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Reader Steve Borell provides this link: Germany overreacted by diminishing nuclear power in wake of the ​Fukushima ​disaster–and now is desperate for more coal fired power!  -dh


Calgary Herald by James Wood.  Alberta Premier Jim Prentice sees opportunity trumping obstacles.  -dh


Today's Consumer energy Alliance energy links.


Pebble Partnership's short term judicial victory; but the jury is still out on the long term result of EPA coordinating with environmental activists to pre – emptively block development projects in violation of Constitutional, due process rights.  -dh

Resource Development Council (RDC) Conference Part I (Below), II, Day 1 Wrap Up, Day 2 Morning Sessions, Friday Conference Wrap Up

by Katie Bender (NGP Photo), Alaskanomics

​(Complete conference agenda with videos and presentations)

The Resource Development CouncilKatie Bender, Northrim, Alaskanomics, Alaska, RDC, Resource Development Council for Alaska, Photo by Dave Harbour hosted the 35th Annual Alaska Resource Conference last week. … Alaskanomics … highlight(s) the presentations from the conference.

The two-day event allows the resource industry to gather and look back at the past year, while planning for the coming year. There were many things to celebrate at this year’s conference, but participants and speakers were decidedly cautious about the State’s fiscal future.  

As is the tradition, the conference started out with an outlook for the coming year by Alaska Department of Labor Economist, Neal Fried. With the exception of 2009, the Alaska economy has been growing for the past 25 years. The growth has not always been by leaps and bounds, but it has been moving in the right direction. In 2014, it is predicted that there will only be about 900 new jobs in Alaska, which is only 0.6 percent. This is not as strong as many would hope and there will be a breakdown of the employment categories in January when the annual wrap up is published. Fried continued with brief updates of the various resource industries.

  • Timber has had very little change and is down with record lows
  • Mining is largely unchanged as well and has slowed and growth has flattened out
  • Fishing grew in both processing and harvesting this past year
  • Oil keeps hitting new highs, North Slope employment has doubled in the past decade
  • The Visitor Industry is up for the third year in a row

Alaska earnings have grown since a dip in the late 1990s and we currently have the second highest household income behind Maryland. The population grew in the past year, but the growth is starting to slow down.

Kara Moriarty of the Alaska Oil and Gas Association gave the update for the oil and gas industry. She shared the usual numbers that more than one third of all Alaska jobs are tied to the oil and gas industry and for every one industry job, 20 other jobs are generated through industry spending. The oil industry paid $6.9 billion in taxes and royalties and luckily the current tax policy generates more revenue at low prices than the old regime. This is very good since the price of oil has dipped below $80 a barrel. There has been a lot of new development on the North Slope and in Cook Inlet. Moriarty finished with the reminder that while we cannot control the price of oil or Alaska’s high cost environment, we could all be “Resource Proud”.

Stephanie Madsen of the At-Sea Processors Association shared that the fishing industry continues to grow and is currently the number one private sector employer in the state. The value of Alaska’s fisheries fluctuates because of the global market. The industry continues to be challenged by environmental non-governmental organizations (NGOs) calling for protected areas. Madsen continued by noting that Alaskan fisheries historically have been managed conservatively and are continually adapting to the varying definitions of sustainable.

Keith Coulter with Koncor Forest Projects gave the update for the timber industry, which by far has seen the largest decline of other resource industries. He noted that both fishing and forestry are sustainable and renewable and are not mutually exclusive. Rural communities that have lost timber are having a hard time replacing the jobs and income that were seen with the timber industry. Coulter shared that he felt that Federal Forests should be managed in the same way that private forests are and Alaska should resist efforts to adopt federal forest practices. He warned that changes to the Alaska forest practice should be informed by contemporary science. Coulter also urged the need for reform of federal overreach in the Tongass and elsewhere through fewer environmental regulations and restrictions.

Karen Matthias with the Council of Alaska Producers gave the update for the mining industry. She was proud to share that both Red Dog and Greens Creek Mines were celebrating their 25th anniversary of operation. She said the industry needed to do a better job at sharing success stories from around the state. An example is that Usibelli Mine has been in operation for more than 70 years and is mining responsibly. There are more than 5000 direct mining jobs in Alaska with an average annual wage of $100,000. Donlin Gold is in the permitting process and other mines could bring many new jobs to the state. Alaska is number one in the world for pure mineral potential and holds incredible potential in the mining industry. It was no surprise to conference attendees that permitting is consistently the biggest challenge in mining and is a very slow process. The outlook is bleak right now, but the industry can redouble efforts to fight against those trying to block responsible development and educate the public on the positive impact of mining so that things might improve.

Gideon Garcia with CIRI Alaska Tourism wrapped up the year in review with the tourism industry update. This past year, Alaska saw 1.96 million visitors, who spent $3.9 billion. The tourism industry adds 46,000 jobs for Alaskans. The projections for the 2015 season look good. Cruise traffic is predicted to have a 2.8 percent increase and overall visitor traffic is expected to jump 2-3 percent in 2015.

The year in review and 2015 outlook is a staple to the RDC conference and while presenters were proud to share accomplishments within their individual industries, it was obvious that the challenges of federal overreach, commodity prices, and regulations weighed heavy in the room.

Alaskanomics will continue to highlight the conference with Investment in Action by Trond-Erik Johansen of ConocoPhillips Alaska and Investing in Alaska’s Future with Janet Weiss of BP Exploration (Alaska).

 Posted by  at 04:10 PM in Alaska's EconomyFishing IndustryJobsMiningNatural ResourcesOil & GasPopulationTaxes,TimberTourism | Permalink  


RDC Part 2

The first day of the RDC conference continued with discussions from the heads of ConocoPhillips Alaska and BP Alaska about their investment in the North Slope. Both companies have had a busy year and are continuing the trend of investment in Alaska.

Trond-Erik Johansen of ConocoPhillips kicked things off, assuring the crowd that there are many good things happening in Alaska. There have been some challenging debates over the past few years, but ConocoPhillips will continue to move forward and will stay the course of investing on the North Slope. ConocoPhillips is very focused on converting resources that are in the ground into real oil in the Trans-Alaska Pipeline System (TAPS). The 2014 capital budget was up 50 percent from 2013 and is double the 2008-2012 average. The CD5 project, that was announced prior to SB21, is on schedule and on budget ($1 billion). The first oil from the project is estimated to flow at the end of 2015 with peak production at an estimated 16,000 BOPD in 2016.

The Alaska projects that were announced since SB21 hit the books are also still on track. Two new rigs were added at Kuparuk and are producing an additional 8,000 BOPD per rig. Each rig also added an additional 100 direct jobs for the state. Kuparuk production has flattened with the additional rigs. There are new projects in the Western North Slope/Alpine area that will help slow the production decline. A new Kuparuk drill site 2S (Shark Tooth) has been approved for construction. Peak workforce during construction will be 250+ jobs in 2015. The project has a budget of $500 million. An additional 8,000 BOPD is predicted to start in late 2015. Greater Moose’s Tooth is in the permitting stage. If permits are received by February 2015, the project will add 30,000 BOPD in 2017. Johansen wrapped up his presentation with a note about the Cook Inlet Assets and Natural Gas Sales. It is the only LNG plant to export from the US. Exports only occur in the summer because the gas is needed in Alaska during the cold, winter months.

Janet Weiss of BP Alaska shared Johansen’s optimism for the future of Alaska’s North Slope. As of November 18, BP and Hilcorp closed the deal that transferred a portion of BP’s North Slope assets to Hilcorp. The transfer allows BP to focus on the major fields and to remain competitive at Prudhoe Bay. BP will add a rig in 2015 and another in 2016, which will increase activity by 40 percent. They will also add an additional 25 miles of pipeline to bring more oil to TAPS in 2017. BP will also expand their current pads at Prudhoe and add a new drilling pad in the near future.

BP continues to invest not only in production, but also in Alaskans and education. As a company, BP has invested $28 billion in education and workforce programs in Alaska. They will continue their focus on growing the resource space that includes the people of Alaska and not just the capital.

Both ConocoPhillips and BP were cautiously optimistic about being able to slow the production decline on the North Slope. They are both working to move projects forward. Production is still far from the levels of the past, but both leaders felt that Alaska was moving in the right direction and that there are still plenty of resources to develop.

Governor Parnell stopped by the conference for a brief thank you to the resource industry. He highlighted the growth that has been seen during his time in office. Southcentral Alaska has new economic possibilities, especially along the Kenai Peninsula. The Governor thanked everyone in attendance for their support and their work to create more economic opportunities and growth. He concluded by saying how thankful he was for the opportunity to serve Alaska and its citizens and looked forward to getting back to work as a regular citizen.

More RDC highlights will be posted throughout the week.

 Posted by  at 11:52 AM in Alaska's EconomyJobsOil & Gas | Permalink                


Day 1 Wrap Up.

