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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.  -dh

 

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3-31-15 Legislative Leaders Focus On Gasline Details - Commentary, "Proud as Quixote"

31 March 2015 2:30am

We want to work with our new Governor to progress this great State forward, especially knowing

Our Commentary:

The two legislators above created the Alaska Gasline Development Corporation (AGDC) concept as an insurance policy for transporting Alaska North Slope (ANS) gas to citizens and to an export facility. 

The current governor - who opposed the AGDC/ASAP gasline concept before he supported it .... more coming....

 

the difficult times before us. We respect that he is our Governor, duly elected by Alaskans, and we appreciate the respectful acknowledgement that we, too, are representatives duly elected by Alaskans. We all have Alaskans’ best interests at heart, and want a future of prosperity and opportunity in our State.

While we believe we share many of the same goals and values as the Governor, we differ as to the approach to natural gas development that will deliver the greatest benefits to Alaskans.

Let us be very clear about what we want: We want to commercialize natural gas for the highest value possible, for the Permanent Fund and for the Treasury, so that every Alaskan may share in the wealth of our resources. We want affordable natural gas to flow to our communities that still suffer under the fluctuating prices of fuel oil. And we want a project that includes the necessary elements — including participation of the North Slope producers and the State — for real success, as soon as responsible project engineering and -permitting allows.

The Legislature found that project with the Alaska LNG Project, in which the state is a 25 percent owner.

But we also preserved our ability to pursue a different project, if the Alaska LNG Project does not progress into the next development stage. We have that in the 36-inch line that the Alaska Gasline Development Corporation has developed. It is in prime position to alter if necessary — and if the Alaska LNG Project does not prove viable, we’ll know what adaptations we must make in order to offer a viable project. To increase its size now, to an arbitrary, unsupported volume, is not a prudent use of funds. That does not provide us a viable alternative should Alaska LNG not progress.

The Governor has indicated he sees success in a different framework. Unfortunately, to date, neither he nor his administration have shared those details with us and with the Alaska public. He submitted a letter to the Senate Resources Committee on Friday with some explanations for his alternative approach, and we appreciate that. But Alaskans need to know details. What about the LNG component — who owns that? And the pipeline — is the state to shoulder 100 percent of the risk and cost? Who will ship gas, if one or more of the producers remain engaged in Alaska LNG? If all 3 producers are not partners, how will the state determine its gas share — and is it enough to support our level of equity ownership? We want to better understand the terms and structure of his proposal in order to conduct the rigorous vetting and analysis that will allow us to make an informed, responsible decision on a forward course.

The government process is about thorough, open review of ideas, in the form of legislation, that leads to policies. We hold hearings; explore details; call for experts to analyze and model impacts; vet each and every aspect; hear from the public; undertake legal review; and, finally, debate on whether a policy should be adopted.

It is how Alaskans came to be owners of the Alaska LNG Project; through a deliberate, well-investigated decision.

Certainly, we would have preferred not to have introduced legislation — House Bill 132 — to temporarily restrict an alternative, conflicting approach and to keep Alaska LNG on track. However, we were compelled to, out of grave concern that the Administration’s approach would threaten the viability of the tremendous opportunity before Alaska in the Alaska LNG Project. A project that is on time, on budget, and on track to success. And unfortunately, the few details offered by the Governor’s letter reaffirm that it is more imperative than ever to pass HB 132, as his approach clearly creates a competing alternative that threatens the state’s investment in and the success of Alaska LNG.

The details of any project are crucial. At stake are the value of our royalty gas, which feeds the Permanent Fund; our state share in production, property and income taxes that support the treasury; the availability and cost of gas for Alaskans; and future North Slope resource development. Variations on the SB 138 framework can have significant consequences. These details were not part of the Governor’s letter — and we must have these details in order to make a deliberative decision on natural gas policy, and the responsible fiscal choices our constituents demand.

We want to work together on a path forward that is responsible, allows for public understanding and input, and does not recklessly waste state money pursuing options that lack a proven, commercial foundation. Competing with ourselves, while confusing our partners and the markets, is not in our best interests.

