See Alaskanomics Posting of Mike Bradner's Column Re: State Spending. Why do we at Northern Gas Pipelines often focus on the importance of a 'sustainable Alaska budget'? Because if the state cannot control spending and continues deficit spending, no infrastructure project in the future will be safe from sudden, unplanned, predatory taxation to stave off bankruptcy: hence, no gas pipeline. That's why. -dh
Apology To Canada And To The World
Back in the olden days, 1979 or thereabouts, I had just finished my assignment as public affairs director for the U.S. portion of the grand, 27-member Canadian / American Arctic Gas Pipeline consortium. I had an office and secretary in both our Anchorage and D.C. offices. I traveled weekly between the two locations and Canada for six years--often with company president, Bob Ward, former Alaskan Lieutenant Governor. Working with my Canadian public affairs counterpart, author Earle Gray, was another of many important cross-border relationships.
Anyway, that experience came to an end and, impressed with the entrepreneurial genius of T. Boone Pickens, I wrote him offering my corporate and grass-roots communications services.
Pickens never wrote back, but, happily, three members of the former Arctic Gas consortium did provide me with continuing U.S./Canadian energy challenges.
First, Cy Orlofsky of Columbia Gas Transmission Company asked me to consult with the Alcan Project controlled by John McMillian Northwest Energy Company, and Bob Blair of Alberta Gas Trunkline, Ltd. Northern Natural Gas of Omaha -- thanks to a recommendation of VP Dan Dienstbier -- brought me on as public affairs director to reorganize that department (i.e. before the company morphed into Internorth and then Enron). After that brief assignment, Atlantic Richfield's Robert O. Anderson hired me as government affairs director in Alaska and, later, Washington D.C.
T. Boone Pickens as the world has learned, has done just fine in the communications area without Dave Harbour's help.
Nevertheless, my own experience with Arctic Gas and ARCO enabled me to share with Pickens a knowledge of Canadian / American energy interdependence. Just as Canadian oil and gas flows through the U.S., so do American pipelines move through Canada. Our oil and gas industries benefit from the experience and technology shared by company employees rotating between U.S. and Canadian project assignments. We are each other's largest trading partner. ...not to mention our shared interests in the Arctic and North American military defense.
In 2000-2001, when we created the Northern Gas Pipeline blog, we were determined to encourage greater understanding and rapport between the two great North American neighbors.
Sometimes this was a struggle, as when the U.S. took an ill-considered tariff position regarding the import of Canadian softwood. Then there were those associated with Alaska energy concepts (i.e. El Paso Natural Gas, Yukon Pacific, Alaska Gasline Port Authority, Backbone, etc.) that often demeaned Canada as a tool for leveraging less-economic or infeasible, "All-Alaska" energy projects.
Fast forward to this era. TransCanada Pipe Lines, Ltd. has grown into a much bigger energy entity in Canada and the United states. Its pipelines crisscross North America. It is a major player in the Ak-LNG project. And, its Keystone XL project has been front page business news for over a half decade.
|Keystone: Obama's slow-motion Kabuki theatre (See This Edmonton Sun Commentary of March 3) by Kenneth P. Green|
The Obama Administration's political rejection of the Keystone XL project was a monumental decision that could shift tens of thousands of energy jobs to other countries; diminish the entire U.S. economy, injure relations with Canada, further demonstrate lack of solid American leadership to the world and seriously damage our efforts to achieve energy independence and stronger national defense capability.
In response to Obama's veto of the Keystone XL project, T. Boone Pickens produced this Op-ed piece in today's Calgary Herald.
In it, Pickens apologizes for Obama's irresponsible Keystone XL veto. Our readers can join in that apology as we interact with our fellow Canadian and U.S. families, business partners and politicians.
But the purpose of this column today -- after providing a little U.S./Canadian historical and personal background -- is to extend America's apology to not only Canada but the world in general: for the loss -- or, hopefully, just the delay -- of this great project.
Because of Obama's Keystone XL action:
- thousands will not have jobs, and
- U.S. energy prices are likely to be higher, and
- government unemployment and social expenses will be higher, and
- scores/hundreds of local, state and national governments will not have badly needed project tax revenue, and
- because of the arbitrary and capricious nature of Obama's veto, the country's "rule of law and reliance on due process" is further shaken (Ref: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, etc.), and
- uncountable personal lives will have been affected in negative ways as unemployment, involuntary transfers, divorces and marriages, home ownership, manufacturing, health, and other human conditions are affected, and
- project demand for foreign goods and services will affect the economy beyond North American borders, and
- countries wishing and planning for aggression against North America's people and economies will be given indirect aid and comfort.
Reader letter today:
Dave, I met Mr. Pickens at a cocktail party in Saratoga Springs in 2008. He was charming, impressive and extremely credible. He was advocating natural gas as a way to break America’s dependency on oil, and a substantial portion of my portfolio is dedicated to natural gas investments.
So yes, we join with T. Boone Pickens in apologizing to Canada for America's indefensible delay or killing of the Keystone XL pipeline project.
But we would go on to extend that apology to America's allies and the people of the entire world. The U.S. owes this apology to the world for failing to live up to the high standards our fellow humans have come to expect from the "shining city on the hill" that was once the United States of America.
Once America could say, "We are dedicated by our Constitution and by tradition. to upholding a citizen's right of due process and the rule of law emanating from that guarantee."
We are optimistic that the country can once again regain, embrace, protect and defend its traditional high standards.
We are not optimistic that this return to the Constitution will be easy.
A Terrible Constitutional Amendment; Constitutionalizing the Dividend
Alaska Legislative Digest- Supplemental Commentary
By: Mike Bradner
Sen. Bill Wielechowski has introduced a proposed constitutional amendment, SJR-1, that would constitutionalize the Permanent Fund dividend. This would essentially take Fund income off the table for spending on the basic purposes of government, such as schools, health and social needs, public safety, and transportation that might be needed under emergency fiscal conditions.
We’re not picking on Sen. Wielechowski, but he volunteered to be part of this discussion!
Basic Politics 101: What’s the primary purpose of government?
