12-19-14 Chevron Exits 'Economically Uncertain' Arctic OCS - Regulators Question Alaska's Arctic Gas Project
On December 11, 2014, the National Hydrocarbon Commission of Mexico announced the proposed terms for the shallow water bidding round, consisting of the Bid Conditions and the Model Contract. Our friend, Pedro van Meurs (NGP Photo), along with J. Jay Park, Q.C., prepared a joint commentary on both these documents. This report is available for free to interested parties. Click Here to download the document.
BP's Alaska Hire rate continues to exceed 80%, and spending with Alaska companies is 81% of total in-state spending, according to its 2014 Alaska Hire report. BP Publishes Alaska Hire each year to focus on education, training and mentoring programs that are designed to bring more Alaskans into the oil and gas industry. Readers may access Alaska Hire here
Reuters (Reporting by Scott Haggett; Editing by Cynthia Osterman) - Chevron Corp said on Wednesday a plan to drill for oil in the Beaufort Sea in Canada's Arctic is on hold indefinitely .... In a letter to Canada's National Energy Board, the company withdrew from a hearing into Arctic drilling rules because.... (More)
REGULATORS QUESTION ALASKA LNG PRELIMINARY PLANS (From Office of the Federal Coordinator)
In their first feedback on Alaska LNG's preliminary construction plans, federal and state agencies raised dozens of questions and issues they want to make sure are covered as the project sponsors progress with design and environmental analysis.
The agencies on Dec. 11 asked the project sponsors for more information about where they plan to get construction gravel, how they plan to lay a pipeline across Cook Inlet and what kind of wear and tear state roads and bridges would endure as tons of materials move across Alaska during construction.
The requests for more information were expected as the sponsors are in the early stages of their design, route selection and construction planning for the LNG export project.
Today's Consumer Energy Alliance Energy Links:
Downstream Today: Keystone XL: Oil, Gas Industry Awaits Fate of the Pipeline's Final Phase.
If oil sands from Canada will make it to the market whether the pipeline is built or not, then moving the product through a pipeline would not only produce fewer emissions than transporting it using other methods, such as rail or truck, but it would also be safer than other methods of transport, according to the President of the Consumer Energy Alliance, David Holt (NGP Photo), during a broadcast of Houston Public Radio.
“Pipelines are an order of magnitude safer and more environmentally responsible than any other mode of transportation for crude and natural gas. Whether or not we permit the Keystone pipeline, the crude oil in Canada is going to be produced. In the State Department’s own report, they said that without Keystone, the emissions impact to ship that [Alberta oil sands] to the east and the west, and to take it to China and elsewhere, could be a 600 percent increase in emissions,” Holt said.
New York Times: Cuomo Bans HF
Gov. Andrew M. Cuomo’s administration announced on Wednesday that it would ban hydraulic fracturing in New York State because of concerns over health risks, ending years of debate over a method of extracting natural gas.
Reuters: NY unlikely to face lawsuits over shale ban, experts say
When Governor Andrew Cuomo announced a ban on fracking in New York on Wednesday, he predicted "a ton of lawsuits" against the state. But that is unlikely as the end of a drilling boom has left the industry in no mood for a fight, industry experts and lawyers said.
Associated Press: McConnell Wants to Stop Coal Rules
Incoming Senate Majority Leader Mitch McConnell, R-Ky., pledged on Wednesday to do all he can to stop President Barack Obama's coal plant regulations, saying a White House "crusade" has devastated his state's economy.
SNL: House Republicans slam EPA carbon rule for existing plants as 'unrealistic'
The Republican majority on the U.S. House Energy and Commerce Committee contends the EPA's draft carbon dioxide regulation is illegal under the Clean Air Act and that the proposal's goals are "unrealistic."
Reuters: Chevron cancels Canadian Arctic drilling as oil prices slide
Chevron Corp is putting a plan to drill for oil in the Beaufort Sea in Canada's Arctic on hold indefinitely because of what it called "economic uncertainty in the industry" as oil prices fall.
Bloomberg: U.S. Talking Oil Exports Just When World Needs It Least
The U.S. Congress is talking about allowing unfettered oil exports for the first time in almost four decades. Its timing couldn’t be worse.
