By: Scott Goldsmith, NGP Photo
Economic Death Spirals: Part I
Economic Death Spirals are never pleasant and can vary in impact. As a former utility regulator, I was always on the lookout for potential utility death spirals, for their impact could bankrupt utility investors, make utility rates unaffordable for consumers and/or threaten the lives of those dependent on life sustaining heat, light, water and sanitary services.
A utility death spiral can strike when rates become too high for consumers to afford. In such a case, fewer consumers can pay for the service. As customers leave the utility or use less of its service, overall utility costs increase because they are borne by an increasingly smaller number of remaining customers. Ultimately, there could be a very few customers paying such a high price that the utility and its investors have to call it quits. The utility death spiral is one form of economic, “death spiral”.
Having become acquainted with the tragic consequences of potential and some actual economic death spirals, I now apply the concept to a variety of personal and public policy situations—some of which will be of value to our Alaskan and Canadian readers coping with big energy projects.
The Traditional Utility Death Spiral
An honest regulator today must be very frustrated. By 'honest' we mean public servants committed to just and reasonable adjudication of utility rates based on facts and evidence in the record before them...not on personal political instincts or outside pressure.
The concept of "global warming" became de rigueur, beginning about two decades ago, then morphed into "global climate change" when in more recent years science could not sustain the theory of "warming".
It is hard for ordinary, hardworking citizens to believe but we have shown in these pages that "climate change" is a political technique for defeating capitalism and organizing communities to achieve power.
To use climate change to achieve power and defeat capitalism, the manipulators -- the strategic planners pulling the strings -- have perverted the rule of law in a number of areas which we have also reviewed in these pages.
But today, we'll address the manipulation of the utility regulatory process.
Here is the general, trustworthy, reliable process of utility regulation with which I became familiar as a regulator.
A regulatory utility agency is created by the Legislature with quasi-judicial and quasi-legislative powers.
In its quasi-judicial role, it adjudicates utility rates, assuring that they are 'just and reasonable' for consumers and give utilities the 'opportunity but not the guarantee of achieving a fair return of and on their investments.' Final decisions are adjudicated in private to assure a candid internal debate of merits and of the record but are subject to appeal both by the agency then by the judicial system.
In its quasi-legislative role, it may be given the power to promulgate regulations, rules established consistent with statutes passed by the Legislature. Regulations have the force of law but are created after a proposal is submitted for public review, public comment is considered. The overall record is generally adjudicated and voted on in public.
The regulator may grant a utility a monopoly service area in return for having its operations regulated by the agency. That agency will issue a certificate of public convenience and necessity in return for the utility’s commitment to provide dependable service within its certificated area. The regulatory entity then monitors operations and hears complaints and adjudicates requests for consumer rate increases – using a “just and reasonable” standard.
In short, regulation of the monopoly utility becomes the surrogate or replacement for a competitive market. (Note: in the case of utilities, most people wouldn’t want telephone poles constructed by six different companies, or six sets of sewer pipes or water pipes or natural gas distribution pipelines or six garbage collection companies serving various neighborhood customers at 5 a.m., six days a week.)
Most customers would rather have a government regulated utility monopoly, overseen to assure that the rates for the service are, “just and reasonable,” as if there were a competitive marketplace.
In the case of regulated utilities that are privately owned, the regulator decides whether costs were ‘prudently incurred’ and then has to decide using the ‘just and reasonable’ standard whether the rate payers should be charged the additional monthly rate, or whether investors, or shareholders, should ‘eat’ the increase.
But another regulatory principle is this: while assuring that the proposed rate increase is just and reasonable, it does so from both the perspective of the utility and the rate payer. That is, if costs are high but prudently incurred, the regulatory should also be mindful that the utility investors should be protected as well, for it is in the consumers’ interest and in the general public interest to assure that utility investors have the opportunity – but not the guarantee – of making a reasonable return on their investment.
To not be as mindful of a just and reasonable utility cost increase could be to jeopardize the financial ability of the utility to survive.
