Category Archives: Immediate Reactions

A piece in the Fairbanks Daily News-Miner last week deserves discussion.   The piece summarizes recent testimony before Senate Finance and the reaction of one Senator as follows: Continue reading →

Yesterday’s Anchorage Daily News had an interesting quote from Democrat Representative Berta Gardner in one of the stories on ACES.  See Prominent Alaskans back oil tax relief: Legislature, Anchorage Daily News, Feb. 23, 2011. Continue reading →

In a major piece in the current edition of Foreign Affairs, two fellows at the Brookings Institute, argue that, as part of its efforts to constrain Iran, the US government should encourage China to shift its focus from deepening its involvement in the development of Iran’s oil and gas resources, to increasing its participation in US projects.  Getting China to Sanction Iran, Foreign Affairs, March/April 2011.

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A recent book by Pauline Jones Luong (Brown University) and Erika Weinthal (Duke University) is a good read, with implications for Alaska.  Oil Is Not a Curse: Ownership Structure and Institutions in Soviet Successor States, Cambridge University Press, 2010.

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The Alaska Dispatch this morning has a good summary of the current status of ACES reform. See Do Alaskans care about changing the state’s oil tax?, Alaska Dispatch, Feb. 22, 2011. Continue reading →

Important hearing before House Resources yesterday.  Oil industry presentations on the outlook for the industry and the potential impact of HB 110, the Governor’s proposed revisions to ACES. Continue reading →

Interesting article, with implications for Alaska LNG.  The $80/bbl price assumes that Asian LNG prices remain linked to oil.  Given the growth of shale gas, that may be an aggressive assumption.  If gas and oil prices became delinked, the risk associated with an LNG project becomes even greater. Continue reading →

Story from the AP posted a few minutes ago on KTUU: Natural Gas Plant: LNG Plant in Kenai to Shut Down – ktuu.com.

The gist of the story is this:   “ConocoPhillips and Marathon Oil Corp. plan to shut down the Nikiski liquefied natural gas plant in Alaska after more than 40 years in operation.  Officials cite deterioration in the LNG market for the decision.”

This development has negative implications for Cook Inlet gas development, the Bullet Line and the Valdez LNG line (if the fully depreciated Kenai plant can’t maintain an existing position in the Asia LNG market, not likely a new build plant can penetrate the market).   A development that casts a long shadow.

An article in today’s (February 9, 2011) Fairbanks News-Miner reports on a study by Roger Marks for the Office of Federal Coordinator, Alaska Natural Gas Transportation Projects.  The article, authored by Dermot Cole, is available here.

The lead paragraph does a good job summarizing the study’s conclusion:  “If the state wants to subsidize a gas pipeline, it could get far more benefit out of using its resources to help the economics of a large-scale pipeline instead of putting money in a small-diameter line from the North Slope to Anchorage.”  The full study is here.

My immediate reaction is that the study provides a good analysis as far as it goes.  However, the study necessarily accepts as a boundary that the instate line (due to provisions built into AGIA) is limited to 500 MMcf/d. If AGIA is terminated (as it should be), those limitations are eliminated and a different discussion around the instate line becomes possible.

Given that limitation, I would not rely at this point on some of the other conclusions contained in the study (for example, that hydro may be a preferable alternative for Southcentral) until the smoke clears on whether the 500 MMcf/d limitation is terminated.  If the limitation is terminated, the discussion around potential options will change.  Alaska shouldn’t lock into other alternatives until that fundamental issue is resolved.

An article posted yesterday evening in the Alaska Dispatch (see “Alaska legislative leadership runs into political and personality problems,” Nov. 8, 2010) reports on votes taken over the weekend in connection with the formation of the new Alaska House “Majority.”  While the “leadership” is attempting to spin a serious disagreement that resulted as a “personality” dispute, in fact the vote that led to the disagreement appears to have been the first legislative vote on reforming ACES (which stands for “Alaska’s Clear and Equitable Share”), the Palin era tax increase that has been discussed extensively elsewhere on these pages.

My comment on the development follows the article, and is repeated here: