Jim Palmer, president of the Alaska Support Industry Alliance, says he has a few simple goals for his term as leader of the state’s largest oil industry support group.
“My plans are to support and promote development in the state, particularly oil and gas activities and mineral development,” Palmer said in a Dec. 7 interview.
In addition, the Alliance supports its membership, which comprises 400 or so companies along with individuals who support the petroleum and minerals mining industry as opposed to the producers themselves, he said.
The major issue confronting the oil and gas support industry in Alaska is obtaining a pipeline to bring Alaska’s large gas resources to market, according to Palmer.
“A gas transportation system would open up a huge area for economic development in Alaska,” he said. “More gas exploration activity, increased state revenues, potentially other industries spinning off because of access to a supply of natural gas, and, hopefully, lower energy costs here in the state would follow a gas line’s development.”
The one advantage sometimes not spoken about is that once you have a gas transportation system, added Palmer, people will actually go out and look for and find much more gas.
“It means an increase in business and job opportunities. I think that the big prize is the business and job opportunities for Alaska businesses and workers,” he said.
“Secondly, we need to ensure that the oil sector grows,” Palmer said. “If you look at oil production right now, it’s down below a million barrels a day. We have two segments — the base production, as I call it, Prudhoe Bay and Kuparuk. These fields must remain strong. At the same time, I believe we must encourage as much as we can the new producers, new explorers and new players that are coming to Alaska. These would include Pioneer Resources, which we are real excited about. With their Oooguruk project, they’ll be the first non-major to operate on the slope.”
Support for more explorationThe Alliance also wants to encourage more exploration.
“I understand that this year will be a fairly robust one for exploration on the North Slope,” Palmer said. “That’s good. The more we can explore the better. But we also must remember that once you find something, it must be developed and produced. Ensuring and enhancing the ability to develop discoveries is critical, and whatever we can do to expedite responsible development should be done.
“Personally, I think the regulatory reforms the Murkowski administration put into place were beneficial. Certainly, many of us believe the state permitting and regulatory framework is functioning better now than it was in the past. I hope the new governor doesn’t change it so resource development becomes more difficult again,” Palmer said. “Obviously, the tax debate last year was long and tedious. I certainly believe, and I think the Alliance does too, that since we’ve been through that debate, let’s see how this tax law works before making any additional changes. Let’s move on.”
As for the Alaska service sector, it is always changing, according to Palmer.
“That’s just the nature of the competitive marketplace.”
The more players, the betterLooking back 20 years, the early ‘80s brought an oil boom to Alaska. Toward the end of that decade, the state entered a recession or depression, he recalled. In the early 1990s, the industry went into a phase of forming alliances to cut costs and improve performance. This effort yielded mixed results. Some companies benefited, others did not. Since then, many players and contractors downsized or left the state, while others have expanded, Palmer observed. The Alaska oil patch has changed from this period.
“I think the producers, the explorers and the people in the oil patch are always looking for better ways of doing business. The more players you have the better the marketplace works.
“And the increased activity, hopefully, will allow greater opportunities in the market and greater success for Alaska businesses and Alaska-based businesses. And that is who makes up the Alliance membership,” he added.
Palmer said the Alliance is ready and willing to work with the Palin administration in whatever way it can to benefit the state.
“Regardless of whom we voted for in the general election, I think almost all Alaskans are hoping our new governor will do well and succeed, certainly in the gas negotiations but in other areas as well,” he said. “We’re all optimists at this point, and we are supporting her and her administration’s efforts regardless of political persuasions. Hopefully, things will go very well.”