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Northern Gas Pipelines is your public service 1-stop-shop for Alaska and Canadian Arctic energy commentary, news, history, projects and people. It is informal and rich with new information, updated daily. Here is the most timely and complete Arctic gas pipeline and northern energy archive available anywhere—used by media, academia, government and industry officials throughout the world. Northern Gas Pipelines may be the oldest Alaska blog; we invite readers to suggest others existing before 2001.

 

Alaska Taxes

11-25-13

25 November 2013 4:30am

Globe & Mail by Eric Reguly.  Oil prices fell as much as 2 per cent on Monday (Today), after Iran reached a deal with six world powers....  Petroleum News.  Troubled times in Canada - 11/24/2013  Obstacles piling up in front of Canada's petroleum industry and its government allies are accumulating so rapidly that hopes of exporting ...​


ADN Commentary by Paul Jenkins re: Repeal of Oil Tax Bill Sheffield, Governor, Alaska Oil Tax Reform, SB 21, Photo by Dave HarbourReform: Tony Knowles, Governor, Alaska Oil Tax Reform, SB 21, Photo by Dave Harbour

"Two former Democratic governors, Tony Knowles (NGP Photo-r) and Bill Sheffield (NGP Photo-l), have expressed opposition to any repeal. Just about everybody running for important state offices -- from governor on down -- is on record for or against the repeal."  (NOTE: We urge readers who haven't already, to review the Competitiveness Review Board presentation given friday to Commonwealth North.  Our tax commentary for many years is founded on the principle that Alaska must be competitive to survive, economically.  This technique is one effective way of calculating competitive positioning as a factual basis for tax and regulatory decision making.  We believe that while SB 21 is a step in the right direction to become less uncompetitive, Alaska will have to do more to attract the tens of billions of dollars needed to reverse the downward economic trend.  The new 'Board' has the economic future of Alaska resting on its forthcoming decisions and recommendations.  -dh)


Another News Miner Community Perspective on Mining, by Kyong Hollen.  

The first bar of gold was poured in 2006 and production has been steady ever since.

This has meant not only benefits to the company, but jobs for Alaskans, business for suppliers, added revenue to the state and philanthropic scores for Delta Junction, Fairbanks and the University of Alaska Fairbanks. In fact, Pogo recently pledged $1 million to UAF for a mining engineering endowment that will allow graduate students to work on long-term projects. 

More here....

Fairbanks News Miner, Alliance Leader, Rebecca Logan (NGP Rebecca Logan, Alaska Support Industry Alliance, Mining Jobs, Anglo, Pebble, Photo by Dave HarbourPhoto), Speaks Out On Mining Benefits.  "Anglo American’s recent departure from the Pebble Mine project has generated contentious debate throughout the state and in our nation’s capital about the future of domestic mining.  ...  It’s a hard pill to swallow considering that our nation’s $6.2 trillion worth of mineral resources could be developed responsibly, generate economic growth, support new high-paying jobs and strengthen domestic industries.  ... just look at the more than 9,500 Alaskan jobs the mining industry supported last year alone. These jobs are among the highest paying in the state with an estimated average annual salary of $100,000 — more than twice the state average. Mining not only creates jobs at mine sites, but also supports local businesses, generating employment at grocery and supply stores, auto dealerships and hotels.  ...  Mining supported nearly 2.2 million American jobs and contributed $232 billion to the nation’s GDP in 2011 alone. The very minerals mined here in Alaska and throughout the United States are essential elements to nearly every domestic manufacturing chain, from the automotive sector to defense and renewable energy. Minerals supply our industries with the raw materials they need to continue churning out innovative American products.  More here.... 

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11-15-13 - New Battle For ANWR Begins!

15 November 2013 9:43am

Commentary:  Yesterday, BP's Dawn Patience provided a report demonstrating that the company spends $1.5 billion and supports more than 350 vendors, 2,300 BP employees and 22,500 total jobs in Alaska.  Here's the .pdf.  

The company's significant, Alaska projects include, "13 oilfields on the North Slope (including Prudhoe Bay, Endicott, Northstar and Milne Point), which account for about two-thirds of Alaska oil production."  The report goes on to note that the company spent over $25 billion with 15,000 vendors throughout the country in 2012, creating a national economic impact of $147 billion.  

The Alaska impact is great, but we believe it to be a fraction of what it could be were state and federal energy policies more reasonable.  BP spent about 6% of its total US expenditure in the country's largest  state.  We see that number as a reflection of two things: 1) the difficult cost challenge of producing new oil on Alaska lands and, 2) national regulatory restrictions on access to oil rich federal lands and 3) very competitive domestic energy investment alternatives.

We provide these Alaska and national numbers to emphasize the choices investors have.  Being truly aware of the competition for capital should convince policy makers that in order to retain investment, their areas need to be competitive.  

In Alaska's case, having some of the highest taxes, labor and operating costs in the free world does not translate to, "competitive" over the long haul...especially when most of our competitors don't need an 800 mile pipeline to bring oil and gas to a market hub and when most are located in more temperate zones that are less remote to the markets.  

To add insult to injury, Alaska's tarnished reputation is to increase taxes retroactively -- after investment has been made -- and when a moderate tax reform is enacted, lawmakers make its effective date prospective, not retroactive.  

Furthermore, a pending citizens initiative to repeal oil production tax reform, in effect, cannot but help delay if not derail certain investor decisions--which is probably what the environmentally oriented initiative sponsors hope for.

Investors are also mindful that Alaska's unsustainable spending/income trend makes any of today's investors potential targets for massive tax increases in the not too distant future. 

To ignore these realities is to ignore the responsibility of leadership and reflect a misunderstanding of economics.     -dh 

NEW ANWR BATTLE ERUPTS

Juneau Empire (TODAY).  U.S. Senators Maria Cantwell (D-WA) and Mark Kirk (R-IL) introduced legislation Wednesday that would designate 1.56 million acres of land in the Alaska National Wildlife Refuge as wilderness. ...

Sen. Lisa Murkowski (NGP Photo) called the bill “anti-Alaska legislation” and said it would ban oil and natural gas development in the non-wilderness portion of ANWR.

“I cannot understand how, given Alaska’s decades of responsible energy development, this is still viewed as a good idea or a necessary action,” Murkowski said. “At a time when our nation clearly needs more jobs, more revenues, and more domestic energy, this bill defiantly ignores all three.”

Alaska State Rep. Charisse Millett (NGP Photo), R-Anchorage, issued a statement Thursday saying that it was unfortunate that “some members of Congress are more interested in waging a policy fight based on outdated beliefs that fly in the face of reality.”

“It’s disappointing, though not surprising, that senators from states claiming to be good faith neighbors with Alaska are once again attempting to dictate its economic future,” Millett said in the statement. “Alaska has a track record of responsible oil and gas development that spans decades.”


Petroleum News.  After a recent speech in which Interior Secretary Sally Jewell laid out the Obama administration’s vision for conservation, Alaska’s Democratic senator, Mark Begich (NGP Photo), fired her a letter promising a fight.  (See our Commentary)

 

 

 

 

Today's News Links From Consumer Energy Alliance:

Huffington Post: On Fracking, It's Time to Discuss Facts 

In the past few years, the use of the technology of hydraulic fracturing to produce oil and natural gas has dominated national energy policy discussions. Much of the discourse has been fraught with fear, misunderstanding and, in some cases, misinformation. However, in some cases, dispute is slowly being replaced by reasoned debate, acceptance and increasingly responsible regulation and use of this technology.

Breaking Energy: 10 Tips to Save Energy Consumers Money this Winter 

The EIA’s latest Short-Term Energy and Winter Fuels Outlook finds US households heated with natural gas, propane and electricity face higher heating bills this winter. Higher heating costs can hit families on fixed budgets hard, so the Consumer Energy Alliance compiled a list of winter energy-saving tips that can soften the increased heating cost burden anticipated this season.