The primary purpose of government, Sen. Wielechowski, is to provide public services, not to pay the public a cash dividend. The latter may be feel good politics, but it lacks a place in the fundamental role of government.
None of us know how this fiscal crisis we’re mired in is going to work out. The odds are we’re not going to get through it without some significant budget reductions, harsh enough that they will also put revenue necessities on the table.
Revenue necessities - taxes!
These “revenue necessities” are polite words for “taxes,” money we will have to pay-citizen taxes they’re called. In the agenda of revenue, use of Permanent Fund income, is also a revenue, citizens surrendering a portion of their dividend for public services.
State lawmakers, as well as governors, in recent years have lived in a political environment where taxes have not been part of the discussion with the public.
Taxes is a political “choke word”
Alaskans seem to have a speech impediment. They can say Tanana, Tutatuliak, Tallahassee, Texas, Tatalanika. But ask them to say “taxidermy,” but hold everything after the “x” and they’ll choke up, and perhaps go into apoplectic shock. On the state level, taxes have simply been off the table for decades, not discussable. As a result, the “political culture” of such discussions is also a blank.
Politicians have to “facilitate” bringing taxes to public discussion
This isn’t to be taken lightly. Politicians have to work up to a dialogue about taxes, as well as use of Permanent Fund income. No one has to rush the barricades. But politicians do have to facilitate “this language,” gradually bringing the public into the discussion. Notice we used the word “facilitate.”
One of the political skills of politicians, especially when they face politically hazardous, and unavoidable, issues is to use their political skills to insure that such issues get on to the table. If they can’t personally touch the issues, then the skill is getting less vulnerable parties to push the issues on the table.
We have not had to deal with revenue issues within the institutional memory of most of our present lawmakers, so it should be no surprise they are reluctant to engage such discussion.
No one yet has put revenue discussion on the table!
• In the aftermath of the 2008 financial crash, and subsequent recession, the first action of many states across the country was to put all their revenues, fees, tax exemptions, and etc. on the table for review (not necessarily advocacy).
• Such a review of our revenues options has yet to occur.
• The recent Commonwealth North report (by people who don’t have to stand for election) managed to do a volume of work without putting revenue issues on the table. They had the opportunity, but made only a reference to such future work.
Talking taxes is politically hazardous, to be sure!
Talking taxes is a hazardous process to be sure. By nature, politicians avoid being first to grab the “third rail” of new and controversial issues. Nurturing revenue issues forward is a delicate dance between legislative leaders, majorities, minorities, and individual lawmakers. Many lawmakers come from districts where such issues may be far more hazardous than others. Then there is the governor, who has a singular constitutional responsibility to lead.
Legislators need to think about the fact that they don’t have to be elected forever.
There is life after politics. They may well have to stand up among flying political bullets. They may survive, they may not. The history of such revenue/tax combat is that the voters, of course, do react. They come down hard on a “tax legislature.” In fact, voters in reaction often don’t distinguish between those who voted for taxes and those who did not - they just whack them all.
However, even where there is a quantum shift in makeup of a Legislature, the new body rarely repeals such taxes. They may move some decimal points, and make political noise, but the revenue enactments generally remain “in place” – they were necessary. However, we are told that many lawmakers who bite the bullet often later get elected again. They apparently were respected for their courage.
Facing up to tough issues, not passing the buck!
Politicians are elected to do what? They are elected to look at complex issues, and at a greater depth than the general public, being busy with their daily personal lives can possibly do.
However, there are many of the elected willing to duck such issues, pass the buck to the public. We’re talking about putting a revenue issue out at public referendum - let the public decide. The result of such a political dodge is that there will be only one answer by the public - that will be an emphatic “no.”
Once putting a tax issue to a public vote, lawmakers are stuck with that as “precedent.”
The odds are repeated efforts will just bring repeated rejection.
Income tax, sales tax, or use PF income
The question for such lawmakers who dodge responsibility and pass the buck to the public is:
• “Why the Hell do we elect you.” We elect people to make the tough decision.
The best test of the necessity of a tax is when politicians lay their futures on the line and “do it.”
In the future, like it or not, lawmakers will likely face choices that involves enacting an income tax, a sales tax, and use of Permanent Fund income.
What we “are not” as a state!
We need to remember we are not a “usual state,” we are not Maryland, Delaware,
New Jersey, Connecticut, New Hampshire, Vermont, which you can walk across in a day. Nor are we Ohio, Indiana, Illinois, Iowa , Wisconsin that you can easily drive across in a day. These are states where a kilowatt of electricity can flow border to border, where the tax bases of local governments are relatively uniform, where local governments can support many services without state assistance.
As a state “what we are”
We are is a state that superimposed over the contiguous United States would stretch coast to coast, a fifth the size of the contiguous states. We have two-thirds of the shoreline, an extensive fishery, 82 percent of our communities are connected only by air, the state operating 247 airfields. One marine highway system stretches 1,619 miles along our coastline.
We operate school systems unconnected by roads, and where individual school sites are unconnected from each other. The densities of school populations and school costs defy efficiency in Many of these areas lack a local tax base in the traditional sense. Costs for electricity and heating oil is prohibitively high, climate restricts fuel deliveries to once a year. Community infrastructure is costly and difficult to maintain- water, sewer, waste treatment, and solid waste.
We have gained in our core regional efficiency!
Today the good news is that the costs of our railbelt region (Seward to Fairbanks) are pretty good in comparisons with elsewhere. The same is true for our Southeast Alaska cities and boroughs. The bad news is that a lot of “other Alaska” still has a high cost profile.
All this being said, our windfall of oil revenues due to the 2008 ACES tax, and the escalation of oil prices worldwide, has allowed our budgets to soar.
We can reduce budget, but also have to have a mix with new revenues. A good end result comparison might be with similar core areas in other states.
The same goes regarding what people pay for their services in these ad hoc comparisons.
So what’s going to happen now?
Somewhere here lawmakers have choices to make regarding budget reductions and balancing reductions these with a mix of different kinds of new revenue. Our budget spending is still constrained by oil prices. While we may adopt new revenues that are more predictable, our reliance on oil prices will remain, and oil price will likely remain volatile for some time to come.
