Federal Progress

Comment on EPA release, below: Arctic exploration companies still face a gauntlet of Obama administrative agency permit approvals in order to mobilize for the 2012 summer season.  Shell's Alaska manager, Pete Slaiby (NGP Photo, 9-8-11), told audiences recently that the company would make its decision to 'go or no go' by mid October.  The EPA's multi-year delay of this OCS air quality permit complicated by lawsuits has already cost the Lessee (Shell) hundreds of millions as it prepared for earlier approvals and summer exploration seasons, then had to demobilize fleets of exploration assets when various permits were not forthcoming.  Alaskans who have witnessed the many ways interactive Obama administration agencies can act to 'go-no go' projects will not be comforted by this 'final permit approval'.  After all, the agency is now asking for 'petitions of review' to the 'final' decision and sister agencies can still stop America's greatest current domestic energy exploration effort dead in its tracks.  Remember 'the weakest link'?  Companies must sometimes think they are in a strange, opaque game show run by malicious children who take pleasure in saying, "go, no go" at times and in ways seemingly designed to bring America's domestic energy wealth and job production to a tragic and unnecessary end as caring citizens watch in horror.  We hope our suspicions are badly placed and that the governmental-enviroextremist cabal characterizing this Administration relents in the face of a national election long enough to let Arctic exploration thrive along with an improved job and economic recovery trend.    After all, they have robbed us of an innocent assumption that they value due process and they have given us much reason to be suspicious of their motives and moves.  -dh

(EPA Release From Seattle – Sept. 19, 2011) Today, EPA Region 10 issued final air quality permits to Shell for oil and gas exploration drilling in the Alaska Arctic. The permits will allow Shell to operate the Discoverer drill ship and a support fleet of icebreakers, oil spill response vessels, and supply ships for up to 120 days each year in the Chukchi Sea and Beaufort Sea Outer Continental Shelf starting in 2012.

A few minutes ago, NGP received the copy of a "Make Alaska Competitive Coalition" statement by former University of Alaska President Mark Hamilton (NGP Photo) smashing a specious contention by Senator Hollis French and Representative Les Gara (i.e. both downtown Anchorage attorneys are schooled in the art of rhetoric) that Alaska's predatory taxes are good for Alaska.   Here is the document for your weekend study.    Between Obama anti-development regulators in the Federal arena and the same mentality hindering development on Alaska lands, the state has a dismal economic outlook when it could be leading American economic recovery in so many ways.   With Alaska's economic lifeline, the Trans Alaska Oil Pipeline, 2/3 empty and and becoming more vacant at a throughput decline rate of 6% annually, investment into oil prospects on state land is essential.  Also essential, is a state tax and regulatory policy that attracts and does not repel such investment.  -dh

On the Federal side of the ledger, we calculate that Alaska has not experienced one single positive act of support for its economy or the American economy from the Obama Administration which controls access to Federal on- and off-shore lands.  Below, you'll read the 'conditional good news' that the Interior Department OCS leasing department has tentatively approved Shell's Exploration Plan for next summer.  Trick is to get a final approval in time to mobilize for next summer.  Anti-Alaska development groups are massing to oppose that approval.  A few days ago our own North Slope Borough Mayor blasted the Exploration Plan (EP).  The Pew environmental group has blasted the EP.  Shell answered Pew's blast with a factual response.  Then, we hear that in preparation for next week's trip to Alaska, an Interior Department Press Conference accepted the call of an Alaska environmental lawyer (i.e. Peter Van Tuyn) supposedly calling from a 'Montana mountaintop' blasting Alaska oil and gas development.  Pardon us if these attacks on Alaska seem just too well coordinated.  Pardon us if we remain skeptical that the Interior Department has any intention of forthrightly fulfilling the role of America's landlord by responsibly leasing and permitting exploration and development of America's natural resources.  Pardon us if we doubt the Obama Administration cares a whit about America's economic recovery or American jobs.  -dh

