|Tomorrow is 9/11. Join with good people in Lamar, Colorado and throughout the nation as we strive to, "never forget".|
Students will receive free lunches courtesy of BP and the University of Alaska will provide hosted lunches for faculty and staff. (See our earlier report and comment regarding Arctic policy. This should be an important, educational forum and we hope for a series of penetrating questions dealing with the White House's position on a proposed, restrictive Beringia agreement and Ocean Policy Task Force impacts on Alaskan/American consumers. -dh)
EPA Applies Unreasonable Fuel Standards Policy To Alaska Tourism
Federal regulators violated the clear terms of the Endangered Species Act, by adding a healthy species - the polar bear - to the ESA list.
Watch PLF President Rob Rivett discuss: Polar Bears Costing Americans Jobs
The Alaska Travel Industry Association (ATIA) joined a growing chorus of Alaskans opposed to Alaska’s inclusion in the Emissions Control Area (ECA). At its convention last month, ATIA passed a strongly worded resolution asking the Environmental Protection Agency (EPA) to “exempt Alaska until such time as reasonable fuel standards can be proposed based on actual data and a balanced policy be developed that considers the economic impact on all of Alaska’s resources.” While some shipping interests have recently negotiated compromises with federal officials, we are concerned that throughout this process Alaskan consumers of goods carried by ocean going vessels and tourist customers of cruise ships, and thousands of jobs throughout the country have been so little included in the Federal government's calculus. We hope that in the future, primary consideration is given to actual economic effects--not just web page lip service to 'common sense economic principles' backed up by loose reference to 'scientific literature' and 'computer modeling'. When so many federal agencies are now basing their initiatives on the 'proven science' of global warming at a time when the Arctic ice sheet -- and polar bear populations -- are increasing in size, consumers need to know the true basis for the sacrifices the government is asking them to pay for new environmental rules (i.e. higher fuel, transportation, utility and food prices). -dh
|Polar Ice Cap Has Increased by Over 900,000 Square Miles
The London Daily Mail has some fun with the tax-funded BBC, which in 2007 predicted the disappearance of the polar ice cap. Over the last year, the polar ice cap has increased by over 900,000 square miles. A chilly Arctic summer has left nearly a million more square miles of ocean covered with ice than […] READ MORE
News Miner by Jeff Richardson. Some miners in the Fortymile mining district are angry about a series of field investigations of the area last month, saying the presence of armed federal officers was an intimidating and unnecessary intrusion.
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The Examiner. The EPA is now part of an Alaska Environmental Crimes Task Force that is armed to the hilt to investigate “environmental crimes” by Alaska miners. Apparently, a dirty water discharge has now risen to the level of the use of deadly force against the offending miner.
Hydraulic Fracturing comment and links by Energy In Depth:
- AUDIO: EID’s Dave Quast talks HF in California on the Center for Industrial Progress Powerhour (link)
Niles reconsiders HF ban. Tribune Today. Shawn Bennett, field director for Energy in Depth, called the legislative bans ''boiler plate'' and ''color by number'' approaches by groups opposed to drilling. The measures, in reality, cannot be enforced and are unconstitutional, he said. Bennett said the legislation as it stands has ''unintended consequences,'' like prohibiting the transportation of items used in the drilling process - concrete, sand, water - through the city. Also, the legislation supercedes state law, which gives the Ohio Department of Natural Resources the sole power to permit and regulate the industry, Bennett said.
Niles may revise drilling ordinance. WFMJ News. The problem with the Niles ordinance is that it also bans doing commerce with the oil and gas industry. A spokesman for Energy In Depth said that sends the wrong message to an industry that's worth multi-millions of dollars. "What it does is it essentially bans any company who wants to do business with the oil and gas industry" said Shawn Bennett of Energy In Depth.
Council may rescind ordinance banning oil and gas drilling. Youngstown Vindicator. Shawn Bennett, field director for Energy In Depth, an outreach group funded by the oil and gas industry, told council that the Niles ban violates state law, which gives the authority for well permits solely to the Ohio Department of Natural Resources. “There are unintended consequences in the Community Bill of Rights,” Bennett said. As an example, he cited a provision that bars storing or transporting “produced” water through the city. “This would stop the city from selling water to energy companies or to other municipalities,” Bennett said. “If you do that, you would be in violation of your own ordinance.”
Niles officials get HF lesson. WKBN 27. “I hope they understand they were fed a bill of goods by groups who promote this bill of rights. Again, it does nothing more than it’s just a piece of paper and the letters written on it aren’t worth more than the piece of paper. What Rhonda Rita did very well was educate them on the oil and gas industry and I think they needed that,” said Shawn Bennett, a spokesman with Energy In Depth. NOTE: Read EID’s post on Niles’ bill of rights HERE.
