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Providing coverage of Alaska and northern Canada's oil and gas industry
May 2018

Vol. 23, No.19 Week of May 13, 2018

AOGCC removes sunset clauses

Kristen Nelson

Petroleum News

The Alaska Oil and Gas Conservation Commission voted unanimously at a May 2 public meeting to remove sunset clauses from 10 conservation orders issued in 2015 and 2016, the only orders to contain such sunsets. During that time the commission was proposing multiple changes to its regulations, including a five-year sunset for conservation orders, or a sunset when the operator for the property changed. The commission approved changes to its regulations late last year; the sunset was not included in those changes.

In 2016 comments on the proposed regulations, the Alaska Oil and Gas Association and ConocoPhillips Alaska objected to the sunset proposal. AOGA told the commission that sunsetting would create greater uncertainty, noted that the commission already had authority to alter orders and said the automatic sunset would place a large administrative burden on operators. ConocoPhillips said it strongly opposed the sunset proposal, calling it an “onerous rule” and saying the company saw “a high risk of new and unnecessary problems” with automatic expiration.

While the commission was considering the proposed regulatory changes it included sunsets in the 10 orders.

Dave Roby, AOGCC senior petroleum engineer, summarized the issue at the May 2 meeting. He said the sunset clauses were included at a time when the commission expected to make regulatory changes requiring sunsets. After putting out the proposed regulations the commission decided it didn’t need the sunset clause, Roby said, as the commission has the authority to open an order at any time.

The 10 orders included a 2015 area injection order for the Thomson sand at the Point Thomson unit, along with orders covering various other North Slope oil pools and units, several orders for Cook Inlet oil pools and two Cook Inlet area disposal orders.

Roby said there had been opposition to including the sunset, but none to taking it out.

- KRISTEN NELSON






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