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Oil Patch Insider Alberta cleans up royalty house; Alyeska wins operator award; JPO moving; Foothills road studies this summer
Whatever Alberta’s oil and gas producers think of the province’s new royalty scheme — and the displeasure is close to universal — Alberta Auditor-General Fred Dunn isn’t about to give them a break.
Following earlier criticism that the old royalty regime did not collect what Alberta was entitled to and failed for six straight years to meet the bottom end of the government’s targets, he has promised a report by October that will show whether the pieces are in place to ensure that what is due is paid.
Dunn said he will also conduct a review next year to identify whether the regime is properly in tune with changing prices for conventional crude, oil sands crude and natural gas.
He told the Alberta legislature’s public accounts committee that the royalty system has historically contained structural flaws that combined the three separate commodities under a single “blurred” performance measure.
It was “very hard to understand what it was that was being received on behalf of Albertans,” Dunn said.
He also said the Conservative party government — which has been in power for 38 years — missed its own royalty collection target of 20-25 percent of industry net revenue for six years.
While unable to estimate the lost royalties, he had previously reported that billions of dollars were potentially left uncollected.
Complicating matters is the fact that the government reports its royalty data on a three-year rolling average, Dunn said.
He has asked the Energy Department to create three separate performance measures for the commodities and start reporting annually instead of on a rolling basis.
Dunn said the regime review is needed because the old system set rate caps that were outdated by six or seven years.
Energy Minister Mel Knight said his department expects to deal with the problems by Sept. 30 and is working with Dunn to “set up the proper targets and markets.”
—Gary Park
Alyeska wins API Operator Award Alyeska Pipeline Service Co. has received the American Petroleum Institute’s 2008 Distinguished Award for Outstanding Safety and Environmental Performance in the large pipeline operator category. The award was presented in April at API’s 60th annual Pipeline Conference in Fort Worth, Texas.
Alyeska operates the trans-Alaska oil pipeline from Alaska’s North Slope to the Valdez Marine Terminal, moving some 750,000 barrels per day of crude oil.
“This is among the industry’s highest honors and it is not awarded lightly,” Alyeska President and CEO Kevin Hostler said in a statement. “API sets rigorous minimum criteria to just apply, and simply meeting those targets does not guarantee a company will receive the Distinguished Operator Award. The fact that Alyeska has been honored with this speaks to the pride and teamwork of TAPS employees who are committed to safety, the environment and the integrity of the pipeline,” Hostler said.
Alyeska previously won the Distinguished Operator Award in 2005, the company said.
Alyeska has received five API environmental awards in the past and API said the company “has made a step-change improvement in safety performance.”
API cited Alyeska’s “initiatives in preventing soft tissue injuries, its outstanding mainline integrity program (zero pipeline releases due to corrosion), its significant engagement with external stakeholders, and taking an all-hazards approach to business continuity.”
Alyeska also won the API Large Operator Environmental Performance Award, API said, and reported zero employee Occupational Safety and Health Administration lost-time and-or restricted work-injuries (zero fatalities; zero days away from work cases; and zero job transfer or restriction cases).
—Petroleum News
188 Northern Lights new home to JPO Petroleum News reported in its May 10 issue that the Alaska Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects would be moving to the 188 Northern Lights Building in Anchorage in the fall. The 188 Northern Lights Building is the new Midtown building where Denali — The Alaska Gas Pipeline has its offices.
The OFC Alaska office currently rents space from the Joint Pipeline Office at 411 W. 4th Avenue in Anchorage.
It turns out that all of the federal personnel at JPO are moving — and probably state JPO personnel as well.
JPO said in its May 8 newsletter that a general services agreement has been signed formally authorizing the move of federal personnel associated with JPO. JPO-associated personnel from the Bureau of Land Management, U.S. Department of Transportation PHMSA and OFC will be moving to 188 Northern Lights, with the move expected to begin in July.
JPO said the Alaska Department of Natural Resources is working to reach an agreement to co-locate JPO’s state personnel in the same building.
JPO is an umbrella organization of the state and federal agencies with regulatory and oversight responsibilities for the trans-Alaska oil pipeline and other non-in-field oil and gas pipelines in Alaska.
—Petroleum News
Engineering, environmental studies for Foothills road The Joint Pipeline Office provided an update on the proposed state road to Umiat in its May 8 newsletter.
JPO said the Alaska Department of Transportation and Public Facilities is preparing for engineering and environmental field studies on potential road corridors within the project study area this summer field season.
The proposed all-season road from the Dalton Highway to Umiat, the Foothills West Transportation Access Project, would allow access to potential oil and gas resources in the northern foothills of the Brooks Range, as well as access to the National Petroleum Reserve-Alaska from Umiat.
Two phases are anticipated for the proposed project: An 80-mile road from the Dalton Highway to the Gubik oil and gas fields east of the Colville River and a second phase extending the road 15 miles to the Colville River and potentially providing access to the state airport at Umiat by bridge. The studies planned for this summer are in advance of developing permit applications.
JPO said specific engineering field studies anticipated for this summer include imagery acquisition; topographic mapping; hydrology investigations; geotechnical investigations; and road alignment evaluations.
Anticipated environmental field studies include wetlands mapping; fish and wildlife evaluation; subsistence evaluation; and cultural resource identification.
—Petroleum News
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