Well… Maybe not killing EV’s… Just leveling the playing field a bit.
Guest gloating by David Middleton
Senate Republicans passed legislation early Saturday allowing oil and gas drilling in the Arctic National Wildlife Refuge as part of a tax reform package, moving closer to fulfilling a long-time GOP goal.
The passage of the bill marked a significant achievement for Sen. Lisa Murkowski, R-Alaska, the chairwoman of the Senate Energy and Natural Resources Committee, who has introduced legislation to open a portion of the Alaskan refuge to drilling every term she has served in the chamber, only to be blocked by Democrats.
A new change in the Republican tax bill would allow energy companies classified as publicly traded partnerships to take the pass-through business deduction.
The Trump administration’s campaign for “American energy dominance,” which focuses on elevating the nation’s fossil fuel production, received a potential big boost from Republican senators early Saturday.
The tax measure they approved proposes to open the Arctic to oil and gas development, weaken investment incentives for solar and wind production, and end a big tax credit for new electric vehicles.
“End a big tax credit for new electric vehicles”… ¡Hasta la vista Elon!
Senate Majority Leader Mitch McConnell actually deserves a lot of credit for this. Late last week, the Senate had a truly awful tax bill and the GOP was at least five votes short of being able to pass it. Last minute “sausage making” actually improved the bill.
With its narrow majority in the Senate, the Republicans will have to steer the Conference Committee toward the Senate version rather than the House version of tax “reform.” While the final product will be far from Reaganesque, on the business side, it appears to be pretty good… Particularly on the energy business side.
The “big win” of the energy trifecta is clearly ANWR.
Opening less than 3% of the Arctic National Wildlife Refuge (ANWR) in Alaska for responsible energy production could create thousands of jobs, generate billions in new revenue and help reduce our dependence on foreign sources of oil.
Small Area = Big Energy Potential
- The North Slope of ANWR, known as “Area 1002”, was specifically set aside by Congress and President Carter in 1980 for oil and natural development. This area is not designated as Wilderness.
- A plan developing 500,000 acres—less than three percent of ANWR’s acreage—would provide access to the majority of ANWR’s resources.
Supplying America’s Families and Businesses with American Energy
- According to U.S. Geological Survey estimates, the North Slope contains an estimated 10.4 billion barrels of oil.
- This is more than the known oil reserves of entire countries that the U.S. currently imports oil from, including: Mexico, Angola, Azerbaijan, Norway, India, Indonesia, Malaysia, Egypt, Australia and New Zealand, Turkmenistan, and Uzbekistan.
- At peak production, ANWR could supply up to 1.45 million barrels of oil per day.
- This is more than the U.S. imports from Saudi Arabia every day.
- Alternatively, 1.45 million barrels of oil per day is over one quarter of what the U.S. imports from OPEC countries each year.
Reducing the Debt, Generating New Federal Revenue
- Developing ANWR’s resources could generate approximately $150 billion to $296 billion in new federal revenue – a substantial amount that would help pay down our Nation’s debt.
- Total government revenue, including leases, royalties, and state local and federal taxes for the life of ANWR field production, could be as much as $440 billion.
Creating American Jobs, Growing the Economy
- Opening a small portion of ANWR to energy production would create tens of thousands of American jobs and contribute to significant economic growth.
- Studies have shown ANWR job creation ranging from 55,000 to 130,000 jobs.
Increasing Our National Security
- Responsibly developing our own American energy resources in ANWR will help reduce our dependence on oil from hostile countries and lower foreign imports.
- According to the Energy Information Administration, crude oil imports will decline by one barrel for every barrel of ANWR oil production.
- USGS ANWR Fact Sheet
- USGS Open File Report 98-34, Geographic and Geologic Setting
- IER ANWR
- API ANWR Fact Sheet
The failure to open ANWR-1002 would soon force the premature shutdown and dismantling of the Trans Alaska Pipeline System (TAPS).
A premature end to TAPS would strand about 30 billion barrels of oil and 137 trillion cubic feet of natural gas under Alaska and its OCS (outer continental shelf).
• The Trans Alaska Pipeline System’s (TAPS) minimum flow rate of about 300,000 barrels of oil per day will be reached in 2025, absent new developments or reserves growth beyond the forecasted technically remaining reserves. An Alaska gas pipeline and gas sales from the Point Thomson field and the associated oil and condensate would provide another boost to oil production and extend the life ofTAPS for about one year to 2026. A shut down of TAPS would potentially strand about 1 billion barrels of oil reserves from the fields analyzed.
