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NEWS BULLETIN

August 27, 2001 --- Vol. 7, No. 105August 2001

Anchorage scoping meeting set for Katalla exploration

There will be an Anchorage scoping meeting Aug. 28 on a plan of operations for exploration at Katalla.

The Forest Service said Aug. 27 that Cassandra Energy Corp., as agent of Chugach Alaska Corp., submitted a plan of operations for oil and gas exploration at Katalla. Cassandra is requesting approval of a plan of operations and a special use permit to conduct exploratory drilling for oil and gas in the Katalla area of the East Copper River Delta.

The proposed drilling area is 56 miles southeast of Cordova. Drilling would be on private land, with lateral drilling extending into reserved oil and gas rights underlying public lands. The Forest Service said that its agreement with Chugach Alaska Corp. requires approval of a plan of operations and completion of an environmental analysis.

The Anchorage scoping meeting will be from 4-8 p.m. Aug. 28 at 3301 C St., Ste. 300. The Forest Service said the meetings are open house style, with Forest Service employees on hand to answer questions.

Outside firm lands state gas study contracts

The state Division of Oil and Gas has chosen a single firm, Econ One of Los Angeles and Houston, for a pair of studies relating to the commercialization of Alaska North Slope natural gas, Kevin Banks, DOG petroleum market analyst told PNA.

An analysis of now ANS gas will be valued for state royalties will be done primarily at Econ One’s Los Angeles office, Banks said. That study will seek to make the best case for the state in royalty calculations, and establish the state’s valuation methods in advance to avoid litigation and provide certainty for the companies.

The demand study will be handled primarily by Econ One at its Houston office and will estimate the cost of delivering ANS natural gas to various regions of the state. It will also evaluate energy use and costs by region, and whether ANS gas can be competitive with current energy sources.

Banks noted that no in-state companies bid on the ANS natural gas in-state use study contract — likely because most qualified in-state firms were already committed to the producer group.

British Columbia strike task force to develop energy policy

The British Columbia government has established a task force to develop the province's first long-term energy policy which it hopes will make the industry more "structurally and competitively sound."

Premier Gordon Campbell and Energy Minister Richard Neufeld said a report will be presented by Feb. 15, 2002, and a new policy will be unveiled two weeks later.

The major emphasis will be on the best ways to capitalize on growing demand for natural gas and to develop coalbed methane resources, but the task force will avoid the controversial issue of offshore oil and gas drilling.

The government said the British Columbia energy sector faces "major issues" relating to competitiveness, export policy, environmental protection and development.

Task force members include Jack Ebbels, deputy minister of the British Columbia Ministry of Energy and Mines and John Bechtold, a former senior executive with Petro-Canada.

CIRCAC calls for pipeline risk assessment

The Cook Inlet Regional Citizens Advisory Council is calling for a comprehensive review of the inlet's offshore and onshore pipeline.

The Cook Inlet RCAC said in Aug. 24 that the action comes on the heels of two recent pipeline failures in the Cook Inlet area, a sheen of unknown source first reported in Central Cook Inlet July 31 and a leak earlier in the month in Tesoro Alaska's product line in Captain Cook State Recreation Area.

The Cook Inlet RCAC said it identified a need for a Cook Inlet pipeline risk assessment over a year ago in a report on pipeline regulatory requirements which indicated that Cook Inlet pipelines are old and approaching the end of their expected life span.

"We cannot afford to wait any longer to begin a risk assessment of Cook Inlet pipelines. The pipelines, in some cases, have been in service for almost 40 years. It is time to evaluate the condition of the pipelines and get a clear understanding of what we are dealing with in Cook Inlet,” said Cook Inlet RCAC Executive Director James E. Carter Sr.

Cook Inlet RCAC said it "recognizes and appreciates the high level maintenance and monitoring work that industry has done with Cook Inlet pipelines" but said "there are still too many questions about the overall condition of the pipelines. It is essential that an independent review and assessment of Cook Inlet pipelines be undertaken as soon as possible."

The Cook Inlet RCAC said the Alaska Department of Environmental Conservation "has the funds necessary to start the process and should move forward without delay." Such an assessment, the Cook Inlet RCAC said, could be used as the basis for a pipeline forum to "bring industry, regulators, and citizens together to determine what steps need to be taken to improve the overall operation of Cook Inlet pipelines."

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