The natural gas boom may be America's best antipoverty program. Wall Street Journal, Editorial. Thanks to the lower price for natural gas, families saved roughly $32.5 billion in 2012. (That's 7.4 billion MMBTUs of residential use of natural gas times the $4.40 reduction in price.) The windfall to all U.S. natural gas consumers—industrial and residential—was closer to $110 billion. This is greater than the annual income of all of the residents in 14 states in 2011.
Seismologist: HF doesn't cause earthquakes. Associated Press. A University of Texas seismologist says human activity associated with oil and gas production can sometimes cause earthquakes, but hydraulic fracturing isn't the problem. Cliff Frohlich told scientists gathered in Morgantown for a National Research Council forum that when quakes do happen, they're typically linked to the disposal of drilling fluids in underground injection wells.
Open the door to shale gas exports. Lebanon Daily News, Editorial. The advent of horizontal drilling and hydraulic fracturing - also known as fracking - have led to domestic shale gas and oil production increases of 50 percent annually since 2007. This acceleration could create as many as 1.7 million jobs by 2020, according to a report by the McKinsey Global Institute, a consulting firm.
Scale of West Coast HF Probed. Wall Street Journal. Brian Petty, executive vice president for government and regulatory affairs at the International Association of Drilling Contractors, said all forms of fracking are safe, and that fracking offshore doesn't present any additional risks. "Above all, our position is that it's safe and effective," he said. "It's just like they're out there in Kansas, except there's an ocean on top."
Chesapeake drops fight to extend 200 NY gas leases. Associated Press. Members of landowner coalitions in southern New York have grown increasingly frustrated as Gov. Andrew Cuomo has continued the moratorium on the technology that has brought areas in other states new jobs and economic growth and flooded the market with low-cost natural gas.
LDC Panel: HF Ban Only Possible Hurdle for Gas Growth. NGI's Shale Daily (sub req’d). The only possible land mine for continued robust growth in U.S. natural gas supplies in the next five years would be an outright ban or oppressive national regulation of the use of hydraulic fracturing in America's revitalized oil/gas fields, according to a panel of bullish experts assembled on the opening day of the LDC Gas Forum Mid-Continent in Chicago Monday.
Industry mulls best ways to take advantage of shale gas boom. Platts. With the shale revolution well-entrenched, natural gas industry observers on Monday debated the direction the nation should take in order to best exploit the abundance of gas currently hitting the North American market, which some pointing to transportation and others to power generation.
How HF can work in Britain. The Guardian, Column. Britain's shale gas resource is a valuable national asset and could contribute to our prosperity. Chemically speaking, shale gas is extremely similar to the UK's so-called conventional North Sea gas. It is not only valuable as a source of relatively clean energy but also for use in chemical processes: in the United States more than a third of natural gas is used to make products like plastics, fertiliser, anti-freeze and even fabrics.
Shale Gas Won't Hurt Climate Targets, U.K. Government Study Says. Bloomberg. The research by David Mackay and Timothy Stone was published after anti-fracking protesters disrupted drilling by Cuadrilla Resources Ltd. in Balcombe, England. It’s a rebuke to critics of fracking who say greenhouse-gas emissions may be exacerbated by the technique that extracts gas and oil by grinding underground rocks with water and chemicals. NOTE: UPI and E&E News (sub req’d) also report.
Shale: A key to Israel's future. The Jewish Chronicle, Column. When we consider whether it is worthwhile to develop Israel’s shale resources, it is important to stress that the Government of Israel has declared that reducing the world’s dependence on OPEC oil is of strategic importance to Israel. And so, it has established a special division in the Prime Minister’s office to mount a government-wide effort to help the world find alternatives for fueling transportation (including advanced biofuels, natural gas and electric vehicle technologies).
Shale gas endorsed by UK energy secretary. BBC News. A senior government minister has thrown his weight behind the exploitation of shale gas.It is suggested that south Wales has huge reserves that could be tapped by a process called fracking.
Petronas Close to Selling Shale Gas Stake to Indian Oil for $1.1 Billion. Wall Street Journal. Malaysia’s Petroliam Nasional Bhd, or Petronas, is close to selling 10% of the shale gas assets from its recently acquired Progress Energy Resources Corp. to state-owned refiner Indian Oil Corp. for around $1.1 billion, people familiar with the matter said Tuesday.
An overlooked gas source gets new attention amid anti-HF furor. E&E News (sub. req’d). Methane captured from disused coal mines has been a minor source of energy in the United Kingdom for decades. But new technologies are broadening the field of coalbed methane, or CBM, which means tapping into unworked seams to release the gas trapped in the coal.
