Trump Wants More Alaskan Energy

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Following a U.S. Department of Energy (DOE) report pointing to an increase in Alaskan oil production, the federal government said it was looking to expand exploration and development, while pushing for exports of liquefied natural gas (LNG).

"It's time for the U.S. to embrace Alaska's abundant and largely untapped resources as a pathway to prosperity for the nation, including Alaskans," said Interior Secretary Doug Burgum. "For far too long, the federal government has created too many barriers to capitalizing on the state's energy potential."

Pushing a greener agenda, former President Joe Biden largely put Alaska off limits to drillers, though President Donald Trump upended agenda that through executive action. To meet presidential orders, Burgum said he would pursue reopening parts of the National Petroleum Reserve in Alaska up to drillers, leasing out parts of the Arctic National Wildlife Refuge and advancing an Alaskan LNG project.

Bergum's announcement followed a report from the Energy Information Administration (EIA), the data office for the DOE, that said Alaskan crude oil production could average 438,000 barrels per day (BBL/d) next year, close to a 4% increase from what's forecast for this year.

Two new oil developments in Alaska--the Nuna prospect from ConocoPhillips (NYSE:COP) (Houston, Texas) and the Pikka project, led by Santos (Adelaide) and Spain's Repsol (Madrid)--are expected to boost crude oil production in the state after decades of decline. Combined, both could add another 100,000 BBL/d to Alaskan crude oil production capacity. For more on that, see March 21, 2024, article - Is Alaska Oil on the Rebound?

Production in Alaska peaked at about 2 million BBL/d in 1988, though output has declined since. After problems with offshore drilling infrastructure, Shell plc (NYSE:SHEL) (London, England) left the state in 2015. There was only one bidder, Hilcorp Energy (Anchorage, Alaska), for a lease off Cook Inlet in 2023.

Meanwhile, a warming climate means the window of opportunity to build in Alaska's tundra is shorter. The American Petroleum Institute (API), which advocates on behalf of the oil and gas industry, hailed the decision nonetheless.

"API welcomes the administration's efforts to fully leverage Alaska's enormous resource base as a driver of revenue, economic growth and energy security," said Holly Hopkins, the group's vice president of upstream policy.

On the LNG front, Alaska LNG has been approved by the Federal Energy Regulatory Commission (FERC), but is not yet under construction. It would draw on supplies from the North Slope to deliver as much as 3.5 billion cubic feet of natural gas per day for foreign markets. If completed, it would be one of the largest U.S. LNG export facilities by volume. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project and Plant databases can click here for the project report and click here for the plant profile.

The U.S. in 2022 became the world leader in LNG exports. That helped fill the void left in Europe by sanctions imposed on gas-rich Russia for its war on Ukraine. Trump's second-term administration has acted quickly to approve even more LNG export facilities, capitalizing on U.S. energy dominance.

Exports from the western shores of North America could be competitive, however, as Canada looks to expand its trade options with LNG facilities in British Columbia that could feed the energy-hungry economies in the Asia-Pacific.

With trade disruptions emanating from Trump's sweeping tariff agenda, U.S. options may be limited. China said it would stop taking in U.S.-sourced LNG in response to Trump's trade policies. For more on that, see March 20, 2024, article - Cold Shoulder: China Pauses LNG Shipments from U.S Due to Tariff Retaliation Moves.

China's economy is the second-largest behind the U.S. It was one of the top 10 importers of U.S.-sourced LNG last year.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).