Today's Oil and Gas News Briefs, Courtesy: Larry Persily
AGDC: government gasline equity owner board of directors meets Saturday
CBC. TransCanada Withdraws Nebraska Pipeline Application
Commonwealth North: Open meeting tomorrow with Mike Pawlowski, Deputy Chief of Staff to U.S. Senator Lisa Murkowski
Yesterday's results: Alaska Oil & Gas North Slope Lease Sale
Time for Congress to defund sue and settle (And we couldn't agree more! -dh)
The Daily Caller, By Michael Bastasch
The head of the Environmental Protection Agency said it wouldn’t be “extreme” for the government to ban all coal, oil and natural gas production on federal lands, but was quick to add governments had broader things to consider in crafting energy policies.
U.S. Sen. Lisa Murkowski (NGP Photo), today voted to block the Obama administration from imposing costly new climate regulations on America’s economy.
Murkowski voted in favor of Senate Joint Resolution 23 and Senate Joint Resolution 24, which are both bipartisan resolutions of disapproval under the Congressional Review Act (CRA) to block the administration’s so-called Clean Power Plan limits on carbon dioxide emissions from new and existing power plants.
“The Obama administration has once again overstepped in attempting to drastically overhaul the way America generates its energy,” Murkowski said.
McCarthy’s remarks were in response to a question from Loveless asking her if it’s an “extreme” position for environmentalists to call for a ban on coal, oil and gas production on federal lands.
Oil and gas news briefs for
Osaka Gas interested in selling, trading its U.S. LNG
(Platts; Nov. 18) - Japan's Osaka Gas is keen to resell and trade its offtake volume from the Freeport LNG plant under construction in Texas to boost profits and flexibility in its LNG procurement, the president of the gas utility said Nov. 18. "We want to resell as much of this volume as possible," Osaka Gas president Takehiro Honjo said. "This LNG is Henry Hub-linked and we could consider not only just bringing it back to Japan but also other options such as swapping cargoes with those in Southeast Asia, Europe."
Osaka Gas has a liquefaction tolling agreement with Freeport LNG, which is expected to start-up in 2018. The contract allows Osaka Gas to take 2.2 million metric tons per year of U.S.-sourced gas with no destination restrictions. Honjo said low oil prices would reduce the competitiveness of U.S. LNG but the utility needs to see how energy prices pan out in 2018. If prices to liquefy and deliver U.S. gas are too high, Osaka could choose not to liquefy some of its volume, though it still would be required to pay Freeport a fee for the reserved capacity at the liquefaction plant.
Though Osaka Gas wants to increase its equity in LNG projects, Honjo said he does not currently see any attractive LNG investment opportunities.
China looking to sell unneeded LNG, adding to global oversupply
(Bloomberg; Nov. 18) - U.S. liquefied natural gas producers face an unlikely challenge as they prepare to enter global markets: China’s sale of supply it won’t need. The Asian nation will accept only 77 percent of its contracted cargoes in 2015 as its slowest economic growth since 1990 cuts demand, according to industry consultant IHS Inc. The rest of the supply will be put up for sale amid a worldwide glut that Goldman Sachs says is likely to force U.S. export projects under construction to operate at half capacity.
The U.S. and China are seeking to sell cargoes just as new LNG output equivalent to more than a third of global demand is set to flood the market over the next three years. While producers face more competition, the supply surge is a bonanza for the world’s biggest buyers, including Japan, that are benefiting from the lowest prices since at least 2010. “Chinese buyers have started trying to divert cargoes away from their home market,” James Taverner, an IHS analyst in Tokyo, said by e-mail.
The North American shale boom triggered producers to prepare for LNG exports five years ago, when benchmark U.S. natural gas was as much as double today’s price. Elsewhere, companies sank billions of dollars into new supply from Australia to Africa, counting on Asian demand. LNG producers will increase annual supply by about 90 million tons over the next three years, according to Sanford C. Bernstein & Co., equivalent to about 38 percent of demand in 2014. Meanwhile, China will cut natural gas prices for business and industrial users as it seeks to boost demand for the fuel.
China cuts benchmark natural gas price to spur more demand
(Wall Street Journal; Nov. 18) - China’s government Nov. 18 moved to shore up ailing demand for natural gas across its economy with deep price cuts aimed at spurring more use by domestic industry. The cuts, reported by the National Development and Reform Commission, China’s top economic planner, cut benchmark city-gate prices by $3.10 per 1,000 cubic feet for industry and commercial users. The move had been expected for several months and equals a 28 percent cut in average city-gate prices nationwide.
The cuts are important, not least because they signal Beijing is serious about weaning its reliance on coal as part of cleaning up China’s air and economy. But at the same time, the lower price could slow domestic shale exploration and production in western China, analysts said. City-gates prices refer to the prices that local distributors pay for gas and have a significant impact on the prices that end-users such as factories pay as well as overall domestic demand. The price cut doesn’t apply to residential consumers.
