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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

6-7-15 Oil Taxes Approach the Alaska Political Spotlight Again

07 June 2015 3:43pm

Comment.  Readers can be sure that when Alaska's governor calls a summit on the state's fiscal situation, the outlook for oil and gas investors becomes less certain.  (See ADN story, column left)

This is because the natural course of politics is to tax entities with the most cash and fewest votes and protecting large voting blocks of beneficiaries.

For example, the capital intensive oil industry employs very few, highly skilled masters of technology to produce great wealth.  Other industries, like commercial fishing and tourism are people intensive; they employ huge armies of mostly lower skilled workers --voters-- that produce insufficient tax revenue to fund the education, airports, social services, roads, docks and seasonal unemployment costs associated with their vocations.

So when the Revenue Commissioner talks about "changes" to an oil and gas tax regime that was reformed by the Legislature two years ago, then withstood a voters initiative to repeal the reform last year, investors must calculate a higher risk factor into their ongoing investment decisions -- including big projects like gas pipelines.

The way it will likely happen is that politicians will say, "...the fiscal crisis affects everyone and everyone will have to contribute a 'fair share' to the solution." What follows will be fairly insignificant spending cuts and modest tax hikes affecting large groups and proposals for more significant tax increases affecting oil and gas investors.

If it rolls out any other way, it will be a first for Alaska.

Alaska's deplorable fiscal crisis is decades old and self imposed by politicians and greedy constituents; it was not caused state's small cadre of highly efficient wealth producers. 

Yet we can expect in coming months misleading and demonizing rhetoric aimed at those investors to justify taxing them more; the rhetoric will also serve to cover the derrieres of the real culprits -- Alaska's current and past political bosses.  

-dh

ADN by Dermot Cole and Nathaniel Herz.   ...

“We’re going to have taxes that impact individual Alaskans. We’re going to have to look at changes to oil and gas taxes. We’re going to have to look at strategic use of our legacy assets,” (Revenue Commissioner Randy  Hoffbeck) said, referring to the Constitutional Budget Reserve, the Permanent Fund and other accounts.  

Hoffbeck said oil and gas tax changes could be part of the solution but “I don’t want anybody to misinterpret this as saying, ‘It’s time to go after the oil companies again.’  

“Is there room to modify oil and gas taxes? To make them more efficient, to make them work better, generate more incentives for investment, while still being fair? I think that’s an honest intellectual discussion that we need to have.”


More on gas pipeline from Petroleum News: 

Chenault bullish on LNG progress, prospects - 06/07/2015 House Speaker Mike Chenault has been busy dealing over the budget impasse that's approaching its fifth month. But the Nikiski Republican hasn't lost sight of recent significant oil and gas developments, be it repairing the Dalton Highway, protests from Washington state and Seattle politicians over S....


 

Categories:

6-2-15 New Alaska North Slope Discoveries!

02 June 2015 9:32am

Rebecca Logan, Alaska Support Industry Alliance, Armstrong, North Slope Discoveries, Dave Harbour PhotoNEW Alaskan Discoveries Are Significant: See TODAY'S NEWS!  (Note: we thank Rebecca Logan {NGP Photo}, Alliance General Manager, for alerting us to this important announcement!)


Robert Dillon, US Senate Energy Committee, Lisa Murkowski, Keystone XL, Photo by Dave Harbour

Keystone XL Commentary by Robert Dillon (NGP Photo), U.S. Senate Energy and Natural Resources Committee


TODAY'S RELEVANT ENERGY LINKS, COURTESY OF CONSUMER ENERGY ALLIANCE


 
 
British Columbia's energy projects lure companies stung by Alberta downturn
Still, all of the LNG terminals proposed for the British Columbia coast remain in the planning stage while gas and crude- oil pipeline projects face ...
 
 
Kinder Morgan Trans Mountain pipeline expansion could cost Canada $22.1B, says SFU study
"Investing some $20 billion in potentially empty pipeline space imposes a very large cost on Canada, to the oil and gas sector, to the Canadian public ...
 

WASHINGTON, D.C. – On Wednesday, June 10, 2015, at 11:00 AM, in room 1324 Longworth House Office Building, the Subcommittee on Indian, Insular and Alaska Native Affairs will hold a legislative hearing on the following bill:

  • H.R. 2387 Don Young, Alaska Congressman, Native veterans, Photo by Dave Harbour(Rep. Don Young, NGP Photo), To amend the Alaska Native Claims Settlement Act to provide for equitable allotment of land to Alaska Native veterans.

 

 

 
 
 
 

Armstrong Announces Significant Discoveries on the North Slope of Alaska

June 02, 2015 07:00 AM Eastern Daylight Time

DENVER--(BUSINESS WIRE)--70 & 148, LLC (Armstrong) announced today the successful completion of the 2014/2015 winter campaign.

“These new discoveries show the immense potential that still exists on the North Slope of Alaska”

Two Nanushuk wells were tested this year, including the Qugruk 8 (Q-8) vertical well, which tested a small portion of the net pay zone and flowed 30 degree API gravity crude at rates of up to 2,160 barrels of oil per day (BOPD). The Qugruk 301 (Q-301), two miles north of Q-8, tested a 2,000 foot horizontal lateral. The well flowed at tubing constrained rates as high as 4,600 BOPD with minimal bottom hole pressure drawdown.

In the East Alpine field, two new penetrations were completed in the Alpine Formation, adding to the previous two penetrations. Three of these wells have encountered oil productive Alpine sand in excess of 95 feet thick at a depth of 6500 feet with porosities ranging from 15% to 25%. Well control and seismic data indicates the oil pool covers an area in excess of 15,000 acres.

The successful drilling program is the result of a joint exploration effort underway since 2012. Repsol operates the consortium and holds a 70% interest, Armstrong holds a 22.5% stake and GMT Exploration Company has 7.5%.

The activity to date since the beginning of exploration has resulted in the discovery of several oil fields on the North Slope of Alaska. All 16 wells (including sidetracks) drilled by the consortium have found hydrocarbons, most with multiple pay zones. In the Nanushuk reservoir, the consortium has drilled seven appraisal wells to date and has proven an oil pool that covers more than 25,000 acres, at a depth of 4,100 feet, with an oil column of 650+ feet, and up to 150 feet of net pay with an average porosity of 22%.

Although additional drilling is needed to confirm the ultimate size of some discoveries, this season’s results justify moving forward with development, and two of the fields are in the process of being permitted for development -- one in the Nanushuk and another in the Alpine Fm.

“These new discoveries show the immense potential that still exists on the North Slope of Alaska,” said Bill Armstrong, President of Armstrong Oil & Gas. “We strongly believe that there are many great conventional oil projects yet to be found and developed in Alaska, and with the passage of the More Alaska Production Act (SB 21), the state has encouraged new drilling and future developments.”

 
 
 
 
 
TODAY'S RELEVANT ENERGY LINKS FROM CONSUMER ENERGY ALLIANCE....
 
Washington Examiner: Offshore drilling would continue under most 2016 hopefuls
A May poll of South Carolina voters by Consumer Energy Alliance, a coalition of business and energy industry groups, showed 63 percent supported Arctic drilling compared with 32 percent who opposed it. Eighty-five percent of the Palmetto State voters polled said energy issues will play an important role in the 2016 election.
 
