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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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4-13-15

13 April 2015 2:23am

Juneau Empire/AP by Mark Thiessen.  The federal government began the review process Friday on Royal Dutch Shell’s plans to continue a drilling program it halted in 2012 in Arctic waters off Alaska’s northern shore.


Today's relevant energy links from Consumer Energy Alliance: 

Jack Belcher, OCS, East Coast, Consumer Energy Alliance, Dave Harbour PhotoCarteret County News-TimesHearing focuses on seismic testing (working story) The N.C. Department of Environment and Natural Resources has heard from a variety of people on proposals to conduct seismic surveys off the coast of North Carolina. Seismic surveys are a method of searching for offshore oil and gas deposits. The federal Bureau of Ocean Energy Management has received applications from four companies to conduct surveys off North Carolina.  ...    Jack Belcher (NGP Photo) of the Consumer Energy Alliance also supported the surveys. He said he thinks it only makes sense to know what energy resources are off the coast.  “Sound energy policy needs to be made with good data,” he said, “and to get that we need to survey.” 

Wall Street JournalNew U.S. Offshore Oil and Gas Drilling Rules Seen Imminent
The Obama administration is expected to propose in the coming days an offshore oil and natural gas drilling regulation aimed at preventing the kind of explosion that erupted five years ago on BP’s Deepwater Horizon rig, killing 11 people and causing the biggest offshore oil spill in U.S. history.
 
The New York TimesNew Sea Drilling Rule Planned, 5 Years after BP Oil Spill
The Obama administration is planning to impose a major new regulation on offshore oil and gas drilling to try to prevent the kind of explosions that caused the catastrophic BP oil spill in the Gulf of Mexico, administration officials said Friday.
 
The Washington PostGreenpeace group leaves Arctic drill rig after six-day stay
Six Greenpeace activists opposed to offshore drilling in the Arctic have abandoned a Seattle-bound drill rig they boarded in the Pacific Ocean six days ago, the organization said Saturday. Rough seas prompted the decision, Greenpeace said in an email. The protesters rappelled off the rig and got into inflatable boats before returning to a Greenpeace ship stationed nearby.
 
Associated PressRough seas force Greenpeace activists to abandon Arctic drill rig after 6 days
Six Greenpeace activists opposed to offshore drilling in the Arctic have abandoned a Seattle-bound drill rig they boarded in the Pacific Ocean six days ago, the group saidSaturday. Rough seas prompted the decision, Greenpeace said in an email. The protesters rappelled off the rig and got into inflatable boats before returning to a Greenpeace ship stationed nearby.

FuelFixFeds launch review of Shell’s Arctic drilling plan
The Obama administration on Friday launched a formal, 30-day review of Shell’s broad plan for boring up to six exploratory oil wells in Arctic waters near Alaska, even as the company moves drilling rigs and equipment to the area.

Washington ExaminerObama climate agenda faces first big test
President Obama's legacy climate agenda faces its first major challenge next week as over a dozen states have their day in court. The U.S. Court of Appeals for the District of Columbia Circuit will hear oral arguments April 16 from states and industry contesting the Environmental Protection Agency's emission rules for power plants. The rules are at the center of the president's legacy agenda for battling the threat of global warming.

ForbesStates Ignoring Mitch McConnell, Working On Clean Power Plan: EPA
Last month Senate Majority Leader Mitch McConnell urged states to ignore the Environmental Protection Agency’s Clean Power Plan, but the states are ignoring McConnell and working toward compliance, EPA Admninistrator Gina McCarthy saidFriday at the University of Chicago.

The Arizona RepublicEPA regulations good for economy? Bah!
Will it be good for Arizona's economy if (and/or when) the Environmental Protection Agency takes control of the state's energy production? To some of us, it's silly to even bother asking such a question. The EPA intends to force clean-air regulations on Arizona power plants intended to reduce carbon emissions by 52 percent within 15 years. The regulations would shut down coal-fired plants, which produce by far the highest percentage of Arizona's energy.

The HillAnti-fracking groups send a letter to Clinton
More than 100 environmental groups are pressuring former Secretary of State Hillary Clinton to oppose hydraulic fracturing, days before her expected presidential campaign announcement. The coalition of mostly local anti-fracking groups noted that New York, the likely host to her campaign and the state she represented in the Senate for eight years, banned fracking in December.
 
