You Read It Here First
Comment: While our loyal readers are suspect about Federal Comment Periods -- with good reason -- we cannot afford to let any record of comment be overbalanced with armies of environmental activists. NGP Readers Everywhere: Please Comment Before Today's Deadline On National Petroleum Reserve - Alaska Permit Application. Full background here.
Please pay special attention to this statement on the issue by U.S. Senator Lisa Murkowski (NGP Photo) as you're not likely to read about her concern in local or national newspapers today. In part, she said: "I am concerned about the critical project decisions that are being left for the record of decision, which could impact whether this project moves forward or not,” Murkowski said. “Federal leaseholders need to have a permitting process that is timely and predictable in order to invest the billions of dollars it takes to develop America’s energy resources.”
-dh (Reference: more on federal comment periods....)
Calgary Herald by Dan Healing. The long-term gain of increased pipeline capacity led to short-term financial pain as oilsands producer MEG Energy Corp. reported another quarter of record production on Wednesday.
Bill McCaffrey, president and chief executive, said on a conference call MEG took a $27-million cash flow hit in the three months ended Sept. 30 as it produced nearly 76,500 barrels per day but sold only 69,800 bpd.
Alaska Native News by Jason Mayrand. Community members around Alaska who are advocating for a pipeline that will deliver gas to Alaskans and address high in-state energy costs, are voicing disappointment in comments made by gubernatorial candidate Bill Walker (NGP Photo).
NGP Reader Comment Re: NPR-A Deadline
From Bob Hoffman.
Mr. Harry A. Baij
“BLM-Alaska manages 22.8 million acres of surface and subsurface estate in the National Petroleum Reserve-Alaska (NPR-A) on Alaska's North Slope. It is nearly the size of Indiana and is the largest single block of federally managed land in the United States.” Source: http://www.blm.gov/ak/st/en/prog/NPR-A.html
This permit is for 72.7 acres.
Resource development on the North Slope of Alaska has proven results to both a benefit to our country and to provide for the protection of the Arctic environment.
I support the applicants intended use and urge the Army Corp of engineers to approve the application.
Mr. Harry A. Baij
I am sending you this email as my official “comment” on the application to discharge gravel fill in wetlands from ConocoPhillips Alaska (CPAI) to support the development of the Greater Mooses Tooth Unit 1 (GMT1) drill site in the National Petroleum Reserve-Alaska (NPR-A).
As mentioned by the use of the acronym above – NPR-A – National Petroleum Reserve – Alaska, this area was set aside specifically for petroleum development. I find it interesting that many folks seem to prefer the acronym over the official title because the title sums it up so well. This is an area designated for petroleum development and as such I fully support the application and request the project be allowed to proceed post haste. Our state and our nation can very much benefit from greater energy independence through such projects as this. The political, economic, and security rewards far and away surpass the minor land impacts required for responsible resource development.
Reed Christensen (NGP Photo)
President, General Manager
10-28-14 What Do Dandelions and Energy Have In Common? - National Petroleum Reserve Comment Due Tommorrow!
NGP Readers Everywhere: Please Comment Before Thursday's Deadline On National Petroleum Reserve - Alaska Permit Application.
Today, at great cost to state and local governments, bureaucrats gather in Anchorage to 'discuss' how to deal with invasive species. Meanwhile, government managers coddle and cultivate the biggest invasive weed, the ubiquitous dandelion, which grows and multiplies under their noses, infesting northern forests and city landscapes alike. We observe -- and have given ample proof here -- that national energy policies, in the hands of bureaucracies, are similarly managed. -dh
Your author once chaired a pipeline portion of the Inuvik Oil and Gas Conference. We reported a week ago (i.e. You read it here first) that the conference would be postponed from this coming summer to 2016.
Today, the CBC provides more background, here.
