Today, Congressman Doc Hastings (NGP Photo) said, "...the Obama Administration has threatened to impose ocean zoning to shut down our oceans, and today the President is making good on that threat."
(We began updating readers on this threat of Executive Overreach years ago. Scroll down to 'Current Event #4' , on this page. Also see Washington Post News Alert which mentions involvement of White House Chief of Staff John Podesta, a leading player in the Enviro-Industrial-Governmental Cabal. -dh)
The one state out of 50 with real gross domestic product loss in 2013 was Alaska.... With declining oil production, and high governmental, climactic, geographic, marketing and logistical costs Alaskans are justified about being very concerned for the future of their children. This is why voting to repeal oil tax reform in the August primary election is a vote for continuing economic decline. The Department of Commerce is also documenting with this report that poor Federal natural resource policy in Alaska (i.e. and elsewhere) results in economic weakness. -dh
US Department of Commerce. Real gross domestic product (GDP) increased in 49 states in 2013, according to new statistics released today by the Bureau of Economic Analysis (BEA). (Our thanks to Dan Kish, Institute for Energy Research's SVP, for bringing this report to our readers' attention. -dh)
Alaska Dispatch. A group fighting to repeal Alaska’s new oil-production tax cut publicly issued an apology on Monday days after a volunteer sent out a caustic statement that, among other things, accused former Gov. Tony Knowles (NGP Photo) of being a “paid shill” for the other side.
In fact, the group, Vote Yes! Repeal the Giveaway, has no evidence showing that Knowles is paid by the opposition and should have never have sent the email, said the group’s campaign manager, T.J. Presley.
From the Alaskanomic's Blog:
Posted: 16 Jun 2014 11:11 AM PDT
The Anchorage Chamber of Commerce commissioned a study on Cook Inlet Oil and Gas by Northern Economics. The report that resulted from this study was published this spring. For your convenience, we have included a link to the report in the Resources section of Alaskanomics.
It should be no surprise that the Cook Inlet oil and gas industry is extremely important to Southcentral Alaska and the rest of the state. In Anchorage, 82 percent of homes are heated by natural gas. The Anchorage Chamber of Commerce has made energy security a top priority. In a recent survey, over 40 percent of members noted that energy was a concern and the biggest concern in relation to energy was the high price due to deficient supply.
The study finds that the impact of Cook Inlet oil and gas is significant. There is a $2.8 billion economic output from the industry in Cook Inlet. $350 million of this is in payroll with 1,300 direct jobs on the Kenai Peninsula. There is a $423 million benefit from using local, Cook Inlet Gas, rather than using other fuel sources. The total worth of Cook Inlet oil and gas is $4.7 billion. This is over 10 percent of the Alaska economy and with new investment pouring into the State; Cook Inlet appears to be rebounding.
The view the full report, please use this link.
|World Energy, by George Backwell. ...a fraction of natural gas projects ... will become reality as high costs and weakening gas prices....|
Alaska Dispatch, by Brigham McCown.
As political shenanigans continue to delay approval of the Keystone XL pipeline, Alaska voters hold the key to avoiding a similar fate for what could be North America’s largest pipeline project (i.e. Natural gas pipeline).
Washington Examiner by Mark Tapscott. Another scientist has more bad news for global warming advocates who claim that Americans are killing Arctic Polar Bears.... *** Professor Matthew Cronin (NGP Photo) of the University of Alaska at Fairbanks studied the genetic histories of the three bear species, brown, black and polar (NGP Photo). *** What Cronin found casts significant new doubt about claims that the furry white monsters of the Arctic are soon going to be extinct if America doesn't stop causing global warming by burning fossil fuels. *** Cronin has been studying animal genetics for 25 years and his latest study will be made public in a paper to be published shortly in the online Journal of Heredity, according to UAF's Nancy Tarnai. (See a related article)
Fuel Fix. American Energy Partners said Monday it plans to spend $4.25 billion to expand into Texas and West Virginia for the first time and to snap up more land in Ohio.
