Showing posts with label north slope. Show all posts
Showing posts with label north slope. Show all posts

Tuesday, August 26, 2014

What did NO on Prop 1 do for Alaska . . . NOTHING.

SB21 brought industry commitments.
So say T.J. Presley and Nick Moe, the two who pushed the SB21 Prop 1 NO campaign.
Industry commitments?
 What industry commitments?
 What did Alaska trade with SB21? Another one-way deal brokered by Hawker and Chennault, Conoco's boys.
BP is laying people off.
The work being done is maintenance that was ignored for many years. Now, maybe, in 2016, there will be a favorable Congress elected and a President who just might open ANWR and allow offshore oil and gas development. Makes sense to spend the money, just in case.
How will offshore development help or benefit Alaska? Alaska does not get a cut of those royalties. Aside from whatever village becomes the staging area, there is no benefit.
Then, there is the idea of upping production in a time of 'glut'. How many tankers from Valdez full of Alaska crude are turned away from West Coast refineries, because of the wealth of shale oil being produced?
Is our oil wanted in the market right now?  No.  There is an excess of oil, with surpluses being produced in the Middle East as a hedge against any crisis that might cause a spike in demand.  
Saudi Arabia is trying to produce sufficient surplus oil to cause a downturn below $80/bbl as part of a plan between the Saudis and the Obama Administration to create financial stress on Putin's Russia.  At $80/bbl, Russia can pay for government, at $79.99/bbl, it cannot.  Now, you know why the price of oil has been declining lately.
What happened to the NG from Qatar that was supposed to supply the U.S. domestic needs for 25 years? The first LNG tanker was turned around and sent to Asia last May. That gas now supplies 60% of the Japanese LNG market.
Even though the Japanese are looking for new suppliers, Alaska's governor and Legislature are not interested.
 Our governor and Legislature could have cared less about the Japanese delegations that came to Alaska to secure LNG post the Fukishima meltdown.  The Gov and the Legislature evidently work for Conoco and Exxon. That is clear, otherwise, why would $3B in potential investment into an Alaska natural gas pipeline and LNG train have been allowed to walk to Kitimat and Chenier in LA? Alaska was not interested in the deal, so the money walked and was invested elsewhere.
What did NO accomplish? More money for the oil companies, less for Alaska.
I am a no tax kind of conservative. I believe that Alaska should have stuck with royalties and never bothered with taxes on the oil industry. We would have been much better off, and the oil industry would have thrived here with a vibrant oil and gas service industry instead of the few companies engaged in oil and gas anything in Alaska--fiscal certainty and all of that. However, we became greedy, allowed our gov't to milk the oil companies and now, we play stupid games. Our Legislature and governor studies and studies and studies and we languish wondering if there will ever be any new development in the oil sector and in the gas sector?
People move to Alaska hoping, only to find an expensive place to live with the economy largely being fueled by gov't money.  Eventually, those taillights will be headed south--sooner the better.
The oil companies promised nothing and that's what we received with SB21. Nothing.
There is no leadership in Juneau. The increasing spending is a demonstration that we have devolved from building infrastructure with our oil royalties largess to maintaining and keeping the plebes happy with social entitlements. No leadership, no direction, no commitment to do other than kiss the oil companies' corporate posteriors in the vein hope that they will pull the rabbit of economic prosperity out of the declining oil revenue hat before we use the entire PF to keep the illusion of fiscal solvency alive. That is the problem, has been the problem ever since Sarah Palin was elected, left Alaska, and the boy wonder, otherwise known as Captain Zero, became Governor six years ago. Yeah, six years, we've been blessed with . . . nothing.

Now, we have a $7M per day deficit spending with Governor Parnell's spending excesses.
 SB21 is still the law, meaning less money to the State.
Fine.
Now what?
November will be the 'what'. The Legislature will not change. The same "me toos" will be back in Juneau to do what Hawker and Chennault say.
Hopefully, Bill Walker and Craig Fleener will have their shot at running the State. At least we will have a governor who has a plan to move forward with economic prosperity and fiscal responsibility as the goals.





http://www.adn.com/article/20140825/defeat-oil-tax-referendum-puts-alaska-win-win-territory

Saturday, February 16, 2013

Exxon and ROSNEFT expand agreements

On February 13, 2013, Exxon and ROSNEFT of Russia expanded their 2011 Strategic Cooperation Agreement in what is being touted by Larry Persily, Federal Coordinator for Alaska Gas Transportation Projects, as a major development for the North Slope Point Thompson natural gas project owned by Exxon and as an indicator of a potential natural gas pipeline in the offing. However, what is being touted by Persily and in the Alaska press as a done deal is far from being a "done" anything.

