September 22, 2016 --- Vol. 22, No. 35September 2016

DNR approves Prudhoe POD

State Natural Resources Commissioner Andy Mack has approved BP's 2016 Plan of Development for the Prudhoe Bay field on the North Slope, taking a highly contentious issue between the state and industry off the table.

BP is the operator of the Prudhoe field on behalf of itself and other owners including ConocoPhillips and ExxonMobil.

A dispute had developed over a request by Gov. Bill Walker and former Attorney General Craig Richards for confidential gas marketing information, which BP and other Prudhoe owners had rejected.

Had it not been resolved the state's approval of the Plan of Development, a kind of field operating permit, could have been denied, leading to litigation that would have undercut support among the companies for Walker's new initiative for a state-led natural gas pipeline.

In a statement, BP spokeswoman Dawn Patience said, "The State of Alaska approved the annual Prudhoe Bay Plan of Development (POD) revised version submitted by BP and the other PBU working interest Sept. 1."

"As BP said previously, we believe our POD submittal satisfied all of the Prudhoe Bay Unit Agreements and the POD regulation requirements. The Alaska Dept. of Natural Resource, division of oil and gas agreed and approved the plan," Patience said in the statement.

The controversy has been brewing since May, when DNR told BP its annual POD was "incomplete" because the gas marketing information was not included. Previously the state has not required oil and gas marketing information and there is no requirement in current state regulations. The requests had come from the Department of Law.

In letters to BP from Division of Oil and Gas Director Corri Feige dated Sept. 16 and followed up by a Sept. 20 letter from Mack approving the plan, the DNR noted efforts by BP and the other companies to provide more information on preparations for major gas sales in confidential briefings, and including written materials.

However, the state administration backed away from requests that the companies provide concrete assurances they will market gas, instead relying on public statements of commitment to the Alaska LNG Project.

The Sept. 16 and Sept. 20 letters to BP also refer to commitments by the Prudhoe owners to "specific, measurable, verifiable actions to progress Major Gas Sale through the Alaska LNG Project" made in presentations to the Legislature and the public.


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