The commission also said it was deepening energy-sector reforms by allowing greater price negotiation between buyers and sellers. With the move, China will allow suppliers to charge up to 20 percent more than the benchmark, based on supply and demand. It set no downward limit for price fluctuations. The price cuts, which will take effect , aim to restore demand growth for gas in China after it soured this year. “China is the most important gas growth market globally, and the LNG industry will breathe a sigh of relief on this announcement,” said Neil Beveridge, a gas analyst at Bernstein Research.
China proposes $7 billion investment in U.S. methanol plants
(Energy Wire; Nov. 17) - China is seeking to tap the flood of cheap natural gas coming from the interior of North America by converting it to methanol at three huge refineries proposed in Washington and Oregon. The plants, collectively called Northwest Innovation Works, have received little attention despite their head-snapping impact: The refineries could increase demand for natural gas in the Pacific Northwest by 40 percent. They would more than triple the size of the fast-growing U.S. methanol industry.
At an estimated $7 billion cost, the refineries would be one of the largest investments ever by China in new U.S. manufacturing. The largest plant, in Tacoma, could use more water than all the residential customers of the public utility district combined. The plan is being viewed warily by Pacific Northwest environmental groups that have been effective at slowing a long list of proposals to deliver North American coal, oil and gas to markets in Asia. Two of the three refineries would sit on the banks of the Columbia River.
The end goal is methanol, a crucial building block of plastic and many other materials of modern life. China would be the sole recipient of the production, which would lower greenhouse gas emissions in China while raising them to a lesser degree on American shores. China is the world's largest producer and consumer of methanol, and it manufactures almost all of it from coal, which creates a great deal of carbon emissions. The three plants would about triple total U.S. methanol production.
British government wants to close all coal-fired power plants by 2025
(New York Times; Nov. 18) - The British government Nov. 18 called for closing all coal-fired power plants in the country by 2025. The move, announced in advance of the U.N. conference on climate change in Paris on , appeared aimed at showing Britain as a leader in reducing carbon dioxide emissions. “It cannot be satisfactory for an advanced economy like the U.K. to be relying on polluting, carbon-intensive 50-year-old coal-fired power stations,” said Amber Rudd, minister for energy and climate change.
The government will publish its detailed proposals in the spring, she said. Rudd wants more gas-fired stations to be built, since relying on "polluting" coal is "perverse.” Coal use in Britain is in decline as utilities close aging plants, but more than 20 percent of the country’s electricity was still being generated from the fuel in the second quarter of this year. By comparison, just over 30 percent of British electricity came from natural gas, 25.3 percent from renewables and 21.5 percent from nuclear plants.
Analysts say most British coal plants are likely to be shut by the mid-2020s anyway, but they add that forcing the closing of all coal plants within a decade could be too hasty. Speaking Nov. 18 to a group of civil engineers, Rudd said Britain should be using gas instead of coal to generate electricity because gas burns cleaner than coal. With the decline in North Sea production, she added, Britain may need to get 75 percent of its gas from other countries by 2030, compared with the roughly half that it now imports.
First Sabine Pass LNG to Europe could go to Lithuania
(Reuters; Nov. 17) - The first export of U.S. liquefied natural gas to Europe will head for Lithuania, two industry sources say, a gesture to the Baltic states that are heavily reliant on Russia for supply, and the first shot in a price war over market share in Moscow's backyard. The February delivery of U.S. LNG will challenge Russia's land-locked pipelines. The Cheniere Energy LNG export plant at Sabine Pass, La., is expected to start shipments early next year.
In addition to Sabine Pass, four other LNG export terminals are under construction on the U.S. East and Gulf coasts. Talks are ongoing on the inaugural U.S. shipment, though Lithuania's state-run Lietuvos Energija wants a discount to Russian piped deliveries, one source said. Most of the output at Sabine Pass is under long-term contract, though the customers are free to deliver the LNG wherever they want. U.K.-based BG Group is an anchor customer for the Cheniere plant.
One question is whether Gazprom will defend market share by upping output and lowering prices or by restraining production, as it did during the last gas market glut in 2008-2009, and waiting for prices to recover, said Stephen O'Rourke, director of gas research at consultancy Wood Mackenzie. Lithuania opened its floating LNG import terminal in 2014.
Partners OK additional drilling to feed Australia LNG plant
(Sydney Morning Herald; Nov. 16) - BG Group and its Asian partners in the $20.4 (U.S.) billion Queensland Curtis LNG venture in Australia have given the go-ahead for $1.7 billion of additional spending for up to 400 new wells to maintain gas supply. Drilling will occur over the next two years. The large investment underscores the ongoing spending commitment required by the coal-seam gas LNG projects in Queensland, which need to keep drilling new wells every year to maintain gas supplies for their export plants.
