|Calgary Herald by David Marsden. ... What we are quibbling about is the depths of Obama’s hypocrisy. The Keystone XL pipeline would not add to the United States’ consumption of oil.|
Today the House will act on legislation to provide relief to farmers and help return water flows to the Central Valley. (See our earlier story of the effect of national energy policy on California and Colorado food production. -dh)
Fuel Fix. Former U.S. Secretary of Interior Ken Salazar (NGP Photo) said Wednesday morning that he believes hydraulic fracturing is safe, and the energy industry should work to convince the public that it doesn’t pose a safety threat.
U.S. Sen. Lisa Murkowski yesterday secured a commitment from the nominee for Assistant Secretary for Land and Minerals Management, Janice Schneider, to improve the Interior Department’s permitting process and provide greater regulatory certainty for oil and natural gas exploration in the Arctic.
“I agree with you that business needs regulatory certainty and predictability. People, particularly when they are going to invest huge sums of money, need to understand what the rules of the road are…. If I am confirmed to this position, I am committed to ensuring that there is an opportunity for greater regulatory certainty, including the potential for offshore oil and gas exploration off of Alaska,” Schneider told Murkowski. (NGP emphasis added.)
Murkowski said she was disappointed, but not surprised last week by Shell’s announcement that it was canceling its exploration plans in the Chukchi Sea this summer because of the 9th Circuit ruling on Lease Sale 193 and Interior’s failure to provide regulatory predictability for the Arctic.
Murkowski told Schneider that the Interior Department needs to make a clear commitment to the responsible development of the oil and gas resources that exist in the Beaufort and Chukchi seas, and commit to a dual track for development in the Chukchi Sea in 2015 that both remediates the environmental impact statement that was struck down by the 9th Circuit Court and at the same time continues the department’s evaluation of the exploration plan so that Shell can proceed in 2015.
Schneider made her comments on Tuesday at her nomination hearing before the Senate Energy and Natural Resources Committee. Murkowski is Alaska’s senior senator and the top Republican on the energy committee. Complete video of Tuesday’s hearing is available on the energy committee’s website.
U.S. Sen. Lisa Murkowski (NGP Photo) yesterday firmly pressed the nominee for Assistant Secretary for Fish Wildlife and Parks, Rhea Suh on the Interior Department’s disregard for the needs and concerns of the people of Alaska. (See today's Energy Guardian report.)
Murkowski questioned Suh about whether the department was doing anything to ensure the safety of the people of King Cove after Interior Secretary Sally Jewell rejected, on Dec. 23, a proposed a life-saving road that would have connected the isolated community to an all-weather airport a few miles across the Izembek National Wildlife Refuge.
After Suh had no answer, Murkowski said her growing frustration with Interior goes well beyond just one issue.
“This is about more than just a 10-mile road,” Murkowski said. “This is about how many Alaskans feel this administration is treating us when we are far away at the other end of the continent and out of sight, out of mind.”
Tuesday marked the second time Suh, who if confirmed, would oversee the U.S. Fish and Wildlife Service and National Park Service; has appeared before the Senate Energy and Natural Resources Committee. Murkowski, the energy panel’s top Republican, called for a second hearing after being disappointed in Suh’s responses at her initial Dec. 12 hearing.
“I have serious reservations about not only what I perceive is your lack of knowledge of western lands issues, but also with your unfamiliarity with Alaska’s most pressing issues and unique governing statutes,” Murkowski said to Suh. “I’m not being overly parochial here – we have more than 70 percent of the National Wildlife Refuge System and two-thirds of the National Park System located in Alaska, so when you indicated in our meeting that you were not prepared to discuss any of my state’s issues in any detail – that concerns me.”
Murkowski pressed Suh on the development of the Arctic, King Cove, reform of the Land and Water Conservation Fund to address the national parks maintenance backlog, subsistence reform in Alaska.