Igor Sechin, president of ROSNEFT, said, "The agreements signed today bring the already unprecedented scale of ROSNEFT and ExxonMobil partnership to a completely new level. The acreage in the Russian Arctic subject to geological exploration and subsequent development increased nearly six-fold. That means the enormous resource potential of Russian Arctic offshore fields will be explored and developed in the most efficient manner with the application of cutting-edge technologies and expertise of our strategic partner, ExxonMobil, using state-of-the-art environmental protection systems. Participation in the Point Thomson project will increase ROSNEFT’s access to the latest gas and condensate field development technologies used in harsh climatic conditions".

 

Stephen Greenlee, president, Exxon Mobile Exploration Company, said the agreement builds on the ongoing successful cooperation between the companies. "This expansion is an illustration of the strength of the partnership that exists between ExxonMobil and ROSNEFT," said Greenlee. "We look forward to working together on these new projects."

Igor Sechin, president of ROSNEFT, and Stephen Greenlee, president of Exxon Mobil Exploration Company, signed several agreements under the watchful eye of Vladimir Putin, President of Russia. These agreements expand the relationship of Exxon and ROSNEFT, including an ongoing program of staff exchanges of technical and management employees.

Exxon and ROSNEFT are expanding their cooperation under a 2011 Strategic Cooperation Agreement that expands exploration to six times that existing to include an additional 150 million acres in the Russian Arctic.

A separate Memorandum of Understanding covers the intent to study the viability of an LNG export facility in the Russian Far East. Under this MOU, Exxon and ROSNEFT will form a working group to commence work to study the viability of the proposed LNG project.

Will this LNG project have any impact upon Exxon’s participation in AGIA with TransCanada?

Exxon and TransCanada are studying the potential of the Valdez natural gas pipeline LNG project to move North Slope gas to market. Under a separate Heads of Agreement ROSNEFT was given an option for a 25% interest in the Pt. Thompson field. An option for an interest, but no commitment from ROSNEFT for any intent to invest in the development of Pt. Thompson.

It appears that Mr. Persily and those touting the option for Pt. Thompson seem to be overlooking the nationalist aspects of any investments on the part of ROSNEFT. Russia will come first to any investment in Alaska. ROSNEFT is the national oil company of Russia. This deal with Exxon is not being done to benefit Exxon and much as it will benefit ROSNEFT.

It is assumed by Persily and others that ROSNEFT would want to move the North Slope gas to market as soon as possible. Therefore, the agreement with ROSNEFT regarding Pt. Thompson is considered a good omen with respect to a natural gas pipeline to move North Slope natural gas to market.

Pt. Thompson has approximately 8 trillion cubic feet of natural gas. Pt. Thompson has been a technically challenging development, as it is a high pressure field with approximately 8 trillion cubic feet of gas reserves. The North Slope holds an known reserves of 35 trillion cubic feet of natural gas and condesates and an estimated potential of greater than 125 trillion cubic feet.

ROSNEFT hopes to benefit in the technology sharing aspects of the agreements with Exxon.

Little explored offshore blocks in the Chukchi, Laptev, and Kara seas were included in the agreement expansion. These blocks are reported to have good potential for oil and gas.

Kara Sea blocks:

East Prinovozemelskiy-1, 2, and 3; 125,904 sq km, 31.1m acres, water depth is 10 meters-440 meters

Severo-Karsky, 196,000 sq km, 48.4m acres, water depth is 20 meters-480 meters

Laptev Sea blocks:

Ust’ Oleneskiy, 64,103 sq km, 15.8m acres, water depth is 19 meters to 90 meters

Ust’ Lensky, 46,851 sq km, 11.6m acres, water depth is 15 meters-90 meters

Anisinsko Novosirbirsky 140,981 sq km, 34.8m acres, water depth is 20 meters-2,000 meters

Chukchi Sea blocks:

Severo-Vrangelevskiy 1, 2, 115,176 sq km, 28.4m acres, water depth is 40 meters-370 meters