Ribbon cutting for new Alaska Geologic Materials Center Tomorrow, Oct. 29
Power Grab: Dems Want Regulation Of Internet Speech
Not content with the total bias and domination of the news networks, CNN, and the nation's leading newspapers, the Democrats on the Federal Elections Commission (FEC) have moved to assert federal control over Internet political speech. Claiming the authority to regulate political postings and blogs as independent campaign expenditures, they want to apply federal campaign finance laws to online voices. More here....
Alaska Department of Natural Resources (DNR) Spokeswoman Elizabeth Bluemink alerts our readers to the ribbon-cutting and open house for the new Geologic Materials Center (GMC) at 11 a.m. on Wednesday, Oct. 29. The center is located at 3651 Penland Parkway in Anchorage.
The GMC houses the State of Alaska’s collection of geological materials, which are cataloged, preserved and available for use by the public, industry, researchers and educators. The open house on Wednesday will include a tour of the new center.
“The new Geologic Materials Center is an outstanding example of the State saving money and improving its services to the public by undertaking a public-private building purchase agreement. We significantly reduced the cost and duration of this project and will deliver an enhanced facility that provides excellent access to our state’s geologic information,” said Department of Administration Commissioner Curtis Thayer.
New construction was sought to replace the aging GMC located in Eagle River, which had grown out of its available space and was in poor condition. The original building project concept was estimated to cost roughly $45 million and take eight to nine years to complete.
By purchasing the former Sam’s Club building in East Anchorage for $16.1 million and investing in renovations instead of new construction, the State spent closer to $24.5 million and is enabling the staff and the public to use the new GMC in under two years. The State also benefited from Walmart’s generous contribution of $2.5 million to support enhanced educational opportunities, including viewing rooms and space for classroom instruction. In addition, the building occupied by the GMC will house the State Pipeline Coordinator’s Office, currently located on 4th Avenue in downtown Anchorage, resulting in additional cost saving for the state.
“With the new GMC, Alaska now has a state-of-the-art facility to house our geologic materials for the maximum benefit of the public, industry and our educational system,” DNR Commissioner Joe Balash said.
“Maintaining and protecting this collection will result in tremendous benefits to future generations of Alaskans, supporting both an educated workforce and new resource discoveries,” Balash said.
Among the geologic materials that will be housed in the 100,000 square-foot, heated building are thin sections, core and cuttings representing over 13 million feet of oil and gas drilling, 300,000 feet of core drilling from mineral projects, 115,000 surface rock samples, and 96,000 pulps.
The new GMC has significantly expanded and improved core viewing facilities, including large private viewing rooms, conference rooms, new microscopes, new sampling equipment and wireless internet access. 2-D and 3-D seismic data will also be available from the new facility as they are made available.
Relocation of the geologic collection will begin following the ribbon-cutting ceremony, with the new facility fully functional and open for business by next spring.
Murkowski: Global Oil Outages Can Provide “Strategic Warning” of Threats to Stability
Top Energy Committee Republican Warns of Petroleum Production Losses in Libya, Yemen, and Elsewhere
U.S. Sen. Lisa Murkowski (NGP Photo), today released a report surveying petroleum production outages around the world, data which could be used to provide strategic warning of threats to international security.
“Losses in oil production often reflect instability,” Murkowski said. “Energy reporting clearly pointed to Iraq’s deteriorating security years before the current collapse and provides us strategic warning of violence in other countries and regions.”
Russia To Invest In Alaska: Not Likely (Read Below).
ADN, Atle Staalesen, Barents Observer: ... Rosneft has asked the Russian government for renegotiated terms in all its offshore oil licenses. Russian Minister of Natural Resources Sergey Donskoy confirms that the oil giant has requested new terms in a total of 60 licenses....
ADN by Pat Forgey. Russia's Rosneft oil company, facing U.S. sanctions following Russia's seizure of part of neighboring Ukraine, won't be buying part of the huge Point Thomson natural gas field on Alaska's North Slope, Exxon Mobil said Wednesday.