NPRIn Pennsylvania, Employment Booms amid Oil and Natural Gas Bust
Lower oil and natural gas prices have the petroleum industry laying off tens of thousands of workers. It looks like a decade-long trend of job growth in the U.S. oil business may end. But there are parts of the country where those job numbers are still rising. Pennsylvania is one of them. Randy Stroup sees evidence of that where he lives in Williamsport, Pa. "You can drive down the road and see the amount of oil and gas trucks with their names on the side," he says.
 
Public Radio InternationalFracking is about to change, and almost no one is happy about it
The Obama administration recently announced new rules to regulate fracking. But no one, it seems, is entirely happy with them. Fracking, or hydraulic fracturing, is the process of drilling and injecting fluids into the ground at high pressure to break up shale rock formations and release natural gas that's trapped inside. The practice has helped make the United States the world’s top producer of oil and gas, and has spurred an economic boom in places like North Dakota.
 
Times RecordForestry Association OK with ‘Threatened’ Bat Status
The Arkansas Forestry Association says it can live with a recent U.S. Fish and Wildlife Service decision to list the northern long-eared bat as a threatened species while allowing most forest management practices to continue unabated.
 
Arkansas Democrat-GazetteTanks full of oil, U.S. refineries to pump out cheap summer gas
The United States has so much excess oil -- a product of booming production from the nation's shale formations -- that it is running out of places to store it. But before storage tanks begin to spill over, relief is on the way as refiners are set to churn out record amounts of gasoline this year, turning the oil surplus into a gasoline glut.
 
24/7 Wall StreetLow Crude Oil Prices Leave Thousands of US Wells Uncompleted
There are roughly 2,500 to 3,500 drilled but uncompleted oil wells in the United States, according to analysts at IHS Inc. (NYSE: IHS). As many as 1,400 of those wells are located in the Eagle Ford shale play in South Texas.
 
Fort Worth Star-TelegramCities concerned about state urban-drilling bill
Senior gas well inspector Tom Edwards weaves his van through the tight spaces of the drilling site, keeping a close eye on the tangle of pipes, hoses and valves pushing water, sand and chemicals deep into the ground to break up the tough shale rock below.
 
San Antonio Express-NewsPipeline bound for pristine Big Bend
In the wide-open Big Bend, where private property rights are sacrosanct and a “no trespassing” sign means just that, unwelcome interlopers, from nosy environmentalists to federal employees, always have been quickly sent packing. Thus, the news that a couple of billionaire businessmen intend to run a large natural gas pipeline through 143 miles of mostly private ranch land to the Mexican border has folks here in shock.
 
Midland Reporter-TelegramBig Bend pipeline proposal has residents riled up
In the wide-open Big Bend, where private property rights are sacrosanct and a “no trespassing” sign means just that, unwelcome interlopers, from nosy environmentalists to federal employees, always have been quickly sent packing. Thus, the news that a couple of billionaire businessmen intend to run a large natural gas pipeline through 143 miles of mostly private ranch land to the Mexican border has folks here in shock.
 
The Denver PostColorado's big coal-burning utilities take a turn to renewable energy
Most of the electricity produced in Colorado still comes from burning coal, but even the state's two largest coal burners are adding more renewable energy. The Tri-State Generation and Transmission Association and Platte River Power Authority each recently announced plans for new renewable energy sources.
 
ColoradoanAnalysis: What's in Larimer County fracking fluid
More than 100 different ingredients have been used at 30 hydraulic fracturing sites in Larimer County since 2012. Missing from 80 percent of those jobs was an oft-cited cause for health and safety concerns: benzene, a known carcinogenic.
 
Casper Star-TribuneMead: Federal fracking rule is wrong approach
Wyoming has a proud history of leading the nation with responsible natural resource development. We have a state energy strategy that balances energy production and conservation. We support advanced energy research at UW’s School of Energy Resources and conservation projects through the Wildlife and Natural Resource Trust Fund.
 
The Detroit NewsFracking opponents try again
The wheels begin to turn in earnest next week on efforts to bring a ban on hydraulic fracturing before Michigan voters in 2016. When Michigan's Board of State Canvassers meets Tuesday, the four-member panel will review forms for the collection of signatures to initiate legislation.
 