BG started shipments from the facility in January — the first ever gas exports from Queensland — and has so far delivered 62 cargoes to Asia. As partners in Queensland Curtis LNG, China National Offshore Oil Corp. and Tokyo Gas will fund part of the additional drilling, but the British company will shoulder most of the investment in line with its 73.75 percent stake in the acreage. The work also includes 450 miles of water and gas gathering lines, a compression station as well as other power and water lines.
Chevron reports Gorgon LNG in final stages for commissioning
(Business Finance News; Nov. 16) - One of the largest liquefied natural gas projects in the world, and Australia’s largest ever resource project, the Chevron-led Gorgon project is on its way to make its first LNG shipment in early 2016. In the latest update on its website, Chevron reported the project in its final stages to prepare for commissioning, which would allow start-up of the plant’s first liquefaction train.
An LNG cool-down cargo is expected to arrive in mid-December, necessary to help in cooling down the massive storage tanks in preparation for the start of LNG production at the plant. Gorgon, at an estimated $54 (U.S.) billion, and another Chevron-led project in Australia, Wheatstone, and an LNG export project in Angola are expected to help improve cash flow at the oil-and-gas major after years of multibillion-dollar construction spending on the projects.
The $10 billion Angola plant has been closed since last year for major rebuilding after production problems. Wheatstone, at $29 billion, is scheduled for start-up before year-end 2016. Wheatstone, Angola and Gorgon have all incurred delays and cost overruns.
First Nation considering small LNG plant near Vancouver
(Globe and Mail; Nov. 16) - The Tsawwassen First Nation is considering building a small liquefied natural gas production plant and export terminal south of Vancouver, working in a joint-venture with FortisBC that is expanding its own 1971 liquefaction plant in Delta, also just south of Vancouver. The First Nation proposal calls for producing 3 million to 5 million metric tons of LNG per year, filling several tankers per month. The project would rely on an existing pipeline to deliver gas. No project cost was provided.
Members of the First Nation are set to vote on the proposal . The First Nation has selected industrial property on its land for the LNG site. The FortisBC $400 million expansion is separate from the proposed Tsawwassen project. Expansion work started at the FortisBC Tilbury plant last year, with the additional production to start up by the end of 2016. The Tsawwassen First Nation is among 20 or so LNG plants proposed for up and down the coast, looking to profit from shale gas plays in northeastern B.C.
B.C. official asks LNG opponents to wait for federal review
(Globe and Mail; Canada; Nov. 15) - B.C. Deputy Premier Rich Coleman said plans for a liquefied natural gas terminal near Prince Rupert will be judged on a science-based environmental assessment, urging the project’s critics to wait for details from a federal review. Coleman said critics should allow the Canadian Environmental Assessment Agency to finish its job and study new submissions — notably scrutinizing more details and revisions expected from the company about its plans for building the LNG terminal.
A group led by a Lax Kw’alaams First Nation tribal leader complains that the Pacific NorthWest LNG project will damage juvenile salmon habitat. Donnie Wesley, a hereditary chief of the Gitwilgyoots tribe, argues that no amount of mitigation measures would protect the ecologically sensitive Flora Bank, located next to Lelu Island in the Skeena River estuary.
“They always say it should be based on science, but they’re prepared to prejudge it,” Coleman said of the project’s opponents. Malaysia’s state-owned Petronas heads the venture, one of 20 projects in British Columbia vying to export gas overseas, mostly targeting Asia. Pacific NorthWest LNG is trying to address opponents’ concerns in its project plans. Canada’s environmental agency started its review into Pacific NorthWest LNG in April 2013. It could issue its decision in February.
New report says LNG project in B.C. would not harm salmon habitat
(Globe and Mail; Canada; Nov. 18) - Flora Bank is a resilient area that would emerge unscathed in the event that liquefied natural gas is produced on Lelu Island, B.C., a report commissioned by Pacific NorthWest LNG concludes. Visible at low tide, Flora Bank contains eelgrass that nurtures juvenile salmon in the Skeena River estuary near Prince Rupert. Pacific NorthWest LNG, led by Malaysia’s state-owned Petronas, wants to build an export terminal on Lelu Island, located next to Flora Bank.
“The technical work completed to date indicates that the project is not likely to cause significant adverse environmental effects on fish and fish habitat,” according to the consortium’s 36-page summary of its findings. The findings contrast sharply with research carried out by the aboriginal-backed Skeena Fisheries Commission, which is sounding the alarm about significant risks to Flora Bank.
