What's Wrong With Alaska?

Billions of petroleum related investment dollars are flowing from Asia to Canada.

Q.  What's wrong with Alaska?

A.  It is among the most expensive operating environments in the world (i.e. labor, transportation, climate, transportation, remoteness to the markets).  It is mostly owned by the Federal government, with an Administration openly hostile to natural resource development.  Federal statutory, regulatory, leasing and taxing policies are volatile and threatening.  Alaska state petroleum taxes are the highest in the free world and unpredictable.  Alaska's government spending and income projections are unsustainable, mark of an unreliable partner.   The majority of Alaska's people and leaders are apparently content with the investment climate they have created.  Alaska's children will be unable to criticize a paltry, diminishing inheritance because they will never know -- and could only imagine -- how it might have been.     -dh

Calgary Herald by Peter Tertzakian (CH Photo).  At last count, Korean, Chinese and Japanese interests have contributed or committed at least $13.8 billion into the Canadian oil and gas economy. ... that’s only in the past 12 months, and doesn’t include unannounced deals that probably add another billion investment dollars into Calgary head-office coffers. Equity infusions and joint venture dollars account for $9.7 billion, most of which will be invested into Western Canadian projects over the next few years. The full acquisition of Harvest Energy by the Korean National Oil Company put $4.1 billion into the pockets of Harvest’s shareholders who may not reinvest into Canada’s oil and gas business. However, under the banner of Korea’s state-owned oil company the new Harvest should have no trouble accessing a pipeline to deep-pocketed Asian capital.  ...  Let’s put the $13.8 billion of Asian inflow into perspective. Capital expenditures into Canada’s oil patch are down by 25% since the heyday of 2006-to-2008, but are still running around $40 billion per year right now. Another relevant marker is that companies raise about $10 billion a year from equity markets, dominantly from Western institutions, so in this context too the influx of new Asian money is very significant, even if it’s spread out over a few years. To be sure, reinvestment into Canada’s upstream oil and gas economy would be significantly lower, probably at least 10% less, if access to the Asian capital was absent this year.

Olympian by Mike Dunham.  "Going to Extremes," which came out in 1980, became a best-seller. It presented a portrait of a juvenile society in transition, emerging from wilderness self-reliance into layered modern complexity, driven by the sudden rush of pipeline construction and oil money.

Peninsula Clarion by Brielle Schaeffer.  The Kenai City Council passed a re-zoning ordinance at its meeting Wednesday night that would allow industry on the property planned for the Cook Inlet Natural Gas Storage facility.

Downstream Today by Matthew Dalton.  The European Union will propose new restrictions on how greenhouse gas allowances can be produced from industrial gas projects, European climate change commissioner Connie Hedegaard said Wednesday.  ... The commission will develop a proposal for new rules on gas projects that will apply to the EU's emissions trading system after 2012.  "The international debate has made it quite clear what changes to the CDM are needed...and also what successor mechanisms should be put in place to make the carbon market an even more powerful instrument to reduce emissions," Hedegaard said. (Is this a trend that will float across the pond to Canada and the United States--perhaps via the United Nations?  -dh)