“I firmly believe that the Fish and Wildlife Service is headed in the wrong direction and has lost sight of its responsibility to the American people,” Murkowski said. “This problem is most recently highlighted by the service’s role in the fundamentally flawed review process and rejection of the life-saving King Cove road, but it’s not limited to that single decision. My view is that the Fish and Wildlife Service is simply not considering the impact of its decisions on people across our country. That needs to change.”
After the hearing, Murkowski cast doubt on whether she would support Suh’s nomination, citing ongoing concerns with the lack of detailed answers to questions she has posed to Suh.
Alaska Journal of Commerce by Tim Bradner. Flint Hills Resources will cease refining operations at its North Pole refinery near Fairbanks this spring, the company announced Tuesday in a press release.
Senate Energy Committee Spokesman, Robert Dillon, this morning provided us with an analysis of Keystone XL Pipeline labor benefits discussed during Bill O'Reilly's Super Bowl interview with President Barack Obama. (Dillon's analysis follows:)
In September 2009, President Obama declared, “I will not rest until anybody who’s looking for a job can find one – and I’m not talking about just any job, but good jobs that give every American decent wages and decent benefits and a fair shot at the American Dream…That's what I'm fighting for every single day.”
Fast forward to last week, when the State Department once again confirmed that the Keystone XL pipeline is a prime opportunity for President Obama to fulfill his commitment to American workers. State estimated that Keystone would create 42,100 jobs – and enable those workers to earn more than $2 billion in new wages – if the president finally, after more than five years, approves it.
So how did the president react? In an interview with Bill O’Reilly that aired shortly before the Super Bowl, the president somehow saw fit not to welcome, but to dismiss the good jobs Keystone would bring.
The president tried to correct Mr. O’Reilly and claim that “it’s a couple thousand to build the pipeline.” Yet State’s own analysis, pasted below, shows that it was Mr. O’Reilly who was correct, and Mr. Obama who was wrong.
We can assume the president was trying to refer to the construction jobs associated with Keystone, estimated by State at 6,800. We consider that an impressive number – especially in comparison to the construction jobs associated with each of the projects within the president’s much-touted energy loan guarantee program. The high-water mark under that program were an apparent 3,000 construction jobs for Solyndra – which quickly went bankrupt, leaving taxpayers on the hook for $535 million in losses. Next highest was a solar project with 1,700 construction jobs; most other projects reported no more than a couple hundred.
The math here isn’t hard: Keystone will create 42,100 jobs that are clearly needed. With unemployment at 6.7% and the last jobs report showing just 74,000 new positions created in December, this decision should be easy. It should already be made. The president needs to quit delaying, quit disparaging, and approve Keystone.
Globe and Mail by Brent Jang. Northwest Territories Premier Bob McLeod (NGP Photo) says the key to reviving dormant plans for the Mackenzie Valley pipeline will be to transport natural gas from the Arctic into British Columbia instead of Alberta. Private-sector proponents of the Mackenzie line consider the NWT project to be currently uneconomic, based on market conditions of plentiful gas supplies in North America.
Arctic Gas Leadership
We have much respect for the 12th Premier of the Northwest Territories, Bob McLeod, and for his dedicated leadership of a huge, 440,000 square mile area that is about 2/3 the size of Alaska.
While we have itemized Alaska's myriad conflicts with its federal bureaucracy, the NWT has had its own federal challenges, too.
Like premiers preceding him, McLeod has fought to transfer control over natural resources from Ottawa to Yellowknife (i.e. devolution). He has governed a great land with fewer than 50 thousand citizens and worked to develop a responsible, resource-based economic powerhouse in the Arctic.
...and, he tenaciously pursues the 45+ year-old Arctic gas dream of moving Mackenzie Delta gas to market.
Simultaneously, Governor Parnell pursues a similar Arctic gas dream.
Most of the industry players in the Mackenzie Delta are Alaska North Slope producers/explorers as well. TransCanada is another party both projects have in common.
Once, it made more economic sense to move Alaskan and Canadian Arctic gas to market in the same pipeline. First, there was the Arctic Gas Pipeline route across the top of the Arctic National Wildlife Range (i.e. now a 'refuge'); then came the Alaska Highway route.
