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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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You Read It Here First

5-22-15 EPA Broke The Law When It Preemptively Attacked the Pebble Project.

22 May 2015 6:31am

Many friends of
"Alaska's Diplomat", Chuck Becker, have commented on the important life he led, including his energy industry understanding.  (Note: we will remove or edit any comments at the request of commenters.  -dh)


Canada's Fraser Institute analyzes how US loss of freedom affects economic recovery...and wonders how Alberta's new government will affect energy industry vitality.


 EPA's Pebble Blame Game

Wall Street Journal
(Write "Pebble" and/or "Federal Overreach" and/or "Rule of Law" in our NGP Google search engine, upper right.  You will find our many references, like this one, to the Pebble project.  We are grateful to the Wall Street Journal and Ms. Strassel for these excerpts and for airing this matter so well in today's issue.  We also appreciate alert readers like Dan Kish in Washington D.C. for alerting us first thing.  -dh)

By 

KIMBERLEY A. STRASSEL

May 21, 2015 7:24 p.m. ET

Government agencies have a certain descending order of excuses....  (Subscribe and read full WSJ article here.)

The EPA has a problem: its pre-emptive veto of the Pebble Mine, a proposed project in southwest Alaska. The law says that Pebble gets to apply for permits, and the Army Corps of Engineers gets to give thumbs up or down. The EPA, a law unto itself, instead last year blocked the proposal before applications were even filed. The agency claims .... (More....)

This column reported a week ago on EPA documents that tell a very different story. They reveal the existence of an internal EPA “options paper” that make clear the agency opposed the mine on ideological grounds and had already decided to veto it in the spring of 2010—well before it did any “science.” Emails showed an EPA biologist, Phil North..., (More....)

None of this looks good, and in a nearby letter EPA Region 10 Administrator Dennis McLerran is already bringing up semantics. According to the EPA—and other environmental groups now picking up the same line—the agency didn’t “veto” the project, but ....

In a conversation with me last week, Mr. McLerran also turned to the “underlings did it” excuse. Asked about the options paper ....  It is a preliminary document, done by lower level staff.”

On June 7, 2010, Michael Szerlog, manager in the EPA region’s aquatics resources unit.... The message mentions Mr. McLerran....  (More....)

On June 15Kendra Tyler, special assistant in Mr. McLerran’s office, wrote to EPA staff: “I know that Dennis would like a briefing on the options paper soon . . .” On June 30, Mr. North emailed colleagues to explain that: “The only time the RA [Regional Administrator] is available to discuss the options paper before he visits Bristol Bay is Thursday . . . ” Later that day, Matthew Magorrian, also in the regional office, told a big group of EPA employees that “DM already has draft of options paper.”

...the list of EPA employees who make up the core group discussing the options paper are not a bunch of low-level chemists and permit writers. ...Mike Bussell, then the director of the EPA’s Office of Water and Watersheds in Seattle; David Allnutt, then acting regional counsel; Linda Anderson-Carnahan, then acting associate director of environmental cleanup; Tami Fordham, then policy adviser. Mr. McLerran says no “key decision makers” saw the options paper. ... (More....)

Several of those included in these email chains would go on to take active roles in performing the EPA’s “watershed assessment” of the mine project. Ms. Fordham is listed as a contributor, as is an EPA officer named Richard Parkin. ... Mr. McLerran says “key decision makers” decided to perform three years of “science” on Pebble. But it turns out those doing the science were those who had already decided to block the mine.

The EPA offered this statement on Thursday: “It is a normal part of EPA’s deliberative decision making....” (More....)

The EPA is worried because it is getting blowback that goes beyond public disapproval of its abuse of power. In November a court ordered ....  The agency is right to be worried; its Pebble veto is a scandal.  (More....)


Fraser Institute lends understanding to Canadian and US economies and energy industries.  Here are recent reports:

 


Here is how we memorialized the passing yesterday morning of our great friend, Chuck Becker.  Because of his work ethic, kindness, patience, diligence and patriotic labor in support of Alaska and the nation, we discovered the breadth and depth of the public comments made on various web pages.  We are delighted to assemble these for the convenience of friends and family so that they might live on in our Northern Gas Pipeline archives:

Categories:

5-14-15 UN Climate Chief Against Oil, Against Capitalism

13 May 2015 11:22am

"Useful Idiots"


Published this morning: our MASTER RESOURCE Op-ed: "Seattle Hearing on Shell's Arctic Rig Docking: A Clash of Visions"


UN Climate Change Chief, Christiana Figueres: Against Capitalism and Against Shell's Arctic Exploration 


See earlier reports this week on Seattle's port hearing regarding the Staging of Shell's summer exploration in the Arctic

Investors Business Daily.  At a news conference last week in Brussels, Christiana Figueres, executive secretary of U.N.'s Framework Convention on Climate Change, admitted that the goal of environmental activists is not to save the world from ecological calamity but to destroy capitalism.

"This is the first time in the history of mankind that we are setting ourselves the task of intentionally, within a defined period of time, to change the economic development model that has been reigning for at least 150 years, since the Industrial Revolution," she said.  

Politico.  United Nations climate change chief Christiana Figueres on Wednesday questioned the wisdom of Shell's quest to drill in the Arctic.  "There is an increasing amount of analysis that points to the fact that we will have to keep the great majority of fossil fuel reserves underground (Note: one of the talking points in several enviro presentations in Seattle on Tuesday.  -dh), and there’s increasing amount of analysis that points to the increased danger ... of high-cost carbon investments," Figueres, the executive secretary of the UN Framework Convention on Climate Change, told reporters.  

  

 

 


 

"Useful Idiots"

by

Dave Harbour

Today we fearlessly define the role and character of 'useful idiots', expose their masters and shatter the innocence of those who continually ask, "why would they do that?" 

As in the case of the Seattle hearing earlier this week, we often see the liberal element of our society acting in character: loud, defiant, rude, intolerant, highly emotional and quick to cite assumptions without much factual basis.  

Above, we quoted Christiana Figueres, executive secretary of U.N.'s Framework Convention on Climate Change in connection with the Seattle hearing.  She commented on Shell's exploration plan and her talking points mirrored those heard in the hearing

She confirmed that the goal of environmental activists is not to save the world from ecological calamity but to destroy capitalism.

More on Figueres here.

They will often demonize their prey and take illegal shortcuts as they pursue their ends via any means.

Who are the world's current army of useful idiots?

