You Read It Here First
What's next for Keystone XL?
|We urge our gentle readers to review yesterday's posting; we cannot remember -- in well over a decade -- posting a more useful, relevant and actionable commentary for our Alaskan, Canadian and Lower 48 readers. -dh|
Alaskanomics by Mark Edwards.
Over the next couple of days, I will post a three part series about the current oil price environment in Alaska.
It is well known that Alaska’s economy is highly sensitive to the price of oil. Billions of dollars in investment capital flow into the state each year as energy companies both explore for new oil and maintain their existing fields. This activity has an enormous positive multiplier effect on the rest of the economy as major service industries including trucking, construction, finance, legal, engineering, retail and countless others see a direct benefit from the contracts and employment required to support this massive effort. Read more....
(Note: Once we posted this report we realized our headline wording could be regarded as unfair, That is to say, not all Arabs are supporting US environmental groups to undermine US energy security. And, while all members of Saudia Araba's ruling family are likely to be of Arabian descent, not all citizens of that family should be so accused. Having now expressed that sensitivity, the unsettling fact remains that one of America's great Middle Eastern allies of the past, may now be showing new colors and our relationship may well be coming to an end. As to the U.S. environmental groups, like the Sierra Club, that would consort with foreign power(s) determined to make America once again dependent on their oil, we say "shame on you; your behavior is highly unpatriotic if not treasonous." -dh)
Saudi's Join "Cabal" and Support Enviros Against American Energy Independence.
Last week, thanks to Alert Reader Steve Borell, we were able to join the chorus 'outing' the traitorous relationship between American environmental activists and Middle Eastern energy producers.
Today, we have another story from the Free Beacon (Below) that sheds more specific light on the House of Saud and how it has joined the Sierra Club and sister anti-energy organizations as part of the Enviro-Industrial-Governmental Cabal:
Free Beacon by Lachlan Markay. Saudi Arabia’s efforts to “drown” American energy producers make the oil-rich theocracy a crucial ally of the environmentalist movement, according to a leading green group.
The House of Saud, the kingdom’s royal family, is “our best ally in the fight against Keystone XL,” according to Paul Rauber, the senior editor of Sierra, the bi-monthly magazine published by the Sierra Club.... Read more
|Calgary Herald by Dan Healing. Oil services company Baker Hughes Inc. will lay off about 7,000 workers — likely including hundreds in Canada — as it prepares for a downturn in orders because of the plunge in crude prices, the company said Tuesday. The layoffs represent about an 11 per cent cut to the 62,000-plus workers Baker Hughes says it employs worldwide. Company spokeswoman Melanie Kania said.... Read more.|
Is Governor Walker Creating An Uncertain Investment Climate?
US News by John Burnett. In recent weeks, the state’s newly elected governor, Bill Walker, has said and done things that have put him at odds with energy companies seeking to invest in Alaska, and thus prompted concerns among politicians, business leaders and ordinary Alaskans about his commitment to projects like the one in the North Slope.
Most notably, Walker raised strong objections to a newly enacted tax structure on oil production that was intended to encourage investment in the state. It was an abrupt – and alarming – shift on his part, as he pledged during his campaign last year that he would not undo the tax law that Alaskan voters upheld in a referendum this past summer.
If that were not enough, Gov. Walker (NGP Photo) contradicted Candidate Walker on another matter that has implications for the Alaska project: a private lawsuit he filed against a deal the state reached with ExxonMobil that paved the way for construction of a natural gas facility at Point Thomson on the North Slope.
As a candidate, Walker pledged to drop that suit if elected. Now that he is governor, Walker has not only refused to drop the suit, but ....
Now is not the time to be creating any kind of uncertainty. Read more....
|Tomorrow, if you are in Anchorage, plan to attend the Alaska Support Industry Alliance breakfast briefing by the Alaska Deputy Commissioner of Revenue Marcia Davis. That will coincide with the Governor's legislative budget speech to the Legislature. If you are concerned about Alaska's economy but are looking for specific issues and facts upon which to base questions, you might want to review the last two days of commentary. -dh|
We will continue to add more photos, here, to our archives from the Alaska Support industry Alliance's Meet Alaska 2015 Conference earlier this month.