1200 WOAIUSA Now Number One Oil and Gas Producer in the World 

Boosted by massive oil and gas production from the Eagle Ford shale oil play southeast of San Antonio, the U.S. Energy Information Administration reports that the U.S. is overtaking Russia and Saudi Arabia and will become the world's largest producer of oil and natural gas in 2013, 1200 WOAI news reports. The average production in the U.S. is the equivalent of about 22 million barrels of oil natural gas and related fuels.  That compares to Russia's daily production of about 21.8 million barrels per day.

Capital Soup: Consumer Energy Alliance-Florida Executive Director to Speak at the National Hispanic Caucus of State Legislators 2013 Summit

As if consumers don't have enough problems with a sputtering economy, heath care bills and a wheezing jobs market, winter and its bigger heating bills are around the corner. According to the U.S. Energy Information Administration, more than 90% of American households will see higher energy bills this winter. The EIA says the total cost for natural gas heat this year will climb 13%, to $679. Homes with electric heat (38% of the total housing stock) will fare better, as prices will climb by only 2%.Either way, homeowners and renters who handle their own utility bills should take steps to keep heating costs down -- even before the weather really turns cold.    

Huffington Post: Where Is Obama on Climate Treaty?

n Warsaw, 189 countries are represented in the negotiations that started Monday. Many people are rightly wondering about the country responsible for the most climate pollution in the atmosphere. There are reasons for hope about the U.S. reducing its emissions, but Obama still shows no indication he's serious enough to give international climate policy the force of law. According to the Energy Information Agency, U.S. carbon dioxide (CO2) emissions have decreased to 1992 levels, achieving about a 13 percent cut since 2005 levels (other climate pollutants are uncertain). Much of this CO2 decrease is due to dropping coal for electricity.

 

Bloomberg: Tennessee Valley Authority Defies McConnell With Coal Cut

The Tennessee Valley Authority said it will cut its use of coal-fired electrical generation by about half of current levels, shuttering some units and converting others to burn natural gas to meet tighter emission-control regulations. The board of the Knoxville, Tennessee-based public utility voted today to close eight coal-burning generators. Among them are two that will be shut and converted to burn natural gas at Paradise Fossil Plant in western Kentucky, which U.S. Senate Republican leader Mitch McConnell, who represents the state, had urged be kept as coal units.

750KTRH AM: The U.S. is Headed for Energy Independence

Energy independence is coming for the United States much sooner than most oil industry watchers had expected. New advances in technology push developments like the Eagle Ford shale formation as a source of crude, meaning the U.S. could be the top oil producing nation in the world by 2016.  And, it goes further than that.

Kitsap Sun: California's Low-Carbon Fuel Rule Is Working, Study Says, but Threats Loom

California is replacing oil with cleaner-burning fuels in cars and trucks, thanks to a landmark low-carbon fuel rule, according to a recent report. But the rule's fate is uncertain amid legal chaos and a shortfall in the production of clean biofuels. The report, conducted by researchers at the Institute of Transportation Studies at the University of California, Davis, said California drivers saved more than two billion gallons of gasoline in the two years since the launch of the rule—about as much gas as the state uses in two months. The carbon emissions reduction is equal to taking half a million vehicles off the road.

The Wall Street Journal: West Virginia Preps for Shale-Gas Play

A Brazilian conglomerate unveiled a proposal Thursday to build a multibillion-dollar natural-gas refining complex in West Virginia—the biggest such development in the state as it tries to profit from the region's drilling boom. The proposed project by Odebrecht Group, a privately held São Paolo-based engineering, construction and petrochemical company, would include a plant known as an ethane cracker, where natural gas is turned into ethylene, a chemical-industry feedstock. It would also include three plants to produce polyethylene, which is used to make numerous products, from plastic bags to pipes.

Reuters: COLUMN-Shale 2.0, going global: Kemp

How quickly the shale revolution spreads from North America to the rest of the world is the single most important factor affecting the outlook for oil and gas markets over the next two decades. For pessimists, the conditions that made the shale revolution possible in the United States will be difficult to replicate, slowing the spread of shale oil and gas production. In its 2013 World Energy Outlook, the International Energy Agency projects shale oil production will reach almost 6 million barrels per day (bpd) by 2030, about 6 percent of global supplies.