Associated Press: Things to know about the Calif. oil spill
The May 19 spill occurred along the same stretch of Santa Barbara County coast as the devastating oil platform blowout in 1969 that galvanized the environmental movement. While the impacts of the latest spill have been far less severe, the episode has angered conservationists and residents who lived through the earlier disaster.
 
Los Angeles Times: Santa Barbara fisherman files suit against oil pipeline company
As Santa Barbara fisherman is suing the Texas owners of the oil pipeline that ruptured last month, spilling up to 105,000 gallons of crude along the coast near Refugio State Beach, for economic damages.
 
Huffington PostOpinion: U.S. needs to back oil, gas boom to strengthen job market
Federal leaders should support the oil and natural gas boom and ease the permitting process for infrastructure projects to continue bolstering the nation's strong job market, writes Sean McGarvey, president of North America's Building Trades Unions and chairman at the Oil and Natural Gas Industry Labor-Management Committee. Energy infrastructure expansion could add jobs and generate savings for the nation with about $1.14 trillion of investments through 2025, McGarvey notes, citing the American Petroleum Institute. "The family-sustaining jobs that the boom is creating are exactly the type of jobs we need to rebuild the great American middle class," he writes.
 
National Journal: EPA Climate Plan Sent to White House for Review
The Obama administration has teed up a busy summer on climate change, with the final review of its tentpole climate rule swinging into action.
 
The Hill: Obama climate rule nearly complete
The Obama administration is conducting the final review of its controversial rule to limit carbon emissions from power plants. The White House Office of Management and Budget (OMB) said it is putting the regulation into the final review process after receiving the texton Monday from the Environmental Protection Agency (EPA).
 
The HillFrench official says climate deal should bypass
 

The French foreign minister said Monday that any international deal that comes from a climate conference in Paris this winter should be written so it avoids needing ratification by Congress. "We know the politics in the U.S." Foreign Minister Laurent Fabius said, the Associated Press reports. "Whether we like it or not, if it comes to the Congress, they will refuse."
 
The HillKansas governor signs bill to comply with power plant rules
Kansas will formulate a plan to comply with the Obama administration's climate rule for power plants despite ongoing opposition to it within state government. Republican Gov. Sam Brownback signed a bill last week directing the state's Department of Health and Environment and the Kansas Corporation Commission to work on a strategy to meet the goals of the Clean Power Plan, which looks to cut greenhouse gas emissions from power plants.
 
E&E News: FERC commissioner says EPA carbon rule may usurp state powers
States complying with U.S. EPA's Clean Power Plan run the risk of ceding jurisdiction over energy policy decisions to the federal government, according to Federal Energy Regulatory Commission member Tony Clark.
 
Breaking EnergyFERC Advances Reliability Safety Mechanism in Final Clean Power Plan
On May 15, 2015, the Federal Energy Regulatory Commission (FERC) provided the Environmental Protection Agency (EPA) with a letter signed by all five Commissioners that details its role in implementing a Reliability Safety Valve (RSV) in the proposed Clean Power Plan (CPP). The CPP proposal, issued on June 2, 2014, aims to reduce power sector emissions by 30 percent by 2030 relative to 2005 levels. It provides state-specific, rate- or mass-based targets to reduce power plant carbon dioxide emissions and guidelines for state plans to meet the targets.
 
Bloomberg: Global oil companies refocus businesses, promote gas
Royal Dutch Shell, Total and other global oil producers said Monday that they are collaborating to encourage the use of natural gas as an alternative to coal. The companies are increasing their gas production to levels greater than those of their oil output as they refocus their businesses on gas.
 
Reuters: The U.S. oil HF’s dilemma: crouch or pounce?
U.S. shale oil producers, having weathered the worst price plunge in their industry’s brief history, now face a dilemma: whether to stay in a defensive crouch after slashing their rig fleets, or start drilling more wells to capture a partial recovery in prices.
 
Financial PostThe great HF revolution paradox
One of the great paradoxes of the fracking revolution is that its “father,” the late George P. Mitchell, was a fan of sustainable development. This might not quite rank with cotton manufacturer Friedrich Engels supporting Karl Marx, but it comes pretty close. That’s because if sustainability has one key tenet, it is that the fossil fuel industry must be killed to save the planet. Instead, fracking has revitalized it.
 
OilPrice.com: Why natural gas may become the fuel of choice in this coal state
Kentucky has long been a coal state, and as such has consistently resisted efforts by the federal government to limit greenhouse gas emissions from its coal-fired power plants. Nevertheless, Kentucky may end up complying with the new rules by default.
 
Environmental Leader: HF Drives New Water Management, Treatment Technologies
As the water footprint created by hydraulic fracturing and directional drilling continues to grow in the US, water management issues are projected to become more challenging, Industrial WaterWorld reports. Fortunately, technical advancements and new initiatives are beginning to address water access, reuse and recycling issues.
 
Roll Call: Dems should back offshore drilling expansion
Democratic members of Congress should stop using false arguments to rationalize restrictions on offshore oil and natural gas production and exploration, and instead overcome "the Arctic myth" and expand access to such activities, writes Randall Luthi, president of the National Ocean Industries Association. He notes that contrary to the beliefs of some lawmakers and groups, knowledge has been developed for decades on "nearly every aspect of the Arctic seascape" through technologies and research funding from the industry and federal regulators.
 
Bloomberg: Corn Ethanol Is Worse Than Keystone
For years, environmental activists have opposed the Keystone XL pipeline, claiming that development of Canada’s oil sands will be “game over for the climate.” But if those same activists are sincere about climate change, why aren’t they getting arrested outside the White House to protest the use of corn ethanol?
 
International Business Times: HF Resumes in Denton
Natural gas drilling is starting up again in Denton, Texas, despite the city’s 7-month-old ban on hydraulic fracturing. Vantage Energy resumed operations Monday at its Denton well just weeks after Gov. Greg Abbott passed a law prohibiting cities from banning fracking on their home turf. Three activists were arrested at the drill site Monday morning after attempting to block an access road.
 
VICE News: Denton, Texas Banned Fracking — But the Drillers Are Back
In November of last year, voters in Denton, Texas sent the oil and gas industry packing, passing with a 58 percent majority a referendum banning fracking within city limits. But now the frackers are back. Last week, Colorado-based Vantage Energy began operations — legally.
 
NBC DFW3 arrested in Denton HF protest
The return of fracking came with protests and arrests in Denton. On Monday morning, three members of the Denton Drilling Awareness Group, also known as Frack Free Denton, were arrested by police on criminal trespassing charges.
 
Fierce EnergyDOE driving tribal clean energy in Alaska
The Department of Energy (DOE) is giving select Alaska Native villages assistance to implement President Obama's Climate Action Plan through the Alaska Strategic Technical Assistance Response Team (START) Program, which provides federally-recognized Alaska Native corporations' governments with technical assistance to accelerate tribal clean energy projects and initiatives.
 
FuelFixNew lawsuit filed against seven-year-old Arctic drilling auction
A 2008 government sale of Arctic drilling leases to Shell and other companies is set to face fresh scrutiny in the federal courts, with a dozen environmental and Alaskan groups preparing to file a new challenge to the auction.
 