Dave Harbour, publisher of Northern Gas Pipelines, is a former Chairman of the Regulatory Commission of Alaska and a Commissioner Emeritus of the National Association of Regulatory Utility Commissioners (NARUC). He served as NARUC's official representative to the Interstate Oil & Gas Compact Commission. Harbour is past Chairman of the Alaska Council on Economic Education, former Chairman of the Anchorage Chamber of Commerce, and past President of the American Bald Eagle Foundation. He is Chairman Emeritus of the Alaska Oil & Gas Congress.
Point of Personal Privilege: Scroll Down For An Update On, "Alaska's Diplomat", Our Friend, Chuck Becker
U.S. Sen. Lisa Murkowski (NGP Photo), Friday issued the following statement in response to a letter that 18 Senate Democrats sent to Interior Secretary Jewell, calling on the Obama administration to stop energy production in the Arctic. This comes after the administration approved plans for Shell to drill in Alaska’s Chukchi Sea this summer.
“Today’s attempt to block energy production in Alaska ignores the facts. For more than 30 years, Alaska has demonstrated its safe record of responsible oil and natural gas development in the Arctic. Even the Obama administration agrees this project can move along safely,” Murkowski said. “Right now, the United States can either choose to responsibly develop its resources under its superior standards or let countries like Russia lead the way. We can either choose to produce our own resources or return to the costly days of buying them from abroad. When it comes to realizing the benefits of energy production, I’ll always put Alaska and our nation first.”
The Democrats’ letter opposes increased energy production in the Arctic and is in contrast to the Obama administration, which approved Shell’s plans to drill in the Arctic this summer. This week, U.S. Bureau of Ocean Energy Management Director Abigail Ross Hopper told Platts that new Arctic energy development could be carried out safely.
Hopper echoed President Obama’s recent comments that Alaska energy production is good for our nation. He said, “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.”
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. The Northstar field in the Beaufort Sea has produced 150 million barrels of oil since 2001.
Studies show that increased leasing and development in Alaska’s Beaufort and Chukchi seas and in Cook Inlet could, by 2035, create nearly 840,000 jobs and raise more than $200 billion in revenue for the government.
Here is more information about this week's Celebration of Chuck's life, included in an obituary prepared by Chuck's loving wife, Micky and family.
We also include for Chuck's many friends among our readers, a video that the family has distributed.
On this memorial day, we shall long remember those who have fallen in defense of our Nation and Chuck, who served the nation with distinction in so many ways.
Many friends of
"Alaska's Diplomat", Chuck Becker, have commented on the important life he led, including his energy industry understanding. (Note: we will remove or edit any comments at the request of commenters. -dh)
Canada's Fraser Institute analyzes how US loss of freedom affects economic recovery...and wonders how Alberta's new government will affect energy industry vitality.
May 21, 2015 7:24 p.m. ET
Government agencies have a certain descending order of excuses.... (Subscribe and read full WSJ article here.)
The EPA has a problem: its pre-emptive veto of the Pebble Mine, a proposed project in southwest Alaska. The law says that Pebble gets to apply for permits, and the Army Corps of Engineers gets to give thumbs up or down. The EPA, a law unto itself, instead last year blocked the proposal before applications were even filed. The agency claims .... (More....)
This column reported a week ago on EPA documents that tell a very different story. They reveal the existence of an internal EPA “options paper” that make clear the agency opposed the mine on ideological grounds and had already decided to veto it in the spring of 2010—well before it did any “science.” Emails showed an EPA biologist, Phil North..., (More....)
None of this looks good, and in a nearby letter EPA Region 10 Administrator Dennis McLerran is already bringing up semantics. According to the EPA—and other environmental groups now picking up the same line—the agency didn’t “veto” the project, but ....
In a conversation with me last week, Mr. McLerran also turned to the “underlings did it” excuse. Asked about the options paper .... It is a preliminary document, done by lower level staff.”
On June 7, 2010, Michael Szerlog, manager in the EPA region’s aquatics resources unit.... The message mentions Mr. McLerran.... (More....)
On June 15, Kendra Tyler, special assistant in Mr. McLerran’s office, wrote to EPA staff: “I know that Dennis would like a briefing on the options paper soon . . .” On June 30, Mr. North emailed colleagues to explain that: “The only time the RA [Regional Administrator] is available to discuss the options paper before he visits Bristol Bay is Thursday . . . ” Later that day, Matthew Magorrian, also in the regional office, told a big group of EPA employees that “DM already has draft of options paper.”