There’s a lot more ahead of us!
There is a lot more ahead of us regarding a host of issues that revolve around budget situation. We will have ongoing special reports exploring the shadows of emerging policy. Right now lawmakers are pretty much just looking at budget reductions, disregarding revenue. They are assessing what is structurally possible and over what kind of time span. Cuts take time to implement, programs time to dismantle and phase out. There are also contracts. Likewise new revenue take time to put in place.
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Calgary Herald Op-ed by T. Boone Pickins. To my friends in Calgary and across Canada: I apologize on behalf of my fellow Americans for the United States government’s actions.
Why? Because after years of poring over the engineering, design, geology and the contents of the proposed Keystone XL pipeline, President Barack Obama chose to make a political statement and vetoed a bill to allow construction to begin.
I feel bad about this. I lived in Canada in the 1960s. You have a great country, and it’s a great place to operate in the oil and gas sector. We should have done better by you.
You may not follow the ins and outs of the U.S. Congress as much as we do, but you probably know Keystone was a bipartisan bill. Republicans and Democrats in the U.S. House and Senate voted for it. That was big news, as Democrats and Republicans working together on anything over the last 10 years has been rare.
There was no good explanation for Obama’s decision to veto the bill. The U.S. Department of State reported previously the environmental effects of the pipeline would be minimal. In its January 2014 report, the department stated: “emissions (from pipeline activities) would be equivalent to greenhouse gas emissions from approximately 300,000 passenger vehicles operating for one year.”
There are 250 million passenger vehicles operating in the U.S.
Keystone would have the effect of adding about 1/10th of one per cent to the fleet.
Because the pipeline crosses national boundaries, the State Department is charged with producing reports. Yet, after State made its report, the White House went “agency shopping” and asked the Environmental Protection Agency (EPA) to take another look at Keystone. To no one’s surprise, the EPA fired off a letter objecting to pipeline construction, citing concerns of increasing greenhouse gas emissions.
Where the EPA went wrong, however, was calculating the effects on greenhouse gases “from the extraction, transport, refining and use of the 830,000 barrels per day of oilsands crude that could be transported by the proposed project at full capacity.”
The problem with the EPA’s math is that Canadians don’t need permission from the U.S. to recover that oil and sell it. Canadians will extract it and ship it overland by train or via pipeline and tanker, not south to the United States, but west to Asia, or elsewhere. When oil prices come back up, Korea, Japan, China and others will benefit from the Canadian oilsands, not the U.S.
It is no surprise to Canadians that Canada is the U.S.’s largest oil-trading partner. But it is a surprise to many U.S. residents. I have long been a supporter of the idea of building on the North American Free Trade Agreement by establishing a North American energy alliance to include Canada, the U.S. and Mexico.
The reason oil prices are not bouncing up and down with every piece of news out of Iraq, Iran and Israel is the U.S. and Canada are using the latest innovative technology to recover oil and natural gas — from sands and shale. Additional production from those sources has provided an international energy price shock absorber. For U.S. consumers, lower gasoline and diesel prices have been like getting a $300-billion bonus. The effect in Canada has likely been similar.
So, why is Obama so opposed to the Keystone XL pipeline? As my dad used to say, “Son, it’s kind of like murder. It’s tough to explain.”
Politics is the most likely answer. The veto lets the president throw a bone to his political left while thwarting a win for the Republican-controlled House and Senate on their bill.
The silver lining is this: Obama’s veto didn’t kill the Keystone XL pipeline. He delayed it. Sooner or later, good planning will trump bad politics and the project will get the green light — we hope.
My Canadian friends, please have patience. The Keystone pipeline will happen.
T. Boone Pickens is the architect of the Pickens Plan, an energy plan for America. He is also chairman and CEO of BP Capital.
Landlocked: Murkowski Explains Alaskans’ Access Frustrations
The Governor and Entire Congressional Delegation Recently Vowed to Fight the Administration's Overreaching Action to Shut Down Alaska Resource Development and Her Economy. Senator Murkowski Has Acted to Create A YouTube Video to Highlight Growing Federal Restrictions in Alaska. Thank you, Senator Murkowski for Effective Work And Quick Action! We believe that some educational entity could take that map video and expand it into a one hour lesson plan framework for elementary, high school and college students. -dh
WASHINGTON, D.C. – Senator Lisa Murkowski today released a video to help broadcast the Alaska #ThisIsOurLand movement’s agenda to a wider national audience.
With Alaskans reeling from the Obama administration’s ongoing efforts to block off millions of onshore and offshore acres from energy development, Murkowski produced the two-minute film to speak plainly to Americans who may be unaware of the federal government’s costly, ever-growing overreach in Alaska.
In the video, Murkowski points out that 61 percent of Alaska’s lands are controlled by the federal government – and that almost none of those lands are truly open to energy production. Instead of allowing Alaskans to responsibly develop the State’s vast resource potential, the Obama Administration has converted an additional 12.2 million acres within ANWR into de facto wilderness; withdrawn 9.8 million additional acres in the offshore Arctic; removed roughly half of the National Petroleum Reserve (NPR-A) from leasing; planned a 685,000-acre “Area of Critical Environmental Concern” in the Fortymile Mining District; proposed sweeping critical habitat designations; and preemptively targeted potential development on State lands.
All of this and more has occurred in conjunction with a series of major federal rules – from the “Waters of the United States” expansion to EPA’s climate regulations – that will bring additional costs and consequences for energy development in Alaska.
Text of Senator Murkowski’s Remarks
“Hi this is Lisa Murkowski, Senator for Alaska. And I want to talk you about the state of my State.
“Alaska is about one-fifth of our country, by land mass. We’re twice as big as Texas, with North Carolina thrown in for good measure.
“If Alaska was overlaid on the Lower 48, we’d stretch from California to South Carolina. That’s a lot of land – but what you may not know, is who controls it.
“The National Park Service manages about 15 percent. The Bureau of Land Management controls another 20 percent. The Fish and Wildlife Service administers 19 percent. The Forest Service controls another six percent down in Southeast. Then you add one percent for the Department of Defense, and the federal government controlling about 61 percent of Alaska’s lands.
