You Read It Here First
Now in its second decade, the Inuvik Petroleum Show or “IPS” takes place every June in Inuvik, Northwest Territories. Host to over 500 participants including delegates and exhibitors from across Canada and beyond , this three day tradeshow and conference is a must-attend event for the oil and gas sector. (NGP Photo: author chaired 2002 oil & gas presentation. Don't miss local restaurant specialties, surf and turf: musk ox and char! The nighttime sing-alongs in lounges and friendly locals will make the trip memorable!)
|North Slope Borough and ConocoPhillips develop Alaska North Slope emergency response transportation process to safeguard village residents. (Photo: NSB Mayor, Charlotte Brower)|
Supporting Both Academic Freedom and The Right to Criticize Academic Activists
Last Thursday, University of Alaska - Fairbanks (UAF) Chancellor Brian Rogers (NGP Photo) addressed members of the Alaska Support Industry Alliance in Anchorage on the subject of the University's Fairbanks coal fired power plant. (We have an interesting personal story to tell here for readers who may be interested.)
Following the presentation, a member asked Rogers about the policy of professors signing a controversial letter/petition "applauding" the EPA's assessment of a proposed Pebble mine project (here) -- while identifying themselves with the University (For those interested, we explain the controversy here). Rogers said that of the many who claimed a University of Alaska relationship, less than half were actual university professors. The rest had honorary titles or persons who might have taught a class one time and one signer who was not affiliated with the University at all.
We have written extensively on the subject of the Pebble project's constitutional right to file for permits to operate on state leased lands--and the catastrophic effect on the public interest were activist organizations and federal agencies to preempt that project before it is availed the guaranteed right of due process. We think the rule of law evaporates if due process can be denied in this case and that determined activism will have precedent for stopping all natural resource, construction, agricultural, industrial, or housing projects anywhere in America. We also believe the EPA, with support from its supporters, has attacked the Constitution and Sovereignty of the State of Alaska by denying due process to a project lawfully granted leases on Alaska state lands. And, we think that a citizen can personally oppose the Pebble project for any reason but strongly support our call to protect "due process".
- Integrity. Having served as a university vice president, a high school and university English teacher; a regulatory commission chairman; a spokesman for oil, gas, mining and pipeline companies; an Army officer and a Washington Post newspaper delivery boy, I would never have thought of hiding behind some supposed, "Free Speech" defense while trumpeting a political viewpoint and pretending to represent my employer. Professors, like others, who use their official affiliations to give credence to their personal, political convictions have deviated from science and fact into the world of politics--at the expense of their own reputations and that of the institution(s) they presume to represent. On the other hand, we respect the integrity of some signers of the attached letter who represented themselves as retired or who did not otherwise use current state or university titles to enhance the impact of their petition signature. While we may oppose their politics, we do not criticize those who exercised their freedom of speech to sign the political petition--only those who seek to enhance their importance at the expense of their claimed affiliation. (I have to insert that it seems really amazing how some Academics can so blithely create a double standard. When one of them publishes a research paper, the "Academy" is expected to "peer review" it, to vigorously test it for scientific validity. But when a politician writes a letter on an environmental subject, a professor who works every day demanding peer review of scientific methodology, doesn't hesitate to sign his or her name ... even while invoking the unapproved use of his institution's name ... even when he or she has a degree totally unrelated to the letter/petition subject ... and even when he or she has not necessarily ever studied the topic in greater detail than skimming the contents of the biased letter/petition. In my farewell remarks before the Regulatory Commission of Alaska, I identified this same difficulty with other 'professionals', like regulators.)
- What's a governor to do? Some suggest that university systems throughout the country are heavily influenced by leftist professors. In fairness, others deny the allegation. In any case, one observes that money motivates much human action, including the actions of professors. Accordingly, one almost always finds it useful to "follow the money". If, as UAF professors have testified, Alaska Arctic OCS oil, gas and other human development should be suspended for a decade or so, until they get funding to complete a base line inventory of Arctic coastal and ocean ecology, one sees at least one motivation for professorial researchers who oppose development. It takes a great deal of money to prove or disprove the thesis that development should be permitted. One can, therefore, sympathize with excellent university leaders going back to Dr. William Wood, and more recently, Brian Rogers, Generals Mark Hamilton and Tom Case and Pat Gamble. How do they keep peace in the academic family and run an institution by taking a stand against activist professors who advocate under cover of university titles -- and who, presumably, are inculcating their own version of "Science" to impressionable students? Furthermore, the University of Alaska some years has leveraged about $6 in research grants from outside sources for every $1 of Alaska budget contributions. This has brought in hundreds of millions of dollars to the Alaska university systems and those benefiting from them. This gives incentive to professors to support federal government and private granting agencies politically. It gives perverse incentives to administrators to support professors who bring home the grant bacon. In turn, Legislators' constituents and campaigns are partly funded by such activity. And, what's a Governor to do?
- What we can do? We note that several of the letter/petition signers profess to represent Alaska's private university, Alaska Pacific University (APU). APU thrives on private contributions, particularly those originating from natural resource extractive industries and those affiliated or doing business with them. We note that if University of Alaska and Alaska Pacific University professor advocates named in the letter/petition got their way, there would be no money in Alaska to support either a public or a private university. Therefore, truly, we also observe that while we do not oppose a professor's right to speak against Alaska's economic survival, we do not have to pay for his or her right to do so. What can we do? We can tell the public and private institutions when they come calling for donations that we do not support their anti-development activist professors whether they officially or unofficially represent the institution. We can say, "Not this year". We can suggest to Legislators and the Governor when university lobbyists go to Juneau that we do not want to give them funding for research that produces armies of Academics intent on destroying the economy. We can say, "Not this year". Lastly, we can be a little more courageous about telling it like it is. All of us have the freedom of speech. If someone or some institution is contributing to the economic death of Alaska, each one of us has the right if not the responsibility to object. Right?