...the list of EPA employees who make up the core group discussing the options paper are not a bunch of low-level chemists and permit writers. ...Mike Bussell, then the director of the EPA’s Office of Water and Watersheds in Seattle; David Allnutt, then acting regional counsel; Linda Anderson-Carnahan, then acting associate director of environmental cleanup; Tami Fordham, then policy adviser. Mr. McLerran says no “key decision makers” saw the options paper. ... (More....)
Several of those included in these email chains would go on to take active roles in performing the EPA’s “watershed assessment” of the mine project. Ms. Fordham is listed as a contributor, as is an EPA officer named Richard Parkin. ... Mr. McLerran says “key decision makers” decided to perform three years of “science” on Pebble. But it turns out those doing the science were those who had already decided to block the mine.
The EPA offered this statement on Thursday: “It is a normal part of EPA’s deliberative decision making....” (More....)
The EPA is worried because it is getting blowback that goes beyond public disapproval of its abuse of power. In November a court ordered .... The agency is right to be worried; its Pebble veto is a scandal. (More....)
Fraser Institute lends understanding to Canadian and US economies and energy industries. Here are recent reports:
- Video: Video - What America’s Decline in Economic Freedom Means for Entrepreneurship and Prosperity. America’s decline in economic freedom is eroding entrepreneurship.
- Which path will Alberta's NDP government take? (Calgary Herald, May 8) by Charles Lammam and Jason Clemens
- The provinces are lousy at controlling spending (Calgary Herald, May 16) by Mark Milke (So are the U.S. and Alaska. -dh)
Here is how we memorialized the passing yesterday morning of our great friend, Chuck Becker. Because of his work ethic, kindness, patience, diligence and patriotic labor in support of Alaska and the nation, we discovered the breadth and depth of the public comments made on various web pages. We are delighted to assemble these for the convenience of friends and family so that they might live on in our Northern Gas Pipeline archives:
- Facebook page, Dave Harbour:
Mary Pignalberi During many years at SOA, Chuck was my "cubicle neighbor"while he worked for the US Dept. of Commerce. His smile and "I'm from the well-dressed culture and elite demeanor" will always resonate with me. Thank you for providing a special place of putting him at rest. Mary Pignalberi
- Facebook page, Chuck and Micky Becker:
1 hr ·I was truly saddened to hear about Chuck's passing. When I think of Chuck, probably the first words that comes to mind is "gentleman", his sense of humor, but not at the expense of others and his care and concern for Alaska. Chuck will long be remembered in the most positive ways. My thoughts and best wishes to you.
"Every man dies - Not every man really lives."
Chuck really lived - he was such a good man, a kind man, a generous community man with a big heart.
My condolences, Micky, to you and your family!
- Facebook pages, other:
- Other comments:
- Emails to Dave Harbour
- Dave –
Back in the early ‘00’s (and maybe before that), Chuck was hosting groups of VIPs who would travel to Alaska in the context of trade and economic studies. Twice or three times Chuck sought to bring such groups to Valdez to see the Marine Terminal. Two of the groups I remember were professionals from the Departments of State, Commerce and Energy, whose portfolios included energy trade and global energy production issues. One was a group of foreign service professionals and desk officers with Russian assignments. As you might expect, the groups themselves were comprised of invariably fascinating people in their own right. The Valdez component of their Alaska sojourn would usually fall later during the week. By that time the group would have cohered into a convivial set of traveling companions – but what I saw as indispensable to that (being a bit of a student of organizational behavior) was Chuck’s own spirit of hospitality, his attention to detail that enabled these trips to take place seamlessly, his own intellectual curiosity, coupled with his knowledge and love of Alaska. At Alyeska, we basked in his credibility with his guests – and, since the trips were usually in June or so, the fabulous weather that Chuck always seemed to arrange made ‘basking’ pretty easy! I remember a number of enjoyable conversations with Chuck and his interesting guests standing at the rail of an escort tug, as we watched SERVS and Terminal operations at work, and the majesty of Port Valdez all around us. I’d known Mickey as the very busy and incredibly competent executive secretary at ARCO for Skip Bilhartz and Ken Thompson (and Kevin Myers). We did not know them socially, but it was apparent that they were quite a team.
