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Northern Gas Pipelines is your public service 1-stop-shop for Alaska and Canadian Arctic energy commentary, news, history, projects and people. It is informal and rich with new information, updated daily. Here is the most timely and complete Arctic gas pipeline and northern energy archive available anywhere—used by media, academia, government and industry officials throughout the world. Northern Gas Pipelines may be the oldest Alaska blog; we invite readers to suggest others existing before 2001.

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1-26-15 New Week, New Challenges

26 January 2015 3:47am

NORTH DAKOTA RIG COUNT POINTS TO U.S. OUTPUT DECLINE

The decline in oil drilling that has occurred so far across the United States is probably enough to ensure U.S. production peaks by April or May, though that might not be evident until June or July given delays in publishing production records. If the number of active rigs continues to decline in...


A Good Father Figure

by

Dave Harbour

Please refer to our Sunday review, yesterday, of the President's executive action against Alaska and consumers throughout America

WASHINGTON, D.C. – U.S. Sens. Lisa Murkowski and Dan Sullivan, and Rep. Don Young will hold a press conference today at 2 p.m. in the Senate Radio and TV gallery to respond to the Obama administration’s efforts to lock up millions of acres of the nation’s richest oil and natural gas prospects on the Arctic coastal plain and move to block development of Alaska’s offshore resources.

We will report....  -dh


For those keeping a close eye on the Alaska economy, Alaskanomics produced this report today: 

The Department of Labor and Workforce Development release its monthly unemployment numbers on Friday. The seasonally adjusted unemployment rate for December was down to 6.3 percent. The national rate was 5.6 percent for the same period. Alaska’s unadjusted rate was also at 6.3 percent for December.

The Municipality of Anchorage and the North Slope Borough were the only areas that did not have an increase in the unemployment rate. Anchorage is less subject to seasonal shifts and the North Slope Borough saw an increase with winter construction. The North Slope Borough has the lowest unemployment in the State at 3.7 percent, while Hoonah-Angoon Census Area has the highest with 21.6 percent.

For full statistics....

​Yesterday as I was considering the President's continuing and escalating attack on Alaska's statehood act, constitution and people my mind wandered to how other presidents would be acting.

I first thought of the "Father" of the United States, George Washington.  He endured great hardship with his troops.  He left family behind to fight the nation's enemies.  He protected his people and defended them against internal and external threats.  And, he refused to become "President for life" when the people urged him to do so.

I think of Abraham Lincoln, the father of American unity who poured his energy, soul and his very life into service of his country.

And, I think of their mutual devotion to our Creator, without whom the country could not have achieved maturity and without whom the country cannot long remain great or even exist.

Then, I think of our current president who vacations while his people fight; who deceives the people on all manner of domestic issues; who aligns himself with communists, socialists and anarchists bent on destruction of America's way of life; who will not come to the aid of soldiers and diplomats locked in mortal combat and hesitates not to leave them behind to the cruel devices of our enemies; who claims credit for energy and economic accomplishments occurring in spite of his contrary efforts; who actively blocks energy, mining, timber and other multiple use, wealth and job producing activity on public lands...and so much more.

One asks, when the president of a country birthed in sacrifice and devotion to Christian service separates himself from that legacy, what can the future hold for citizens?

None of us is perfect.  Presidents aren't perfect.  And, regular fathers of families are imperfect, too.

Perfection in our presidents and our fathers is not the issue.  The issue is the purpose, devotion and example of life set for a father's children or a president's citizenry.

On this side let's say you have a father who acknowledges his imperfection yet strives with devotion to his heavenly Father to care for, protect and guide his children to healthy, adult outcomes.

And, on this side, you have a proud, imperfect father who does not seek the kingdom of heaven, scorns it and thereby neglects the time honored rules of the spirit and of living.  Can he with that lack of foundation care for, protect and guide his children to healthy adult outcomes?  

If a president consorts with those who would deprive his children of freedom and the opportunity of free enterprise can that be called protection?

If a president demonizes opponents to win an argument, can that lead citizens to healthy outcomes? 

If a president seeks luxury while his citizens suffer in war or other depravations, can he be said to nobly guide them?

Enough of the Father analogies.  They might just as well have been "mother" analogies or "cousin" analogies.  

The point is this.  We don't have much choice about the family into which we are born.  We do get to have the leadership we elect.  If the majority of Americans supports the kind of leadership we have, it will continue and its goals will change the culture and nature of the nation.  

If the majority comes to believe that the traditional values of founding Fathers are critical to America's future, America might prosper, survive and enjoy a continuing mantle of protection.

For one, I am for good father and mother figures as defined above and reject the alternative.

It remains to be seen if the majority of my fellow citizens agree or prefer the new direction upon which we are now embarked.