Bloomberg Businessweek: TransCanada’s Keystone Fight Turns to Exports on Oil Glut
Russ Girling’s Keystone XL saga is taking a new twist with a global glut of cheap oil. Americans, including President Barack Obama, are increasingly questioning whether the pipeline is needed or if it will just be a corridor for Canadian oil-sands crude to reach China. Girling’s answer is that the U.S. isn’t weaning itself off foreign oil anytime soon and that Gulf Coast refineries will be the buyers, not Asia.
The Denver Post: Tilting the Keystone
Being an ardent opponent of the Keystone XL project in rural Colorado isn't a popular position. The vision for this 21st century pipeline has been sold as a necessary component of our energy challenges and a massive job creator. Unfortunately, the pipeline is neither, and would be better characterized through the lens of American rural landscapes as an assault as opposed to an asset.
KMTV: Fight over Keystone XL continues, landowners vow to fight until very end
TransCanada has until mid January to acquire the land needed to build the Keystone XL Pipeline through Nebraska. A new offer from the company is on the table for landowners.
Fresno Bee: Plunging oil prices are good for us, bad for Putin
Plunging gas prices are a gift in more ways than one. They mean more cash in people’s pockets during the holiday shopping season, so hopefully local retail will get a boost. They will soften the blow next month for any price spike when fuels come under California’s cap-and-trade system to combat climate change.
CBS 4 News: Falling Gas Prices Could Harm Colorado’s O&G Industry
While prices at the pump are pleasing to many drivers so far this holiday season, the plummeting prices of oil are a bit concerning for Colorado’s oil and gas industry. Coloradans are paying an average of $2.52 per gallon. That’s 54 cents less than a year ago when it was $3.06. “Colorado has had a significant increase in production. At these prices I’m not sure that will continue,” said Stan Dempsey, president of the Colorado Petroleum Association.
Associated Press: Colorado drillers warn of closures with fines
Colorado oil and gas industry leaders say new fines for rule violations could lead in some cases to companies shutting down or curtailing operations. An attorney for the Colorado Oil and Gas Association industry group told regulators penalties should be waived for minor infractions.
News & Observer: NC Rules Review Commission approves HF standards
North Carolina’s proposed fracking safety standards sailed through a rules reviewWednesday despite a staff attorney’s warning that several rules failed to meet state standards and should be put out for public hearing. The Rules Review Commission’s approval means the fracking rules won’t be delayed by several months for extra reviews and hearings. Instead, the rules, written by the Mining and Energy Commission, are now headed to the state legislature, which is expected to lift North Carolina’s fracking moratorium in a matter of months.
Baltimore Sun: Shale ban in NY prompts calls for MD to follow suit
With New York's governor banning hydraulic fracturing for natural gas in that state, environmental groups are calling on Maryland's lawmakers to follow suit. New York Gov. Andrew Cuomo ended six years of study in that state and sided with his top advisers in deciding the potential environmental and health risks of "fracking," as it's commonly known, were too great to allow it to go forward there.
Lancaster Online: Home heating costs are down
Lancaster County residents should get some relief on their heating bills this season — unless there’s a repeat of last winter’s deep freeze. The administration estimated in its winter report on winter fuels that the decline in average price for some heating sources also will contribute to savings.
WOAI: Eagle Ford Production Strong--Won’t be Killed by Saudi Moves
The plummeting price of oil has not yet begun affecting drilling in the Eagle Ford shale south of San Antonio, an investigation by News Radio 1200 WOAI's Michael Board has concluded. Benchmark West Texas Crude fell nearly a dollar again on Tuesday to settle at $55.05 a barrel. That's down from $116 in April, and $110 as recently as June.
Dallas Morning News: Lawmaker files bill to discourage cities from passing HF bans
Rep. Phil King, R-Weatherford, proposed on Wednesday a bill that would require cities to make up for any revenue lost as a result of passing a municipal oil and gas ordinance–a requirement that could dissuade cash-strapped cities from considering or approving some local regulations.
Express-News: 500+ rigs may shut down as oil slides, analysts say
As many as 550 drilling rigs may have to sit on the sidelines of U.S. shale oil patches over the next few months, analysts say, as oil prices have folded nearly in half since this summer. The projections come a few days after Texas drilling rigs led the nation in a 1.4 percent weekly decline in the U.S. active rig count, according to oil-field services firm Baker Hughes.