Thank you for the reminder of some favorite moments in my career, and of a man who added a note of grace wherever he went. Requiescat in pace, Chuck. I’ll look forward to leaning on the rail with you again sometime, watching beauty go by.
1220 L Street NW
Washington DC 20005
- Dave –
- Emails to Dave Harbour
Point of personal privilege: Our great friend, Chuck Becker, passed away this morning (Photos). Today, family and countless friends are mourning his passing. We will attempt to provide more official information as the family makes it available.
Chuck and I met in the mid-1970s in Washington D.C. Another dear friend, the late Anchorage Mayor George Sullivan was his client and I was representing the first North Slope gas project, the Arctic Gas Consortium, with Washington and Anchorage offices.
After Chuck had moved to Anchorage and completed his economic development assignment with the Sullivan administration, and I had joined Atlantic Richfield Company, he and I worked on some communication projects. He soon became a respected communications consultant to some of the most important businesses in the 49th state.
Chuck was deeply involved in support of reasonable development of Alaska's resources through leadership positions with the Alaska Support Industry Alliance and after years of service was named "Director Emeritus".
A veteran of the United States Department of Commerce, he served as the long-time director of the Alaska Export Assistance Center, revered for his accomplishments by the Alaska World Affairs Council which he also served as a director and past president.
Indeed, I have always considered Chuck to be deserving of the title, "Alaska's Diplomat"; for his every mission at home or abroad uniquely reflected great credit upon the United States, Alaska, his personal integrity and his own considerable abilities.
I believe the world, the country and the State of Alaska are better for having hosted the life of this dedicated man.
I believe that Chuck's friends and family will remember him as much for his patient, gentle and principled nature as for his professional accomplishments.
One of our commentaries last week was edited and reprinted by the national, Master Resource Blog, and concluded with a number of interesting reader comments. (It was followed by a more heavily researched piece dealing with the environmental strategy to defeat capitalism.)
From Master Resource, it was adopted into an Austrian Economics Addict editorial: "In this article by Dave Harbour titled, Seattle Hearing On Shell’s Arctic Rig Docking: A Clash Of Visions, he talks about the differences between the two sides in this battle. Here are some excerpts from the article.
“If our civilization is to continue, our well-grounded public and private leaders need to wake up and undertake communication programs designed to better articulate...."
* * *
Would we like to see your reaction? Yes we would, and we will reprint or link selected submissions.
Readers wishing for a more in-depth look at the role of environmental armies in securing their avowed goal of 'the destruction of capitalism' may be interested in our less politically correct editorial last week, "Useful Idiots".
Calgary Herald Editorial: Everyone seems to agree that more pipelines are needed to carry Alberta bitumen to new markets, so let’s hope premier-designate Rachel Notley puts a lid on any further talk that could endanger approval of Enbridge’s Northern Gateway project.
Today's Energy Links by Larry Persily:
B.C. agrees to fiscal terms with Petronas for LNG project
(Wall Street Journal; May 20) - The province of British Columbia and Malaysia’s state-owned energy company Petronas on May 20 said they had agreed on fiscal terms to promote construction of a liquefied natural gas export terminal near Prince Rupert.
First Nation opposition presents legal question for LNG project
(Business in Vancouver; May 19) – The decision by the Lax Kw’alaams First Nation in British Columbia not to accept an offer from Pacific NorthWest LNG raises a number of questions, such as whether Petronas, which has yet to make an investment decision, might cut its losses if First Nations mount an all-out battle.
Companies deny Wood Mackenzie report of delays for Australia LNG
(Bloomberg; May 19) - Chevron and Japan’s Inpex Corp. face potential delays in starting liquefied natural gas projects in Australia, according to consulting firm Wood Mackenzie. Chevron’s Wheatstone and Inpex’s Ichthys ventures could start output in mid-2017, later than the companies forecast, Angus Rodger, Asia-Pacific analyst at Wood Mackenzie, said in an interview....
U.S. exports could help push LNG market toward more spot sales
(Bloomberg; May 19) - The U.S. is about to change the global LNG market. When the first tanker carrying liquefied natural gas leaves Cheniere Energy’s Sabine Pass terminal in Louisiana in December, it will turn traditional consumers into new traders with more bargaining power.
