Weekly Notes From Office of the Federal Coordinator, Alaska Natural Gas Transportation System: 

Tax reform critics are continuing to try and bluff their fellow Alaskans into believing the state's oil tax regime is competitive. For the sake of Alaska's economic well being, they should start being honest about the cards we're playing. The fact is lawmakers are playing ACES high.  One of the bedrock arguments proffered by critics who oppose reforming oil taxes is that compared to other oil producing regions, Alaska is right in the middle. This is false.  ***  o put this into perspective; we're expecting Alaska's producers to invest billions to increase oil production, under the highest tax structure in North America as well as the fifth highest in the world.

Alaska Legislators Propose Boost for In-State Gas Pipeline, 24 introduced a bill package that supports the state-created Alaska Gasline Development Corp. AGDC is overseeing and facilitating the planning of an in- state ...

Near-term pipeline plans grow, longer-term projects sag, Oil & Gas Journal, By Christopher E. Smith.  Planned pipeline construction to be completed in 2012 rose 6.7% from the previous year, with increases in planned crude and natural gas pipelines more than countering sharply reduced products pipeline construction plans.  

Russia's Gazprom says unable to pump extra gas to Europe, Yahoo!7 News, Men work on a gas pipeline in northern Russia. Gazprom said on Saturday it could not pump additional gas to Western Europe amid a cold snap, after EU officials and energy firms said the Russian giant's deliveries had dropped in several states.

Pre-Keystone, Obama Backed Sands Pipeline - National Journal, Amy Harder - More than two years ago, on Aug. 20, 2009, Secretary of State Hillary Rodham Clinton approved a 1,000-mile pipeline that has the capacity to send 800,000 barrels of oil a day from Canada’s oil sands to Wisconsin. That pipeline is owned by the Canadian company Enbridge and began operating in October 2010.
 
Imperial Oil launches $2-billion Cold Lake expansion - The Vancouver Sun, Rebecca Penty - The Nabiye expansion will tap a further 280 million of reserves at the northern Alberta project, Imperial said on Friday. It will also include a 170-megawatt cogeneration plant to produce steam and electricity and a facility to process the bitumen produced at the site.
 
Natural gas stars in new energy policy - Times Colonist, Gordon Hamilton - Premier Christy Clark announced a new provincial energy strategy Friday that trades off the energy self-sufficiency target of the Gordon Campbell government for a new liquefied natural gas industry that has the potential to attract new businesses, new jobs and an estimated $20 billion in new investments to the province.
 
Sierra Club took $26 million from natural gas industry – Global Post, Amy Sliverstein - Brune said that Sierra Club only decided to accept donations from the natural gas industry because Sierra Club's leaders at the time believed that natural gas was a safer, cleaner alternative to coal. The money helped fund Sierra Club's Beyond Coal campaign.
 
Shell Focuses On Natural Gas, Leading In Arctic, LNG, GTL - E&P, Scott Weeden - With the opening of the Pearl gas-to-liquids (GTL) plant in Qatar and the final investment decision (FID) on the Prelude floating, liquefied natural gas (FLNG) plant off Australia, Shell’s portfolio will have an even higher proportion of natural gas to oil by the end of this decade.

Alberta Federation of Labour opposes Northern Gateway pipeline, wants refining jobs in Canada – Daily Commercial News and Construction Record - The Alberta Federation of Labour is opposing construction of the Northern Gateway pipeline from the Alberta oilsands to Kitimat, British Columbia on the grounds that the construction jobs would only be “transitory,” higher oil prices would result and jobs in refining would not be created in Canada.
 
Energy regulator approves export licence for BC LNG - The Globe and Mail, Carrie Tait and Nathan Vanderklippe Canada’s national energy regulator has granted its second liquefied natural gas export licence in less than four months – further opening the door to a future where Asia-bound tankers deliver new profits to struggling gas producers.
 
Japan to drill off-shore wells to tap gas hydrates - Reuters Africa - State-run Japan Oil, Gas and Metals National Corp (JOGMEC) said on Friday it would start drilling wells off the coast of central Japan from around Feb. 14 ahead of trial methane hydrate production slated for January-March 2013.
 
Industry, environmentalist sides of OCS development debate exchange views – Petroleum News, Alan Bailey “It took us six years and about $70 million to get the two air permits that are now final,” Childs said. “I will tell you that it is our perspective that the permitting process is being abused by groups who don’t like the policy platform put forth by the federal government.”
 