House Natural Resources Chairman Rob Bishop (UT-01) last night issued the following statement in response to President Obama’s State of the Union Address:
“President Obama tonight spoke about expanding our economy and attaining energy security, but time and again, he has actively blocked the responsible development of our domestic energy resources. He reiterated his commitment to investing in education, yet failed to acknowledge that his administration’s restrictive land use policies are denying local communities the tax revenue that is necessary to make these investments.
“While the President’s rhetoric suggests that he is inclined to change course, his administration’s punitive regulatory agenda speaks with greater authority. Look no further than the 600 new rules and regulatory notices that have been issued by federal agencies since the start of the New Year. In the coming weeks and months, the House Natural Resources Committee will conduct thorough and aggressive oversight to hold the Obama Administration to account for its actions.”
11-7-14 Alaska Governor Acts On Gasline And Legislators React - President Makes Preemptive Attack On Keystone XL
ADN by Dermot Cole. Gov. Bill Walker (NGP Photo) took a major step toward revising the way the state is dealing with a proposed gas pipeline by removing three members of the Alaska Gasline Development Corp. board and instructing two commissioners not to sign a secrecy pledge proposed by the Parnell administration. (Comment: We do not know enough about all the circumstances to comment on the rightness or wrongness of the Governor's action or legislative reactions. We do observe that decision makers in a time of fiscal crisis would probably be well advised to bend over backwards to be cordial and considerate in their interactions. The fiscal challenge descending upon Alaska and her citizens will be difficult enough to confront with a united team and much harder to resolve successfully if we are divided. -dh)
Calgary Herald by Stephen Ewart.
Commentary: Preemption of Due Process and Erosion of the Rule of Law.
We have seen the current, Administration consistently erode the rule of law.
The EPA has acted to preemptively kill an Alaska mining project, on valid Alaska state leased ground, before the proponents filed for the first permit, on the basis of an EPA-imagined development scenario, before any public hearings, findings of fact or legal record could be assembled.
This is a horrible infringement on America's constitutional protection of due process and the rule of law which it protects.
The precedent the EPA is trying to establish could provide hostile federal agencies with a new tool for stopping state, municipal, agricultural, recreational, mining, commercial fishing, manufacturing, transportation, home building projects on federal, state, municipal or private land...anywhere, anytime.
Similarly, the Administration has sought, unsuccessfully, to block development in Alaska by proclaiming vast areas should be protected for certain species when the populations of those species are increasing (i.e. Steller Sea Lion, Polar Bear.)
In the case of Keystone, the President has blocked State Department approval of the project following valid, due processes which cleared the project.
Now, when the Congress seems poised to introduce Keystone enabling legislation, the President announces intent to veto any such legislation. This is more clear and present evidence of willful disdain for the spirit if not the precise definition of due process.
Through such action in the energy business, together with evidence in other federal jurisdictions (i.e. Overreaching Executive Orders, Justice Department-selective enforcement, IRS-targeting non-profits, State Department-Benghazi, etc.), one must conclude the country is dangerously close to losing constitutional freedom and the rule of law reputation for which it was once so well regarded.
Energy company shareholders are among the most affected by a dilution of due process when the rule of law is replaced by rule of men with political agendas.
The White House warned Tuesday that U.S. President Barack Obama would veto a new Congressional bill to have the Keystone XL pipeline built arguing there is a well-established process to review the controversial cross-border project.
Almost seven years after filing its application for a 830,000 barrel a day oil pipeline, TransCanada chief executive Russ Girling expressed exasperation over the latest setback.
“The review process for Keystone XL has been anything but well-established. We are well over the six-year mark reviewing the final phase of Keystone with seemingly no end in sight,” Girling said in a statement after... (More here)
Canadian Press/Global News. Alberta’s premier remains hopeful about the Keystone XL pipeline despite word that U.S. President Barack Obama may veto the project. Prentice says he will travel to Washington within the next month to let people know that Keystone is in the best interests of Canadians and Americans alike.