  • These are the fresh faced, idealistic Australian "volunteers" who trespass on legal, oceangoing vessels to protest their oil exploration missions.
  • These are the selfish who would print money to overspend now for their own comfort at the expense of their children who will pay the bill one unjust way or another.
  • These are forest activists whose handiwork produces forest fires by politically fighting sustained yield forestry and who injure the loggers by 'spiking' trees.  
  • These are city park "occupiers"  advocating anarchy while looting nearby stores and leaving piles of human waste and trash for honest citizens to clean up later.  
  • These are avowed socialists, advocating dictatorship and economic slavery by taxing a business to transfer wealth to, "green industry", true believers.  
  • These are politicians who have developed wealth transfer into a lucrative profession.
  • These are litigants who would introduce a cake maker or photographer to bankruptcy or jail for politely declining to support a wedding ceremony.  
  • These are atheists, secularists and alternative religious fanatics who would erase the Christian heritage of America by forcing removal of all reference to Christ from public dialog and public places.
  • These are global warming (a.k.a. "climate change") devotees who use devious techniques with religious fervor as a means to achieving their end -- eliminating opposition.
  • These are those whose livelihood is based on creating racial or gender or religious or patriotic mistrust, bias and unrest where there was none.
  • These are politicians advocating a weaker military and a more robust welfare state.
  • These are school administrators who don't support teachers attempting to enforce order in a classroom and teachers who infuse their own liberal philosophies into lesson plans of every subject, from physics, to biology, English, history, economics and political science.
  • These agitators will oppose without meritorious argument the construction of major projects, such as the Keystone Pipeline.
  • These geniuses will burn to the ground the only pharmacy or convenience store in a ghetto to protest the lack of jobs in the ghetto.
  • These will picket or boycott a restaurant whose management proclaims devotion to Christian values.
  • These will picket and interrupt commerce and traffic in support of a government-ordered "Minimum Wage" as thousands of entry level, teen aged employees and senior citizens face layoffs, restaurant closings and non-human automation.
  • These will support amnesty for trespassing, criminal, disease carrying and otherwise illegal aliens whose own countries would incarcerate or execute Americans who attempted illegal entry...and whose immigration programs are only open to healthy investors, fixed income retirees or professionals with talents to offer.
  • These are those who are quick to criticize and demonize America's founding Christian principles while demeaning those who might in any way criticize an alien religion that is abhorrent to America's constitutional values and the intent of the country's founders.
  • These others would wrap their climate change/global warming vocations/avocations in a mantel of religious fervor, absent the omnipotent, omnipresent, omniscient Creator, of course.
  • These are the ones who would use, not their own, but taxpayer dollars to subsidize unqualified homebuyers or uneconomic green company supporters in return for political support.
  • These are that flank of the movement that would disarm America as the bureaucracy gains power.

Most of these seem highly dedicated to some cause.  

All are on a stage.   

Their acting performances are near flawless, because they are not merely actors on this stage of life and political action: they are true believers: housewives, students, professors, retirees, group activists, religious activists, political operatives.

And most align themselves with the Democrat Party in the United States or, more honestly, with "liberal" or "socialist" or "communist" parties in other countries.  (Some of us can remember having good friends and colleagues who labeled themselves, "conservative democrats".  Try to find one now who will not vote lockstep with the mainstream democrats on most issues.)

To those controling these intricate productions, to those who write the scripts, choreograph the action, design preprinted picket signs, create and coordinate talking points with the democrat/socialist/environmental networks and finance the productions -- to those who manipulate them -- the real life actors are very useful idiots.

Follow the money and power.  The result of all of the misguided, unAmerican actions above is to shift money and power -- and votes -- from producers in a free society to beneficiaries of a fascist bureaucracy.

Fate of the useful idiots may not be what they expected.

Tragedy might await useful idiots.  When the manipulators achieve power through the labor of the many constituent groups, their faithful environmental or social or political advocates will be expendable.  

This is because following the accumulation of complete power, the liberal idealists, the useful idiots, will have no option but to support and vote for the fascist manipulators.  Just ask liberal minorities how their brothers and sisters in Chinese or ISIS territory or Cuba are treated.  And how did they fare under Roman, Turkish, Nazi, Soviet, RussianPol Pot or Boko Haram rule?  

If useful idiots in America reflect on this history, they would join Christian prayer groups.  They would carry the American Flag in parades, promote the Constitution and eject leftist philosophies whose end can only be to enslave the idiots who enable it.

Which of the countries hyperlinked above would provide the security, safety, rule of law, freedom, true hope and opportunity enjoyed by our past generations?

But what about mainstream, traditional, conservative, patriotic America in a fascist environment?

Those opposed to the manipulation will have already been dealt with: forced into bankruptcy, intimidated, monitored, investigated, jailed, or otherwise neutralized.  It is now happening before our eyes.

The IRS abuses us, is not punished and its offenders given princely retirements and bonuses.  The VA abuses veterans, is not punished and its offenders given princely retirements and bonuses.  The Attorney General selectively enforces the law and encourages racial strife.  The White House co-habits with tax cheats and employed one as Treasury Secretary.  And, so much more....

I am often amazed when the federal government denies a permit, promulgates a terrible new regulation or vetoes a logical law that some of my friends still ask in wonderment: "Why would they do that?"

I always suggest that friends might find the answer by considering the manipulators of that result to be very smart, logical and serious.  One should then consider the movement of money and power in connection with that particular issue and suddenly the very clear but evil strategy is revealed.

Who are the manipulators of useful idiots?

What is that mysterious cabal of government, environmental and corporate manipulators?

The Manipulators:

Christine Figueres let the cat out of the bag.  

She is certainly one of the manipulators, using her "climate change" position of authority in the United Nations to disseminate global warming/climate change propaganda used by her faithful followers.  

And faithful her followers are, in spite of her organization's having used unprincipled tactics (i.e. 1, 2, ) to promote her ultimate goal of "destroying capitalism".

One guesses that the desirable end result of her work would be to put the UN firmly in charge of its various world units in a new world order -- though other world dictators might have a more selfish reason for bringing down the world's largest free economy.

In any case, we refrain from speculating further as to precise plans.

All we have to go on now is what we believe in a court of law to be a powerful case of circumstantial evidence, combined with the occasional admission such as that of Ms. Figueres, quoted above.

However, when we note the dozens of White House visits of some of the favored ones noted column right; when we note lack of prosecution of guilty allies; when we note the use of federal power to attack political opponents; and, when we see before our eyes the long tradition of due process fading into history: then, we know change is on the way.  No, change is here.

And we know for certain that such change does not bode well for freedom, constitutional principals, the rule of law, free enterprise, traditional values, our Christian culture, our history, our Founders' dreams, our childrens' hopes and opportunities, peace in the world, or security at home. 

What is the solution?

Already, we see change is inevitable.  The question is how extreme will it get.

When the majority of Americans vote for the sort of change described herein --and they have -- change has already occurred.

When great companies like Wal-Mart and General Electric have already laid tribute at the alter of various politically correct, carbon tax, climate change, socialist and/or environmentally extreme NGOs -- change has already occurred.

When the military's traditions have been emasculated, Bibles banned, Christianity abused, General and Flag officers replaced with agreeable operatives in uniform -- then we know change has already occurred.

When we see an Administration that backs down from a red line in Syria, how can we expect for it to support allies engaged in Asian island disputes with China; with mano a mano disputes between Russia and NATO allies; with the Iranian fleet testing our Yemen resolve; with Middle Eastern jihadists threatening our Israeli, Jordanian, Saudi and other allies; with jihadists establishing training camps throughout the United States; with Russians taking more and more command of Arctic resources and waterways?

What is the solution; what should we do?

Well, the thing the United States of America is not doing as a nation and the majority of its people are not doing as individuals, is kneeling before our Master and Creator, vowing allegiance, requesting forgiveness, giving thanks, asking for guidance and protection as his children.

The most important thing we could do are those things listed above.  Our Founders did and were led to miraculous victory--not unlike Joshua of old.

By taking the same approach, we expose ourselves and our Nation to a state of grace, to the unequaled power of our God.  We will be led to elect good people to public office and to find hope where now there is only the specter of disaster, destruction.  That is the solution.

We will keep faith with our Founders who, in turn, found God's guidance and protection real, everlasting and irreplaceable.  And they warned future generations that only by continued allegiance to the creator and the founding principles could we hope to see the nation survive future challenges.  That is what we should do.

Yes, this webpage is about energy.  But energy is a part of and will be controlled by the big, orchestrated changes now occurring.  Presently, those changes do not look well for a free and productive private sector.  And while we do not have ministerial training, we would be compelled by history and logic to this conclusion -- even were we not compelled by faith.

Unless we face the major issue -- reliance on Holy God -- no industry, no state, no employment, no nation, no family, no future is secure from the dedicated and evil networks organized against and poised to change our way of life.

In that somber change, sadly, we can believe -- unless we are willing to change ourselves.

Adieu.

 

Categories:

5-8-15 "Danger Stranger"

08 May 2015 12:51pm

Will the Seattle Port Authority’s Independence Survive Mayor Murray’s Political Influence?

By

Dave Harbour

On Tuesday and Wednesday we commented on an unbelievable act of the mayor of Seattle, Ed Murray, causing us to think, "Danger Stranger".  

In other news today:

  • WSJ: Could climate change politics strand energy reserves?  (Today's news points in that direction.  -dh)
  • Seattle Times Editorial: Murray insists that he’s a strong supporter of the port and maritime industry. But if the city’s move blocks Shell and scuttles the port’s lease with Shell’s partner Foss Maritime, it could permanently tarnish the reputation of Seattle’s struggling port and put the city’s future as a maritime hub in question.
  • The Stranger
  • First Nation rejects BC LNG project
  • Alberta Energy industry nervous about NDP election win

Seattle has long been critical of Alaska while not hesitating to reap her wealth.  

But we are shocked at this action, this "strange new danger" of a Mayor attempting to block interstate commerce for admitted, political reasons.  It resembles the President's rejection the the Keystone Pipeline for similar political reasons, though the project had State Department support.  

The mayor used a convoluted "climate change" rational to thwart a decision of Seattle's "independent" Port Authority to accommodate vessels bound for oil and gas exploration in the Alaskan Arctic.

While Shell and its contractors may well have a backup plan to use another port, many Alaskans consider it in their interest to challenge this decision for broader reasons. 

The respected Resource Development Council for Alaska has urged its members to provide input to Seattle Port Authority Commissioners and has noted that, “… it creates uncertainty and sends a signal to maritime companies that a lease with the Port may be targeted by special interests and local politicians in the eleventh hour, even as vessels are en route to the region.”  The Alaska State Chamber of Commerce and Alaska Support Industry Alliance  have also encouraged their members to communicate with Port Commissioners. 

See this excellent CNBC review and background piece by AP writer, Dan Joling.

The federal government sold oil and gas leases to Shell Oil and the project moves slowly forward only as regulators grant permits.  The application for permits and the granting or denial thereof is part of America's Constitutional system of due process.  Due Process is one of many Constitutional principles and legal protections which we sometimes think of as, "the rule of law". 

On a local level, Shell Oil's contractor contracted with the "independent" Port Authority for seaport services.  The actions of the mayor--in addition to confounding local due process and threatening the entire success of the Arctic exploration project--could have unanticipated effects on Seattle:

  • The Mayor's use of the permitting process to forward an admitted, political agenda could affect the credit rating of the Port of Seattle, which was created to be an "Independent Agency".  We believe the city’s credit rating could also be exposed, with local tax impact.
  • The Mayor's interference with the independent Port Authority's process could result in loss of the short summer exploration season in the Arctic; one can only imagine the hundreds of millions of dollars of loss the Mayor could be responsible for causing many entities in Seattle and beyond.
  • Politically motivated action by the mayor (i.e.  "To prevent the full force of climate change, it's time to turn the page on things like coal trains, oil trains and oil drilling rigs."), could impact the Port Authority's revenue by making the agreements it enters into with revenue paying customers of the seaport, the airport and other entities less reliable. 
  • Should the Mayor's position stand, potential investors might decide to invest in other jurisdictions.  Existing investors may decide to "get out of Seattle while the getting is good".  Rating agencies, we believe, will calculate this new era of risky, local government activism into their rating calculations.
  • Much of Alaska's tourism and commercial fishing activity is staged or supported from Seattle.  But Alaska public services from airports to seaports to health facilities to public transport and education are heavily subsidized by Alaska's 90% oil-funded budget.  Lacking the significant support of the oil industry, it is unlikely that tourism and commercial fishing entities would enjoy the same quality of shore-based support they now receive.
  • Alaska’s government and 49th State companies could consider the various Port of Seattle services too risky when large capital losses may occur as a result of changing political sentiments.  
  • Will a revenue change cause the Authority to ask for more taxes within its jurisdiction?  Could revenue bond coverage requirements be threatened, leading to technical if not actual defaults?  Does this sort of political interference by the City endanger the legal basis of the independent Port Authority and make it and the city subject to lawsuits from existing bondholders? (Note: Stock market analysts and rating agency specialists are always watching.  We believe it likely that City and Authority bond counsel may already be receiving queries from New York and San Francisco.)  

This week U.S. Senator Dan Sullivan questioned the Administration's usurpation of Congressional authority

Washington D.C.

The Trans-Alaska Pipeline System (TAPS) has served Alaska, the Pacific Northwest and the entire country well for nearly 4 decades. 

It is now 3/4 empty and in danger of shutting down during the next few years.   

TAPS can only continue if new, Alaska North Slope (ANS) oil sources are developed.  Ironically, rich new sources of billions of barrels of potential oil and gas reserves surround the 800 mile long TAPS’ ANS entryway.  

Some of that potential is on state land, subject to Alaska's own rapacious appetite for taxes and high per capita spending.  Most of the adjacent oil potential is on federal land surrounding Prudhoe Bay.  The Obama administration has taken action to lock up billions of barrels of potential oil reserves, preventing its access to TAPS.  

In a US Senate hearing this week, Alaska Senator Dan Sullivan questioned the administration's overreaching executive action to manage as wilderness, a small section of ANWR that Congress dedicated to oil and gas production (See video above).   

The BLM has taken action to block oil and gas development within half of the adjacent National Petroleum Reserve - Alaska while promoting that it is making much of it available.  The Interior Department and EPA have caused unwarranted delays in Shell's access to its federal leases in the Arctic.  

While Seattle's economy continues to benefit from Alaska's diminishing energy wealth, Alaska is more dependent on that one source of income than any other state.  Its state operating budget is 90% dependent on TAPS, for it makes possible the collection of oil royalties, a production tax, a property tax and state income taxes.  Alaska's entire economy is over 1/3 dependent on TAPS and would be a mere shadow of its former self without TAPS.

Without TAPS and the potential oil reserves it could transport from adjacent reserves in the OCS, NPR-A and ANWR, tens of thousands of jobs could be lost while American consumers would continue paying more for imported oil.  Also lost: countless billions spent with suppliers, service companies and manufacturers throughout the country-- and additional billions paid in federal and state taxes.

And with the future of TAPS in question, how likely is it that Alaska's monster gas reserves can be developed and transported to market?

