by Denise A. Bode
As amazing technology continues to revolutionize our energy future, it is appropriate to reflect on the accomplishment of a landmark technological achievement: the Trans Alaskan Pipeline System (TAPS). Forty years ago this summer, oil began flowing from Prudhoe Bay to a new marine export terminal at Valdez. Since then, TAPS has carried 17 billion barrels of oil and filled almost 22,000 oil tankers. To date, the state of Alaska has collected $141 billion in petroleum royalties and taxes.
It’s an incredible story. When Alaska became a state in 1959, it included ownership of 1.6 million acres of frozen tundra along the Artic Ocean. Nine years later, a successful well confirmed discovery of the huge North Slope of Alaska oil field. Barriers to development were substantial. Congress resolved Native American land claims by enactment of the largest land claim settlement in history. Then, the North Slope was the subject of the first major test case of the National Environmental Policy Act (NEPA) environmental impact requirement. Again, after years of debate, Congress intervened to clear the way. Nonetheless, court challenges regarding construction of the TAPS continued until the OPEC embargoed oil to the U.S. for its support of Israel in the Arab-Israeli War. The oil supplies in Alaska were seen as a solution to the threat posed by the embargo and our growing dependence on OPEC. So, Congress again acted, passing a third bill, the Trans-Alaska Pipeline Authorization Act, eliminating any additional legal barriers to building the pipeline project. Finally, the path was cleared for the industry-owned Alyeska pipeline company to complete the 800-mile TAPS from the North Slope fields.
Forty years later, TAPS is facing declining oil production from the North Slope fields. But the oil industry has announced a number of new discoveries that promise to boost pipeline throughput. But to really increase production, industry and other officials are focused on opening up other areas to exploration and production such as the Arctic National Wildlife Refuge and the National Petroleum Reserve-Alaska. But what is different in 2017 than then, is the shale oil revolution that continues to bring new oil and gas to market in the Lower 48 states. It may be harder to convince Congress today to open up these national wildlife preserves at a time of great abundance.
ENERGY TRANSPORTATION NEWS
- Pipeline fight returns to where it started: Water
- Construction starts on Enbridge Line 3 pipeline replacement from Hardisty to Wisconsin
- Tribes to court: shut down pipeline
- After Two Spills, Shell Oil to Replace Miles of Problem Pipeline
- First day of hearing puts TransCanada on the witness stand
- Sunoco Reaches Settlement on Natural Gas Pipeline
- British Columbia Vows to Block Pipeline Expansion
- Keystone XL opponents vow long flight as Nebraska hearing concludes
- Jurisdictional fight makes for strange bedfellows
- Sage grouse, chemicals amendment await NDAA debate
- Zinke orders changes to sage grouse conservation policies
- Pruitt distances himself from Trump cuts to Great Lakes
- EPA completes review backlog
- USDA office told to use ‘weather extremes’ instead of ‘climate change’
- Court strikes down EPA limits on HFCs
- Judges prod Trump administration over slow pace of Clean Power Plan review
- States urge justices to take up landmark groundwater ruling
- Court rejects effort to revive Pruitt’s methane rule stay
- Court indefinitely halts suit on Obama new power rule
- EPA to assess climate report
- Penalties assessed by EPA decline under Trump, study finds
- Trump officials begin review of Obama emissions standards for cars
ENERGY REGULATORY NEWS
- FERC’s ‘pro-markets’ quorum stirs hope among generators
- Legal future uncertain as Interior scraps valuation rule
STATE ENERGY NEWS
- Trump’s border wall would slice through wildlife refuges and cut off U.S. territory in Texas
- Mineral Rights Start Gushing Cash for Colleges
ENERGY POLICY NEWS
ENERGY MARKET NEWS
GLOBAL ENERGY NEWS
- As NAFRA talks approach, Mexican officials meet with business leaders in border states
- Here’s How Trump Might Retaliate Against China (Corrected)
- Lawmakers to Trump: Venezuelan sanctions could harm industry
ENERGY TAX NEWS
- On August Breaks and Business Taxes
- Trump White House quietly courts Democrats for tax overhaul
- Budget watchdog group urges current-law baseline for tax reform
- Debt limit fight to hurt September tax efforts, Goldman says
- Even in North Korea retired general John Kelly is an apolitical force in a White House divided by ideology
- Poll: Tax Reform Needed for Farmers and America
RENEWABLE ENERGY NEWS
- Solar eclipse will affect thousands of solar arrays around U.S.
