Steve Borrel, Alaska Miners Association, China, Japan, Photo by Dave HarbourOur friend Steve Borrel (NGP Photo) observes that: "The article below underscores the desire of Japan to obtain mineral resources from
Alaska and other destinations that do not require travel through the areas
shown in this article."  

We would add that other Asian allies of the U.S. could also find their interest in Alaska — and the Canadian west coast energy and minerals markets — more inviting.  

Offsetting this potential, growing interest, however, is increased competition from other natural resource areas, lower current demand for commodities, as well as Japan's renewed focus on nuclear energy capacity.  We thank our readers like Steve for giving us additional eyes and ears as we seek to connect the dots from this side of the globe to competing areas.               -dh

Asia Maritime Transportation Initiative.  China’s airstrip construction at Fiery Cross, Mischief, and Subi reefs, and more recently developments in the Paracel Islands, have dominated the South China Sea discussion. But capabilities being developed at its smaller Spratly Island outposts—Gaven, Hughes, Johnson South, and especially Cuarteron reefs—will prove equally important to Beijing’s long-term strategy. This month’s deployment of HQ-9 surface-to-air missiles on Woody Island in the Paracels, while notable, does not alter the military balance in the South China Sea. New radar facilities being developed in the Spratlys, on the other hand, could significantly change the operational landscape in the South China Sea. And along with the development of new runways and air defense capabilities, they speak to a long-term anti-access strategy by China—one that would see it establish effective control over the sea and airspace throughout the South China Sea.

(Link here)

The following observation from our Aussie energy analyst friend today references strategic industry positions of some of Alaska's and Canada's favorite companies: BP, ConocoPhillips, ExxonMobil and Shell.  So, as our readers connect these dots in the world of general industry competition and specific LNG positioning, we ask, "where does this leave Alaska and west coast Canadian LNG export projects?"   -dh   

Following the takeover of BG Group by Shell, the industry is now dubbing the new and larger Shell, together with Exxon, as the "ultra-majors" of the industry – that (so far) have left BP, Conoco, Total and Eni as looking more like …. (More)

Some analysts have recently suggested that size is not necessarily good in the current low oil price environment, as the ultra-majors will have to add very large new projects year after year just to stand still.

We beg to differ.

For instance, the recent results of Conoco will show that …. (More)

Secondly, a large driver of the Shell/BG transaction was about becoming the largest LNG player on the planet – thereby gaining the best position from which to make profits as this traditionally very economically inefficient industry liberalises.

We do not expect the other majors to fail to see these sorts of points.  A combination of e.g. BP and Total (against the back-drop of a potential Brexit!) would deliver a rival LNG giant, whilst Chevron and Conoco could marry up with no real political opposition…. (More)

Other News:

  • Alaska Public Media, with Audio.  State officials have put a number on how much they will trim from next year’s budget for marketing liquefied natural gas from the proposed pipeline: $7 million.
  • Today, the Subcommittee on Oversight and Investigations held an oversight hearing to review the Presidential Memoranda on mitigation issued on November 3rd, 2015 to five federal agencies. The memoranda creates sweeping new statutory authority and new requirements that agencies must use when evaluating and approving projects on federal lands and waters.

    “This Administration hasn’t shown much, if any desire to actually develop our resources,” stated Subcommittee Chairman Louie Gohmert. “I’d like to see policies that promote efficient development of our natural resources and provide for their appropriate mitigation, but what this Congress cannot accept is another attempt to increase the unilateral expansion of the executive branch and the influence of land managers outside of their fiefdoms.” 

    Many of the terms used in the Memorandum to describe resources requiring mitigation from projects—including “important,” “scarce,” “sensitive,” and “irreplaceable”—are largely undefined. These vague terms create potential legal uncertainty relating to the Endangered Species Act and the Federal Land Policy and Management Act for scores of permitted activities on federal lands.

    Members raised concerns that the Memorandum's standards exceed statutory standards set in law by Congress and will result in further regulatory confusion and burdens. Rep. Bruce Westerman (R-AR) raised concerns that it will delay or derail a host of economic and energy-related projects that should otherwise be approved under current law.  

    Rep. Raul  Labrador (R-ID) questioned panelists on definitions of phrases and words used in the statute to characterize environmental resources and mitigation thresholds. In response to their answers, he said, “That’s the problem that I have with this, is that we are actually going through this analysis that is so subjective instead of objective. You can define it any way you want and then I can define it any way I want.”

    "The Memorandum is not a regulation or new requirement," Managing Director of the Council on Environmental Quality Christy Goldfussargued on behalf of the Obama Administration.  

    Click here to view the full witness testimony.