HF and future of energy. Santa Maria Times, Editorial. We are a state and a nation that runs on oil, and will for the foreseeable future. Hydraulic fracturing is a method that can increase domestic oil production. But it must be done safely, and so that everyone can be assured that irreparable damage is not done.
Enhanced gas production is a must, but safeguards critical, says Hick. Denver Post. Gov. John Hickenlooper said Monday he welcomes the increasing production of natural gas in Colorado while holding the oil and gas industry to "highest standards" to prevent any negative effects of fracking. "I know horizontal drilling works for us, not against us," said the governor.
Governors rally state regulators to 'lead the way' on HF rules. E&E News (sub. req’d). Colo. -- Colorado Gov. John Hickenlooper (D) is supposed to be co-hosting a National Governors Association conference on shale energy and state policies here, but at times, it seems as if he's practicing his stand-up routine.
Municipalities energized for HF votes. Colorado Statesman. Five Colorado communities — Fort Collins, Loveland, Lafayette, Boulder and Broomfield — are expected to vote in November on whether to impose a ban or enact lengthy moratoriums on the controversial hydraulic fracturing drilling process.
Colorado grandparents deliver anti-HF letter. The Boulder Weekly. A day after National Grandparent's Day, grandparents from around Colorado will deliver a letter to Gov. John Hickenlooper and other governors protesting against the oil and gas drilling process known as fracking.
Wyden sees North Dakota oil, gas, other energy activity first-hand. Oil & Gas Journal. US Senate Energy and Natural Resources Committee Chairman Ronald L. Wyden (D-Ore.) saw more than oil and gas operations when he visited North Dakota Sept. 6-7 for an up-close look at energy activity in the state. His itinerary, which the office of committee member John Hoeven (R-ND) helped arrange, included an ethanol biorefinery with a unique partnership with a coal-fired power plant, and a model mined-land reclamation site.
Whiting Petroleum offers $1.8 billion in notes. Denver Business Journal. Whiting Petroleum Corp. will offer $1.8 billion in senior notes due in 2019 and 2021, allowing the company to repay all its outstanding debt. The money also will be used to fund its $260 million purchase of mineral rights in Williston Basin and retire its $250 million of outstanding 7.0 percent senior subordinated notes that are due on 2014.
As gas continues to go up in the air, N.D. moves to tighten loose flaring rules. E&E News (sub. req’d). The North Dakota Oil and Gas Division is writing rules that will offer a tax incentive to reduce the amount of gas flared, although state regulators and environmental groups say flaring is likely to continue.
Drilling in the forest should be beneficial. Charleston Daily Mail, Editorial. Experience in Pennsylvania and West Virginia shows fracking can be done safely without harming the environment. Instead of a moratorium, the Forest Service should consider the facts.
Pennsylvania ranks 9th in economic growth potential. Philadelphia Business Journal. A new survey ranks Pennsylvania 9th in the nation in economic growth potential. The Business Facilities ranking report hailed Pennsylvania's natural gas industry as a big economic catalyst. Here's what it had to say: “We expect the economic benefits from natural gas fracking operations in the Marcellus Shale formation to start paying dividends in PA and OH in terms of spurring economic development in both states.”
Natural Gas Is Fueling This Growing Industry. Motley Fool. Range Resources, Chesapeake Energy, and EQT Corporation all operate branch offices in southwestern, Pennsylvania, self proclaimed Energy Capital of the East. Why? Because the heart of the Marcellus Shale, the most productive gas field in America, spans the region, state, and nearby borders.
Intertek Expands Marcellus and Utica Shale Oil & Gas Services. The Enquirer Herald. Intertek, the leading quality solutions provider to industries worldwide, has expanded their Pittsburgh, Pennsylvania facility to support growing oil and gas related activity in the Marcellus and Utica Shale plays.
Chesapeake drops fight to extend 200 NY gas leases. Associated Press. Chesapeake Energy has dropped its two-year legal battle to force an extension of 200 expired gas-drilling leases covering 13,000 acres in southern New York, the law firm representing the landowners said Monday.
N.Y. panels to debate HF ban. Farm and Dairy. Experts in fracking, land use and the law will convene for Fractured Communities: Hydraulic Fracturing and the Law in New York State at Albany Law School Sept. 24.
WVU Hosts National Research Council on Shale-Gas Drilling. WBOY-TV. West Virginia University is hosting a two-day National Research Council workshop. It focuses on regulation, technical, and environmental issues in shale-gas drilling. Industry, academic, and government agencies from across the United States came to WVU to discuss the uncertainties that come along with shale-gas drilling.
