashed again overnight (more below).   Current sentiments appear to be very bearish, with every piece of bad news being the signal for a sell-off.

A quote from Tudor Pickering Holt's daily note to clients yesterday is set out below.  To my mind this provides a clue as to the source of much of this bear-ishness:

"The snapback in stocks / commodities coming out of the 2008/2009 financial crisis spoiled us…it’s usually not that easy exiting a down cycle."

This to me says that the market is going through the "five phases" of grief after last year's oil price crash - and we are now only at the second phase: anger that the re-bound has not yet come (and is not in sight).  If this cod-psychology is correct, then we have still three phases to go....

Commodity prices

Brent closed down more than 3% at US$47.00, whilst WTI was even harder hit, closing down 4.3% at US$40.55.  The twelve month forward price is now worse than it was during the 2008/09 GFC induced oil price fall.

The numbers du jour which induced this fall was data from the EIA's weekly report, which indicated that US crude inventories increased by 2.6 mmbbls (although net product inventories - gasoline and distillate - fell by 2.1 mmbbls).  The market consensus figure earlier in the week had not anticipated the extent of the build.  The EIA also reported that US daily imports had increased by ~0.5 mmbopd - implying that the US is being used as the global storage site of last resort.

The Henry Hub natural gas price closed down 1c at US$2.71.

LNG

Regular followers will recall that this blog considers that the Alaska LNG project is the tortoise of the LNG world - well placed to beat some of the flashier hares.  However, Alaskan politics is currently bouncing a few rocks off the shell of this plodder.  Readers around the world will recall that Alaskan Governors can often be colourful characters - looking no further than one of the favoured running mates of The Donald, one Ms Sarah Palin.

Not wanting to be beaten by Ms Palin's appetite for socialist oil industry taxes, the latest Governor (Bill Walker) has introduced a concept worthy of Hugo Chavez: taxing gas resources in the ground (a "reserves tax") at the same time as he has signaled he would like the State to takeover 51% of the BP/Exxon/Conoco AKLNG project.

As this is the USA, I expect reason to prevail eventually - but this shows that LNG projects everywhere are subject to politicians mistaking fragile eggs for golden gooses.

Governments and fracking

Victoria's Auditor General released a report yesterday concluding that the State was not as well placed as it should be to manage issues associated with on-shore oil & gas exploration.  This has led the Greens to issue a clarion call for the ban of fracking for the period of "forever" (rather than the usual mealy-mouthed five year moratorium).  The Farmer's Federation wants more "science".  Clearly more than a million safely fracked wells don't provide a statistically valid sample size......

Company news - Armour Energy Ltd (AJQ)

Micro-cap AJQ has announced today that it has signed a non-binding deal with large US private equity firm, American Energy Partners (AEP) under which the latter may farm-into AJQ's Northern Territory acreage.

AEP was founded a few years ago by the colourful ex-CEO of Chesapeake Energy (the second largest US gas producer), Aubrey McClendon.  This is the first deal that it (or Chesapeake, to my knowledge) has done outside the USA - the well costs, etc, will not be familiar!

If the deal is turned into a binding one, it will see AJQ be 25% free-carried through a US$100M program, and receive US$11M cash up-front as well.

AEP's founding investor was another US private equity firm, Energy & Minerals Group (founded by ex-Exxon MD Lee Raymond's son) - who themselves recently entered the Northern Territory through a farm-in with private Australian company, Pangaea Resources.

Company news - A J Lucas Ltd (AJL)

AJL has a 40% stake in the UK's best known shale gas exploration company, Cuadrilla Resources, who were recently awarded further exploration licences in on-shore England.

Company news - Beach Energy Ltd (BPT)

BPT today announced that it had appointed an acting-CEO - Neil Gibbons - as MD Rob Cole was absent for family reasons.

Company news - Santos Ltd (STO)

Tomorrow STO will announce its half-yearly results.  Its full year results in February included a A$1.6B write-down - but using oil price assumptions that are significantly higher than the current forward strip - or indeed than the bearish sentiments on price that came from Woodside's results briefing earlier this week.

STO will have to walk a narrow line between not being seen as being over-optimistic on oil prices versus not wanting to precipitate the equity raising which its leadership has nailed its credibility to not doing.

Quote of the day

Aubrey McClendon's robust views on the fracking debate:

"We frack all the time. What’s the big deal? Where is the mushroom cloud? Where are the dogs with one leg?”

 

 

Gas/LNG links courtesy of Larry Persily, Kenai Peninsula Borough:

Oil and gas news briefs for Aug. 20, 2015

Report says U.S. LNG must be price competitive to succeed
 RBN Energy; Aug. 17) - The U.S. over the next three to five years will become a top exporter of LNG, and may emerge as the world’s leading exporter by the mid-2020s. The 12 liquefaction trains now under construction at five sites in the Lower 48 states together will have the capacity to export up to 54 million metric tons per annum, about 7 billion cubic feet of gas a day. How much more the U.S. LNG export potential can grow is covered in a report released this week by energy analytics firm RBN Energy.
 
The report, “LNG is a Battlefield — The Prospects for U.S. Success in Overseas Markets,” said that despite gas becoming the “hydrocarbon of choice for power generation, heating and many other uses across much of the global energy market … LNG must not be cost-prohibitive.” And until LNG demand grows as expected over the long term, the short-term view looks week. “A lull in demand growth — coupled with new liquefaction capacity — has bloated LNG supplies and slashed prices in the past year.”
 
Even with low oil prices, which have dropped the oil-linked price charged for LNG under traditional long-term supply contracts, “the U.S. should remain a cost-competitive supplier to international markets,” the report said. A lot will come down to price, it said. “Returns on investment in U.S. LNG export infrastructure as well as the extent of future expansion depend on price competitiveness in international markets.”
 
 
Buyers’ market pushes Australia LNG developer to focus on costs
 
(Reuters; Aug. 19) – Australia’s largest independent oil and gas producer Woodside Petroleum said it has stepped up marketing for its proposed Browse floating liquefied natural gas project, but conceded it is facing a buyers' market against a backdrop of weak oil prices. “The project will need to deliver an acceptable return at the current expectations of oil pricing, meaning it needs to break even at the sorts of oil prices we’re seeing in the marketplace today,” CEO Peter Coleman said.
 
Despite some analysts expecting a delay, the company is still targeting a final investment decision on Browse in the second half of 2016, having moved into the front-end engineering and design phase this year. Woodside has been able to cut cost estimates by 20 to 30 percent for the subsea and pipeline pieces of the long-delayed project off Western Australia, which analysts previously estimated at $45 billion when it was planned with a land-based liquefaction plant.
 