The three announced acquisitions are the latest — and the most expensive — in a series of moves by Aubrey McClendon (NGP Photo), one of the first wildcatters to capitalize on the U.S. shale boom, to rebuild his empire after he relinquished his perch at the top of Chesapeake Energy last year.
From the National Ocean Policy Coalition: The U.S. Arctic Research Commission's daily update (last week) included an announcement by the White House Office of Science and Technology Policy and the National Ocean Council that former Alaska State Rep. Beth Kerttula has been selected to serve as National Ocean Council Office (NOC Office) Director. Kerttula replaces Dr. Brad Moran, who has been serving as Acting NOC Office Director since November 2013. Coverage of the announcement includes articles in the Alaska Daily Dispatch,Anchorage Daily News, and KTOO News. KTOO reports that Kerttula will serve as NOC Office Director for one year, with an option to remain through the remainder of the Obama Administration.
Calgary Herald, by Stephen Ewart. The military crisis in Ukraine has brought into focus Europe's dependence on Russian natural resources for 30 per cent of its energy requirements just as Prime Minister Stephen Harper is in Europe for the G7 Summit and the D-Day anniversary events Friday in Normandy.
With coercion of Russian oil supplies deemed "unacceptable" by political leaders in Europe this week, it appears crude from Canada's oilsands has become much more acceptable.
Consumer Energy Alliance (CEA) tells us that last Thursday, CEA-Florida joined PACE for the Gulf Coast Energy Forum in Mobile, Alabama during which executives from five southern utilities raised concerns about the EPA’s new rules on carbon emissions for existing power plants. As Alabama.com noted, one of the biggest concerns highlighted by the executives was the rule’s effect on the energy mix and the likely dependence on natural gas that will result.
The Daily Caller: EPA Rules To ‘Necessarily Skyrocket’ U.S. Electricity Prices
U.S. electricity rates are set to rise more than 10 percent by 2020 because of onerous federal environmental regulations on coal-fired power plants, according to an analysis by American Action Forum. This means consumers could be forced to pay $150 more each year for electricity due to Obama administration power plant regulations.
E&E News: “The United Mine Workers of America is blasting the Obama administration's new proposal for controlling greenhouse gas emissions from existing power plants, which will likely contribute to the loss of coal mining jobs. "The UMWA has not and does not dispute the science regarding climate change," Cecil Roberts, the group's international president, said in a statement this afternoon. "Our dispute is with how our government is going about addressing it, and on whom the administration is placing the greatest burden in dealing with this challenge," he added. Roberts said the rule would lead to "long-term and irreversible job losses." The union says it calculated the potential direct coal generation job losses at 75,000 by 2020.”
Washington Post Editorial. DEBATE HAS raged over whether the United States can fight Vladimir Putin on the Russian president’s most favorable ground: energy politics. It can, and it should, particularly because there’s an obvious path forward that coincides with the United States’ — indeed, the world’s — economic interests. That path is lifting irrational restrictions on exports and making it easier to build natural gas export terminals.
Comment: This comment and our archives will supplement the adjacent story.
Late last year we began documenting with more and more detail the relationship of socialist and environmental extremism to the current administration in Washington.
Here is a recent link that, in turn, links back to John Podesta, George Soros, the Center for American Progress and other groups that contribute to the corruption of the Rule of Law in the United States.
Powerline Blog (3/22/14) ... a still deeper level of corruption is on display here. Juliet Eilperin is a reporter for the Washington Post who covers, among other things, environmental politics. As I wrote in my prior post, she is married to Andrew Light. Light writes on climate policy for the Center for American Progress, a far-left organization that has carried on a years-long vendetta against Charles and David Koch on its web site, Think Progress. Light is also a member of the Obama administration, as Senior Adviser to the Special Envoy on Climate Change in the Department of State. The Center for American Progress is headed by John Podesta, who chaired Barack Obama’s transition team and is now listed as a ‘special advisor’ to the Obama administration. Note that Ms. Eilperin quoted Podesta, her husband’s boss, in her puff piece on Tom Steyer. Oh, yes–one more thing. Guess who sits on the board of the Center for American Progress? Yup. Tom Steyer.”