Shale drilling appears to be ramping up, as the wells in that phase increase. Farm and Dairy. Drilling appears to be taking center stage in Harrison and Belmont counties. According to the Ohio Department of Natural Resources, there are now 68 wells in some sort of drilling phase, which increased from 52 in July. And in Belmont County, seven wells went from the permitted stage to a drilling phase
HF will hit the ballot in Youngstown. E&E News (sub. req’d). This fall, voters in Youngstown, Ohio, will have the opportunity to choose whether they want to allow hydraulic fracturing in their city. A May poll showed 56 percent of voters are fine with the oil and gas extraction technique, but opponents have collected signatures to push fracking back on the ballot.
Shale drilling appears to be ramping up, as the wells in that phase increase. Farm and Dairy. Drilling appears to be taking center stage in Harrison and Belmont counties. According to the Ohio Department of Natural Resources, there are now 68 wells in some sort of drilling phase, which increased from 52 in July. And in Belmont County, seven wells went from the permitted stage to a drilling phase.
Environmentalists draft rules on HF. Coshocton Tribune. An environmental interest group says Ohio’s regulation of the burgeoning high-tech oil and gas industry has serious faults, leaving the state’s environment and land owners unprotected.
You can get a degree in the ‘Eagle Ford’ now. Houston Chronicle/Fuel Fix. Palo Alto College is launching a new associate degree program in oil and gas technology – part of a response to a need for skilled workers in the Eagle Ford Shale.
Sanchez Energy to snap up more Eagle Ford Shale assets. Houston Chronicle/Fuel Fix. Houston-based Sanchez Energy Corp. is again expanding its Eagle Ford Shale position with a deal to buy 3,600 net acres in South Texas for $220 million in cash.
What’s driving high-dollar shale play transactions? Houston Business Journal. Among the past six weeks worth of Houston energy transactions, roughly $2 billion of shale assets have changed hands.
East Kelly set to double its rail cargo this fiscal year. San Antonio Business Journal. “Success at East Kelly Railport is the result of having the right location at the right time and working with the right partners to capture market opportunities,” Rico adds in a written statement. “When the Railport was launched a few years ago, we saw steady, moderate growth. (The) Eagle Ford has been a game-changer and provides logistics firms at the railport a strong future.”
Senator Uresti appointed to the Energy Council working group. San Antonio Business Journal. State Sen. Carlos Uresti, whose district includes part of the Eagle Ford Shale, was last week appointed to the Energy Council, a top energy-policy working group.
What's driving high-dollar shale play transactions? Houston Business Journal. Among the past six weeks worth of Houston energy transactions, roughly $2 billion of shale assets have changed hands.Oasis Petroleum Inc. (NYSE: OAS) just bought more acreage in the Bakken Shale, which almost doubled its holdings in the liquids-rich play, for $1.5 billion
"US Leadership In An Emerging Arctic" is the lecture topic next Tuesday in Anchorage, when Ambassador David Balton (NGP Photo) and former Lieutenant Governor Fran Ulmer (NGP Photo) will address the World Affairs Council. Reservations here. Various Arctic energy issues are certain to be addressed, including Arctic shipping, resource development, and sovereignty issues. -dh
"Alaska's Troubled Romance With LNG", by Dave Harbour. Here is this week's Xtra column, submitted for distribution to tens of thousands of households.
Note that these columns (see them all, here) are limited to about 1,000 words. Accordingly, it grieves us that much must be left out. With that limitation in mind, we encourage readers to support our goal of 100% accuracy by sending us additions/corrections here and we will make necessary adjustments to the archived story below.
North Slope Borough Breaks Ground For $90 Million In Utility Improvements At Prudhoe Bay
On Wednesday several dozen Alaska North Slope Native residents, service company managers and oil industry officials gathered at Prudhoe Bay to 'break ground' on for new utility facilities serving the large oil field.
Improvements now in the design stage will involve replacement and upgrading of the North Slope Borough's water and wastewater treatment plant and expansion of the landfill.
...more coming next week. We confess that priorities and a desire to provide readers with a good story required that we take the weekend to complete our work. Have a nice one.... -dh
After the Prudhoe Bay discovery (“the discovery”) in the winter of 1967-68, Alaskans learned that their great, Arctic oilfield was also the largest natural gas find in American history.
Then, in 1969, a Kenai Peninsula Liquefied Natural Gas (LNG) plant began cooling Cook Inlet gas to almost -260 degrees Fahrenheit, compressing it to 1/600th of its gaseous volume, transporting it by tankers to Japanese utilities. The Kenai plant introduced Alaska to its love affair with LNG. It was only U.S. LNG export facility for over four decades.
The larger, Prudhoe Bay discovery injected vigor into the 49th state: new jobs, new public services and amenities, and countless new business opportunities for a new age of pioneers.