Yuzhno Chukotsky, 73,197 sq km, 18.0m acres, water depth is 40 meters-70 meters

The following cautionary note was included with Exxon’s press release:

"CAUTIONARY NOTE:

Statements of future events and conditions in this release are forward-looking statements. The Strategic Cooperation Agreement represents a binding outline of terms, and closing of the transactions contemplated by the agreement is subject to execution of definitive final agreements, receipt of necessary regulatory approvals, and other customary conditions. Actual future results, including potential costs and benefits realized by the parties as a result of the transactions, could differ materially depending on the outcome of future negotiations; the actions of governmental authorities and regulators, including legal and legislative uncertainties; the outcome of exploration programs; changes in prices and other market and economic factors affecting the oil and gas industries; future technological developments; other technical and operating factors; actions of competitors; and other factors discussed under the heading "Factors Affecting Future Results" on the Investors page of ExxonMobil’s website at exxonmobil.com."

The news from ROSNEFT and Exxon sounds good on the surface. However, given Putin’s penchant for using Russia’s oil and gas as bludgeons to effect foreign policy with Russia’s neighbors, means that Alaska’s leadership should take this agreement with a grain of salt. It is not in Russia’s interest any more so than it is in Canada’s interest for Alaska North Slope natural gas to enter the Asian market.

The Pt. Thompson option offered to ROSNEFT may have just been chaff on the part of Exxon to further delay any progress to bring North Slope gas to market. The option may have just been an offering to the State to show compliance with Governor Sean Parnell’s demand and Exxon’s agreement to settle the State’s litigation that Pt. Thompson be in production by 2016.

In any case, any deal with Russia will certainly involve more benefit for Russia than for Exxon or Alaska.

For more information:

ROSNEFT press release:

http://www.rosneft.com/news/pressrelease/130220133.html

EXXON Mobile Exploration Company press release:

http://news.exxonmobil.com/press-release/rosneft-and-exxonmobil-expand-strategic-cooperation

The Maritime Executive:

http://www.maritime-executive.com/article/Rosneft-and-ExxonMobil-Expand-Strategic-Cooperation/

PennEnergy

http://www.pennenergy.com/articles/pennenergy/2013/02/arctic-license-additions-for-rosneftexxonmobil-partnership.html

The Alaska Dispatch:

http://www.alaskadispatch.com/article/rosneft-takes-alaska-natural-gas-field-stake-exxon-mobil-brokered-deal

The Miami Herald:

http://www.miamiherald.com/2013/02/13/3232883/russia-signs-deal-for-stake-in.html

Subsea World News:

http://subseaworldnews.com/2012/09/07/russia-rosneft-exxonmobil-sign-agreement-for-feasibility-study-of-shallow-water-platform/

Monday, May 30, 2011

Parnell and ACES . . . too little, too late?

The Legislature starts its second special session, still without a budget, still without any Alaska’s Clear and Equitable Share (ACES) revisions, and without agreeing to continue coastal zone management. Thus far, a very good reason to file thirteen our entire Legislature in the next two election cycles. Unfortunately, we voters will forget about the State’s issues with the windup to the 2012 Presidential race. There is more news about former Governor Sarah Palin than about the incredible failures on the part of Legislature.

Gov. Parnell has vowed to keep fighting to reduce the rates oil companies pay under the current ACES law. ACES was passed during Gov. Sarah Palin’s unfortunately not brief enough gubernatorial administration. It should be remembered, that our Gov. Sean Parnell was then Gov. Sarah Palin’s Lt. Governor. A first belated step towards ‘independence’ from Palin for Parnell?

Gov. Parnell is a former State legislator who became an oil company lobbyist in Juneau after this tenure in the State Senate and House. That he would try to reduce the impact upon the oil companies is not surprising, but, a bit late.

In case no one has noticed, the oil flowing through the TAPS is declining to the point of no return, meaning that it will no longer be economically viable to move oil down the pipeline because of the declining volume of oil, and the point at which there can be no restart of the pipeline system if there is a shutdown for any reason. The last shut down last winter was a touch and go in terms of restarting the flow of oil. Alyeska’s president Thomas Barrett stated in a public radio interview that Alyeska was very concerned about the ability to restart oil flowing after the shutdown for a broken pipe at Pump Station 1 in January of this year. He went on to say that it was touch and go as to whether or not the pipeline would restart. He further estimated that within the next four to five years at the most, operating levels of 500,000 barrels or less would be reached at which point, Alyeska’s engineers believed that restarting the pipeline after a shut down would not be possible. It was also disclosed that TAPS has suffered up to an 80% deterioration in the walls of the pipe. This would mean a lengthy replacement of pipe in order to extend the life of TAPS, should methods and technology prove that recovery of the heavy oil under Prudhoe can be accomplished in economic quantities.