Citizens’ Voice: Gas companies: 'We're hiring'

Although there won't be any wells in the Wilkes-Barre/Scranton area, there will still be lots of natural gas-related career opportunities, people in the industry say. From truck drivers to laborers, engineers to scientists, the jobs are out there. "We're hiring, and the pay is good," John Augustine of the Marcellus Shale Coalition said of the industry after a seminar at the East Mountain Inn on Thursday. Although the Marcellus Shale underlies Luzerne and Lackawanna counties, its natural gas was "cooked out" by the high temperatures that hardened the coal.

Breaking Energy: Energy Quote of the Day: Keystone XL’s Role in a Low Oil Price Scenario

Language on the proposed Keystone XL pipeline buried on page 491 of the International Energy Agency’s most recent World Energy Outlook may provide more fuel for opponents of the project, but it could offer a leg up to project proponents, as well. The WEO 2013 forecasts that oil sands production will average 4.3 million barrels per day in 2035, up from 1.8MM bbl/d last year, “contingent on the construction of major new pipelines to enable the crude to be exported to Asia and the United States.” The pipelines in question are Keystone XL, which would link Alberta oil sands to Gulf Coast refineries, and two pipelines from Alberta to Canada’s western coast to allow for Asia-Pacific exports.

Houston Business Journal: Rail vs. pipeline debate lacks facts and fairness

The production of oil in the Bakken Formation and revitalized Spraberry oil field is playing central roles in powering our country’s march toward energy independence and in reshaping our national energy debate. Unfortunately, one aspect of that debate has been tainted by bad research and dubious claims. None have been as egregious as one advanced by some increasingly desperate Keystone XL backers who have asserted in various forums that the use of rail to move crude oil from fields to refineries puts the public in jeopardy.

Juneau Empire: Legislation introduced would prevent drilling in ANWR

U.S. Senators Maria Cantwell (D-WA) and Mark Kirk (R-IL) introduced legislation Wednesday that would designate 1.56 million acres of land in the Alaska National Wildlife Refuge as wilderness. “The Arctic National Wildlife Refuge is a national treasure that must be preserved for future generations to experience and enjoy,” Cantwell said in a statement. “I’m proud to join Senator Kirk on this bipartisan bill to protect one of the last pristine public lands in America. We need to advance forward-looking solutions for America’s energy future, while preserving this treasured public land and the unique ecosystem that depends on it.”

Denver Business Journal: Broomfield vote flips, city says frack ban approved, will recount

Voters in Broomfield approved a ban on hydraulic fracturing, better known as fracking, within the town’s borders, by a razor-thin margin of 17 votes out of 20,683 cast, according to the latest tallies by city officials posted Thursday night. The margin is so narrow that a recount is mandatory, according to the city. That's a switch from the unofficial results posted after the elections ended Nov. 5, which showed the measure losing by about 13 votes. The ballot question called for a five-year moratorium on fracking.

The Wall Street Journal: The Right Way to Frack

What is one thing you wished the public understood about fracking? BILL RITTER: The public should understand that hydraulic fracturing can be done in a way that is both environmentally sound and socially responsible. Oil and gas producers have been developing and using hydraulic fracturing techniques for decades. It has only been in the last decade, however, that hydraulic fracturing has been combined with directional drilling, allowing producers to tap tight shale oil and gas reserves that previously were considered non-retrievable.

The Wall Street Journal: ‘Fracking’ Is a Loaded—and Misunderstood—Term

Pro or con, “fracking” has become a politically charged word. In the 1984 textbook “Fundamentals of the Petroleum Industry,” hydraulic fracturing or “fracking” is defined as follows: Modern fracturing uses pressured water, gels of various types, and other fluids that are compatible with the formation and hydrocarbons… to inject tons of fluid thousands of feet into the earth at nearly unimaginable pressures…great enough to lift and break up the producing formation…When the fracturing pressure is removed, overburden pressure reasserts itself and sometimes reseals the formation as tightly as before. The contractor, therefore, pumps a propping agent (e.g. usually sand) down the hole with the fluid. It props (tiny) fractures open against formation pressure when the fracturing pressure is gone.