Speaker of the House Mike Chenault represents Niksiki and Rep. Mike Hawker represents Anchorage in the Alaska House of Representatives.

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3-29-15 NPC Says Develop Arctic Energy

29 March 2015 7:38am

Hearst Newspapers by Jennifer Dlouhy.  

The United States should move swiftly to harness the tremendous oil and gas reserves locked under its Arctic waters while the industry improves the equipment used to drill wells and sop up spills, according to a government advisory committee report released Friday.

The analysis, conducted by the National Petroleum Council at the request of Energy Secretary Ernest Moniz, makes the case for the United States to aggressively develop Arctic oil and gas that can help supply the country with energy long after production tails off from onshore fields.   More....


Juneau  Empire Editorial.  

Lately, the Alaska Legislature has been talking a lot about the gas pipeline. Under Gov. Sean Parnell, Alaska signed a deal with Big Oil that would build one from the North Slope down to the Kenai Peninsula. By all accounts, that pipeline’s looking like the best way to keep Alaska from going broke in the middle term. 

Of course, we’ve thought the same thing before. We thought it about the El Paso proposal, the Foothills Gas Pipeline, the Yukon Pacific Corp. pipeline, the Alaska Gasline Inducement Act and the Denali Gas pipeline. We’ve thought it about bullet lines and small-diameter lines.

The AK LNG — Alaska Liquified Natural Gas — pipeline might yet turn out to be another broken dream. If that happens, the state will be in true financial trouble.

With so much at stake, doesn’t it make sense to have a spare tire?

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3-28-15 Governor and Legislature Clash

28 March 2015 3:33pm

 
 
Walker and legislators can't bridge their divide over Alaska natural gas pipeline
“No one's going to take care of Alaska better than Alaska, and we just have to ... It bars the state's Alaska Gasline Development Corp., or AGDC, from ...
 
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3-26-15 Major Alaska Legislative Hearing: Ak-LNG North Slope Gas Project

26 March 2015 6:59am

Senator Cathy Giessel, AGDC, ASAP, Ak-LNG, HB 132, Photo by Dave HarbourCommentary: Yesterday, the Senate Resources Committee's Chairman, Cathy Giessel (NGP Photo) scheduled testimony on HB 132 clarifying the mission of the state-owned Alaska Gasline Development Corporation. 

ON THE FEDERAL SIDE:

Randall Luthi, Alaska OCS, National Ocean Industries Association, IOGCC, DOE, Photo by Dave Harbour ADN Commentary by Randall Luhi (NGP Photo).  We need to take our country and economy to the next level in terms of energy security. The only way to do this is to safely and responsibly explore our own offshore energy resources, particularly off Alaska.


SHELL DECISION CLOSE!

ADN by Jennifer Dlouhy.  The Obama administration is set to announce within days whether it will reaffirm a seven-year-old government auction of oil leases in the Chukchi Sea — a decision critical to Shell's plans to resume drilling in those Arctic waters this summer. 

As our readers know, Governor Bill Walker once opposed AGDC's sponsorship of the medium diameter so-called ASAP gas line from Prudhoe Bay, past gas-hungry Fairbanks to South Central Alaska.  

Walker now proposes that AGDC's project be expanded in some as yet undefined way to accommodate high gas volumes. 

This would put AGDC's ASAP project in direct competition with its partnership position in support of the Ak-LNG project.

We'll provide a more complete report later; meanwhile, here is a link to the actual video archive of that hearing.    -dh


Today's American Energy Alliance links:

Special deals for Tesla:
 
The Wall Street Journal (3/25/15) editorializes: “California has tried to solve this problem for Tesla with its zero-emissions vehicle mandates, which have other makers buying ZEV credits from Tesla. But the sheer idiocy of these subsidies is a continual risk to Tesla. A ZEV car in California is one with zero emissions at the tailpipe, no matter how much environmental degradation it causes upstream. Toyota, for one, has recently switched its attention to hydrogen-fueled cars, which emit only water and warm air at the tailpipe, never mind that 95% of the world’s hydrogen is manufactured from fossil fuels. Policies that are so transparently stupid and perverse, like the policy of subsidizing rich people with $7,500 tax credits to indulge themselves with Tesla’s products, would not seem a sound basis for a scale auto manufacturer, which Tesla aspires to become.”