BP today announced its intention to establish a separate business to manage its onshore oil and gas assets in the US Lower 48.
Comment: Yesterday we noted that two legislators are planning for a new oil revenue stream should voters adopt an August Primary Ballot proposition to repeal oil tax reform.
That revenue stream will be based on a new policy emphasis on state investment and equity into oil and gas exploration and development projects. These are the same minority legislators who are leading an effort to repeal the SB21 oil tax reform bill passed by a majority of the House and Senate, and signed by the Governor, less than a year ago.
We can now see a strategy rising from the mist: repeal of tax reform will have to be replaced by something that produces revenue. Since repeal of reform will deflect investment, an unhappy but obvious policy replacement would be to socialize/nationalize natural resource industries...starting with the small step of massive equity investment of public funds and employment of state employees to oversee the profitability of the investments.
What could possibly go wrong?
Today, we hear in a Fairbanks News Miner editorial, that certain Mayors who reap large and mostly passive benefits from the oil and gas statewide property tax, are mounting an effort to investigate impact on their revenues from an agreement between the state and gas pipeline parties regarding the fiscal regime enabling a gas pipeline project to proceed.
Certain gubernatorial candidates oppose both oil tax reform and the fiscal terms surrounding a gas pipeline project.
The current governor supports both tax reform and the proposed gas pipeline fiscal regime.
While there seems to be alignment among major gas pipeline and oil tax stakeholders, lack of political alignment from other, vocal influence leaders could well cause oil tax reform to disappear after August, soon to be replaced by new statewide leadership and a new world of natural resource control by bureaucrats and government ownership of the 'means of production'.
Should this be the outcome, we can envision great impact, as well, on Alaska's entire investment climate, not merely limited to natural resource investors. -dh
Comment: Fox News interviewed former Alaska Governor Sarah Palin (NGP Photo) today.
During the interview, we learned that Candidate Obama opposed Candidate Romney's conviction that Russia posed a global threat to peace.
The program also produced a video of Candidate Sarah Palin, earlier warning that just as Russia invaded Georgia it could as easily invade Ukraine.
Throughout the interview, Palin emphasized the importance of approving the Keystone XL pipeline and developing domestic energy resources with Administration support--rather than Administration opposition.
Our faithful readers know that we have been hard on Palin for her Alaska oil tax and gas pipeline policies nearly a decade ago...but in this interview we found ourselves appreciating her message, which we paraphrase: "Develop America's resources aggressively and responsibly now, Mr. Obama, or watch our standing in the world and support for our allies diminish along with our national security and economic recovery."
We also note from the current issue of Petroleum News, that "Commissioner John Norman (NGP Photo) retired from the Alaska Oil and Gas Conservation Commission at the end of January. Norman, an attorney, had been the public member of the commission for 10 years. He was named to the commission by former Gov. Frank Murkowski in 2004, replacing Sarah Palin as the public mem...." (We are reminded once again of what a small world it is as we congratulate Governor Palin on her stand for domestic energy production and her replacement, Commissioner Norman, for a lifetime of service to the state and nation. -dh
Wall Street Journal by James Freeman
WARREN BUFFETT, CLIMATE-CHANGE DENIER
The billionaire chairman of Berkshire Hathaway (Photo, Buffett with NGP Publisher) is on some kind of roll. Yesterday we told you about his warning on public pension funds in his annual letter to shareholders. Now, he's puncturing deeply-held liberal myths about global warming. Mr. Buffett tells CNBC that extreme weather events are not becoming more common, and that climate change is not altering his company's calculations when insuring against catastrophic weather events. "The public has the impression that because there's been so much talk about climate that events of the last 10 years from an insured standpoint and climate have been unusual," he said. "The answer is they haven't." (We commented on the subject of climate change two days ago, invoking Aristotle's Golden Mean ideal; and we challenged both sides of the debate). -dh
Comment and link: We earlier commented on LNG competition.