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11-5-13 Parnell Touts Benefits of Oil Tax Reform

05 November 2013 10:45am

Alaska Governor Sean Parnell, Oil Taxes, Reform, Production Tax, PPT, Photo by Dave HarbourCommentary:  Late yesterday, we received a copy of a letter (below) from Alaska Governor Sean Parnell (NGP Photo) addressed to citizens.  

We have supported tax reform in the spirit of fairness.  However, in the sense of 'enlightened self interest', we know that absent a competitive investment climate in an oil-abundant era, Alaska's production and economic strength will continue to decline.  

Tax Commentary: We would suggest that economic principles apply throughout the free market--whether one is employed by the film, cruise, fishing, farming, manufacturing or oil industry.  "The more you tax and regulate, the less you get from that source."

Our friend, Bob Neumann, recently said, "The state legislature and governor’s office need to recognize the economic benefits that the cruise industry brings to our state.  Thousands of jobs would not exist without the cruise industry.  Overtaxing and overregulating has a direct effect on the industry.  A healthy balance must be permanently grounded in our state and not be continually revisited with each new legislature or governor.  This can only be achieved through education and promotion of the industry directly with the support of our government on the local and state level."

-dh

Next August, voters will face a referendum question of whether to keep tax reform or repeal it.  We believe Parnell's communication efforts are valid and that Alaskans will come to understand how important it truly is to preside over a fair, predictable and competitive investment climate.  

Absent those qualities, who would want to invest gas pipeline or other project money in a place with the most remoteness to markets, the most difficult climate, the highest wages, the highest taxes, some of the most demanding regulations and a history of changing the rules of the game AFTER investments have been made?      -dh


Dear Alaskan,

Over the past several months, Alaskans have started to see the benefits of our new oil tax structure, the More Alaska Production Act. Companies and investors are responding with long-term development plans for the North Slope, which is resulting in new opportunities and jobs for Alaskans. We are even seeing new entrants coming to Alaska.

Our new tax structure is working, and that’s great news for us, for Alaska’s economy, and for future generations. Let me share with you some of these recent announcements:

Caelus Energy Announces $1.5 billion investment in Alaska

Caelus President James Musselman: “We are attracted to Alaska because of the enormous geologic opportunity as well as the incentives, such as SB 21, that the state has put in place to encourage energy investment by independent oil and gas companies.”

BP Alaska president: Oil tax bill makes several projects possible

She [Janet Weiss] said it will add some 200 new jobs and result in between 30 and 40 additional wells being drilled each year for at least five years. Beyond that, Weiss said, BP and its partners are evaluating a $3 billion project to pursue new developments in the western part of the greater Prudhoe Bay area.

Alaska oil and gas jobs continue growth…

After ConocoPhillips added an extra drilling rig to its Kuparuk field this summer, citing the more favorable tax policy, Little Red Services has had more work at that field, [President and CEO Doug] Smith said. The company's man hours are up 20 percent there, and Little Red recently added eight full-time workers and increased its fleet of hot-oil trucks to six to meet the extra demand, Smith said.

Repsol plans: three more wells, three more rigs

Slope investments may top $5B with BP plans

“…. those could easily increase the total of pending new projects to $5 billion.”

ConocoPhillips to increase Alaska production

ConocoPhillips is planning to bring an additional rig to the Kuparuk field this spring and working with co-owners to fund a new drill site on the Kuparuk River field, the company said in a Wednesday announcement.

The renewed optimism is creating opportunity across our state and driving Alaska’s economic comeback. Many other Alaskans and Alaska businesses are benefitting as well. Take a look at what Alaskans are saying.

Make no mistake, the More Alaska Production Act is working for Alaskans.