Personal comment: During the Great Eastern Blackout of 2003 your author was taking courses at the University of Michigan in Lansing on principles of utility and pipeline, economics and regulation. On the late afternoon of August 14, classmates (NGP Photo, 8-8-03) were walking from the parking garage to our graduation dinner/ceremony when the lights all over town began going dark as the sun began to recede. Everywhere ... except where we were, in the middle of the University Campus. Ironically, a day or two earlier, campus guides had taken us on a University tour, including a detailed briefing of the University's coal fired power plant. The University was quite comfortable with having this facility on campus because as our guide said, "we can use the grid in an emergency, but if the grid has an emergency, we remain independently powered." So on the related question of whether or not the University of Alaska should maintain an ageing coal fired powered plant on its far north Fairbanks campus, we would say: "the rationale for doing so is compelling, especially in view of the fact that the Campus is close to a nearly infinite supply of coal!" -dh
Q. Why is it so controversial for University of Alaska and Alaska Pacific University Professors to 1) sign this attached letter/petition, and 2) to do so while using their own university titles, presumably without permission from their universities to do so?
A. The letter/petition is controversial because professors advocating the EPA position are supporting a major violation of the American Constitution and of the rule of law; because they are doing so with the presumed support of the institution whose name they boldly use without approval; and, as Alaska educational service providers, the unlawful practice they condone erodes the economy of Alaska upon which their own and other great and small institutions and enterprises survive.
As we have explained, we support the Constitution's guarantee of free speech. We further support the freedom of all citizens, including professors, to 'petition their government'. We also agree that, citizens have the right to personally support and/or express opinions for or against projects, such as the proposed Pebble Mine in Southwestern Alaska.
However, we also embrace other, traditional principles:
- When an institution depending on public financing, permits activities designed to harm the public, the public has the freedom to withdraw financing of that institution.
- When employees act against the interests of the employer or taxpayers, they may be censured or dismissed if they use unapproved titles, resources, time and affiliations of the employer.
- When America's rule of law is threatened, all Americans are threatened and those threatening it, even while engaged in the act of speaking freely are subject to criticism and censure.
- With freedom comes responsibility.
- Those endangering the public interest must be willing to accept responsibility for loss of public support.
Note: Some of Alaska's most influential leaders whose businesses and eleemosynary activity would be harmed by liberal and/or misguided professorial activism serve on the Alaska Pacific University Board of Trustees and the University of Alaska Board of Regents. We sympathize with these public spirited, well intended citizens -- many of whom are dear and respected friends -- who also face difficult challenges when overseeing the policies of their institutions.
"I will observe a caution that I have for my colleagues regarding NARUC and urge them to watch the organization closely. Look, the job of regulatory commissioners is to carefully adjudicate proceedings based on a legal record with an absence of tainting, tarnish, bias. But somehow, when finding themselves in a public setting like a national organization, commissioners are sometimes led or tempted by a siren call of some group of Commissioners that wants the rest to take political positions based, not on a record, but on the emotional issue du jour. And that is inappropriate in my view. NARUC--just like a local Commission--ought to be taking positions based on a record even though it is a modified record."
Alaska Journal of Commerce by Tim Bradner. Flint Hills Resources will cease refining operations at its North Pole refinery near Fairbanks this spring, the company announced Tuesday in a press release.
Senate Energy Committee Spokesman, Robert Dillon, this morning provided us with an analysis of Keystone XL Pipeline labor benefits discussed during Bill O'Reilly's Super Bowl interview with President Barack Obama. (Dillon's analysis follows:)
In September 2009, President Obama declared, “I will not rest until anybody who’s looking for a job can find one – and I’m not talking about just any job, but good jobs that give every American decent wages and decent benefits and a fair shot at the American Dream…That's what I'm fighting for every single day.”
Fast forward to last week, when the State Department once again confirmed that the Keystone XL pipeline is a prime opportunity for President Obama to fulfill his commitment to American workers. State estimated that Keystone would create 42,100 jobs – and enable those workers to earn more than $2 billion in new wages – if the president finally, after more than five years, approves it.
So how did the president react? In an interview with Bill O’Reilly that aired shortly before the Super Bowl, the president somehow saw fit not to welcome, but to dismiss the good jobs Keystone would bring.
The president tried to correct Mr. O’Reilly and claim that “it’s a couple thousand to build the pipeline.” Yet State’s own analysis, pasted below, shows that it was Mr. O’Reilly who was correct, and Mr. Obama who was wrong.
We can assume the president was trying to refer to the construction jobs associated with Keystone, estimated by State at 6,800. We consider that an impressive number – especially in comparison to the construction jobs associated with each of the projects within the president’s much-touted energy loan guarantee program. The high-water mark under that program were an apparent 3,000 construction jobs for Solyndra – which quickly went bankrupt, leaving taxpayers on the hook for $535 million in losses. Next highest was a solar project with 1,700 construction jobs; most other projects reported no more than a couple hundred.
The math here isn’t hard: Keystone will create 42,100 jobs that are clearly needed. With unemployment at 6.7% and the last jobs report showing just 74,000 new positions created in December, this decision should be easy. It should already be made. The president needs to quit delaying, quit disparaging, and approve Keystone.