Cheniere says it is talking with LNG buyers in China
(Reuters; May 19) - Chinese buyers are eyeing long-term supplies of liquefied natural gas from Cheniere Energy’s U.S. export operations....
Tokyo Gas looks to invest in more U.S. production as price hedge
(Reuters; May 18) - Tokyo Gas, Japan's biggest gas utility, is looking to invest in more U.S. shale gas production ....
GAIL signs preliminary deal to sell some of its U.S. LNG to Shell
(Reuters; May 20) – GAIL, India's largest state-owned natural gas distributor, has signed a preliminary deal to sell some of its contracted volumes of liquefied natural gas to Shell....
Proposed Nova Scotia LNG project gains provincial permit
(The Chronicle Herald; Halifax, Nova Scotia; May 19) - After an environmental assessment, Nova Scotia’s provincial environment minister has granted Bear Head LNG approval to build an 8-million-tons-per-year liquefied natural gas plant.
Australia’s LNG industry has its share of worries, survey says
(Sydney Morning Herald; May 18) - A lack of competitiveness, unwieldy regulations and inflexible industrial relations threaten to derail a bonanza from the liquefied natural gas sector in Australia as it transitions from a $250 billion investment phase into production.
BHP says Australia LNG project ‘falls lower’ on its list of priorities
(Bloomberg; May 17) - BHP Billiton is lowering the priority of its proposed $10 billion Scarborough liquefied natural gas project with partner ExxonMobil in Australia amid a fall in prices and ....
Natural gas industry faces increasing opposition to pipelines
(USA Today; May 17) - The U.S. is producing record amounts of natural gas.... But building the infrastructure necessary to bring that fuel to market is increasingly difficult.
North Dakota farmers, ranchers frustrated over salty wastewater spills
(Wall Street Journal; May 16) - For most of the years since wildcatters began tapping the North Dakota prairies for oil, energy companies have existed peacefully with the farmers and ranchers ....
State legislatures act to protect drilling from local restrictions
(Wall Street Journal; May 19) – A Texas city last year banned fracking; state lawmakers want to make sure that never happens ....
Yukon Territory gold mine would consider using LNG for power
(CBC News; May 16) - Kaminak Gold Corp. is aiming to finish a feasibility study for its Coffee Gold project near Dawson City....
Yukon First Nation will invest in LNG-fueled power plant
(Yukon News; Whitehorse, Yukon Territory; May 15) - The decision to invest in Yukon Energy’s liquefied natural gas-fueled power plant in Whitehorse, the Canadian territory’s capital city, is supported by the Kwanlin Dun First Nation community, according to ... Chief Doris Bill....
Oil exports to Canada help ease pressure on U.S. storage capacity
(Wall Street Journal; May 19) – Crude oil exports to Canada provided a crucial relief valve for U.S. producers this year, according to a new report from ...
Our Instinct: Conservatives Must Seize Opportunity To Save Alaska's Economy
|We 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:
- budget shortfalls
- falling oil production
- bloated, unaffordable state budgets
- Federal government overreaching authority
- The future of Alaska's children.
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.
|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.
News 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.
Today'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.
Commentary: Earlier this week we gave credit to the useful idiots of the country by respecting their devotion as true believers in however climate change is defined today. We also pointed out that one of the world's most respected climate change leaders admitted that her work was not so much about the environment as about destroying capitalism. The story below describes the thought process, or lack thereof, of a graduate student from Olympia who drove to Seattle to protest the world's reliance on oil. And he brought others with him. -dh
Seattle Times by Coral Garnick. Conrad Ely brought a kayak and canoe with three of his friends from Olympia. He is pursuing a master’s degree in environmental studies program at The Evergreen State College in Olympia and drove up Saturday to join the demonstration and show his opposition to oil dependency.
“I think our resources should be spent on finding alternatives rather than on finding oil,” he said after unloading his supplies and signing a waiver upon arrival at Seacrest Park.
(Comment: We believe an interesting environmental studies masters thesis could focus on the fossil fuels and mined minerals that compose Mr. Ely's Kayak, clothing and the car/fuel that carried him from Olympia to Seattle; then, using scientific methodology, determine how he would maintain his lifestyle and future career without them. -dh)