The partners are now focused on driving down costs so Browse can be profitable even if oil fails to rebound, and will be marketing the gas aggressively this year. One of those partners, Shell, whose floating LNG technology is the template for Browse, recently said it was far from certain the partners would approve the project. 
 
Gazprom faces serious challenges, including all-time low production
 (Agence France Presse; Aug. 16) - Facing a cold shoulder from Europe and increased competition at home, Gazprom has struggled to assert dominance on the global energy market, prompting speculation the natural gas giant could have no choice but to splinter. With the Russian economy slipping into recession on the back of lower oil prices and Western sanctions over Ukraine, the economy ministry has predicted Gazprom would produce 14.6 trillion cubic feet of gas this year, an all-time low for the company.
 
Gazprom's market capitalization has crashed in recent years. Before the 2008 global financial crisis, the company was worth over $300 billion. Its value now hangs around $50 billion, trailing far behind other major energy companies. "Gazprom is confronted with the greatest challenge in its history," said Chris Weafer, a partner at the Macro Advisory consultancy firm. "What remains to be seen is whether Gazprom becomes an appendage of the foreign ministry or evolves into a global energy company."
 
Gazprom is grappling with a series of issues, including its recent loss of the Ukrainian market, Europe's energy diversification and increased competition at home. And without U.S. technology blocked by sanctions, experts fear that Russia will not be able to exploit its Far East resources that had been destined for LNG exports. "This is bad news for Russia because the production of LNG is a strategic objective in the region," said Valery Nesterov, an analyst at Sberbank Investment. Some analysts have said Gazprom could benefit from dividing into smaller entities that would be more efficient and transparent.
 
 
Gas supply a question for Canada’s East Coast LNG export projects
 
(Globe and Mail; Canada; Aug. 17) - Two proposed liquefied natural gas projects on the Nova Scotia coast have received approval from Canada’s National Energy Board to export LNG, but they are counting on U.S. producers to supply much of the gas. In that case, they likely need new pipeline capacity to move that gas into New England to provide the supply to underpin their ambitious plans. Pieridae Energy and Bear Head LNG each received Canadian approval of their gas export license late last week.
 
The two projects are in addition to two others proposed for Nova Scotia and New Brunswick, all of which count on Canadian and U.S. gas making it north to the proposed liquefaction plants. “The big questions are: Where is the gas going to come from, and how are you going to get it to an LNG facility,” Fred Bergman, senior policy analyst with the Atlantic Provinces Economic Council, said in an interview.
 
Nova Scotia’s offshore fields have supplied gas to Canada’s Maritimes provinces and the U.S. Northeast for years, but will begin a steep decline later this decade unless companies develop new gas reserves. Another option for the LNG plants is Spectra Energy’s plan to build a new gas pipeline from the prolific Marcellus Shale field in Pennsylvania to New England, where it can be moved into Nova Scotia. But that project has run into stiff opposition in Massachusetts. 
 
Oman struggles with growing domestic demand vs. LNG exports
 
(Platts; Aug. 18) - Over the past two years, Oman has quietly expanded the number of countries to which it exports LNG to well beyond those with which it has long-term supply contracts. In a state that needs increasing volumes of gas to fuel its oil and heavy industrial sectors, this raises far-reaching questions about energy strategy and allocation of gas resources to exports vs. domestic needs.
 
Oman’s government two decades ago saw LNG exports as an important means of diversifying the economy and moving state revenues away from a heavy dependence on oil exports. A total of 10.4 million metric tons per year of LNG production and export capacity was developed, with plants commissioned in 2000 and 2005. Oman signed long-term supply contracts with Japanese, South Korean and Spanish buyers, which in some cases were also the project shareholders.
 
Oman planned to negotiate additional contracts with new customers, predominantly in Asia. However, industrial expansion and rampant population growth in Oman, as elsewhere in the Arabian Peninsula, meant that securing domestic gas supply quickly trumped exports as a government priority, leaving the LNG plants significantly underutilized. In 2011, senior government officials suggested that at least one of the plants might be decommissioned once the long-term supply contracts expire.
 
 
 
Top LNG carrier owners join up to market short-term charters
 
(Reuters; Aug. 18) - Three of the world’s top liquefied natural gas carrier owners have decided to market 14 vessels jointly on a spot-charter basis, part of a new pooling arrangement aimed at cutting operating costs in a depressed market. The pool, consisting of eight modern vessels from Norwegian shipper Golar LNG and three each from Gaslog, headquartered in Monaco, and Dynagas, based in Greece, will commence chartering operations in September, a statement from Gaslog said Aug. 18.
 
A glut of newly built LNG vessels emerging from shipyards in Asia has been one factor driving down daily charter rates to around $30,000 per day, compared with $130,000 two years ago. "The LNG Carrier Pool allows the participating owners to optimize the operation of the pool vessels through improved scheduling ability, cost efficiencies and common marketing," the statement said. The vessels will seek employment exclusively for charters of 12 months or less.
 
The move reflects a growing LNG market shift toward short-term trading of cargoes as prices come under pressure and new production from Australia and the United States is expected to add to oversupply. "The real driver primarily is the fact that we are seeing the short-term shipping market growing substantially. In the year to date there have been 97 short-term vessel fixtures versus around 78 in 2014," said Gaslog CEO Paul Wogan. "It's becoming a much more important piece of the (LNG) shipping market.”
 
 
 
LNG spot market in Asia back up to $8
 
(Platts; Aug. 18) - The Platts LNG Japan-Korea Marker for September deliveries averaged $8.007 per million Btu July 16 – Aug. 14, up 8.3 percent from August, the highest month-on-month gain so far this year, on renewed buying interest and waning availability of spot cargoes in Asia. It was the highest monthly average price since February, when it was $9.911. However, it’s the seventh consecutive month that prices have hung around $7 to $8 since falling from the $9-to-$10 level in January-February.
 
With northeast Asian end-user demand still tepid and Indian importers reluctant to pay more than $8, the market appeared to have hit a ceiling. Even with the slight boost to $8, year-on-year the marker for September deliveries was down 25.2 percent compared with the average price a year ago at $10.702.
 
 
B.C. communities want share of energy project revenues
 
(Globe and Mail; Canada; Aug. 17) - The indirect cost of workers commuting to energy-sector jobs has prompted 21 local governments in Northwest B.C. to band together and press the province for a greater share of project revenues. Representatives met in Terrace, B.C., on Aug. 15 to formalize the Resource Benefits Alliance. Stacey Tyers, the group’s chairwoman, said workers used to move their families into northwestern B.C. towns for new projects but now most people fly in and out for a job.
 