Rosneft, one of the world's top oil producers along with Exxon, received the option last year as part of an agreement the two companies signed to expand their strategic cooperation in the Arctic.
But now, Exxon says Rosneft won't be part of the development of Point Thomson.
"Rosneft had evaluated the opportunity, and elected not to participate," said Kimberly Jordan, an Exxon spokeswoman for the company segment that includes Point Thomson and other Alaska operations.
The report, entitled Oil Production Outages & Strategic Warning, is available here. Highlights include:
· Recent violence in Yemen, Libya, and South Sudan has caused sustained losses in oil production;
· Petroleum outages clearly illustrate the effectof sanctions against Syria and Iran;
· Iraq saw significant and rapid increases in petroleum outages concurrent with the rise of ISIS; and
· Colombia and Nigeria have also seen oil production losses as a result of pipeline sabotage.
The report concludes:
“Sustained levels of such outages in other countries may constitute a degree of strategic warning to policymakers that attention is required, and ultimately are a reminder that record-breaking increases in North American oil production can enhance national security and stabilize global markets.”
Earlier this fall, Sen. Murkowski released staff reports that called attention to the deteriorating security situation in Iraq, as documented by public energy-related reporting, and that analyze ISIS black market oil sales and the possibility of Coalition strikes against ISIS oil.
Our Comment: We are grateful to Chester Carlson of the U.S. Senate Energy and Natural Resources Committee for circulating the timely information above. It could be valuable to American and Canadian oil producing state/provincial fiscal planning efforts.
The study could be useful to those concerned with the national economies and national defense and, of course, to energy regulators, marketers, producers, contractors, consumers and investors.
However, the study generally deals with history -- from whence comes data. While history is interesting it cannot enable one to predict future events with precision, since new developments are constantly affecting and changing assumptions and what would otherwise have been future outcomes.
Our dear professor, Peter Drucker, always reminded us that trying to predict the future is foolish; that, the purpose of strategy is to take the 'right risks', not to eliminate risk.
Certainly, this EIA supported study might assist decision makers in identifying the 'right risks' but only in the degree to which the historical data remains relevant. For example, "...petroleum production outages," could be offset to greater or smaller degrees, either by economic malaise and demand decline or by new discoveries and technologies or a combination of factors.
We believe that Senator Murkowski made appropriate use of conditional statements (i.e. "...can provide strategic...; and, “Losses in oil production often reflect instability....”) and that the study could provide planners with a useful perspective. -dh
TransCanada Flaring Gas Today
CBC. TransGas, the pipeline subsidiary of SaskEnergy, is doing a controlled flare of natural gas at its Regina storage cavern southwest of the city this morning. The flare is set to start at 8:30 a.m. CST.
It will last for about three hours.
The location is roughly 1.6 kilometres west and 1.6 kilometres south of the Lewvan overpass, in Regina's southwest corner.
"Flaring is necessary to help TransGas perform operational upgrades to the pipeline system," the company said in a statement.
|News Alert In Canada|
Premiers united over 'extraordinary' Energy East pipeline project | video. Calgary Herald
Alberta Premier Jim Prentice and New Brunswick Premier Brian Gallant sat down to talk business about the proposed Energy East Pipeline project on ...
The College of Engineering, Architecture and Technology at Oklahoma State University inducted five industry leaders into its Hall of Fame last Saturday including 1986 Chemical Engineering graduate, Janet Weiss (NGP Photo) now President of BP Alaska.
CEA POLL SHOWS MAJORITY SUPPORT IN KEY STATES FOR OFFSHORE DRILLING:
Consumer Energy Alliance voter polls conducted in three states with pivotal U.S. Senate races finds strong support for allowing oil and natural gas drilling in U.S. waters inside the Arctic Circle. The poll finds Alaska, Georgia and Louisiana each have close races for U.S. Senate that will indicate the direction of federal policy towards offshore energy. More....