One way leads to historically proven, laudable, protected and peaceful outcomes.  The other way, history shows, leads to dictatorship, misery and loss of freedom.

It's time to make a choice and act upon it.

Categories:

1-25-2015 REPORT ALERT: Federal Government Makes Economic War On Alaska and All American Consumers

25 January 2015 11:18am

Alaska Governor Bill Walker, Federal War on Alaska, overreach, Dave Harbour PhotoSenator Lisa Murkowski, Federal War on Alaska, overreach, Dave Harbour PhotoSenator Dan Sullivan, Federal War on Alaska, overreach, Dave Harbour PhotoCongressman Don Young, Federal War on Alaska, overreach, Dave Harbour Photo

 

 

 

(NGP Photos, Left to right: Governor Bill Walker, Senator Lisa Murkowski, Senator Dan Sullivan, Congressman Don Young)


REPORT ALERT: Federal Government Makes Economic War On Alaska and All American Consumers

BY

Dave Harbour

While Alaskans have a right to be outraged that their statehood birthright and economic future are now threatened, AMERICAN CONSUMERS EVERYWHERE will feel the pain as this Administration continues to violate the spirit and fact of due process and threatens the very rule of law protecting every citizen.

 

Today, Robert Dillon of Senator Lisa Murkowski's Energy Committee office dispatched a somewhat unprecedented weekend news release reflecting an immediate and unified response to an imperial, federal action.  

Signed by Governor Bill Walker and the entire Alaska Congressional Delegation, the SUNDAY announcement read: "Obama, Jewell Declaring War on Alaska’s Future!"

Read the entire release here....

​It should be called, "Obama's Sunday War On Alaska".  

Today, the President took took careful aim then leveled a surprise, Sunday punch on the state of Alaska, the Congress and all American consumers -- while announcing more attacks are coming.

According to a Sunday press release, the Obama administration plans to manage a strip of land on Alaska's already protected northern coast Refuge as wilderness while recommending to Congress that the designation become law.

Long managed as a restricted use Wildlife Range, in 1980 Congress enacted the Alaska National Interest Lands Conservation Act  (ANILCA) which converted the Arctic National Wildlife Range into the more restricted "Refuge" status.

James Halloran, Obama's War On Alaska EconomyOur friend and senior energy analyst, James Halloran (NGP Photo), was moved this weekend as well to comment on the President's Sunday Alaska announcement.  He is one American that most Alaskans would agree, "knows what he is talking about".  Read more....

That law then went on to include a "no more" clause requiring that the federal government not ever again by administrative action designate Alaska wilderness without an act of Congress.

ANILCA also expressed the clear will of Congress that the approximately 5% of the 19 million acre ANWR, called the "coastal plain", be specifically available for oil and gas development upon further action by Congress.

Thus, the intent of Congress could not have been clearer that 1) no future administration could outlaw coastal plain energy development and 2) that the administration was not free to establish more Alaskan wilderness areas by fiat.

This matter of reasonable access to federal as well as state lands is critical for a couple reasons dealing with the Alaska Statehood Act passed by Congress in 1958 and signed into law by President Eisenhower in 1959.  The Act was created by what is commonly thought of as a 'compact' involving a 1) plebiscite of Alaska's citizens, 2) approval of Alaska's constitution and 3) approval by Congress and the President. The Statehood Act narrowly passed based on the conviction  that Alaska could make a living from its natural resources.  The state constitution was based on the economic expectation of resource development.  Finally, the vote of citizens could not have occurred without the expectation of access to state lands in addition to state sharing of revenue derived from resource development of federal lands.  

Adding more insult too injury, last week the President issued an executive order affecting the Arctic, knowing that Alaska is America's only Arctic state.  Alaska is adjacent to perhaps as much as 20% of the world's remaining oil and gas reserves.  While Canada and Russia along with the half-dozen other Arctic nations are seeking to establish and hold jurisdiction over this wealth, the US executive order focuses mainly on the administration's key, domestic pre-occupation: global warming.  Thus, Alaskans are afraid of a federal government that created this new executive order:

Alaska Governor, Walter J Hickel, Federal abuse, Dave Harbour Photo

Our readers can therefore understand why Alaskans now feel deeply betrayed by the federal government (Hear the late Governor and former Interior Secretary Walter Hickel describe federal abuses, NGP Photo).  Alaskans' livelihoods were dependent on resource development from the very birth of their state.  Since 1959, thousands of additional federal laws, regulations and rulings have deeply diluted the ability of the state to financially survive.  We have documented in this webpage a litany of federal abuses that even erode due process protections of the U.S. Constitution, the underpinning of the Alaska statehood compact and the very concept of America's reliance on, "Rule of Law".  We feel like the bystander watching a sly cook slowly raising the temperature of a pot of water containing hapless citizens of a former, pioneering state.