Jim Prentice (NGP Photo) says there is broad public and political support in the United States for the pipeline that would carry Alberta bitumen to the U.S. Gulf Coast.
Globe & Mail. Quebec’s energy regulator is giving the thumbs-up to TransCanada Corp.’s Energy East pipeline, calling the plan “desirable.”
The $12-billion pipeline between Alberta and New Brunswick aims to connect western crude with eastern refineries and new markets across the Atlantic.
TODAY'S Energy In Depth News Links:
Weds., January 7, 2015
- EID-National: API’s State of American Energy address and report underscore bright future ahead – if policy-makers do their job (1/6)
- EID-Illinois: Unlike New York, Illinois is helping its economically challenged regions by moving forward with shale (1/6)
- Guest post from BakerHostetler: Cuomo’s decision on HF doesn’t appear to be based on science – or the law (1/6)
API chief focuses on oil exports, KXL in annual address. E&E News (subs. req’d). Throughout his remarks, Gerard touched many times on the need to move forward in approving construction of the Keystone XL pipeline from Canada. Describing that approval as "low-hanging fruit," he expressed disappointment at news that the White House said it would likely veto a KXL approval bill introduced yesterday by Sens. John Hoeven (R-N.D.) and Joe Manchin (D-W.Va.). "The American public is frustrated and confused by this indecision," Gerard said. "They say to themselves, 'Wait a minute, there's 42,000 jobs here and we can't make a simple decision?' So, longer-term, I believe Keystone is ultimately going to get done."
Democrats must respect the power of oil and gas. Houston Chronicle, op-ed. Oil and gas is no longer a game reserved for Texas wildcatters. Shale can be found easily in blue states and red states, and politicians all along the aisle should have trouble finding bad news in fracking's gifts of job growth, affordable fuel and strength abroad.
Industry benefits from transparency about HF fluids. The Oklahoman, op-ed. Baker Hughes, an energy firm in Houston, is about to make history. It just pledged to disclose the chemical makeup of its hydraulic fracturing fluid. Fracking fluids are safe. And the public deserves to know what goes into them. That’s why I firmly support fracking disclosure laws.
Oil prices will recover, but market could behave chaotically. Houston Chronicle. In a balanced market, however, the oil industry simply cannot produce all of oil the world needs for $50 a barrel or less. That's the good news for Houston, but the bad news is that companies will be under intense pressure to produce oil as cheaply as possible because, since November's OPEC meeting, the world lacks a regulator, or swing producer, to stabilize the market. If left to its own devices, the invisible hand of the market will be stirring a pot of chaos in 2015.
U.S. oil production will be falling by end of 2015. Reuters, column. In the short term, U.S. oil production is set to continue rising because there is still a backlog of wells waiting for fracturing crews and completion after the record drilling during the first ten months of 2014. In North Dakota, for example, there were around 650 wells waiting on completion services at the end of October 2014 because drillers had outpaced completion crews, according to the state's Department of Mineral Resources.
Low oil prices leave U.S. shale players cautious. UPI. Energy companies working in U.S. shale basins announced plans to trim capital programs for 2015 because of the steep decline in oil prices. The price for West Texas Intermediate crude oil, the U.S. benchmark, dipped below the $50 mark for the first time in more than five years Monday. Globally, oil prices have lost half of their value since mid-June 2014, forcing major oil and gas companies to cut back on spending for this year.
Anti-Cuadrilla group's leaflet misleading, says watchdog. The Independent. In a setback for the anti-fracking lobby, the Advertising Standards Authority (ASA) found that sections of the leaflet from the Residents Action On Fylde Fracking (Raff) protest group misinterpreted scientific data around shale gas extraction and exaggerated the size and scale of planned fracking operations in the region.
Junior explorer pulls plug on Ukraine. UPI. The economic climate in Ukraine is no longer conducive to continue investing in shale natural gas opportunities, producer JKX Oil & Gas said Wednesday. "The board of JKX has decided that the combination of Ukrainian Government-imposed restrictions on selling its gas to industrial clients and the punitive rate of gas production tax requires the company to suspend its planned 2015 capital investment program in Ukraine until the economic parameters for investment improve," it said in a statement.