Alaska

Over the last half dozen years we have documented a pattern of federal assault on Alaska resource development in particular.  When Congress approved Alaska’s Statehood Act in 1958 and President Eisenhower signed it early the next year, all were aware that Alaska’s Constitution required the economy to be based on natural resource development.  

Since then, there have been so many assaults on that constitutional foundation that many wonder if the state has the ability, now, to maintain a sustainable economy.  Many assert, in fact, that the federal government has broken the statehood compact which consisted of the Act, the Alaska Constitution and a statewide plebiscite. 

Elsewhere

The current administration is now well known for actively violating the "rule of law" in many instances, which we have also documented (1, 2, 3, 4).  The pattern of federal overreach and lawless behavior is a concern to all citizens and enterprises, including natural resource industries.

Conclusion

The Seattle Mayor’s political intervention into the Port Authority’s independent seaport management could set a strange and dangerous precedent for other cities and even states to use their regulatory powers for political purposes.  That practice, in turn, could have a huge impact on the sanctity of municipal contracts, municipal bonding capability and reliability of interstate commerce.

Growing sentiment that the rule of law itself is under assault by government agencies overreaching their authority, is justified.  (Note: "Rule of Law" is a little difficult for a layman to define.  It is one of those concepts that, however it may be defined, is to us a symbol of confidence in a lawful, stable, systematic, open and fair system of governance.)

In simple terms, America – including our natural resource job and wealth producing industries – are losing trust in those responsible for independent, just and reasonable adjudication of complex issues.

Loss of trust results in higher risk.  Higher risk means higher potential for default. High risk is one of an investors greatest concerns and could encourage one to begin considering how to export work to less risky areas.

Seattle is one of our favorite cities.  All Alaskans have adopted it to one degree or another and all benefit from its supplies and services.

We wish Mayor Murray well in his decision making.  We trust that with additional input his decisions will strengthen the reputation of Seattle as an investment destination and the Port Authority as an independent decision making body and reliable business partner.                  -dh

Finally, how is it logical for a politician to seek to address climate change by thwarting energy production in the most highly regulated, most environmentally focused country and state? 

Wouldn't less production of oil and gas in Alaska -- like political blockage of the Keystone Pipeline -- merely trigger production abroad, creating greater environmental exposure and 1) less U.S. employment, 2) higher balance of trade deficits, 3) a lower level of national security, 4) less direct and indirect local, state and federal tax and royalty revenue, and 5) higher imported energy costs for American consumers? 

 

 


 

 

 

 

 


Canadian Press (CBC).  The first of three votes on a natural gas benefit offer worth over $1 billion has been unanimously rejected by a First Nation on British Columbia's northwest coast.  ... more than 180 eligible voters at a meeting in Port Simpson stood up to oppose the plan to build a liquefied-natural-gas pipeline and terminal in their territory, said Lax Kw'alaams band member Malcolm Sampson.


 

Calgary Herald by Dan Healing.  ...Calgary’s oil and gas industry Wednesday insisted the new NDP provincial government declare its intentions — and do it as quickly and as clearly as possible.  Election pledges to raise corporate taxes, review royalties collected on petroleum production and withdraw support for oil pipelines to B.C. and into the U.S., were criticized during the election.... On the morning after the election, energy stock prices dropped as financial investors released reports warning the new government....  Gary Leach, president of the Explorers and Producers Association of Canada ..., said in an interview the NDP’s position on pipelines, for example, shows the party doesn’t understand the connection between market access, getting the best price for oil and the creation of wealth and jobs in Alberta.


Wall Street Journal, by LIAM DENNING.  Even as oil rallies back above $60 a barrel, obituaries are being drafted. Oil majors face questions from shareholders concerned the threat of climate change means some of the reserves underpinning the companies will never be produced. In a recent report, HSBC urged investors to plan for this risk of “stranded assets.”


 

RDC Action Alert:
Support Shell’s Use of Terminal 5 at Port of Seattle

Comment today!

Overview:
In a politically motivated effort to hamper Arctic offshore oil and gas development, Seattle Mayor Ed Murray is pressuring the Port of Seattle to pause and reconsider plans to use Terminal 5 to support the staging of Shell’s Arctic exploration equipment. Shell will be using space at Terminal 5 over the next two to four years for seasonal staging and maintenance of its fleet. However, Mayor Murray and the Seattle City Council is moving to block Shell and scuttle the port’s lease with Shell’s partner, Foss Maritime.

If the city’s move to derail the lease is successful, such action would set a dangerous precedent and send a message that Seattle is closed to business. Furthermore, it creates uncertainty and sends a signal to maritime companies that a lease with the Port may be targeted by special interests and local politicians in the eleventh hour, even as vessels are en route to the region.

Since 1987, Shell has successfully drilled 11 wells offshore in the Alaska Arctic. With today’s even stricter safety standards and regulation, exploration can and will be done safely.

Action requested:
Support Foss Maritime's Lease of Terminal 5 and its efforts to create jobs and make upgrades to the Port. This lease and the necessary upgrades support offshore drilling in Alaska, which will directly benefit Washington’s economy. Tell Port of Seattle Commissioners to uphold their decision to support Puget Sound’s maritime industry.

albro.t@portseattle.org
gregoire.c@portseattle.org
creighton.j@portseattle.org
bryant.b@portseattle.org
bowman.s@portseattle.org

Call the main switchboard and ask for the Commission at (206) 787-3000.

Send letters to:
Port of Seattle Commissioners
P.O. Box 1209
Seattle, WA 98111

Points to consider for your comments:

  • The port made the right decision to support the maritime industry, local trades, and businesses by approving Foss’s lease of Terminal 5. Foss has also agreed to pay for much needed port upgrades, making this a no-cost proposition for taxpayers. The project is an important job generator. Foss Maritime’s work at Terminal 5 has already put 417 people to work in Port Angeles and Seattle – supporting more than 1,000 jobs for the Puget Sound region.
  • For Seattle to remain a thriving and viable maritime city, it cannot continue to set a hostile tone toward the port, the maritime sector, and Alaska, one of its most important trading partners.
  • The maritime industry and the port must have regulatory certainty at all levels of government to maintain global competitiveness and protect middle class jobs at the core of the industry.
  • The port is focused on key trade, transportation and travel in the Pacific Northwest, supporting diverse industries and running efficient operations, while improving and protecting Puget Sound’s multi-billion dollar economic relationship with Alaska.
  • If the port’s lease with Shell and Foss Maritime is blocked, it would set a dangerous precedent targeting fossil fuel industries and tarnishing the reputation of Seattle’s port.
  • Alaska and Puget Sound share a dynamic and diverse economic relationship strengthened by air and sea shipping, seafood, petroleum, and tourism. Alaska’s contribution to the Puget Sound economy accounted for 113,000 jobs in the region and $6.2 billion in labor earnings in 2013.
  • Oil and gas production is the foundation of Alaska’s economy. Arctic oil development has the potential to refill the Trans-Alaska Pipeline System and sustain the state’s economy through much of the 21st century. A strong Alaska economy will greatly benefit the Puget Sound region.
  • Of all cargo movement between the Port of Seattle and Alaska, 80 percent is transported north. Large projects in Alaska, including new mining and oil and gas operations, directly benefit both the Alaska and Puget Sound economies in multiple ways.
  • Alaska supplies nearly half of all crude oil refined in Puget Sound. An estimated 12,000 Puget Sound jobs and $780 million in labor earnings are connected with refining Alaska oil.
  • Offshore development in the Alaska Arctic has the potential to be a significant contributor to our nation’s energy security, as well as a significant source of long-term jobs for Americans. It is estimated that economic activity from the development of Arctic energy resources would create an annual average of 54,700 jobs nationwide with a cumulative payroll of $154 billion over the next 50 years.
  • 35 exploration wells have been drilled offshore in the Alaska Arctic. In 1964, Shell was the first operator to install a platform and produce hydrocarbons in Cook Inlet, and since 1987, Shell has successfully drilled 11 wells offshore in the Alaska Arctic. With today’s even stricter safety standards and regulation, exploration can and will be done safely.
Categories:

5-6-15 Seattle Mayor Increases Risk For Seattle Investors - New Pipeline Bill Expedites Process

06 May 2015 7:44am

Senator Shelley Moore Capito, a member of the Senate Energy and Natural Resources Committee, introduced legislation today to modernize and improve the timeframe for the approval of new pipelines. 


Follow-up commentary.  Yesterday, we posted news and comment regarding the effort by Seattle's Mayor Ed Murray to delay or prohibit Shell Oil and its contractors from using port facilities in preparation for a summer exploration program in Arctic waters.

News Links: Seattle's Mayor Murray Seeks to Delay Alaska OCS exploration:

5-5-15 Seattle Times Update

5-5-15 Russia Today (RT)

5-4-15 Fox Business

5-4-15 Seattle Star Tribune

4-18-15 King 5 Video

Based on statements by the Mayor in these new links, readers will find that his action appears to be, not partly, but purely motivated by his "climate change" agenda.  

On a federal level, the EPA has undermined one of the primary foundations of the rule of law, due process.  It attempted last year to prohibit the Pebble gold mining project in Alaska from operating on, state lands, before it had even filed for permits.

Seattle's Mayor rationalizes his action by stating that, "To prevent the full force of climate change, it's time to turn the page on things like coal trains, oil trains and oil drilling rigs."  

So now, on a local level, due process has been attacked using the flimsiest of rationals.  

Seattle's Port Authority approved use of the port under an existing permit.  Now, the mayor wants to require the Authority to obtain a unique, new permit for this particular project.  

We believe it is "proven science" that every action has an equal and opposite reaction.  Time will tell what form the reaction takes in the marketplace but with this sort of leadership, investment risk must be affected in greater or lesser degrees depending how close one is to the environmental and political agendas of local elected leaders in Seattle.                 -dh


Senator Shelley Moore Capito, a member of the Senate Energy and Natural Resources Committee, introduced legislation today to modernize and improve the timeframe for the approval of new pipelines. 

The Oil and Gas Production and Distribution Reform Act strengthens the role of the Federal Energy Regulatory Commission (FERC) to better coordinate government agencies involved in the pipeline permitting process. The bill is co-sponsored by Senators Heidi Heitkamp (D-ND) and Bill Cassidy, M.D. (R-LA).

“West Virginia’s Marcellus Region has the largest shale gas reserves in the United States. This rapid rise in production in the Marcellus Region has been great for our economy but has outpaced our pipeline’s capacity,” said Sen. Capito. “This bill increases pipeline capacity, allowing the U.S. to fully take advantage of its vast natural gas reserves and limit any overload on existing pipelines.”

This legislation would provide more certainty around the timeframe for pipeline approvals and allow the U.S. to provide adequate pipeline infrastructure. America’s oil and natural gas production is increasing, yet there is a shortage of pipelines to support moving these natural resources. The current permitting process for pipelines often takes months or years. The slow and uncertain regulatory approval process delays construction, which delays manufacturing projects and hurts families and businesses that rely on affordable energy.

“A key piece of developing and implementing a multifaceted, bipartisan energy strategy includes building out our energy infrastructure to meet our energy transportation needs,” said Sen. Heitkamp. “It just makes sense that oil and gas pipeline applications should be addressed in a timely manner so we can more efficiently site and construct additional pipelines while paving the way for North American energy independence and security. This bill is the type of commonsense energy policy that I’ve been talking about since I came to the Senate – and was an issue I was glad to work on with Senator Capito.”

“American energy production is accelerating, but the approval process to build the infrastructure to move these resources is stuck in neutral,” said Dr. Cassidy. “Streamlining the approval process saves taxpayer money and ensures families have access to reliable energy to fuel their cars, heat their homes and run their businesses.”

Through the Oil and Gas Production and Distribution Reform Act, FERC’s permitting and review process would be improved by requiring the following:

  •         Commitments and cooperation from all federal and state agencies considering any aspect of the application; 
  •         Firm deadlines for coordinating agencies to issue associated permits;
  •         Concurrent reviews where each federal and state agency considering an aspect of an application carries out its obligations concurrently and in conjunction with the National Environmental Policy Act (NEPA) review;
  •         Issue identification and resolution to prevent unnecessary delays or permit denials;
  •         Expedited processing to allow an applicant to fund a third party contractor or FERC staff to assist in preparing and reviewing their application; and
  •         Accountability, transparency and efficiency by requiring FERC to publish an online “regulatory dashboard” to track information related to the permit review.
Categories:

5-5-15 - Corruption In China's State Run Oil Patch - Seattle Picks An Energy Fight With Alaska!

05 May 2015 6:57am

Senate Energy & Natural Resources Committee TODAY Releases the Majority's Priorities (Videos)

Chinese Corruption And An Alaskan Irony

Van Meurs Hosts A June Shallow Water Leasing Workshop In Mexico City

TODAY's Consumer Energy Alliance relevant energy news links!


Seattle Is A Nest Of Alaska Friends and Critics

by

Dave Harbour 

Associated Press: Seattle Mayor Ed Murray: Port needs new permit to host Shell's offshore Arctic drilling fleet
Mayor Ed Murray threw a wrench into plans for a 400-foot oil-drilling rig to arrive in Seattle when he announced Monday that the Port of Seattle can't host Shell's offshore Arctic fleet until.... Environmentalists have already sued over the plan, saying the port broke state law in February when it signed a two-year lease with Foss Maritime, whose client is Shell, without doing an environmental review.  (More....)

Our friends and critics in Seattle have one thing in common: they like the money Alaska generates for their economy.  

But the critics can't have it both ways: all will suffer if they persist in sending negative economic signals North (i.e. as they have over the years) and opposing our OCS, ANWR, NPR-A, mining, timber and other, reasonable and lawful, natural resource activities that help both economies.

One of Alaska's good friends is the Seattle Chamber and its long-time Alaska Committee.

In 2002, the operations director for the Transportation Institute, Richard Berkowitz, asked your author to address the Alaska Committee on the subject of Seattle's relationship with Alaska.  The Chamber's members appreciate the symbiotic relationship shared by their city and Alaska.

The Consumer Energy Alliance released a new poll today sampling the feelings of Iowa and New Hampshire voters on the subject of offshore drilling above the Arctic circle. It’s a subject which should be of particular interest to both voters and presidential aspirants as recent moves by the Obama administration, along with the Departments of the Interior and Energy seem to be edging us back into the game....  (Find the poll here.)

Today, Rich alerted us to a position adopted by the City of Seattle that a new permit was needed for Alaska OCS related dock operations controlled by the Port of Seattle (See AP story above).  

The oil company involved has not yet commented, but we have observed that even small delays can deliver a mortal blow to Arctic, seasonal exploration activities.

Alaskan business and governmental decision makers who monitor environmental strategies will likely be offended if not outraged that the City's leadership could undertake to irrationally bite one of the hands that feeds its hungry economy.

We also provide a copy of the letter the Institute dispatched, challenging the city for attacking a state whose economy is joined so tightly to their own.

This reminded us of that speech we gave over a decade ago on this same subject.  We attach it here because it gives our readers a good deal of background on the subject of Seattle-Alaska relationships.  Readers will also be interested in having for their research files some background on the broken promises of statehood.

We hope Alaska's corporate and governmental leaders (i.e. both here and in Congress) can calculate a way to reasonably but forcefully respond to the Seattle's misguided position...and thank our friends at the Transportation Institute for educating city leaders.       

 


Commentary: Please note irony in Chinese/Alaskan approaches to state control of energy projects

As Chinese communist leaders seek to expose corruption in state owned entities and move toward a market driven economy, Alaska's leaders move toward more state ownership of energy projects ranging from competing gas pipelines (?) and gas distribution system to hydro to geothermal to wind.  

State ownership is a seductive but dangerous undertaking.  

Since money spent does not belong to bureaucratic and politically appointed decision makers, investors can trust in one thing: that outcomes and risks will be much harder to anticipate -- and they will not necessarily reflect the judgment of prudent persons with personal skin in the game.  

Should government participants begin arranging jobs or contracts for friends, the risks could become much greater.  (See yesterday's Commentary which partly involves the concept of corruption in state-owned enterprises.)  -dh  

Calgary Herald Bloomberg Report by Aibing Guo.  

... What happens next to China’s energy sector is the subject of much speculation. CNPC and Sinopec Group’s listed units spiked on April 27 on rumors they could merge after a newspaper reported that China may cut the number of its state-owned enterprises to 40 from 112. In March, people familiar with the government’s plans told Bloomberg that reform could see companies bundled by industry and their control handed to state asset-management firms.

The reforms are part of China’s bid to bolster flagging economic growth and Xi’s insistence that market forces play a more decisive role. State-owned companies account for roughly a third of the economy and more than a quarter of them are loss- making, Barclays Plc analysts said in August. (More....)      

 

 

The Senate Energy and Natural Resources Committee today released the third installment in its video series highlighting the priorities of its Republican members. In today’s video, U.S. Sen. Mike Lee, R-Utah, outlines his plans to increase local control and management of Utah’s natural resources.   

 


Pedro Van Meurs, Mexico, Shallow Water Leases, Photo by Dave HarbourMexico is not 'northern' but many of our northern gas pipeline readers will be interested in this new workshop offering by our friend, Pedro Van Meurs.  -dh

The final terms for the first shallow water bidding round will be announced on May 29.   At the same time, the terms for the areas allocated to PEMEX are also known.  This means at that date the first Mexican commercial-fiscal package for petroleum will be complete.

On June 8 and 9, 2015 in Mexico City, Van Meurs will host a workshop providing an independent analysis and evaluation of these terms.  This workshop will be beneficial for all those interested in investing in Mexico’s petroleum industry.   

Click here for more information about this workshop.


Your NGP one-stop-shop presents today's relevant Consumer Energy Alliance energy news links:

The Consumer Energy Alliance released a new poll today sampling the feelings of Iowa and New Hampshire voters on the subject of offshore drilling above the Arctic circle. It’s a subject which should be of particular interest to both voters and presidential aspirants as recent moves by the Obama administration, along with the Departments of the Interior and Energy seem to be edging us back into the game....  (Find the poll here.)

Digital Journal: Poll: Iowa and New Hampshire Voters Support Arctic Drilling, Say Energy is Important Issue in 2016 Race  
Continuing the trend of energy policy as a key issue in nationwide elections, voters in Iowa and New Hampshire showed overwhelming support for U.S. energy leadership in Arctic offshore energy production. The results show offshore energy policy is an important focus even for both Iowa and New Hampshire voters, just as Presidential candidates start canvassing the states.
 
Hot Air: POTUS contenders take note: Iowa and New Hampshire voters support Arctic drilling 
The Consumer Energy Alliance released a new poll today sampling the feelings of Iowa and New Hampshire voters on the subject of offshore drilling above the Arctic circle. It’s a subject which should be of particular interest to both voters and presidential aspirants as recent moves by the Obama administration, along with the Departments of the Interior and Energy seem to be edging us back into the game. Some of the loudest voices on the Left are already up in arms and Hillary will be forced to answer their demands at some point.
 
Platts: OTC 2015, Day 1: Elected officials ask oil and gas to keep improving communication 
Every hero needs a sidekick, every dog needs its day, and every oil and gas conference has to talk about bettering communication with the public, it seems. The 2015 Offshore Technology Conference in Houston this week is no exception. Today is the first day of the conference, which regularly brings in about 90,000 attendees (or more) to hear from industry execs and elected officials and to learn about the companies, organizations and countries represented in booths and demonstrations.
 
Houston Chronicle: OTC: Beyond cheap oil *OTC Panel Coverage
The annual Offshore Technology Conference could be the biggest ever despite the lowest oil prices in years. Exhibitors filled 696,000 square feet at the 2014 Offshore Technology Conference, and the exhibition space is larger for this year's event beginning Monday at NRG Park.

San Antonio Express-News: Gov. Pat McCrory at OTC: Drilling dollars essential to sell offshore exploration along East Coast *OTC Panel Coverage
When it comes to offshore drilling, money talks. That’s the message North Carolina Gov. Pat McCrory delivered to the Offshore Technology Conference on Monday, as he insisted that coastal states supporting drilling near their shores will demand a share of federal oil and gas revenues from the activity.
 
E&E News: N.C. governor eager to see permits, rules for Atlantic exploration *OTC Panel Coverage
North Carolina will continue to press the federal government on expediting permits for offshore seismic surveys and to radically alter the recent proposal to expand drilling to the Atlantic Ocean, the governor vowed yesterday. Speaking to offshore energy industry insiders at the annual Offshore Technology Conference here, Gov. Pat McCrory (R) said he would like to see seismic surveys off his state's shoreline underway by the fall of this year. More modern and advanced surveys are required to get a better sense of what offshore oil and gas potential may lie off North Carolina, he said.
 
Oil & Gas Journal: OTC: Federal, state cooperation vital for offshore energy development *OTC Panel Coverage
US coastal states and the federal government will have to continue having an open and honest dialogue about the safe and reliable exploration and development of offshore oil and gas resources, panelists agreed May 5 in an opening session at the Offshore Technology Conference in Houston.
 
Fuel Fix: Gov. Pat McCrory at OTC: Drilling dollars essential to sell offshore exploration along East Coast *OTC Panel Coverage
When it comes to offshore drilling, money talks. That’s the message North Carolina Gov. Pat McCrory delivered to the Offshore Technology Conference on Monday, as he insisted that coastal states supporting drilling near their shores will demand a share of federal oil and gas revenues from the activity.
 
JDNews.com: Governor McCrory Urges More Federal, State Cooperation in Offshore Energy Development *OTC Panel Coverage
Governor Pat McCrory participated in a panel discussion today on U.S. offshore energy development at the annual Offshore Technology Conference in Houston. The governor was joined by U.S. Senator Thom Tillis (NC), House Committee on Natural Resources Chairman Rob Bishop (UT) and the Bureau of Ocean Energy Management Director Abigail Ross Hopper.
 
Consumer Energy Alliance: Poll: Key Primary Voters Support Arctic Drilling, Say Energy is Important Issue in 2016 Race
Continuing the trend of energy policy as a key issue in nationwide elections, voters in Iowa and New Hampshire showed overwhelming support for U.S. energy leadership in Arctic offshore energy production.  The results show offshore energy policy is an important focus even for both Iowa and New Hampshire voters, just as Presidential candidates start canvassing the states.
 
The New York Times: E.P.A. Carbon Emissions Plan Could Save Thousands of Lives, Study Finds
New carbon emissions standards that were proposed last year for coal-fired power plants in the United States would substantially improve human health and prevent more than 3,000 premature deaths per year, according to a new study.
 
Associated Press: Obama's carbon plan could save 3,500 lives annually
The Obama Administration's hotly debated plan to reduce heat-trapping carbon dioxide from the nation's power plants will save about 3,500 lives a year by cutting back on other types of pollution as well, a new independent study concludes.
 
New York Times: Chemicals Detected in Pa. Drinking Water
An analysis of drinking water sampled from three homes in Bradford County, Pa., revealed traces of a compound commonly found in Marcellus Shale drilling fluids, according to a study published on Monday.The paper, published in the Proceedings of the National Academy of Sciences, addresses a longstanding question about potential risks to underground drinking water from the drilling technique known as hydraulic fracturing, or fracking. The authors suggested a chain of events by which the drilling chemical ended up in a homeowner’s water supply.
 
Dallas Morning News: Bill to limit Texas cities’ rules on fracking heads to governor
Senators delivered a sweeping victory Monday to oil and gas operators in a fight that has roiled North Texas and pitted a key state industry against communities’ desire to restrict fracking. The Senate gave final approval to a measure to pre-empt cities from banning fracking and enacting a variety of other oil and gas-related ordinances, sending the bill to Gov. Greg Abbott on a 24-7 vote. He is expected to sign it.
 
Associated Press: Texas Legislature acts to stop cities from limiting drilling
Texas moved Monday to ban its own cities from imposing prohibitions on hydraulic fracturing and other potentially environmentally harmful oil and natural gas drilling activities within their boundaries — a major victory for industry groups and top conservatives who have decried rampant local "overregulation."
 
Associated Press: Seattle Mayor Ed Murray: Port needs new permit to host Shell's offshore Arctic drilling fleet
Mayor Ed Murray threw a wrench into plans for a 400-foot oil-drilling rig to arrive in Seattle when he announced Monday that the Port of Seattle can't host Shell's offshore Arctic fleet until it gets a new land-use permit. Royal Dutch Shell PLC has been planning to base its fleet — including a drill rig and two tug boats — at the port's Terminal 5 for six months each year, when they're not being used in the Arctic. Environmentalists have already sued over the plan, saying the port broke state law in February when it signed a two-year lease with Foss Maritime, whose client is Shell, without doing an environmental review.
 
Daily Caller: RFK Anti-HF Group Has Ties to Company in Corruption Probe
Robert F. Kennedy Jr.’s environmental group that heavily opposed allowing hydraulic fracturing, or fracking, in New York has ties to a company being investigated by federal agents. The Arizona-based AbTech Industries is at the center of a federal investigation for its business dealing with Senate Majority Leader Dean Skelos, the leading Republican in the state Senate, and his son Adam. But even more interesting is that AbTech has strong ties to Waterkeeper, an environmental group that has opposed fracking in New York State.
 
Forbes: Crude Oil Rail Shipments Sabotage Freedom of Information Act
New regulations from the U.S. Department of Transportation declare that details about crude oil rail shipments are exempt from public disclosure (Tri-City Herald). This ends DOT’s existing regulations that required railroads to share with state officials, and the public, information about shipping large volumes of dangerous crude oil by rail. These disclosure requirements were put in place last year after a Bakken crude oil train-wreck in Lynchburg, Virginia.
 
The Hill: Schumer wants faster oil train changes than Obama
Sen. Chuck Schumer (D-N.Y.) is introducing legislation to require faster implementation of a series of regulations regarding the transportation of crude oil that were unveiled last week by the Obama administration. Schumer's legislation would require freight rail companies to phase out older rail cars that have been blamed for numerous high-profile disasters within two years, instead of the eight-year deadline that was set by the Obama administration.
 
E&E News: Greens go all-out to influence crude-by-rail rule
Earlier in the month, representatives from the environmental group Earthjustice sat down with OIRA to call for a ban on the oldest, least crash-worthy type DOT-111 tank cars still used to haul thousands of barrels of crude across the country each day. Other organizations present at the March 13 meeting included ForestEthics, Riverkeeper and the Sierra Club, all of which have voiced concerns about a string of recent oil train derailments and explosions. Earthjustice again met with OIRA on April 15, just two weeks before the release of the final rule.
 
UPI: U.S. shale players doing more with less
Though net profits and spending are down, companies working in U.S. shale basins are finding well costs going down while production forecasts grow. The low price of oil is forcing energy companies to spend less on exploration and production efforts.
 
Breitbart: Recent California quakes not linked to drilling
Although many speculate that a series of earthquakes erupting in the Baldwin Hills region of Los Angeles are tied to drilling activity in nearby oil fields, scientists inform that they are not connected. The 3.8 trembler (revised from the 3.9 reported on Sunday) that rattled Los Angeles on Sunday and two others that struck the area in the last three weeks, were deep enough below the earth’s surface not to be linked with the Inglewood Oil Field–the largest contiguous oil-producing site in greater Los Angeles—according to Seismologists.
 
Washington Free Beacon: Report: Federal Oil and Gas Production Down Significantly Under Obama
Oil and gas production on federal land continues to decline even as the United States experiences unprecedented growth in overall fossil fuel extraction, according to a federal report released on Monday.
 
Bloomberg: Energy Loans to Deteriorate Further, Bankers Say in Survey
The condition of oil and gas loans held by U.S. banks is poised to worsen if commodities fall in line with futures prices, according to a Federal Reserve survey of bankers. About 59 percent of senior loan officers in the U.S. surveyed in April said the quality of loans made to drilling and extraction firms in the oil and natural gas industry is likely to “deteriorate somewhat,” according to the Fed’s quarterly survey. Loan restructurings, reductions in the size of outstanding credit lines and demands for additional collateral may mitigate losses, the loan officers said.
 
E&E News: To right their course, supermajors pass the pain on to oil field services
Big Oil wants to slash costs this year, and that will mean putting heat on the companies that do much of its technical work. The world's largest international oil and gas companies, the "super majors," have faced nearly a decade of rapidly escalating operating and equipment expenses, but rising oil prices and ever escalating profits over the same time period concealed or offset the effects of an expensive business climate.
 
Denver Post: Liquified natural gas may boost Western Slope producers' fortunes
Natural gas fields on Colorado's Western Slope have been battered by low prices for almost six years, but turning that gas into liquid and selling it in Asia may be a way to revive the region's fortunes. "Liquefied natural gas is one of the best options we've seen," said David Ludlam, executive director of the West Slope Oil & Gas Association, a trade group. What is buoying Western Slope hopes is the proposed Jordan Cove LNG plant in Coos Bay, Oregon.
 
UPI: New refinery online in North Dakota
A new refinery in North Dakota, the first of its kind in the country in nearly 40 years, will help drive the state's economy forward, MDU Resources said. The Dakota Prairie refinery is designed to process 20,000 barrels of oil per day from the state's Bakken shale reserve. Up to 7,000 bpd worth of production in the form of diesel fuel will be sold to in-state customers.
 
Kalamazoo Gazette: Michigan earthquake not caused by fracking, scientists say
The state official who oversees regulation of oil and gas wells says he is certain thatSaturday's earthquake in Kalamazoo County is unrelated to fracking or other drilling in the area. "I am extremely confident there is no connection," said Hal Fitch, a geologist who is director of the Michigan Department of Environmental Quality's Office of Oil, Gas, and Minerals.
 
Shreveport Times: Old gas field opens up new opportunities
What's old is new again when it comes to the Cotton Valley sands formation in north Louisiana. An old field that's produced natural gas since the 1940s and '50s, the Cotton Valley formation has opened up new opportunities for drilling for operators in Caddo, DeSoto and even Lincoln parishes looking for more economical ways to extract the resources during the stagnant energy market.
 
Shale Plays Media: Ohio infrastructure sees no slow down
While oil and natural gas prices have affected the industry greatly, oil and gas companies in Ohio are still investing billions into new infrastructure. According to a report published by Bricker & Eckler LLP, a Columbus, Ohio-based law firm, investments in oil and gas infrastructure has increased by $6 billion since last fall. The increase is driven by the development going on in the Utica and Marcellus Shale Formations, which both happen to be extremely rich in natural gas.
 
Wilkes-Barre Times Leader: U.S. must take advantage of energy industry now
Abundant, affordable and available resources have made us a world leader in energy. And the U.S. oil and natural gas industry is ready to work with elected officials, policymakers and residents in Pennsylvania to ensure the moment lasts and creates a strong American energy future. Rather than adding additional taxes that constrict opportunities for the commonwealth’s economy to grow, we should support energy policies that grow the market for Pennsylvanian businesses.
 
WRAL: Carolinas clear first proposals for offshore oil surveys
State regulators in both Carolinas have signed off on proposals by companies to conduct seismic testing for oil and natural gas off the Atlantic coast, subject to some conditions. The South Carolina Department of Health and Environmental Control last Friday certified a proposal by Spectrum GEO. Earlier the North Carolina Department of Environment and Natural Resources certified proposals for surveying by both Spectrum and GX Technology.
 
Argus: Virginia governor vetoes coal tax credit extension
Virginia governor Terry McAuliffe (D) has vetoed legislation extending the state's tax credits for coal producers and users by two years. McAuliffe vetoed the bill on 30 April, saying the incentives have not had the desired effect of supporting coal mining employment. Lead sponsors of the bill and the Virginia Mining Association did not immediately return requests for comment.

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3-16-15 The Future of Oil Prices According to An Astute Reader - Senators Sullivan's Reputation Spreads

16 March 2015 5:35am

Dan Sullivan, US Senator, Alaska, Maiden Speech, Master Resource, Dave Harbour PhotoOur friend, Rob Bradley, Master ResourceRob Bradley (File Photo-R) of the Master Resource Blog, saw U.S. Senator Dan Sullivan's (NGP Photo) Maiden Senate Speech on this website and has further promoted it to his large international audience (here).  (Our original coverage and speech text)  -dh


Halloran Opines On Proposed Ohio Severance Tax and Future of Oil Prices

James Halloran, Energy Analyst, Ohio, Severance Tax, Oil Prices, Northern Gas PipelinesRepublican Governor Proposes Ohio Severance Tax?  Our friend, Independent Energy Analyst James R. Halloran (File Photo) just returned from the Ohio Oil and Gas Association Winter Meeting where he reported that, "the big issue is Governor Kasich’s proposal for a (completely mis-named) “severance tax”. We will have a lot more on that topic after (maybe) cooling off slightly. Momma did not train this writer to suffer fools gladly, and that is what Ohio is faced with on the topic of taxation of the oil & gas business."

Steve Heimel of APRN retires, Personal, Photo by Dave Harbour(Point of personal privilege: our friend and longtime APRN senior reporter Steve Heimel (NGP Photo)  is retiring after decades covering countless Alaska issues.  -dh)

On oil prices, Halloran says, "The overwhelming question (outside of Ohio) is,  When will oil prices go back up (how high is a second implicit question)? That question was posed to us numerous times at the Winter Meeting. Our standard answer is that oil pricing is a process, not an event. Assume for the moment that Brent oil (we try to stay with the international price for analysis purposes) were to return to $70 by midyear (this is NOT a prediction; it is for discussion purposes): Can we tell them what will happen to the price in the next six months after that?

"The relevant questions that need answering first", he says, "are:

  • "Have there been fundamental changes in the market that will cause crude oil to trade at a different price range than $94-114 for an extended period of time? If so, what are they, and how will they affect the industry longer term?
  • "If the the major inputs to the current market are more likely of a transient nature, what will have to change for prices to recover? Will a price recovery cause some of these transient inputs to recur?"

He elaborates that, "there are some effects that are of a transient nature (maybe) that are significant contributors to the oil price drop, of which we have commented heavily in the last several months:"

  • "The strong dollar, which is following a trend to get even stronger, and which will likely provide a major head wind for any near-term recovery
  • "Massive amounts of capital and incredibly low interest rates, putting many PE, Major, and vulture players ready to jump into the Energy pit. This is related to the strong dollar, and will provide no relief from the fact that there are too many players.
  • "Too much production, which is having a hard time to find a home (see the chart of inventories below, courtesy of Mike Bodell), which graphically illustrates the situation.
  • "Much of the capital cutbacks are coming out of the hide of service companies, so that lower costs will not really bring lower production volumes soon."

"No one is cutting back to the point of ceding “market share” to others. This capitalism at its purest. Unfortunately, it is being done in an environment in which central banks are imposing zero effort to observe capital discipline: Nothing. Nada. Rien. Zip.

"The only “good news” (but less helpful than one might think) is that the rig count continues to drop.  It is too much to try to get trends from the rig count on a weekly basis, so we will be looking at it monthly. This should make it easier to spot trends. Our observations are as follows:

  • "The downturn in rigs is much more directed toward oil (no surprise). Oil rigs are down 45% from our base date last December, compared to 25% down for gas rigs. The Marcellus, Utica, and Eagle Ford, which have large dry gas plays, are not down in rigs as much as the other basins.
  • "Vertical rigs are down much more than horizontals. Also, Small Basins are harder hit than the major basins.  This consistent with the WSJ article, which indicates that major players are still drilling big wells (just not completing them).

"BOTTOM LINE:  The beatings will continue until capital discipline improves and/or the number of players is reduced.  There may be rallies, but they will likely be shallow."  (Note: While Halloran has sources to back his statistics, we removed them in the interest of space.  -dh)

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