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

 

Commentary

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

26 October 2013 9:21am

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

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

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

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

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

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

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

Stay warm. 

Best,

Dan

Daniel V. Kish

Senior Vice President, Policy

Institute for Energy Research


Petroleum News.  

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

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

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

Categories:

10-25-13

25 October 2013 6:51am

Our Commentary Goes Nationwide

We find more evidence supporting the wisdom of oil tax reform

by

Dave Harbour

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


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

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

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

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


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

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

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

10-23-13 Why All Alaskans Should Support Oil Tax Reform: We've Proved It Works!

23 October 2013 7:31am

Commentary: We've Proven Tax Reform WORKS!

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

(Ref: existing incentives)

Oil & Gas Online:  

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

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

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

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

 

 


 

Dan Hassey

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

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

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

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

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

Now look at this natural gas price chart.

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

Categories:

10-22-13 Question CNBC's Cramer; Question White House Political/Economic Advisors

22 October 2013 7:28am

Today's CNBC Comments Require Critical Thinking

by

Dave Harbour

Have you ever heard smart people being interviewed about Alaska and/or energy issues and wondered how they could be so uninformed/devious (i.e. Could there be any other explanation?)

This morning on CNBC, Jim Cramer spoke with Jason Furman.  The 42 year-old Furman is an alumnus of the Brookings Institute and the President's Council of Economic Advisers Chairman. 

On energy, Cramer suggested that the government help with the labor shortage of energy producing states, addressing the mismatch between states with job shortages and states with employment shortages.  It seemed like he was suggesting a government agency be created to reimburse out of work citizens in some states to fly to other states for energy jobs.  I thought, "It is unbelievable that a brilliant investor like Cramer would suggest that the country compound its government overreach, its spending excesses and its unsustainable debt by unleashing yet another government program to replace the more perfect processes of the free market." 

I tend to credit Cramer more with being uninformed about energy issues than devious.  The old boy has given me and many others good investment advice over the years.  But Cramer could have given a more astute observation regarding job shortages in energy producing states and job losses in energy consuming states.  He could have suggested to the Chairman of the Council of Economic Advisors that the President chasten the Corps of EngineersEPABLM (1) & (2), USFWS, and other agencies to support "all of the above, including fossil fuel" energy job growth instead of doing everything possible to shut it down.  He could have suggested that the Federal government begin to support the use of fracking technology in the blue, energy consuming states so that their citizens wouldn't have to move to Texas, North Dakota, Colorado and Oklahoma.  He could have urged immediate approval of the President Obama-delayed Keystone XL pipeline.  He could have urged the White House to reopen the Outer Continental Shelf areas for oil and gas exploration and development that it has closed down--against the will of coastal states' governors.

Then Council Chairman Furman stated with firm conviction that the President "has been right out in front" of energy issues with an "all of the above policy" that has contributed to a "real resurgence" in oil and gas development which now has the country producing more than it exports.  This is blatantly untrue.  Virtually all of the dramatic oil and gas production increases have come from state or private lands--not federal lands, where leasing and production has decreased.

Furman also said that lack of job growth was owing to the "sequester and to brinkmanship".  In short, he says with an accusing finger pointing in another direction, "It's not the President's fault."

One must attribute Furman's view of energy and economic issues more to a devious effort to mislead the public because his Administration has all the facts--were it to be more interested in facts than political outcomes.

The Administration knows full well that its Alaska policies alone have delayed or killed creation of hundreds of thousands, perhaps millions of jobs throughout the country.  We have documented these efforts over the last five years in www.northerngaspipelines.com.  Applying post-deepwater Gulf oil spill policies to shallow waters in Alaska by fiat (i.e. without due process), creating critical habitat for Steller sea lions and polar bears and beluga whales when those populations are not endangered...are increasing unemployment. The EPA joining with environmental extremists seeking to kill a development project before it files for its first permit on state land, violates the rule of law and due process while killing countless jobs and creating a precedent that will haunt job creators for generations to come.

This doesn't include a long list of Presidential job attacks in the Lower 48Congressional end-runs, usurpation of authority, and misappropriation of funds which I would be delighted to discuss with friends anytime.

We have reached the point in America when ordinary citizens cannot count on the honesty, objectivity or fairness of the Executive Branch or of the mainstream media.