BPs Outlook Released Today: You Read It Here First
State and Private Parties Sign LNG Project Commercial Agreements
(Anchorage, AK) - Natural Resources Commissioner Joe Balash (NGP Photo), Revenue Commissioner Angela Rodell and Alaska Gasline Development Corporation (AGDC) President Dan Fauske (NGP Photo) announced today that they have signed a Heads of Agreement (HOA) with ExxonMobil, BP, ConocoPhillips, and TransCanada Corp., regarding the proposed Alaska LNG project, which would provide gas to Alaskans and be one of the largest export projects of its kind in the world. (See NGP Photos)
“This agreement is essential to establishing the commercial structure of this project and will allow the project’s investors to move this project, so important to the future of all Alaskans and our broader economy, on a clear path forward,” said Commissioner Rodell.
“As an equity partner, the state will play a critical role in setting the terms for decades-worth of gas production from the North Slope. In setting these terms, our goal will be to maximize the royalty value of the state’s gas on behalf of all Alaskans,” said Commissioner Balash.
“Today’s agreement reaffirms AGDC’s central role as Alaska’s gas pipeline company and further enables the corporation to explore every option for delivering gas to Alaskans at the lowest possible cost. We’re moving full-steam ahead with our own Alaska Stand Alone Pipeline (ASAP) project and on-track for an open season in 2015,” Fauske said.
In addition to the HOA, the two commissioners have also signed a Memorandum of Understanding (MOU) with TransCanada defining the pipeline company’s role in developing the midstream (pipeline) portion of the project. Both documents were made public today and will serve as guidance to the Alaska Legislature during its review of legislation Governor Sean Parnell will propose during the session beginning Tuesday, Jan. 21.
The HOA provides a roadmap for the Alaska LNG Project to ramp up the Pre-Front End Engineering Design (Pre-FEED) stage and establishes a framework for negotiating multiple project-enabling agreements. The HOA includes the state as an equity partner, provides gas to Alaskans, lays out proposed fiscal terms, and includes pro-expansion principles that will allow third-party access to all of the project components, including possible construction of a new LNG train at the liquefaction plant. It outlines significant participation by AGDC, including a new subsidiary to carry the state’s interest in the project, and specifically recognizes that AGDC will continue to pursue the ASAP instate gasline project.
The MOU with TransCanada is part of an amicable wind-down of its Alaska Gasline Inducement Act (AGIA) license and describes an arrangement for the company to provide the State of Alaska with transportation services for the state’s royalty and tax share of gas flowing through the pipeline, including offtake points for instate gas deliveries. TransCanada would fund midstream development work and provide the state with an option to purchase up to 40 percent of the equity in the midstream component of the state’s portion of the overall project before it moves to Front End Engineering Design (FEED). The MOU also provides that TransCanada will work with the state to expand the Gas Treatment Plant and pipeline to additional, third-party gas producers on the North Slope. Various aspects of the MOU provide terms that are more attractive than what exists under AGIA, such as the debt structure for future pipeline expansions.
Governor Parnell announced in his Friday, Jan. 10 speech to the Alaska Support Industry Alliance that he will ask the Alaska Legislature to take up bills that authorize DNR to modify leases, allow the state to enter gas shipping agreements, revise the production tax for natural gas, authorize AGDC to participate in liquefaction and make other changes. This legislation will pave the way for the LNG project partners to spend hundreds of millions during the pre-FEED stage. During the subsequent FEED stage (prior to construction), billions must be committed to complete the project engineering and design.
“We will be asking for some new powers that will allow us to fully participate in the LNG project, but in working through the legislative process, we intend to maintain transparency in our decision-making process. While the series of steps needed to execute an LNG project are more complicated than a traditional pipeline project, it remains important to include the public at each major decision point,” Balash said.
Following approval of the legislation, the state and the companies expect to complete their pre-FEED work in roughly 18 months. The FEED stage lasts two to three years, after which a final decision is made to proceed to construction.
The HOA and MOU are public documents and are available for review at www.dor.alaska.gov.
Today, BP provided us with its annual Energy Outlook. According to the 2035 outlook, "...global energy consumption is expected to rise by 41 per cent from 2012 to 2035 – compared to 55 per cent over the last 23 years (52 per cent over the last twenty) and 30% over the last ten. Ninety five per cent of that growth in demand is expected to come from the emerging economies, while energy use in the advanced economies of North America, Europe and Asia as a group is expected to grow only very slowly – and begin to decline in the later years of the forecast period.
"BP Chief Economist Christof Rühl said: “This process shows the power of economic forces and competition. Put simply, people are finding ways to use energy more efficiently because it saves them money. This is also good for the environment – the less energy we use the less carbon we emit. For example CO2 emissions in the US are back at 1990s’ levels.”
Bob Dudley, BP Group Chief Executive said that the Outlook “highlights the power of competition and market forces in unlocking technology and innovation to meet the world’s energy needs. These factors make us optimistic for the world’s energy future.”
Dudley added: “The Outlook leads us to three big questions: Is there enough energy to meet growing demand? Can we meet demand reliably? And what are the consequences of meeting demand? In other words, is the supply sufficient, secure and sustainable?”
“On the first question, our answer is a resounding ‘yes’.The growth rate for global demand is slower than what we have seen in previous decades, largely as a result of increasing energy efficiency. Trends in global technology, investment and policy leave us confident that production will be able to keep pace. New energy forms such as shale gas, tight oil, and renewables will account for a significant share of the growth in global supply.”