“That’s more land than Texas and Utah combined. So who controls the rest?
“The State of Alaska has 27 percent. Alaska Natives have 12 percent. And that leaves just one-quarter of one percent of Alaska as private land - barely even noticeable on a map.
“And while the State and Alaska Natives do their best to foster economic development, the federal government has taken the opposite approach.
“All of the non-yellow lands are federal lands that are now off-limits to resource production. Even the yellow federal areas are hardly “open” to development. All of the dark blue offshore areas have serious development restrictions. Most recently, the Obama Administration is trying to permanently restrict development in the red and orange areas. It’s also targeting the area in pink for new limitations.
“When you add it all up, the federal government is now blocking development on our most resource-rich lands and waters. That’s depriving Alaskans of our ability to produce energy, minerals, timber, and more for the good of our nation. And it’s depriving our nation of jobs, revenues, security, and prosperity.
“That’s the state that we’re in, in Alaska. And that’s why we’re asking for greater access to our lands and waters.”
KTVA by Rhonda McBride.
|AJOC by Tim Bradner. I was puzzled, but not surprised, when Gov. Bill Walker made his surprise announcement that he would seek an expansion of a state-led gas pipeline that is being planned as a backup to a large industry-led pipeline and liquefied natural gas project, which is now in preliminary engineering. More....|
When Gov. Bill Walker (NGP Photo) announced he wanted to put a backup gas line project in competition with the Alaska Liquefied Natural Gas project, he opened a Pandora’s box of questions for lawmakers focused on AKLNG as the main vehicle for getting North Slope gas to market.
House majority leaders responded by introducing legislation to prevent a competing line for AKLNG, unless producers back out from the project.
TODAY'S CONSUMER ENERGY ALLIANCE ENERGY NEWS LINKS
Albuquerque Business First: Viewpoint: Why New Mexico doesn't need fracking bans*David Holt Op-Ed
Energy production has always been an important part of New Mexico's economy. Indeed, the state ranks sixth in the country in crude oil production, and its production of natural gas accounted a crucial 4.8 percent of U.S. marketed natural gas production in 2012, according to the Energy Information Administration (EIA).
CEA’s The Energy Voice: Winter Storms Evoke Polar Vortex Price Spikes
It’s not just record-low temperatures giving consumers chills during this week’s winter storms and wild weather. The cold weather brings with it reminders of last year’s regional power outages and spikes in electricity and heating costs for many New England, New York, Mid-Atlantic and Midwest residents. Part of the price spikes were attributable to a lack of adequate pipeline infrastructure to move natural gas to areas of demand.
The Hill: Obama embraces Keystone skepticism
President Obama has increasingly sided with the most negative assessments of the proposed Keystone XL oil pipeline, leading both opponents and supporters to believe that he’ll reject the contentious project’s permit. As anger among Republicans in Congress has grown stronger when it comes to Obama’s years-long delay on judging Keystone, the president has gradually abandoned attempts to avoid weighing in on the project’s merits, gravitating instead toward arguments against it.
KTIV: Nebraska congressman says Keystone XL pipeline won't be built during Obama presidency
Nebraska's First District Congressman doesn't think the Keystone XL Pipeline will get built while President Barack Obama is in office. U.S. Rep. Jeff Fortenberry made that statement during a visit to Norfolk on Tuesday. Fortenberry said that President Obama's recent veto shows that there is now no way the pipeline will get built without an administrative change.
The Intelligencer: Sen. Capito Calls for Keeping Keystone Pipeline Out of New Legislation
West Virginia's two U.S. senators are united in their belief the proposed Keystone XL pipeline project should move forward, but they appear to disagree about how to make it happen. Following the Senate's failed attempt to override President Barack Obama's veto of legislation approving construction of the long-delayed pipeline, the bill's original co-sponsors, Sens. Joe Manchin, D-W.Va., and John Hoeven, R-N.D., said they would try to tack pipeline approval onto a long-term highway funding bill that will be up for consideration in the coming weeks.
U.S Chamber of Commerce: EPA War on Coal Will Shut Down More Power Plants in 2015
EPA’s “War on Coal” is succeeding in driving coal-fired power plants into retirement. The Energy Information Administration (EIA) reports, “Nearly 16 GW of generating capacity is expected to retire in 2015, 81% of which (12.9 gigawatts) is coal-fired generation.” At the same time, new electricity-generating capacity will come mostly from wind (9.8 GW), natural gas (6.3 GW), and solar (2.2 GW).
The Washington Times: Now this is getting serious: Climate change puts coffee at risk, EPA chief warns
Americans’ morning caffeine rush ultimately could be a casualty of climate change, Environmental Protection Agency Administrator Gina McCarthy said Wednesday. In a speech at the Council on Foreign Relations, Ms. McCarthy said the changing climate — which she believes is largely caused by human activity — puts economies, global security and food supplies at risk. Coffee lovers also will eventually feel the effects, the EPA chief said.
E&E Publishing: Consumers trapped in the middle of Big Coal's fight for survival
Chris Woolery seemed impatient when he cornered a lawmaker inside an elevator at the Kentucky Capitol. It was his first shot at bending an ear as legislators hustled to their morning meetings. "I've helped folks with $1,400 electric bills, and we've cut their bills in half," Woolery said, twisting his tall frame inside the packed shoebox to get closer to the state representative from Lexington.
Milwaukee Journal Sentinel: Walker, Obama administration representatives differ on emissions cuts
Representatives of the Obama and Walker administrations gave polar opposite views in Milwaukee on Tuesday about federal regulators' plan to reduce emissions tied to global warming. Defending the plan, Susan Hedman of the Environmental Protection Agency described it as flexible and workable, saying it would lead to health benefits through reduced hospitalizations linked to less polluted air.
UPI: Oil price rally waning, though WTI holding strong
Crude oil prices continued their slow fade Tuesday even as U.S. data show evidence the bear market had an impact on the production behind recent market trends. The price for Brent, the global benchmark, slid about 1.3 percent from Monday's close to trade near $57.70 per barrel for the April contract early in Tuesday trading. Brent hit a low mark of around $45.13 per barrel mid-January and climbed 37 percent by late February. The rally, however, ran out of steam in March, with Brent crude oil prices down about 5.3 percent since the start of the month.