Crain’s Detroit BusinessGroup seeks to put fracking ban on November 2016 ballot
A Michigan group is seeking to put a ban on horizontal hydraulic fracturing up for a statewide vote in November 2016. Secretary of State spokesman Fred Woodhams saysFriday that petition language will be discussed Tuesday at a Board of State Canvassers meeting.
 
Associated PressUtica shale gas to fuel new eastern Ohio power plant
A Swiss company says it's planning to use natural gas from the Utica shale formation to fuel an $899 million power plant that will be built in eastern Ohio's Carroll County.
 
Baltimore SunLegislature sends fracking ban to Hogan
Maryland lawmakers on Friday voted to send Gov. Larry Hogan a two-year ban on the natural gas extraction process known as fracking. The action marks the first time the legislature voted for a moratorium on hydraulic fracturing and its most decisive statement yet on curbing the controversial practice.
 
The Patriot-NewsCourt blocks environmental group's plea for radioactivity data on Marcellus Shale drilling
An environmental group can't have access to raw data collected during a state probe into potential exposure to radioactivity from Marcellus Shale gas and oil drilling operations, a Commonwealth Court panel ruled Friday.
 
Pennsylvania Business Daily: Marcellus Shale Coalition reports record base of natural gas
Marcellus Shale Coalition (MSC) President David Spigelmyer said Wednesday the Potential Gas Committee’s most recent assessment shows the U.S. had access to a recoverable resource base of 2,515 trillion cubic feet of natural gas at the end of 2014.
 
State JournalMarcellus tops U.S. gas fields reserves list
The Marcellus Shale area in West Virginia and Pennsylvania has been ranked first in the U.S. Energy Information Administration's top 100 U.S. gas fields list for 2013. The EIA called the addition of the Marcellus Shale to the top 100 “notable,” as the last time the data was updated, in 2009, the relatively young Marcellus region wasn't even part of the top 100.
 
Wheeling IntelligencerMarkWest Growing In Spite Of Market
Even faced with lower oil and natural gas prices, Marcellus and Utica shale processors continue building billions of dollars’ worth of infrastructure throughout the Upper Ohio Valley.
 
The Charleston GazetteTest well in Putnam County leads to gas speculation
As gas companies continue to develop the Marcellus Shale in Northern West Virginia, recent gas exploration in Putnam County and Eastern Kentucky have people speculating about the possibility of a future gas boom in the southwest part of the state.
 
Breaking EnergyDon’t Blame Fracking for California’s Water Woes
It’s inevitable. In comments to nearly every story about California’s drought, someone will rage that if Gov. Jerry Brown really wanted to do something to save water, he’d put an end to fracking in the state.
 
NewsmaxNY Post: State Killing Job Opportunities by Rejecting Fracking
The Start-Up NY program, created to promote the state and its opportunities, has already spent $28 million, but only attracted 76 new jobs, a New York Post op-ed saysSunday, for a tally of $368,000 per job, but when it comes to the fracking industry, the state's government wants no part.

Categories:

4-2-15 On The Road

02 April 2015 1:19pm

Governor Bill Walker today stated his support of two recent announcements on Arctic offshore oil and gas exploration.

On Tues., March 31, the U.S. Department of Interior issued a Record of Decisionaffirming Chukchi Sea OCS Oil and Gas Lease Sale 193 and the remaining oil and gas leases issued in 2008 as a result of the sale. 

“I’m pleased Interior Secretary Sally Jewell has taken a thoughtful and balanced approach to oil and gas leasing,” Governor Walker said. “This is an important step toward responsible Arctic exploration.”

Governor Walker also said he is encouraged by the National Petroleum Council’s report to the U.S. Secretary of Energy. The 500-page report contains a series of recommendations that reflect the Walker-Mallott administration’s goals for sustainable and responsible development of the outer-continental shelf and greater Alaskan engagement.

“As the United States assumes chairmanship of the Arctic Council this month, I’m pleased to see NPC recommends more investment in and coordination of offshore Arctic oil and gas research,” Governor Walker said. “The U.S. is an Arctic nation because of Alaska. This detailed and non-advocacy report underscores the importance of Alaska’s oil and gas resources to the nation.”