It should not also be forgotten that a state 1/5th the size of the nation is not only full of natural beauty, but also with energy, strategic minerals, rare earth elements, fish, timber, and tourism related resources that have and could continue to provide untold wealth to the citizens of the country without materially affecting the natural wonders.  

So here we are on this lovely weekend, after church and expecting a quiet walk, when we and the world hear that the White House, without warning, has declared economic war on Alaska by violating the will of Congress imbedded in ANILCA on top of the continuing pattern of abusive authoritarianism.

Alaska's Governor, two U.S. Senators and lone member of the House of Representatives all reacted bitterly to the administrative action today. 

We can certainly expect more announcements and news conferences from Alaska officials in the days ahead.

Other references: Washington Post; KTUU.com: Walker 'angry, very angry' over planned ANWR wilderness designation; Alaska Dispatch News; Fairbanks News Miner; Wall Street JournalNew York Times 

____________________________________________


FOR IMMEDIATE RELEASE         JANUARY 25, 2015 

ROBERT DILLON (202) 224 6977 (MURKOWSKI)                MIKE ANDERSON (202) 223 7132 (SULLIVAN)               MATT SHUCKEROW (202) 412 8533 (YOUNG)                     GRACE JANG (907) 957 9451 (WALKER)

    Obama, Jewell Declaring War on Alaska’s Future

WASHINGTON, D.C. – Alaska’s Congressional Delegation and Gov. Bill Walker today denounced President Obama and Interior Secretary Sally Jewell for launching an unprecedented assault on Alaska that will have long-lasting effects on the state’s economy and the nation’s energy security.

In coordination with the White House, Secretary Jewell will announce this week – starting today – that she will lock up millions of acres of the nation’s richest oil and natural gas prospects on the Arctic coastal plain and move to block development of Alaska’s offshore resources. The administration is also weighing additional actions in the near future that would prevent new production in the National Petroleum Reserve-Alaska.

“What’s coming is a stunning attack on our sovereignty and our ability to develop a strong economy that allows us, our children and our grandchildren to thrive,” Sen. Murkowski said. “It’s clear this administration does not care about us, and sees us as nothing but a territory. The promises made to us at statehood, and since then, mean absolutely nothing to them. I cannot understand why this administration is willing to negotiate with Iran, but not Alaska. But we will not be run over like this. We will fight back with every resource at our disposal.”

“This outrageous action confirms what most Alaskans have feared – that the Obama administration’s war against Alaska families and the middle class would only intensify under the final two years of President Obama’s tenure. But Alaskans have been in tough battles before. We will defeat their lawless attempt to designate ANWR as a wilderness, as well as their ultimate goal of making Alaska one big national park. This decision disregards the rule of law and our constitution and specifically ignores many promises made to Alaska in ANICLA. It is just one more example of President Obama thumbing his nose at the citizens of a sovereign state – and will put Alaska and America’s energy security in serious jeopardy,” Sen. Sullivan said. “I stand united with Sen. Murkowski, Congressman Young, Governor Walker and the members of the Alaska State Legislature to vigilantly safeguard and defend our fellow Alaskans’ interests, and I pledge to do everything in my power to fight back against this assault on Alaska’s economic future.”

“This callously planned and politically motivated attack on Alaska by the Obama administration is akin to spitting in our faces and telling us it’s raining outside. As if on command from the most extreme environmentalist elements, this president and his team of D.C. bureaucrats believe they alone know what’s best for Alaska, but this brazen assault on our state and our people will do the complete opposite,” Rep. Young said. “Every time the president undermines the law of the land, he breaks his oath of office and weakens the nation we love. This latest move, in clear violation of ANILCA’s 'no more' clause, and despite the fierce opposition of every Alaska statewide elected official and the vast majority of our people, demonstrates that the Imperial Presidency of Barack Obama knows no bounds. Simply put, this wholesale land grab, this widespread attack on our people and our way of life, is disgusting.”

The Interior Department plans to immediately begin managing the 1.5 million acre coastal plain of the Arctic National Wildlife Refuge (ANWR) as wilderness – adding to the 18 million acres of ANWR already designated wilderness. This management status will prohibit even motorized access to the coastal plain.

Gov. Walker was outraged by the Obama administration’s actions at a time when the state is drawing down more than $10 million from savings every day due to low oil prices and declining production despite having more than 40 billion barrels of untapped resources, mostly in federal areas where oil and gas activity is blocked or restricted.

“Having just given to Alaskans the State of the State and State of the Budget addresses, it’s clear that our fiscal challenges in both the short and long term would benefit significantly from increased oil production,” Gov. Walker said. “This action by the federal government is a major setback toward reaching that goal. Therefore, I will consider accelerating the options available to us to increase oil exploration and production on state-owned lands. This further underscores the need for Alaska to become a participant in the infrastructure development for the benefit of all North Slope participants and the residents of Alaska.”