Bloomberg: Get Ready for Oil Deals: Shale Is Going on Sale
A decision by Whiting Petroleum Corp., the largest producer in North Dakota’s Bakken shale basin, to put itself up for sale looks to be the first tremor in a potential wave of consolidation as $50-a-barrel prices undercut companies with heavy debt and high costs. For the first time since wildcatters such as Harold Hamm of Continental Resources Inc. began extracting significant amounts of oil from shale formations, acquisition prospects from Texas to the Great Plains are looking less expensive.
CBS News: U.S. oil regions are bracing for more bankruptcies
There are more signs that the North American oil boom, and the lower gas prices it brought with it, is running out of...well, gas. On Monday, Houston-based BPZ Energy, an independent oil and gas exploration and production company, announced it was voluntarily filing for Chapter 11 bankruptcy protection.
Platts: US crude production to rise to 9.3 million b/d in 2015: EIA
The US Energy Information Administration on Tuesday nearly tripled its forecast for the 2015 Brent-WTI spread to $7.35/b, largely due to a glut of US crude production. The 2015 spread, which EIA in February forecast would be $2.54/b, was widened due to "continuing large builds in US crude oil inventories, including at the Cushing, Oklahoma storage hub," the agency said in its latest Short-Term Energy Outlook.
The State: BP oil spill film used to fight SC drilling as business leaders counterpunch
Boosters of drilling for gas and oil along the South Carolina coast are punching back at a sustained effort by environmental groups to influence public opinion against a proposal that could allow offshore drilling. As a public comment deadline nears, U.S. Rep. Jeff Duncan, R-S.C., and business leaders will hold a forum Wednesday near Charleston to explain why oil and gas would be the right industry for coastal South Carolina.
WSAV: Feds holding SC meeting on offshore oil, gas exploration
Folly Beach has become the fifth coastal community in South Carolina to pass a resolution opposing offshore drilling for oil and natural gas. The town passed the resolution Tuesday evening, the night before the federal government holds a meeting on the prospect of opening wide swaths of the Atlantic off the Carolinas to drilling later in the decade. That meeting in Mount Pleasant is sponsored by the federal Bureau of Ocean Energy Management.
McClatchy: Some in Georgia are skeptical of offshore drilling plans
News that President Barack Obama is proposing to open Georgia’s coastal waters to oil and gas drilling has taken many people in the state off guard, and opponents are scrambling to resist the plan. “It’s definitely clear that they woke up,” said Claire Douglass, campaign director for the environmental group Oceana.
The Wall Street Journal: Wrecks Hit Tougher Oil Railcars
In a string of recent oil train derailments in the U.S. and Canada, new and sturdier railroad tanker cars being built to carry a rising tide of crude oil across the continent have failed to prevent ruptures.
Associated Press: Recent derailments deepens fear of train disaster
Many factors can cause an accident, from too great a speed to operator fatigue. We won't know the cause of the most recent ones until investigations are complete, but weather may be a factor. When it is very cold, as it has been across much of North America, steel rails and train car wheels can contract and become brittle. If the steel has a manufacturing flaw, no matter how small, it can spread rapidly in the cold weather.
Fuel Fix: Wisconsin Democrats want oil train rules on fast track
The Obama administration should take “immediate action” to boost the safety of moving crude by rail following a string of oil train explosions, argue a pair of Wisconsin lawmakers. Wisconsin Democratic Sen. Tammy Baldwin and Rep. Ron Kind insist that the accidents — including two in Ontario, one in Illinois and another in West Virginia in the past four weeks — illustrate the need for a rapid phase out of “antiquated” tank cars that are prone to rupture as well as stepped-up standards for new models.
Midwest Energy News: Under Rauner, Illinois’ energy direction remains unclear
Two months after his inauguration, Illinois Gov. Bruce Rauner has made national headlines for his aggressive efforts to get the state’s budget crisis under control. Energy and related environment issues have so far taken a back seat, but experts and advocates are watching closely for signs of what the new Republican gubernatorial administration will mean on that front.
Associated Press: NC House members want air emission rules for HF
Three North Carolina Republican lawmakers want to make clear a state environmental panel must draw up rules designed to minimize toxic emissions related to any upcoming natural gas exploration through fracking. The Wake County House members filed the billMonday, a week after a flap over a provision inserted into another bill by the House majority leader.
Pittsburgh Business Times: Slowdown costs at least $1.5B in capital spending
Five natural-gas producers with significant operations in southwestern Pennsylvania have reduced their capital budgets collectively by 23 percent — or $1.5 billion — according to numbers reported in operational guidance.
Associated Press: Governor advances tougher drilling rules
Pennsylvania state environmental regulators say they want to get tougher on how the Marcellus Shale natural gas drilling industry stores waste, dampens noise and affects water resources, schools and playgrounds. Department of Environmental Protection officials gave a Monday briefing in which they described key elements of a forthcoming plan to update drilling industry regulations.
Columbus Dispatch: Businesses pick apart Kasich’s tax proposals
Gov. John Kasich’s tax proposals continued to take on water yesterday — and some of his front-line supporters in the business community are the ones shooting holes in the boat. Ohio’s nine metro chambers of commerce, including Columbus’, said Kasich’s tax package — which includes $5.7 billion in income-tax cuts and $5.2 billion in sales, business, tobacco and fracking tax increases — could “stall Ohio’s recent economic rebound.”
Columbus Dispatch: Panel accepts some safeguards for state parks, rejects others
An Ohio House panel modified a fracking proposal yesterday to explicitly mandate “zero surface impact” on state parks and forests. But by mostly party-line votes, the House Energy and Natural Resources Committee denied a pair of additional amendments that would have provided extra protection to public lands.
Times-Recorder: Ohio senator seeks stricter waste penalties
A state senator wants increased penalties and stiffer permit rules for improperly disposing of gas-drilling waste and toxic brine in Ohio. Senate Minority Leader Joe Schiavoni's legislation would raise the state's penalties for knowingly disposing of oil and gas waste illegally to levels found in the federal Clean Water Act. The Boardman Democrat says violators could face a felony.
