September 07, 2001 --- Vol. 7, No. 113September 2001

Resource sub-cabinet, producers discuss off-ice deadlines for North Slope

Marty K. Rutherford, deputy commissioner of the state Department of Natural Resources, told PNA yesterday that the state resource sub-cabinet is currently working on permitting issues that have arisen in the last year between state agencies and Alaska’s oil and gas companies.

PNA asked Rutherford specifically about differences between the state Department of Environmental Conservation and Phillips Alaska Inc. regarding permitting an exploration well in the Beaufort Sea McCovey unit. (DEC’s proposed stipulations for that project, which would have required operator Phillips to be off the ice in early April, contributed to Phillips’ decision to declare the project uneconomic and halt the permitting process in May.)

“We haven’t really dealt specifically with the McCovey issue,” Rutherford said, although she did say the deputy commissioners who make up the sub-cabinet were discussing the issue of off-ice deadlines: “We are still actively working that issue, but we’re dealing more with onshore … within the coastal zone.”

The representatives from DNR, DEC, the Department of Fish and Game and the Division of Governmental Coordination who sit on the resource sub-cabinet, are “providing an opportunity for the companies to talk about their concerns … about issues that need cross-agency resolution,” she said. “We’re dealing with a full gamut of cross departmental issues.”

Rutherford said the sub-cabinet hopes to have the question of off-ice deadlines resolved by mid-November in time for the 2001-2002 exploration season.

“Phillips is planning a very active exploration season,” she said. “We’re very happy about that.”

ChevronTexaco must sell its general aviation fuel business in Alaska

Alaska, along with 11 other states and the Federal Trade Commissio, filed settlement papers today that clear the way for the merger of Chevron Corp. and Texaco Inc., Attorney General Bruce M. Botelho said.

The settlement was reached after the companies made major concessions, including agreeing to sell all of Texaco’s interest in U.S. refining and gasoline marketing to another buyer, possibly Shell.

Texaco must also divest its general aviation fuel business in a number of states, including Alaska. Without such a divestiture, the new entity, ChevronTexaco Corp., would control nearly 100 percent of the aviation gasoline market in Alaska.

State regulators initially were concerned the merger would give ChevronTexaco too much market power, which would then reduce competition in the marketplace and lead to higher consumer prices for gasoline and aviation gasoline.

The buyer of Texaco's general aviation business under the settlement is expected to be Avfuel Corp., an independent marketer of aviation fuel.

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