Wilderness status would permanently place off-limits the United States’ most promising onshore oil prospect and severely restrict access for subsistence hunters and other uses of the area. Under the terms of the 1980 Alaska National Interest Lands Conservation Act (ANILCA), additional wilderness designations are barred in Alaska without the express approval of Congress.

Secretary Jewell also said that President Obama plans to indefinitely withdraw areas in the offshore Arctic from oil and gas leasing in the new five-year plan being released later this week, which will effectively ban development in large swaths of the Chukchi and Beaufort seas. It is unclear how these new restrictions will affect areas already under lease by Shell, ConocoPhillips and Statoil.

Sen. Murkowski is chairman of the Senate Energy and Natural Resources Committee and the Interior and Environment Appropriations Subcommittee, which together have oversight of the Interior Department’s underlying legislative authority, nominations, and budget.

“These decisions simply cannot be allowed to stand,” Sen. Murkowski said. “I have tried to work with this administration – even though they’ve made it extremely difficult every step of the way – but those days are officially over. We are left with no choice but to hit back as hard as we can.”

###

For further information, please contact Robert Dillon at 202.224.6977 or robert_dillon@energy.senate.gov.

 

Visit our website at http://energy.senate.gov/public/


 

James Haloran.  We try to stay away from political commentary in this corner, as there are a huge number of political blogs and news sources that cover that front ad nauseum. Also, the points at which politics falls tangentially against the Energy world can usually be dealt with generically; one does not have to name specific entities or given parties, since neither party holds the copyright on stupidity when it comes to Energy matters.

Occasionally, however, some politician or party requires some comment. Today the Narcissist-in Chief  has proposed to extend further designation of major parts of the Alaska Natural Wildlife Refuge as wilderness area. He will need congressional approval to do this, which is unlikely to happen with a Republican congress. But he is also planning to rework the rules of the Interior Department in such a way that future development will be almost impossible. This will include offshore drilling in Alaska.

We could spend a lot of words analyzing this move, but let us try to do it an few bullet points.

  • As for the danger to wildlife in northernmost Alaska, the caribou herd size has fluctuated in recent years, but none of the fluctuation has had anything to do with oil and gas production in Prudhoe Bay. The herd size actually rose dramatically in the first few years after oil began flowing in 1974, and is still much larger than it was at that time. The threat to wildlife argument is just smoke.
  • There are already sizeable roadblocks to production from ANWR. It is estimated that it could take as long as 13-15 years to develop a major amount of ANWR production, counting permitting, exploration, development, and especially litigation from such groups as the NRDCThe only reason Prudhoe Bay got developed when it did was the Native Claims Settlement Act (1973) precluded environmental litigation; all claims were to arbitrated through the Interior Department. No surprise that almost no claims appeared, since the lawyers could not figure out a way to profit from arbitration. Such a preclusion is unlikely to happen again, since the Democratic Party is a majority-owned subsidiary of the tort lawyers.
  • If it becomes designated a wilderness area, there is no way congress could ever find the backbone to reverse it. As we noted, such a designation is unlikely, but Obama’s minions will set up such a rule-making process as to make it de facto a wilderness region.
  • To save this is for “future generations” is also baloney. Besides the fact that the region gets almost no visitors, it would get no more (or fewer) if it were a wilderness area, given the severe restrictions on even using a chain saw in such a designated area. As one site about travel there says: ANWR isn’t like a national park: Visitors will not find hiking trails, facilities or visitor centers. Snow covers the refuge nine months of the year and air travel is the only way in or out, making the remote refuge seem like the last frontier. Visiting the park requires advance planning and understanding of survival techniques.” Also, the Alaska North Slope is notorious for a massive quantity of large, voracious mosquitoes.

Few people understand the size and nature of the area involved. To put in perspective, we generally describe it this way in presentations:

  • ANWR is about the size of the State of Ohio (see the maps below), most of which is glorious mountains and river-filled valleys. None of this mountain area is conducive to drilling, nor is it likely to have much oil and gas that would be commercial. In any event, it is essentially already off limits.
  • Following this analogy, the ANWR Coastal Plain bordering the Beaufort Sea is roughly akin to the six counties in Ohio that border on Lake Erie, in terms of location and size. It is a fairly small part of ANWR, just as these are six counties in Ohio out of 88 in total,  and not terribly scenic. It is roughly akin to a desert on which millions (billions?) of huge mosquitoes swarm every summer.
  • Diving down one step further, the foot print of the infrastructure needed to develop oil in the Coastal Plain area would probably fit into the area from Public Square in Cleveland out to E. 55th Street, although it would be spread out over a larger area. Thus we are talking of a footprint of perhaps 30 square miles (very much on the high side), counting pipelines if all the equipment is pushed together, out of 30,136 square miles total for ANWRThis is 1/10 of 1% of the space, below inconsequential.

