Petroleum News by Gary Park. Dead man walking, a self-induced coma, or a lull in proceedings — call it what you want, but the latest lurch in the drawn-out history of the Mackenzie Gas Project does not bode well for the plan to commercialize Canada’s stranded Arctic natural gas. Amid a flurry of mixed messages on April 8 from partners in the MGP consortium, the emerging consensus is that budgets are being slashed and some staff are being laid off in response to the erosion of project economics caused by a dismal outlook for natural gas prices. ConocoPhillips set the ball rolling by announcing it was recording a first-quarter non-cash impairment for the carrying value of its undeveloped leasehold on the Mackenzie Delta and capitalized project development costs of about US$525 million after-tax. Lead partner Imperial Oil said its ExxonMobil Canada affiliate will scale back spending, while Imperial will close its Northwest Territories offices in Fort Simpson and Norman Wells and downsize its Inuvik operation. Then the Aboriginal Pipeline Group or APG, which stood to obtain a one-third equity stake in the planned C$11.3 billion Mackenzie Valley pipeline, said it was taking similar measures to Imperial with its northern offices.
Alaska Dispatch by Andrew Halcro (NGP Photo). As the Alaska state Legislature begins a special session today on oil tax reform, things are a little chilly in the Capitol. Between the House, the governor and the Senate, there are more ill feelings than in all of Bartlett Regional Hospital. The biggest sticking point of the two-year battle over oil tax reform has been the debate over the legacy fields on the North Slope. While the governor and the House want to include these fields in tax reform, the Senate has balked thus creating a show down. The Senate has taken more than enough time to vet the tax reform issues. They’ve had a number of experts and industry leaders who have pointed out the flaws in the current ACES tax structure. But senators have been unmoved.
Today’s Consumer Energy Alliance Links:
Wall Street Journal:TransCanada Submits Keystone Pipeline Reroute Plan – TransCanada Corp. TRP -0.28% submitted a reroute of its Keystone XL oil pipeline to the Nebraska state government Wednesday, moving a step closer to reviving the project after it was rejected by the U.S. government earlier this year. The reroute will avoid an environmentally sensitive area in the U.S. Midwest state, and comes a day after Nebraska Gov. Dave Heineman signed a bill allowing the state’s review of the pipeline to continue.
Reuters: US House votes again to approve Keystone XL pipeline – The U.S. House of Representatives voted on Wednesday in favor of speeding up the Keystone XL oil pipeline from Canada for the fourth time in two years, but the Nebraska Republican who has championed the project knows the vote may not be the last. The pipeline, put on hold by President Barack Obama earlier this year, has become an outsized political symbol heading into the November elections as Republicans use it to attack Obama’s economic and energy policies.
TransCanada Wednesday submitted a new route through Nebraska for its stalled Keystone XL oil pipeline. Fox News reported TransCanada offered its new plan to the Nebraska Department of Environmental Quality. Details of the new route were not reported.
Huffington Post: Obama’s Secretive Keystone XL Decision (Op-ed by Ken Blackwell) – The oppressive monster known as the Environmental Protection Agency (EPA) is not just killing jobs these days — it is intentionally avoiding transparency that may shed light on the political motivations behind the agency’s actions. Started in 1970 by President Richard Nixon, the EPA was a small agency that combined several anti-pollution and clean water agencies into one agency with 4,084 employees and a $1 billion budget.
I’ve got one question for President Obama: What is it going to take for you to put a stop to Shell’s plans for Arctic Ocean drilling this summer? The reasons not to drill just keep mounting — and the reasons to drill? Well, there seems to be just one, and I can’t say it in politically correct company. I can give you a hint: Republican rhetoric and the 2012 presidential election.
Washington Post: Gas prices: Global problem, domestic blame – Gas price spikes have the potential to focus American voters on global issues like limited oil supply, potential conflicts in the Middle East and economic growth in China and India. Indeed, economists point to all three of these as key factors in gas prices. But foreign policy has taken a backseat in the debate over gas prices, which continue to flirt near $4 a gallon, and polls show Americans blame domestic culprits just as much as global factors for higher pump prices.
No matter what Mitt Romney and other Republicans say, there are no easy fixes for rising gas prices. With the national average price hovering near $4 a gallon, Americans are understandably concerned, and President Obama was right to call for more scrutiny of the oil markets.
The Houston Chronicle: Survey increases estimates for natural gas in world – Outside of the United States, the world holds 20 percent more natural gas and 13 percent less oil than a previous assessment of global energy resources estimated, according to a U.S. government report.