ADN by Richard Mauer.  Shell cleared a major hurdle Thursday in its effort to begin a two-year drilling program in the Arctic Ocean next summer, receiving a conditional exploration permit from the federal agency that oversees offshore oil development.The company said it was buoyed by the morning announcement from the Interior Department's Bureau of Ocean Energy Management, Regulation and Enforcement, just as Interior Secretary Ken Salazar (NGP Photo) was preparing for an Alaska visit next week at the invitation of Sen. Lisa Murkowski (NGP Photo), R-Alaska.  ... Representatives of several environmental organizations, in a joint telephone news conference from Washington, D.C., said they were disappointed by the decision and were studying whether to challenge it in court. Erik Grafe, an Anchorage-based attorney for Earthjustice, said they had 60 days to file a lawsuit.  ... "Shell has been working to secure approval of this plan for over five years," Murkowski said in a prepared statement. "This is another positive step forward, and I'm hopeful that they will soon be able to move forward with exploration and production in the Beaufort."  She, Sen. Mark Begich (NGP Photo-r), D-Alaska, and Rep. Don Young (NGP Photo), R-Alaska, said the exploration project would create jobs and, if commercial development followed, could forestall problems with the trans-Alaska pipeline associated with declining oil flow.  ... Peter Van Tuyn, an environmental lawyer from Anchorage with the Alaska Wilderness League, phoned in to the Washington press conference from a mountain in Montana to say too little is still known about the Arctic environment to justify drilling.  

Today,  House Natural Resources Committee Chairman Doc Hastings (NGP Photo) said, after the Department of Labor released its July jobs report: 

Northern News Services by Samantha Stokell.  Jackie Challis (NNS Photo by Samantha Stokell) started working as the town's community economic development manager at the start of July. She comes with years of experience in developing economies and tourism across the North, including a year as Inuvik's tourism co-ordinator, from 2008 to 2009.  ...  "We can't do our jobs without working together," Challis said. "My job is to promote Inuvik to people to live, to work, to invest and to visit."   Her job is also to provide support for potential economic projects such as the Tuktoyaktuk-Inuvik highway, the Mackenzie Valley Gas Pipeline and the Mackenzie Valley Fibre Optic Link.  "The pipeline is the greatest opportunity and the opportunities expand beyond the pipeline and get other businesses and visitors here," Challis said. "We're trying to bring money and people here and the road would not hurt."

Call to Action.  Citizens, let's please prepare to give the White House our Input FRIDAY NIGHT on the combined effort of over two-dozen Federal Agencies to 'Zone' the oceans surrounding America (Alaska has about 3/4 of the US coastline).   This Federal control extends to the Great Lakes and throughout the watershed feeding the oceans.  Imagine the thousands of jobs this 'ocean zoning' will create for environmental activists and lawyers in almost every state!   Control the oceans and watersheds and you truly control the entire 'means of production' in this country.  This action is taken by Presidential Executive Order without Congressional authorization and is probably the most egregious example we've seen of Federal overreach and usurpation of state sovereignty.  See this RDC Information Sheet, and...see you Friday between 3:30-4 p.m.!  -dh

Calgary Herald by Dan Healing.  U.S. Ambassador David Jacobson told a Calgary crowd Wednesday that Canada and the United States are making strides in reducing regulatory barriers but an audience member in the oil and gas business said barriers at the state and county levels cause the real problems.  (More below.)

Fairbanks News Miner by Christopher Eshelman.  A key federal environmental regulator has cleared a permit for the Alaska Railroad’s plans to bridge the Tanana River near Salcha.  ...   Lisa Herbert, the chamber’s executive director, said Tuesday’s news also helps the railroad.   “This project is shovel-ready and will put many Alaskans to work for Alaskan companies,” she said by statement.  (See our earlier story and connection to NPR-A permit for CD-5 being denied by EPA for similar reasons: ARNI.  -dh)

Read more: Fairbanks Daily News-Miner - Tanana River bridge gets EPA approval 

House Natural Resources Committee Chairman Doc Hastings (NGP Photo-r) today unveiled a discussion draft of The National Petroleum Reserve Alaska Access Act, a bill to cut through bureaucratic red tape and unlock the full potential of energy resources in the National Petroleum Reserve-Alaska (NPR-A). As part of the American Energy Initiative, this legislation will create new jobs, support current energy jobs in Alaska, and help lower energy costs by ensuring NPR-A resources are developed and transported in a timely and efficient manner. Chairman Hastings is in Alaska today for an Alaskan energy tour, including the NPR-A, with Governor Sean Parnell (NGP Photo-Upper Left) and Rep. Don Young (NGP Photo).  See full Story Here.