In the meantime, throughput through the Alaska Pipeline continues to dwindle. From its high of 2 million bpd, it is now operating at about 550,000 bpd. The pipeline is uneconomic below 350,000 bpd, and at some point more oil will have to be sourced, or the US will lose a major source of its daily oil. Given the lead time it will take to develop alternative sources, the proposed benching of any consideration of ANWR by the Socialist-in-Chief is particularly curious. This is akin to the curious timing of the lifeline Obama extended to Cuba at the time just when it became apparent Venezuela could no longer give aid to the communist island.  

This occurs at the same time Obama tries to take credit for the growth of oil production in the US during his reign, even as access to federal lands has been cut, and regulations have gotten more onerous. When confronted about this contradiction on one of the talk shows this morning, one of Obama’s minions, Chief of Staff Denis McDonough, said that the administration takes the hit for things that do not work even if (it believes) it had nothing to do with it, why not take credit when something works?

Of course this proposal is just part of a process to gin up the base for the 2016 election, but the American public is being used as the juniper berries.

There are 726 days left.  God help the United States of America


The Hill.  Obama proposes more protections against drilling in Alaska refuge

By Timothy Cama - 01/25/15 12:01 PM EST

President Obama will ask Congress to enact further protection’s for the remote wilderness area in Alaska’s northern reaches in an effort to stop any potential oil or natural gas drilling there.

...

Alaska’s all-Republican congressional delegation immediate lambasted the plan as a “war on Alaska’s future.”

Obama announced the proposal in a video from Air Force One on his trip to India.  More....http://thehill.com/policy/energy-environment/230664-obama-proposes-more-protections-against-drilling-in-alaska-refuge

https://encrypted-tbn2.gstatic.com/images?q=tbn:ANd9GcQXfA3uEMcPAVDPCXIko2jxMjcB8DqtOHQEZsuzmXRC5RJ482lh

 

https://encrypted-tbn1.gstatic.com/images?q=tbn:ANd9GcQudpgqHIm8bNisMIBNbWiOalVzZFdybsY_MBh7vw9pKHkA8qwcKQ

 

 

 

1.   https://encrypted-tbn2.gstatic.com/images?q=tbn:ANd9GcQF5gonRDJemA7ghBl2o4o0WJ7gpZVV5OONCfTAo-rlvllm3Ofp7g

James R. Halloran

(c)440-823-8664 | (h)440-423-4424 

jamesrhalloran@hotmail.com

Any opinion or viewpoint expressed in this email is solely that of the author and in no way reflects the opinion(s) of any affiliated company, employer or other organization.

Categories:

1-25-15, Sunday

25 January 2015 5:03am

Points of personal privilege: on this beautiful Sunday, we note the following personal items and leave you witha poetic prayer.

1.  Kudos to all but a big hug and kiss to Nancy for a career of accomplishment far above and beyond any call of duty! -dh

From the Arctic Sounder:

'Last week seven directors of various nonprofits in the state were awarded a six-month break through the Rasmuson Foundation Sabbatical Program.

The recipients come from five communities across the state and include professionals in arts, and health and social services.

"Among them are Guy Adams, who is the CEO of the Northwest Inupiat Housing Authority in Kotzebue, and Marie Carroll who is the executive director of the Arctic Slope Native Association in Barrow. Also receiving the award were Nancy Harbour of Alaska Center for the Performing Arts in Anchorage, Marcia Howell of the Alaska Injury Prevention Center in Anchorage, Laurie Kari who runs the Mat-Su Valley Interfaith Hospitality Network DBA Family Promise Mat-Su in Wasilla, Rebecca Shields of the Kodiak Women's Resource and Crisis Center in Kodiak and Pauline Smith who runs the Alaska Literacy Program in Anchorage".  http://www.thearcticsounder.com/…/1504arctic_executives_awa…

​2.  Dr Charles Stanley, Alaska Cruise, Dave Harbour, Northern Gas Pipelines, Faith, what we sow, more than we sow, later than we sowToday we pursue our typical Sunday schedule:  exercise; good healthy, natural breakfast; an hour with our friend, Dr. Charles Stanley; and, an hour at our church.  

In thanking you for being our reader, we must state an acknowledgement that we are imperfect in perhaps all ways but strive toward that lofty goal from waking at dawn to time for blissful sleep come evening.  We also acknowledge that in the 'striving' we are also imperfect.

God bless you and yours.  

-dh

_______________________________________________

Email response to two Kenai Peninsula NGP Readers who constantly give us nourishing feedback. 

To: B & A C.......