Protests Hit Southern Algeria Over Shale. Associated Press. Protests in Algeria's remote and sparsely populated south over efforts to exploit the country's vast shale gas reserves spread to the regional capital Tuesday, the state news agency reported.
New report calls for better oversight of injection wells. Bakersfield Californian. In a report with strong implications for Kern County's oil industry, an environmental activist group called Tuesday for changing the process for exempting aquifers from federal groundwater protections. An oil industry trade group, the California Independent Petroleum Association, was dismissive of the report, noting there is no evidence of waste being injected into drinking water supplies.
5 things to know as the Colorado legislative session begins. Associated Press. Colorado lawmakers begin the 2015 session on Wednesday. Here's a weekly look at what's coming up: Fracking - Another big debate involves whether any new regulations are needed over hydraulic fracturing, or fracking. Gov. John Hickenlooper assembled a task force to look at how to settle land-use clashes among homeowners, local governments, and the energy industry. The task force's charge is to give lawmakers recommendations, but whether anything happens remains to be seen.
Windsor braces for industry slowdown. The Coloradoan. While many Northern Colorado residents are enjoying the country’s falling gas prices, Windsor officials say the anticipated slowdown in tax revenue from oil and gas companies will hamper them this year. Those companies will likely scale back their operations around Windsor, Town Manager Kelly Arnold said during a work session Monday. Fracking activity in the area may not pick back up until 2016.
What new fines would have meant in Windsor spill. The Coloradoan. An oil and gas operator who spilled 7,500 gallons into the Poudre River last year would have faced 15 times the financial penalty under a new fine structure passed this week. The Colorado Oil and Gas Conservation Commission approved a maximum penalty of $15,000 a day for "the most egregious violations" in a Monday hearing — up from a previous maximum fine of $1,000 per day.
Oil price plunge imperils La. jobs — but when? The Advertiser. In Louisiana, initial claims for unemployment insurance in mining — many oil and gas jobs are recorded as mining — totaled 227 in December, higher than in any previous month but not much higher than claims recorded in January 2014. Guarisco said oil and gas employment appeared to remain robust in December, as many oil and gas jobs must be done no matter the price per barrel.
Denton anti-HF activists to make appearances in St. Tammany Parish. Times-Picayune. Two people whose efforts helped enact a ban on fracking in Denton, Texas, will be in St. Tammany Parish this weekend for a party and a symposium about hydraulic fracturing. The citizens group Tammany Together is putting on the events.
Penn students jump into the shale fray with a new technology. NPR. One of the pressing questions regarding fracking is whether or not the chemicals used to help pry the gas from tight rock formations like the Marcellus Shale leaks or migrates to drinking water supplies. Imagine if you could determine whether fracking caused ground water contamination using a thin strip of single carbon atoms. That’s what two seniors studying at both the University of Pennsylvania’s Wharton school and its bioengineering department, are trying to do. Teddy Guenin and Ashwin Amurther are finalists for a $5000 prize through the University.
Analyst predicts gasoline rebound despite oil's plunge. Tribune-Review. Gasoline prices likely will rebound over the next few months and rise above $3 per gallon by May, despite the continuing drop in global oil prices, a national analyst predicted Tuesday. Oil prices driving much of the pump price dropped by half because of increased supply from shale producers, tepid global demand and a decision by exporters such as those in the OPEC cartel to push prices down by maintaining production.
US Forest Service accepting comments on Va. pipeline path. Associated Press. Friday's the deadline to comment on a proposed natural gas pipeline whose route includes the George Washington National Forest. The multi-billion-dollar pipeline is proposed by Dominion Resources and other energy companies. It would run from West Virginia, through Virginia and into North Carolina. The proposed $5 billion, 550-mile pipeline would transport natural gas collected through hydraulic fracturing, or fracking, from Pennsylvania, Ohio and West Virginia.
Shale is proving beneficial. The Star Democrat, LTE. In her guest comment, “Fracking may prove to be harmful to public’s health,” Rebecca Rehr presents the potential hazards of hydraulic fracturing without balancing them with the benefits. Of course there are health and environmental hazards to extracting oil and gas from tight shale and other rock formations. However, horizontal drilling and fracking have dramatically increased U.S. production of oil and gas, leading to benefits both here and globally.
