Oil & Energy by Dr. Kent Moors. How Falling Oil Prices Could Trigger an “Unpredictable and Dangerous Mess”
Yesterday, ConocoPhillips announced that it has completed five-year, Alaska North Slope contracts with URS Corporation, CH2M HILL, and ASRC Energy Services. See the full news release details here.
From the office of House Resources Committee Chairman Doc Hastings (NGP Photo) comes this alert of interest to most natural resource companies doing business in Alaska and the American West. We feature it in this Northern energy webpage because it demonstrates the broad, deep and dangerous reach of Obama administration agencies in their zeal -- without scientific justification -- to shut down natural resource exploration and development in America...and many other business and recreational activities as well. -dh
Release: "House Natural Resources Committee Chairman Doc Hastings along with 17 Members of Congress sent a letter to the Director of the U.S. Fish and Wildlife Service, Dan Ashe, urging the Service to extend the comment period for the proposed critical habitat designation of the western yellow-billed cuckoo. This proposed listing, driven by a 2011 court mega-settlement and not by sound science, would have devastating negative effects on small businesses, farmers, ranchers, forest management, and American energy production in nine states throughout the West."
Mining and Arctic Shipping Historic Voyage: What does it portend for more Alaskan and Canadian natural resource shipping and markets?
Could Russian chess players be the ultimate winners?
Former Alaska Mining Association Executive Director Steve Borell linked us today with this mining.com story:
According to the 70-year old shipping company (i.e. FEDNAV) the MV Nunavik will be the first vessel to carry a cargo of Arctic origins the full length of Canada’s Northwest Passage from Baffin Bay through the Bering Straight.
The ship is loaded with a cargo of nickel concentrate from Nunavik’s Deception Bay destined for the port of Bayuquan, northern China.
How do we know the current location of the Nunavik and her crew as we write this. FEDNAV has provided this helpful webpage. Join us and follow her to China!
You, too, can traverse the great Northwest Passage, in the summer of 2016.
The MV Nunavik successfully completed the Northwest Passage portion of its historic voyage a few days ago.
Then, it survived Typhoon Phanfone as it passed through the Bering Strait and the International Date Line.
As this is written, it carries its massive nickel concentrate payload past the Kamčatka Peninsula, then will head south of Sakhalin Island.
Follow its progress here as it approaches its destination at Bayuquan.
What does this voyage mean to future natural resource transportation from Arctic areas?
FEDS QUERY ENERGY FIRMS AHEAD OF EXPORT RULINGS
The U.S. Commerce Department has taken a small step toward resolving some two-dozen pending requests to export lightly processed oil this summer, asking energy companies to fill out a one-page questionnaire about their plans, sources familiar with the document told Reuters.
The nine questions may help the department map out a further easing of the four-decade old ban on crude exports.
One envisions massive new ice-breaking, cargo carrying ships competing for the Alaska and Canadian Arctic trade -- a vast new industry.
- One can also envision the requirement for more military assets in Alaskan and Canadian Arctic areas, to protect resource development and national sovereignty. Prime Minister Harper has recognized this responsibility though America's president has not. This is particularly important in view of Russia's new imperialism being exercised in Europe and its massive Arctic natural resource investments (i.e. like this) now moving at full speed without the level of environmental safeguards which exist in North America.
NWT Premier Bob McLeod (NGP Photo) has recently envisioned another way to avoid Western Canadian and Lower 48 pipeline project opposition: move the resource down the Mackenzie River Valley to Inuvik and access international energy markets via the Arctic Ocean.
Oil companies making discoveries in the arctic may well find better economics by shipping oil or LNG directly from offshore production platforms to Asian markets. Part of the economics of TRADITIONAL oil, gas and mining involves a hostile and uncertain onshore regulatory environment (e.g. EPA's unconstitutional project preemption; White House's Keystone XL Pipeline approval recalcitrance; Washington opposition to ANWR, full use of NPR-A; arbitrary and capricious use of ESA and CWA.) On the US side, pipeline impediments come largely from America's own federal government and a coalition of environmental groups which actually make money by litigating, protesting and stopping (i.e. and often settling with a cooperative, federal agency defendant) such wealth producing projects. On the Canadian side, environmental extremism is as challenging as down south. But much of the pipeline and other natural resource project delay has originated with the country's now well established court precedent of the concept of, "Duty to Consult". While coordinating with stakeholders is a logical requirement of development, the concept can also be misused. Put another way, it can be used to stop development permanently or until a developer is willing to pay what the stakeholder wishes. New waterborne transportation concepts may or may not ultimately be immune from similar exploration, production and transportation delays in Arctic offshore areas. We encourage all Arctic developers, particularly those in Canada, to become very familiar with Bill Gallagher's review of such issues.
- Oil, gas and mining companies could be providing new employment and opportunities to hundreds of service companies and manufacturers. The opportunities could involve ports, service boats, heavy equipment and operators, catering services and so much more.
- If the Obama Administration is successful in fully implementing its "Ocean Policy" -- without Congressional authority and without designated Congressional budget support -- it could seek with environmentally extreme allies to shut down the oceans to economic enterprises. In effect, this vast new administrative power could allow the opportunities presented by the current Northwest Passage voyage to be neutralized -- at least within waters controlled by the U.S.
