Alaska oil price heads higher

1. That’s part of the reason BP left.

2. No one wants to trade oil commodities anymore…electric vehicle manufactures, Lithium suppliers, solar panel manufactures & clean energy like Hydrogen cells are popular on Wall street these days.
   Alaska needs to “re-tool” for the 21st century or we will get left out in the dust.
   Instead of AIDEA wasting $20 million on ANWR oil leases that will never get developed, it should put some of that money into local economies that are the backbone of the state.
   Indoor grow gardens like “Bowery Farming” would be a good way to invest in the communities instead of continuing to subsidize a dying industry like oil.

   • Steve, I appreciate your comments but I take exception to some of your points of view today. First off a cursory examination of the history of oil prices would help explain why oil is currently down. Besides Cartels, taxes, and political influences Oil is like any commodity affected by supply and demand. Turns out that due to technological advances. Trumperian Oil Friendly policy and new production in the USA the supply was waaay up. In addition, the Saudi’s and Putin got in a pissing match over Putin’s funding Iran’s militaristic endeavors. Since Russia needs pertro dollars, The Saudi’s flooded the market to hurt Russia.,( and US production).
     Then along came covid 19…
     Truth is green energy is cool but won’t replace Jet-A. 12 gallons gets you to Seattle on a good day. Oil will bounce back and then fall again. Nothing new. Alaska should support it’s Oil industry.

   • To state or imply that electric vehicles are going to totally replace internal combustion engine vehicles any time in the near or foreseeable future is childishly simplistic and simply wrong.
     .
     For one thing, the nation’s electrical grid has nowhere near the capacity to supply all the electricity needed for a fleet of that size. So who or what is going to fund the multi-trillion dollar rebuilding of our electrical grid?
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     Secondly, electric vehicles are at an extreme disadvantage in colder climates, such as ours here in Alaska, and even more disadvantaged and impractical in extreme winter temperatures. Unless one is going to be satisfied with a 50-mile range between recharges (which will also take much longer due to the colder temperatures).
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     Mass deployment of electrical vehicles is merely a pipe dream that denies reality and the laws of physics on multiple levels. Unless, of course, one’s REAL goal is the virtual elimination of personally-owned and operated vehicular transport.

     • I’m not a greenie by any means, but electric vehicles will be the lions share of vehicles sold in the US within the next decade, it might take another decade for them to make that same mark here in Alaska, but it will happen within a generation. Electric vehicle manufacturers have only just started ramping up production, with Tesla leading the way.
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       Batteries perform better in colder climates, it’s the safety and comfort of the human in the vehicle that draws down the charge in the battery when it’s cold.
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       The electrical grid can ramp up in short order to supply the demand, when and where there is money to be made capacity can and will be found.

       • ???????

       • Steve, I am sorry for you. Your obvious lack of knowledge pertaining to the relevant laws of physics, and real material and infrastructural limits, surrounding electric vehicles and their putative mass adoption only demonstrate to me that your investment thesis will be a terribly unrewarding one for you.
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         “Batteries perform better in colder climates”. REALLY???? Do you actually live here in Alaska, or have ANY real-world experience? Or were you just joking when you made that statement in denial of all reality?

         • Jefferson,

           I understand your confusion, I should have been more clear. Batteries used in cars in hot environments do not last as long as those in colder climates. Since a vehicle is a long term investment the longer the battery lasts the better the long term performance. A battery repeatedly charged and discharged below 70 degrees F has twice the cycle life of a battery charged and discharged in 110 degree F.
           Put another way the lifetime performance of a hot battery is much, much less than that of a cold battery.
           .
           But I will bow to your superior knowledge pertaining to the relevant laws of physics, and real material and infrastructural limits. Since my real world experience shows that hot batteries do not last as long as colder batteries it probably doesn’t mean much to you either. Don’t just take my word for it though, “Car batteries typically last from three to five years, according to AAA, spanning from 58 months or more in the furthest northern regions of the U.S., down to less than 41 months in the most southern regions.” – Consumer Reports.

         • As far as investing, had I put $10,000 into Tesla stock and $10,000 into Exxon Mobil stock 10 years ago today I would be a millionaire. About $1,200,000 would be from Tesla, and about $8,000 would be from Exxon Mobil.
           .
           Coulda
           .
           Shoulda
           .
           Woulda

         • Steve-O, it is both funny and illustrative how you dishonestly sidetracked the discussion from how batteries PERFORM at low temperatures, which was the REAL relevant matter, to how long they (supposedly) last at different temperatures.
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           I can now clearly see what kind of person I am dealing with here — some millennial who is extremely short on real-world experience and common sense, but long on ‘education’, theory, and disconnection from reality. I will not waste any time on you further.

         • No worries Jeff, once again you’ve been proven wrong and instead of admitting it you strike out in anger and make false assumptions…you’ve done this before and will no doubt do it again.
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           I figured with your obvious wealth of knowledge pertaining to the relevant laws of physics, and real material and infrastructural limits you would have at least had some type of response pertinent to the discussion…

     • And I say that as a shareholder in numerous oil and oil support companies. I haven’t yet bought into an electric vehicle company, but I sure wish I would have bought Tesla at various times over the last decade…I could have been a millionaire many times over.

   • Only hitting on part of the issue there Steve (Stine, not to get confused with Steve O).
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     The petroleum industry is a LOT more than just fuel for vehicles, heat for homes, and electricity. An electric vehicle will literally grind to a halt without the petroleum industry providing lubricants. The plastics used in the vehicle bodies and interior, the insulators keeping the wires from shorting out, all products of the petroleum industry.
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     The solar panel industry is just as dependent on petroleum as the EV industry is.
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     In fact, the sunglasses you are wearing in your profile pic are a product of the petroleum industry.
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     Yes, I know, there are all natural substitutes for most of the products the oil industry produces, but none have the same utility per unit as petroleum. Natural lubricants can be created from plants, but how many square miles of cultivated land will be needed to produce the amount needed by Tesla in one year? Same thing across the board, regardless of the substitute you identify for a petroleum product. A barrel of oil is so much more than just gas and diesel.

   • It apparent you have not lived in the state more than a week and have a low education on American energy. If you lived in Alaska before oil you might speak a lot differently I did I know.

3. The price of oil will continue to climb but there is a very strong chance we won’t be able to capitalize. Alaska is under attack to stop all oil and gas production, apparently in an attempt to lower our temperature and make glaciers grow. Oh well, the Saudis and others will capitalize because for some reason their oil doesn’t cause climate change.

4. The way the Hilcorp purchase is with BP, they need the oil under $50 to pay less to BP for the purchase. So, with oil right above $50, they actually make less than they do below $50.

5. Any oil price increase is good for Alaska. But $50 is not enough to attract the needed amount of new investment. Additionally, some of the new North Slope players paid too much when they bought in and cash flow is not robust at $50. None of the new players would have come to Alaska had their crystal ball been better, perhaps especially Hilcorp. Alaska cannot determine, modify or impact oil prices. What we could have changed for the better we did not. Mike Dunleavy was elected almost half way into state fiscal year 2019. Earlier this month he released his proposed state budget fiscal year 2022. His first budget was for fiscal year 2020. If that budget had been adopted Alaska would be in much better fiscal shape today. We would have been much better prepared for current economic circumstances even though we did not and could not have seen this coming. The budgets for 2020, and for fiscal year 2021 (the current year) would have been dramatically smaller, and state savings would be about $6 billion more than they are today. The state would have received and would receive through Juneau 30, a total of about $850 million more in oil and gas property taxes; but instead that amount has evaporated with the municipalities and will continue to evaporate. The Dunleavy-Babcock-Arduin budget was the best budget for the pandemic no one saw coming and would have left us with options that we do not have today. Legislators will once again come to Juneau, the 3rd time since Dunleavy was elected, to wring their hands over the state budget; theater really. They may or may not approve the higher PFD, but it’s a safe bet they will approve spending an unsustainable amount for the year that begins July 1, and they will likely approve hundreds of millions of dollars in new state debt. As Alaskans we wring our hands over what we cannot change, and we fail to adjust what we can change to meet current conditions. State government will once again hold its own employees harmless by over-spending, and local government employees will also be held harmless. What could happen is that the Lower 48 begins to recover more quickly than Alaska; the best private sector workers will therefore tend to be lured by better opportunities, continuing the trend of the Alaska economy being over-weight in state and municipal government workers, and in people living on governmental transfer payments. In no small way holding Juneau and local governments harmless from current economic realities serves to encourage private sector workers to seek work in the Lower 48. As a fiscal strategy we will hope for $110 oil to bring us back into balance, and to repay the new state debt we will almost certainly approve and sell. Hoping for higher oil prices continues to be the only fiscal plan that can be agreed in Juneau.

6. What are electric cars made from? What are batteries made of?

   • Ssshush, Brian! Don’t you know you are not supposed to ask such questions? If and when anyone dares to challenge or question the cult of the myth of technocornucopian ‘progress’, the only proper response is “SCIENCE!”.

7. Electric vehicles are a joke. People seem to think that electricity is ” clean ” energy. Most electric production is anything but clean. Many places it is produced by burning fossil fuels. Wind power requires lots of fossil fuels to manufacture and maintain turbines. The manufacture of batteries used in electric cars is devastating to the environment. Electricity only seems ” clean ” because it’s produced somewhere else.

   • Exactly!

   • Which is exactly why they are and will sell like hotcakes in this country! Many Americans like all of our modern day conveniences they just don’t want the mine in their backyard. Being a NIMBY is foundational to at least 50% of the American public, how many times have you heard someone say they are a conservative or a republican but they don’t support Pebble?

8. All the green stuff sounds great. Right up until the time you run out of oil and fossil fuels. Cause green won’t cut it when the wind stops blowing or the clouds roll in. Hydro is fine but you can only dam so many rivers.

   Not to mention everything else made with oil. The price is only down for now. This time next year it may be $150 a barrel. Look at California who can’t stop the rolling outages with green energy when they need it the most in hot dry times.

   Let’s not be short sighted. Oil is going to be around for quite some time, green energy will only go so far.

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