Bright Bulb Award:

"Rather than issuing standards and rules to which new wells must conform, the BLM instead has invested itself with the power to either sign off on or block each individual well, operating on a case-by-case basis. (Based on what statutory authority? Are we still even asking that question?) Which is to say, satisfying the letter of the law will not be enough — BLM bureaucrats still will have the final say, employing whatever whimsical standards leap into their perverse little minds. This is a recipe for outright corruption..."

The RFS has a fever. And the only cure is full repeal.

The Wall Street Journal (3/25/15) editorializes: "At the Iowa Agriculture Summit earlier this month, most of the prospective Republican presidential candidates embraced the renewable-fuel standard, one of the worst examples of corporate welfare in America. This federal mandate props up the U.S. ethanol industry by forcing refiners to blend biofuels into gasoline. Despite the fact that it is an obvious business handout, White House hopefuls rarely attack the standard, lest they harm their chances of winning the Iowa caucuses."

Handouts breed corruption, as the Oregon DOJ is about to discover. 

The Oregonian (3/24/15) reports: “The Oregon Department of Justice has opened criminal and civil investigations into the award of $11.8 million in state tax credits for a series of solar arrays installed at Oregon State University and the Oregon Institute of Technology. The agency acted after The Oregonian/OregonLive reported earlier this month that developers of the arrays missed deadlines to qualify for subsidies under the state's business energy tax credit. The news organization's investigation found that backers submitted phony and misleading documents to the state to demonstrate construction was underway by the deadline - documents that officials at the Oregon Department of Energy failed to check.”

Does the hypocrisy of it all even remotely cross his mind?

The Washington Free Beacon (3/25/15) reports: “Leftist actor Mark Ruffalo, best known for his supporting role in 13 Going on 30, has not let his crusade against fossil fuels get in the way of his mass consumption of them…Though Ruffalo has committed himself to divesting from fossil fuels, he is far from committed to reducing his own fossil fuel use. Ruffalo is currently offering to fly (presumably on a fossil fuel-burning jet) the winners of a raffle he is running to the world premiere of Avengers: Age of Ultron...The winners of Ruffalo’s raffles will be burning just a fraction of the fossil fuels burned during the filming of the latest Avengers movie, which was filmed at 23 locations across the globe. He and the rest of the Avengers filmed in locations ranging from England to South Korea to Bangladesh to South Africa to Italy.”

Let's not kid ourselves: The PTC isn't about developing new technology. It's about lining AWEA's pockets. 

The Daily Caller (3/25/15) reports: “Sen. Lamar Alexander has a proposal for Democrats: End subsidies to wind power producers and use that money to double funding for federal energy research at the Department of Energy. “Washington has a bad habit of picking winners and losers, and an addiction to wasteful subsidies of all kinds – we need to end these policies,” the Tennessee Republican said during a hearing on DOE’s 2016 budget request Wednesday. For years, many Republican lawmakers have been looking to end the Wind Production Tax Credit (wind PTC) which has been extended nine times since 1992. The wind PTC pays wind farm operators for the first 10 years of electricity produced. The wind lobby has fought hard to reinstate the subsidy after it expired at the end of last year.”

Ever the good little lemmings, Marylanders are following New York's lead. Over a cliff.

The Baltimore Sun (3/24/15) reports: “Both chambers of the Maryland General Assembly separately passed measures Tuesday that mark the most aggressive action the legislature has taken to curb natural gas extraction in the state. The Maryland House of Delegates passed a three-year ban on fracking and the Senate approved tough new legal standards for drillers. Each bill must still clear the other chamber, but the actions signaled the legislature was willing to go further than it has before to limit natural gas drilling.”

Do you have something to hide, Gina?

The Washington Examiner (3/25/15) reports: “A House committee Wednesdaysubpoenaed Environmental Protection Agency Administrator Gina McCarthy for her cell phone billing records and emails. The subpoena by the Committee on Science, Space and Technology was issued at 1 p.m. Wednesday and seeks the records after the agency failed on at least 10 prior requests from the panel for documents on whether an estimated 5,000 text messages were improperly deleted from McCarthy's device.”