Associated PressCelebrity make splash with Calif. drought awareness
Cher, another Malibu resident, has also let her grass go brown and has talked about the water shortage on Twitter. In a post last month, she complained California used fresh water for fracking. "We’re in a catastrophic drought, water means life??" she wrote. "We can’t drink oil."
 
Associated Press: HF halt sought in N.W. New Mexico
Environmental groups Monday renewed their call to end hydraulic fracturing in northwestern New Mexico as part of an ongoing battle over oil and natural gas development and the protection of cultural and archaeological sites. The groups delivered a letter to the Bureau of Land Management in Farmington, saying increased development has led to more truck traffic and dozens of new well pads during the last year, and that is harming the region that includes Chaco Culture National Historical Park.
 
E&E NewsCourt keeps activists out of HF lawsuit
The Colorado Court of Appeals on Thursday upheld a lower court's decision that the grass-roots group East Boulder County United had no legal right to intervene in a lawsuit between the Colorado Oil and Gas Association and the Front Range city of Lafayette, which passed a fracking ban in 2013.
 
Post IndependentNo oil and gas in North Fork Valley
Most here feel that oil and gas development simply does not fit into the lands where we live, grow our food, have our businesses and recreate. If oil and gas development is to happen in some places, we need to see other places removed from the threat of it happening there in the future. We want to have a say and direct input into how, where, if and when this activity occurs.
 
Associated PressNatural gas drilling on upswing in Lincoln Parish
A Texas energy company has purchased or leased about 71,000 acres in and around Lincoln Parish, where it is operating as many as eight rigs with plans for perhaps 10 more by the end of the year. The News-Star reports Memorial Resource Development Corp. of Houston is drilling for natural gas and natural gas liquids.
 
Morning Journal News: Drilling severance tax off the budget table, House speaker says
Any plans to raise the state tax on shale gas production and earmarking some of the proceeds for counties impacted by the drilling boom appear to be on hold, at least for now. That was the message delivered by someone who should know - Ohio House Speaker Cliff Rosenberger - who was among state legislators attending a forum held Monday and hosted by state Rep. Tim Ginter.
 
Columbus Business FirstOhio shale gas production up in 2015, but growth slowing
Natural gas production increased more than 11 percent during the first three months of 2015 compared with the previous three months. Gas production had increased by 25 percent in the fourth quarter compared to the third, according to the Ohio Department of Natural Resources.
 
American City Business JournalsOhio shale gas output rose 11% in Q1, regulator says
Natural gas production in Ohio's Utica Shale in the first quarter rose over 11% from the previous quarter to 183.6 billion cubic feet, according to the state Department of Natural Resources. The figures indicate a slower output growth than that of the fourth quarter of last year, when production increased by 25% from the third quarter.
 
Pittsburgh Post-GazetteAnalyst: Proposed Pa. severance tax would be highest among gas-producing states
Pennsylvania would have the highest severance tax rate among seven natural gas-producing states if it adopts Gov. Tom Wolf's proposed severance tax on shale gas production, state Independent Fiscal Office Director Matthew Knittel said Monday at a joint hearing held by state Senate committees on environmental resources, energy and finance. The tax rate for both value and volume of output should average about 7.3% after the end of the decade, Knittel said. He added that about 80% of the tax would be paid by consumers outside of the state.
 
Patriot-News: Pa. severance tax would be highest among natural gas states, report says
Gov. Tom Wolf's proposed severance tax would take Pennsylvania from last place to first among major gas-producing states in taxing the extraction of natural gas, according to the Independent Fiscal Office. In testimony before a Senate committee Monday, IFO Director Matthew Knittel said the effective tax rate after all state taxes are accounted for would be 7.3 percent. Neighboring states like Ohio and West Virginia levy taxes of 0.8 and 5 percent, respectively, while Texas' taxes range from 3.1 to 3.5 percent.
 
Pittsburgh Post-Gazette: Proposed severance tax would be paid by out-of-state consumers, agency says
Gov. Tom Wolf’s proposed severance tax on shale gas would shift Pennsylvania from having the lowest to the highest effective severance tax rate among seven major gas-producing states, but most of the tax likely would be paid by out-of-state consumers, the head of Pennsylvania’s Independent Fiscal Office testified on Monday. Matthew Knittel, director of the non-partisan office that provides budget analysis, gave the new assessment of the tax during a joint hearing of the state Senate’s energy and finance committees.
 
Patriot-News: HF, severance tax issues will dominate Senate hearings
Questions about how Pennsylvania regulates and taxes the natural gas industry will dominate two Senate hearings, including the vetting of Gov. Tom Wolf's environmental secretary pick. On Monday, the Senate Environmental Resources & Energy committee will scrutinize the governor's proposed 5 percent tax on natural gas drillers. The following day, the same panel will consider the nomination of John Quigley to run the Department of Environmental Protection.
 
Legal IntelligencerWolf creates natural gas pipeline task force
Pennsylvania is missing an even bigger opportunity for a return on Marcellus Shale drilling due to an inadequate system of pipelines, business officials have repeatedly said. Now Gov. Tom Wolf has formed the Pipeline Infrastructure Task Force to help coordinate thousands of miles of additional pipeline needed to take advantage of all the markets for the shale gas.
 
Associated PressVa. panel recommends new HF regulations
A Virginia advisory panel is recommending that energy companies disclose the chemical ingredients they use in horizontal fracking, a type of natural gas drilling that has spawned environmental concerns. The proposal is among 14 recommendations that have been sent to Gov. Terry McAuliffe for review.
 
Charleston Daily MailDavid McKinley: Connecting the dots on regulations
Too much of anything is a bad thing. If you plug too many appliances into an outlet, it will blow a fuse. If you overload a boat, it will sink.
 
Orlando Sentinel: Advocate: Fla. can lead on energy
Central Florida faces stronger storms and population surges due to global warming, an advocate warns. Florida trails the nation in promoting renewable energy, says an advocate for more action on climate change. Promoting renewable and more-efficient energy won't kill jobs — it'll create them, and advocate says.

 


Keystone Commentary and Status Report

by

Robert Dillon

U.S. Senate and Natural Resources Committee

Keystone – Four (More) Months and Counting

Just wanted to bring to your attention that today marks four full months since the State Department’s deadline for interagency comments on the Keystone XL pipeline.

We’re sure that like all of us, you’re shocked – shocked! – that the project remains stranded in completely arbitrary regulatory purgatory.  And by that we mean, not shocked in the slightest.

In mid-January, during the Senate debate on bipartisan legislation to approve the cross-border permit for this long-delayed pipeline, the State Department announced a deadline of February 2 for interagency comments on whether it would be in the national interest. 

The Washington Post reported that as a result of this “tight deadline” the Department was “picking up the process where it suspended it last spring.”  And the State Department confirmed on February 4th that it had received comments from all eight relevant agencies.   

So, what has happened over the past four months?  By all appearances, a whole lot of nothing. The State Department could have spent two full weeks on the comments submitted by each agency. (We wish we had that sort of time to meander through our daily work.) Yet Keystone XL remains in limbo due to an administration that won’t make a decision.

The Keystone XL pipeline’s cross-border permit has now been stranded for more than 2,447 days and counting. The president has dismissed the project as a “single oil pipeline.” And the Quadrennial Energy Review spent hundreds of pages diagnosing our nation’s energy infrastructure needs and challenges. 