“[Workers] use our services, they impact our social systems while they’re here. They use our hospitals … but there’s no contribution to the community in that regard,” said Tyers, who is also chairwoman of the Regional District of Kitimat-Stikine. She said the “unprecedented” agreement between communities empowers them to work on their shared goal of funneling provincial cash from energy projects back to the communities.
 
The alliance wants a commitment based on a percentage of project profits, and they’ve given themselves three months to get the province to start negotiations. The alliance calculated a 3 percent revenue share would produce $1 billion to cover infrastructure, mitigate social impacts and develop a legacy fund. The communities have amassed an infrastructure deficit of $500 million, Tyers said, as workers stretch capacity to the limit for roads, sewers and water but take their wages back to their home communities.
 
 
B.C. LNG hopeful starts site evaluation work
 
(North Coast Review; BC; Aug. 18) – Chinese-owned Nexen Energy has taken another step in the early days of its proposed liquefied natural gas export terminal on Digby Island, in front of Prince Rupert, B.C., with its provincial application to begin evaluating the site for potential development. The Aurora LNG project applied Aug. 5 to the B.C. Ministry of Forests, Lands and Natural Resources for an investigative-use license for geotechnical and geophysical studies.
 
If approved, the first phase of work would occur before the end of September, with the second phase to continue through the end of the year. Nexen would set up a temporary staging area for the work, transporting crews and equipment to the site by water taxi, boat, barge or helicopter.
 
The project has been estimated at about $20 billion to build a plant with capacity of 10 million to 12 million metric tons per year. Nexen has talked of making an investment decision on the project in 2017. The company has started its application process with the B.C. environmental assessment office. In addition to Nexen holding a 60 percent stake, two Japanese companies hold 40 percent of Aurora LNG. The proposal is one of almost 20 LNG hopefuls looking at supplying B.C. gas to overseas markets.
 
 
Oregon community debates LNG project workforce housing camp
 
(The World; Coos Bay, OR; Aug. 17) – The North Bend (Ore.) planning commission has extended the public comment period on Jordan Cove LNG's workforce housing camp application an additional 10 days. Following the commission’s contentious hearing July 20 on the conditional-use permit for the housing camp, city staff received an abnormally large amount of written testimony. They weren't able to get it all online until late Aug. 14, and the commission unanimously agreed Aug. 17 to keep the record open until Aug. 27.
 
After that deadline, Jordan Cove will have until Sept. 3 for its rebuttal. The commission will meet Sept. 21 to issue a decision, which could be appealed to the North Bend City Council. Meanwhile, the community debate continues. Boost Southwest Oregon members turned out Aug. 17 to support the project. “This area was built on industry, not on tourism. And I love tourism, it's really great if we can survive on that, but it's industry that builds this city, so I'd just like to see more of it,” said Bruce Payne, of Coos Bay.
 
The anti-LNG crowd also showed up, ready to make their case against the housing camp for the proposed liquefied natural gas plant and export terminal. Simpson Heights resident Ron Wiggins questioned the city sewer system’s ability to take on the camp with almost 1,900 workers.
 
 
Santos on target for September start-up of Australia LNG plant
 
(Sydney Morning Herald; Aug. 18) - Santos has marked a major milestone at its $18.5 billion liquefied natural gas project in Queensland, Australia, that firms up its start-up target for around the end of September, but its shares softened further as the market remained preoccupied by funding concerns and the weak oil price. Santos reported that it had introduced coal-seam gas into the first LNG production unit at its GLNG project on Curtis Island in Gladstone, signaling the huge project is within weeks of start-up.
 
It will now move to start up the pre-treatment units for the gas, then chill down the liquefaction units to start making LNG. Santos CEO David Knox said the upstream coal-seam gas fields are now "fully operational," while the plant is the final stages of commissioning. Construction at the flagship project has been underway for the past 4½ years. At full production, the plant will be capable of making 7.8 million metric tons of LNG per year. Partners include Malaysia’s Petronas, Korea Gas and France’s Total.
 
 
Israel reaches deal for development of offshore gas field
 
(Reuters; Aug. 16) - Israel's Cabinet Aug. 16 approved a deal with a U.S.-Israeli consortium that would move forward development of the huge Leviathan offshore gas field. The controversial deal reached late last week, which Prime Minister Benjamin Netanyahu believes will bring Israel several billion dollars in the coming years from development of Leviathan and two smaller fields, still needs parliamentary approval.
 
The deal will allow Texas-based Noble Energy and Israel's Delek Group to keep ownership of the largest offshore field, Leviathan, with an estimated 22 trillion cubic feet of gas. In return for retaining their stakes in Leviathan, the two companies are required to sell off other assets, including stakes in another large deposit called Tamar. Critics of the plan said the government gave into most of the companies' demands and left Noble and Delek with too much power by controlling most of Israel's gas reserves.
 
Israel, which has gone from an energy-dependent country to a potential gas exporter, currently receives its gas for electricity generation from Tamar, which began production in 2013. Leviathan is slated to begin production in 2018 or 2019 and expected to supply billions of dollars of gas to Egypt and Jordan in addition to supplying Israel. As part of the deal, the companies agreed to invest $1.5 billion in the next two years toward developing Leviathan, and also agreed to lower domestic gas prices for several years.
 
 
U.K. to open areas for fracking; opponents vow ‘hundreds of battles’
 
(The Guardian; UK; Aug. 18) - Large areas of Yorkshire, the northwest and the east Midlands are to be opened up to fracking after the British government announced it will offer a fresh round of licenses for oil and gas exploration, covering 1,040 square miles. Areas near Leeds, Sheffield, Lincoln and Nottingham are to be offered to companies in an expansion plan that green groups predicted would trigger “hundreds of battles” over the future of the countryside.
 
Ineos, the Anglo-Swiss chemicals group that wants to lead the U.K.’s shale gas industry, was awarded three licenses and said the latest ones could pave the way for gas to be pumped by 2020. The applications are subject to approval by local councils, which will have 16 weeks to decide. The government promised last week to step in if councils fail to keep to the deadline.
 
The government’s promise to fast-track shale gas in the U.K. comes on the back of strong opposition by environmental groups and a decision by the Lancashire county council to reject an application by exploration firm Cuadrilla on the grounds of visual impact and noise. Both Scotland and Wales previously imposed moratoriums on fracking for shale gas.
 
 
EIA lowers its U.S. oil forecast to $49 this year, $54 in 2016
 
(U.S. Energy Information Administration; Aug. 19) - Amid high uncertainty in the global oil market, the U.S. Energy Information Administration has lowered crude oil price forecasts in its Short-Term Energy Outlook, expecting West Texas Intermediate crude to average $49 per barrel in 2015 and $54 in 2016 — $6 and $8 lower than forecast in last month's energy outlook.
 
