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Morning Headlamp - Consultant Finds Threats to AKLNG in New Report

Nikos Tsafos outlined challenges


In a recent report to lawmakers, consultant Nikos Tsafos outlined challenges threatening the project's potential for success. They include a competitive market and a laundry list of tasks the state will need to achieve, such as finding buyers, insulating itself from cost overruns and buying gas at commercially reasonable prices from its former project partners, the North Slope's major energy companies. Rosetta Alcantra, a spokeswoman for the Alaska Gasline Development Corp., said Tsafos' company didn't contact the corporation in compiling the review. The state-sponsored corporation has become the project lead.


Royal Dutch Shell's head of exploration Ceri Powell will step down next month, capping seven years in the role marked by sharp cutbacks in the company's search for new oil and gas reserves amid the industry's deep downturn since mid-2014. In an interview with Reuters last month, Powell described Shell's shift away from complex and costly exploration projects in "frontier" areas such as Alaska to areas closer to the company's existing production such as Malaysia and Brunei. Last year, Shell angered investors when it wrote down $7 billion after failing to find any oil or gas in the Chukchi Sea off Alaska's northwest coast.


Ed Rasmuson, former commissioner of the Alaska Department of Revenue Bill Corbus, energy consultant Jeff Cook, Bering Straits Native Corp CEO Gail Schubert, and Kenai Peninsula Borough mayor Mike Navarre penned an op-ed in the Fairbanks Daily News Miner calling on lawmakers to fix Alaska's budget. According to the group, "we should not forget that the state needs to deal with the hundreds of millions of dollars we owe to companies for unpaid oil and gas tax credits. We need to resolve that debt if we're to truly solve our fiscal problems. And we need to remember that, because it will take time to implement any new taxes and to collect on other changes in Alaska's tax structure, we should expect a larger drawdown on our budget reserves in fiscal 2018 as the changes take effect."


First Reads

Consultant raises concerns about Alaska gas project
Associated Press, Becky Bohrer, January 22, 2017

Exclusive: Shell's exploration boss Powell to step down
Reuters, Ron Bousso, January 23, 2017

Conaway on oil: Open public lands, get rid of regulations
MRT, Trevor Hawes, January 21, 2017

Citizen watchdog group hammers state for not responding to Cook Inlet leak
Alaska Dispatch News, Alex DeMarban, January 22, 2017

It's time to fix Alaska's budget deficit
Fairbanks Daily News Miner, Ed Rasmuson, Bill Corbus, Jeff Cook, Gail Schubert and Mike Navarre, January 22, 2017

Trump Aides Prepare List of Early Energy Changes, Sources Say
Bloomberg, Jennifer A Dlouhy, January 20, 2017

Talking Arctic – Moving Frontiers
The Barents Observer, Thomas Nilsen, January 23, 2017

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