- Enviros, GOP candidate unite against Okla. Car fee
FROM THE CHART ROOM
U.S. Becomes Net Exporter of Gas in 2017
EIA’s latest Short-Term Energy Outlook projects that the United States will export more natural gas than it imports in 2017. The United States has been a net exporter for three of the past four months and is expected to continue to export more natural gas than it imports for the rest of 2017 and throughout 2018. The United States’ status as a net exporter is expected to continue past 2018 because of growing U.S. natural gas exports to Mexico, declining pipeline imports from Canada, and increasing exports of liquefied natural gas (LNG).
The United States is currently the world’s largest natural gas producer, having surpassed Russia in 2009. Natural gas production in the United States increased from 55 billion cubic feet per day (Bcf/d) in 2008 to 72.5 Bcf/d in 2016. Most of this natural gas—about 96% in 2016—is consumed domestically. Abundant natural gas resources and large production increases have created opportunities for U.S. natural gas exports.
With a near doubling of U.S. export pipeline capacity to Mexico by 2019, EIA expects U.S. natural gas exports to increase, though they should remain well below the available pipeline capacity. Mexico’s national energy ministry (SENER) expects to increase its natural gas use for electric power generation by almost 50% between 2016 and 2020. Mexico’s domestic natural gas pipeline network is undergoing a major expansion, primarily to accommodate new natural gas pipeline imports from the United States.
In addition, supplies of natural gas out of Appalachia into the Midwestern states are likely to gradually displace some pipeline imports from Canada as well as increase U.S. pipeline exports to Canada from both Michigan and New York. Several new pipeline projects, including the Rover and Nexus Gas Transmission pipelines, are also being developed to increase takeaway capacity from the Marcellus and Utica supply regions that span parts of New York, Ohio, Pennsylvania, and West Virginia into the U.S. Gulf coast, Midwestern states, and eastern Canada.
EIA expects exports of liquefied natural gas (LNG) to increase. U.S. liquefaction capacity continues to expand as five new projects currently under construction—Cove Point, Cameron, Elba Island, Freeport, and Corpus Christi—come online in the next three years, increasing total U.S. liquefaction capacity from 1.4 Bcf/d at the end of 2016 to 9.5 Bcf/d by the end of 2019.
Three liquefaction trains at Sabine Pass, Louisiana, are currently the only operational liquefaction facilities in the United States. A fourth train at Sabine Pass is undergoing commissioning and a fifth train is expected to come online in 2019. Another liquefaction project at Cove Point, in Maryland’s Chesapeake Bay, is scheduled to come online later this year.
Based on construction plans, EIA expects that by 2020 the United States will have the third-largest LNG export capacity in the world after Australia and Qatar. The latest Short-Term Energy Outlook forecasts that U.S. LNG exports will reach 4.6 Bcf/d by December 2018 as new liquefaction trains at Cameron, Freeport, and Elba Island come online. However, actual use of U.S. LNG export terminals will be affected by the rate of global LNG demand growth and competition from other global LNG suppliers. Read more on the EIA website.
Michael Best Strategies’ Energy Team
- Denise Bode
- Greg Brophy
- Beth Cubriel
- Andrew Cook
- Chip Englander
- Sarah Helton
- Ross Romero
- Thomas Schreibel
- Kevin Swanson
- Jeffrey Sherman (Michael Best)
About Michael Best Strategies
Michael Best Strategies focuses on achieving clients’ objectives through unparalleled strategy development and deployment for implementation, pragmatic guidance on public policy development, and government relations. The Strategies team specializes in a full range of services, including government relations, public policy consulting, grassroots advocacy, public affairs, conference planning, and strategic political relationships. For more information, visit michaelbeststrategies.com.