Concerns over the pace of economic growth in emerging markets, continuing (albeit slowing) supply growth, increases in global oil inventories, and the possibility of increasing volumes of Iranian crude oil entering the market contributed to the changed forecast, the EIA said.
 
 
Pennsylvania looking at more revisions to oil and gas rules
 
(Pittsburgh Post-Gazette; Aug. 18) - Pennsylvania environmental regulators are making a list of items they want to see in another major revision to the state’s oil and gas rules, just as they near the end of a contentious rule-drafting process that will have taken half a decade when it is finished next year. In an Aug. 12 conference call to announce the final rules package for aboveground oil and gas activities, Department of Environmental Protection Secretary John Quigley cast his comments repeatedly toward the future.
 
“This is not the end of the process,” he said. “There is more study needed on additional measures, and there will be more rule-making in a separate process, to ensure responsible drilling and protection of communities, public health and the environment.”
Regulators gave few details about what the next round might hold, but they signaled some areas. Quigley said the agency will release more information about the potential scope of the next regulatory package, probably between October and December.
 
Rules to control noise from well sites — which the department drafted then dropped from the current package, calling them “premature” — might become part of a future regulation after the agency develops a best-practices guide, state officials said. Quigley said the agency is “looking in particular at public health protections” as it compiles a list for the next regulatory package “because that is certainly one of the areas of biggest concern.” One source said air quality issues would be covered in the next round.

 

Categories:

8-18-15 Outrageous Decisions

18 August 2015 3:00pm

Bill Walker, governor, Alaska, Standard and Poor's, downgrade, oil, taxes, john donne, ernest hemingway, for whom the bell tolls, Photo by Dave HarbourGovernor Bill Walker's Outrageous Decisions

by

Dave Harbour

RATING AGENCY WARNS ALASKA: A VERY SIGNIFICANT AND VERY BAD OMEN. THIS ACTION WILL AFFECT THE COST OF MONEY AND, THUS, INCREASE ALASKA'S DEFICIT.  WARNING OF A RATING DOWNGRADE PORTENDS MORE BAD NEWS TO COME ABSENT A SIGNIFICANT TURNAROUND IN STATE POLICY.  -DH

STORY BY ANDREW JENSEN, JOURNAL OF COMMERCE

Standard and Poor’s Ratings Services lowered the outlook on the State of Alaska’s credit rating from “stable” to “negative” on Aug. 18, and gave politicians one year to reorganize the fiscal house before the downgrades accelerate.

Standard and Poor’s wrote that the current budget deficit is inconsistent with the state’s “AAA” rating on its general obligation bonds and its “AA+” on appropriation-backed bonds, but cited the state’s still healthy budget reserves as a bridge that could maintain the high ratings.  (READ MORE HERE).

Note: Circa. 2007 your author (i.e. a regulatory commissioner at the time) had the responsibility of briefing approximately 20 investment companies and the three rating agencies in NYC on Alaska's fiscal challenges.  Approximately two dozen of those professionals have remained on our email alert list over the years.  These analysts are the best and the brightest in their financial fields and Alaskans should never be so provincial as to think that what is said and done here is not noticed by investors, analysts and lenders in New York and throughout the world.  

Alaska is not an Island unto itself....

-dh

Immediately after the November election Governor-elect Bill Walker (NGP Photo) assured assembled members of the Resource Development Council for Alaska that he was not their enemy.  

We suspected his poor performances over the years in a quixotic representation of the so-called "Port Authority" would be reflected in his governorship.  

But, we held out hope that performance of his new duties would match his significant charisma and public speaking talents.

Alas, to this watcher of Alaska's slumping economy, the new Governor has engaged in a pattern of poor decisions.

He announced opposition to the Alaska Gasline Development Authority (AGDC) concept of being a back up plan to deliver Alaska North Slope (ANS) Gas to the state's residents.

Then, he began to criticize the large gas transportation project aimed at both monetizing ANS gas through exports and providing taps along a pipeline right-of-way to residents.

We commend the major Alaskan investors/oil producers and Trans Canada for maintaining a stiff upper lip and good attitude as they continued their multi million dollar effort to prove the feasibility of the Ak-LNG project amid a volatile world economy and a failing and unsustainable Alaska economy.

Meanwhile, appearing to do everything possible to discourage the state's largest investors, he began touting his ability to use AGDC as a vehicle for competing with the major Ak-LNG project.  Many of us were bewildered at the strategy, or lack thereof, that could lead a Governor to support investment in one project, then advocate using another state organization to compete with it.  
 
Today, we are not bewildered by such decisions; we conclude them to be outrageous behavior by a public official.
 
In the early part of the year, the Governor began to hint that increased industry taxes might be part of the answer to Alaska's deficit budgeting.  Most savvy observers have long observed that in order for Alaska to become solvent again it must encourage more oil development, not discourage it.

With Alaska failing to balance its budget or even enact significant cuts in its spending, the state's governor proposed even more deficit spending: expanding Medicaid.

Following the Legislative session, earlier this summer, he vetoed legislative expenditures to fund tax credits lawfully accrued by oil producers for investments in the state.

He then championed expanded state involvement in creating a natural gas utility for Fairbanks but urged his 'independent board appointees' to the Alaska Industrial Development and Export Authority (AIDEA) to switch gas sources.  AIDEA now seeks to obtain expensive natural gas reserves (i.e. 3x higher than current, Lower 48 prices) from the limited Cook Inlet supplies serving the major population in South Central Alaska while abandoning the world class reserves on the ANS where gas could be obtained cheaper.

As we noted in yesterday's posting, Walker is now beginning to threaten the oil industry with a reserves tax -- an outrageous and hostile act that would tax private sector energy investors for NOT producing gas even if market timing indicated caution and prudence in project sanctioning.

Today, we note that Standard and Poor's has begun the process of downgrading Alaska's credit rating (i.e. story right column above).  Three ANS oil industry taxes and a royalty payment fund about 90% of Alaska's state government operating budget and support over a third of the state's economy.  The 40-year-old Prudhoe Bay field responsible for most of that wealth has been declining in recent years at a 5-7% annual rate.  The trans-Alaska pipeline transporting that crude oil to market is nearly 3/4 empty.  Major transportation difficulties are now on the horizon and without significantly increased oil throughput, the pipeline could shut down within just a few years--or sooner.

Meanwhile, Alaska will have burned through all of its major savings accounts within the next two-three years.  While a $55 billion Alaska Permanent Fund is a tempting source of cash, the state's Constitution prevents easy access to it.  In any case, spending that savings would not lead to a sustainable economy; it would just prolong the point of no return.

On top of the fact that the state is not earning what it spends...using its savings...and its governor wants to increase spending...three other factors portend economic disaster for Alaska absent masterful management of money and resources: 1) A nearly $10 billion unfunded liability in the State's employee retirement programs; 2) a steadily declining level of oil production; and 3) an average oil price this summer that is half of what it was last summer.