Pacific NorthWest LNG conducted new studies after the Canadian Environmental Assessment Agency requested more details from the consortium. Pacific NorthWest LNG said it will also have a program to monitor fish habitat and will continue to discuss its plans with groups ranging from Fisheries and Oceans Canada to First Nations. The federal environmental agency is expected to produce a draft report before rendering a final decision on the Petronas-led project by the spring of 2016.
Pakistan looks to convert power plants, boost LNG imports
(Pakistan Today; Nov. 15) - The Pakistan government is considering converting its inoperative electricity generation plants running on diesel or furnace oil in Sindh and Punjab to liquefied natural gas to boost power generation capacity, said Syed Mohammad Ali, CEO of Engro Vopak Terminal and Elengy Terminal Pakistan. Most of the big electricity plants running on diesel and furnace oil are not producing electricity at full capacity because of domestic natural gas shortages or expensive alternative fuels.
“The initial plan of the government is to run the inoperative electricity plants at their full capacity through imported LNG,” Ali said, adding that the plants could make electricity at half the cost of other fuels. On any given day, diesel is more expensive than LNG, he said. LNG prices are down sharply from their peak less than two years ago as new supplies are coming online in an oversupplied market. Pakistan has started importing LNG just in the past year, after domestic gas production failed to keep up with demand.
The country produces about 4 billion cubic feet of gas per day but could use an additional 2 bcf a day, Ali said. “LNG remains a cheaper option (than diesel or fuel oil),” he said. “LNG … is more efficient in power generation, leading to lower operational, management and transportation costs.” According to some estimates, the CEO said, Pakistan could save $1 billion to $1.5 billion per year by importing 1 bcf a day of LNG to replace oil fuels.
TransCanada plans expansion to handle Alberta, B.C. gas production
(Calgary Herald; Nov. 16) - More relief for Western Canada gas producers enduring pipeline bottlenecks is on the way with Calgary-based TransCanada announcing Nov. 16 a $570 million proposal to add capacity for 2.7 billion cubic feet per day of firm contracts on its Nova Gas Transmission system by 2018. Dozens of oil and gas companies operating in western Alberta and northeastern B.C. have reported interrupted production over the summer as natural gas gushing from horizontal, multi-fractured wells overwhelm pipeline capacity.
“There’s a lot of capacity in Alberta but, in many cases, it’s in the wrong place. Horizontal drilling has changed where we drill,” said Jim Evaskevich, chief executive of junior Yangarra Resources, which uses TransCanada to take gas to market from its land base in west-central Alberta. “We lost a lot of production this year, although currently we don’t have much cut back.”
TransCanada said its 2018 expansion program represents the minimum system addition required to cover contracts, and additional expansions may be planned if identified in an assessment this year. It said it intends to make application to the National Energy Board in the second half of 2016 to build the 2018 projects. The expansion would be in addition to $7.5 billion of projects already announced on the Nova system as TransCanada works to handle growing gas production in the region.
TransCanada expands its pipeline work in Mexico
(Bloomberg; Nov. 17) - Days after the U.S. spurned TransCanada’s proposal to expand its Keystone oil pipeline network across North America, Mexico opened its arms. TransCanada won the rights last week for its sixth gas pipeline in Mexico, one of the company’s key targets for growth. The Nov. 10 decision came four days after the U.S. denied TransCanada’s bid to build its Keystone XL oil sands project across the border.
Mexico’s need for foreign investment to help the nation improve its infrastructure is a welcome opportunity for TransCanada after losing its seven-year battle to complete Keystone XL. The Canadian company, which owns pipelines and power plants, plans to invest more than $3 billion in Mexico by 2017, said Robert Jones, president of Mexico operations. Mexico is planning to hold as many as five gas pipeline auctions before the end of January, and TransCanada will “look at them all,” Jones said.
With the latest contract, TransCanada now holds rights to develop and operate more than 1,200 miles of pipelines in Mexico. TransCanada’s expansion in Mexico coincides with the country’s overhaul of its energy industry that ended the state-run monopolies, opening the door to private investment. Mexico plans to expand its pipeline network 75 percent by 2018 and is seeking as much as $10 billion in investment for 24 new projects in the short term, helping to move plentiful U.S. shale gas south of the border.
Flint Hills applies for small-scale LNG exports; targets Caribbean
(Energy Wire; Nov. 18) - Flint Hills Resources has applied to export liquefied natural gas via an expedited pathway that relies on an existing small-scale LNG plant and standard-sized shipping containers and barges to reach Caribbean and other small markets. In a recent filing with the Department of Energy, Flint Hills, a Wichita, Kansas-based Koch Industries subsidiary, requested permission to export up to 120,000 gallons of LNG per day — about 3.6 billion cubic feet of natural gas per year.