Department of Natural Resources Commissioner Mark Myers and Senator Bert Stedman are the only two Alaskan members of the NPC, an oil and natural gas advisory committee to the U.S. Secretary of Energy.

(National Petroleum Council report: http://www.npcarcticpotentialreport.org/)

Categories:

4-1-15 Happy April Fools Day! Commentary: Are We The Fools?

31 March 2015 11:30pm

See National Ocean Policy Council Alert Here!

(Readers will understand the importance of this alert after reading today's commentary, below.  -dh)

See Part 4, Alaska Economic Report Below

Related Commentary: "The Sting"

Last Friday, former Alaska Legislator Beth Kerttula, posted this NEW OCEAN POLICY announcement

"Today, we are releasing the first Report on the Implementation of the National Ocean Policy, which highlights the progress we’ve made since we released an action plan last year. From supporting the ocean economy to ensuring the security of our ports and waterways, and from improving coastal and ocean resilience to providing local communities with tools to plan for a better future, we’ve made tremendous strides in undertaking our role as responsible stewards of this Nation’s great oceans.

"Among the activities described are a host of steps to promote sustainable energy development and aquaculture practices—including ensuring that permitting processes for these activities are...."

Here is a report from the private sector's "National Ocean Policy Coalition".  See Action Alert Here!

This massive undertaking -- which will ultimately affect all waterways feeding the Great Lakes and Oceans -- is a regulatory monster created by President Obama early in his first term.  See our original, 2009 report here.  See strategy of NOAA support here.

The oceans, Great Lakes, and all waterways and lands surrounding them are destined to be regulated under a new regime called, ecosystem-based management (EBM).

Our astute, NGP readers can just imagine the havoc that Obama, Kerttula and their massive grass roots constituencies can bring to America's traditional use of our waters.  

Not only does this effort threaten any natural resource activity in Alaska (i.e. which has 3/4 of America's coastline and over 3 million lakes, rivers and streams), but can severely affect every single American.  

The direct effects will be felt by commercial fishermen and others who make a maritime living--and even farmers whose activity on private land can be deemed to affect waters leading into lakes and oceans.  

Indirect effects will descend upon every American who will ultimately pay for the cost of this regulation and with more jobs exported to countries which do not have such regulatory obstacles.

The final insult to our way of life is that this whole, massive effort is unapproved and unfunded by Congress.  

Obama has done it all by Executive Order and memorandum.  It is run under the cover of the White House's Council on Environmental Quality and by his order, dozens of government agencies are indirectly funding the effort -- redirecting their own congressionally approved funds and people to this dangerous activity.

We believe that this is one of the greatest examples to date of Obama's unconstitutional usurpation of Congressional powers.

We also wonder why more Governors and Congressional Delegations are not literally handcuffing themselves to the White House fences until this sort of illegal activity ceases.

Until and unless relief from such usurpation comes from some as yet unidentified champion, we can only conclude that America's rule of law is finished and that we have entered a new era of elected fascists who create law out of thin air by the memorada edicts and Executive Orders.  

Oh, and about DOI's affirmation of Lease Sale 193 yesterday, good luck.

Yes, we have been set up and stung again and again; and this is the latest sting by this administration.

American citizens have, indeed, been played for fools by those they elected.

-dh

Commentary: "The Set Up".

Yesterday, the Department of the Interior issued a Record of Decision affirming Chukchi Sea OCS Oil and Gas Lease Sale 193 and the remaining oil and gas leases issued in 2008 as a result of the sale. Press release  (Comment: Now that DOI has finally validated its own lease sale  (i.e. and long ago accepted payment by industry), observers will now watch carefully to see if the regulators deny access through the permitting process.  We hope the outcome is not a statement months or even weeks from now to the effect that, "Our policy is that exploration and development should occur in these areas, but only under responsible conditions.  To date, those applying for permits have not demonstrated that exploration -- much less development -- can occur responsibly in these areas.  Accordingly, the applications for permits are denied."  -dh)


Fox Business News.  

The Alaska Senate passed a bill Tuesday that would temporarily restrict participation by a state-sponsored corporation in an alternate gas pipeline project proposed by Gov. Bill Walker.