Were we advising the Governor, we would:

  • urge action that would support investment in the state--and honest partnership with investors.
  • We would significantly cut spending in America's highest per capita spending and debtor state.  
  • We would seriously attempt to wean the highest per capita population of not-for-profit corporations in America from state government largess.  
  • We would cut virtually all capital spending, save for maintenance (i.e. which really is in the operating category).
  • We would undertake whatever legislative changes that could lead to not overspending on public employee overhead.  
  • We would also cut all higher education spending that worked counter to Alaska's resource development priorities (i.e. mandated by Alaska's constitution), and
  • we would energetically fight the Federal government every step of the way as it, and its environmental allies, seek to scuttle the 49th ship of state.

Somehow, we think this Governor to be incapable of such decisiveness, though we are still open to being pleasantly surprised.  But we'd better be surprised quickly because a 'drop dead' date quickly approaches and to survive, Alaska needs a major policy overhaul.

If this doesn't happen, we are mindful of John Donne's 1624 observation, later made more famous by Ernest Hemingway, who predicted and then lived the reality of really tough times: the Spanish Civil War.  We hope Governor Bill Walker takes history to heart, for he, too, is no island unto himself.   Outrageously bad decisions can not only create a bad governor's legacy, but can forever injure the economic future of an entire state, our hopeful offspring and coming generations of our descendants.

"No man is an island, entire of itself; every man is a piece of the continent, a part of the main. If a clod be washed away by the sea, Europe is the less, as well as if a promontory were, as well as if a manor of thy friend's or of thine own were: any man's death diminishes me, because I am involved in mankind, and therefore never send to know for whom the bell tolls; it tolls for thee."  -John Donne

Amen.


 

Categories:

8-17-15 Feds Permit Half A Loaf (adding many conditions) For Shell's Arctic Program

17 August 2015 11:46am

Breaking News: Bureau of Safety and Environmental Enforcement (BSEE) Director Brian Salerno today announced that Shell has received approval of one Application for Permit to Modify (APM) to conduct exploratory drilling activities into potential oil-bearing zones offshore Alaska at one of the wells at the Burger Prospect, Burger J.  Read More....


OUTRAGEOUS: Alaska's "Socialist Governor In Sheep's Clothing" Begins To Bear All.  See Tim Bradner's piece in the Alaska Journal of Commerce.  We will have plenty of comment tomorrow.  -dh

"Gov. Bill Walker is still pushing North Slope producers for a larger share of the Alaska LNG Project, and may promote a state gas reserve tax as leverage against the companies, state legislative leaders briefed recently on the governor’s plans said in interviews."


 

After extensive review and under a robust array of safety requirements, Bureau of Safety and Environmental Enforcement (BSEE) Director Brian Salerno today announced that Shell has received approval of one Application for Permit to Modify (APM) to conduct exploratory drilling activities into potential oil-bearing zones offshore Alaska at one of the wells at the Burger Prospect, Burger J.  The company remains limited to the top section of the Burger V well.

Shell submitted an APM on August 6 to modify the Burger J Application for Permit to Drill (APD), which previously restricted Shell from drilling into oil-bearing zones since a capping stack was not on hand and deployable within 24 hours, as required by BSEE.  A capping stack is a critical piece of emergency response equipment designed to shut in a well in the unlikely event of a loss of well control.  The capping stack, staged on the vessel M/V Fennica, is now in the region and capable of being deployed within 24 hours.

“Activities conducted offshore Alaska are being held to the highest safety, environmental protection, and emergency response standards,” said Salerno. “Now that the required well control system is in place and can be deployed, Shell will be allowed to explore into oil-bearing zones for Burger J.  We will continue to monitor their work around the clock to ensure the utmost safety and environmental stewardship.”

Shell is still prohibited from simultaneous drilling at Burger J and V, in accordance with the approved APDs, which define limitations related to marine mammal protection consistent with requirements established by the U.S. Fish and Wildlife Service (USFWS).  Consistent with regulatory requirements, a USFWS Letter of Authorization (LOA) issued on June 30 requires Shell to maintain a minimum spacing of 15 miles between active drill rigs during exploration activities to avoid significant effects on walruses in the region. 

Under the LOA, Shell is also required to have trained wildlife observers on all drilling units and support vessels to minimize impacts to protected species.  Shell must stay within explicitly outlined vessel operating speeds and report daily regarding all vessel transits.

To ensure compliance with this and other conditions, BSEE safety inspectors have been present on the drilling units Noble Discoverer and Transocean Polar Pioneer 24 hours a day, seven days a week to provide continuous oversight and monitoring of all approved activities.  The inspectors are authorized to take immediate action to ensure compliance and safety, including cessation of all drilling activities, if necessary.  BSEE experts have been engaged in thorough inspections of both drilling units and Shell’s response equipment.

The Burger Prospect is located in about 140 feet of water, 70 miles northwest of the village of Wainwright.

BSEE’s close oversight of drilling operations in the Chukchi Sea this year is consistent with its continuing efforts over the past five years to upgrade safety standards to improve the safety of offshore oil and gas development.  In addition, building on the lessons learned from Shell’s 2012 drilling operations in the offshore Arctic and incorporating the recommendations of a Departmental review of those activities, the Bureau of Ocean Energy Management (BOEM) on May 11, 2015, provided conditional approval of Shell’s Exploration Plan, which established numerous additional stringent safety requirements:

·         All phases of an offshore Arctic program – preparations, drilling, maritime and emergency response operations – must be integrated and subject to strong operator management and government oversight, as detailed in Shell’s Integrated Operations Plan;

·         A shortened drilling season to allow time for open-water emergency response and relief rig operations late in the drilling season before projected ice encroachment;

·         Capping stack must be pre-staged and available for use within 24 hours;

·         A tested subsea containment system must be deployable within eight days;

·         The capability to drill a same season relief well;

·         A robust suite of measures to avoid and minimize adverse impacts to marine mammals and their habitat, impacts to Native subsistence activities, and other environmental impacts; and

·         Drilling units and their supporting vessels must depart the Chukchi Sea at the conclusion of each exploration drilling season.

The Department has also published proposed regulations to ensure that future exploratory drilling activities on the U.S. Arctic Outer Continental Shelf are done safely and responsibly, subject to strong and proven operational standards andShell’s Chukchi Sea operations are being held to many of standards in the proposed regulations.

NGP Readers may find the APM and decision letter here.