Prosperity also produced political tensions. Politicians wanted tax money for constituent projects. Proliferation of social services increased state spending. Environmental activists sued developers. Petroleum investors –and the state treasury--wanted the lowest possible capital and operating costs to secure profitable returns.
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After that discovery 45 years ago, companies began planning transportation alternatives for Prudhoe’s oil and natural gas reserves.
Investors wanted the most efficient transportation system, but politicians wanted a say, too.
In the early 1070s Congress concluded the oil line should run through Alaska to Valdez while a gas pipeline could move Arctic gas to Midwest and other markets.
Alaskan oil producers completed the Trans Alaska Pipeline System (TAPS) in 1977.
To build a gas pipeline, twenty-seven U.S. and Canadian oil and gas companies formed Alaskan Arctic Gas Pipeline Company in the early 1970s led by former Lieutenant Governor Bob Ward. Former TransCanada President Vern Horte led the sister company, Canadian Arctic Gas Pipeline Limited.
Arctic Gas chose a Mackenzie River Midwest pipeline route for Alaskan and Canadian gas, and rejected inefficient alternatives including LNG trucks, tankers, trains, dirigibles and submarines. It spent $250 million on technical studies and the most extensive environmental study in history.
Arctic Gas was well into its planning when El Paso Natural Gas began promoting a Gravina Point LNG project near Valdez. Alaskans loved it and a new LNG romance began.
A third challenger entered the fighting cage in the mid-1970s when Northwest Energy Company and Alberta Gas Trunk Line defected from Arctic Gas’ Consortium to promote a separate Alaska Highway routing for Alaska gas.
All three projects fought for Federal Power Commission (FPC, now “FERC”) approval in the United States while Alcan and Arctic fought for Canada’s National Energy Board (NEB) blessing.
Alaska’s governor, William A. Egan, and a budding grass roots organization called Organization for the Management of Alaskan Resources (OMAR) supported El Paso’s LNG Project. Most Lower 48 Governors and influence leaders favored Arctic Gas.
In 1977, FPC Administrative Law Judge Nahun Litt said, “The Arctic Gas application is superior in almost every significant aspect when compared to El Paso.”
The FPC decision supported either Alcan or Arctic; El Paso’s LNG scheme was dead!
Canada’s NEB rejected Arctic Gas and approved Alcan’s project which, ironically, was eventually taken over by TransCanada PipeLines Ltd. TransCanada now leads the Alaska gas project, along with Alaska producers. Its goal – also an ironic twist of fate -- now seems to favor moving Alaska’s gas, not via the Alaska Highway route which it had adopted, after opposing -- but via a pipeline-LNG system to Asian markets.
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America and Canada had dismissed the Arctic and El Paso LNG alternatives but successive Governors worked to commercialize North Slope gas.
Governor Jay Hammond appointed Governors Hickel and Egan to co chair a gas task force. The 1982 group embraced LNG marketing of Alaska’s gas. Hickel later formed Yukon Pacific Corporation to sponsor an LNG project.
Governor Tony Knowles issued Administrative Order 188 forming another gas pipeline advisory group in 2001. His theme was, “My way is the highway”. Though a noble effort, a project could not go forward without producer ‘buy-in’ and producers hadn’t completed their own pipeline and LNG feasibility studies.
After Congress passed the Alaska Natural Gas Pipeline Act of 2004 to expedite an Alaska gas project, Governor Frank Murkowski negotiated a contract with producers to increase taxes in return for giving them “fiscal certainty”. The Legislature increased their taxes but didn’t deliver the fiscal certainty necessary to finance a giant, 30-year project.
Governor Sarah Palin’s “Alaska Gasline Inducement Act” (AGIA) in 2007 demanded benefits for Alaska from a pipeline project in return for subsidies. TransCanada became the State’s AGIA partner. But Palin also sponsored increased oil taxes that made Alaska investments very risky.
Meanwhile, back at the LNG ranch, two main suitors continued their own quest for an enduring relationship with Alaska.
The Hickel inspired, Yukon Pacific, closed its doors in 2011 after a valiant effort to collect permits and unsuccessful work to attract LNG buyers. Municipal entities, including the City of Valdez, formed the Alaska Gasline Port Authority in 1999 supporting another Valdez LNG project which many Alaskans still love to support to this day. But last March, the Energy Department rejected the Authority’s gas export application.
After 2007, US markets for Alaska’s gas evaporated with skyrocketing Lower 48 shale gas production. Today’s domestic gas prices seem too low to support a multi-billion dollar Arctic pipeline to the Midwest.
Happily, Japan’s catastrophic tsunami and nuclear meltdown of March 2011 did stimulate demand for more natural gas.