Natural Gas Price Plummets, But Tax Still a Wolf Priority. Philadelphia Magazine. States that depend on energy resources to power their economies and budgets are tightening their belts as the prices of oil and natural gas fall, but that won’t — and maybe shouldn’t — stand in the way of a new fracking tax in Pennsylvania, officials say.
Natural-gas home-heating rates low for January. Cleveland Plain Dealer. Cold January weather has arrived, but rates for natural gas have fallen. Both Dominion East Ohio and Columbia Gas of Ohio are posting standard rates that are lower than those in December and lower than year-ago January prices.
Small earthquakes in Mahoning County. Akron Beacon Journal. Shawn Bennett, of the Ohio Oil and Gas Association, said, “There is no reason for hysteria” regarding the new report. Ohio is working closely with researchers in other states on how “best to mitigate such events from happening in the future,” he said. NOTE: Houston Chronicle/Fuel Fixalso reports.
4 mild earthquakes startle North Texas; no damage reported. Express-News. Four small earthquakes have rattled North Texas hours apart. No damage was reported from Tuesday temblors. The U.S. Geological Service plotted the epicenters of the four quakes to northeast Irving, a Dallas suburb. At least two could be felt throughout the Dallas-Fort Worth area.
Low gas prices means job losses. KENS5. The output of the Eagle Ford Shale, recently slipped for the first time in more than a year. The state reports production at the shale dropped by about 2,000 barrels in December. A local economics professor from UTSA said cheap gas prices could mean job losses since a significant part of the economy is driven by oil and gas production.
Other references "A Deal Is A Deal", etc.:
We have a new report this morning that: "BP contributes $143 billion to the U.S. economy and supports nearly 220,000 jobs". In that report, BP America's Chairman and President John Mingé (NGP Photo) writes of Alaska that, " We are spending heavily to continue developing the giant Prudhoe Bay field after selling interests in four other Alaska fields. We also are working to advance the Alaska LNG project, which will help transport North Slope gas to global markets. Alaska voters supported these efforts by keeping in place a historic tax reform measure that encourages the industry to invest more in the state. -dh
WASHINGTON – BP’s business activities in the U.S. helped generate close to $143 billion in economic impact in 2013 and currently support nearly 220,000 American jobs, according to the company’s U.S. Economic Impact Report 2014.
Released today, BP’s new report provides a detailed, state-by-state look at the breadth and impact of the company’s activities in America. Since 2009, BP has invested nearly $50 billion, making it America’s largest energy investor. In 2013 alone, BP spent $22 billion with vendors across the country on products and services, ranging from offshore drilling rigs to gasoline-producing equipment for its refineries.
Our 13 oilfields on the North Slope (including Prudhoe Bay, Endicott, Northstar and Milne Point), account for about two thirds of Alaska oil production. We also hold the greatest ownership share in the 800-mile long Trans Alaska Pipeline System (TAPS).
"We are also one of Alaska’s largest private sector investors, taxpayers and employers. In 2012, BP Alaska paid $2.8 billion in taxes and royalties and other government payments to the State of Alaska. Furthermore, BP is one of the top 10 employers in Alaska, with 2,300 employees and more than 6,000 contractor jobs." (From BP Alaska web page. ALSO, SEE BP COMMITMENT TO VETERANS! DH
“No energy company has invested more in the U.S. over the past five years than BP,” said John Mingé, BP America chairman and president. “Our investments not only provide the energy to power the nation, but they also support hundreds of thousands of jobs that fuel the economy.”
BP’s business investments in the U.S. include oil and natural gas exploration and production, fuel and chemical refining, lubricants, shipping, trading, renewable energy production and cutting-edge technology research and development. The U.S. also is home to a number of operations that serve BP’s global businesses, such as the Center for High-Performance Computing in Houston, which houses the world’s largest supercomputer for commercial research.