Categories:

8-14-15

14 August 2015 10:02am

Gas offers have come in - 08/16/2015 (Full story) Petroleum News by Alan Bailey.  The Interior Energy Project, an Alaska Industrial Development and Export Authority initiative to bring affordable energy to Fairbanks and the Alaska Interior, has passed a couple of milestones, as the project team assesses bids for the supply of gas from the Cook Inlet basin and proposals for the sh....  

(Comment: We remain wary about the reality of Walker Administration efforts to block a free enterprise sale of LNG facilities so that politicians can force feed natural gas prices to Interior Alaska.  

It is the recipe for corruption and chaos and, really, serves as pretext for the Walker Administration to pursue other 'controls over the means of production', such as political control over the Alaska North Slope gas transportation project.  

And, don't forget that the Administration's answer to the monumental operating budget deficit is trending toward higher taxes.  

This Administration is, more and more, demonstrating a dangerous fascination with economic socialism, the ultimate, disastrous outcome of which cannot be concealed by any amount of charisma or populism.  -dh)

Categories:

7-21-15 Presidential Candidate Kasich Wants High Oil Taxes To Cover Ohio Overspending

21 July 2015 7:16am

Calgary Herald by Alicjaa Siekierska.  Carbon & dust emissions from oil sands activity stimulates forest growth.

 “...a pillar in President Obama's energy legacy of failure.”  

-Congressman Rob  Bishop

 

 *     *     *

BP Hires Vets

 

Consumer Energy Alliance Relevant Energy Links

 


John Kasich, presidential candidate, ohio governor, severance tax, oil tax, predatory taxation, failure to communicate, tax and spend

Commentary: Today, 2-term Ohio Governor John Kasich announced his presidential bid (Photo credit: LA Times).  He began his term with a multi-billion dollar deficit and now enjoys a $2 billion surplus.  

But Kasich's embrace of Medicaid could put more pressure on the budget every year as federal support diminishes.

Aside from freedom itself, energy production is the basis of wealth and prosperity in America.

Kasich has recently reflected a propensity to offset tax decreases and spending with higher sales and oil & gas severance taxes.  (Here is our earlier report and commentary.)

Kasich has many admirable qualities: good family man, plain talking, faith, patriotic and more....  

Sarah Palin, Alaska governor, oil tax, Kasich, Photo by Dave HarbourBut some of our readers will detect in his presidential announcement a turn toward populism reminiscent of former Alaska Governor Sarah Palin's (NGP Photo) anti-industry rhetoric.  After all, big oil has fewer voters than everyone else who enjoys Kasich's income tax decrease and the beneficiaries of increased Medicare subsidies.

And his failed push for higher Ohio energy taxes could be a troubling characteristic of a new president, a propensity that could lead to a further weakening of America's job force, wealth, national security and future prosperity.  

-dh   


Weak energy production on federal land will serve as “a pillar in President Obama's energy legacy of failure,” the top Republican on the House Natural Resources Committee said.

Rep. Rob Bishop (R-Utah) slammed the Obama administration over a Friday report from the Energy Information Administration (EIA) that shows energy production on federal and Indian lands increasing just 0.2 percent in 2014. 

Bishop said the government should encourage more energy production on those lands, especially given the prospect of Iranian oil entering the market after sanctions on the country are lifted.

“The government's report on energy production on federal lands is astonishingly dismal,” he said in a statement. “The EIA found minuscule growth in oil and natural gas production on federal land — less than a percentage point — the same week that the President welcomes Iranian oil to the market with open arms.”

The EIA reported an overall decrease in energy production on federal land in 2014, primarily in natural gas offshore and in Wyoming. That decrease was offset by a 5.7 percent increase in fossil fuel production on Indian land and a 7 percent rise in oil production, primarily in the Gulf of Mexico, North Dakota and New Mexico.

The small increase in federal land production comes as energy extraction on private land is booming. According to an April Congressional Research Service report, production of oil (an 89 percent increase since 2010) and natural gas (37 percent increase) on private land has surged even as federal land production has fallen.  

“Producers operating on private and state lands are powering our energy economy, but we deserve better from the federal government,” Bishop said. 

“The Obama administration should be expanding access to federal lands and offshore waters and opening up American oil markets — not only for the sake of our economy but for the sake of national security.”


CEA's Energy News Links:

Washington Examiner: Fight over Atlantic drilling wells up *CEA Mention
The governors of all those states want offshore drilling. So, too, do most of their federal lawmakers. That's certainly true. A May poll by industry group Consumers Energy Alliance found 85 percent of the state supports offshore drilling, viewing it as a potential boon to the economy.
 
ShaleMag: Energy Day *CEA Mention 
With the need for students to be knowledgeable in science, technology, engineering and mathematics (STEM) more important than ever, the Consumer Energy Alliance (CEA) and Consumer Energy Education Foundation (CEEF) are hosting the fifth annual Energy Day on Saturday, October 17, from 11 a.m. to 4 p.m. at Sam Houston Park in downtown Houston.
 
Associated PressObama plans Alaska trip for climate change conference
The White House has confirmed that President Obama will travel to Alaska next month for a climate change meeting. White House spokeswoman Hallie Ruvin in a statement says the president on Aug. 31 will visit.
 
MSNBCWhy Shell had the worst week ever
This should have been one of Shell’s best weeks ever. Instead, it shaped up like the corporate equivalent of “The Hangover Part III.” And a happy ending is nowhere in sight.
 
Fuel FixShell-contracted drill ships begin final Arctic journey
Two Arctic drilling rigs have sailed away from Dutch Harbor, Alaska, beginning the final leg of their journey to the Shell’s drilling sites in the Chukchi Sea. The Noble Discoverer left Dutch Harbor on Thursday, and the Transocean Polar Pioneer followed suit on Friday. Both will take about a week to reach their destination: Shell’s Burger prospect in the Chukchi Sea.
 
Alaska Dispatch News: Cold receptions for Shell in Lower 48 ports mean opportunity for Alaska
A dynamic event is underway in Arctic Alaska today: one that, if successful, could have a profound effect on our state's economy. Shell Alaska is preparing to drill for oil this summer in Alaska's offshore continental shelf. To date, Shell has expended over $7 billion in gearing up for their effort. They anticipate substantially advancing their delineation effort by the end of this year's drilling season.
 
UPI: TransCanada uses legacy to explain touted benefits of Keystone XL
The shipment of the 1 billionth barrel of oil through the Keystone oil pipeline system shows commitment to U.S. energy security, TransCanada said.
 
Reuters: Canada provinces agree to strategy on pipelines, climate change
Canada's provinces reached a long-sought deal on Friday over an energy plan for the country, agreeing broadly to curb greenhouse gas emissions while also promoting the use of pipelines.
 
Washington ExaminerBills on tap from House, Senate energy panels
The energy committees of both chambers of Congress expect to offer draft energy bills before the August recess, committee leaders said. The bills are expected to cover oil and natural gas infrastructure expansion, energy efficiency and other concerns.
 