Why the hell is the government giving Alcoa a $259 million loan?

Bloomberg (3/26/15) reports: “ A $25 billion U.S. Energy Department loan program that funded flops like Fisker Automotive Inc. and successes such as Tesla Motors Inc. resumed lending after a four-year hiatus to retool the lending project’s focus. Alcoa Inc. has been approved for a $259 million loan from the Advanced Technology Vehicles Manufacturing program to upgrade a factory making high-strength aluminum that can improve automobile gas mileage.”

At least the Japanese are putting that money to some good use.

The Associated Press (3/26/15) reports: “Despite mounting protests, Japan continues to finance the building of coal-fired power plants with money earmarked for fighting climate change, with two new projects underway in India and Bangladesh, The Associated Press has found. The AP reported in December that Japan had counted $1 billion in loans for coal plants in Indonesia as climate finance, angering critics who say such financing should be going to clean energy like solar and wind power. Japanese officials now say they are also counting $630 million in loans for coal plants in Kudgi, India, and Matarbari, Bangladesh, as climate finance.”

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3-25-15 Gasline Bill Passes - Alaska Economic Update - Arctic Residents Take Place At Arctic Policy Table

25 March 2015 7:16am

Arctic Slope Regional Corporation Seizes Arctic Initiative: Criticizes Environmental Carpet Baggers!

Gasline Bill Passes Alaska House

Alaska Economic Update- Part 2  - See Part 1 Here

By Mark Edwards (NGP Photo)

Mark Edwards, AlaskanomicsIn our last post, we discussed the falling oil prices and the possible impact on the economy. Today we will look at jobs, unemployment, and population.

Payroll jobs increase only 0.3% in 2013 and 2014.  No growth predicted in 2015 - Alaska's payroll job count increased by 1,000 jobs or 0.3% last year, similar to 2013 results.  This slight increase is much lower compared to 5,300 jobs added in 2012 and 4,900 in 2011.  The total number of payroll jobs, not including uniformed military and the self-employed, is about 336,700 on average throughout the year.  It is important to note this is a preliminary estimate by the Alaska Department of Labor using nine months of actual data from employer tax returns and three months of estimates.  The final numbers will be revised in March of 2015.  (Economic Update continued below...)  

video platformvideo managementvideo solutionsvideo player

Gasline Bill Passed House Yesterday (KTUU Video - Left; News MinerAJC background)

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Jason Brune, OCS, Point Hope, Consumer Energy Alliance - Alaska, Dave Harbour PhotoFrom Jason Brune (NGP Photo), Chairman, Consumer Energy Alliance-Alaska.  

"Great decision Point Hope! The original suit included the anti-development Sierra Club, Alaska Wilderness League, and National Audubon Society. What happens to them now that they don't have the local face they took advantage of to give the appearance of credibility to their arguments. 

Rex Rock, Resource Development Council for Alaska, Arctic Slope Regional Corporation, Point Hope, Dave Harbour Photo, OCS"If you haven't seen it yet, watch ASRC president Rex Rock's (NGP Photo) speech to RDC which outlines how Alaska Native communities are preyed upon by these outside environmental groups and what they're doing about it."  (See Rock's RDC Speech Here)

Charlotte Brower, Arctic OCS, ANWR, NPR-A, Dave Harbour PhotoComment: Rock's welcome initiative matches in the private sector the creative and courageous local government initiative taken by Alaska North Slope Mayor Charlotte Brower (NGP Photo) on behalf of her Arctic constituents.   -dh

(Economic Update continued...)  The Alaska Department of Labor’s forecast for 2015 is no change in employment levels.  They predict continued large losses in the government sector.  This has been occurring in federal government as budgets have tightened and are now predicted to decline in state and local government due to low oil prices. 

These public sector job losses will be balanced out by equal growth in the private sector. Continued gains of 200 new jobs are expected in the health care industry due to the continued demographic situation where Alaska has both an aging baby boomer population and a young, under 20 generation.  People require the most health care at the beginning and end of their lives. 