Just as we try to teach our children to be "critical thinkers" (or, do we anymore?), so should we adults analyze what is happening to curtail freedom, to convert private to public employment, to shift income from private employees to public employees, to shift power from the electorate to the unelected.

We will hear a lot of smart people being interviewed.  It is critical for every caring American to understand whether commentators are opining on issues within their realm of expertise and whether they are commenting honestly about issues critical to the future and survival of the country.

-30-

 

Categories:

10-21-13

21 October 2013 2:48am

HOUSTON'S ENERGY DAY IS BIG SUCCESS!  Cities all over North America could emulate this model to interest children in Innovation, Science, Technology, Energy, Engineering and Math!


Energy Day Festival Sparks New Interests for Houston Area Students 
Mayor Parker and Event Organizers Urge Students to Pursue Careers in Energy 

Houston, TX – Twenty thousand people turned out Saturday to applaud more than 85 Houston area teachers and students who were recognized at the third annual Energy Day Festival.  Elementary, middle school and high school age students participated in one of six contests exploring the science and technology behind today’s energy innovations.  
 
David Holt, Energy Day, Consumer Energy Alliance, Photo by Dave Harbour“There are great possibilities for students who pursue careers in science and technology,” said David Holt (NGP Photo), the President of Consumer Energy Alliance, the chief organizer of the festival.  “Energy Day is showing young people the practical applications of what they are learning in the classroom. We need more students engaging and pursing careers in innovation.” 
 
Houston Mayor Annise Parker and the University of Houston Professor Alex Ignatiev also spoke during the festival, each challenging students to pursue careers in science and technology.
 
Photos from Energy Day Festival ‘13

The festival in its third year, featuring over 70 exhibitors, set a new attendance record.   Local law enforcement estimated over 20,000 people attended the one-day event. 
 
The Energy Day Festival marks the conclusion of a series of academic events happening throughout the previous school year.   Students participated in the Energy Academic Program which is made up of six separate contests:  The Science and Engineering Fair of Houston; the CSTEM Challenge; the CASE Houston: Energy City of the Future 2050 Competition; the Children’s Museum of Houston Young Inventors’ Showcase; The International Sustainable World Energy, Engineering and Environment Project; The HGS/HMNS/CEA Art, Essay and Media Contest and the John Kingsley Kerver Educator Award. 
 
Review the 2013 winners at www.energydayfestival.org.

Jim Prentice's LNG message yesterday was as important to Americans as today's commentary may be to future investors in Canada's oil patch!  -dh


Take Heart But Take Heed!

Alaska Must Never Become Like Hostile Argentina

Cautious Optimism From Alaska's Oil Patch

Commentary by

Dave Harbour

Would you rather invest your money in a safe place or an unsafe place? 

Spanish oil company, Repsol, has answered that question by shifting its attention from Argentina to Alaska and other more reliable investment areas among the some three dozen member states of the  OCED (Organization for Economic Cooperation and Development). 

In  1993 Repsol paid $13 Billion for nearly 60% of YPF, the Argentine oil company.  In 2010, Repsol discovered a significant oil shale play in an area called Vaca Muerta.  In 2011, Argentine President Cristina Fernández de Kirchner took action leading to nationalization of most of Repsol’s YPF interests.  Since then, production has declined and the trade deficit has increased.  In wake of the expropriation, according to Forbes, “The EU, along with the UK, Mexico, Chile and Colombia” condemned Argentina’s action.  The U.S. State Department also condemned Bill Hardham, Repsol, Alaska, Argentina, expropriation, taxes, Photo by Dave Harbournationalization of the company. 

Last Friday, at a presentation to Commonwealth North’s Energy Action Coalition, Repsol’s Alaska Operations Manager, Bill Hardham (NGP Photo), told members his company acquired a large lease position in Alaska in 2011 amid peaking tensions in Argentina — as Alaska’s oil tax reform effort was promising an improved investment climate here. 

Oil tax reform finally did occur later with the 2013 passage of SB 21, though a short time later environmental activists and anti reform legislators -- among others -- promoted repeal of the law via a voters' referendum.  The question of whether to repeal oil tax reform will appear on Alaska’s primary ballot next summer.