You light up my life and keep my spirits high!  Thank you.

Here is a Sunday poem for you and A:
_________________________________________________
 
To B. and A. Cxxx., for faithful, inspirational support.
___________________________________________
          Ode to Tears of Praise
 
Why is it that when I pray,
     I often end my prayer in tears?
Because my pleas cause You to hear:
     my flowing tears praise You today,
small thanks for hope and vanquished fears.
 
-Dave Harbour, Sunday, January 25, 2015
 
 
_________________________________________________

----- Original Message -----

From: "B & A" <xxxxxxxxxx@acsalaska.net>
To:

"DAVE HARBOUR" <harbour@gci.net>

Cc:

 

Sent:

Sat, 24 Jan 2015 13:01:58 -0900

Subject:

KEEP UP YOUR GREAT WORK, DAVE HARBOUR!

DAVE . . . SO MUCH NEWS APPEARS ALL OVER THE MEDIA BUT WE CANNOT ALWAYS TRUST THAT THE DETAILS ARE ACCURATE . . .SO . . . WE ARE VERY  “INSPIRED”  AND VERY LUCKY. . .TO HAVE YOUR COLUMN.

WE KNOW YOU ARE PROVIDING IMPORTANT INFORMATION FOR ALASKANS/AMERICANS . . . and we hope you CONTINUE TO SHARE THESE DETAILS!!!

YES, DAVE . . .A. AND I TRULY BELIEVE THAT GOD BOOSTS OUR MORALE BY SENDING SOMEONE LIKE YOU WHO BELIEVES IN KEEPING OUR AMERICA FOCUSED ON GOD’S PLANS!  KEEP INSPIRING US, DAVE!!!

BLESSINGS!

B

Categories:

1-24-15 Alaska Senator Murkowski Addresses the Nation TODAY - Alaska Governor Walker Fights Low Oil Prices?

24 January 2015 10:14am

Alaska Governor, Bill Walker, falling oil prices, budget crisis, cut government spending, cut education, lng project, gas pipeline, oil, arctic, north slope, Photo by Dave HarbourAlaska Senator Alaska Senator Lisa Murkowski, enegy policy, national radio address, republican, oil export ban, Keystone XL, lng project, gas pipeline, oil, arctic, north slope, Photo by Dave HarbourLisa Murkowski Addresses The Nation TODAY

Alaska Governor Bill Walker Finishes A Week Facing Falling Oil Prices

 


Governor Walker

Edited from 'Alaskanomics' by Katie Bender.

Governor Bill Walker (NGP Photo) presented his State of the Budget speech to the Legislature on Thursday night. This was one night after the State of the State speech that he presented to open the Legislative session. 

He said, “...it will not be easy, but we will manage Alaska out of the fiscal challenges facing our state.” 

The budget challenge is well known to the Legislature, the Administration and industry leaders. The public is beginning to become more aware of the scope of the hardship facing Alaska. State revenue is down because of the significant drop in oil prices that Alaska has seen over the last half of 2014. Walker pledged to work to fix government and the budget gap.

Walker outlined his plan for long-term and short-term solutions and asked the Legislature to aid in solving the problems that lie ahead. He concluded by noting that the State must reduce spending which will affect contractors and associated work forces.  He said he will look to the private sector to pick up slack from a reduction in workforce due to changes in government spending.

Walker started the reduction in spending in his own department. He cut the administration by 11 percent and his staff is the smallest it has been in 15 years. He asked his departments to follow his lead and do more with less. 

Walker said he has, “...stopped discretionary spending on mega projects, taken steps to reduce municipal revenue sharing, and asked his commissioners to develop plans for cutting their departmental budgets by five to eight percent in the short-term and up to 25 percent in the long-term.“

After the speech, the Legislature received documents revealing Walker's approach to the budget including the budget overview and summary documents. 

The media received the same information later that night. For a complete transcript of the Governor’s State of the Budget speech, visit HERE.

Our readers can also watch the speech on KTVA television, HERE.

Senator Murkowski

GOP Weekly Address: 'It's Time We Embrace The Opportunities Before Us'

ABC News Radio  January 24, 2015.

Read the full transcript of today's Republican address:

Hello. I’m Senator Lisa Murkowski (NGP Photo) of Alaska.  This past week, President Obama, in his State of the Union address, laid out his plans for America.  And as part of his speech, he called on Congress to pass an infrastructure bill that will create jobs and make our nation stronger for decades to come.

I welcomed that message, and the fact is, we’ve already started.  For over two weeks now, the Senate has been working hard on a bipartisan bill to approve the Keystone XL pipeline.  This important infrastructure project will support thousands of jobs.  It would carry both American and Canadian oil, in the cleanest and safest way, and help keep energy affordable for American families.