Denton Record-Chronicle: Filed legislation could affect city's HF ban
The chairman of the Texas House Energy Resources Committee filed legislation in Austinon Tuesday that would prevent cities from not only regulating oil and gas production with new rules but also from enforcing any such rules they have on the books now.
Fuel Fix: EIA: Eagle Ford production will slow in April
The U.S. shale boom may finally be slowing down, according to projections from the U.S. Energy Information Administration. Oil production from the six largest shale plays in the U.S. will hit 5.6 million barrels per day in April, an increase of less than 300 barrels per day over March, the EIA said in its monthly drilling productivity report on Monday. The increase would be the smallest since February 2011.
Are We Proud Of Alaska's Newest U.S. Senator? Yes We Are!
(We are also delighted with the new, House Natural Resources Chairman, Rob Bishop. Bishop replaced our longtime hero Chairman Doc Hastings and seems to be effectively and seemlessly moving forward. More here.... -dh)
During his tenure as Alaska's Attorney General Alaska's newest U.S. Senator, Dan Sullivan, brought lawsuits against the federal government for endangering Alaska's constitutionally reliant resource base.
Sullivan later served as Commissioner of Natural Resources, continuing Alaska's stand against hostile instances of federal overreaching jurisdiction.
As the 49th State's new senator, he has quickly demonstrated that knowledge is transferable from one responsible position to another; he is becoming a great colleague for our senior senator, Lisa Murkowski, of whom we are also proud and respectful.
We wanted to make sure today that all of our readers have witnessed Sullivan's transformation and think you will agree with us that this Marine officer, this state law and natural resource expert, this U.S. State Department veteran is in the right place at the right time for Alaska's citizens and for the people of the United States.
Letter from Bunny and Al Chong, Kenai Peninsula:
We did campaign and VOTE for Dan Sullivan. He IS AWESOME!!!
Letter from our reader, Scott Ogan, Seldovia:
Yes Dan is quite the Man!!
After working with him as Alaska's Attorney General and as my Commissioner, I am very pleased that his tenacity is transported to the US Senate. He is a strong leader and does not wilt during barrages of “incomings”.
His Alaskan family is rock solid, as he married one of the Fate girls. I served in the Alaska Legislature with Representative Bud Fate and know his beautiful wife as well. Stalwart Alaskans.
Keep up the good work Dave.
He also respects our allies, including America's largest trading partner, Canada.
Above is a video interview posted today (i.e. revealing his policy views on Iran) and below is the maiden speech Sullivan delivered to his colleagues a month ago (i.e. reflecting strong support for Keystone XL and other common sense energy policies) ... for the record.
Semper fi, Senator!
Below is Sullivan's first speech to the United States Senate. It contains facts and background every Alaskan school child should know well. The video documents his ability to understand and defend international diplomacy policy positions.
SENATOR DAN SULLIVAN: MAIDEN SPEECH AS PREPARED FOR DELIVERY 1.27.15
Mr. President, today I stand in support of the Keystone Pipeline Project.
As an Alaskan, I feel it’s important to talk about this bill and the importance of American energy infrastructure.
I live in a state with one of the world’s largest pipelines. In 1973, after bitter debate, similar to the debate about Keystone, Congress passed a bill that led to the construction of the trans-Alaska pipeline system– what we in Alaska call TAPS.
It almost didn’t happen. The Vice President at the time, serving as the president of the Senate, cast the tie-breaking vote.
Then, like now, opponents howled. They said TAPS would be an environmental disaster. They said bird and caribou populations would be decimated. But none of that happened. In fact, birds and caribou flourished, showing that we can develop energy infrastructure responsibly with the highest standards in the world – and Alaska proves this every day.
TAPS was completed in 1978. It has carried almost 17 billion barrels of oil to energy-thirsty American markets. It’s a technological and environmental marvel and a critical component of America’s energy infrastructure. (Download full text here. See video here. See Sullivan take on EPA.)
Today, From the office of House Resources Chairman Rob Bishop:
Bishop Rolls Out Committee Agenda, Drills Down on Federal Onshore and Offshore Energy Production
Politico: “Bishop has already moved to increase the panel’s oversight, opening the door for probes on the Endangered Species Act and federal reviews under the National Environmental Policy Act. ‘[NEPA] is a law that has an impact on every aspect of American life,’ Bishop said. And ESA ‘is a perfect example of an act that is not working,’ he said. ‘If it’s for control, then ESA is wonderful. If you’re actually trying to preserve species, it’s not working. And it needs to be reformed.’…Bishop is one of Capitol Hill’s biggest critics of the federal controls on energy production and public lands use, issues the Republicans highlight by pointing to the declining oil and gas output from federal lands…” (Politico, March 2, 2015)
The Larry Kudlow Show (Audio): “We are living in a much more dangerous world than we ever had during the Cold War. And to meet that threat, that environment, we’ve got to use our diplomatic means, our military means, but also our energy opportunities. The United States has today surpassed Russia and Saudi Arabia in producing energy, but that’s all been done on private lands and state lands,” stated Bishop. “If we really are going to take the role so we can be a benefit to our allies and we can play a role with Putin and the Middle East and everywhere else and not be bullied by OPEC, we have to develop the resources on our federal lands and offshore…That’s the bailiwick that I have…” (The Larry Kudlow Show, February 28, 2015)
Morning in America with Bill Bennett (Audio): “The United States is a leader now in energy production, we’ve caught up to the Russians and Saudi Arabians, but we’ve done that all on state and private lands,” stated Bishop. “If the nation is to go forward now and become an economic leader – so we can benefit our allies, we won’t be bullied by OPEC, we can increase our exports, lower the cost of energy here – you’ve got to go onto federal lands and offshore. And that’s the purview of my committee. So we’re not just a western committee anymore. We really have an impact on the entire country as well as foreign policy…” (Morning in America, Bill Bennett, March 2, 2015)
