Governor's Announcement Underlines The Importance Of The Alliance's "Meet Alaska" and Other Energy Conferences
|ADN by Governor Sean Parnell (NGP Photo).
For the first time in Alaska's history, we have the framework in place to build the Alaska liquefied natural gas (LNG) project on Alaska's terms and in Alaskans' interests.
We have the necessary parties to make the Alaska LNG project go: three producers, a pre-eminent Arctic pipeline builder, an entity that will carry Alaskans' interests (Alaska Gasline Development Corp.) and state agencies responsible for royalties and taxes.
Alaska and Canada are fortunate to host a number of northern energy/mineral natural resource conferences throughout the year.
These events bring government, industry, the media and public together providing updated information and technology advances along with networking opportunity.
In Alaska, the major natural resource conferences include the Alaska Support Industry Alliance's annual Meet Alaska conference; Resource Development Council for Alaska's annual Alaska Resources Conference; the Alaska Miners Association annual conference; and, the annual Alaska Oil & Gas Congress, among others.
We have seen major natural resource announcements flow from many of these meetings and last week's Meet Alaska gathering was no exception.
By now the public is pretty well aware of Governor Sean Parnell's announcement at Meet Alaska last Friday, that the state would seek equity participation in a pipeline/LNG project, that an earlier agreement with TransCanada would be discontinued and that all the major parties have aligned their interests.
While we joined most in the room -- responding enthusiastically to the Governor's announcement and initiative -- astute observers of gas pipeline politics over the years know that he and the Legislature face a number of remaining hurdles.
- The details of 'major party alignment' can only be reviewed and digested after an actual document is agreed to and made public.
- The alignment of parties is surely contingent on Alaska not repealing the tax reform act its Legislature passed last year. (See Stoel Rives, LLC bill analysis.)
- One would further expect alignment of interests among the major parties to depend on the structure of any new natural gas tax statute that might be created.
- For over a decade the major, potential gasline investors have reasonably reminded the public and public officials that fiscal certainty guarantees must be in place before a multi billion dollar gasline project can be sanctioned and financed.
- Will the state provide cash equity from its savings accounts, when those accounts even now cannot satisfy the unfunded liability of state pensions plus projected state spending/income deficits over the next few years? Or, will the state provide equity financing by selling revenue bonds (i.e. not putting the full faith and credit of the state on the line, requiring a higher interest payment), or via a voter approved general obligation bond, with a lower interest payment at the cost of the state's full faith and credit pledge?
- To know a project is real, observers generally expect some verification from buyers that a market exists --particularly with the Asian markets being wooed by multiple LNG projects from Australia, Russia, Indonesia, the Lower 48 and Canada. While market demand will be better known following a formal 'Open Season' process, when state financing is involved citizens might expect more in the way of affirmation that markets exist that fit the volumes and timeframes of this particular project.
- Do pipeline planners count on a certain amount of demand from in-state markets? Will utilities begin to plan for 'take or pay' agreements that obligate pipeline capacity? How will this affect existing relationships between Cook inlet gas sellers and utility gas buyers?
- Has any party petitioned the Alaska Oil & Gas Conservation Commission for its projection of North Slope gas volumes that will be available at the projected time of an LNG/pipeline project completion? Under Sec. 31.05.030 the AOGCC regulates "for conservation", "Environmental Conservation", and "for public health and safety purposes": "the quality and rate of the production of oil and gas from a well or property."
We are delighted to see the forward movement provided under Parnell's leadership with support from a majority of legislators. With Alaska's potential for equity investment in the project, however, we also know that such challenges as those noted above must be anticipated and resolved on the way to successfully monetizing Alaska North Slope Gas.
Tomorrow, we look forward to bringing readers our take on other Meet Alaska presentations -- and event photos -- from last Friday!