"On the question of security, the Outlook offers a mixed, though broadly positive, view. Among today’s energy importers, the United States is on a path to achieve energy self-sufficiency, while import dependence in Europe, China and India will increase. Asia is expected to become the dominant energy importing region. Dudley noted: “This need not be a cause for concern if the market is allowed to do its work, with new supply chains opening up to these big consuming regions.”
On the question of sustainability, global carbon dioxide emissions are projected to rise by 29%, with all of the growth coming from the emerging economies."
The Outlook notes some positive signs: emissions growth is expected to slow as natural gas and renewables gain market share from coal and oil; and emissions are expected to decline in Europe and the US. Indeed towards the end of the period covered by the Outlook we expect many advanced countries will be seeing their economies grow while their energy use falls.
(The BP Energy Outlook 2035 is available online at www.bp.com/energyoutlook; Readers may join the conversation on BP’s social media channels using #BPstats)
Latest EPA Report Suggests Additional Overreach on the Way in Alaska WASHINGTON, D.C. – U.S. Sen. Lisa Murkowski (NGP Photo) today responded to the Environmental Protection Agency’s release of the final watershed assessment of state-owned lands in Alaska’s Bristol Bay region:
“EPA’s assessment stops short of prohibiting responsible development in the Bristol Bay watershed, but the agency has strongly implied that this report will be a basis to preemptively veto economic opportunities in the region in the future,” Murkowski said. “I remain convinced that a preemptive veto of a mine or any other project, which the agency claims it can do under the Clean Water Act, would set a terrible precedent for development in our state and across the nation.”
Murkowski has continually criticized EPA for conducting the assessment based on a hypothetical mine, before any plan or permit application has been filed with the agency.
“If the EPA has concerns about the impact of a project there is an appropriate time to raise them – after a permit application has been made, not before. It is clear that a preemptive veto is still being considered by EPA. Such a veto is quite simply outside the legal authority that Congress intended to provide EPA,” Murkowski said.
Murkowski has twice written to EPA (Feb. 16, 2011 and April 18, 2012) about her concerns with the agency’s Bristol Bay watershed assessment, including whether a decision by the agency to block a large-scale mining operation could set a legal precedent that would prevent other development proposals. EPA responded on Mar. 21, 2011, and May 17, 2012.
Peninsula Clarion/News Miner Editorial. Alaska’s leaders have been talking up a natural gas pipeline for decades. We all need to hope that Gov. Parnell’s burial of the Alaska Gasline Inducement Act and his ideas for how to proceed ultimately bring to fruition the pipeline we dearly need.
Today's 'Energy In Depth' headlines and links:
Natural gas boom makes Penna. an energy keystone. Meadville Tribune. A push for a new natural gas infrastructure comes as the state’s existing lines are near capacity, and as demand for Pennsylvania’s gas grows. Historically, most lines were built to move gas in, rather than out, said Nicole Jacobs, spokeswoman with Energy In Depth.
The significance of Oklahoma's oil industry returns to 1982-like levels. The Oklahoman. Oil and natural gas employment has doubled over the past decade to 57,500, and average compensation per worker ballooned to $110,000 in 2012, the report stated. The industry now hires 5 percent of the state's wage and salary workers and pays 7.2 percent of all employee compensation in the state.
S&P sees stable year driven by cheap, abundant gas. E&E News (sub. req’d). "Hydraulic fracturing and horizontal drilling have unlocked huge deposits of natural gas from shale formations, bringing natural gas access to a level that could meet U.S. projected energy demand for more than 100 years at current consumption rates," credit analyst Jeff Panger wrote.
Andrew Cuomo’s HF ‘cone’ job. New York Post, Op-Ed. Blocking traffic on toll-plaza lanes of the George Washington Bridge for four days under cover of a bogus traffic study turned out to be a very bad idea. So why is it acceptable to block drilling across an entire state for three years under cover of a series of supposed studies?
US shale still thriving. Petroleum Economist. The industry seems in better shape than it has in a long time. Henry Hub natural gas prices over $3.60 per million British thermal units (Btu) are well above the $2/million Btu mark hit at the low point in 2012
Everyone profits when N.D. grows the ‘pie’. Grand Forks Herald, Op-Ed. Few states are blessed with a Bakken shale formation. So, where significant energy resources exist, it seems a no-brainer to take advantage of them. Sadly, that is not universally the case. Ironically, some who most fervently thwart access to the resources are equally fervent about doing something to help the poor. Here’s a suggestion for a first step in helping the poor: At least give them a chance to bake the bread.
Natural Gas Continues to Climb. Wall Street Journal. Natural gas rallied for a third straight session as forecasts for a return to colder weather boosted expectations for substantial gas-powered indoor-heating demand. Natural gas for February delivery settled up 9.5 cents, or 2.2%, at $4.369 a million British thermal units on the New York Mercantile Exchange.
Is HF Shaking Up the Severance Tax World? Bloomberg BNA. Across the country, severance tax collections have increased in previous years as states tap natural resources that were previously unavailable. According to the U.S. Census Bureau’s 2012 Annual Survey of State Government Tax Collections (the most recent yearly data available), severance taxes were up $4.2 billion nationwide.
Obama admin writes to greens on drilling oversight. E&E News (sub. req’d). The Obama administration is seeking to reassure the environmental community that U.S. EPA is on top of the shale drilling boom. NOTE: Click here to read EPA’s letter to NRDC.
UK Cameron attacks critics of fracking as ‘irrational’. Financial Times. David Cameron has struck out at opponents of fracking, suggesting their opposition is based on a “religious” and “irrational” hostility to fossil fuels.