Fox News: EPA 'secret science' under the microscope as GOP lawmakers seek ban 
The Environmental Protection Agency for years has issued costly clean air rules based, in part, on two '90s-era studies linking air pollution with death. But, critics say, the same agency has stymied efforts to access the data behind them. The transparency concerns have Republican lawmakers on a new campaign to end the use of what they dub "secret science."
 
Roll Call: Iran deal may give Americans a break at the gas pump
The tentative deal designed to limit Iran’s nuclear program led to a quick — though modest — decline in oil prices, raising the possibility American drivers may see a prolonged break from high gasoline prices and creating an opening for Republican lawmakers to step up efforts to end a ban on exporting oil produced in the U.S.
 
Roll Call: API: Iran deal another signal for U.S. to end crude-exports ban
The congressional campaign against the ban on crude oil exports is gaining momentum after the U.S. and other countries reached a tentative nuclear deal with Iran, according to the American Petroleum Institute. "By lifting self-imposed sanctions, we can give U.S. producers access to global markets and protect our competitive edge," said Eric Wohlschlegel, a spokesman for API.
 
Fox News: As US energy output surges, Republicans lead effort to lift decades-old oil export ban
Congressional Republicans are leading a bipartisan effort to lift a decades-old ban on oil exports, arguing the recent surge in domestic-energy production and other factors have pushed the embargo past its prime.
 
CNN: Super-charge the solar power boom  
There's a solar power boom in America. But so far, not enough Americans are seeing the benefits of clean energy.
 
Associated Press: More unused oil, gas wells linger without permanent seals increasing risk
Five years after the Obama administration promised to move swiftly to permanently plug unused oil and gas wells in the Gulf of Mexico, even more shafts are lingering for longer periods with only temporary sealing, an investigation by The Associated Press shows.
 
Fuel Fix: Schlumberger CEO: New technology appetite growing amid oil downturn
The CEO of Schlumberger says American oil producers are purchasing a lot more new technology in this year’s oil downturn than in previous rough patches, with new tools making up almost a quarter of the company’s revenue. That’s because the oil bust happens to intersect with a change in what the oil companies want to get out of new technology.
 
The Oklahoman: Investors keep funding oil, natural gas development
A survey this month from the Federal Reserve of Kansas City found that energy companies reported that private equity was more available than it had been in recent months, while financing from banks and other sources were less available. “They’re still confident in the long-term prospects for the oil industry.
 
The Oklahoman: A quiet milestone that's worthy of celebrating
But it also makes sense to use more of the cleaner natural gas, along with policies that encourage the development of renewables, the conversion of more vehicles to compressed natural gas and the facilitation of natural gas exports. Most of these aren’t on the agenda of our garden-variety environmentalist. Let him tilt at his windmills. We’ll celebrate the gas milestone.
 
MIT Technology Review: Where is the global shale revolution?
The United States is not alone in having massive shale gas resources: shale formations rich in gas can be found all over the world. But so far no other country has come close to replicating the U.S. boom that has led to relatively cheap natural gas and helped curb yearly carbon dioxide emissions.
 
OilPrice.com: Can U.S. Nuclear Plants Operate For 80 Years?
The nuclear industry in the United States has been at a standstill for several decades. After an extraordinary wave of construction in the 1960s and 1970s, the nuclear industry ground to a halt. A confluence of events killed off new construction, including high interest rates, cost overruns, delays, and the Three Mile Island incident that scared the public and turned it against nuclear power.
 
The Hill: Court dismisses Oklahoma lawsuit against Obama climate rule
A federal judge on Friday dismissed Oklahoma’s second lawsuit against the Obama administration’s climate rule for power plants.
 
Houston Chronicle: Oil industry critical of planning offshore drilling rules
The oil industry is taking aim at an Obama administration plan to better safeguard offshore exploration, arguing the Deepwater Horizon-inspired proposal imposes costly and "ill-advised" mandates that could make some wells impossible to drill.
 
BloombergAnalysis: Saudi Arabia oilfield is a Bakken competitor
Oil production in the Bakken Shale costs nearly six times as much per barrel as the Ghawar oilfield in Saudi Arabia. This makes the Saudis a formidable competitor, although production is affected by the country's budget concerns, which seek a market price of at least $89 per barrel.
 
The Union: HF and the California drought
There are certain measures being considered in California that would ban fracking or at least keep the water from being put back into the water supply. Groups like the Natural Resource Defense Council and Environment California are working to get voters motivated and to put pressure on the state’s legislators. Get involved or even send a letter to your representative and urge them to deal with this fracking issue.
 
Imperial Valley News: Toward cheaper water treatment - HF matters
Hydraulic fracturing, or “fracking,” produces a lot of wastewater. Drilling one well requires millions of gallons of water that’s injected into the ground to loosen rocks and release oil. While some is reused, much of the produced water is discarded into deep injection wells, and clean water is purchased again and again.
 
The Denver Post: Stop the EPA's carbon power grab, Colorado
When the U.S. Supreme Court remanded the Environmental Protection Agency's (EPA) Mercury and Air Toxics Standards recently, it set a clear precedent that costs matter and that the EPA does not have a blank check on the wallets of energy consumers. The EPA's claim that the $10 billion pricetag was "irrelevant" failed to withstand judicial review.
 
Durango Herald: Gas overtakes coal
Energy companies in Southwest Colorado say hydraulic fracturing and looming carbon-pollution regulations are responsible for natural gas overtaking coal for the first time. The Energy Information Administration’s monthly report for April revealed this week that natural gas surpassed coal as the primary source of electrical power generation in the United States. The monumental moment marks the first time ever that natural gas has powered more electrical generation than coal.
 
Reuters: Okla. regulators expand scrutiny of disposal wells
The Oklahoma Corporation Commission has issued a directive expanding the state's earthquake "areas of interest" with regulations for 211 disposal wells. Well operators will need to show they are not performing water injections under the Arbuckle formation, while some will need to reduce the depth of their wells. The Oklahoma Oil and Gas Association said the directive would lead to positive results.
 
Observer ChronicleThe Texas town that banned HF (and lost)
Denton Law enforcement Sgt Scott Jenkins warns protesters at the web-site of a new fracking properly. When a Texas town voted to ban fracking within city limits, it was a shock to the oil-pleasant condition. But the reaction from the Texas legislature and power business has people questioning what electricity they have remaining. The hydraulic fracturing has started out yet again in Denton, and so also have the protests.
 
San Antonio-Express News: Permian's pancaked rock layers make it the U.S. oil patch king
In West Texas, the king of the U.S. oil fields is proving to be the safest investment for explorers.
 