* * *
Also...see our recent commentary on the effect of the Senate races on Alaska energy policy. -dh
How Government Deals With One Invasive Species, The Dandelion
(Point of personal privilege)
This is, admittedly, a pet peeve. The only way I could relate the dandelion invasion to our study of energy, is to make a point that bureaucracies will never be as efficient with public dollars as citizens are with family dollars.
As a homeowner, I go out and dig up every new dandelion. My wife plants a wonderful array of floribunda alaskana every spring. Church volunteers cull dandelions and cultivate daisies.
But government cultivates dandelions and kills desirable species while simultaneously holding 'Invasive Species Workshops'.
This morning I provided a comment to Alaska Business Monthly regarding an upcoming 'Invasive Species Workshop' listed on its Industry News page. I don't know if the organizers will make a dent in the invasion of unwanted species next year. They do justify spending public money on workshops and publications and 'public outreach' -- which incrementally increases the demand for higher taxes. So, hopefully, the effort will produce cost-effective results.
Meanwhile, with a little common sense, at no additional cost and without workshops government planners could significantly slow the spread of one invasive species, the dandelion.
In our primary area of interest and expertise, energy, one notes that with North Dakota oil and gas production being on mostly private property, it flourishes (Also note Texas, Pennsylvania, Ohio, etc.). But in federal areas, bureaucracies stop production before it begins while cultivating their own, invasive bureaucratic growth. For example, observe the gold plated offices, in Anchorage, inhabited by Department of Interior agencies along with their hundreds of employees, including huge public relations staffs. And, what is their demonstrated, primary role: stopping human activity in a state whose Constitution requires development of natural resources.
The invasive dandelions of government are protected while entrepreneurial daisies and poppies are cut down and eventually culled out of existence.
To continue this little allegory, below we reprint for your information and, perhaps, entertainment, "A Dandelion Story", slightly modified for our readers.
P.S. If Invasive Species Workshop participants do make a dent this coming year in stopping or slowing the growth of invasive species -- particularly the dandelion invasion -- we will look forward to receiving information from them and including it in our searchable archives. We know these public employees are well intended and we look forward to hearing about their results.
Commentary for readers: Alaska Business Monthly (as modified)
A government-sponsored "Invasive Species Workshop" will occur October 28-30 in Anchorage (www.alaskainvasives.org).
Government agencies have generally ignored the invasive species 'elephant in the room', the ubiquitous dandelion.
From public rights of way, dandelion seeds attack neighborhood lawns and establish beach heads throughout our wilderness.
We plant daisies and poppies in the rights of way to meet beautification / landscaping / environmental standards for federal dollars. But the folks who make the plans don't maintain the projects.
Then, dandelions invade. The dandelions are first to pop up in May and early June. Smart maintenance managers could mow then, before yellow dandelion flowers go to seed and before delicate poppy and daisy heads pop up.
But no. Maintenance managers allow the dandelions to flower then go to seed, just as the wonderful poppies and daisies are coming up in mid to late June. The street/highway maintenance managers then send out the lawn mowers to cut down the dandelions just as they are going to seed, spreading the invasive seed, while simultaneously cutting off the heads of daisies and poppies before they can develop seeds.
Most summers there is a bumper crop of dandelions in August. Simultaneously, a few remaining daisies and poppies try again to propagate--just in time for the 2nd mowing.
At the forest edge of East Northern Lights Blvd. in Anchorage, where mowing does not occur, the daisies flourish and dandelions are sparse.
Where the miscoordinated mowing occurs, the expensively planted daisies and poppies die off for lack of progeny while the invasive dandelions multiply with help from street/highway maintenance managers.
Other government agencies also cultivate the invasive species in this way. The Anchorage School District, with its own thoughtless mowing practices, is a major cultivator of invasive dandelions whose seeds invade nearby neighborhoods throughout the city.
It seems that an "Invasive Species Workshop" goal should be to "pick the low-hanging invasive fruit". By simply changing the mowing schedules, maintenance managers could cheaply and efficiently accomplish two goals:
1. They could restrain the propagation of the most invasive of plant species, while
2. simultaneously protecting taxpayer landscape investments intended to beautify public rights of way and other government properties.