- Our readers are familiar with another obstacle to a free use of the Northwest Passage and related on- and off-shore Arctic resource development. A non-U.S. Senate approved treaty between President Barack Obama and and President Vladimir Putin establishing a Beringia relationship between the two countries. Note that while Canada's Prime Minister Stephen Harper has sought to reaffirm and reinforce Canadian sovereignty in the Arctic, President Obama's agencies and environmental allies and President Putin have similar interests: stop U.S. energy development in the Arctic. Meanwhile, Putin is aggressively developing Russia's Arctic energy resources with considerably less delay caused by political opposition, environmental concerns and litigation. Sadly, America's current leaders know and care more about organizing political allies than playing chess in real life -- where, in absence of a 'stalemate', the outcome is always one winner and one who has lost everything.
Alliance Announces Board Changes
Last week the Alaska Support Industry Alliance held its Annual Meeting & Board Elections at Anchorage's Captain Cook Hotel. Dave Lawer passed the reins to incoming Board President Kevin Durling and 7 slots on the Alliance Board were filled. (Here is the Alliance webpage link. Those exploring the webpage will note the Alliance's active involvement -- along with the Resource Development Council for Alaska and a number of active Chambers of Commerce and other organizations -- in policy issues affecting jobs and economic health of the state. -dh)
Four incumbent board members were reelected to three year terms:
- Bryan Clemenz, CH2M Hill
- Krista Gonder, Alaska Tags & Titles
- Mark D. Nelson, ASRC Energy Services
- Pete Stokes, Petrotechnical Resources Alaska
The membership also elected three new board members:
- Adam Crum, Northern Industrial Training
- Wyche Ford, Fluor
- Ben Schoffmann, Kakivik Asset Management LLC & CCI Industrial Services, LLC
The Kenai Chapter of the Alliance also voted to make Scott Davis of Davis Block and Concrete their representative to the statewide board.
Additionally, both the Kenai Chapter and the Fairbanks Chapter of the Alliance elected new Chapter Boards.
- Ken Hall, President (Lynden)
- Joane Johnson, Vice President (Pacific Alaska Freightways)
- Lee Petersen, Secretary (Fairbanks Fuel)
- Tim Musgrove, President (Rain for Rent)
- Ben Cruz, Vice President (Cruz Companies)
- Fran McCampbell, Secretary (Total Office Products)
As always, since accuracy is our goal for this northern energy archive, we invite readers to send us additions or corrections to our postings. -dh
Alaska LNG team in place - 10/05/2014 (Full story) Three project offices for the Alaska LNG Project — in Anchorage, Houston and Calgary — are up and running, legislators were told Sept. 29 in Anchorage at the first public update on the project since enabling legislation was signed into law in May. Steve Butt, overall manager for the Alaska LNG
- Guide to Alaska natural gas projects - 10/05/2014 Pipeline to Southcentral A 737-mile, 36-inch buried pipeline from the Prudhoe Bay field on Alaska's North Slope to the Big Lake area north of Anchorage. From there, the gas could flow to consumers, utilities and other industry via the local distribution pipelines of ENSTAR Natural Gas Co. The pipeli....
- CIPL to replace west side pipe section - 10/05/2014 Cook Inlet Pipe Line Co. has applied to the U.S. Army Corps of Engineers for work required to replace a 6,000-foot section of the crude oil pipeline which runs along the west side of Cook Inlet. CIPL, owned by Hilcorp subsidiary Harvest Alaska, needs Corps authority for a temporary gravel pad to su....
- Cook Inlet Energy to drill gas prospect - 10/05/2014 Cook Inlet Energy LLC is planning to drill an exploratory well on its Kahiltna natural gas prospect in the Susitna basin. The Anchorage-based company lays out the project in a plan of operations filed recently with the Alaska Division of Oil and Gas. Cook Inlet Energy holds exploration licenses on e....
Point of personal privilege. Col. Dave Harbour continues to be remembered by Google, Amazon and this newest video, as we continue to love and miss him and Mom. -dh
|Guide to Alaska natural gas projects Petroleum News
14 issue of Petroleum News, includes the Alaska LNG Project, ... TransCanada and the Alaska Gasline Development Corp.; a smaller-scale LNG ...
|CBC. Oil prices may be at a two-year low, but that doesn’t seem to be dampening the spirits at the International Pipeline Exposition in Calgary.|
Cryopolitics by Mike Bennett. On September 26, ConocoPhillips‘ Polar Discovery departed the Valdez Marine Terminal in Alaska for Yeosu, South Korea. ... The 1975 Energy Policy and Conservation Act, passed during the oil embargo to protect American consumers from price shocks and volatility, generally prohibits U.S. oil from export. Debate over the practicality of the law has grown in recent years, especially thanks to the hydraulic fracking boom in North Dakota. Still, only a few select locations in the U.S. are exempt from the ban. Oil transported through the Trans-Alaska Pipeline has been permitted export since 1996, while Cook Inlet oil has enjoyed the privilege for a longer time, since 1985. At the time, then senator Frank Murkowski (NGP Photo) declared,
“This is a small beginning but it can be a catalyst to unlock some of the previously impenetrable barriers.”
If that name sounds familiar, that’s because Murkowski is the father of current Senator Lisa Murkowski (NGP Photo), who filled his seat when he became governor in 2002. She then won election in 2004. Remarking on the export of North Slope oil to Korea, Murkowski stated in words that echoed her predecessor:
“This is the first North Slope cargo to leave Alaska for overseas markets in a decade. I am encouraged to see Alaska increasing its participation in global oil markets. It’s my hope that Lower 48 oil will soon follow suit.”