Alaskanomics, by Caroline Huntley
Posted: 16 Dec 2014 08:39 AM PST
Governor Bill Walker (NGP Photo) discussed his FY2016 (July 1, 2015 – June 30, 2016) budget proposal at yesterday’s Anchorage Chamber of Commerce luncheon. Having been in the office only two weeks, Governor Walker submitted a $5.3 billion operating budget developed by his predecessor, former Governor Sean Parnell. Walker has not endorsed this budget and his administration is working on its own version. The Walker administration did announce a capital budget of $106 million, pared down from the $220 million capital budget Parnell submitted. With oil prices lower than expected, Walker hopes the decrease in the capital budget will help stretch the state’s dollar and weather a projected $3.5 billion budget deficit for FY2015. Even with the lower capital budget, the state is looking at a similar budget deficit for FY2016, assuming oil prices remain low. Walker, however, pointed out oil prices do swing and is optimistic about the future of Alaska and the opportunities ahead. “We live in one of the most resource-rich states and one of the wealthiest countries in the world,” said Walker. “We don’t have a resource problem. We have a distribution problem. We need a distribution system in place to get our resources to Alaskans and the world market.”
Governor Walker’s team will spend the next few weeks reviewing all capital projects and the operating budget before submitting its final revisions by February 18. At the luncheon, Walker requested the public’s involvement during the budget process. The administration plans to solicit public input on ways to prioritize spending, cut waste and address any inefficiencies as it puts budget plans together.
“I’m confident that together, we Alaskans can manage our way through it,” Governor Walker said. “We need to develop a smart plan so that our children and grandchildren can have stability 30 years from now. We want a plan in place that will not just get us over the hump now, but provide a strong future for decades to come.”
Writing for the Alaska Dispatch, Lisa Deemer writes, "President Obama on Tuesday declared Bristol Bay “a beautiful natural wonder” and designated its salmon-rich waters indefinitely off limits for oil and gas leasing.
"Environmentalists say the move provides significant protection not just for the iconic Bristol Bay sockeye salmon, but for crab, herring, halibut and groundfish, including the lucrative pollock fishery. And salmon returning to the Yukon and Kuskokwim rivers pass through the waters that had been considered for drilling."
Significant growth in the global middle class, expansion of emerging economies and an additional 2 billion people in the world will contribute to a 35 percent increase in energy demand by 2040, according to a new report released today by ExxonMobil.
As demand increases, the world will continue to become more efficient in its energy use, according to the 2015Outlook for Energy: A View to 2040. Without efficiency gains across economies worldwide, energy demand from 2010 to 2040 would be headed toward a 140 percent increase instead of the 35 percent forecast in the report.
ExxonMobil’s Outlook for Energy projects that carbon-based fuels will continue to meet about three quarters of global energy needs through 2040, which is consistent with all credible projections, including those made by the International Energy Agency.
Letters to the Editor, by Thorpe Watson PhD.
|The author, Dr. Watson, is demonized by some special interests involved in activist agendas. We believe his voice should not be muted. Instead, since many trillions of dollars and the future of many countries is at risk, all voices should be heard and considered by critically thinking taxpayers. -dh
The History of World World Temperature...for reference of our readers. -dh
Politicians are now urging us to “fight against climate change”, a phenomenon that has been happening since the beginning of time. This letter examines the authenticity of the challenge taking into account the enormity of the task and the proposed solution relating to the restricted use of carbon-based fuels.
Apparently, the term “global warming” is no longer fashionable because of an increasing awareness of the “warming pause” 18 years ago.
The global-warming narrative had been relying on the 1976 to 1996 decadal warming period, one of the four, naturally-occurring climate cycles. However, some alarmists still use the natural recovery of temperatures since the Maunder Minimum - 1645 to 1715 - as support for their global-warming, alarmist message.
Is this “fight” the ultimate expression of mankind’s arrogance? Or are Canadians being duped into accepting a carbon tax under the false premise that it will stop an ever-changing climate?
Politicians are proposing to fight climate change by restricting the use of carbon-based fuels. This task to stabilize the planet’s climate requires the suppression of four, naturally-occurring, climate cycles.
The decadal – 20 to 40-year cycles. It appears that we are now in a cooling cycle. The last cooling cycle occurred during the period 1940 to 1976.
The millenial – roughly, 1,000-year cycles. Assuming that we have just passed the peak of the Modern Warm Period, we are now experiencing the coolest of the six (6) warm periods since the end of the last glaciation 10,000 years ago.