Somewhere along the way, you’d think that President Obama would make a final decision on Keystone XL, instead of validating the Senate’s decision to start the 114th Congress with a bipartisan bill on this subject. You’d think thepresident would recognize the project’s potential for job creation in a still-struggling economy. 

You’d think he would recognize that pipelines are a safe, clean, and efficient option for transporting the energy that America needs in an increasingly unstable world. But at four (more) months and counting, you’d be wrong.

CNN: As Keystone vote looms, it's crunch time for federal agencies to weigh in

By Kevin Bohn, CNN

Updated 1:28 PM ET, Sun January 18, 2015

Washington (CNN) – With the Senate expected to vote soon on the controversial Keystone XL Pipeline, the State Department is now giving eight federal agencies two weeks to weigh in on it.

The State Department on Friday notified those agencies have only until February 2 "to provide their views on the national interest with regard to the Keystone XL Pipeline permit application," a department official told CNN Saturday, adding that the department "continues its review" (More....)


 

 
Categories:

More Alaska Oil Industry Angst Approaches

19 May 2015 6:33am

Attend the Annual Alaska Oil & Gas Association Luncheon!  Show support for a sustainable future!


Our Instinct: Conservatives Must Seize Opportunity To Save Alaska's Economy 

by

Dave Harbour

Please read news items below

Lisa Murkowski, 75% chance of arctic oil spill, myth, Dave Harbour PhotoWe admire Senator Lisa Murkowski's vigilance on Arctic exploration issues -- and the initiative of her committee's Communication Director, Robert Dillon.  See TODAY'S COMMUNICATION AND VIDEO HERE.

Many moons will come before Shell Oil and other producers, under the most agreeable circumstances, can find and commercially produce oil and natural gas from Alaska's Arctic reservoirs in the Chukchi and Beaufort Seas.

Any Arctic discovery and production may not likely come in time to ameliorate diminishing Alaska production that funds 90% of state government and over 1/3 of the state economy.

The impressive but modestly increased production within the onshore National Petroleum Reserve-Alaska (NPR-A) is clouded by the Bureau of Land Management's decision to lock up half of its remaining potential and continuous/agenda driven EPA and Corps of Engineers efforts to deny and/or delay permits.  

The federal bureaucracy opposes the 1980 intent of Congress and is acting illegally to manage a Refuge like a Wilderness.  The Alaska National Interest Lands Conservation Act (ANILCA) re-categorized  the Arctic National Wildlife Range (into a more restrictive "refuge"), but allowed a future Congress to approve oil exploration and production in a small sliver of the coastal plain of ANWR.

We know that even existing, high cost projects can be lost overnight with imposition of new or increased taxes.

Meanwhile, Alaska's North Slope oil production continues its slide downward exacerbating negative impact on Alaska state government revenue during this low oil price era.

This week we observe that (below) the Governor's reaction to an austere budget is not using his bully pulpit to convince democrats to join the republicans in voting to access billions stored in the 'Constitutional Budget Reserve' (CBR) savings account to balance the budget.

Instead, he is joining the democrats, browbeating the republican leadership to agree to increasing democrat-desired government spending as a quid pro quo to democrats agreeing on a super majority CBR vote.

Together, the Governor and democrats are pressing for more spending, not less, in today's austere fiscal environment.

And, they know exactly what they are doing.  They are together trying to assemble popular support for increasing oil taxes during next year's legislative session, because 1) that would minimize the need for large spending cuts, and 2) THAT IS WHERE THE MONEY IS.  

The problem with increasing the already high Alaska oil tax burden, is that it would discourage if not devastate oil industry investment that could otherwise produce a sustainable amount of future production and financial support for a moderate spending taxing authority.

Our instincts all point to the need for more effective communication.

Conservatives better become better communicators if they hope to explain why their tough approach on the budget is best for Alaska now and for future generations.

They could start by requesting editorial board meetings and giving reporters their personal cell phone numbers.

If they don't quit dodging reporters and don't become superior communicators quickly they will find that the current name calling will escalate.  The Governor and democrats will likely initiate a summer program of constituent meetings around the state.  They will probably ask folks how they think Alaska will solve its fiscal shortfalls.

Renewed demonization of industry and the legislature's republican leadership can easily be reignited; as could a new voters referendum.

And community organizers can produce crowds for constituent meetings and listening sessions that will demand, "Increase oil taxes"!!!!   

Compelling conservative spokesmen need to articulate -- soon and often -- the wiser, approach to dealing with:

But making silk purses out of sows ears requires a miracle.  Our instinct further advises us that it is unlikely the republicans will successfully make the case for tax stability and fiscal restraint. If they wanted to or had the ability to, they would have been doing so every day and twice on Sunday for the last month.

While there are several very noteworthy exceptions, as a group the republican legislators are uncharismatic, unenergetic, unimaginative, uncompetive and rely on demographic majorities for reelection and support.  

While there are many noteworthy exceptions, their democrat opponents are aggressive, young, seek out the media, and have fire in the belly.  

As a group, democrats have the further advantage, as we've said, of believing and acting on the precept that, "The end justifies the means".

Political instinct teaches that democrats see a day ahead, when with aggressive and effective communications, they can seduce the entitlement generation into putting them into power throughout Alaska...and, indeed, the country.  They've already done so within Anchorage city government.

And, for republicans with memory, that will have been an opportunity mis-handled THIS YEAR and countless opportunities lost for the remnants of future generations.

How we hope our instincts are wrong!


ADN, by Dermot Cole.  

A state plan aimed at speeding the transition to natural gas in Fairbanks reaches a key decision point Tuesday, with the Alaska Industrial Development and Export Authority scheduled to consider a $54 million investment to move the project forward.

The AIDEA board, set to meet in Anchorage, is to hear a report recommending the agency buy Pentex Natural Gas Company LLC, the parent company of the Fairbanks Natural Gas utility, for $54 million, with a closing expected by the end of July. The sale price would be reduced by about $15 million through the spinoff of the company’s Point MacKenzie liquefaction plant and other assets to Hillcorp later this year.

ADN by Dermot Cole.  An annual multibillion-dollar debate between oil companies and local municipalities about differences in the taxable value of the trans-Alaska pipeline resumed in Anchorage Monday.

The oil companies argue the 38-year-old pipeline is worth $2.6 billion, while the municipal governments of the North Slope, Valdez and Fairbanks say it is worth about six times that much, in large part because billions of barrels of profitable oil remain to be pumped to Valdez in the decades ahead. The state is arguing for a value three times higher than that favored by the companies.


Bill Walker, Dave Harbour PhotoNews Miner.  Gov. Bill Walker on Monday vetoed much of the underfunded operating budget sent to him by the Alaska Legislature and warned state employees that 15,000 of them could be without a job on July 1 if the Legislature can't come up a fully funded budget.


Peninsula Clarion by Phuong Le.  (Note our extensive coverage by scrolling down through last week's postings.  -dh)

Neither a protest by hundreds of demonstrators nor a permit violation notice from the city will halt Royal Dutch Shell's use of a Seattle seaport terminal as it prepares for exploratory oil drilling in the Arctic Ocean, spokesmen say.

The violation notice issued Monday by the Seattle Department of Planning and Development said use of Terminal 5 by a massive floating drill rig was in violation of the site's permitted use as a cargo terminal. The 400-foot Polar Pioneer and its support tug Aiviq must be removed from the terminal or Shell's host, Foss Maritime, must obtain an appropriate permit, the city indicated. 


