Costs Of New Us Arctic Regulations May Cool Offshore Oil Production Plans. (Podcast) Platts. The Obama administration unveiled final regulations for drilling in US Arctic waters, but questions remain about the future of oil production there. Will the Arctic be pulled out of the administration's upcoming five-year leasing plan, and will environmental opposition and unfavorable economics hinder development offshore Alaska for a decade or more? And how will the outcome of the US presidential election effect the Arctic’s oil and gas future? Senior editor Brian Scheid interviews Mike Levine, Pacific senior counsel at Oceana, and David Holt, president of Consumer Energy Alliance, for answers to these questions and more.
Alaska North Slope crude shipment leaves Valdez bound for South Korea. Platts. A shipment of Alaska North Slope crude is making a rare voyage across the Pacific Ocean to South Korea, according to cFlow, Platts trade flow software. The Bahamian-flagged Suezmax, Tianlong Spirit, which was chartered by BP, first entered Valdez, Alaska, on July 28 and set sail on Saturday. On Monday, the tanker was located in the North Pacific Ocean off the coast of Alaska. The ship's destination is listed as Gwangyang, South Korea, and it is set to arrive there around August 12, according to cFlow data. A BP spokeswoman declined to comment on the individual cargo or the destination of the tanker Monday. However, in July she confirmed that the company had chartered the Tianlong Spirit to move ANS out of Valdez.
Has giant Alaska hit an oil brick wall? The Desert Sun. Alaska, America’s largest state in size, and the smallest in population per square mile (738,000), is running into serious economic trouble after a 40-year oil boom that transformed this once-frigid backwater into the nation’s richest state per capita. This formidable territory, bought from the Russians in 1867, and known as Seward’s Folly, after the then-U.S. Secretary of State paid $6 million for it, is in deep trouble. Not only have crude oil prices crashed everywhere, but the once-seemingly endless giant Prudhoe Bay oilfield is reaching the bottom of its reserves. Thirty years ago, the state was pumping two million barrels of oil a day, a quarter of all U.S. output. But in the past decade, its output had fallen to 500,000 barrels a day, enough to fill only one quarter of the capacity of the state’s main artery, the 800 mile Trans-Alaska Pipeline system. This has begun to savage the Alaskan economy, which was largely dependent on both the volume and high crude oil prices that had previously existed. Consequently, the state’s backup fund is dropping by $11 million a day, enough to drain it entirely within two years.
U.S. Coast Guard’s 226th Birthday Message.U.S. Naval Institute. Today marks 226 years of service by America’s Coast Guard. Building upon our proud history, we are boldly addressing the vast maritime challenges facing our Nation. Strategically focused, we are leading the way into the 21st century. Guided by our suite of regional and functional strategies, we are focused in the Western Hemisphere and Arctic and on guaranteeing economic security by countering the threats to our maritime infrastructure and cyber networks. … We are asserting national sovereignty in the Arctic. Our Arctic Strategy, in line with the national strategy, is based on 150 years of Coast Guard experience. We have led the establishment of the Arctic Coast Guard Forum where we are working with seven partner nations to ensure safety, security and stewardship of this vital and pristine region. We are working with all branches of the federal government to accelerate the acquisition of new heavy icebreakers to operate year round in the most inhospitable regions on the planet. Only the world’s best Coast Guard can meet these challenges.
Walker's oil and gas adviser says he’ll look at tax credits and production opportunities. Alaska Dispatch News. Gov. Bill Walker's new oil and gas adviser said on Monday he'll play a role in helping resolve the standoff between the administration and Alaska's major oil producers over marketing plans for North Slope natural gas. But John Hendrix, a Homer-bred Alaskan who has held key jobs for BP and Apache Corp., also plans to have a broader role that includes speaking frankly with company officials about their development plans and fiscal health. Those discussions should help the state have a better understanding of future development prospects and hear how it can facilitate production. Noting that he's not a regulator, Hendrix said the state needs to have "gritty" conversations with the oil industry about what companies are doing — or not — when it comes to exploration and production. Critics who accused Walker of bullying the industry said Walker will declare the Prudhoe unit in default if the information isn't provided, though Walker said in June he doesn't see that happening. Hendrix said he also hopes to better understand the role state tax credits play within each company. In late June, Walker deferred payment to industry of $430 million in state tax credits to help slow spending at a time when low oil production and prices have blasted a multibillion-dollar hole in the state budget.
