August 02, 2007 --- Vol. 13, No. 69August 2007

Irwin concurs with ACMP determination for Shell Beaufort drilling

The commissioner of the Alaska Department of Natural Resources, Tom Irwin, has upheld the Office of Project Management & Permitting’s determination that Shell’s planned drilling program in the Beaufort Sea is consistent with the Alaska Coastal Management Plan. On June 19 OPMP had proposed an ACMP consistency determination for Shell’s program, but on June 25 the North Slope Borough asked the Alaska Department of Natural Resources to elevate the OPMP finding to the DNR commissioner.

The North Slope Borough expressed numerous concerns about the Shell program, including questions relating to waste disposal and the potential for an oil or fuel spill.

A meeting on July 19 between the interested parties resulted in some alternative measures that the DNR now requires as part of the conditions for the ACMP consistency determination. Those alternative measures consist of:

1. The adoption of a series of alternative measures stipulated by the Alaska Department of Environmental Conservation on July 25 relating to oil spill prevention and response.

2. The adoption of an adaptive management plan or conflict agreement with subsistent hunters for the 2007 drilling program, and a commitment to adopt similar plans for the 2008 and 2009 seasons.

3. An agreement to review the consistency determination for Shell’s 2008 and 2009 drilling programs, in the light of any changes to those programs, recognizing that experience gained in 2007 will likely impact the programs.

DNR’s final ACMP consistency response issued July 27 also says that the conflict avoidance agreement between Shell and the Alaska Eskimo Whaling Commission, signed July 24, will avoid and minimize impacts on subsistence hunting.

For the full story see the Aug. 5 edition of Petroleum News.

Gov. Palin to call special session of Legislature on PPT

Alaska Gov. Sarah Palin said today that she will announce details of a special session of the Alaska Legislature relating to the Petroleum Profits Tax at a press conference tomorrow.

The Legislature passed the new tax last August. The state’s petroleum production tax was formerly a tax on the gross; the PPT is a tax on the net. The PPT was proposed by the administration of former Gov. Frank Murkowski as a companion to the gas pipeline contract which Murkowski negotiated with the North Slope gas owners, BP, ConocoPhillips and ExxonMobil.

The gas pipeline contract failed to receive legislative approval, but the tax passed, although at a higher rate than that proposed by Murkowski.

There have been concerns about the state’s ability to audit costs which oil and gas producers deduct under PPT as well as concerns about ethics issues surrounding the battle over the bill. Three legislators who voted on PPT have been arrested and accused of ethics violations involving an oil industry service company.

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