Here, Peter Tertzakian of the Globe and Mail gives further insight on the softening LNG market for British Columbia exports. Are not some of Canada's LNG export concerns ones that we Alaskans share. In both Alaska's land Canada's cases, LNG market demand and competition are exacerbated by local political interests striving to obtain for themselves and their constituencies all possible benefits -- even if the end result is achieving 100% success in gaining benefits for projects that became embroiled and then doomed in a sea of local and national political struggles.
To quote our reference at the Globe and Mail: Japanese benchmark prices for LNG in Asia have been exceptionally high since the Fukushima nuclear disaster, almost exactly three years ago. Concurrently, domestic Canadian natural gas prices have been anomalously low. The resulting “differential” between the two was $15.70 (U.S.) for one million British thermal units (MMBtu) at its widest in July, 2012. It’s been that massive price gap, or arbitrage, that triggered the buy-low-sell-high opportunity to build LNG export facilities in North America, including 14 projects off the west coast of B.C.
Alliance Profile: M-I SWACO a Schlumberger Company: From Drilling through Production, Focused on our Customers
Alaska LNG Project Faces Market Challenges...And Political Challenges
Alaska and Mackenzie Delta producers are eyeing LNG exports to Asia as this generation's best option for monetizing Arctic gas.
Previous generations were close: with the Arctic Gas project in the 1970s (i.e. including TransCanada); displaced by the Alcan project in the 1980s (i.e. vigorously opposed by TransCanada); and the Alaska Highway gas pipeline project given new life with higher gas prices and passage of the Alaska Natural Gas Pipeline Act of 2004 (i.e. led by TransCanada).
Evolution of Arctic gas projects continued with Governor Sarah Palin's (NGP Photo) support of the Alaska Gasline Inducement Act (AGIA, 2007), giving a subsidy to TransCanada just as the great North American shale gas phenomenon began eliminating that market for expensive, Arctic energy.
However, with subsequent support from the Legislature and Governor Sean Parnell (NGP Photo), TransCanada's project evolved into a duet consortium with ExxonMobil, and more recently achieved significant alignment of interests with the State's Administration, Legislature and other producers.
Meanwhile, the state's operating budget is increasingly unsustainable, depending as it does on drawing down savings accounts in response to its 90% dependence on diminishing oil production.
With the Obama Administration seemingly doing everything possible to prevent oil, gas and mining activity on federal AND state lands (i.e. Readers are welcome to challenge us on this accusation and we will be happy to document it), Alaska's economic prospects are at further risk.
To add to the lack of optimism, in a diminishing oil production environment, a coalition of minority activist and anti-business groups is promoting repeal of Alaska's oil tax reform law (See yesterday's commentary)--though the majority of Alaska's private sector leaders oppose repeal.
The Senate Bill 21 reform effort was passed into law less than a year ago after years of analysis and debate about how to increase investment and natural resource production, royalties and taxes. Repealing SB 21 would send a dramatic signal to the investment world that in Alaska, "A deal is not a deal".
Now, the state's economic hopes are focused like a falcon's gaze on hopes for a gas pipeline and LNG export project whose prime market would be Asian consumers.
However, just as changing domestic gas markets over the last 45 years have killed hopes and plans for monetizing the huge Arctic gas reserves, so now do the furies appear to be conspiring against Alaska's export hopes.
In Canada, a number of LNG projects have been approved or are in mature permitting stages -- by a supportive federal government -- and seem to be mostly targeting Asian markets.
Even though Japan's Fukushima tragedy resulted in more demand for LNG, Japan is also considering lower cost coal as a competitive alternative, which diminishes consumer appetite for more expensive LNG imports. We note that Japan has been one of the most prospective markets for Arctic gas.
Meanwhile, members of Congress who have studied the issue are telling the Administration that unless the Department of Energy increases the approval rate -- and decreases the backlog -- of LNG project applications, markets could be lost to other energy sources.
