December 27, 2007 --- Vol. 13, No. 98December 2007

Judge rules in favor of state on DNR’s Point Thomson decision

Superior Court Judge Sharon Gleason has ruled that the Alaska Department of Natural Resources acted properly when it rejected the 22nd plan of development for the Point Thomson Unit. The governor’s office said today that the judge’s decision affirming DNR’s actions reflects her agreement with the arguments made by the state’s attorneys.

The judge directed DNR to hold an additional hearing to provide the appellants with the opportunity to argue about what the appropriate remedy should be when the working interest owners have failed to fulfill their obligation to develop a unit.

“This ruling represents another significant step forward in the state’s efforts to develop the valuable oil and gas resources in the Point Thomson reservoir and to hold the lessees to the commitments they made in the unit agreement,” Gov. Sarah Palin said. “We are pleased that the court has affirmed the Department’s efforts to ensure that the oil and gas in this reservoir is responsibly produced.”

At the remand hearing, DNR will hear and consider arguments about whether or not termination of the unit is the appropriate remedy for failure to adequately develop this reservoir; or what other action the state should take.

The governor’s office said DNR will act quickly to resolve this matter.

Gleason said Oct. 5 at the end of oral arguments in the case that the likelihood of an appeal was extremely high. She said it was her goal to get a decision out as soon as possible so the case could move on to the Alaska Supreme Court.

Editor’s note: see story in Jan. 6 issue of Petroleum News.

Waiting on snow for off-road travel

The Alaska Department of Natural Resources has not yet opened state lands on the North Slope to general off-road travel, Gary Schultz of DNR told Petroleum News today.

“Some approved vehicles can go on the tundra now,” he said, referring to rolligons, Tucker Sno-Cats and the new Tundra Cat, “but we’re waiting on snow to allow conventional vehicles out there.”

DNR oversees off-road travel for all state lands “between the Canning and Colville rivers within 120 miles or so of the coast,” he said.

“The current status is everything is very cold, the soil temperatures are all very cold, well below the minus 5 degree Centigrade requirement. We’re just waiting on some snow,” Schultz said.

Most ice road construction is under way. “They're making really good headway … using methods that take the low amount of snow into consideration,” he said.

“The farther west you go there is more snow. The Alpine area has pretty good snow, so they’ve been able to go forward with normal ice road construction there,” Schultz said, noting that even though there was some appreciable snowfall earlier in the winter, there has been a lot of wind, “so most of our state snow is out west on BLM land.”

Today, he said, DNR is “looking at seismic areas to give them site-specific approval based on snow cover.”

There are two North Slope seismic projects waiting for permission to travel off-road, both being done by Veritas, Schultz said. “One is in the Meltwater and Tarn area and the other out near Point Thomson. We have surveyors out in those areas checking snow depth. As of last week it looked like part of the Tarn area was okay — (in the vicinity of where) the Alpine ice road starts in the Kuparuk River unit. … So it looks like snow cover is adequate in some areas, and in some areas it’s too thin. We’re trying to find where the good snow is, so they can get started in those areas.”

Schultz said there has been light snow on the North Slope in the last few days, and “the forecast is for more snow, but they’re also forecasting 25 mile per hour winds.”

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