• For the complete study interval from 2005 to 2050, the forecasts of economically recoverable oil and gas additions, including reserves growth in known fields, is 35 to 36 billion barrels of oil and 137 trillion cubic feet of gas. These optimistic estimates assume continued high oil and gas prices, stable fiscal policies, and all areas open for exploration and development. For this optimistic scenario, the productive life of the Alaska North Slope would be extended well beyond 2050 and could potentially result in the need to refurbish TAPS and add capacity to the gas pipeline.
• The forecasts become increasingly pessimistic if the assumptions are not met as illustrated by the following scenarios.
1. If the ANWR 1002 area is removed from consideration, the estimated economically recoverable oil is 29 to 30 billion barrels of oil and 135 trillion cubic feet of gas.
2. Removal of ANWR 1002 and the Chukchi Sea OCS results in a further reduction to 19 to 20 billion barrels of oil and 85 trillion cubic feet of gas.
3. Removal of ANWR 1002, Chukchi Sea OCS, and the Beaufort Sea OCS results in a reduction to 15 to 16 billion barrels of oil and 65 trillion cubic feet of gas.
4. Scenario 3 and no gas pipeline reduces the estimate to 9 to 10 billion barrels of oil (any gas discovered will likely remain stranded).
Some combination of these hypothetical scenarios is more likely to occur than the optimistic estimates.
Recent large discoveries on the North Slope can only be developed if TAPS remains operational. The opening of ANWR Area 1002, is the fast track to keeping TAPS operational for the next 30-50 years.
Recent North Slope Highlights
BOEM Approves Eni Beaufort Sea Exploration Plan
Producer Plans to Drill into a Federal OCS Reservoir from Pre-existing Gravel Island
07-12-2017 ANCHORAGE, Alaska
Contacts: John Callahan
After a comprehensive review and consideration of comments received from the public, stakeholders, and Federal and state partner agencies and tribes, the Bureau of Ocean Energy Management today conditionally approved a Beaufort Sea exploration plan (EP) it received from Eni US Operating Co. Inc.
Eni US is a subsidiary of Italian multinational oil and gas company Eni S.p.A. In its plan, Eni describes its intent to drill four exploration wells into the federal submerged lands of the Beaufort Sea from its Spy Island Drillsite, a pre-existing facility located in Alaska state waters. Drilling will be conducted during the winter months only. The drilling is scheduled to begin in December 2017.
Over the past 30 days BOEM has been carefully evaluating the EP in accordance with federal law and regulations. This evaluation included a site-specific Environmental Assessment (EA) of the proposed exploration activities pursuant to the National Environmental Policy Act. The EA concluded with a Finding of No Significant Impact (FONSI).
“Eni brought to us a solid, well-considered plan,” said BOEM’s acting director, Walter Cruickshank. “We know there are vast oil and gas resources under the Beaufort Sea, and we look forward to working with Eni in their efforts to tap into this energy potential.”
The evaluation also included two separate public comment periods: one to give the public the opportunity to provide information on issues that should be examined in the Environmental Assessment; and one to comment on the EP itself. This input was carefully considered throughout the process.
“I’d like to thank our Alaska Native stakeholder organizations, environmental groups, members of industry and everyone else who took the time to submit substantive comments,” said James Kendall, director of BOEM’s Alaska OCS Region. “Our staff worked very diligently to analyze every one we received, and incorporate that input into our review.”
The EP and supporting documents, and links for viewing the public comments, are available at: www.boem.gov/eni-ep-2017.
An EP describes all exploration activities planned by the operator for a specific lease or leases, including the timing of these activities, information concerning drilling processes, the surface location of each planned well, and actions to be taken to meet important safety and environmental standards and to protect access to subsistence resources. An EP does not allow an operator to produce oil if any is found; for that, an operator is required to obtain approval of a Development and Production Plan (DPP).
Among the conditions of approval is the requirement that Eni must also procure all appropriate permits from other state and federal agencies, including permits to drill from the Bureau of Safety and Environmental Enforcement. A list of the permits Eni intends to apply for is located in Table A-1 of the EP. A full list of conditions of approval can be found in the approval letter at the link above.
Spy Island is one of four oil- and gas-producing artificial islands in the waters of the Beaufort Sea. The others are Northstar Island, Endicott Island, and Oooguruk Island. The construction of a fifth island, as proposed in a DPP submitted to BOEM by Hilcorp Alaska LLC, is under review by federal agencies.
– BOEM –
The Bureau of Ocean Energy Management (BOEM) promotes energy independence, environmental protection and economic development through responsible, science-based management of offshore conventional and renewable energy resources.
Team America Energy Dominance… Frack Yeah!
About the Author
David Middleton works for the evil oil industry. He has 36 years of experience as a geologist/geophysicist working for “Little Oil” (as opposed to Big Oil). He is a member of the Society of Exploration Geophysicists (SEG), American Association of Petroleum Geologists (AAPG) and Houston Geological Society (HGS).