BP produces more than 628,000 barrels of oil equivalent a day – enough to light nearly the entire country. The company’s three northern-tier refineries in Indiana, Ohio, and Washington are together capable of processing more than 742,000 barrels of oil per day. Also, BP’s chemical and lubricant facilities supply materials necessary for modern life, including greases and engine oils marketed under the Castrol brand and chemicals used in fabrics and packaging.
In addition to physical assets and energy production, the U.S. is home to nearly 40 percent of BP’s publicly traded shares and more BP employees than any other nation. The U.S. also is a center for BP research and recruitment. The company will spend $60 million this year on academic research, educational initiatives, and recruitment activities at more than 50 U.S. universities.
At the corporate level, BP contributes more than $30 million a year to charitable and nonprofit organizations such as United Way of America and the National Multiple Sclerosis Society. This includes contributions through BP’s unique Fabric of America program in which BP employees may annually designate $300 of corporate funds to a nonprofit organization of their choice within the United States. Since the fund’s 2007 inception, BP has given more than $26 million on behalf of our employees, helping to support roughly 19,000 organizations in all 50 states.
The investments and spending detailed in the report do not include costs associated with cleanup and restoration activities in the Gulf of Mexico, or claims payments related to the Deepwater Horizon accident.
To view or download BP’s full U.S. Economic Impact Report 2014, please visit this page.
BP in the U.S. - By the Numbers
* Employees: More than 18,000
* Total Jobs Supported: Nearly 220,000
* National Economic Impact: Nearly $143 billion in 2013
* BP U.S. Investment since 2009: Nearly $50 billion
* Money Spent with Vendors: More than $22 billion in 2013
* Community Investment: $30 million annually
Petroleum News/AP by Becky Bohrer: Gas Pipeline Coordinator Office to Close: The office of the federal coordinator for Alaska gas pipeline projects is shutting down after not being included in the budget bill that Congress recently passed. Federal coordinator Larry Persily (NGP Photo) said he plans to have the office shut down by the end of February.
Commentary. As we slip into a pre-Christmas weekend, we decided to both wish you and yours well and provide some reading material to help in contemplating next year's challenges: a speech we gave in Anchorage two weeks ago. Please send us your comments/reactions, here. -dh
Commentary: We have met some wonderful regulators in our career, those who with good cheer, appropriate seriousness, disciplined preparation, and who regulate with consistent fairness and adherence to due process. One of these is our friend, Colette Honorable (NGP Photo). Below is what another friend, David Cruthirds, said about her FERC appointment confirmation in today's Cruthirds Report. -dh
Undocketed : FERC - General: NARUC and FERC congratulate Honorable on Senate confirmation – On Dec. 16, 2014, NARUC President and Florida Commissioner Lisa Edgar issued a news release congratulating Arkansas PSC Chairman Colette Honorable on her Senate confirmation to FERC. Edgar said, “Throughout her tenure at NARUC, Chairman Honorable was a fair and impartial regulator. She led our Association with grace and determination, sharpening our focus on the safety and diversity of our nation’s electricity system. We know she will be a tremendous asset at the Federal Energy Regulatory Commission.” FERC also issued a news release on Dec. 17, congratulating Honorable on the confirmation.
We urge our readers throughout North America to easily and briefly comment on this gas pipeline.
Readers all over need to begin commenting on projects whether they are in our backyard or not.
We cannot allow seminar-based extremist and grass-roots community organizers to dominate due process by giving only an opposing view of job and wealth producing energy projects. In return for your action, we'll redouble our volunteer efforts here to keep you informed of such comment opportunities.
Comment here. -dh
Calgary Herald by Lauren Krugel.
The CEO of TransCanada Corp. (TSX:TRP) says he doesn't see the oil industry's appetite for new pipelines faltering even though crude prices have skidded to the lowest point in.... In an interview in his downtown Calgary office, Russ Girling said he's seen ups and downs far more drastic over his career and expects the oilpatch will come out of the latest downturn in reasonably good shape.
As Canada's Prime Minister Harper and Alberta Premier Prentice (NGP Photo) fight job killing environmental attacks on the economy, our EPA continues to load new costs and less energy supply onto the backs of America's energy/utility consumers. -dh