But Canadian, Russian, Indonesian, Middle Eastern and Australian gas producers are also hungrily eyeing Asian markets. Once Asian utilities have signed long term LNG contracts, latecomers will be locked out.
Will Alaska be locked out?
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Competition increases and most of Alaska’s competitors don’t have to build an 800 mile Arctic pipeline -- on top of LNG costs. Most have lower costs of labor. Most operate in low cost temperate zones – except Russia.
Will Alaskans enthusiastically unify behind the AGIA gas project, helping it achieve the lowest possible costs in our high cost environment?
Or, will Alaskans continue fighting over routes, taxes and regulations as federal government rules proliferate and environmental opposition to all energy projects becomes more intense?
Alaska’s troubled romance with LNG continues.
One wonders, as opposition grows and competition mounts, if the aging romance will give birth to an LNG project or lead to a final break up.
Dave Harbour has directed external affairs for a variety of oil and gas companies in Alaska and consulted with many others. He is former Chairman of the Regulatory Commission of Alaska, the Anchorage Chamber of Commerce, the Alaska Council on Economic Education and the Hugh O’Brian Youth Foundation. He assisted in founding Arctic Power, Saturday Market, the Anchorage Downtown Partnership and the Alaska Support Industry Alliance.
The Overreaching EPA
Our hats are off to this perceptive, Fairbanks News-Miner opinion: An important policy call awaits Environmental Protection Agency Administrator Gina McCarthy, who just visited Alaska. Will she use a section of the federal Clean Water Act to pre-empt any further consideration of the Pebble mine?
Doing so would be an abuse of a questionable authority using incomplete information.
Last month and for some time we have lamented erosion of the rule of law in the United States that accompanies "Federal Overreaching Jurisdiction" (Review here).
Nowhere is federal overreach better illustrated than with the Environmental Protection Agency's (EPA) latest stunt. It has undertaken an process to determine whether or not to block a mining project on Alaska state lands before the project has even filed for a permit.
Regardless of whether one supports or opposes that particular project, all of us should be supporting 'due process'--the constitutional right for citizens to petition their government. In the case of a natural resources project, an applicant will file a permit and various regulatory agencies will make decisions on the application based on facts established in a legal record. Even after a decision is rendered, an unhappy party may still petition the agency for reconsideration and then go on to challenge the regulatory outcome in state or federal courts.
Our fear is that if the EPA is allowed to preemptively block a project before a citizen -- on his/her own or leased land -- can even file for a permit, the EPA will have set a precedent for blocking any construction project it simply does not like.
The flimsiest of subjective excuses associated with the Endangered Species Act, Clean Water Act or Clean Air Act will provide cover for the EPA assault on jobs, the economy and our way of life. Fairness and 'due process' will be relics of a formerly free country.
Our national security, which depends on a strong defense and balance of payments position, is already perilously weakened by this Administration. With federal agencies blocking or stalling natural resource and construction efforts around the country, the end of freedom is palpable.
Was Paul Revere overreacting when he rode through the countryside shouting, "The British are coming".
No. The severity of Revere's situation justified severe action. The severity of this present, internal assault on America's freedom would have Revere and his colleagues turning in their graves.
Ultimately, such internal assaults on freedom will cause loyal Americans serving in uniform to wonder what kind of America they are expected to defend with blood and ultimate sacrifice.
The recognition of that severity now justifies Americans everywhere to warn their fellow citizens, "Wake up! We're under attack from enemies within!"
John Hofmeister Opines Today On Syria
Early this morning, one of our favorite CNBC talking heads, John Hofmeister (NGP Photo), said the oil industry in the Middle East is facing, "...death by a thousand duck bites."
He said that one of the effects of Obama's impending attack on Syria is uncertainty. "Companies are not going to let employees and assets be at risk." He said that as companies face more risk, they will shut down operations.
"Egypt's oil industry has a hard time right now getting people to show up for work," he said, owing to the continuing tension between muslim factions.
He reminded the interviewer that spikes in oil prices inversely affect economies around. "If we stay on this path," he said, "we're not going to have a very good decade."
He concluded that without the Syrian crisis and with world demand for oil and gas week, "This would be a wonderful time for Plan B -- the U.S. dominating the global supply of natural gas...and get off this reliance on the Middle East." -dh
Here is A Link For Readers To Our Latest Column In Xtra, Anchorage's Community Newspaper. Here Is Our Unedited Submission: "Responsibility"
Relevant to our essay, above, on 'Responsibility', Canada's Globe & Mail piece by Jeffrey Jones notes the importance of tax policy to energy project investors. We believe that all decision makers will want to take heed. Those who support higher taxes and regulatory barriers, in essence, wish for fewer energy jobs and investment while those who seek moderate taxes and rules will create more attractive energy investment climates. By their works ye shall know them. D'accord? -dh
Note: We compliment Northrim Bank and www.alaskanomics.com for producing a report of Senator Lisa Murkowski's (NGP Photo) speech Monday to the Anchorage Chamber of Commerce--by Katie Bender. We plan to provide more detailed notes on her speech tomorrow which offers other gold nuggets of interest to Alaskans, Americans at large and our Canadian friends as well. -dh
Another Abuse Of The Endangered Species Act.