Midland Reporter-Telegram: Permian Basin petroleum contraction continues
The Permian Basin petroleum industry continues to contract amid crude prices that are sharply lower than year-ago levels.
 
Big Ten NetworkNorthwestern researchers drill into HF
It’s been driving rapid job creation and an investment boom for a few years now in the Midwest. And experts say it has the potential to make the U.S. energy-independent within the next couple of decades. You and other researchers at Northwestern have spent several years now examining the shale gas production process and how it can be improved. And they recently shared a few ways in which the environmental effects can be mitigated in a study published in the June issue of the scientific journal ACS Sustainable Chemistry & Engineering.
 
The Courier JournalKentucky wins a battle, but War on Coal ongoing
Kentucky has won a battle in the War on Coal. Last month, the U.S. Supreme Court decision said the Environmental Protection Agency violated the Clean Air Act when it issued burdensome new regulations on power plant emissions.
 
The Columbus DispatchODNR sets rules for HF well pads
The Ohio Department of Natural Resources announced on Thursday that it is implementing new rules for the construction of horizontal well-pad sites. Horizontal well pads are used for fracking, when a well is drilled vertically but then goes horizontally underground, allowing for more than one well.
 
Athens MessengerAthens County and Ohio deserve better HF regulation
And guess which of Ohio’s 88 counties is going to be getting the most — Athens County. This is made possible by the opening of an injection well at Torch by S&H Partners. It will more than double the amount of wastewater brought into Athens County to something in excess of 6 million gallons a year.
 
Pennsylvania Business Daily: Lawmakers call on Wolf to end pursuit of higher taxes
State Reps. Jeff Wheeland (R-Dist. 83) and Garth Everett (R-Dist. 84) vehemently called on Gov. Wolf to end his quest for higher taxes and cooperate with legislators to create a realistic budget.
 
Tribune-Review: Public being misled on projected use of shale tax funds, critic of Gov. Wolf argues
The Wolf administration and its allies are misleading the public by implying a proposed severance tax on natural gas would exclusively fund education, the president of an industry group said Friday.
 
Pittsburgh Post-Gazette: Put kids first, not gas companies
The venerable Pennsylvania Republican, portrayed so vividly in the movie “Lincoln” by Tommy Lee Jones, was a man ahead of his time. He helped establish tax-financed public education in our commonwealth — a massive expansion of government at a time when many believed government had no obligation to educate its citizenry.
 
Scranton Times-Tribune: House returns to budget impasse
The House returns to session Tuesday as the stalemate over the state budget starts to resemble trench warfare.
 
York Daily RecordRep. Gillespie: Natural gas impact fee stands to help York County
York County is in the process of receiving more than $420,000 in revenue from the collection of an impact fee on natural gas drilling activities in the Marcellus Shale. Pennsylvania's abundance of natural gas and the fees required by Act 13 of 2012 are the reasons we as a county stand to benefit, even though we are not part of the formation. The four-year total distributed to York County comes to more than $1.5 million.
 
Bradford EraBill looks to Marcellus Shale drilling for economic boost
Looking to parlay the Marcellus Shale drilling boom into even greater economic gains, one state representative has announced new legislation promising a decade of tax breaks to Shale adjacent businesses willing to give Pennsylvania a try.
 
Times Herald-Record: HF studies show the fight must continue
Just because fracking is prohibited in New York is no reason to let your guard down. Those who want to keep their skills sharp should consider some news from California where protecting the water supply is an honest-to-goodness crisis. According to a study just conducted by the California Council on Science and Technology, fracking in the state consumes about 2.6 billion gallons of fresh water each year, an impressive amount at any time, a sure attention-getter in the fourth year of a drought with no end in sight.
 
Albany Bureau: E. Rochester lawyer challenges NY HF ban
A legal challenge to New York’s ban on large-scale hydraulic fracturing has been hidden in plain site since May. East Rochester attorney David Morabito quietly filed a lawsuit two months ago against the state Department of Environmental Conservation, challenging the agency’s decision to prohibit him from fracking on land he owns in Allegany County.
 
Fox 8: Geologist: Samples show signs of shale in Walnut Cove
John Skvarla, the secretary of N.C. Commerce Department, pushed for more spending on shale-gas exploration during a state energy-panel meeting this week after state geologists said samples recently taken from Walnut Cove property indicated unconfirmed signs of shale gas, according to conservationists and commerce officials.
 
Valley News: Prehearing on Valley Green Natural Gas Proposal Slated for Concord
The New Hampshire Public Utilities Commission has set a prehearing conference for late this month to review a proposal to provide natural gas to customers in Hanover and Lebanon via a pipeline. If approved, the franchise petition before the Public Utilities Commission would grant Valley Green Natural Gas authority to provide regulated natural gas service in the two municipalities.

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7-20-15 BC LNG Moves Forward

20 July 2015 5:21am

Vancouver Sun by Dirk Meissner.  

Commentary:

Could the Alaska gas pipeline/LNG project's need for fiscal certainty be modeled after BC's attempt to provide a 25 year window of certainty for investors?

Alaska Governor Bill Walker, gas pipeline, LNG, ak-lng, oil gas taxes, aces, Photo by Dave HarbourAlaska Governor Bill Walker (NGP Photo) has pledged to seek a fiscal certainty for Alaska's gas.  But we have observed that since the major producers own both oil and gas facilities in the state, providing certainty for only the gas still leaves investors vulnerable to predatory taxation.

Unfortunately Alaska has a long history of increasing or enacting oil taxes over the years.  It has even demonstrated an unjustifiable greed in enacting RETROACTIVE oil tax increases.

Therefore, we believe that the only effective fiscal certainty that will provide a proper investment environment for a $45-65 billion Ak-LNG project will be creation of tax certainty for both the investors' oil and gas holdings -- and property.  -dh

A liquefied natural gas industry: the British Columbia government fought an election on it, launched an extraordinary summer legislative session and made financial concessions, but it still isn't enough for the companies that want even lower taxes and have expressed concerns over the availability of workers.

The Liberal government's LNG dream is expected to move towards reality this week when a bill is adopted for a 25-year agreement on what could be B.C.'s first LNG plant.

B.C.'s politicians were recalled this month to debate and pass a single piece of legislation that aims to provide certainty to LNG investors and revenues to the province.

"I think there's more work to do in terms of making sure we are in fact globally competitive," said B.C. LNG Alliance president David Keane. "I think the government has more to do."

Pacific NorthWest LNG, a joint venture backed by Malaysian state-owned energy giant Petronas, plans to build a US$36-billion LNG plant at: http://www.vancouversun.com/business/pass+year+industry+wants+more/11226540/story.html#ixzz3gRB8smIT

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