Son carrying on Jim White's legacy
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James "Jim" Wynn White plans to re-enter the Pelch Well on Beaver Loop Road in Kenai; father property rights advocate
Kay Cashman Petroleum News
The son of fierce property rights defender James "Jim" Wynn White is continuing his father's legacy by re-entering the Pelch Well on Beaver Loop Road in Kenai, Alaska.
James "Jim" Arnim White, a University of Alaska Fairbanks graduate with a doctorate in energy engineering from Texas A&M University, works as a renewable energy engineer in Washington state. After his father's company, Alaskan Crude, won an Alaska Supreme Court case against the Alaska Oil and Gas Conservation Commission, AOGCC issued Order 206, which allows them to keep their existing $200,000 bond in place to suffice for the Pelch well.
And per the court decision, they are no longer responsible for the plugging and abandonment of the Burglin 33-1 well in Prudhoe and a shallow oil well in Katalla east of Cordova, he said in a recent email to Petroleum News.
"Instead of having to post an additional $1,000,000 in bonding, we can now use those funds to complete the Pelch well on Beaver Loop Road in Kenai to help provide gas for Southcentral Alaska."
"My father would be so proud," he wrote. His father passed away on Jan. 22, 2021, in Houston, Texas.
Timing, location White said the re-entry of the Pelch well would "probably take place in the summer of 2025."
While he and his family currently live in Washington, "we still have our shop and an apartment in Kenai. ... We can drive right out to the well site that's only a couple of miles from CINGSA," he noted.
"Although they need some work, we have two workover rigs at the shop, which can be used for reworking wells and drilling shallow gas wells," he added.
Against importing LNG "My father's idea for how Alaskans could solve the current natural gas shortage they find themselves in is something that should be considered," his son wrote to Petroleum News in an email. "Instead of waiting for some white knight to swoop in and save them by importing LNG, Alaska should open up development of Alaska's natural gas to Alaskan residents," he wrote.
"His idea was to give landowners in Alaska the right to explore for natural gas beneath their own property. The state of Alaska's DNR has had their chance to develop onshore gas in Southcentral Alaska; now it is time to give individual Alaskans the opportunity to develop their own resource. The state could start by releasing and making public ALL of the seismic data, maps, and analysis in their possession FREE to Alaskans. Alaskans should be able to see if there is a potential gas reservoir beneath their land," White wrote in the email to Petroleum News about his father's solution to the natural gas shortage in Southcentral Alaska.
"Any landowner should be able to then invest in drilling a well on their land in exchange for getting 87.5% of the gross revenue that comes from the well. To ensure that all the surrounding landowners within a square mile of the well also benefit, every landowner should receive a 12.5% royalty, risk free, right off the top for their proportionate share of gas that is produced beneath their property from day one," he wrote.
"If Alaska's Constitution won't allow giving away 100% of the royalty, then the state should at least share a majority of the royalty with the landowners, otherwise there is no benefit to having a gas well anywhere near their property," he added later.
"Accounting for the drilling and development costs would be on a 'last-in, first-out' basis. In other words, if the drilling costs are greater than anticipated, then contributors that pony up the last funds to get the well on should be entitled to get five times their money back before earlier investors do," White continued.
"Native corporations and Alaska Mental Health Lands landowners would benefit by getting their royalties as well, but details would need to be worked out if they only own the sub-surface mineral rights and not the surface rights. One possible solution may be to give the surface owners an overriding royalty on top of the 12.5% that would go to these important key stakeholders. This would make it slightly less attractive for investors, but not by much. The key is to foster a new and entrepreneurial way of thinking for ALL property owners in Alaska," he said.
"There is a LOT of shallow gas, 5,000 feet or less, in Southcentral Alaska that could be drilled relatively inexpensively with small workover rigs like the ones we have in Kenai. But having to come up with an additional $400,000 cash plugging and abandonment bond can make it unaffordable for most Alaskans. Instead of cash, individual Alaskans should also be able to use the equity in their land as bonding for the plugging and abandonment costs," White said.
"I would add that instead of importing LNG, Alaska should be investing massive amounts of money in energy efficiency and renewables. Energy efficiency alone could cost-effectively reduce Southcentral Alaska's gas needs by at least 20%, while also lowering everyone's gas costs, and generating thousands of local jobs. There is an excellent business case to be made for Alaska to invest in both of these cost-effective strategies instead of leaving it in Permanent Fund bank accounts of a bunch of New York stockbrokers," White said.
"These ideas still need to be flushed out, but now is the time to have this conversation in Alaska," he finished.
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