Robert Dillon, US Senate Committee on Natural Resources and Energy, Murkowski, Photo by Dave HarbourToday's Note From Robert Dillon (NGP Photo), Communication Director, U.S. Senate Committee on Energy and Natural Resources:

There’s been lots of misinformation out there about what the Bureau of Ocean Energy Management (BOEM) has said about the safety of offshore Arctic development in Alaska. Let the attached fact sheet from BOEM set the record straight – it is not accurate to say there is a 75 percent chance of an oil spill from Shell’s Arctic exploration. Period.

The fact is that Alaska has a long history of safe and responsible oil and natural gas production in the Arctic. Some 35 wells have been drilled in Alaska’s Arctic waters since the 1980s. But you wouldn’t know that by listening to the opponents of oil production who claim Arctic drilling can’t be done safely. Hogwash.   

To date, Alaska has produced and shipped more than 17 billion barrels of Arctic oil through the trans-Alaska oil pipeline. We’re already producing oil from federal waters at the Northstar field, which was discovered in 1984 and has produced more than 150 million barrels of oil since 2001.

And our state – with an estimated 46 billion barrels of conventional oil reserves and 430 trillion cubic feet of natural gas reserves – has much more to offer the nation. Studies suggest that increased leasing and development in Alaska’s Beaufort and Chukchi seas and in Cook Inlet could, by 2035, create nearly 840,000 jobs, raise more than $200 billion in revenue for the government and increase U.S. energy production by 3.5 million barrels.

Even President Obama agrees that Alaska production is good for America: “I would rather us – with all the safeguards and standards that we have – be producing our oil and gas, rather than importing it, which is bad for our people, but is also potentially purchased from places that have much lower environmental standards than we do.” – President Obama, May 14, 2015.

 


Our friend, Julie Hasquet offers this heads up about the upcoming luncheon of the Alaska Oil & Gas Association (AOGA).

"This annual event is the best place to learn all of the latest information, facts & figures about what is happening in Alaska’s oil and gas industry.  This year’s opening remarks are from U.S. Sen. Lisa Murkowski,  and the keynote speaker is Adam Sierninski, Administrator of the U.S. Energy Information Administration.

The 2015 luncheon is Thursday, May 28 at 11:30 am at the Dena’ina Center in Anchorage. If you haven’t already, please take the opportunity to  consider buying a table for you and clients...or individual tickets. You can register at www.aoga.org.


 

Categories:

3-5-15 View Live Senate Arctic Hearing Now!

05 March 2015 6:08am

U.S. Senator Lisa Murkowski, Arctic, Alaska, Dave Harbour PhotoTODAY AT 10 AM EASTERN, The Senate Energy and Natural Resources Committee will hold a hearing to evaluate opportunities for the United States to build on its status as an ​Arctic nation for the betterment of the nation and those who live in the Arctic.

Charlotte Brower, Alaska North Slope Borough Mayor, Arctic Policy, Photo by Dave Harbour

U.S. Senator Lesil McGuire, Alaska Senate, Arctic Policy, Photo by Dave HarbourLisa Murkowski ​(NGP Photo-Upper L) chairs the hearing.  The hearing features North Slope Borough Mayor Charlotte Brower (NGP Photo-L.  Said federal Arctic policy works against Alaska's and America's future and is like painting a mailbox while the house burns down...."); and Alaska State Senator Lesil McGuire (NGP Photo); and Representative Bob Herron (Said Canada is key to the success of Alaska and all of America).  -dh  (View hearing here.)


TransCanada, Energy East Pipeline Map, NEB Intervenors

Today's State Spending Commentary by Dave Harbour


 

CBC News.  A New Anti-Energy Tactic: inundate TransCanada's Energy East pipeline regulatory process with nearly 2,000 requests for intervention?  If so, watch for enviro allies in the US to begin applying this technique throughout the U.S.  -dh  "The National Energy Board has received 1,805 applications to participate in the hearing for TransCanada Corp.'s proposed Energy East Pipeline...."


Alaska State Spending Commentary

by

Dave Harbour

Alaska's huge permanent fund fools everyone into thinking the state has no spending problem--including New York rating agencies that give Alaska a AAA bond rating.  

The New York analysts ignore that Alaska is basically insolvent right now -- setting aside the Permanent Fund -- when one cancels its estimated fiscal year-end savings of $9 billion with over $9 billion in the state's personnel retirement fund liability.  

Citizens in general just assume, "well, we'll have the permanent fund for a rainy day."  Rating agencies assume "prudent management" going forward when financial management has not been "prudent" for decades.  But our readers are not stupid.  They can envision a day of divisiveness ahead when every public safety and education lobbyist will be fighting retirees and unions and matching federal fund programs and revenue sharing municipalities for the Permanent Fund scraps.  

Yes, the time to control the budget is now, if not long past.  The fiscal cliff ahead comes closer, for every year of imprudent (i.e. deficit spending).  

Unfortunately, we see this independent governor and republican legislature kicking the can down the road once again, with only cosmetic operating budget cuts this year (We hope we are wrong and that courage will abound as necessary cuts are achieved.  Yet the most courageous, right-thinking elected officials are a small minority and their demands for fiscal responsibility seem muted as the legislative leadership tries to keep the ship of state from rocking too much this year.  We can envision many of these "leaders" retiring in the next year or two, hoping their own undeserved retirement checks are the first priority to fund by a permanent fund soon to be under siege.)

We believe odds are that rating agencies will soon be saying, "With its enormous Permanent Fund savings account, Alaska had the ability to weather volatile oil prices--assuming as we did that they would undertake prudent spending practices.  We regret that their lack of prudence now requires us to reevaluate Alaska's credit worthiness."  

Meanwhile, liberals and environmental activists must be rejoicing; the sooner Alaska depletes its savings, the sooner they can happily advocate higher natural resource taxes, exacerbating the death spiral of Alaska's economy and depopulation of the 49th state.

Below we provide readers with the raw data: we report.  You decide.  -dh


1.  Here is Commonwealth North's new Alaska state operating budget study ("...the state operating budget has increased 102% - from $2.2 billion in FY 2004 to $4.4 billion in 2014.")  More here....

2.  Above is the video -- along with a link -- of Governor Walker's recent presentation to New York rating agency financial analysts representing: Standard & Poor's, Moody's, and Fitch.

3.  Here are the rating agency reports accompanying the ratings they applied to Alaska.  More here....



The State’s Operating Budget: Critical Crossroads, Choices, and Opportunities  Posted: 04 Mar 2015 

Over recent years the state operating budget has increased 102% - from $2.2 billion in FY 2004 to $4.4 billion in 2014. In Commonwealth North's study on the Long Term Economic Sustainability for the State of Alaska (January 2013) they noted that the current level of spending is unsustainable and it's imperative that the state implement a long-term fiscal plan, which will require spending restraints. Fiscal discussions have primarily focused on the revenue side of the state's ledger and on capital project spending. Minimal public attention or discussion has been given to the recurring cost drivers of other state spending.