Recognizing the voters' referendum to repeal tax reform during the primary election next summer, Hardham said that, “We purchased leases and partnered with Armstrong with confidence that Alaska would adopt a tax reform proposal.  Repsol remains confident that Alaska voters will see the benefit of filling the pipeline and attracting new investment into the state.” 

Hardham briefed members on the company’s significant progress since obtaining its Alaskan stake.  In addition to offshore leases in the Chukchi and Beaufort Seas, Repsol  has a 70% working interest in and is operator for 700 thousand leased acres on the Alaska North Slope (ANS).  In 2012 the company completed 48 miles of ice roads and drilled two exploration wells.  Last winter, the company completed 38 miles of ice roads, drilled three wells and identified gravel sources for future operations.  This winter, the company is, “well underway with its planning and permitting,” Hardham said, for 22 miles of ice roads, an air strip, 3 wells, appraisal of last year’s work and flow testing. 

“We want to be here for the long haul,” Hardham emphasized – more than once. 

At conclusion of the presentation, NANA Development Corporation’s Senior Vice President and Chief Operating Officer David Marquez said, “I appreciate your confidence in Alaska voters but what would a vote for oil tax repeal do to your plans?”

“Plans would change,” Hardham said. 

Tom Case, Chancellor, University of Alaska Anchorage, Commonwealth North, LTG, President, Photo by Dave Harbour, USAFCommonwealth North President and University of Alaska – Anchorage Chancellor, Tom Case wondered about ‘surprises’ the company had experienced upon its arrival in Alaska.  Hardham spoke of the complexity of the permitting process and said, “Without our very capable consultants, we would have had a very difficult time navigating the regulatory process.” 

Another member asked about what ‘we’ could do to help.  “The best thing Alaskans could do would be to defeat the referendum to repeal tax reform.  Other than that,” he said, “it would be nice if you could lower Alaska’s very high operating costs.”  The audience greeted that commentary with knowing smiles and a little ironic laughter. 

Pat Galvin, Great Bear, ACES, Department of Revenue, Commissioner, Photo by Dave HarbourFormer Revenue Commissioner, now a Great Bear Petroleum LLC Vice President, Pat Galvin, asked about Repsol’s plan regarding expiring leases.  Hardham replied that the company regarded expiring leases as a ‘driver’ of plans.  He said that expiring leases would have priority attention while in other cases the company could seek extensions of expiring leases. 

Hardham concluded with a summary of the many consulting and contracting opportunities Repsol’s development projects would require, including employment for several hundred Alaskans.   

“Hopefully, we’ll have multiple phases of development,” he said, a statement of optimism chastened by caution.  It was clear that the jury is still out on whether Alaska’s policies will enable the company to continue its progress, or whether a repeal of oil tax reform will align Alaska more with the policies of Argentina.  

One listening to the presentation could take heart at Repsol's large, decisive and rapid Alaskan investments.  But Alaskans who wish to learn from others should also heed the counsel of Fredrik Erixon, director of ECIPE, the world economy think tank in Brussels.  The author of “Pariah in the world economy – how should other countries respond to Argentina’s return to  economic nationalism”, he wrote this spring that, “ the most damaging consequence of the confiscation is that the government has undermined efforts to fund new production in the giant oil shale reserve, Vaca Muerta, discovered by Repsol in 2010.  The expropriation has created a very uncertain investment environment, to say the least, for potential partners in Vaca Muerta.”

Repsol’s management will, no doubt, long remember Argentina’s 2011 expropriation of over $10 billion in shareholder assets, including the undeveloped shale play called Vaca Muerta.   Vaca Muerta is fittingly translated as, “Dead Cow”. 

One hopes that Repsol’s current investment in Alaska is greeted by a friendlier regime – one that does not take assets by increased taxation after investments are made—as has been Alaska’s recent practice. 

After all, “killing the Alaskan goose that lays golden eggs, up here”, in principle, is similar to “killing an Argentinean cow that sustains a faltering economy, down there”. 

Either analogy repels and is repugnant to investors.  


Today's news briefs courtesy of the Office of the Alaska Gas Pipeline Federal Coordinator:

Categories:

10-16-13 "It's A Wonderful Life!"