BP announced a heavy oil R&D recovery project well had demonstrated the viability of recovering heavy oil under the North Slope. There is an estimated 20 billion barrels of heavy crude yet to be recovered from legacy fields at Prudhoe and the surrounding area comprised of heavy oil. BP has been tight lipped about this project, having made only the one press release earlier this year. Heavy crude recovery is the most likely candidate for increasing the flow of oil through TAPS.

Off shore oil is another potential, but only if the Obama Administration figures out that the only way to reduce gasoline prices to the consumer is by increasing the amount of crude available in the market place.

The impact of oil shale recovery will soon be felt in the market place in much the same manner as the impact of shale gas on the natural gas market Outside and in Canada. Already, significant discoveries and returns are turning the Bakken oil shale in North Dakota into developments whose potential may exceed that of Prudhoe Bay in the early days of its development. Recent activity in Texas is proving out the viability of oil shale recovery there, turning depressed areas into boom towns, a welcome change from the impact of an ongoing recession. It is estimated that if the oil shale development continues at the present pace, within the next 20 years Middle East oil will not be needed in the U.S. domestic market.

If car manufacturers would produce vehicles fueled by natural gas for urban areas, that time frame may be halved or reduced even further. In which case, we would no longer have to take in the Wahabbist element from Saudi Arabia that George H. Bush, Bill Clinton and George W. Bush decided the U.S. could absorb to keep Saudi Arabia’s oil flowing. The Bush-Clinton-Bush policy of taking in extremist religious fanatics from Saudi Arabia under the student visa program has been a policy that is a direct threat to our national security.

Gov. Sean Parnell’s desire to reduce the ACES tax rates may be too little too late, just as the delays in deciding upon a reasonable natural gas pipeline option has ended Alaska’s role as a potential major player in either the domestic gas market or the world LNG market. The same can now be said for shale oil.

To the Governor’s credit, at least he is backing a positive option. Whether or not reducing ACES will have any impact upon Alaska’s oil production remains to be seen.

Whether or not there will be sufficient oil production increases within the next five years to keep TAPS in operation is the question. With the shutdown of TAPS, so also ends 90% of the State’s revenues. Alaska will be a far different place within five years of the shutdown of TAPS.