After more than 2,300 days of presidential indecision, it’s important for us to act.  The world is watching to see whether the United States is willing to lead as a global energy superpower that respects its neighbors, trades with its allies, and builds needed infrastructure.  I believe we are ready for that role – and our leadership can start with the approval of Keystone XL.

The new Republican congress you elected has only been in office a few weeks now, but already we’ve made important strides towards making congress function again and getting Washington back to work. We’re fulfilling the promises made in the recent elections, and considering legislation in an open and a transparent manner where both Republicans and Democrats can offer their ideas.

Now, here’s an interesting fact: more amendments were voted on in the Senate just this past week, than were voted on during all of 2014.  Our approach to this energy infrastructure bill is one that allows members from both parties – and every state – the chance to have their voices heard.

Once Congress approves the Keystone XL pipeline with bipartisan support, we will have an opportunity to put forth additional energy solutions that will grow our economy and help hardworking Americans.

We are focusing on energy because it is vital to our prosperity, and a strategic asset that we can use to assist our allies and trading partners.  It is in our interest to continue making our energy abundant, affordable, clean, diverse, and secure.  And I am confident we can reach those goals by strengthening our supply, modernizing our infrastructure, supporting energy efficiency, and ensuring federal accountability.

As Chairman of the Energy and Natural Resources Committee, I will do my best to ensure the Senate approves broad energy legislation this year.  The last time that happened was in 2007.  That was a time of scarcity, but America is now producing more energy than ever before. We’ve seen firsthand that American supply matters to global prices – and the only question now is whether we’re going to take the steps necessary to keep energy affordable.

We can start by looking to Alaska, where we have tremendous amounts of oil just waiting to be produced.  We have prolific resources in our National Petroleum Reserve and offshore.  If we also unlock just a fraction of the non-wilderness portion of ANWR, we could bring about a huge range of economic benefits.  Some may consider this controversial, but it really is not.  Even the head of the Alaska Democratic Party wrote a piece this week, urged that it be opened. It’s time we embrace the opportunities before us.

Republicans have a positive agenda that will help create jobs, keep energy affordable, and increase our security.  Over the next two years, it is our hope that President Obama will be a partner in our efforts, and that he will start by finally approving the Keystone XL pipeline.

Thank you for listening.


 

1-23-15 The Pot Is Beginning To Boil And We're The "Frog"

23 January 2015 6:00am

Our concerns about Wednesday's Executive Order On the Arctic are here, for the record, and we hope Members of Congress and Alaska's Administration are paying attention as the temperature in the pot containing the complacent frog, increases.


ALASKA SUPPORT INDUSTRY ALLIANCE: Here are more photos from the recent "Meet Alaska" Conference in Anchorage.  

We fully support Senator Murkowski's Alaska viewpoint on supporting the Keystone XL Pipeline as reflected in this week's Op-Ed piece in the Alaska Dispatch News.  -dh​


Alaska Has A Powerful Fighter In Washington: Chair Murkowski! -dh

Houston Chronicle, by  Jennifer A. Dlouhy.  

U.S. Senator Lisa Murkowski, Chair, Energy, Natural Resources, Crude Oil Export Ban, Dave Harbour PhotoWhen Republican Sen. Lisa Murkowski (NGP Photo) called for an end to the longstanding U.S. ban on crude exports last January, the Alaskan was entering uncharted territory.

So Murkowski set out to tackle it methodically and deliberately, eschewing bombast and loud press conferences for closed-door meetings with administration officials and white papers that examined every facet of the trade restrictions. She even drafted a roadmap for administration officials to undo the ban.No policymaker had seriously questioned the wisdom of the ban since it was imposed after the 1973 OPEC oil embargo.

It was trademark Murkowski: tackling a thorny legislative issue....  More.... 

This morning, our friend James Halloran, Independent Energy James Halloran, Energy Analyst, Halloran File Photo, Northern Gas PipelinesAnalyst (File Photo) gives us this overview of the immediate and mid-term future of oil and gas markets and a closely related world economy.  

Remember, Dear Reader, that while we strive to be optimistic, we must be committed to reality; those who depend upon us deserve it.  

The reality that Halloran sees in our immediate future gives strength to those who are right now trying to cut all lower priority costs from both government and private industry operations.  It is like preparing for a storm during hurricane season in South Florida.  Those who prepare run the risk of over preparation but those who under prepare run the risk of losing everything.  

-dh

*     *     *

James Halloran Commentary: {Night before last} we featured the possibility of imminent change in the royal leadership of Saudi Arabia. {Yesterday} it was reported that King Abdullah has died, and Prince Salman will succeed him. It is widely known (or believed, at least) that Prince Salman suffers from Alzheimer’s Disease. How the Allegiance Council, made up of royal family members deals with this situation, will be worth watching, as will the timing and process of finally moving the throne to the next generation. We refer you back to the analysis of this issue back to Allen Brooks’ piece reprinted in last nights’ note. As of this moment there is nothing better out there in the media.