The vote followed a failed attempt by legislative leaders and Walker to reach an agreement.

The vote was 13-7, but notice of reconsideration was given, meaning the bill could be voted on again before advancing. It passed the House last week.

Walker has said he would veto the bill. A legislative override would require the support of at least 40 legislators.


Our Quick Takes On Current Alaska Journal of Commerce Headlines:

Hilcorp Energy keeps up spending despite oil price slide  -  More respect and kudos to one of Alaska's great new companies.  -dh



From Brent Greenfield, National Ocean Policy Coalition (Mentioned in commentary, right column.  Please act today.  Note that our preference would be to defund the entire, ocean policy process completely and surgically remove all funding from all agencies devoted to supporting this unfunded government program.  You can support the NOPC letter but we would recommend separate letters to your Congressional delegations recommending total defunding.  -dh)

Our readers:

With Congress set to soon begin drafting bills to fund the federal government for FY 2016, and with National Ocean Policy implementation continuing and very potentially impactful actions currently slated for FY 2016, NOPC has drafted a letter to House and Senate Appropriations Committee leadership in support of language that would achieve a 1-year pause in implementation of two of the policy's most concerning components.  Many of you have signed on to similar letters in the past, and your support is greatly appreciated. 
 
We are at a pivotal juncture with respect to policy implementation, and demonstrating the maintenance and broadening of support for a time-out will be critical to securing effective congressional action.  To that end, please review the draft text below and let us know by COB Wednesday, April 8 if we can add your organization's name as a signatory.  Also, please let us know if there are other organizations in your network that might be interested in signing on.  Thank you again for all your support.
 
Best,
Brent
 
 
Brent Greenfield
National Ocean Policy Coalition
2211 Norfolk
Suite 410
Houston, Texas 77098
 
 
DRAFT
 
Dear Chairmen Rogers and Cochran and Ranking Member Lowey and Vice Chairwoman Mikulski:
 
In connection with the drafting of legislation to fund the federal government for Fiscal Year 2016, the undersigned groups request your support for including language in all appropriations bills that ensures commercial and recreational interests spanning nearly every sector of the U.S. economy are not saddled with additional uncertainty or new regulatory hurdles as a result of implementation of two particular components of the July 2010 Executive Order establishing the National Ocean Policy. 
 
Among other things, the Executive Order directs a multitude of federal entities to participate in “Coastal and Marine Spatial Planning” (CMSP) in all nine U.S. coastal regions.  CMSP is described as a process "to better determine how the ocean, coasts, and Great Lakes are sustainably used and protected," and the Interior Department has likened CMSP to a “national zoning plan” that “will serve as an overlay” in federal decisions.  Concerns are further heightened given that the geographic coverage of CMSP includes inland bays and estuaries and upland areas as new governmental “Regional Planning Bodies” deem appropriate, and since federal entities will “address priority…ocean management issues associated with marine planning as described in the Executive Order” regardless of whether all states in a region decide not to participate.
 
In addition to CMSP, the National Ocean Policy requires the federal government to implement “Ecosystem-Based Management” (EBM), which is described as a “fundamental shift” in how the U.S. manages ocean, coastal, and Great Lakes resources.  Among other things, federal entities are required to “[i]ncorporate EBM into Federal agency environmental planning and review processes” by 2016.
 
Language adopted by the Executive Order states that effective National Ocean Policy implementation would “require clear and easily understood requirements and regulations, where appropriate, that include enforcement as a critical component,”and acknowledges that the policy “may create a level of uncertainty and anxiety among those who rely on these resources and may generate questions about how they align with existing processes, authorities, and budget challenges.”  In order to ensure that further implementation of some of the most concerning and potentially impactful aspects of an initiative that has not been authorized by Congress does not create additional regulatory uncertainty, result in new regulatory hurdles, or siphon away scarce federal dollars from critical and authorized activities, the undersigned groups respectfully request that all appropriations bills include language stating that "None of the funds made available by this Act may be used to further implementation of the coastal and marine spatial planning and ecosystem-based management components of the National Ocean Policy developed under Executive Order 13547."
 