RDC Day 1 Wrap Up

Cook Inlet and the Interior Basin have been the major areas of focus for Hilcorp, Cook Inlet Energy and Doyon Ltd. Hilcorp has only been in Alaska for a few years, but is already making a large impact on production. They purchased assets from Chevron in 2012 and from Marathon in 2013. Production in their major oilfields has doubled from January 2012 through September 2014. Hilcorp President Greg Lalicker noted that he was confident that Hilcorp could meet the needs of Alaska for years to come. An example of this is the Trading Bay Field. There was a steady decline of the field and Hilcorp was able to turn this around and increase production in the field. Hilcorp has invested a total of $73 million in the Trading Bay Field.

Hilcorp will also increase their investment in Alaska with the asset transfer from BP that closed last week. This transfer included 100 percent of BP’s interest in Endicott and Northstar and 50 percent of Milne Point on the North Slope. There is also an option to purchase 50 percent of BP’s interest in the Liberty Development.

David Hall, President of Cook Inlet Energy, continued the discussion by outlining the growth within Cook Inlet. Hall shared the significant investment of Cook Inlet Energy from $34 million in 2012 to almost $140 million in 2014. Cook Inlet Energy works in four distinct fields, Redoubt, West McArthur River, North Fork and Badami. He concluded that the company’s capital expenditures have led to a 436 percent increase in BOE/D from 2012 to 2014. They are continuing to grow and are working hard to offset the production decline.

Jim Mery, Vice President at Doyon Ltd. rounded out the presentation with his company’s work in the Yukon Flats Basin and Nenana/Minto. He said that increased oil activity around the state has revved up Doyon’s business and they are seeing the benefits. Mery outlined Doyon’s objectives of oil and gas discoveries in both basins; new markets for Doyon oilfield service companies; business opportunities for nearby village corporations; job training for shareholders; and to secure new partners for State of Alaska leases.

A focus on the Arctic rounded out day 1 of the RDC Conference. Drue Pearce, Senior Policy Advisor with Crowell & Moring gave a detailed description of the Arctic Council and Alaska’s place in Arctic policy issues. She stressed the shift of the council from promoting economic and energy issues to protecting the environment and conserving its resources. There are many people and organizations that covet the Arctic; and often their agendas do not mesh with Alaska and the Native Alaskan lifestyle. There is currently no discussion of economy or smart development when discussing Arctic policy.

The United States is poised to take over the Chairmanship of the Arctic Council in 2015. Secretary of State, John Kerry, will be the chair of the council for the 2 year US term. Alaska will be well represented with Fran Ulmer as the Special Advisor on Arctic Science and Policy. The theme for the US Chairmanship will be “One Arctic: Shared Opportunities, Challenges and Responsibilities.” The thematic areas include addressing the impacts of climate change in the arctic, stewardship of the Arctic Ocean, and improving economic and living conditions in the region. This will be the first time that US policy is addressing economic issues in the arctic in the current administration. Alaskans should continue to watch the work of the Arctic Council because it directly affects the living and working conditions for many Alaskans. Policy-makers should have input from people who live and work in the Arctic when making decisions regarding our coastlines. Some want to shut off the entire Arctic and if they are not able to do that, they will section it off into pieces that do not allow Alaskans to live the lives they have lived for hundreds of years. It is important that Alaskans have a seat at the table when discussing Arctic policy.

The North Slope is primed for new development and Repsol and Caelus Energy Alaska shared their successes from the past year. Bill Hardham, Alaska Operations Manager for Repsol, reported that they were looking forward to their fourth drilling campaign on the North Slope and have made good progress from the first three winter campaigns. Repsol is the second largest North Slope leaseholder with more than 650,000 acres. They intend to be very busy in 2015 with a 500+ workforce and a budget of $240 million. Repsol is currently waiting for permits to be approved and to have the proper weather to start ice road construction. In the past three seasons, Repsol has drilled nine wells and invested $650 million in the North Slope. They first entered the Alaska market because legislators were willing to work on the tax structure and make Alaska more competitive in the national and global market.

Pat Foley introduced Caelus Energy Alaska to the conference to finish the day’s presentations. Caelus is a privately held Exploration and Production company founded in 2011. It acquired Pioneer Natural Resources Alaska assets in April 2014. Caelus is currently working to develop Oooguruk, where they are 70 percent operators. Oooguruk should have 13,000 BOPD gross production, 80+ Alaska employees, and 150-300 Alaska contract workers. Caelus has a $500 million capital budget for 2015. They see Oooguruk as their platform to grow the business, increase production, and further explore the North Slope.  In the next year, there will be many new projects with a lot of diversity for Caelus Energy Alaska.