Labor, Environmental, and Canadian Aboriginal forces worked together to create obstacles for those project over the last four decades--in addition the brutal economic challenges posed by weak gas prices a generation ago to the shale phenomenon today.
We are sure that behind closed doors, industry and government policy makers in both the US and Canada would agree that the most efficient movement of Arctic gas would still occur through a joint pipeline. After all, the cheapest pipeline produces the greatest net profit to producers and the greatest volume of royalties and taxes to government.
Today, shale gas has cut off the concept of a Mackenzie Valley pipeline to the Central US and Canada.
So now, Premier McLeod is hoping Canadian Arctic gas can find its way to British Columbia as Alaska's Governor and producers are hoping economics and markets will support the movement of Alaska gas to Valdez.
Both the Canadian and Alaskan Arctic gas projects would be competing with each other for big but limited Asian markets.
Today, one cannot help ask: "Why not move Mackenzie Gas over ANWR in a safe, environmentally acceptable, buried gas pipeline to Prudhoe Bay?"
The two gas streams could flow to Valdez and the economies of scale would benefit producers and governments and citizens in both areas.
We are sure there is an answer to our question of, "Why not?"
The answer is, "Don't be naive. That may be more logical but you've got restricted rights of way that would likely take acts of both Congress and Parliament. Besides, we're already committed to planning for separate projects."
We agree that the political realities make the most logical solution to freeing Arctic gas unlikely.
We would also observe that through great leadership, great obstacles are overcome.
It would be a shame if Alaskans and Canadians were deprived of Arctic gas exports for another generation because two separate projects were just slightly short of economic feasibility when a joint projects' economies of scale could have produced prosperity for hundreds of thousands of citizens in both countries.
And so the Arctic Gas saga continues....
From the office of Congressman Doc Hastings (NGP Photo) TODAY:
What the President Failed to Mention in His Address
On Tuesday, January 28th, President Obama delivered his fifth State of the Union address. “The president spoke a lot about his ‘year of action’, but what is significant in his speech is what he failed to mention,” said Hastings on Tuesday following the president's speech. “There was no mention tonight of the thousands of employees who have lost their employer-provided health care coverage or had their take home pay cut as a result of Obamacare. President Obama failed to mention that tens of thousands of jobs would be created if he stopped delaying construction on the bipartisan Keystone XL pipeline. And the president failed to call on the Democrat-run Senate to vote on the 40 House-passed jobs bills still awaiting action, while millions of Americans continue to search for jobs and thousands more give up searching for work each month. The fact is, Americans are hurting as a result of President Obama’s own policies.”
CBC. Ever since Stephen Harper called American approval of the $5.4-billion pipeline from Alberta to the U.S. Gulf Coast a "no-brainer" back in September 2011, a lot has been riding on the eventual vindication of the prime minister's thinking.
Houston Chronicle. ConocoPhillips completed its first full year as an independent producer with a 74 percent hike in fourth-quarter earnings, driven largely by sales of overseas assets as the company turns its focus to North American shale.
(Here is the 2013 fourth quarter Alaska earnings review. “The fourth quarter of 2013 is similar to what we have seen historically under ACES where we pay about twice as much in taxes as we keep,” said Bob Heinrich, vice president finance, ConocoPhillips Alaska. “The recent oil tax reform passed by the Legislature, which took full effect January 1, 2014, improves the business climate in Alaska.")
Journal of Commerce by Elwood Brehmer. The agreement Gov. Sean Parnell’s administration signed for a large commercial liquefied natural gas project could have a major impact on the state’s separate push to develop a smaller gas project, Alaska Gasline Development Corp. President Dan Fauske (NGP Photo) said during a Jan. 24 presentation.
Senate Bill 138, which Parnell’s office introduced to the Legislature the same day, not only outlines the state’s share of an LNG export project with the “big three” North Slope producers and TransCanada, but would also terminate the Alaska Gasline Inducement Act license the state has had with TransCanada since 2009. Ending AGIA would lift the 500 million cubic feet per day transport limit on Alaska Stand Alone Pipeline that AGDC is working on, Fauske said.