Monday, July 5, 2010

Leadership and Ralph Samuels

There has been much made about the lack of leadership shown by the current governor. Governor Sean Parnell has been described as lackluster, mediocre, behind the scenes and hard working, and a nice guy. Ralph Samuels has chosen “Leadership Now!” as his campaign slogan to emphasize his perception of the lack of leadership shown by Parnell. This is an interesting ploy on the part of Samuels, but akin to the pot calling the kettle black. Samuels has his own baggage as regards demonstrated leadership ability.
Samuels’ claim to fame, as touted by his avid radio entertainment advocates, was his solitary vote against former Gov. Sarah Palin’s Alaska Gas Inducement Act, or AGIA. Ralph Samuels was the only legislator to vote against AGIA.
On the surface, this is a bold statement as to his principles. However, it is an indictment against any claims of leadership ability. You see, Ralph Samuels was the House Majority Leader at the time.
Leadership is the ability to induce others to do what the leader wants them to do, whether or not they want to do the task at hand. In the case of Samuels as Marjority Leader, his job was to guide in direction, course, action, opinion, to influence his fellow Republicans in the majority caucus to act united in supporting or defeating whatever legislation was at hand. Where AGIA was concerned, Ralph failed miserably to exercise his leadership position.
Sarah Palin was hardly the pinnacle of cooperation and encouragement for the Legislature. Former Gov. Sarah Palin was a magnet for criticism. AGIA was not quietly passed, but argued vehemently at times. Where were those who argued against AGIA during the legislation’s travails through the legislative process? Why did they fail to stand with Ralph?
Samuels’ standing alone was not a case of a subordinate stubbornly refusing to follow the superior’s orders in good conscience. There was little or no risk in his opposition. Sarah Palin could hardly fire him. This was a case of a ranking member of the Legislative Branch standing against the Governor’s pet project. A governor who was not exactly engaged in any process at any time. A governor too busy with soap opera theatrics to demonstrate any leadership whatsoever during her tenure as governor. Therefore, Samuels’ singular opposition was hardly a case of political courage.
Nor, was Samuels act that of the commander of the Forlorn Hope given the impossible task for which survival of any so ordered unlikely. There was no personal danger involved. No threat to livelihood. No risk whatsoever. How was his sole vote an act of . . . leadership?
I will concede the issue of principle. To Samuels’ credit, he did stand his ground. To what end? If he was so in opposition, why was he standing alone? Why could he allegedly see what others were blind to?
House Majority Leader Ralph Samuels failed to influence his caucus to rally against Gov. Sarah Palin’s AGIA. Not one of his majority caucus minions followed his lead. Not one.
Yet, to hear Dan Fagan and Rick Rydell on their respective talk shows, Ralph’s vote against AGIA is the equivalent of Patrick Henry’s hanging, or Washington crossing the Delaware. Only one politician in Alaska’s political history deserves any real accolades, and that is former Governor Walter J. Hickel who challenged the federal government’s usurpation of sovereignty. He managed to get AS 38.05.500-505 passed. Yet, Samuels could not get one other to vote against AGIA.
To be cynical, was Samuels’ act an act of calculated political strategy? Did Samuels see in a distracted Gov. Sarah Palin the opportunity to challenge what was increasingly perceived as a weak and ineffectual governor?
It is interesting that her Lt. Governor has managed to accrue the same lack of respect. And, Samuels’ challenge.
Ralph Samuels campaign slogan of “Leadership Now” is either a demand by him for someone to step up, or a claim that he is the missing link for leadership. In either case, he is not the panacea that others claim. He is a failed leader.
Ralph Samuels held a powerful legislative position with a clear majority. Yet, he was not able to impede or to hinder the passage of AGIA.
In this time in Alaska’s history, given the decades to get major projects underway, the steady decline in oil production that constitutes 90% of the State’s revenues, and the fiscal catastrophe that will befall this State once TAPS declines to 300,000 bpd to market and is shut down, can we afford a governor who is a failed leader?

Sunday, February 1, 2009

Sarah Palin--she's baaaack!

FINALLY, OUR GOVERNOR IS BACK IN ALASKA ACTING LIKE A GOVERNOR!

The Road to Nome, a long overdue improvement to the State's overland infrastructure is now being proposed by Gov. Palin. This is the first time there has been support by any administration since Walter Hickle in the late 60s.

Even more telling is the beginning of a thaw between Exxon and the State with the approval by DNR for Exxon to drill two gas wells at Pt. Thompson this year, along with building necessary pad and ice road support infrastructure. Granted, a long way to go to settle the State's angst against Exxon for delaying and setting upon gas leases when Alaska and the United States could use the royalties and natural gas. The natural gas would offset Middle East sources, meaning less money to the terrorists and cheaper gas for Americans.

The progress towards the start of a 24 inch natural gas in-state pipeline from the North Slope to Palmer or Anchorage is positive with a potential completion in 2014. That's cutting it too close for my liking in terms of completion before Cook Inlet reserves are depleted, but at least it is a date.

The Healy coal power generation plant sale to Golden Valley Electric is another good decision. The new power plant will reduce costs to central Alaska power consumers and demonstrate that a clean coal generation facility is a necessary and viable power generation technology for Alaska and the U.S. That plant has set idle for better than 10 years after a tremendous investment by the Dept. of Energy and the State of Alaska.

Now, if Sarah will get spending under control and show us the "fiscal conservative" side of the Palin Administration, the Sarah Palin I voted for and supported will be occupying the Governor's office.

The next item should be a vocal and public challenge by our Governor to the ANILCA restrictions regarding rights of way. The Izembek NWR land swap is an indication of unfairness in ANILCA. The State of Alaska should be allowed to build roads as it needs them and where it deems fit, just as every other State has been allowed to do so. To deny Alaska is to impose a restriction that is bad faith with respect to the intent of our Statehood Compact.

WELCOME BACK, SARAH, AND KEEP UP THE GOOD WORK!!!