(STILLWATER, Okla., October 13, 2014) – The College of Engineering, Architecture and Technology at Oklahoma State University inducted five industry leaders into its Hall of Fame on Saturday, Oct. 11. More than 250 people were present at the ConocoPhillips Alumni Center to recognize the achievements of those extraordinary individuals.
Hall of Fame inductees included Debbie Adams (’83 Chemical Engineering), Harold Courson (‘52-‘55 Engineering), Jeff Hume (‘75 Petroleum Engineering Technology), David Timberlake (‘65 Architectural Engineering) and Janet Weiss (‘86 Chemical Engineering).
These distinguished professionals were honored by OSU for their exceptional leadership and contributions to advancing the fields of engineering, architecture and technology.
Debbie Adams currently serves as the Senior Vice President of Phillips 66 based in Houston, Texas. After graduating from OSU with her chemical engineering degree in 1983, she began her career in oil and gas as a process engineer with Conoco. She worked in several capacities for the company, including roles that took her to Sweden and England after the 2002 merger that created ConocoPhillips. During the most recent transition that resulted in the formation of Phillips 66, Adams was named the President of Transportation and promoted to Senior Vice President. She currently serves on the Board of Trustees and Board of Governors for the OSU Foundation.
Harold Courson attended the engineering program at Oklahoma A&M from 1952-1955 before leaving to pursue the oil and gas drilling business. He purchased speculative gas leases in the Texas panhandle and founded Courson Oil and Gas in 1960. His company drilled two of the first horizontal wells in the early 1970s, one of which is still producing today. He has served three terms as Mayor of Perryton, Texas, and is currently the Chairman for Courson Oil and Gas, Inc. and Natural Gas Anadarko Company. Courson was one of 100 recognized as a History Maker of the High Plains by the Amarillo Globe-News.
Jeff Hume is a 1975 Petroleum Engineering Technology graduate who began his career prior to his time at OSU. Immediately following high school, Hume worked as a roustabout in the oil fields outside Enid. He soon realized his passion for the industry and came to Stillwater to obtain his degree. Since that time, he has been a leader for Continental Resources, Inc. for more than 30 years. Hume is a registered professional engineer and member of the Society of Petroleum Engineers. He is currently the Vice Chairman of Strategic Growth Initiatives for Continental Resources, Inc.
A 1965 Architectural Engineering graduate, David Timberlake received his degree and joined the Army Corps of Engineers before transitioning to the private sector. In Washington D.C., he worked in structural engineering and construction inspection for government buildings. There he met an influential colleague who led him on the path to founding his own company — Timberlake Construction. The company has built structures in 48 of the 50 states and its founder currently serves as Chairman and CEO.
Janet Weiss brought her love for math and science, especially chemistry, to OSU when she enrolled in the Chemical Engineering program. Her father, Dr. Franklin Leach, was a professor of biochemistry at OSU, so Janet grew up gaining a love for learning from her father and the university. She graduated in 1986 and began her career at ARCO, where she moved through the ranks. For the past 14 years, Weiss has worked for BP, and she has been a leader in the oil and gas industry. She currently serves as President of BP Alaska and is a published author on the Kuparuk River Field. Weiss is an active member of the Alaska Oil and Gas Association Board, University of Alaska Fairbanks Advisory Board and the Anchorage United Way Board.
Following Saturday’s ceremony, the College of Engineering, Architecture and Technology has recognized 101 Hall of Fame inductees.