Calgary Herald by Deborah Yedlin.  In the midst of the challenges facing the approval of TransCanada's Keystone XL pipeline, U.S. Ambassador David Jacobson touched down in Calgary this week to reiterate the message that Canada is critical to American energy security.  Of course, it's not as simple as that.

Dan Healing of the Calgary Herald Reports Louisana LNG Project Is A 'Go'!

Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Director Michael R. Bromwich (NGP Photo-l) today named Dr. James Kendall (NGP Photo-r at a 3-9-11 hearing in Anchorage) as the Director of the Alaska Outer Continental Shelf (OCS) Region. Dr. Kendall has been serving as Acting Director for the region since January 1, 2011.  (More below.)

Yesterday, Governor Sean Parnell (NGP Photo) --  also grappling with Washington over energy access issues -- urged the federal government to seek Alaska's rare earth element trove for American use as China hoards world supply.  (Scroll down for Monday's background story, below.)  ... “With over 70 potential REE sites, Alaska is in a position to provide significant amounts of REEs to the nation,” Governor Parnell wrote to Energy Secretary Steven Chu. “The federal government simply cannot afford to sit on the sidelines as other countries move aggressively to develop new mines and build a globally competitive research branch.

ADN Op-Ed by Rebecca Logan (NGP Photo).  China's announcement to reduce exports of rare earth minerals has triggered our government and other nations that depend on these critical resources to look within their borders for possible solutions. It also cast light on an underlying problem: the United States lacks a clear strategy to provide the raw materials critical to our economy and national security.

Comment:  Yesterday we were considering the lack of movement on federal approval of ConocoPhillips' CD-5 project in the National Petroleum Reserve-Alaska and recalled a statement by Alaska Railroad President Chris Aadnesen (NGP Photo) last week about fear that the EPA will not provide final approval on an important Tanana River bridge crossing project.  On closer examination, it appears both projects may suffer the same obstructive federal fate through application of 'ARNI, a memorandum of agreement' between the Corps of Engineers and the EPA, a process not approved by Congress or promulgated via a rulemaking process providing for public testimony, petitions for reconsideration or appeals.  Here is a reference we found to this federal challenge by Senator Lisa Murkowski (NGP Photo).  We are confident the state Administration will also be able to follow up on this clear violation of due process by these two agencies.  -dh

On Thursday, June 2^nd the Subcommittee on Energy and Mineral Resources will hold an oversight hearing on “Domestic Oil and Natural Gas: Alaskan Resources, Access and Infrastructure.”  This hearing is part of House Republicans’ American Energy Initiative, an ongoing effort to stop government policies that are driving up gasoline prices and expand American energy production to help lower costs and create jobs. 

According to Senate Energy & Natural Resources Communication Officer Robert Dillon, Senator Lisa Murkowski (NGP Photo) today said of the BOEMRE announcement (below): “It’s my hope that this additional analysis on the potential impacts on the region will help resolve the legal challenges that have held up resource exploration in the Chukchi Sea."

John Callahan of BOEMRE's ANCHORAGE office, provides this Friday announcement. – The Bureau of Ocean Energy, Management, Regulation and Enforcement (BOEMRE) today released a Revised Draft Supplemental Environmental Impact Statement (SEIS) for Chukchi Sea Outer Continental Shelf (OCS) Oil and Gas Lease Sale 193, held in February 2008. The bureau is accepting additional public comment before the document is finalized.  “This Revised Draft SEIS offers additional scientific, environmental and technical analysis that will assist in future decisions pertaining to the leases issued in Sale 193 in the Chukchi Sea,” said BOEMRE Director Michael R. Bromwich (NGP Photo).  

Calgary Herald by Jason Fekete.  The federal Conservative government will regulate the coal-fired electricity and oilsands sectors this year as it looks to curb greenhouse gas emissions, but a carbon tax and cap-and-trade plan aren't part of the environmental blueprint.

Edmonton Journal via CH, by Dave Cooper.  Called a critical outlet for Alberta heavy oil, TransCanada’s Keystone XL pipeline to the Gulf of Mexico is likely to be approved later this year in the U.S., says an energy expert.  “We are saying 70-per-cent likely in the fourth quarter,” said Washington-based Robert Johnston of the Eurasia Group, speaking at PwC’s inaugural Energy Technology Update in Edmonton.