Oil and gas is expected to grow by 200 jobs despite low oil prices because of several large projects underway like Exxon’s work in Point Thomson and off-shore investment by Shell.  Newer entrants like Repsol, Hilcorp and Calleus Energy are also making significant investments in the state.

Retail growth is reemerging after the national recession as many franchise businesses that were preparing to enter Alaska in the last five years are finally following through with their expansion plans now that the US economy has rebounded.  Lower oil prices are also helping consumers by providing more disposal income.  This area is predicted to grow by 300 jobs.  Other forecasted contributors to positive labor growth include seafood (+200) and leisure and hospitality (+300).  We are likely to have a record number of tourists visit the state this year.  Declines of 100 jobs are expected in construction due to low oil prices and lower government spending.  This also impacts professional and business services which is forecasted for a 200 job decline in 2015.

US unemployment rate improves, now better than Alaska - Alaska's seasonally adjusted unemployment rate finished the year at 6.3%, compared to 6.4% at the end of 2013.  The comparable national rate in December was 5.6% an improvement of over 1% from 6.7% at this time last year. 

As seen in the graph below by the Alaska Department of Labor, for over five years Alaska had been doing better than the U.S. in terms of unemployment.  The rate in Alaska in blue has been relatively stable, despite the national recession and the U.S. rate spiked much higher.  Now the U.S. rate is improving relatively faster than Alaska.  This appears to already be affecting population migration trends as jobs are more easily found in the lower 48.

Graph

The unemployment rate is better in Alaska’s largest communities.  The preliminary, not seasonally adjusted, rate for Anchorage was 4.7%, Juneau 4.8%, and Fairbanks at 5.6%.  The Mat-Su rate improved from 8% in 2012 to 7.1% in December of 2014, but is still higher than the national unemployment levels. 

Anchorage and Juneau’s rate is in the range of what economists call “full employment.”  At these low levels a majority of those unemployed are due to seasonal, frictional, structural or cyclical reasons.  For example, some seasonal workers only plan to work part of the year and collect unemployment benefits for the remainder of the year.  The frictional part is the natural short-term movement of workers between jobs and first-time job seekers.  The most important issue for employers is these low rates inevitably lead to a scarcity of qualified workers and upward pressure on wages.

Ketchikan and Sitka are the two newest markets for Northrim.  They show moderate rates of unemployment at 6.6% and 5.4% respectively.

High levels of unemployment still persist in several rural areas of Alaska.  The worst situations are the Hoonah-Angoon Census Area at 21.6%, Wade Hampton Census Area 21%, Municipality of Skagway at 21.2%. However, the North Slope Borough has the lowest unemployment levels in the state at 3.7%. 

Population remains virtually unchanged in 2014, first net loss since 1987 - The most recent Department of Labor estimate for Alaska's population is 735,601.  That is a loss of 61 people net for the year.  It is significant because it is the first year since 1987 that the state did not grow.  Since that time there have been 13 years where the net in and out migration of people was negative and 13 years where it was positive.  However, in all the negative migration years, the rate of natural increase (births minus deaths) was larger than any migration losses.

Over the last decade we have been averaging about 11,000 births and 3,500 deaths for a net natural increase of about 7,500 per year.  Natural increase was 7,427 in 2014.  Last year there was a much larger than normal net out migration of 7,488 people.  This is the highest level seen since there was a net loss of 19,245 people between 1986-87 and 15,710 people from 1987-88.  The driving factor is likely to be the relative improvement of the U.S. and world economy compared to Alaska.  Also, the aging baby boom population may be slowly retiring out of Alaska.  

The 61 person net loss in 2014 is compared to a 4,471 population gain in 2013.  To put these last two years in perspective, the average population growth for the prior decade was 8,946 per year from 2002 to 2012.

Join us for our next discussion about personal income and longer term interest rates.

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3-22-15

22 March 2015 2:17pm

Fairbanks News Miner Editorial.  Other than the state’s budget deficit, the state’s most important decision with regard to its future is the path it will take to a natural gas pipeline. After many years of stagnation under the failed Alaska Gasline Inducement Act, there have been signs of progress in the state’s goal of developing a large-diameter natural gas pipeline that would both supply the state’s gas needs and provide for substantial export. More....

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