'Enormous binge' of energy in U.S. benefits Asia – experts. E&E News (sub. req’d). The U.S. oil and gas boom has been "enormously important" for Asian energy security and could open conversations on how the United States shares its Persian Gulf security costs with buyers in that region, foreign policy experts say.
Power to the people: we have to back HF. London Times, Column. Local communities must see that shale gas is worth their while and can be used to everyone’s benefit
Cameron Favors Payments to Householders Near Shale Wells. Bloomberg. Prime Minister David Cameron said he favors making payments to U.K. households to compensate them for any inconvenience involved in being near shale gas wells, a possible new measure to give the industry momentum.
Why Shale Won't Conquer Britain. New York Times, Op-Ed. This zeal stems from the belief that an increased domestic gas supply will drive down national prices, at once enhancing export competitiveness while addressing growing public concern over rising domestic energy bills. But this strategy is misguided: Unlike in the United States, a shale gas revolution will not bring down prices in Britain.
Russia taps into Siberian shale. UPI. The head of a Russian joint venture between Shell and Gazprom Neft said a pilot hydraulic fracturing program in Siberia could lead to full-scale development.
Shell looks to sell North Sea fields in $15bn disposal program. The Telegraph. Royal Dutch Shell is looking at selling some of its North Sea oilfields as new chief executive Ben van Beurden embarks on a two-year, $15bn (£9.1bn) divestment programme in a bid to boost returns.
GAIL mulls time-swap deal to advance import. Business Standard. State-run GAIL India Ltd plans to strike a “time-swap” deal with US shale gas suppliers so that it can import shale gas by 2015-16, ahead of 2017-18 for which contracts are in place.
U.K. Lobbied in Brussels to Halt EU Legislation on Shale Gas. Bloomberg. The U.K. lobbied European Union policy makers to stop plans for a new law on shale gas exploration, according to an official letter.
Study: Fayetteville gas reserves recoverable through 2050. Penn Energy. A new study from the University of Texas at Austin’s Bureau of Economic Geology says the Fayetteville Shale will continue its viability as a source for U.S. natural gas for years to come. The study finds the shale play holds economically recoverable reserves totaling 18 trillion cubic feet, enough for recovery through 2050.
Activists press governor to ban HF. E&E News (sub. req’d). Rock Zierman, CEO of the California Independent Petroleum Association, last week noted that when moratorium legislation was considered last year, it "only garnered 24 votes out of 80 assembly members." "The only thing that has changed since then is that (1) the author of the moratorium has left the Assembly for the Senate (one less vote) and (2) the governor and [state Division of Oil, Gas and Geothermal Resources] are in the process of implementing the toughest [hydraulic fracturing] regulations in the country," Zierman previously said.
Central Coast residents voice concerns over HF. Santa Maria Times. The fracking debate has intensified over the last few years as oil companies continue to make moves that they say would spur a production boom, create thousands of jobs and generate billions of dollars in revenue.
Water Commission tackles topic of HF Wednesday. Chico Enterprise-Record. Fracking will be the hot topic at the meeting of the Water Commission Wednesday.
Colo. town's HF ban changes company's relocation plans. E&E News (sub. req’d). A Colorado company has decided not to expand into one of the towns that last year sought to ban hydraulic fracturing and to instead go elsewhere out of fear of legal liabilities for doing business with fracking companies.
Longmont council hears about HF at public comment session. Longmont Daily Times-Call. Coombs had suggested last week that he might change his vote. But in responses Tuesday, he defended the decision, saying that Longmont would get a number of benefits, including a requirement that Synergy conduct water monitoring at the well sites and a guarantee that the company would not challenge Longmont's fracking ban.
Florida House subcommittee approves HF disclosure bill. Naples News. Legislation that would require the state to put disclosure requirements in place before hydraulic fracturing, a type of oil and gas drilling commonly known as fracking, is one step closer to the state House floor. NOTE: News-Press, Orlando Sentinel, Florida Current also report.
NC HF panel passes chemical disclosure rule. News & Observer. Fracking companies won the right to keep secret the chemical cocktails they pump underground during shale gas drilling in North Carolina under a chemical disclosure rule approved Tuesday by the N.C. Mining and Energy Commission.
Oil production nears 1 million barrel mark. The Bismarck Tribune. Oil production spiked in North Dakota in November by nearly 28,000 barrels per day, inching the state’s production closer to but still shy of the 1 million barrels per day mark.
Dems call for shakeup of state regulator. E&E News (sub. req’d). North Dakota's Democratic legislators called for an overhaul of the state's main oil regulator in the wake of a string of high-profile accidents, saying the Department of Mineral Resources too often blurs the line between policing and promoting the energy business.
Shallow well producers decry DEP’s proposed new rules. Williamsport Sun-Gazette. The independent drillers of shallow, conventional wells are asking to be excluded from DEP's new regulations, which they believe not only will put them out of business but also hurt the environment.
Shell's $4B Pa. ethane project more likely as rival works cancelled: report. Philadelphia Inquirer. Plans for a taxpayer-backed $4 billion Shell Corp. ethane fuel plant near Pittsburgh are advancing as Shell cancels other projects, including a $10 billion gas-to-liquids plant in Louisiana, that are potential competitors for capital investment, reports McGraw Hill-Platt's The Barrel, a fuel industry newsletter.
Mayor David: Binghamton will never frack. WBNG 12 News. In a phone interview, Mayor David said it didn't make sense to pursue the law that was invalidated in 2012 by the State Appellate Court because it expired at the end of the year. "Even if the state does approve it in the future, there will never be fracking in the city," said David.