The project is tiny by LNG export industry standards, with some Gulf Coast plants looking to export 2 bcf a day. But the Flint Hills project enjoys a benefit the big ones do not: It is exempt from review under the National Environmental Policy Act, potentially saving months or years and millions of dollars. Most liquefaction plants undergo a lengthy environmental review by the Federal Energy Regulatory Commission or Maritime Administration before construction and operation of a terminal.
The FERC process, which covers land-based terminals that serve LNG tanker ships, generally takes at least two to three years and tens of millions of dollars to complete. The MARAD process for offshore plants is designed to produce a decision within one year. But Flint Hills proposes to load up containers at an existing, company-affiliated liquefaction plant in Texas for shipment by barge or containership to buyers. That would be exempt from the stringent environmental review, the company said, because no operations would change at its LNG facility — only the delivery method and destination.
North Dakota oil production down 5 percent from year ago
(Energy Wire; Nov. 16) - Oil production in North Dakota's Bakken Shale formation has begun to coast downward, nearly a year after prices started to crash, and it could keep falling, the state's top energy regulator said Nov. 13. The state pumped 1.16 million barrels a day in September, down about 2 percent from August and about 5 percent below the all-time high set in December 2014.
The number of producing wells fell month over month for the first time since 2003, and the number of wells that have been drilled but not completed, or hydraulically fractured, has topped 1,000, state Mineral Resources Director Lynn Helms said on a conference call with reporters. Companies are "producing only as much oil as they need to make the stockholders and the bankers happy," Helms said.
Drilling is economical in only three of North Dakota's western counties at current prices, and production could drop below 1.1 million barrels a day, Helms said. The average North Dakota price was $31.17 per barrel in September, reflecting the national decline and the higher cost of transporting Bakken oil to refining centers on the coasts. It could take a year for production to recover once prices improve, Helms said.
CWN Energy Action Coalition:
Join us for a special meeting of our Energy Action Coalition this Friday, November 20th, noon – 1pm at the HDR building at 2525 C Street (formerly the CIRI building). Mike Pawlowski, Deputy Chief of Staff to U.S. Senator Lisa Murkowski, will brief us on some of the latest legislation in Washington, D.C. His discussion will include the Energy Policy Modernization Act, a bi-partisan bill recently introduced by Senator Murkowski, who chairs the Senate Energy Committee. Mike will also discuss legislation related to Outer Continental Shelf energy exploration.
Juneau Empire by James Brooks. Alaska’s natural gas megaproject is moving forward.
With a 39-0 vote, the Alaska House approved spending $161.25 million to advance the AKLNG project, which promises to bring natural gas from the North Slope to an export terminal at Cook Inlet. (Governor Walker's LNG Project press releases are here.)
TODAY, November 5, 2015 at 10:30AM EST, Chairman Rob Bishop will hold a press conference call to discuss legislative reforms to the Land and Water Conservation Fund (LWCF).
Committee on Natural Resources Chairman Rob Bishop outlines legislative reforms to the Land and Water Conservation Fund.
Thursday, November 5, 2015
Sen. Murkowski Draws National Attention to Alaska’s Energy Priorities
Energy Committee Chairman Delivers Weekly Republican Address
Washington, D.C. – U.S. Sen. Lisa Murkowski, R-Alaska, today highlighted Alaska’s energy priorities as she delivered the weekly Republican address to the nation. In her remarks, Murkowski sharply criticized the Obama administration’s actions to block energy production in the National Petroleum Reserve-Alaska (NPR-A), the non-wilderness portion of ANWR, and offshore, while bringing attention to the barrage of destructive regulations coming from the EPA.
“Since taking office, the Obama administration has repeatedly denied Alaska’s best opportunities to produce energy for our nation and the world. It has blocked production in half of our National Petroleum Reserve, which was specifically designated for energy development. It is locking away the non-wilderness portion of ANWR, where an estimated 10 billion barrels of oil could be produced from just 2,000 acres. In the Chukchi Sea, the constantly-shifting regulatory environment recently forced a company to abandon seven years of work and $7 billion in investment. And instead of recognizing that as a significant loss, the administration doubled down last week by canceling offshore lease sales in the region,” Murkowski said.
Murkowski’s address, part of her efforts to educate the American people about Alaskans’ needs and opportunities, played to a national audience in all 50 states. She explained to the country that the administration’s decisions have come despite strong opposition from the vast majority of Alaskans, and will have economic consequences felt long into the future.
“All of these decisions ignore the will of hard-working Alaskans, who overwhelmingly support new production. The administration is opening the door for Iranian oil production, but closing it on Alaskan oil. And while the consequences are not yet evident, they will be,” Murkowski said. “These decisions mean fewer jobs, less security for our country, and more of our dollars going overseas. They threaten the safe operation of our Trans-Alaska Pipeline, a national security asset that is just one-third full. And it is only a matter of time until the administration applies this short-sighted strategy to the rest of our nation.”