For more information on the College of Engineering, Architecture and Technology at OSU, visitwww.ceat.okstate.edu
Senate Energy and Natural Resources Committee Communications Director, Robert Dillon (NGP Photo), wrote us this morning, "The New York Times recently ran an article with a headline pronouncing the “end” of Alaska’s energy boom. The reporter focused on how economic anxiety is affecting the state’s Senate election, but in doing so, missed a critical point about Alaska’s “dwindling” production: the main reason it continues to fall is because the federal government refuses to allow access to the vast resources on federally controlled lands." Here is the NYT article, by Kirk Johnson. Below is Dillon's full response which we recommend to all of our readers. -dh
Response To NYT Alaska Energy Article
Today's Other Energy Links:
CBC. A meeting report between Prime Minister Stephen Harper and new Alberta Premier Jim Prentice, "...Prentice campaigned on that experience and has highlighted the importance of market access for Alberta oil during his time as premier so far."
World Energy News. Russia's state-controlled gas company Gazprom may drop its Vladivostok LNG project in Russia's Far East in favour of pipeline gas supplies to China, the firm's Chief Executive Alexei Miller told reporters ... (today).
Fairbanks News Miner Op-Ed by Bruce Campbell. ...no one has done more to impede and slow the development of Alaska’s natural gas than (Bill) Walker. If this is his idea of “support,” voters need to be wary of his claims to “support” any issue....
Huffington Post. Outside super PACs have played a major role supporting Sen. Mark Begich (D) as he faces a tough re-election race against former Alaska Natural Resources commissioner Dan Sullivan (R). (We recently analyzed the effect of this race on energy policy. -dh)
We certainly accept the premise of the New York Times article. Falling production is provoking economic anxiety, bordering on an economic crisis, in Alaska. Yet, it is also completely unnecessary, because there’s plenty of oil in Alaska. In its Annual Energy Outlook for 2014, the Energy Information Administration estimates that Alaska – alone – has 38 billion barrels of technically recoverable oil. Some of that oil is located on state lands, in the form of reserves at existing fields. But the lion’s share is in the Outer Continental Shelf (23 billion barrels), the non-wilderness portion of the Arctic Coastal Plain (over 10 billion barrels), and the National Petroleum Reserve-Alaska (roughly 1 billion barrels).
It’s also important to keep in mind that whenever Alaskans are actually allowed to look for oil, we tend to find more than expected. So in a massive state with huge swaths of land that remain unexplored, 38 billion barrels could ultimately prove to be an underestimate. Certainly, that was the case with Prudhoe Bay, which is now at 17 billion barrels produced and counting.
For today’s purposes, though, we’ll stick with EIA’s number: 38 billion barrels of oil. How much is that, exactly? Well, if produced at a rate of 1 million barrels per day, Alaska’s oil would last for 38,000 days – or about 104 years. If production is allowed to reach even higher rates, Alaska could have enough resource in the ground to replace nearly 30 years of oil imports from OPEC or more than 50 years of oil imports from the Persian Gulf.
The problem is that the federal government, which controls more than 60 percent of the land in Alaska, has repeatedly blocked efforts to develop our resources. Despite President Obama’s willingness to take credit for rising production on state and private lands in the Lower 48, his real record is best revealed in places like Alaska. He and his administration have repeatedly denied access to promising lands; blocked or delayed the approval of roads and bridges needed so that production can begin; and issued regulations that fail to hold up in court.
It’s usually more instructive to judge someone by their actions rather than their words, and the Obama administration is no different. The administration has now locked up half – more than 11 million acres – of the NPR-A, an area explicitly reserved for energy production. The administration is “revising” the management plan for the Arctic coastal plain; most interpret that as a plan to lock the area up as wilderness after the election, even though Congress has repeatedly rejected bills seeking the same. The administration is also rewriting its rules for offshore exploration in Alaska and subsequently delaying efforts to return to an area that was safely explored and successfully drilled more than 20 years ago.
President Obama is not pursuing an “all of the above” strategy in Alaska. Instead, his administration’s restrictions are now inducing levels of economic anxiety in local residents that the New York Times has deemed worthy of the national spotlight. We appreciate the coverage, but what we’d really like is a president and a Senate that will work with us to solve the problem – by producing more of Alaska’s energy.