Public comment sought in Mechanicsburg on oil and gas regulations. Patriot-News. Anyone interested in commenting on proposed revisions to the state's environmental performance standards for oil and gas operations can attend a public hearing on Thursday, Jan. 16.
Heinz Endowments president goes to Rice Energy. Pittsburgh Post-Gazette. Vagt plans to become chairman of the board of and will be a stockholder in Rice Energy Inc. after the Cecil-based drilling company completes an initial public offering later this year, according to documents Rice filed with the Securities and Exchange Commission.
Contest offers $100K for shale innovators. Penn State News. The Ben Franklin Shale Gas Innovation and Commercialization Center is seeking innovators developing the next breakthrough technology for the shale energy play. The 2014 Shale Gas Innovation Contest will award a total of $100,000 to the four best shale energy-oriented innovations, new product ideas or service concepts.
Seismic testing is set to begin in Murrysville. Tribune Live. A Colorado-based company, Tesla Exploration, soon will begin conducting seismic testing in Murrysville as a precursor to Marcellus shale drilling.
Lawmakers want standardized royalty statements. Columbus Business First. Unlike many states, Ohio doesn’t require oil and gas companies to provide standardized royalty statements to landowners. That has led to confusion and second-guessing among some landowners in eastern Ohio’s Utica shale play, says state Rep. John Carney, D-Columbus.
University hoping to fill oil/gas job needs. Coshocton Tribune. The new petroleum geology bachelor of science degree program, to be offered beginning the 2014-15 academic year, is intended to serve as a complement to majors in geology, environmental science, conservation science and earth science.
District enters agreement for community school. Alliance Review. The Southern Local Board of Education moved forward with plans to establish and operate a gas- and oil-oriented community school by approving a preliminary agreement with Jefferson County Educational Service Center (ESC) .
Policy Matters Ohio, Hagan take aim at GOP severance tax bill. Youngstown Vindicator. Policy Matters Ohio released an analysis of a Republican-backed severance-tax bill, criticizing it for imposing too-low rates on oil and natural gas extracted from horizontal wells and for directing revenues toward tax breaks.
Pipe mill considers $81.5M expansion. Warren Tribune Chronicle. Youngstown City Council today will consider passage of an enterprise zone agreement that could lead to an $81.5 million expansion to Youngstown's growing pipe mill industry.
Village of Caldwell asked to participate in oil and gas curriculum via OSU extension grant. The Daily and Jeffersonian. Mike Lloyd, OSU Extension Educator for Community Development in Noble County, invited Caldwell council members to participate in a state project about the impact of oil and gas development in the village.
Rising ozone levels point to tangled web of Texas permitting. E&E News (sub. req’d). The South Texas Energy and Economic Roundtable, a trade group, said other oil and gas companies are also taking voluntary steps to reduce air pollution. "Safety is top priority on our sites and in the communities where we work and live," Omar Garcia, the group's CEO, said in an emailed statement.
Texas Comptroller: HF-Like "Game-Changer" Could Avert Looming Water Crisis. Dallas Observer. "In many ways, the outlook concerning fresh water could mirror what has happend [sic] for oil, another finite resource," the report says. "Oil markets have been upended in the last few years by vast new supplies brought to market by the application of new technologies…It's possible -- though not certain -- that similar game-changers will effect the outlook for water." NOTE: Fort Worth Star-Telegram also reports.
Southcross Energy says it’s considering Eagle Ford expansion. San Antonio Business Journal. Natural gas processor Southcross Energy Partners says its growing volumes in the Eagle Ford Shale have it eyeing expansion opportunities.
Crosstex Energy, Devon Energy to be known as EnLink Midstream. Dallas Morning News. Three months after Crosstex Energy announced it had cut a deal with Devon Energy to form a new oil and gas pipeline company, they finally settled on a name. The new company, to be based in Dallas, will be called EnLink Midstream.
Baker Hughes’ well count drops. Houston Business Journal. The number of inland oil wells in the United States dropped in the fourth quarter, even though the Eagle Ford Shale added wells, according to oilfield services firm Baker Hughes Inc.
Meet Alaska Part II
THIS MORNING IN WASHINGTON: You Read It Here First!
U.S. Sen. Lisa Murkowski (NGP Photo) today sent a letter to President Obama urging him to lift the prohibition on exporting crude oil produced in the United States. Doing so, Murkowski wrote, will allow American producers to access global markets, which will boost production, protect jobs, and increase our energy security.
Murkowski called on President Obama to take a leadership role on lifting the export ban and offered her support in Congress.
“Your leadership will be critical to our success in this endeavor,” Murkowski wrote to the president. “In particular, I would draw your attention to the status of our nation’s hydrocarbon trade. While exports of our natural gas and petroleum products have grown, our work is far from finished, and our policies are, in some cases, far from adequate.
“Despite the obvious geopolitical, economic, and environmental benefits of building out our nation’s liquefaction capacity as soon as possible, the Department of Energy continues to slow-walk its approval of export licenses to our allies. The Keystone XL pipeline, which the State Department estimated would support over 42,000 jobs, remains unapproved even after years of delay. I once again urge you to take immediate action on these infrastructure projects, which you have generally promised to champion,” Murkowski continued.
The administration retains the authority to lift the ban on its own. The U.S. Commerce Department can authorize a swap if domestic crude cannot be marketed in the United States. The president can also issue a national interest determination.
“Lifting the prohibition on crude oil exports also presents us with a rare opportunity to work together in a bipartisan fashion to address this situation before it becomes a problem,” Murkowski wrote. “Together, we can send a strong signal to the world that the United States is ready to lead on energy, the environment, and trade. Lifting the ban will help create jobs, boost the economy, and keep our production at record levels.”