P.O.T.U.S. Sirius XM (Audio): “The United States is becoming an energy leader. We’ve already passed Russia and Saudi Arabia for energy production, but it’s all been on private and state lands,” stated Chairman Rob Bishop. “If we actually want to become a permanent leader in energy: be able to help our allies, not be bullied by OPEC and provide job employment for this country, you’ve got to get the resources on the federal lands and off-shore – and that’s the purview of my committee… what we do here will have an impact on the entire country and even on foreign policy...” (Sirius XM Radio, February 25, 2015)
Wall Street Journal Live (Video): “House Natural Resources Committee Chairman Rob Bishop on President Obama’s proposal to buy more federal land, raise fees and impose new regulations amid maintenance backlogs and wildfires. ‘The [administration] wants to triple the Land and Water Conservation Fund. If you’re going to expand it whatsoever, use that to solve problems not just buy more land that we already have a 21 million backlog on the maintenance of that land as it is…’” (Wall Street Journal Live TV, March 2, 2015)
Houston Chronicle: “Bishop tangles with the White House on energy development. He says the oil and gas revolution has unfolded mostly on private and state land - not the territory under the Interior Department's control. ‘There has to be an overall approach to increasing production on federal property,’ Bishop said. ‘This administration is either slow walking or just stopping that, and that harms the entire country.’ More opportunities for oil and gas drilling on federal lands and waters - and speedier permitting - are essential for the United States to expand its role as a global energy leader, break OPEC's domination and spur domestic jobs, Bishop insisted..." (Houston Chronicle, March 2, 2015)
The Hill (video): “The new chairman of the House Natural Resources Committee sees the Interior Department’s budget as a way to inject creative thinking into issues like oil drilling on federal land and offshore…Bishop said one of his top priorities as chairman and in overseeing Interior’s budget will be to establish an energy portfolio that encourages more oil and natural gas drilling on federally owned lands and offshore… ‘We have already surpassed Russia and Saudi Arabia in energy production, but if we actually want to be a leader in the world in energy production and provide jobs from it, we’re going to have to develop our resources that are on federal land and offshore - and that’s the purview of my committee…’” (The Hill, February, 24, 2015)
Washington Examiner: "GOP lawmakers want states to get more control of the Land and Water Conservation Fund, a 50-year-old program that is funded by offshore oil-and-gas drilling royalties…Many are dissatisfied with the states' share and the federal government using a bulk of its funds to acquire more land. ‘If problems are going to be solved, we have to think differently,’ said House Natural Resources Committee Chairman Rob Bishop, R-Utah, whose panel has jurisdiction over the program. ‘The voices talking about [the conservation fund] right now lack creativity.’ Bishop said he wants better oversight of how the federal funds are used. He contends those dollars would be better spent maintaining roads, trails and buildings at facilities managed by the Interior Department, and that more funds should be given to states to enhance local infrastructure and recreation opportunities..." (Washington Examiner, February, 23, 2015)
Huffington Post: "As the new chair of the House Natural Resources Committee, Rep. Rob Bishop may be ready to spar with the Obama administration on some key public lands and energy issues. But he's also setting a different tone from that of his predecessor, encouraging conservation advocates to think they may be able to find common ground this Congress. Bishop, a seven-term Republican representing Utah's 1st District, took over the chairmanship in January from retiring Rep. Doc Hastings (R-Wash.), who had held that post since 2011…” (Huffington Post, February 20, 2015)
E&E TV: On Point (Video): “The United States has become a player in the energy world. We’ve surpassed the Russians and Saudi Arabians in what we’ve been able to produce in oil and gas, but it’s all come on private and state lands. If the United States is going to really become a leader in energy development and actually be of value to our allies and not be pushed around by OPEC anymore, if we’re actually going to have the jobs that can be created by affordable energy, you have to start the advancement of resources on federal lands as well…” (E&E TV, February 25, 2015)
Bloomberg BNA: “Bishop told Bloomberg BNA March 3 that the committee will be looking at short-term action on the Land and Water Conservation Fund, offshore fisheries management, two programs of federal assistance to counties and schools in rural areas, potential legislation on federal forest management and regulation of natural gas pipelines and electric transmission lines that cross federal lands and...Oil and gas companies and some lawmakers have argued that one reason for the recently large amounts of natural gas flaring—the burning off of gas that emerges as a co-product of oil production—is that the federal government is slow to issue permits for pipelines to take gas away from shale oil and gas regions.‘Actually, the rights-of-way issue is something that is personally important to me,’Bishop said. Another energy issue is the Bureau of Land Management's pending final rule to update regulations governing oil and gas production on federal lands, a rule with a special emphasis on hydraulic fracturing but much broader application as a set of standards to safeguard well integrity...” (March 4, 2015, Bloomberg BNA)
Today's American Energy Alliance Energy Clips:
I guess the EPA wasn't expecting the states to pass up all that "flexibility".
PoliticoPro (3/10/15) reports: “Supporters of President Barack Obama’s climate regulations are getting worried EPA may have few tools to use if states decide to follow conservatives’ advice and refuse to cooperate with the agency on climate change regulations. Questions abound about how the agency would impose its own climate plans on behalf of states or make sure the states that do submit plans actually stick to them. Also up in the air: whether the agency has the right to hit the violators with penalties that could even include the loss of federal highway dollars — one of the main fiscal weapons Washington has used to get states to toe the line on everything from motorcycle helmet laws to underage drinking. But the agency is declining to say whether highway dollars would actually be at risk.”
Bright Bulb Award:
“There remains a strong social contract between scientists who are funded by the government, and the IPCC that supports the government’s political agenda. The feedbacks supporting this social contract in principle can be reversed; it remains to be seen what, if anything, will trigger this reversal. I suspect that it will be the climate itself, if the hiatus/pause/slow down continues.”
We did the math. Clinton’s 55,000 page print job emitted as much carbon as the average American does in one year.