The Trans-Alaska Pipeline Will Dry Up Without New Oil. (Op-ed by Thomas Barrett – Retired U.S. Coast Guard Vice Admiral and President of Alyeska Pipeline Service Co.) Wall Street Journal. For nearly four decades, the Trans-Alaska Pipeline System has served as Alaska's economic artery while providing the rest of the U.S. with a reliable supply of domestic oil from Alaska's North Slope. Even with lower oil prices and the shale revolution increasing domestic production, TAPS, as we Alaskans call it, remains a key component of the national energy infrastructure. But the pipeline needs more Arctic oil to sustain its contributions to Alaska's economy and America's energy security. Even more important are the people who make the industry work. The pending five-year offshore leasing program under review by the Obama administration is critical to the continued operation of TAPS. The program stipulates the size, timing and location of possible leasing activity that the Interior secretary determines best meets the energy needs of the nation from 2017-22. As the administration considers the public comments submitted on the draft plan, it is crucial to consider what is at stake. The draft 2017-22 leasing program includes three proposed sales in Alaska: one each in the Arctic's Chukchi and Beaufort seas and one in Cook Inlet. The Arctic offshore resource potential is enormous. The Interior Department estimates that Alaska's Arctic offshore basins hold more than 27 billion barrels of oil and 132 trillion cubic feet of natural gas—approximately one-third of the nation's oil and gas reserves. Those resources could ensure a steady future supply of oil for TAPS. It is vital that the sales remain in the final program.
Sharing Arctic Assets - How Strategic Cooperation Can Answer US Icebreaking Needs. (Op-ed by Tero Vauraste - President & CEO of icebreaker operator Arctia Ltd. & Vice Chair of the Arctic Economic Council) Huffington Post. The United States is currently contemplating the acquisition of replacement heavy icebreakers. Unlike one would gather from domestic discussions, the US is not alone. The global fleet of about 110 icebreakers is aging rapidly, and other Western nations with icebreaking needs such as Canada, Finland and Sweden have begun icebreaker renewal programs. Capacity needs exist also in many other countries active in polar areas. What could this concurrence of national icebreaking needs mean to the US and other Arctic nations? Has anyone stopped to consider icebreaking partnerships with the private sector and bilateral or international arrangements? Apparently not seriously enough judging by the latest hearings in the House Subcommittee on Coast Guard and Maritime Transportation. Finland is a forerunner in international collaboration as well as public-private arrangements within icebreaking services. The country can procure icebreaking services from both public and private partners and has currently three icebreaking treaties: one between Nordic countries and bilateral treaties with both Sweden and Russia. During Arctic summer when the fleet is not required in the Baltic Sea, Finnish icebreakers are available for charter for international missions in polar areas.
Oil won’t save us (editorial). Fairbanks Daily News-Miner. The July 11 report, “EIA projects rise in U.S. crude oil and other liquid fuels production beyond 2017,” projected a continued decline in Alaska’s output. “Production in Alaska continues to decline through 2040, dropping to less than 0.2 million b/d (barrels per day) in 2040,” according to the report. This is not good news for anyone hoping that increased oil production or an increase in oil prices, or both, is going to help Alaska out of its precarious fiscal situation. … Oil revenue collapsed several years ago, and there’s little sign of improvement. The year-to-year change in the amount of the state’s oil income is staggering, from $1.69 billion in fiscal 2015 to $801 million in fiscal 2016 to a projected $705 million for fiscal 2017, the current fiscal year. And the fiscal 2015 number is down sharply from the days when oil exceeded $100 a barrel; it’s now about $40. That’s catastrophic. It isn’t going to change anytime soon. And what that means is Alaska urgently needs its residents and its elected officials to live in the real world and not in the world of fantasy.