Evercore ISI oil service analyst James West has an outlook for the energy operations in 2015.  We agree with most of it, to the extent that it represents a decent outlook on the business. It is a long piece, but here are some of the highlights:

Key Themes For 2015. The major themes that we believe will unfold in 2015 are:

1) a rapid fall in U.S. activity levels and the bottoming of the rig count in 3Q or 4Q,

2) the slow collapse of the international markets with corruption scandals and geopolitical issues adding to the activity decline,

3) the emergence of the Middle East as the only real regional bright spot,

4) the offshore markets turning from an oversupplied rig market to a full blown cyclical downturn,

5) the disappearance of new offshore rig orders,

6) a pause in the rush to export gas from North America as economics get re-assessed,

7) the largest subsea equipment installation cycle in the industries' history,

8) an increase in opportunistic M&A and share buybacks, especially given cash balances,

9) more growth for IPM-style projects, and

10)  the continued push towards more automation in the global oilfield.

North America Is a Cash Flow Game… And Cash Flow Is Collapsing

The E&P business in North America is primarily a cash flow-driven business, and while production of hydrocarbons will continue to rise this year (with the rate of growth likely slowing considerably by year-end), the substantial decline in oil prices will dramatically impact cash flow and thus capital expenditures. We now anticipate CAPEX to drop by 30% year-over-year with higher cost liquids plays such as the Bakken impacted the most. Natural gas plays will likely remain insulated given their relative economics. The capital markets (both high yield and equity) will likely be mostly closed for the exploration and production companies, and while these companies would prefer to "drill through" what we expect to be a relatively short-term oil price trough, the companies will quickly see their cash flow decline, the absence of funding precipitating spending cuts. Capital spending cuts announced so far by the industry have been significant. This will slow down production growth, and thus the self-correcting mechanism remains in place. We anticipate 4Q15 versus 4Q14 production growth to be minimal at best. The first drop in the rig count will be sharp and unfold primarily during the first quarter, with a second substantial drop in late 2Q as hedges begin to roll off. We anticipate that the rig count will bottom late in the third quarter. Pricing pressure will be exerted across all product lines―no one will be immune tothe sharp decline in activity that we envision.  

U.S. Land Rig Count Forecast

Amid our expected 30% North American E&P reduction in CAPEX during 2015, we model a slightly more severe 35% decline in the U.S. land rig count as spending cuts affect drilling to a greater extent than completions and other services. We forecast a decline in the rig count from its 4Q14 peak of 1,864 to a trough level of 1,204 for a net decrease of ~660 rigs.

The steepest drop should come in 1Q15 in response to the sharp commodity price selloff, with a more gradual decline set for 2Q15 before establishing a trough late in 3Q15, followed by a potentially modest uptick in 4Q15.

Rigs in conventional plays rife with smaller, private operators drilling shallow wells are likely to suffer most as those producing the incremental barrel are most sensitive to sustained low oil prices and have limited access to fresh capital. Among the major unconventional plays, the Bakken is likely to be one of the hardest hit as Continental, the region’s most active E&P, is budgeting 2015 drilling capital for the region at $1.55 billion (down 40% from its prior revised budget of $2.6 billion) and lowering its rig count from 19 currently to 10 in 1Q15. Midcontinent areas such as the Woodford and Niobrara, and perhaps more importantly the Permian, should also languish as their high concentration of vertical rigs drop out of the market. Furthermore, several areas in the Permian such as the Wolfbone and Wolfberry exhibit some of the worst economics among all U.S. unconventional plays, with breakevens in the ~$75-80/Bbl range.  Though we model a 25% trough-level rig reduction in the Eagle Ford, this area is a potential wildcard as economics are shaping up better there than in other basins, and operators are migrating to the sweet spot between liquids-rich and wet gas compositions. 

One relative unconventional bright spot could be the Marcellus/Utica, as efficiency gains and increased stage counts per well contribute to low breakevens and attractive IRRs even with gas prices under $3.00/MMbtu.  

Market, Not OPEC, To Sort Out Prices (For Now)

The reaction (or inaction) by OPEC so far to the dramatic decline in global oil prices is telling.  The cartel is unwilling to stem the decline due to the driver: demand. If it were merely a supply issue the cartel would likely have reacted at the November 27th meeting with a modest cut but given the demand concerns that would only have served to push the demand issue further into the future. OPEC's willingness to allow short term pain is in the best long-term economic interests of the cartel. The pain may also lead to better cohesion and adherence to quotas in the future; again, a decision that is in the group's long-term interests. For now the cartel has left the market to decide the clearing price for the commodity.

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