16 October 2013 8:32am

Alaska Governor Sean Parnell, OCS Governors Coalition, Mississippi, Stock Photo by Dave Harbour

Calgary Herald BY LAUREN KRUGEL, CP​.  “I was not a huge supporter of how actively the federal government was a year or two ago in promoting pipeline projects for its interests and taking on some of the opposers,” Ian Anderson told an Calgary business audience on Wednesday.

​Comment: Alaskans can be proud of the leadership role Governor Sean Parnell has assumed as Chairman of the OCS Governors Coalition--in support of responsible domestic energy exploration and production.  Here are photos of yesterday's meeting in Mississippi.  -dh

 

 


It's A Wonderful Life"

by

Dave Harbour

Helvi Sandvik, Nana Native Regional Corporation, Alaska, Oil and Gas, Alaska Support Industry Alliance, Speech, Photo by Dave HarbourAt last Friday night's Alaska Support Industry Alliance annual meeting, Helvi Sandvik (NGP Photo) reviewed the, "...history of Alaska's oil industry ... like Clarence the Angel did for George Bailey in Frank Capra's classic film, 'It's a Wonderful Life'".  (Other meeting photos.)

Sandvik, President of the multi-national development arm of NANA Regional Corporation operates with over 11,000 employees on four continents, eight countries and all 50 states with a payroll exceeding $ ¾ billion.

With a corporate mission to maximize economic growth and quality of life among other “core principles”, NANA is squarely in the business of supporting efforts of its Alaska Native shareholders to secure “Wonderful Lives” for themselves and future generations. 

She showed that just as Clarence demonstrated how bleak "Potterville" would have been without George's influence, Alaska without the oil industry "definitely would have been a very different place."

Then she cautioned the audience that, "if we do not constantly remind people how blessed we are to have resource development in this State, our future may not be as bright as our past."  To emphasize the point, she referred to declining oil production and the fact that Alaska North Slope (ANS) maintenance work on ageing facilities does not, "...add new barrels to the pipeline".

Earlier, we reported on similar comments from Charlotte Brower, Alaska North Slope Mayor, SB 21, Photo by Dave Harbouranother great Alaska Native leader, Alaska North Slope Borough Mayor Charlotte Brower (NGP Photo).  "I applaud Governor Parnell, and the Alaska Legislature for the courage and confidence they displayed in the passage of Senate Bill 21. Passage of this bill will create and encourage investment in the oil and gas industry," she said.

Then she touched on an issue we have often addressed here: the need for tax reform to create sustainable production and throughput of the Trans Alaska Pipeline System (TAPS).

Last spring the Legislature passed Senate Bill 21, an effort to reform the very predatory production tax which elevated the state to one of the highest taxing regimes in the free world--in one of the highest operating cost environments.

Sandvik said that following passage of tax reform, delayed projects are once again alive, "activity on the slope increased and optimism in our future was budding once again...."

She then warned that the voters' referendum to repeal tax reform has dampened that initial euphoria following passage of SB 21 and challenged her listeners to imagine what the state would be like without oil development.

She said that without oil, "In my view, Alaska Native Corporations would not exist".  She then pointed out that over half of Alaska's largest companies are Alaska Native corporations.

"Since the passage of the Alaska Native Claims Settlement Act," she said, "many Alaska Native Corporations have developed businesses dedicated to serve the oil industry.  For NANA, we consider ourselves to be a resource company at our core."  She said the oil industry has been a good partner.

We have often reminded readers to be sensitive to the subsistence lifestyles of fellow citizens in rural Alaska.  We have also acknowledged that a modern, subsistence lifestyle is supported by many state services funded by a state that receives over 90% of its operating budget from the declining ANS production.

Sandvik concluded with a moving story.  "This summer in my village of Kiana," she recalled, "I was on the beach visiting with a couple of guys I have known all of my life.  When I was still a teenager, both of them had found their way into a job on the North Slope, working two weeks on, two weeks off.  They learned valuable skills.  One of those men worked on the North Slope until he retired two years ago.  The other took the skills he had developed on the North Slope and found a job as a truck driver closer to home, at NANA’s Red Dog Mine.  He retired last year.  Both of them were on the beach, fishing."

She observed that having a good lifestyle, job and income in one's hometown is a "wonderful life" to hope for.

"Like George Bailey," she concluded, "we want to be true to our values.  We want to do right by our families.  We want our communities to prosper.