The glacial-interglacial – 100,000-year cycles. We are now approaching the end of the Holocene Interglacial, which followed the Wisconsin Glacial Period.
The ice age – 150 million-year cycles. The current Ice Age is known as the Holarctic-Antarctic Ice Age and was preceded by five ice ages of variable durations. Ice ages have occurred during 17 per cent of the planet’s existence; that is, the planet is usually free of polar ice caps.
Green energy policies are now being adopted by governments allegedly to stabilize the planet’s climate; that is, “to fight against climate change”.
Such “green” policies discourage the use of carbon-based fuels in order to reduce emissions of carbon dioxide (“CO2“). CO2 is an essential plant food and is as important as oxygen and water in sustaining life on the planet. Consequently, these policies are really anti-green. Clearly, CO2 is not a pollutant!
The CO2 content of the atmosphere is a fraction of that contained in ancient atmospheres. Our air/ocean store of CO2 has been severely depleted by natural processes to form carbonate rocks such as limestone. The consumption of all known coal, oil, and gas deposits will not materially replenish this store.
Furthermore, Canada’s contribution to the world’s CO2 emissions is an insignificant 1.5 per cent. The world would not even notice a complete shut down of Canada’s economy. It might notice Canada’s consequential return to an impoverished medieval lifestyle.
In the meantime, China would overwhelm our minuscule CO2 reduction by continuing to commission one or more coal-fired power plants per week.
Ontario provides us with ample evidence that the climate-change/global-warming narrative must be denounced. This province is on the “green” road to bankruptcy.
A carbon tax will simply accelerate the destruction of its economy.
In conclusion, there is no evidence that so-called green energy policies will stabilize the planet’s ever-changing climate. Tragically, Ontario’s self-induced, economic suicide will be a futile gesture.
Thorpe Watson PhD
Federal Endangered Species Decisions Faulty
House Natural Resources Committee majority staff released a report today that questions the independence and accountability of the peer review process in recent Endangered Species Act (ESA) listing decisions. The report entitled, “Under the Microscope: An examination of the questionable science and lack of independent peer review in Endangered Species Act listing decisions” studies the federal government’s peer review process for 13 different ESA listing decisions made by the U.S. Fish & Wildlife Service (FWS) since July 2013. The report found numerous examples of potential bias and conflicts of interests with the peer reviewers and a lack of transparency and consistency in the peer review process.
“The decision of whether or not to list a species under the Endangered Species Act has significant implications for the economy and livelihoods of impacted communities and private landowners. As such, these important decisions must be based on sound science that has undergone an independent peer review. This report raises troubling concerns about the lack of independence of the peer review process and whether many current, upcoming or recently finalized listing decisions, such as the White Bluffs Bladderpod in my Central Washington district, are scientifically sound,” said House Natural Resources Committee Chairman Doc Hastings (NGP Photo).
Petroleum News by Gary Park. Arctic Gateway, a sweeping initiative to explore ways to move oil and natural gas from Alberta, the Northwest Territories, Yukon and Alaska to markets in the Asia-Pacific region, will likely be an underpinning of a standalone energy strategy being drafted in the NWT, said Industry Minister Dave Ramsay (NGP Photo).
Journal of Commerce by Tim Bradner (NGP Photo). On the Alaska LNG Project, another priority, Walker said: “We have met with — and probably again also in the next 30 days — the AK LNG sponsors. We have met with the ADGC (Alaska Gasline Development Corp.) leadership and some of the board members and some of the outgoing administration and had a debriefing with them,” Walker said in the briefing.
Calgary Herald by Mario Toneguzzi. A new RBC report says slumping oil prices will be a drag on Alberta’s economy in 2015.
Here's a rich source of information on energy regulation: The Cruthirds Report.
NAESB Board of Directors meeting – The North American Energy Standards Board held a Board of Directors meeting in Houston on Thursday, Dec. 11, 2014. There were 50 +/- folks in the room, as well as a large contingent on the phone. As noted in our last report, I was the featured speaker for the meeting and provided wide-ranging remarks on issues and challenges facing regulators and the industry. Topics ranged from the DOJ’s investigation of Entergy, the Georgia PSC’s $200+ million “gift” to the Southern Company’s shareholders in the Plant McIntosh affiliate abuse case, the sometimes corrosive political influence exerted by some incumbent utilities and the associated ethical challenges for regulators, and the dire need for better gas-electric process harmonization. Presentation.