Energy Townhall (3/10/15) reports: “Printing Hillary Clinton’s 55,000 pages of emails emitted nearly 40,000 pounds of greenhouse gases about as much as the average American produces about that amount in one year. Clinton’s extravagant print job comes less than six months after her stump speech to national environmentalist groups about the urgent need for reduction in carbon dioxide emissions. Former Secretary of State Hillary Clinton, following in the long line of executive branch transparency issues, has finally released at least a partial record of her emails to the State Department. Clinton had previously kept the emails on a homebrew email server, thus avoiding both government email security measures and FOIA requests. This is likely also in violation of federal law if any matters that were Classified or Sensitive But Unclassified were sent to her email or if she send any sensitive emails. Unfortunately, the incomplete emails the Clinton camp released were done so not on a modern, digital format, but were actually physically printed, using over 55,000 pieces of paper. Though many older politicians may find modern technology like PDFs, email, and flash drives befuddling, we imagine leftist politicos like Hillary Clinton would at least understand the environmental consequences of their actions.”
Swiss make cheese out of the carbon tax. Guess which kind?
The Wall Street Journal (3/8/15) reports: “Swiss voters Sunday overwhelmingly rejected an initiative that would have scrapped the Alpine country’s value-added-tax system and replaced it with a carbon tax, a move that would have made gasoline, heating oil and other forms of power more expensive for consumers. Roughly 92% of voters opposed the initiative, known as “Energy Rather than VAT,” while 8% supported the measure, according to preliminary results from 13 of the country’s 26 cantons. The initiative would have encouraged Swiss households to use renewable energy sources, including solar and wind, which would have been exempt from taxes. The initiative, which was introduced by the Green Liberal Party of Switzerland, was designed to help lower carbon emissions and reduce global warming.”
How many decades does it take for a temporary subsidy to be called permanent?
The Washington Times (3/7/15) reports: “Former Florida Gov. Jeb Bush said that a federal program promoting wind energy production, which recently expired, has worked and should be renewed for at least a few more years before being phased out altogether. Mr. Bush has returned to Iowa for the first time since announcing in December that he was interested in running for president. Last week, he appeared at the annual Conservative Political Action Conference outside Washington, and on Saturday he was among a number of likely GOP presidential candidates that flocked to the Iowa Agricultural Summit, hosted by Bruce L. Rastetter, a major GOP donor.”
Why we fight.
The Guardian (3/9/15) editorializes: “The actual story: what happens at Paris will be, at best, one small part of the climate story, one more skirmish in the long, hard-fought road to climate sanity. What comes before and after will count more. And to the extent Paris matters, its success will depend not on the character of our leaders but on how much a resurgent climate movement has softened up the fossil fuel industry, and how much pressure the politicians feel to deliver something.”
It's easy to get up from rock bottom.
The Washington Post (3/9/15) reports: “In the grand scheme of things, one year — 2014 — only represents a slight nudging of the gigantic ship of U.S. energy in a renewable direction. Even if it grew less, coal is still the No. 1 source of net generation each year in the United States, followed by natural gas. And the numbers for these two sources still dwarf the totals for all renewable sources combined. Still, there can be no denying that the U.S. energy system is changing, and that renewables — wind and solar — are booming. Whether they’re doing so fast enough to decarbonize our world before we pass the threshold that would bring on dangerous climate change, however, is another matter.”
|Watch live hearing today @ 1 p.m. ADT re: HB 105, AIDEA BONDS; PROGRAMS; LOANS; Fairbanks LNG PROJECT (Note increased C.I. reserve estimates) ... Friday, Gas Pipeline Federal Coordinator's Office Closed; Larry Persily (NGP Photo) now Kenai Borough Gas Pipeline Coordinator ... AJOC, Midwest Utility Coming North To Alaska?|
It took nearly 40 years, one national inquiry and thousands of hours of negotiations, but in 2011 the National Energy Board finally approved the Mackenzie Valley gas pipeline. By then, there was just one problem: nobody really wanted to build it anymore. A massive pipeline that was once described as “the biggest project in the history of free enterprise” had been waylaid, ironically enough, by free enterprise. Gas prices were too low to justify the expense or generate a reasonable return for investors. And yet, there’s a movement afoot, driven by both government and industry officials, to build another major oil project in the North. Who said Canadians weren’t capable of optimism – or irony?
|Wall Street Journal -- Stupidity of Oil Export Ban....|
Commentary: As Obama squashes TransCanada's Keystone, an army of Interveners seek to quash TransCanada's Energy East exit for oil sands crude. And, more recently, Alaska's governor transfers support for the TransCanada/producer/state Alaska LNG project to a 100% government controlled gas pipeline, imperilling the former. -dh
Larry Persily, former federal coordinator for Alaska gas line projects, has accepted a position with the Kenai Borough government to include sharing information with the public about the Alaska LNG project and oil and gas issues in general. He will distribute the twice-a-week summaries in his new capacity. The update service will continue free of charge to readers.
Office of the Federal Coordinator is closed
The Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects closed on March 7, 2015, due to lack of funding. Its website, Arcticgas.gov, is being maintained, but not updated, by the U.S. Arctic Research Commission, with assistance of Alaska Resources Library & Information Services (ARLIS) at the University of Alaska Anchorage.
Much of the office’s work also can be accessed online at The Pipe Files, a searchable digital library of hundreds of Alaska gas line project documents going back to the 1970s.
Congress created the Office of the Federal Coordinator in 2004 to help expedite and coordinate federal permitting for construction of a pipeline to move Alaska North Slope natural gas to North American markets. The current project under consideration by North Slope oil and gas producers involves piping the gas to a liquefaction plant in southcentral Alaska for export of LNG. More than 20 federal agencies are expected to have jurisdiction over that project.
|For useful references, see: 3-4-15, Legislators Push Back; 3-2-15, Walker and Legislature Tangle; 2-28-15 Walker Op-Ed; 2-28-15, Jenkins Op-ed re: Crazy as a loon/fox.|
Gov. Bill Walker now finds himself at loggerheads with lawmakers correctly cranky about his grandiose expansion plans for the $10 billion Alaska Stand Alone Pipeline.
His idea is to have ASAP compete with the $65 billion Alaska LNG Project, even though that could ball up the state’s business relationship with producers, who have spent hundreds of millions getting this far, and scare the bejeebers out of the market, which craves stability. More....