"With the referendum to un-do tax reform on the table, we have our work cut out for us.  We all need to step up to help Alaskans understand that tax reform is already working, and it holds the key to our future."

We observe that some environmental activists and others supporting repeal of tax reform think a 'wonderful life' may be an Alaska that resembles "Potterville".  They are entitled to that opinion.

We, however, celebrate the courage, insight and initiative of leaders like Sandvik, Brower, responsible industry leaders, legislators and a dedicated Governor.

This united leadership -- in the face of a "Potterville" mentality -- can assure that Alaska has a sustainable flow of natural resource income to support the "wonderful lives" we all seek for ourselves, our families and the generations following us.

Sandvik ended her inspiring speech, deservedly, to cheers and an appreciative audience's standing ovation.

(See Sandvik's full speech text here.)

Other meeting photos:

Doug Smith, Alaska Support Industry Alliance, David Lawer, First National Bank of Alaska, Photo by Dave Harbour"The Changing of the Guard: Outgoing Alliance President Doug Smith passes the gavel to incoming president David Lawer."

Sandra Yi-Fuller, Micky Becker, Shell Oil, Alaska Support Industry Alliance, Photo by Dave HarbourSandra Yi-Fuller and Micky Becker of Shell Oil enjoy the evening.

 

Alliance Board Members Kevin Durling and Matt Melton, with Board Member Emeritus Lynn Johnson in background.

Scott Jepsen, ConocoPhillips, Alaska, David Lawer, First National Bank of Alaska, Support Industry Alliance, Photo by Dave HarbourScott Jepsen (L) of ConocoPhillips and David Lawer, First National Bank of Alaska


Today's Energy In Depth Links:

NATIONAL

US world’s largest producer of oil in 2013 due to shale: report. Shale Energy Insider. PIRA Energy Group, a NYC-based energy markets consulting firm, reports that the US is the world’s largest producer of oil in 2013, according to data presented at PIRA’s recent Retainer Client Seminar held in New York City.
 
Why Oil & Gas Should (Continue to) Be Regulated By The States. Forbes, EID’s Blackmon. At the end of the day, proper regulation of the oil and gas industry is critical for everyone, including the industry.  But over-regulation of it is counterproductive and only serves to create shortages and increase costs to the consumer. 
 
U.S. shale crippling Russia’s energy empire. The National Interest. The April discovery of a new shale formation in Western Texas is another indication that the shale-gas revolution, which is rapidly changing the way that the world gas market operates, continues to press ahead. Russia is the world’s largest gas exporter, yet some experts believe that President Vladimir Putin and Russia’s energy establishment seem to be ignoring these changes—to their possible detriment.
 
Activists, industry starting to find consensus on shale. Christian Science Monitor. The quality of the debate over whether or how to tap shale gas and oil may have turned a corner this year as more groups and states find consensus-seeking ways to deal with the hard issues.
 
Eastern HF fights make their way out west. National Journal. California is almost 3,000 miles away from Pennsylvania, where anti-fracking activist and Gasland producer Josh Fox first gained his fame. But the fights playing out in the Northeast are now migrating west.
 
Energy among few bright spots on U.S. horizon – analysis. E&E News (sub. req’d). Domestic energy employment is one of a few bright spots on the horizon for the U.S. economy, according to a new analysis from Raymond James & Associates Inc.
 
Oil and gas deals stage comeback in 3rd quarter. E&E News (sub. req’d). Houston-based research firm PLS Inc. said deals reached $41.8 billion in the third quarter, up 59 percent. Analysts attributed the rise to surging activity from state-owned energy companies, including China National Petroleum Corp., which made the biggest deal of the quarter when it bought $5 billion in assets in Kazakhstan from ConocoPhillips Co.
 
Ex-BHP Billiton oil chief to head energy firm. E&E News (sub. req’d). Six months after retiring as chief of BHP Billiton Ltd.'s oil division, Mike Yeager is moving into a new post as chairman and CEO of a Houston oil firm.

INTERNATIONAL
 
Russian Minister says no shale development for now. Wall Street Journal. Russia does not deem it necessary to join the shale gas bandwagon and will not undertake large industrial scale production of shale gas, Alexander Novak, Minister of Energy said at a conference Wednesday.
 