 

See Our Northern Waters Task Force Commentary and Links Below

Office of the Federal Coordinator, by Bill White (Photo).  Building a major pipeline to carry stranded North Slope natural gas to market would boost the number of jobs and wealth in Alaska. But the impact would be muted compared to the economic upheaval from building the trans-Alaska oil pipeline 35 years ago.  That's a key conclusion of a draft economic analysis, prepared by the gas line project developer and released Jan. 13, that forecasts how life in Alaska would change if the proposed $32 billion to $41 billion pipeline from the North Slope to Alberta gets built.  The project would jolt Alaska, injecting into the economy jobs and money that otherwise wouldn't be there.  Roughly 10,000 workers would be employed during peak construction, and spending could reach $6 billion on wages, goods and services in Alaska.

Alaska Dispatch.  During his nearly four decades in office, the House has passed 11 of his ANWR drilling bills, Congressman Don Young (NGP Photo) said. All but one died in the Senate. The only one that made it through Congress died ignominiously on President Bill Clinton's desk.

TAMPA - December in their fall business forum in Tampa, Florida the National Conference of State Legislatures (NCSL) passed a pro-development ANWR resolution in support of increasing domestic energy production and reducing oil imports.  Alaskan State Representative Dan Saddler (NGP Photo) of Eagle River introduced the resolution to the national body on behalf of Alaska.  The Alaska State Legislature, Alaska congressional delegation and Governors office all strongly support development in the 10-02 Area of ANWR. 

See Senator Cathy Giessel's  (NGP Photo) current ANWR comment.  See Giessel's earlier ANWR comment.  

WASHINGTON, D.C., The House Natural Resources Committee today passed three bipartisan American energy bills this week that are important components of the American Energy and Infrastructure Jobs Act, which will create over a million good-paying jobs, remove government barriers to American energy production, make America more energy secure, and help repair our roads and bridges without raising taxes.

“This Republican jobs plan opens access to American energy resources, creates new jobs, brings certainty for small businesses that depend on affordable energy, and generates new revenue that can be used to build roads and infrastructure projects to create even more American jobs. Unlocking our Nation’s energy resources starts a wave of economic benefits and job creation that will positively touch nearly every aspect of our economy,” said Natural Resources Committee Chairman Doc Hastings (NGP Photo).  The energy portion of the plan would expand access to American offshore and onshore energy resources - creating over a million new American jobs, lowering gasoline prices, reducing our dependence on foreign sources of energy, and raising new revenue.

• Offshore Energy Production. The plan would require the Administration to move forward with new offshore energy production in areas containing the most oil and natural gas resources that President Obama placed off limits for drilling after taking office. The plan includes the Atlantic Coast, Pacific Coast, and portions of the Eastern Gulf of Mexico. It requires the Secretary of the Interior to conduct oil and natural gas lease sales in the Gulf of Mexico, offshore Alaska and Virginia that have been delayed or cancelled. The plan will create over 1.2 million jobs and establishes fair and equitable revenue sharing for coastal states. Click here to learn more.

• ANWR. The plan would open less than 3 percent of the Arctic National Wildlife Refuge (ANWR) in Alaska to responsible energy development by directing the Interior Secretary to establish lease sales in the North Slope. The North Slope of ANWR was specifically set aside in 1980 by President Jimmy Carter and Congress for oil and natural gas development. The plan would create tens of thousands of new jobs and improve the local Alaskan economy. ANWR contains approximately 10.4 billion barrels of oil and at peak production could supply the U.S. with up to 1.45 million barrels of oil per day. Click here to learn more.

The Alaska Northern Waters Task Force concluded its work January 30  (NGP Photo: Reggie Joule, Chairman).  It held a press conference this week and issued a report which, among other things, urged that the group be made permanent by transforming it into the Alaska Arctic Policy Commission.  See our earlier analysis and editorial comment.  Scroll down for  our current editorial comment.  Listen to this week's meeting with the media: 

Posted: February 02, 2012 : 38:59 The Legislature's Alaska Northern Waters Task Force released its findings and recommendations Monday, and members held a press conference Thursday to discuss them and the next steps. ... •  Download Audio  [MP3:37.35MB]   Comment:  Please find the full report and official webpage here along with recommendations to create from this temporary task force an "Alaska Arctic Policy Commission".  All members found great value from the communication they enjoyed with the communities and with one another during the 18-month life of this task force study.  No doubt they learned much.  And, there is no doubt that as America's only Arctic state, Alaska has a stake in development of international Arctic policies.  One also observes that from this good intent and rationale comes the growth of another costly bureaucracy that in some ways subsumes from the State's Administration the authority to represent Alaska with the federal government, other countries and international non-profit organizations.  In short, while one always wants to seek better communication and address critical issues, one also notes that growth of government agencies is not without cost and can impact our constitutional distribution of state powers.  (One also observes that the worldwide travel and diplomatic opportunities for Commission members will be truly breathtaking!) -dh

Canada ambassador: Pipeline should be built “on merits” - Fuel Fix, David Hendricks - The U.S. government must decide whether it wants more oil from Canada or wants to continue relying on high levels of supplies from the Middle East and Venezuela, the Canadian ambassador to the United States said Wednesday while in San Antonio.