Including this language will provide Congress with an important opportunity to more closely examine the National Ocean Policy and the full range of its potential impacts before it is fully implemented.  In closing, we appreciate your attention to this issue and respectfully request inclusion of the proposed language in all Fiscal Year 2016 appropriations bills. 
 
Sincerely,

Newsmax by Ken Mandel.  The Keystone pipeline project transports oil from Canada to refineries in Illinois and Texas via eight U.S. states. Completed in 2014, a shortcut known as the Keystone XL was approved by Congress the next year, but vetoed by President Barack Obama.

The debate continues to rage. Here are eight quotes from oil company executives, who stand to benefit from the pipeline's construction: 

1. "Anything could happen, we don't know, but we remain confident that when Keystone is ultimately built, it will be the safest pipeline that has ever been constructed in this country." — Andrew Craig, TransCanada's land manager for Keystone projects and development, told NBC News. 

Read More....


Forbes (3/27/15) editorializes: “This Saturday marks the seventh annual observance of “Human Achievement Hour,” a celebration of technology and prosperity hosted by my organization, the Competitive Enterprise Institute. Originally created as an alternative to the World Wildlife Fund’s “Earth Hour” campaign (which urges people to turn off their lights in the name of environmental conservation), Human Achievement Hour counters widespread predictions of environmental and societal doom.”

Alaska Economic Update- Part 4  -  Parts 1-4 Here

Posted: 31 Mar 2015 11:21 AM PDT

By Mark Edwards

Today we wrap up our series on the Alaska Economic Update. Over the past three posts, we have looked at oil prices, jobs, and population. We wrap things up today with the housing marketing and the building environment. For the complete Alaska Economic Update as well as other important studies, visit our ‘Resources’ section.

Home lending activity flat - The Alaska Housing Finance Corporation (AHFC) released its third quarter report on Alaska housing indicators. It tracks new loan activity for single family homes and condominiums in Alaska.  The data is based on a survey representing approximately 95% of mortgage lenders in Alaska and also includes AHFC loans. The survey covered mortgage lending activity in the first nine months of 2014.

It reported 6,889 loans were originated statewide for single family homes and condominiums for a total amount of $1.8 billion. This is nearly identical to the volume in the first 9 months of 2013. Loans were done with an average down payment of 11% for the last five years.  Single family homes accounted for 87% of statewide mortgage lending activity with 52% of those loans occurring in Anchorage. The Mat-Su contributed 18% of the volume, 10% in Fairbanks, 8% in Kenai, 5% Juneau, 2% Kodiak, and 1% in Ketchikan.

10% of total mortgage activity for the quarter was for condominiums and only 3% was multi-family.  91% of condominiums were financed in Anchorage. Juneau accounted for 5%, and the Mat-Su, Kenai and Fairbanks 1%. 

Refinance activity slowed rapidly in 2014, but may rise as interest rates are falling again - 30 year conventional fixed interest rate mortgage loans have been getting less expensive for three decades.  In 1981 they peaked at 16.6% and have undergone a slow and steady decline ever since.  In early 2009 rates dipped under 5% on average for the first time and a surge in refinance activity began. 

According to AHFC statistics, there was less than $200 million in refinance loans completed per quarter in Alaska in 2006 and 2007.  In 2008, the average rose to $400 million.  Then in the first quarter of 2009 the activity spiked to $1.4 billion, followed by $1.2 billion in the second quarter.  During this time, the average 30 year interest rate declined nearly 1.5% in six months. 

Graph 1

The refinance pace slowed somewhat in the last half of 2009, but still finished the year with $3.7 billion in refinanced mortgage loans according to AHFC statistics.  In 2010, the refinance volume declined to $2.4 billion, followed by $2.1 billion in 2011.  2012 saw an unexpected decrease in interest rates again to an all-time historic low of 3.3% by the end of the year.  This led to an increase to $3.1 billion in refinance activity. 

Rates increased throughout 2013 and you can see on the far right of the graph, the result has been a steep drop off in refinance activity.  Rates began declining again last year and finished 2014 at 3.86% on average.  AHFC data is only available through the third quarter of 2014 at this time, so we have not yet seen the year end results.  Rates continued lower in February to 3.71%.  This should be a positive trend for both home sales and refinance activity this year.