Stormont row on the cards over HF in Northern Ireland. Belfast Telegraph. Environment Minister Mark H Durkan said that fracking would not happen on his watch. But yesterday Trade and Industry Minister Arlene Foster called on Mr Durkan, who recently replaced Alex Attwood on the Executive, to think again.
 
HF decision an 'executive issue'. BBC News. Any decision about fracking should be a matter for the Northern Ireland Executive as a whole, Enterprise Minister Arlene Foster has said.
 
South Africa Says HF Fluids Must Be Disclosed. Bloomberg. South Africa proposed regulations for hydraulic fracturing that would require disclosure of chemicals used and meet standards set by the American Petroleum Institute, a year after lifting a moratorium on the technique.
 
Mexico's Pemex voids $1.8 bil tender to import US shale gas. Platts. Mexican state oil and natural gas monopoly Pemex Tuesday voided what was to have been a $1.8 billion tender for a huge pipeline to bring US shale gas south of the border.
 
Saudi Arabia hopes spending blitz can turn around aging fields. E&E News (sub. req’d). Saudi Arabia's state-owned oil company hopes to boost production capacity by channeling "massive investments" into older fields. Khalid al-Falih, Saudi Aramco's CEO, said yesterday that the energy giant has steadily raised its capital budget over the last 10 years, to $40 billion.

ALASKA

Republican pushes 'energy resurgence' in launch of Alaska Senate bid. E&E News (sub. req’d). Alaska's Senate race heated up yesterday as Dan Sullivan, former head of the state Department of Natural Resources, declared his candidacy for the Republican nomination. At an Anchorage news conference, Sullivan stressed the need to expand Alaska oil and gas development and block "federal overreach" on state issues.

COLORADO

Anadarko VP on Colorado operations, floods, HF. Denver Business Journal, Q&A with Brad Holly. We are investing about $1.7 billion in the basin in 2013. We have 13 drilling rigs running and plan to drill about 400 wells this year. About 40 percent of the company's production comes from the basin, and it’s getting about 40 percent of the company’s capital investment this year.
 
CSU launches study on methane emissions. The Coloradoan. Colorado State University announced on Monday the launch of a “groundbreaking” study that will track natural gas processing facilities’ methane emissions, which environment experts say have a damaging effect on the Earth’s atmosphere.
 
Oil industry spends $250,000 to fight moratorium. The Coloradoan. "On behalf of the 100,000 Colorado families and the businesses across the state that rely on the energy industry, we are financially supporting the local groups who oppose the bans,” said Doug Flanders, director of policy and external affairs for COGA.

MICHIGAN

HF foes may key drive. Livingston Daily. Livingston County opposition to hydraulic fracturing could be instrumental in getting a proposal to ban “fracking” on the November 2014 ballot, the head of the ballot effort said.

NORTH DAKOTA

Road closures, flaring mar Bakken Shale oil growth. E&E News (sub. req’d). The amount of natural gas burned in flares in North Dakota's Bakken Shale oil field rose in August, as the state's rapid production growth continued to strain its infrastructure.
 
NORTHEAST
 
CONSOL ramps up in its gas division. Tribune Today. After selling more gas and coal than it had expected during the recently ended quarter, CONSOL Energy now has signed an agreement for construction of Utica Shale infrastructure in Noble County, the company announced Tuesday.
 
Marcellus gas about to enter NYC, but New England is a tougher sell. E&E News (sub. req’d). A new "superhighway" pipeline opens next month to carry a large batch of natural gas primarily from the Marcellus Shale into New York City and surrounding suburbs, providing another outlet for the bottlenecked Appalachian production. But the road to New England isn't as open.
 
Carroll Co. Wants to Move Forward with HF in Maryland. Westminster Patch. Carroll's representatives say Maryland needs to move ahead with fracking in the state. Senator David Brinkley, R-Carroll, said he thinks Maryland should "move full speed ahead with it."  Delegate Susan Krebs, R-Carroll, agrees, saying that Maryland is losing out on economic benefits by not getting on board. Krux('ns:centro', 'dataprovider.exelate');
 
CONSOL exceeded production and sales expectations for the quarter. The Examiner. "Our gas production growth is beginning to accelerate as we and our Marcellus Shale partner expand the rig count. We now have a record 8 rigs drilling in the Marcellus Shale on our JV acreage. For 2014, we and Noble Energy expect to be operating at least this many rigs," commented J. Brett Harvey, chairman and chief executive officer.
 