PLF. The U.S. Fish and Wildlife Service has labeled more than 1,500 acres of private land in St. Tammany Parish, Louisiana, as “critical habitat” for the dusky gopher frog. This designation would force the owners to jump through so many bureaucratic hoops that they would be barred from making productive use of their property.
Dusky Gopher Frog.
There’s one small problem with the attempt to safeguard the frog on this land: the area isn’t suitable for the species. There aren’t any dusky gopher frogs on the property.
...the Anchorage Chamber hosted US Senator Lisa Murkowski at its weekly, Monday Forum.
Murkowski shared that there was a large number of high ranking visitors that we have seen in the state this month and how the visits were important to the political climate.
In August, the Chief of the US Forest Service, Administrator of the EPA, the acting Under Secretary of Commerce for NOAA, the Air Force Chief of Staff, the Commandant of the Coast Guard and the Secretary of the Interior have all visited, or will visit, Alaska and learned how their respective agencies work within the Alaskan environment.
Murkowski continued by discussing the importance of the military in regards to Alaska’s economy. Alaska has strategic military value and the Pentagon is beginning to realize the potential across the state.
She spoke in depth about economic concerns and the Affordable Care Act (ACA) and how each affected the State of Alaska and its residents.
Murkowski noted that even though we don’t know a specific date, we will bump up against the debt ceiling in the coming months. She feels it is important to figure out a solution to the problem before it is too late and feels that Congress can do a better job of finding ways to fix the current budget. She stated that the sequestration does not provide solutions to the problem of the $16.9 trillion debt that the US currently holds.
Murkowski agreed that the US needed healthcare reform but did not feel that the ACA addressed the true problems of needing increased access and decreasing the cost of healthcare. She believed that defunding the act was not the solution because it would leave the law on the books and would burden individuals and families. She agreed that there were good parts to the new law, including the provision to allow dependents to remain on a parent’s plan until age 26, as well as the changes to insurers being able to limit coverage to individuals with pre-existing conditions. She stated that change will come when there is a reduction in cost of healthcare to individuals and families.
Murkowski wrapped up her presentation with a note that she felt that it was time for the Congress to start governing. Too much time was being spent on messaging and working to secure votes for the next election. She wanted Congress to lead the way and start to create laws that would make a difference, rather than blaming the other side for the Nation’s problems.
Murkowski is the first Alaskan born senator and the 6th to represent Alaska in Congress. She was re-elected in 2010 and holds a number of committee positions, including being a ranking member of the Committee on Energy and Natural Resources.
Teenagers hate it when people tell them to be “responsible”. It’s another way of saying, “You should change your ways,” when one is perfectly happy with the status quo.
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For Alaskan citizens, the status quo has been pretty sweet. We were once America’s largest oil producer. We put a ton of dough into a Permanent Fund. We spent more per citizen than other states. We passed a blizzard of social and public works programs. We repealed the state income tax on ourselves and have no state sales tax.
With oil production falling at a 5-7% annual rate things don’t look so sweet right now.
Our oil production is down by nearly ¾ and we lag behind Texas, North Dakota and even California.
We should all care about oil tax and spending policy if we are involved in education, government or nonprofit work. If we are rural residents, our subsistence way of life is supported by oil. If we are into health, transportation, wholesale, retail or professional services, we depend on Alaska’s oil production.
The Trans Alaska Pipeline System (TAPS) is like an umbilical cord giving life to Alaska. TAPS oil pays for ninety percent of our state government. It directly and indirectly supports over half of our entire economy. Yet as our production declines, our elected leaders continually increase spending.
In modern words, “This is an unsustainable situation”. In other words, “It’s our responsibility to do something”.
Alaska has the world’s largest commercial fishing industry. It employs nearly 80 thousand mostly seasonal workers. But its business leaders know oil provides most support to the state budget. Without oil paying the lion’s share of government, fishermen would shoulder responsibility for more taxes.
Alaska’s tourism industry provides over 35 thousand mostly seasonal jobs. But its hundreds of entrepreneurs know if oil didn’t pay for state promotions, transportation infrastructure and other amenities, tourism would have to pony up more taxes.
Alaska’s 44 thousand oil industry employees support most other Alaska jobs .