As a way to find solutions to the budget problems, Commonwealth North enlisted the help of its Fiscal Policy Study Group. The study group is co-chaired by CWN board members Eric Wohlforth and Cheryl Frasca and the group was asked to produce a study that aims to:

  • Increase the understanding of cost drivers of the operating budget over the last ten years and the forecasted impact over the next ten years.
  • Understand the impact and nature of formula-driven programs and the latitude for change.
  • Identify the effectiveness of state programs through a review of its performance measure framework in terms of results delivered and resources required.

More than 6 months of discussion and research allowed the group to produce a report that gives targeted suggestions to evaluate and reduce spending in the state’s operating budget. It is important to evaluate spending before addressing revenue because Alaskans will want to know that the state is being fiscally responsible before being asked/required to contribute to the state’s revenue. The recommendations from the report are below.

  • Immediately get Medicaid reforms underway to ensure the state can continue to provide services to those most in need. All formula-driven programs must be reviewed in terms of policy goals, results being achieved and cost effectiveness.
  • Administration, unions re-open negotiations to identify short and long-term savings in personnel and benefits costs.
  • Ensure all current revenue is available to fund highest priorities by placing all state revenue in the general fund unless external legal restrictions.
  • Undertake in-depth review of programs that examines effectiveness and appropriateness and engage citizens in these reviews. Report results to citizens and use data to inform budget decision-making.
  • Governor establish citizen-led commission to undertake such a review.
  • Establish a process similar to BRAC to implement package of recommendations that will be necessary to re-size state programs.
  • Governor and Legislature co-sponsor series of dialogues in which citizens better understand the challenge and through which they provide input on the choices they believe should be made.

Budget practices and process recommendations- Governor

Governor’s budget development

  • Citizen panels provide input into Governor’s proposed budget
  • Governor moves up budget submission to November 15 to give Legislature more time

Budget practices and process recommendations- Legislature

  • Revenue limit
    • Establish limit on savings used in any one year- provides additional pressure for spending reductions and prolongs availability of savings
    • Deposit all savings into statutory budget reserve- removes ¾ vote requirement to access Constitutional Budget Reserve
  • Create Joint Ways & Means committee
  • Establish revenue limit by defining, through resolution, amount of savings and other revenues available to fund next budget
  • Review revenue forecasting for reliability
  • Return to Constitution’s 120-day session
  • Increase interim work on budget
  • Special session(s) devoted to budget work if necessary
  • Increase time for budget work
  • Implement contingency plan for mid-year savings when significant drop in revenue

Each of these recommendations involves political obstacles and requires deliberative, thoughtful actions to ensure economic stability. Commonwealth North presented this study to public at an luncheon on February 25 and delivered the report to the Governor and the Legislature on the same day. Read the full report and presentation given by Eric Wohlforth and Cheryl Frasca.  


Rating Ag

ency Letters and Ratings

State Announcement: March 3, 2015 JUNEAU –Governor Bill Walker and Department of Revenue Commissioner Randall Hoffbeck today announced that the State of Alaska has received three separate AAA bond ratings from Moody’s Investor’s Service, Standard & Poor’s and Fitch Ratings. The announcements come after the bond rating agencies met in February with Governor Walker, Commissioner Hoffbeck and staff members of Departments of Natural Resources and Revenue. The meetings addressed growing concerns about Alaska’s declining oil revenue.

“This is excellent news,” Governor Walker said. “Three separate agencies have each given Alaska a triple-A bond rating, which will provide the state with unparalleled access to funding for future capital projects. I look forward to the opportunities this news will provide us in the years to come.”

A rating of AAA is the highest grade assigned by credit rating agencies. It is given to entities with an exceptional degree of credit worthiness, with little risk of loan default. As a result, Alaska will receive some of the lowest interest rates available when issuing or refinancing its bonds, saving the state millions of dollars in the coming years.

“Developing Alaska’s natural gas resources is one of the top priorities of this administration,” said Governor Walker. “Securing these bond ratings will help see such projects to fruition by attracting potential investors and allowing Alaska to get the biggest bang for its buck. I also want to thank past leaders, who had the wisdom to create large reserve funds—without which we could not have secured these coveted ratings.”

On March 10, the state is scheduled to sell its Series 2015A $162.7 million general obligation bond anticipation note to refinance its Series 2014A bond anticipation notes. In addition, on March 26 the state is scheduled to sell approximately $100 million of its Series 2015B general obligation bonds to refinance its Series 2009A general obligation bonds, saving the state an estimated $9 million in future interest costs.

Download Moody's rating here

Download the Fitch rating here

Read the S&P letter here

Read the S&P report here

###

Categories:

2-27-15 Understanding Oil Prices

27 February 2015 6:29am

See Consumer Energy Alliance's Friday Energy News Links, here.

ALERT - ALERT: Anchorage readers should PLEASE attend Bureau of Ocean Energy Management (BOEM) meeting on Monday.  We hope that the Governor's Office and Legislators are represented--since the subject pertains to keeping the Trans Alaska Pipeline System (TAPS) viable AND assuring the sustainability of South Central Alaska gas supplies!   Details here. 


As Russia moves to cut Ukrainian gas supply, we wonder why the U.S. does not come smartly to the rescue with energy and weapons supplies!  -dh

We urge our gentle readers to review Wednesday's posting; we cannot remember -- in well over a decade -- posting a more useful, relevant and actionable commentary for our Alaskan, Canadian and Lower 48 readers.  -dh


Understanding the Current Oil Price Environment

Part II 

by Mark Edwards, Alaskanomics.  

See Parts I, and III

Posted: 26 Feb 2015 11:40 AM PST

Mark Edwards, Alaskanomics, Northrim Bank, Economist, oil price environment, Photo by Dave HarbourIn Part I, I outlined the background of Alaska's economy in relation to the price of oil and how the current price is affecting the economy. Today, I will show the root causes for the recent decline and will wrap up on Friday with the reasons we should be optimistic for the future.

What are some of the major root causes of the recent price decline?

  • Sustained high prices led to an increase in new exploration investment.  Many previously marginal fields became economically viable at $100, which in turn led to dramatic increases in supply.
  • The U.S. market became a net exporter of energy from a boom in domestic supply coupled with a slight decrease in demand. 
  • More energy intensive manufacturing moved to other parts of the world like China where coal is more prevalent.
  • Technology has reduced the marginal cost of production in some fields and allowed previously uneconomic fields to be produced using new techniques.
  • Saudi Arabia has not supported falling prices like they have in the past by using OPEC to constrain supplies.  They appear to be trying to punish rival Iran, who is more sensitive to prices in their budget, and possibly see a chance to put smaller high-cost producers out of business to recapture market share.
  • The U.S. dollar strengthened against a global basket of currencies last year.  Oil is traded globally in dollars, so a strengthening dollar allows you to buy the same amount of oil for a lower price.
  • Global economic concerns have led to lower world GDP expectations and therefore lower oil demand growth in the future.  The European economy is still fragile, Japan has been stagnant for  two decades and China is seeing slower growth rates.  Weakening US power, turmoil in the Middle East and Russian aggression have added to the instability in global trade (Our emphasis added.  -dh).

    Regional BOEM Public Affairs manager, John Callahan, sends us this notice for a Monday meeting in Anchorage which our readers should attend if possible:

Our agency has a public scoping meeting in Anchorage Monday night. Rather than glaze your eyes with a bunch of jargon I thought I would just try to really clearly lay out what it is about.
 