Best regards,

Governor Sean Parnell

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10-26-13 Has Oil Tax Reform Made Alaska's Investment Climate Half Full or Half Empty?"

26 October 2013 9:21am

Comment: Yesterday we editorialized about more evidence supporting Alaska's oil tax reform bill, including Caelus Energy's entry into Alaska partly in response to oil tax reform.  Alex DeMarban, Alaska Dispatch, Pioneer, Caelus, SB 21, Photo by Dave Harbour

Today, Alex DeMarban (NGP Photo) of the Alaska Dispatch provided a more in-depth report in which he editorialized that: "The departure of Pioneer from Alaska seems to cut into a major plank of Senate Bill 21, a huge tax cut for the state's oil producers that was supposed to help Alaska's dwindling oil fields overcome competition from booming shale deposits in Texas and North Dakota."

Casey Sullivan, Pioneer Natural Resources, Calus, Photo by Dave HarbourDeMarban then quoted from a company spokesman.  "Casey Sullivan (NPG Photo), an Alaska-based spokesman with Pioneer, said the company felt that SB 21, which boosted state subsidies for production, offered Pioneer a better long-term deal compared to the 2007 tax increase."

Yesterday in our report we quoted Caelus Energy President & CEO Jim Musselman's rationale: "We are attracted to Alaska because of the enormous geologic opportunity as well as the incentives, such as SB 21, that the state has put in place to encourage energy investment by independent oil and gas companies."

We leave it to readers to judge whether oil tax reform has made Alaska's investment climate glass half full or empty.   -dh

This reader comment came yesterday in response to our commentary on 10-22-13: "Question CNBC's Cramer; Question White House Political/Economic Advisors"

It is becoming clearer and clearer to me that in order for rational policy to prevail, decent people must begin to understand that the last thing we should resort to is some government involvement.  How has it become acceptable in the land of the free and the home of the brave that people instinctively seek to “be governed” whenever a problem crops up?  A nation of individuals who would rather be governed than be free to make their own decisions does not have the requisite supplies of confidence to remain #1.

Stay warm. 

Best,

Dan

Daniel V. Kish

Senior Vice President, Policy

Institute for Energy Research


Petroleum News.  

The Alaska Gasline Development Corp. board of directors will meet Oct. 30 from noon to 5 p.m. at the Wilda Marston Theater at 3600 Denali St. in Anchorage.

The public may participate from the Legislative Information Office in Fairbanks and from the State Office Building in Juneau, or by calling 907-330-8452 for the access number.

AGDC said in the meeting notice that pertinent reference materials, if used, will be made available to members of the public wishing to participate in the meeting.

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10-25-13

25 October 2013 6:51am

Our Commentary Goes Nationwide

We find more evidence supporting the wisdom of oil tax reform

by

Dave Harbour

CBC.  To avoid disturbing the site where ancient human bones were discovered, a Saskatchewan pipeline company says it will tunnel deep below.​


On Wednesday, we inventoried ways in which the Federal government was hamstringing job creation by blocking natural resource development (i.e. Thinking Critically About CNBC).

Yesterday, we noted that the Steller Sea Lion is finally off the threatened species list.

Doc Hastings, Congressman, Prairie-Chicken, Lesser, US fish and wildlife service, Western Association of Fish and Wildlife Agencies' Lesser Prairie-Chicken Range-Wide Conservation Plan, Photo by Dave HarbourToday, Congressman Doc Hastings (NGP Photo) explains why citizens must still remain critical of Administration strategy (re: Lesser Prairie-Chicken Range-Wide Conservation Plan--another initiative that threatens human livelihoods.)  -dh

Also noteThe National Blueways Secretarial Order was signed by Interior Secretary Ken Salazar in 2012 and creates unilateral authority for the Secretary to designate entire watersheds as “National Blueways.” 


More: The nation's energy infrastructure is under attack. The destruction of the utilities that provide electricity or its ability to refine oil is critical to crippling a nation's ability to function, based on the universal use of hydrocarbons such as coal, natural gas, and oil.  EnergyBiz.