ADN By Lisa Demer. Gov. Sean Parnell (NGP Photo) on Friday announced that he was prepared to abandon the Palin-era natural gas pipeline law and set the state on a new path as an investor and partner in a long-dreamed-about natural gas project from the North Slope. (We'll have more report and photos for our readers on Monday. -dh)
Juneau Empire. Gov. Sean Parnell (NGP Photo) on Friday announced a new way forward on a long-hoped-for natural gas pipeline that includes scrapping the terms of a 2007 law he says no longer works well for the situation.
(We'll have more news links, our own report and commentary for readers on Monday. -dh)
We are attending the Alliance's "Meet Alaska" conference today. Reports will follow.
TODAY, House Natural Resources Committee Chairman Doc Hastings (NGP Photo) delivered the following opening statement at today’s Full Committee oversight hearing on “Obama Administration’s War on Coal: The Recent Report by the Office of the Inspector General.”
“We’re here today to discuss the U.S. Department of the Interior Office of Inspector General’s new report on the Office of Surface Mining Reclamation and Enforcement’s (OSM) rewrite of the 2008 Stream Buffer Zone Rule.
By now, everyone on this Committee is very familiar with this rewrite, and it has been the subject of Committee oversight and investigation for well over two years. In short….The Administration has spent millions of dollars, in secret, working on a new regulation that will put thousands of Americans out of work and increase electricity costs. It’s one of the most covert, but destructive tactics in President Obama’s war on coal.
Fairbanks News Miner Op-Ed by Diane Blumer (NGP Photo).
The Parnell administration remains committed to growing opportunity for Alaskans. As we look ahead to 2014, our economists forecast Alaska adding 1,500 jobs — 2,400 new private sector jobs, diminished some by a decline of 900 government jobs.
Alaska added more than 1,500 jobs through the first half of 2013, and Alaska is one of a handful of states that has recovered all of the jobs lost during the recent recession. Alaska’s unemployment rate was below the national rate for 61 consecutive months as of November.
Important Event: On Friday, leaders of Alaska's oil industry, the Interstate Mining Compact Commission, the National Mining Association and FrackNation producer Phelim McAleer, will join Governor Sean Parnell (NGP Photo) to MEET ALASKA. See agenda below. NGP Readers may register here, but seats are limited and time is of the essence! We'll have a report for our Canadian and Lower 48 readers by Monday.
WGOW (Chattanooga, TN): Winter Energy Tips, A Radio Interview with Natalie Joubert, Consumer Energy Alliance (NGP Photo)
AAPG Explorer: Ms. Cox goes to Tallahassee: Energy Expertise Shared, with Consumer Energy Alliance's Michael Zehr. “The role we are looking to fill would address what hydraulic fracturing is,” Zehr said, “and some of the key issues to keep in mind regarding the process as states seek appropriate regulatory guidelines to ensure exploration occurs in an environmentally responsible fashion.”
Today's Consumer Energy Alliance Energy Links:
McClatchy DC: Debate rages over exporting America’s oil. The push to end the ban on exporting U.S. crude oil to foreign nations is at a level not seen in decades, with the top Republican on the Senate Energy Committee joining the call Tuesday. Alaska Sen. Lisa Murkowski (NGP Photo; see our event report yesterday) argued that the ban, put in place after the 1970s Arab oil embargo, doesn’t makes sense given the current U.S. oil production boom. Her endorsement follows comments by Obama’s secretary of energy that the ban should be reconsidered, and a pledge by the oil industry’s main lobbying group to press Congress and the president on the issue. (See our report yesterday.)
The Washington Times: Sen. Lisa Murkowski calls for Obama to end ban on crude oil exports. Senator Lisa Murkowski, the leading Republican on the Energy and Natural Resources Committee, used a Brookings Institution platform on Tuesday to call for the president to reverse course on crude oil import bans. Her call carries special weight because she’s the highest-ranking member of Congress so far to push for the ban’s repeal, the Energy Guardian reported. “I am calling for ending the prohibition on crude oil and condensate exports,” the Alaskan senator said, the outlet reported. And she backed her rhetoric with a vow to act. (See our report yesterday.)