The following Advanced Energy for Life article highlights the White House's illogical and harmful attack on America's Constitution. Meanwhile, keep our 2012 warning commentary in mind as you consider the nexus joining all of these overreach issues -- which provide pretext and precedent for omnibus federal control. -dh
In his Harvard days, Barack Obama studied under law professor Laurence Tribe. Perhaps the future President spent too much time at the law review and missed the part about limited powers. We say that because Professor Tribe delivered a constitutional rebuke this week to the Obama Administration that is remarkable coming from a titan of the liberal professoriate.
Mr. Tribe joined with the world’s largest private coal company, Peabody Energy, to criticize the “executive overreach” of the Environmental Protection Agency’s proposed rule to regulate carbon emissions from existing power plants. In joint comments filed with the EPA, the professor accuses the agency of abusing statutory law, violating the Constitution’s Article I, Article II, the separation of powers, the Tenth and Fifth Amendments, and in general displaying contempt for the law.
As Obama Champions Carbon Tax In Low Price Oil Era, Harper Turns Away From Carbon Taxing. (Note that in the same timeframe, the White House is illogically killing the Keystone XL project that would provide economic stimulus to both the U.S. and Canada. -dh)
Calgary Herald, by Stephen Ewart.
Sure it’s “crazy” talk, but Prime Minister Stephen Harper is actually being up front about his assessment of climate policy and the oil industry.
Agree with Harper or not, it’s a change from his government’s long history of over-promising and under-delivering on environmental policies and Canada’s global commitments to reduce greenhouse gas emissions. However blunt, the prime minister is being unusually honest.
He’s clearly backing away from earlier — always improbable — climate rhetoric.
With the oil price free fall threatening the $60 US threshold, Harper told the House of Commons this week he has no intention of imposing a carbon tax on a nationally important industry, even as Canada falls further behind GHG commitments and the next round of global climate negotiations kick off.
"Obama's Successful War on Conventional Energy Sources"
|WSJ Op-Ed by Congressman Kevin Cramer.
Pushback against the Obama administration’s complex Clean Power Plan—which would reduce carbon emissions from power plants by 30% in 2030 from 2005 levels—has mostly focused on its staggering cost. NERA Economic Consulting, for instance, estimates the plan will increase the nationwide average price of electricity 12% to 17% over 15 years. But a pair of recent reports present an even more ominous picture. Not only will electricity cost more, Americans might not be able to get it when they most need it.
The North American Electric Reliability Corp. (NERC), a regulatory authority that monitors the U.S. and Canadian power systems, released a study on Nov. 12 concluding that the long-term reliability of the U.S. grid in some areas is already at risk. Because of rapid shifts to renewable and natural-gas generation, combined with closures of coal-fueled power plants due to existing Environmental Protection Agency regulations, “reserve margins” in the Midwest, New York and Texas have reached dangerously low levels—meaning an increased likelihood of brownouts and blackouts in the coldest weeks of winter and the hottest days of summer.
We've chastised President Obama many times for failing to live up to promises he made when running for the office. So in fairness, we want to credit him for fulfilling one of them: his pledge to raise energy costs.
In early 2008, candidate Obama told the San Francisco Chronicle that "under my plan ... electricity rates would necessarily skyrocket."
Obama was referring to his plan to cap greenhouse-gas emissions, which would, among other things, effectively choke off coal as an energy source. He was just as fond of high gasoline prices, telling CNBC in June 2008 — as gas prices shot up to $4 a gallon — that he "would have preferred a gradual adjustment."
Six years later, and Obama has succeeded.
According to the Bureau of Labor Statistics, the energy price index has been higher than the overall Consumer Price Index since December 2010 — 46 straight months and counting.
Why the big reversal? Despite Obama's alleged "all of the above" energy policy, he's declared virtual war on conventional energy sources.
The Ambler road. The Juneau road. The Knik Arm bridge. The Susitna Dam. The Alaska Stand Alone Pipeline (ASAP), known colloquially as the “bullet line.” The large-diameter natural gas pipeline.
Alaska has no shortage of capital-intensive megaprojects in the works, but now the state is scrambling to find funds to cover the basic needs for state operating expenses. As oil prices continue to dip, the fortunes of Alaska’s megaprojects are waning precipitously.
SCROLL UP TO 12-12-14 FOR MORE ON THE SUBJECT OF WHITE HOUSE OVERREACHING AUTHORITY