Earlier this week, we posted a commentary on Repsol's Alaska investment (i.e. Take Heart But Take Heed).  That commentary Governor Sean Parnell, More Alaska Production Act, Repsol, SB 21, Photo by Dave Harbourwas edited and reformatted by Master Resource, with our permission, and released today to its thousands of readers.  In part, we said, "In 2011, Repsol acquired a large lease position in Alaska given the rich prospecting and the upside of positive tax reform in the state. The latter occurred in mid-2013 with the passage of Senate Bill 21, the More Alaskan Production Act, signed into law by Governor Sean Parnell (NGP Photo).

 
Late yesterday, a reader (i.e. J.N.) alerted us to a related Wall Street Journal article.  In it, we find that the highly respected independent operator, Pioneer Natural Resources, has sold its Alaska operations to another firm attracted to the state by oil tax reform.   According to the Wall Street Journal article, James C. Musselman, President and CEO of Caelus Energy Alaska LLC, stated, "We are excited to enter the North Slope through the purchase of Pioneer's assets. The current Pioneer Alaska team is very impressive and has the experience to develop the significant resource potential they have identified and help us grow the business in the future. We are attracted to Alaska because of the enormous geologic opportunity as well as the incentives, such as SB 21, that the state has put in place to encourage energy investment by independent oil and gas companies."
 
 
Some opponents of tax reform -- those seeking repeal of the new reform act -- believe that more moderate taxation does not attract more investment.  We urge citizens on a local and national basis in both the United States and Canada to put new credence on the very basic economic principle that, "The more you tax the less you get."  
 
We do admit, however, that economic realities sometimes take years to manifest themselves.  This means that in the short term, a greedy government may well make 'more' NOW for current beneficiaries by taxing more -- even if it is at the LATER expense of the helpless, non-voting generation who depend on our judgment and decisions.  -dh
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10-23-13 Why All Alaskans Should Support Oil Tax Reform: We've Proved It Works!

23 October 2013 7:31am

Commentary: We've Proven Tax Reform WORKS!

This morning, Alaskanomics sheds light on how much film production tax credits have helped the economy.  Here's a Peninsula Clarion story that demonstrates how five separate tax incentives have leveraged more jobs and production in the Cook Inlet Area.  With these two examples of how moderate, competitive tax policy produces good results for Alaska, one wonders why several legislators and community activists are trying so hard to repeal SB 21, the "More Alaska Production Act" designed to increase Alaska North Slope production, jobs, Trans Alaska Pipeline throughput and Alaska's economic strength!     -dh

(Ref: existing incentives)

Oil & Gas Online:  

Sixty-seven percent of voters nationwide support offshore drilling for domestic oil and natural gas resources, according to a new poll conducted by Harris Interactive for API’s “What America is Thinking on Energy Issues” series.

This support bridged party lines, with clear majorities of Republicans (79 percent), Democrats (57 percent) and Independents (67 percent) all supporting offshore drilling.

 “Americans get it: domestic oil and natural gas development is a key driver for new jobs, economic growth and energy security,” said Erik Milito, director of upstream and industry operations for API.

(Scroll down for our related editorial, yesterday.  -dh)

 

 


 

Dan Hassey

Today's Natural Gas Price Analysis From Dan Hassey, Uncommon Wisdom

The natural gas production cost currently ranges from $1.50 up to $4 per million cubic feet. When natural gas prices fell to the $2 level, producers shifted to oil and natural gas liquids.

With a glut in natural gas supplies, production is falling. One of the best ways to determine the potential supply of natural gas is to look at rig counts.

Baker Hughes (BHI) tracks the number of rigs operating all over the world. This table from its website shows the decline of rigs used for natural gas drilling:

The U.S. natural gas rig count fell by 240 rigs in the last year, a 40% decline. Notice how the number of oil rigs rose slightly since a year ago. Those are producers switching from natural gas to oil.

Now look at this natural gas price chart.

When prices hit $2.00, producers cut back on production. Then demand picked up, especially from utility companies. Prices recovered and have now doubled to the $4 area.

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