The full text of Murkowski’s letter to the president is available on the Senate Energy and Natural Resources Committee website. Murkowski sent similar letters to the State, Energy, and Commerce departments, and to the Federal Energy Regulatory Commission, which can be found in the documents section under letters.
Murkowski, the energy panel’s top Republican, released a white paper on energy exports last week. The paper, A Signal to the World: Renovating the Architecture of U.S. Energy Exports, is available on the committee’s website, as is supporting analysis by the nonpartisan Congressional Research Service.
See our 1-7-14 Story (You read it here first!)
Yesterday we pretty much focused on various aspects of Governor Sean Parnell’s (NGP Photo) announcement at Friday’s Meet Alaska conference, that all major gas pipeline/LNG project parties had reached, “alignment”.
Today, we recognize the people represented at the Alaska Support Industry Alliance’s annual “Meet Alaska” event -- and what they said -- for the benefit of our thousands of Asian, Canadian and US readers who were not present.
ConocoPhillips' Exploration & Production Executive Vice President based much of his presentation on Alaska's competitive positioning in the world oil and gas market.
Matt Fox (NGP Photo) told the audience that his company -- the largest oil & gas exploration company in the world -- would be spending most of its available capital on development and on major projects. (See Fox's slide presentation here.)
While noting his company's interest and investment in the Eagle Ford, Bakken, Permian Basin and other prospective oil & gas areas of the world, Fox also reminded the audience that, "International LNG is a global commodity as well as oil."
He said that the shale phenomenon has provided the United States with a hundred years of supply on a very flat supply curve, "...stabilizing the price range for a long time to come."
While Russian and North Sea gas supply sets prices in Europe, a recent $16 Mcf price in Japan -- still exacerbated by the nuclear accident -- provides Alaska with a window of opportunity.
However, he said, "we have to make sure that we have confidence in Alaska's fiscal regime."
"Competition is incredible," he said, adding that Alaska's recent enactment of production tax reform (SB 21) was already stimulating more investment in the state.
"You have to go back quite a ways to find where we spent more money on Alaska North Slope (ANS) than now, following passage of SB 21."
* * *
The Alliance also represents Alaskan mining support industries and National Mining Association president Hal Quinn (NGP Photo) addressed the state's competitive challenges.
Quinn emphasized the importance of allowing oil, gas and mining industries to be free to export and engage in the world market, noting that coal not only provides the U.S. with 40% of its electrical supply but coal supplies 40% of world electric supplies as well".
Maintaining a vibrant world market that supplies reliable energy is critical, he said, noting that India's labor force alone is projected to grow at a rate of 1 million/month.
Minerals provide 15% of America's Gross Domestic Product he said. (We further observe that reasonably priced energy supplies are the foundation upon which other mineral exploration and development and manufacture is based. -dh)
After Quinn criticized the EPA for exercising federal overreaching authority that could stop a lawful mining project before it has filed for a permit (See our earlier commentary), he also cautioned the audience about unjustified delays in the federal permitting process. "No one should ever confuse the rigor of the permitting process with its length," he said. (See Quinn's presentation here.)
ExxonMobil's Gina Dickerson (NGP Photo) provided an encouraging update of activities aimed at accessing the ANS gas and gas liquids potential at Point Thomson.
As project manager, Dickerson briefed the audience on the project's three wells (i.e. two for production and one for injection); the 17" pipeline to Badami facilities; the nearly $2 billion spent on the project to date, 70% of which has been spent in Alaska; a 48 mile winter ice road to the Endicott's accessible facilities, and the dramatic 2-year progress toward completing an airstrip and support facilities. (See Dickerson's presentation here.)
Today's Consumer Energy Alliance Clips:
90.5 WESA - NPR: Energy Alliance: Fracking Is Not a 'Four-Letter Word'. An energy supply and consumption watchdog group is taking its fight against a proposed moratorium on shale drilling in Pennsylvania to the lawmakers sponsoring the bill and to their constituents. The Consumer Energy Alliance sent a letter to State Sen. Jim Ferlo (D-Allegheny) asking him to pull the legislation from consideration. SB 1100 was introduced in September and was referred to the Senate Environmental Resources and Energy Committee where it has languished ever since. The bill calls for the state to stop issuing new drilling permits until a full assessment of the environmental, social and economic impacts of shale drilling can be completed.
Capital Soup: Consumer Energy Alliance-Florida Statement on Subcommittee Passage of Hydraulic Fracturing Legislation The Florida House of Representatives’ House Subcommittee on Natural Resources and Agriculture today passed House Bills 71 and 157, sensible hydraulic fracturing legislation sponsored by Rep. Ray Rodrigues (R – Lee County). Upon passage of the legislation, Consumer Energy Alliance (CEA) – Florida Executive Director Kevin Doyle issued the following statement: “Consumer Energy Alliance applauds both Representative Ray Rodrigues for sponsoring legislation that would lay the foundation for a transparent process for hydraulic fracturing in the State of Florida and the Florida House Subcommittee on Natural Resources and Agriculture for its passage today. As we continue to shift our energy reliance toward natural gas, Florida’s business community and consumers can be negatively impacted if we do not have the right policies in place to protect the benefits that our current energy situation is providing to our country.”