Murkowski, as chairman of the Senate Energy and Natural Resources Committee and the Interior-Environment Appropriations Subcommittee, has written and advanced legislation to increase oil production on the North Slope and to stop overreaching federal regulations that will harm the state.
Murkowski noted that the anti-development decisions she highlighted in the address are only some of the instances where the Obama Administration is negatively impacting the health and prosperity of Alaskans: also on the list are the Interior Department’s decision to deny a life-saving road for the residents of King Cove; policies that continue to decimate the Southeast timber industry; unnecessary land management restrictions such as the “Areas of Critical Environmental Concern” proposed for northern Alaska; the proposed Stream Protection Rule that would put almost every Alaska placer miner out of work; and more.
Murkowski concluded the address by highlighting her commitment to bipartisan consensus on common sense solutions that will benefit Alaska. She specifically noted the strong bipartisan support that her broad energy bill – the Energy Policy Modernization Act – drew when it was reported by the Energy Committee earlier this year.
“Moving forward, Republicans hope that President Obama will work with Congress on policies that can draw bipartisan support. That’s the best way to help states like Alaska. And it’s the best way to protect our future – our economy, our security, and our environment,” Murkowski said.
Murkowski is the sponsor of S. 494, the Authorizing Alaska Production Act, which would open roughly 0.01% of the surface acreage of the Arctic National Wildlife Refuge to responsible oil and gas production. She is also the sponsor of S. 2011, the Offshore Production for Energizing National Security Act, which would provide revenue sharing for offshore production and mandate offshore lease sales in Alaska. Murkowski is working hard to recruit additional support for both bills, and today’s address was the next step in those efforts.
The Weekly Republican Address is available in both audio and video format and is embargoed until 2 a.m. Alaska Standard Time/6 a.m. EST, Saturday, October 31, 2015. The audio of the address is available here, the video will be available here, and you may download the addresshere.
A full transcript of the address follows:
“Hi, I’m Lisa Murkowski. And I’m honored to represent Alaska in the U.S. Senate, where I chair the Committee on Energy and Natural Resources.
“It’s been a pretty good week in Congress – with the House of Representatives welcoming a new speaker, Paul Ryan, and the Senate passing a major bill to protect our nation’s cyber security.
“What I want to talk with you about today, though, is another key national security issue – energy. And I want to highlight what is happening in my home state, because it foreshadows challenges to come all across our nation.
“Since taking office, the Obama Administration has repeatedly denied Alaska’s best opportunities to produce energy for our nation and the world.
“It has blocked production in half of our National Petroleum Reserve, which was specifically designated for energy development.
“It is locking away the non-wilderness portion of ANWR, where an estimated 10 billion barrels of oil could be produced from just 2,000 acres.
“In the Chukchi Sea, the constantly-shifting regulatory environment recently forced a company to abandon seven years of work and $7 billion in investment.
“And instead of recognizing that as a significant loss, the Administration doubled down last week by canceling offshore lease sales in the region.
“All of these decisions ignore the will of hard-working Alaskans, who overwhelmingly support new production. The Administration is opening the door for Iranian oil production, but closing it on Alaskan oil. And while the consequences are not yet evident, they will be.
"These decisions mean fewer jobs, less security for our country, and more of our dollars going overseas. They threaten the safe operation of our Trans-Alaska Pipeline, a national security asset that is just one-third full. And, it is only a matter of time until the Administration applies this short-sighted strategy to the rest of our nation.
“With prices low, we need to open the areas where it is most cost-effective to produce energy. We need to modernize our policies and open our markets. And we need to avoid overly burdensome regulations.
“Unfortunately, the Administration is charting a different course. The EPA and other agencies are issuing a barrage of regulations that will have limited environmental benefit, but will absolutely reduce our ability to produce energy here at home.
“For example, the EPA’s new ozone standards will provide little in the way of health benefits, while costing billions to comply.
“Its climate regulations will shutter power plants across the country – raising electricity costs and threatening the reliability of our electric grid.
“And the ‘Waters of the United States’ rule, the WOTUS, a massive expansion of federal regulatory powers, could allow the EPA to regulate drainage ditches and occasional ponds.
“There is a better path. There is no reason why our energy policy should be so divisive. And that’s why I am working hard to forge bipartisan consensus on policies that will keep energy affordable and abundant, as it becomes cleaner and cleaner.
“To give you one promising example, those of us on the Energy Committee have developed a broad bill that will save energy, promote innovation, invest in critical infrastructure, and boost our energy trade – among many other benefits. It passed out of our Committee with a strong bipartisan vote. We have also gathered bipartisan support to end the outdated ban on crude oil exports.