1. The Bureau of Ocean Energy Management (BOEM) is responsible for managing oil and gas resources on the Outer Continental Shelf.
 
2. As part of that, BOEM is required to develop a five-year schedule of lease sales designed to best meet national energy needs.
 
3. BOEM has started developing this plan for the years 2017-2022. A DRAFT of the plan is available here: http://www.boem.gov/2017-2022-DPP/ [PDF]. This draft proposes holding three lease sales off the coast of Alaska -- one each in the Beaufort, the Chukchi, and Cook Inlet.
 
4. BOEM now needs to prepare an Environmental Impact Statement (EIS) to analyze the potential environmental impact of the draft plan.
 
5. On Monday, March 2, from 3 p.m. to 7 p.m. at the Anchorage Marriott Downtown Hotel, BOEM will hold a public scoping meeting to get public input as to what the scope of this EIS should be.
 
In other words, agency analysts are looking for input like:
 
* "When you prepare the EIS, be sure to take a close look at the impact on species X"
 
* "In the draft plan, we see that such-and-such an area would be open to leasing. Be aware that part of that area is an important subsistence use area for local residents"
 
* "I believe that areas [A,B and C] should be removed from consideration for exploration, for the following reasons..."
 
Everyone is invited! We hope to get a good mix of input from environmental groups, industry Alaska Native organizations, etc.
 
Much more information about this is available at: http://boemoceaninfo.com/
 
Thanks! And, of course, I am happy to answer any questions about this you may have.
 
John Callahan
BOEM Public Affairs
Alaska OCS Region
 
==============PSA ================
 
The federal government would like your input. Regulators are writing an environmental impact statement to look at the potential impacts of future offshore oil exploration. On Monday, from 3 to 7 pm, they will host a public meeting at the Marriott Hotel in Anchorage. Everyone is invited. More information is available at:  boemoceaninfo.com [B-O-E-M ocean info dot com]           

Today's weekend energy links from Consumer Energy Alliance:

CEA's The Energy Voice: Bill Gates Weighs in on Energy Research
When Bill Gates gets involved, you know it’s serious. That’s why we were glad to see Microsoft founder and billionaire philanthropist pounding the lectern over the need for more funding in energy research.
 
Associated Press: Nebraska Judge Agrees to Halt Condemnations for Keystone XL
A Nebraska judge has issued a temporary order to stop a Canadian company from seizing access to land in one eastern county to build the Keystone XL pipeline.
 
Business Insider: Obama vetoed the Keystone XL pipeline, but here's why approval is still possible
President Obama used his veto power on Tuesday for just the third time in his administration, sending back to Congress legislation approving construction of the Keystone XL pipeline, which would transport 800,000 barrels of oil per day from Alberta, Canada to refineries along the Gulf Coast.
 
Bloomberg: Alberta in Talks on Climate Policy with Eye to Keystone Approval
Alberta is in talks with other Canadian provinces and U.S. states to cooperate on climate and environmental policies as it seeks to improve the reputation of its oil sands and win approval of TransCanada Corp.’s Keystone pipeline.
 
CBS News: Keystone XL Veto Could Make a Case against Fracking
President Barack Obama recently vetoed a bill approved by both Congress and the Senate to build the Keystone XL pipeline, an oil pipeline system commissioned to transport oil from Canada and the North Dakota Bakken Shale region to Midwest and Gulf Coast refineries.
 
Town Hall: Obama's Veto of Keystone Pipeline Is All About Politics
In the days leading up to President Obama's veto of the Keystone XL pipeline, 14 oil tanker railroad cars derailed in West Virginia and exploded in a fiery environmental disaster.
 
Oil Price: Keystone XL Saga May Not Be Over Yet Despite Obama Veto
President Obama’s veto of legislation that would have allowed construction of the Keystone XL pipeline was directed only at the bill itself and doesn’t necessarily mean he wouldn’t eventually authorize construction of the project itself.
 
The Advocate: Our Views: Obama’s Keystone veto unjustified
Ordinarily, we’d be somewhat sympathetic to President Barack Obama’s stated position on the construction of the Keystone XL pipeline, as it is a matter of a president’s prerogative on foreign policy.
 
Harvard Political Review: Does the Keystone Pipeline Veto Matter?
On Tuesday, President Obama vetoed a bill that would have approved the Keystone XL pipeline. The pipeline is known more than anything for the debate it has stirred between Republicans and environmentalists. While Republicans largely support the measure as a job creator, environmentalists condemn it as a threat to our atmosphere and climate because of the potential for larger amounts of greenhouse gas emissions.
 
The Post and Courier: Override Obama on Keystone
President Barack Obama’s veto of the Keystone XL Pipeline bill Tuesday didn’t come as a surprise. But his latest rationalization for continuing to oppose the project was, to put it mildly, perplexing.
 
National Journal: Moderate Senate Democrats Defy Obama on Keystone
At least seven Senate Democrats say they will thumb their nose at the White House and vote to override President Obama's veto of the Keystone XL pipeline bill. Although it will still leave GOP leaders short of the 67 votes they would need to overcome the veto in the Senate, the continued defection of moderate Democrats shows it will be difficult for Obama to keep his party together for energy and climate fights later in the year.
 
Politico:  NAFTA’s specter may haunt Keystone verdict
President Barack Obama may decide to kill Keystone XL for good, but that could be no easy task — thanks in part to the North American Free Trade Agreement.
 
The Bellingham Herald: Senate bill would look to install crude oil pipeline across Washington State
A state senator introduced a bill today that would require Washington to look at building pipeline to move crude oil through the state. “We need to move oil across our state and there is a lot of concern about oil-by-rail,” said Sen. Michael Baumgartner, R-Spokane, in an announcement Wednesday, Feb. 25. “It’s time to look at a trans-Washington oil pipeline.”
 
Reuters: Oil cash crunch to squeeze rigs, operators out of business
Offshore drilling rig operators are facing a cash crunch as oil firms hold back work and the shakeout will put vessels and possibly some operators out of business, Claus Hemmingsen, chief executive of Maersk Drilling, said.
 
E&E Publishing: Western regulators, utilities call for more time to implement EPA's Clean Power Plan
U.S. EPA proposed an unreasonable and costly deadline for states to begin reducing global warming emissions, according to utility officials and regulators in Western states who testified here yesterday before the Federal Energy Regulatory Commission.
 
The Wall Street Journal: Gas’s Drop Drives U.S. into Deflation Territory
The U.S. in January saw its first dip in overall consumer prices in more than five years. But the economy is far from the precipice of debilitating Japanese-style deflation.
 
UPI: U.S. crude oil production holding steady
U.S. crude oil production for the week ending Feb. 20 held steady amid rig count reductions and planned cuts in upstream spending, federal data show.
 
CNBC: Are oil producers running out of closet space?
Oil supply running ahead of demand hasn't just pressured prices, it's also filling up storage space, potentially pushing crude toward another leg down.
 
Fuel Fix: Halliburton exec: “Boom town” costs falling amid oil slump
In places like West Texas and North Dakota, “boom town costs” like company-paid housing and a commuter workforce that’s burning air miles are starting to wind down as drilling rigs retreat from surging shale plays, Halliburton’s president said Tuesday.
 