Liquefied natural gas producers turn to Asia - The Globe and Mail, Sean McCarthy - Faced with the prospect of a long-term glut of gas and low prices in North America, producers in western Canada have more incentive than ever to build liquefied natural gas terminals on the west coast to allow exports into the premium-priced Asian market.

ExxonMobil Licenses Oil Sands Steam Injection Technology to Baker Hughes - Business Wire - ExxonMobil Upstream Research Company has awarded the first license for its patented steam injection system and production method to Baker Hughes to improve the efficiency of in-situ oil sands projects. Approximately 80 percent of Canada’s oil sands can be produced using in-situ technology, which involves the injection of steam to enable bitumen to be extracted through drilling versus surface mining.

UPDATE 1-PetroChina buys Canada shale stake from Shell - Reuters, Alison Lui - PetroChina Co Ltd said on Thursday it has signed an agreement to buy a 20 percent stake in a shale gas project in Canada from Royal Dutch Shell Plc, the latest in a series of overseas acquisitions by Chinese state energy giants.

Russia Says Arctic Surveys May Add to its Continental Shelf - Bloomberg, Jake Rudnitsky - Geographic surveys conducted in 2011 in the Russian Arctic could add as much as 1.2 million square kilometers (463,000 square miles) to Russia’s continental shelf, according to the Natural Resources Ministry.

Stelmach advising Ukraine on gas development plans - Calgary Herald - Main callout pointer for calgaryheraldcom ..... Lougheed served on a number of corporate boards became involved in the development of a gas pipeline to the....

Fairbanks Daily News Miner by Max Buxton.  Slow progress on an in-state natural gas line to bring the inexpensive, clean burning fuel from the North Slope into Fairbanks has Interior lawmakers looking at alternatives.   Rep. Bob Miller, D-Fairbanks, on Wednesday introduced a measure to study the feasibility of extending Southcentral’s existing natural gas system to the Interior within the next few years.

ADN by Lisa Demer.  A Canadian energy business announced Wednesday it will pay $1.1 billion to buy the parent company of Enstar Natural Gas Co., the lone distributor of natural gas to tens of thousands of homes and businesses in Southcentral Alaska.  "Basically, it's operations as normal," Enstar spokesman John Sims said. Enstar's management team remains intact, including Colleen Starring (NGP Photo)  as president, he said. The name Enstar stays too, he said.  AltaGas calls itself an energy infrastructure company and says the purchase will help it grow into one of North America's biggest energy companies. It already gathers, processes, transports and stores natural gas. It has wind and hydro projects. Natural gas utilities currently operated by AltaGas serve 119,000 customers in Alberta, Nova Scotia, British Columbia and the Northwest Territories.

Comment.  Unlike the Alaska Dispatch Op-Ed writer, we have a high regard for Alaska Department of Fish and Game Commissioners Cora Campbell (NGP Photo) and her acting Director of the Division of Wildlife Conservation, Doug Vincent-Lang. (NGP Photo)  We have witnessed both of them in public briefings and answering media questions.  They do their homework and appear to be highly dedicated.  While the writer of the piece may have his own reasons for attacking the reputations of the two officials, he doesn't provide a very convincing rationale or set of facts upon which to base such assassinations of character.  -dh

(Post completed: 05:34 ADT)

Industry establishes Canada-wide operating practices for shale, tight natural gas hydraulic fracturing - Digital Journal The Canadian Association of Petroleum Producers today announced new Canada-wide hydraulic fracturing operating practices designed to improve water management and water and fluids reporting for shale gas and tight gas development across Canada.

ConocoPhillips says more study needed of Alaska LNG exports - Fairbanks Daily News-Miner, Dermont Cole, "And it is really not just thinking about it from the perspective of Lower 48 natural gas production, but as we think about what long-term alternatives are for Canadian gas production, and importantly, as we think about what alternatives could be for development of the North Slope gas in Alaska. Those are all things that we'll be investigating whether liquefaction and export of natural gas makes sense going forward."

Officials answer proposed Alaska gas pipeline questions – Fairbanks Daily nNews-Miner, Mary Beth Smetzer, Fewer than 50 people turned out Monday evening for the public scoping meeting conducted by the federal agency about environmental concerns of the proposed natural gas pipeline from the North Slope’s Prudhoe Bay to Canada.

OVERNIGHT ENERGY: House Republicans forge ahead on drilling - The Hill, Ben Geman and Andrew Restuccia, The House Natural Resources Committee will mark up bills that open Alaska’s Arctic National Wildlife Refuge to oil development; mandate far wider offshore leasing; and seek to spur oil shale development in western states.