“Moving forward, Republicans hope that President Obama will work with Congress on policies like these that can draw bipartisan support.
“That’s the best way to help states like Alaska. And it’s the best way to protect our future – our economy, our security, and our environment.
“Thanks so much for listening.”
THIS MORNING: Senator Murkowski Hit Interior Hard For Opposing Alaska's Survival As An Independent State...
(...and we agree with her entire statement!)
U.S. Sen. Lisa Murkowski, today convened an Energy and Natural Resources Committee hearing to consider six nominees for the Department of Energy and Department of the Interior. Murkowski used her opening statement to lay out a litany of anti-Alaska actions by Interior, expressing frustration with those decisions and observing that the department is “destroying the hopes” of countless Alaskans.
Click photo for video
“The Interior Department’s record has been very frustrating – particularly if you are an Alaskan. We’re seeing decisions out of Interior that are really destroying our hope to be independent as a state,” Murkowski said in her opening statement at Tuesday’s energy committee’s hearing.
Murkowski pointed to Interior’s denial last week of requests to extend leases in the Chukchi Sea and to Interior’s decision to cancel offshore lease sales in the Arctic.
“This past Friday, Interior launched yet another assault on Alaska’s ability to produce its resources – denying lease extensions for Shell and Statoil, while canceling offshore lease sales that were planned for the Arctic in 2016 and 2017,” she said. “These decisions again reject the needs and desires of the overwhelming majority of Alaskans. Interior has again failed to listen to us, and again chosen to act against us.”
Murkowski criticized Interior for blocking development in half of the National Petroleum Reserve-Alaska (NPR-A), for stalling projects in NPR-A, for effectively locking down nearly all of the non-wilderness portion of ANWR, and for its heartless decision to reject a life-saving road for the isolated community of King Cove. She also criticized Interior for failing to provide regulatory certainty or permitting predictability for offshore Arctic development – one of the key factors that forced Shell to abandon seven years of work and $7 billion in private investment.
“If you’re an Alaskan, you have to wonder, what’s going on within Interior? What does Interior have against us? How can Interior set up a regulatory regime that prevents companies from having commercially viable exploration programs, and then claim that shows a ‘lack of interest’ in the Arctic?” Murkowski said.
Murkowski grilled Kristen Sarri, who is nominated to be DOI’s Assistant Secretary for Policy, Management, and Budget – an office she currently leads on an interim basis – on her role in the Arctic leasing decisions. Sarri largely deferred, raising new questions about why her office was not involved in these significant decisions and whether Interior conducted any analyses of their economic impacts.
(Click photo for video)
Murkowski also questioned Mary Kendall, nominated to be permanent Inspector General for the Interior Department, about some of the controversies associated with her more than six-year interim tenure. Kendall’s nomination is tantamount to a lifetime appointment, but Murkowski noted that the controversies have raised “legitimate questions” about whether Kendall is “the right fit for the permanent position.”
The committee also reviewed the nominations of Dr. Suzette Kimball to be Director of the U.S. Geological Survey; Dr. Cherry Murray to be the Department of Energy’s Director of the Office of Science; Victoria Wassmer to be DOE Under Secretary of Energy; and John Kotek to be Assistant Secretary for Nuclear Energy.
Murkowski did strike a more positive note about the three DOE nominees.
“I have said before that Secretary Moniz is doing a good job at the Department of Energy. I don’t agree with him on everything – but he works with us, he listens to us, and I believe he deserves to have his team in place to support him,” Murkowski said.
Friday Afternoon Breaking News
Bishop: Interior Arctic Lease Cancellation Plays into Russia’s Hands
WASHINGTON, D.C. – House Committee on Natural Resources Chairman Rob Bishop (R-UT) issued the following statement on the announcement made today by the U.S. Department of the Interior that it will cancel the two potential Arctic offshore lease sales scheduled under the current five-year offshore oil and gas leasing program for 2012-2017:
|“I am disappointed by this announcement. Alaska must be able to responsibly explore and develop our rich natural resources both onshore and offshore. Any action that limits our ability to explore for more oil—to increase much-needed oil production through the Trans-Alaska Oil Pipeline—creates unnecessary uncertainty and burden on our economy.” – Governor Bill Walker|
A POWERFUL STATEMENT
“This Administration has dangerous priorities. It drives Shell out of the Arctic by giving the company regulatory hell for years, then uses this victory for big special interest groups to stop any hope for future energy development in the Arctic. While the Obama Administration pats itself on the back, Putin is patting this Administration on the head. Obama has once again played directly into Russia’s hands as he destroys our nation’s energy potential.”