WVU Officials Present Findings After Monitoring Drilling Operations. WBOY 12. The West Virginia University Extension Service hosted a forum on Tuesday evening about monitoring Marcellus shale drilling operations. Dr. Michael McCawley with the WVU department of occupational and environmental health sciences gave a presentation on his findings from a study he did.
 
New Hanger ad features ‘Gasland’ residents. StateImpact PA. This week in political ads, Democratic gubernatorial candidate John Hanger has released a new web video positioning himself as a tough regulator of drilling. Hanger served as DEP Secretary under Governor Ed Rendell at the start of Pennsylvania’s natural gas boom.
 
New report highlights negative impacts of HF. Legislative Gazette. A recent report conducted by a New York-based environmental group highlights a slew of consequences hydraulic fracturing could potentially have on the state, including depleting water sources and increasing costs to small communities.

OHIO
 
Why the Utica Shale Might Be the Best Play in the U.S. Daily Finance. It turns out the Utica is just saturated with a vast amount of recoverable natural gas and natural gas liquids. While it doesn't contain the high levels of oil of the Bakken or Eagle Ford, the amount of gas that can be extracted on a barrel of oil equivalent, or BOE, basis per well rivals or exceeds these two oil rich plays.
 
Mansfield Residents Upset About HF Near Their Homes. CBS Local. For two years, residents in one Mansfield neighborhood enjoyed the quiet, clean environment expected of suburbia. But now that Eagleridge Operating has started up its rig drills for natural gas in the area — all that has changed.
 
Ohio utility chief warns of reliance on gas over coal. Dayton Business Journal. Public Utilities Commission of Ohio Chairman Todd Snitchler is not a fan of a “dash-to-gas” mentality that calls for coal-rich states such as Ohio to make a quick switch to natural gas as the preferred fuel for its power plants, according to Columbus Business First.
 
Belmont County: Judge rules in favor of landowners. Farm and Diary.  A Belmont County judge has ruled that one oil and gas company can not hold a lease in perpetuity. The case of Oxford Oil verses the West family is one of many lawsuits in Belmont County courts over oil and gas issues. The West family owns 97 acres in Wayne Township.
 
Group claims Ohio’s becoming ‘waste dump’ for HF companies. Columbus Business First. A soil recycling company has been thrown into the middle of a controversy over the disposal of drill cuttings from oil and natural gas wells, with its owner saying critics of the process are misinformed.

OKLAHOMA

Booming oil towns prepare for bust. Tulsa World. The surge in oil drilling has drawn money and men like a magnet to run-down communities that haven't seen a boom since the 1980s. But leaders and residents here are increasingly mindful that the runaway riches tapped by hydraulic fracturing will eventually run out.

TEXAS
 
So far this year: 3,266 new wells in the Eagle Ford. San Antonio Express-News.  Eagle Ford Shale drillers have started 3,266 new wells so far this year, according to the latest Baker Hughes Well Count.
 
Goodrich will boost 2013 capital budget, including Eagle Ford work. San Antonio Business Journal. Goodrich Petroleum Corp. says its boosting its 2013 capital expenditures to $255 million from a previous estimate of $230 million, including drilling and completion projects in the Eagle Ford Shale.
 
Kinder Morgan to build Gonzales plant. Gonzales Inquirer. Kinder Morgan Energy Partners, L.P. announced Friday it has entered into an agreement with a large Eagle Ford Shale producer to extend the Kinder Morgan Crude and Condensate (KMCC) pipeline farther into the Eagle Ford Shale in South Texas.
 
Sizing up the Permian. Investing Daily. The Permian Basin beneath west Texas and southeastern New Mexico receives a fraction of the press coverage accorded the Bakken and Eagle Ford, but it has more production potential than these two shale formations combined. The reasons it’s often overlooked are that the Permian is not just a shale oil play, nor is it a recently developed basin.

WYOMING

Wyo. oil industry fears effects of prolonged furloughs. E&E News (sub. req’d). Wyoming energy industry leaders worry an extended government shutdown could put a damper on business. The shutdown, which began Oct. 1, halted new production on federal lands -- a development that has had little impact on energy companies used to waiting more than a year to secure federal permits from the Bureau of Land Management.

 

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