DOE.  The U.S. Department of Energy today issued  a conditional authorization approving an application to export liquefied natural gas (LNG) from the Sabine Pass LNG Terminal in Louisiana, paving the way for thousands of new construction and domestic natural gas production jobs in Louisiana, Texas, and several other states.

HEAR SENATOR MURKOWSKI SPEAK ON OIL TAXES VIA C-SPAN AT 2:20 P.M. EDT.  LOOK BELOW FOR BREAKING NEWS ON NEW GAS HYDRATE TEST WELL INSTALLATION!  ALWAYS TUNE IN HERE FOR BREAKING NEWS AND COMMENTARY ON STATUS OF GAS PIPELINE PROJECTS! 

Yesterday we addressed President Obama's Saturday pro-domestic energy speech; today the ADN editorializes: 

BOTTOM LINE: Let Shell explore, let Slope producers tap NPR-A -- and keep a close watch.  No question there is risk, and a lot of work to do before production -- if it pans out. But, as Sen. Mark Begich (NGP Photo) pointed out, our policy should be to develop with care. Exploration is a first step -- and a chance for Shell to show that it's operating with the best possible safeguards.  Sen. Lisa Murkowski's (NGP Photo) succinct summation of an American oil-and-gas energy policy hasn't lost its currency: Produce more, use less. Alaska's Arctic still has much to contribute on the production side.

Department of Energy.  A fully instrumented well that will test innovative technologies for producing methane gas from hydrate deposits has been safely installed on the North Slope of Alaska. As a result, the "Iġnik Sikumi" (Iñupiaq for "fire in the ice") gas hydrate field trial well will be available for field experiments as early as winter 2011–12.  The well, the result of a partnership between ConocoPhillips and the Office of Fossil Energy’s (FE) National Energy Technology Laboratory, will test a technology that involves injecting carbon dioxide (CO2) into sandstone reservoirs containing methane hydrate. Laboratory studies indicate that the CO2 molecules will replace the methane molecules within the solid hydrate lattice, resulting in the simultaneous sequestration of CO2 in a solid hydrate structure and production of methane gas.

Calgary Herald by Dina O'Meara.  Suspension of oil and gas production is spreading across northern Alberta as wildfires rage out of control.  Oil and gas producers Monday evacuated workers and closed heavy oil facilities, pipelines and processing plants as emergency teams battled wind-fuelled fires that now cover more than 30,000 hectares.  Canadian Natural Resources pulled 1,300 workers from two camps associated with its Horizon oilsands project outside of Fort McMurray as flames burned within 150 metres of one of its lodges.  "We have no actual fire on our site per se, it's still a ways away, but we're just taking precautionary measures," vice chair John Langille told the Herald.

Our Friend, Thomas Maunder, Anchorage Chapter Secretary of the American Association of Drilling Engineers invites one an all to their annual BBQ.  "On Friday afternoon", he says, "we will host our annual Fin, Feather, or Fur Food Festival at the bottom of the sledding hill at Kincaid Park.  I invite all you to come and enjoy what has become a great day of good food and comradeship.  The funds we hope to raise go to two main efforts.  Every year since we began hosting this event, we have contributed to 3 of the local food charities.  We support Bean's Cafe, The Downtown Soup Kitchen and Kids' Kitchen.  Last year we donated $3000 to each organization.  The remaining funds we direct to scholarships for engineering students already attending college and recent high school graduates.  The format is that each team (we have 21 registered so far) will prepare and serve a menu item that began life with fins, feathers or fur.  We have one group that brings in a 4th category -- alligator.  The success of the event has surpassed our wildest dreams.  Please come and join us on the afternoon of the 20th.  Call or message with any questions."  Tom Maunder, Chapter Secretary, 907-529-1645.

Scroll down for Denali-The Alaska Gas Pipeline News Releases  Commentary: We announced the termination of this project at 10:03 today {5-17-11} and took the precaution of copying all of the project's website news releases below for posterity.  One expects that the website at some point will be unceremoniously discontinued, too, and readers will find the impressive record of that project and its dedicated management memorialized here for future reference -- as we have done for all of the historical gas pipeline projects beginning in the late 1960s.   As a suggestion for students/researchers seeking information: put your search criteria into the local Google search bar, above left, and you will be led to all of our websites having information about your search terms.   Thank you, Denali participants, for the important effort and know that the daunting political and financial challenges you faced were not of your making nor within your control.  You aquitted yourselves with distinction and grace.  -dh