Murkowski: Interior Attempting to Shut Down Arctic Development for Decades
Vows Legislative Pushback in Wake of Latest Anti-Alaska Decision
Washington, D.C. – U.S. Sen. Lisa Murkowski, (NGP Photo), today issued the following statement after the Department of the Interior announced its rejection of Shell Alaska’s request to extend its leases off of Alaska’s northern coast and the cancellation of future leases sales in the region.
“This is a stunning, short-sighted move that betrays the Interior Department’s commitments to Alaska and the best interests of our nation’s long-term energy security. Today’s decision is the latest in a destructive pattern of hostility toward energy production in our state that began the first day this administration took office, and continued ever since.
“Less than a year ago, Interior announced it was locking up millions of acres of the nation’s richest oil and natural gas prospects on the Arctic coastal plain. Interior has also taken more than 11 million acres of the National Petroleum Reserve-Alaska off the table. It has made it nearly impossible for companies to navigate the permitting process, which dramatically limited Shell’s ability to drill to just 163 out of more than 2,800 days.
“It is absurd that Interior has created a regulatory environment where operators cannot have commercially viable exploration programs, because so many requirements and hurdles have been put in place, and then blames them for not moving forward. There is not a lack of interest in the Arctic – if anything, what we are seeing is a lack of interest in working with the current leadership of the Interior Department.”
“Instead of seeking to shut down Alaska, Interior should remember that the North Slope was nearly abandoned after 14 dry holes were drilled. The opportunity to keep going led to not only the discovery of Prudhoe Bay, but also the production of more than 17 billion barrels of oil and a generation of opportunity for Alaska.
“I will certainly remember that fact as I continue to push legislation that will force Interior to hold regular lease sales in the offshore Arctic. The Energy Committee has already reported my OPENS Act to the full Senate for further consideration, and I will be looking at every possible opportunity to advance it into law.”
Alaska’s Arctic waters hold an estimated 24 billion barrels of oil and 104 trillion cubic feet of natural gas. In July, Murkowski, chairman of the Senate Energy and Natural Resources Committee, advanced the Offshore Production and Energizing National Security (OPENS) Act to ensure that Alaska receives a fair share of the revenue from development in the federal waters off its shores. The OPENS Act also requires annual leases sales in offshore Alaska, including in the near-shore Beaufort Sea.
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|Quote of the day from our Aussie O&G analyst friend:
...from an anonymous letter circulating in Saudi Arabia, said to be written by an unhappy faction of princes:
“We will not be able to stop the draining of money, the political adolescence, and the military risks unless we change the methods of decision making, even if that implied changing the king himself.” (Our Note: between this, Amerca's poor leadership and Russia's Mid-East adventure, oil and gas prices may not be in a week what we believe they will be today. -dh)
Today: Doyon, Limited, a major Alaska landowner, describes its aggressive exploration program for oil and gas in an accessible area west of Fairbanks, in Interior Alaska. Read more (thanks to Doyon's James Mery)....
A president leading his nation toward disaster
When one considers the Administration's passive-aggressive opposition to virtually all fossil energy projects, he reveals himself to be an enemy of American public interest.
We have described these and many other attacks on the U.S. economy by this administration.
The pattern is undeniable.
Were the Congress not so lacking in self-confidence and determination to defend the Constitution against all enemies, both foreign and domestic, they should have authored impeachment charges long ago.
So now, just consider that one important result of denying the export of plentiful American oil, is to minimize international demand for U.S. oil shale and other energy projects--that could improve national security, dramatically increase employment of American citizens, neutralize much of the balance of payments deficit, reduce the national debt and improve U.S. leadership in the world power vacuum now being filled by a Russian leader-- a man with fire in his belly and traditional leadership skills, no matter how badly perverted they may be.
Denying American energy exports is a frontal attack on the free market, on the wellbeing of American companies and citizens.
It is yet another act that comforts America's enemies and denies benefits to allies and other friends of the United States.
It is another sign of a leader coaxing his flock to follow him to a cliff overlooking a very deep canyon, from which there is no returning.
“It is unfortunate that the White House fails to understand the national security and geopolitical benefits of lifting the ban on oil exports. Ask Poland, which is 96 percent reliant on Russia for its oil, or Japan, which must continue to rely on Iran, if U.S. oil ‘is not needed at this time.’ The veto threat reveals a fundamental misalignment within the administration. These policy contradictions merit further attention. Regardless of what the president’s advisers may tell him, congressional legislation has become necessary: even though he has the authority to act, he has not – even though the time is right, the need is clear, and the global dividends promise to be significant.”
In July, the U.S. Senate Energy and Natural Resources Committee, chaired by Murkowski, reported favorably her bipartisan bill, the Offshore Production and Energizing National Security Act (S. 2011). If enacted, the bill would fully repeal the outdated restrictions on exporting American oil, while preserving the emergency authorities of the president to act during emergencies.