Consumer Energy Alliance’s The Energy Voice: Penn. State Senators asked to ‘Keep The Heat On This Winter’ It’s January. It’s Cold. No surprise there, but why in the middle of the harsh winter months are Pennsylvania State Senators working to advance legislation to put a moratorium on shale gas development in Pennsylvania? The bill is SB 1100 or the Statewide Natural Gas Drilling Moratorium Act. If made into law, Pennsylvania’s bustling shale gas economy would come to a halt. Who would be affected? In total 2.6 million people
TODAY, House Natural Resources Committee Chairman Doc Hastings (NGP Photo) delivered the following opening statement at today’s Full Committee oversight hearing on “Obama Administration’s War on Coal: The Recent Report by the Office of the Inspector General.”
“We’re here today to discuss the U.S. Department of the Interior Office of Inspector General’s new report on the Office of Surface Mining Reclamation and Enforcement’s (OSM) rewrite of the 2008 Stream Buffer Zone Rule.
By now, everyone on this Committee is very familiar with this rewrite, and it has been the subject of Committee oversight and investigation for well over two years. In short….The Administration has spent millions of dollars, in secret, working on a new regulation that will put thousands of Americans out of work and increase electricity costs. It’s one of the most covert, but destructive tactics in President Obama’s war on coal.
Fairbanks News Miner Op-Ed by Diane Blumer (NGP Photo).
The Parnell administration remains committed to growing opportunity for Alaskans. As we look ahead to 2014, our economists forecast Alaska adding 1,500 jobs — 2,400 new private sector jobs, diminished some by a decline of 900 government jobs.
Alaska added more than 1,500 jobs through the first half of 2013, and Alaska is one of a handful of states that has recovered all of the jobs lost during the recent recession. Alaska’s unemployment rate was below the national rate for 61 consecutive months as of November.
Calgary Herald. Canadian oil and gas producers were “overly optimistic” heading into 2013, failing to predict a slowdown in business activity over the last 12 months and the job losses that have occurred as a result.
Alaska US Senator Lisa Murkowski Releases Energy White Paper
Yesterday we briefed readers on a webcast speech Senator Lisa Murkowski (NGP Photo) would deliver today at 9 a.m. EST in Washington to a Brookings Institute audience. Brookings promoted the speech as a discussion of the, "future of U.S. energy trade and its implications on the domestic economy and national security."
Most of us west of the DC beltway had to get up early for the on-line presentation (i.e. 5 a.m. Alaska time) but it was worth it.
Senator Lisa Murkowski this morning released a white paper on U.S. energy export policy, A Signal to the World: Renovating the Architecture of U.S. Energy Exports.
The white paper is available here, as are studies from the Congressional Research Service on energy exports.
Video of the speech this morning at the Brookings Institution is scheduled to be uploaded here.
Here is our story on Murkowski's release last year of Energy 20/20: A Vision for American’s Energy Future.
Murkowski used the webcast speech to make public release of her new 20 page white paper, "A Signal to the World: Renovating the Architecture of U.S. Energy Exports." Her message centered around modernizing antiquated laws and regulations and removing an unnecessary crude oil export ban. She spoke in her capacity as ranking member of the Senate Energy and Natural Resources Committee.
Murkowski said the fact that the United States was producing more energy than ever before occurred in spite of the federal government's policies, not because of them.
Antiquated statutes, policies, and regulations, she pointed out, contributed to inefficient agency administration, lack of clarity for investors and concepts enacted decades ago when the nation's challenges and energy supply potential were different.
Murkowski noted two goals of her energy initiative: "The first" she said, "is to highlight facts. Consensus about the facts is the basis for productive dialog. My second goal is to help frame a conversation about the state of U.S. energy exports, the 'architecture of the energy trade.'”
She addressed a common theme that not exporting natural resources/energy would mean that more would be available for US consumers. Murkowski said that modernizing the "architecture of U.S. energy exports" will be a positive signal to investors and to other world markets, improve balance of payments, minimize permitting delays, create jobs and help resolve "mismatching" of supplies and refined products and keep energy more affordable for American consumers.
Her other view of improving supply and controlling prices: "...we should be opening up federal lands to energy production, not closing them off. I can think of a few places in Alaska that could be opened up immediately for new oil production, which would lower gasoline prices."
Brookings Institution Senior Fellow, Foreign Policy, Charles K. Ebinger (NGP Webcast Photo, Left), moderated the event. He said that Murkowski's was one of the most important speeches presented to his forum.
Managing Director William J. Antholis, (NGP Webcast Photo, Right) -- Senior Fellow for Governance Studies -- provided a long, flattering and detailed introduction for Murkowski.
Latest energy links from the Office of the Federal Coordinator, Alaska Gas Pipeline:
- Queensland LNG industry opposes calls for export limits
- Korea Gas sells off one-fifth of its U.S. LNG to Total
- Lithuania looks forward to LNG imports as alternative to Russian gas
- Contractor demands $1.6 billion in Panama Canal expansion overruns
- Panama Canal cost dispute could hurt U.S. LNG exports
- India prime minister calls on LNG buyers to band together on price
- Shell, El Paso plan more liquefaction capacity for Georgia terminal
- India wants in on LNG shipbuilding business, too
- Shell takes more time for Pennsylvania ethane cracker decision
- Home values up 26.7% in Kitimat, B.C.
- Northern terminus of Keystone pipeline ready for the boom
- Investigators search for cause of rail tanker car explosions
- U.S. DOT warns Bakken crude may be more susceptible to explosion
- U.S. ban on oil exports could be up for debate in 2014
- Lower-cost shale oil allows U.S. to boost exports of refined products
- Hawaii utility considers burning wood pellets to generate electricity
Keynote to Brookings Institution
January 7, 2014
Thank you for that kind introduction, William. I am pleased to see so many of you here and very grateful to the Brookings Institution for the opportunity to be here today.
(For Complete Speech, Click Below....)