Bloomberg: U.S. Oil Discount Poised for Record Widening
U.S. crude’s discount to European prices headed for a record widening in dollar terms this month as prices at $50 a barrel failed to slow the nation’s fastest oil output in more than three decades.
 
The Hill: Greens petition California to ban HF
Dozens of environmental groups filed a legal petition Thursday asking California Gov. Jerry Brown (D) to ban hydraulic fracturing for oil and natural gas in the state. The groups said their case is bolstered by recent news that oil and gas drillers were allowed by the state to inject wastewater from 140 wells, some of which were fracked, into protected waters.
 
Associated Press: Group Backs off Plan to Put Shale Ban on Colorado Ballot
An activist group on Thursday backed off its earlier announcement that it would to try to get a statewide ban on hydraulic fracturing on the Colorado ballot and said it would instead try to persuade Gov. John Hickenlooper to halt the practice. Karen Dike of Coloradans Against Fracking said the group has not ruled out a campaign to put a ban on the 2016 ballot if the governor doesn't act.
 
Denver Post: Colorado oil and gas task force ideas worth enacting
The rap on the much-anticipated recommendations from a state oil and gas task force is that they're not substantial and will do little to resolve conflicts between communities and the industry. Frankly, that's a cynical and unfair assessment. It fails to recognize the balance of interests at play and the power of collaboration at the front end of planning for oil and gas operations.
 
The Coloradoan: Don't be deceived; learn facts about oil and gas
The debate over oil and gas development in Windsor has escalated lately as more activity has moved into the area. As former state representative for Windsor, I encourage local residents to learn more about this vital energy industry that is providing jobs for people in Windsor and across Colorado, and that is also finally making our nation energy independent.
 
CBS DenverShale Task Force Sets the Starting Bell for Ballot Issues
The much maligned oil and gas task force that Governor Hickenlooper put together last fall to keep fracking ballot issues off the 2014 ballot finally submitted proposals to the legislature this week. The nine proposals range in scope but all attempt to address the chasm between local communities and oil companies.
 
Denver Business Journal: More Colorado companies plan capital spending cuts
More energy companies with Colorado ties have announced budget cuts nationwide and in the state as low crude oil prices continue with no end in sight. Crude oil prices for the U.S. settled Thursday at slightly more than $48 per barrel, the lowest level in a month and a far cry from the $100 per barrel prices seen last summer.
 
Patriot-News: New York town to find a way to frack despite state ban
This town of 5,000 people situated near the Pennsylvania border and directly over one of the richest deposits of the gas-laden Marcellus Shale formation is moving forward with ordinances that would clear the way for fracking. Yes, that is right, Windsor Town officials are planning to approve fracking - "gas and oil development," as they term it - despite New York Gov. Andrew Cuomo's fracking ban, issued late last year.
 
Pittsburgh Post-Gazette: A severance tax would set back Pennsylvania
Pennsylvania is the showcase for economic benefits from the Marcellus Shale boom. Witness the impact of natural gas production on job growth. It has led to the creation of a wide range of jobs — petroleum geologists and engineers, roughnecks, welders, steamfitters, laborers, computer specialists, truck drivers and hotel and restaurant workers.
 
NPR: Pennsylvania’s effective tax rate on drillers is declining
Even though revenue from Pennsylvania’s gas impact fee has generally ticked upward over the years, the annual effective tax rate on Marcellus Shale drillers has steadily gone down– that’s according to a new analysis released by the state’s Independent Fiscal Office. The IFO is modeled on the U.S. Congressional Budget Office and provides nonpartisan analysis for budgetary purposes.
 
Akron Beacon Journal: Oil production jumps 18.1 percent, natural gas 25.6 percent
During the fourth quarter of 2014, Ohio’s horizontal shale wells produced more than 3.5 million barrels of oil and nearly 165 billion cubic feet of natural gas, according to figures the Ohio Department of Natural Resources released Wednesday. Oil production from 779 horizontal Utica wells increased by more than 545,000 barrels, up 18.1 percent, and natural gas jumped by more than 33 billion cubic feet, or 25.6 percent, compared to the third quarter of 2014.
 
Youngstown Vindicator: Columbiana County tops Valley oil and gas production
Columbiana County is the 2014 winner for Mahoning Valley oil and natural gas production. The county produced 21.3 billion cubic feet of natural gas and 172,388 barrels of oil in four quarters last year, according to data released by the Ohio Department of Natural Resources.
 
Wheeling News-Register: Ohio Gov. Kasich’s Proposal to Taxes Criticized
As Ohio's oil and natural gas drillers slam Gov. John Kasich's plan to raise severance taxes on their activities, at least one legislator believes the governor wants to redistribute the wealth generated in the shale fields of Belmont, Jefferson, Harrison and Monroe counties throughout the state.
 
Akron Beacon Journal: Antero to cut back on drilling in Utica region
Colorado-based Antero Resources Corp. told financial analysts and the media Thursdaythat is expects to cut back on its Utica Shale drilling by 36 percent in 2015.The company, a major player in Ohio’s Utica region, intends to spend $1.6 billion for drilling and completions in 2015. A year ago, the firm earmarked $2.5 billion for such drilling.
 
Express-News: The top oil-and-gas producing counties in Texas
Six of the top 10 oil-producing counties in Texas are in the Eagle Ford Shale, according to recent data from the Railroad Commission of Texas. Texas in December produced around 2.3 million barrels of crude oil daily. That’s up from a daily average of 1.8 million barrels in December 2013.
 
Midland Reporter-Telegram: Pain will be a reality in Midland, but not for long
The downturn in the oil industry will cut into Midland’s economic success, but as in the past, the economy and the oil industry will come back, said economist M. Ray Perryman, president and CEO of The Perryman Group. Perryman spoke Wednesday to a packed house at Odessa Country Club, addressing concerns about geopolitics, stability in the oil industry and how the American oil industry has changed the landscape domestically and internationally.
 
Austin Business Journal: Energy, immigration collide at Texas-Mexico conference
The ongoing drumbeat of Texas leaders' demands that the Obama administration pay to secure the Texas-Mexico border came close to derailing the message of a two-day conference in Austin to share best practices in the energy and technology sector. Mexico's new president Pena Nieto is pushing a progressive multi-sector business reform agenda, including passage of legislation that will bring private investment to the country's energy sector for the first time.

Categories:

2-26-15 Please Review Yesterday's Commentary

26 February 2015 7:17am

What's next for Keystone XL?


We urge our gentle readers to review yesterday's posting; we cannot remember -- in well over a decade -- posting a more useful, relevant and actionable commentary for our Alaskan, Canadian and Lower 48 readers.  -dh

Alaskanomics by Mark Edwards.  

Understanding the Current Oil Price Environment - Part I  (See later Parts II and III)

Mark Edwards, Economist, Northrim Bank, Commonwealth North, Oil Prices, Photo by Dave HarbourOver the next couple of days, I will post a three part series about the current oil price environment in Alaska.

It is well known that Alaska’s economy is highly sensitive to the price of oil.  Billions of dollars in investment capital flow into the state each year as energy companies both explore for new oil and maintain their existing fields.  This activity has an enormous positive multiplier effect on the rest of the economy as major service industries including trucking, construction, finance, legal, engineering, retail and countless others see a direct benefit from the contracts and employment required to support this massive effort.   Read more....


 

 

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