Oil companies like Atlantic Richfield Company (ARCO) risked a lot to first discover the Swanson River field on the Kenai Peninsula in 1957… and then Prudhoe Bay in the winter of 1967-68. Their investment into this remote, high cost area was encouraged by a low tax environment.
Following the Prudhoe Bay discovery, Alaska’s Governors and Legislature began increasing oil taxes – in fact, about a dozen tax increases, year after year.
In 1981, the Governor and Legislature created an important oil tax reform package while repealing the individual income tax. That day, March 18, 1981, marked the first day of roughly 20 years of oil tax stability for Alaska. No significant tax increases marred oil company investments in new exploration and production even though oil prices remained low during a large part of those two decades.
A few years ago, with oil and gas prices increasing, elected leaders decided to increase taxes again. The tax change was called “ACES”, Alaska’s Clear and Equitable Share. It made Alaska the highest oil taxing jurisdiction in the free world.
Alaskan exploration slowed as oil exploration boomed in North Dakota, Texas, Australia and Canada.
Last Spring, lawmakers reformed ACES to make Alaska more competitive with other oil producing areas. Since then, we have seen signs of greater oil investment in the state.
However, some Alaskans still advocate a return to status quo with a repeal of the oil tax reform. We can expect this issue to be widely debated in the months ahead.
How should readers think responsibly on this subject? Here are a few credible sources that underscore the importance of tax and spending reform:
First, we rely on the University of Alaska’s Institute of Social and Economic Research (ISER). In a February 27 report to Commonwealth North, ISER ‘s Scott Goldsmith said that Alaska has $60 billion in savings (i.e. including the Permanent Fund) and $89 billion of oil assets still to be produced, for a total of $149 billion. To manage those assets for the long run, he said the state could spend approximately $5.5 billion/year. But he noted that the 2013 General Fund budget of $7.6 billion resulted in overspending $2.1 billion.
Second, Alaska banks have financial and economic expertise. These locally owned institutions also have, “skin in the game.” Northrim’s Alaskanomica.com published a piece on August 9, a couple weeks ago, noting that the oil tax reform bill, “…allows Alaska to be globally competitive in the industry….” The First National Bank of Alaska’s, Alaskaseconomy.org webpage, portrays Alaska’s economy as a three-legged stool. One leg is oil, but that leg also supports the other legs indirectly. In a link to an Anchorage Daily News Column by oil economist Roger Marks, the Bank highlights, “10 things to consider about oil taxation.” In the column, Marks points out that high oil taxes make Alaska less competitive and hurt chances for a natural gas pipeline.
Third, our State’s Revenue Department, in last year’s “Alaska’s Oil and Gas Fiscal Regime” analysis, illustrated Alaska’s need for tax reform to compete globally for industry investment.
Fourth, Canada’s Fraser Institute surveys petroleum industry investors. The most recent survey reveals how over 600 investor companies react to investment opportunities in nearly 150 taxing jurisdictions. Alaska is not at the bottom of the list but ranks behind 60 areas including Oklahoma, Texas, North Dakota, Canada, Australia, Tasmania, the United Kingdom, and Norway.
Fifth, Wood Mackenzie, a leading world energy industry research firm, ranked Alaska as one of the least attractive places in North America for investment. Only New York ranked lower than Alaska.
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Would a responsible person think that controlling Alaska’s spending and increasing our oil investment competitiveness is essential to all of our futures?
Or, should we be confident that the status quo will continue to supply all of our economic needs?
Either way, we are responsible. History will tell how we exercised our responsibility.
Dave Harbour is Publisher of www.northerngaspipelines.com. He is a former Chairman of the Regulatory Commission of Alaska, the Alaska Council on Economic Education, the Anchorage Chamber of Commerce and the Hugh O’Brien Youth Foundation-Alaska. He is also Co-Chairman of the 9th Annual Alaska Oil and Gas Congress held in Anchorage this September.
- Locally Owned Alaskan Bank Economic Analyses:
Drones and Energy: Our Opinion
Alaska's Lieutenant Governor Mead Treadwell (NGP Photo) is Chairman of the Aerospace States Association.
Speaking on the subject of the threat to privacy posed by drones, the Daily Caller quoted Treadwell yesterday as saying that, "The paper we are releasing today...strikes a fine balance between protecting individual privacy rights as guaranteed by the Fourth Amendment and exploiting the significant economic and humanitarian benefits of UAS technology.”
We would observe that unrestricted use of drone audio/video could compromise the security of critical infrastructure such as power production, manufacturing, energy refineries, drilling, mining and transportation operations.
We would also observe that Drone coverage of wide expanses of oceans and remote lands could greatly enhance exploration efforts.
In general, technology is good; but, we also think it good to always beware of unknown results created by the confluence of evolving paradigms and emerging technology.