The Department of Energy's LNG export function -- under direction of Assistant Secretary for Fossil Energy, Christopher Smith (NGP Photo) -- seems to be increasing its approval activity.
|Fuel Fix. Oil industry and business groups have formed a new coalition to make the case for expanded exports of American natural gas.
The “Our Energy Moment” campaign, which is described as a grassroots organization, aims to counter the arguments of export foes, as the Obama administration weighs applications to widely sell liquefied natural gas overseas.
An increased approval rate for Canadian and Lower 48 LNG projects is certainly good for North American economies.
Logically, a larger number of LNG exporters means more competition for an Alaska project.
Most projects will be attempting to secure long term supply contracts with utilities and/or large industrial users. As those markets become satisfied with the growing number of current LNG projects, Alaska North Slope and Mackenzie Delta gas will surely have a more challenging time -- as later comers -- elbowing their way into market niches that will pay top dollar for long term contracts.
We suspect that one saving grace of current Arctic gas projects is the high degree of expertise focused on their successful outcome. In particular, we note that many if not most of the Alaskan and Mackenzie Delta producers have LNG experience and some affiliated interests with each other and even with Canadian west coast and Lower 48 LNG exporters.
Where does this leave Alaskan citizens and investors?
- In six months, Alaskans will vote on whether to stabilize or destabilize their investment climate. Depending on the referendum's outcome, we can envision either massive new investment in the state or massive withdrawals of capital investment plans, over time.
- If the August plebiscite favors investment, we can envision all parties attempting to fast track gas pipeline timetables. If the vote repeals tax reform, we see a gloomy end to this generation's plans for monetizing Alaska gas.
- In the next three years, the Obama Administration will either ease up on Alaska or continue its nearly perfect record of opposing, slowing and/or stopping every major development they can in the state. If projects can be sanctioned under the federal assault, more oil and gas can contribute to a sustainable economy. If federal pressures continue and even increase, prospects for more oil, gas and mining production are limited.
In conclusion, we cannot overstate the importance of the August referendum vote on whether to repeal Senate Bill 21.
This is because repeal of SB 21 would recreate an investment climate that has minimized what could have been sufficient investment to stabilize if not reverse waning, North Slope oil production.
As we have demonstrated above, Arctic gas LNG projects will have a challenging enough time finding a market niche even in the best of circumstances. But repeal of SB 21 will, in our view, totally emasculate the investment climate along with plans for a gas pipeline.
We would also offer this additional perspective on the highly lauded, state financed, in-state gas pipeline project, under control of the Alaska Gasline Development Corporation. That project was designed to meet growing demand for natural gas as a heating and power supply for the majority of Alaska's population.
But with 90% of the state budget depending on oil production -- along with a third of Alaska's economy -- repeal of SB 21 would result in growing job losses and a massive, lemming-like out-migration of citizens from the state over the next five years.
In such circumstances, existing natural gas supplies will be more than sufficient to supply the survivors without the need for or expense of a new, in-state gas pipeline.
Finally, we invite those seeking optimism to find it by joining us in seeking a stable tax environment and for more powerfully exercised state's rights in the face of an overreaching and predatory federal government.
Bristol Bay Times by Jim Paulin. Royal Dutch Shell's new chief executive said last week that the company is shelving its Alaska exploration program, at least for this year, a move that will impact the economy of Unalaska/Dutch Harbor.
Unalaska served as Shell's base in 2011 and 2012, as the nearest port with year-round open water and well-developed port facilities, despite being about 1,000 miles from the offshore oil prospects to the north in the Arctic Ocean.
"It's a pretty substantial hit," said Tom Enlow, of Unisea, which operates the Grand Aleutian Hotel in Unalaska. Shell had planned to rent between 70 and 75 hotel rooms daily from April through September, at an average of $139 per day, he said Monday.
The oil company's pullout means a loss of not only hotel rental revenue, but also food and beverage expenses, for both Unisea and other local restaurants, as well as less money for the local marine support sector that provides parts and services to ships, Enlow said.
The city government will also lose out because of reduced fees and sales taxes generated by Shell's activity, said Enlow, who is also a member of the Unalaska City Council.