Housing statistics still good relative to the U.S. – The recently released survey by the Mortgage Bankers Association shows that Alaska continues to have some of the lowest levels of foreclosures and delinquencies on residential mortgage loans in the United States. Through the third quarter of 2014, Alaska ranked 5th and 7th best in the nation out of 50 states in foreclosures and delinquencies of all loan types.

The total inventory of foreclosures in process is 0.9% in Alaska, while the country has a much larger lingering foreclosure inventory at 2.4% due to higher rates during the recession and longer resolution times. These rates are an improvement from four years ago when Alaska’s rate was 1.4% and the U.S. foreclosure rate was 4.6%.

Delinquent loans are more than 30 days past due, but not yet in foreclosure. Alaska is fifth best behind North Dakota, South Dakota, Montana and Hawaii in the overall level of delinquent loans. Alaska’s delinquency rate is 3.6%, while the U.S. average is 6% for all loan types. This is an improvement for Alaska from 4.8% four years ago. The U.S. delinquency rate has also come down more dramatically from 9.4% at this time four years ago.

Graph 2

Subprime lending to traditionally non-qualified borrowers was a large contributing factor to the national mortgage problems. The survey covers 95,176 mortgages in Alaska. 6,110 or 6% were considered subprime, compared to 9% nationally. The rate of delinquencies and foreclosures on subprime loans is significantly higher. However, Alaska is in a far better position and again leads the nation as having the lowest level of foreclosures and is second in delinquencies for this important category. Subprime foreclosures in Alaska are at 2% while the national average is 9.8%. Alaska’s subprime delinquency rate is 9.4% compared to the national average of 19.3%.

Building permits up 430 units in 2014, but still historically low - According to the U.S. Census Bureau, the number of building permits for new, privately owned housing of 1 to 5 unit buildings remained low for the 8th straight year.  It had been under 1,000 units since 2007, but in 2013 it grew 9% to 1,081.  Last year saw a dramatic jump up to 1,509.  However, this is still half the level seen 10 years ago.

Growth in single family homes increased from 877 to 1,114 last year.  The number of duplexes permitted fell from 66 to 50.  The number of structures with three or four living units decreased slightly from 49 to 45.

The other major growth area beyond single family homes was in multi-family.  The number of structures with five or more units climbed from 10 in 2013 to 33 in 2014.  In terms of housing units that meant a growth from 87 to 300 last year.  The biggest challenge has been making new construction affordable enough to meet buyer’s income levels.  There is a shortage of low cost housing in Anchorage.  Vacancy factors are very low and the number of existing homes under $350,000 is in short supply.  It appears builders have started to take more risk in this market segment, likely aided to some extent by government subsidy programs.  Anchorage is expected to follow other growing cities by becoming denser, building vertical and redeveloping older properties.

Graph 3

Graph 4

Categories:

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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3-21-15

21 March 2015 4:16pm

Petroleum News.  In early February Ben van Beurden, CEO of Shell, confirmed that his company was moving ahead with plans to restart its exploration drilling in Alaska’s Chukchi Sea during the 2015 summer open water season. In apparent confirmation of that statement notices relating to requests from Shell for some go....

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3-6-15 Oil Investors Continue To Face Federal and State Obstacles

06 March 2015 7:32am

Alaska Journal of Commerce by Tim Bradner.  Just as things seemed to be going reasonably well for the large Alaska LNG Project, the $45 billion to $65 billion gas pipeline and liquefied natural gas initiative in which the state is a partner, Gov. Bill Walker may be throwing a wrench into the works.  More....

Houston Chronicle by Jennifer Dlouhy.  The Obama administration will decide soon whether to sign off on Shell's request for extra time to hunt for oil in Arctic waters, Interior Secretary Sally Jewell said Wednesday.

Without action, Shell's oil and gas leases in the Beaufort Sea will begin expiring in 2017, followed by its drilling rights in the nearby Chukchi Sea two years later.

The same fate awaits Chukchi Sea leases sold in 2008 to Statoil and ConocoPhillips, which have made similar appeals for more time, citing regulatory uncertainty and other obstacles.

"We are actively working with Shell and other leaseholders up there on their request for suspensions," Jewell said during a Senate Appropriations subcommittee hearing. "We will be resolving that relatively soon."  (Read more....)


 

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