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Williams Alaska Petroleum president outlines growth plans in Alaska New EPA sulfur limitation regulations could disrupt supplies in the state, says Randy Newcomer Tom Hall PNA Contributing Writer
Reflecting the parent company’s business strategy, Williams Alaska Petroleum Inc. President Randy Newcomer told the 2000 Alaska Oil and Gas Association’s annual meeting May 22, “We are trying to do our part to continuously grow our portfolio of interdependent businesses.”
To underscore that statement, Newcomer provided a brief overview of the company’s presence in Alaska and a few of Williams Alaska’s future plans.
Besides increasing North Pole refinery production capability to 215,000 barrels per day over the past two years (primarily for jet fuel in anticipation of growth in the air cargo industry), the facility produces over 60,000 BPD of refined petroleum products for a variety of consumers. The company also owns and operates a 700,000 barrel fuel terminal at the Port of Anchorage and has 28 retail convenience stores in Alaska’s major cities.
New directions Two examples of Williams Alaska’s mission to develop interdependent businesses are about to become reality as Newcomer reviewed the company’s latest developments.
Two years ago Williams Alaska and a partner, the Lynxs Group, began construction on an air cargo handling facility at the Anchorage International Airport to serve a growing air cargo industry. Newcomer said that the $20 million facility, called the Alaska CargoPort, will be ready for occupancy this summer and is close to announcing its first tenant.
Williams purchased Mobil’s 3 percent interest in the trans-Alaska pipeline system. “This purchase is still pending, but it is expected to close within a few weeks,” said Newcomer.
Williams Alaska’s North Pole refinery processes North Slope crude is transported from Pump Station No. 1. “Our 3 percent TAPS purchase is a good fit for our refinery volume,” he said.
Has the EPA gone too far? Newcomer warned that new gasoline and diesel fuel sulfur limitations slated by the U.S. Environmental Protection Agency to take effect between 2004 and 2006 will significantly impact not only the state’s refiners, but its consumers as well. The new regulations would limit gasoline sulfur content to 30 PPM and highway diesel sulfur content to 15 PPM.
“The technology to achieve these drastic sulfur reductions is currently either not yet available or is very expensive to employ,” Newcomer said. He said that this would be especially true for Alaska where the demand for those products is much smaller than the rest of the country.
Refiners, Newcomer explained, would have to decide to either cease making those products or invest hundreds of millions of dollars in new facilities with little or no return.
“Either way,” he said, “the consumer will be faced with increased fuel prices and the prospect of supply disruptions until all of the logistics can be worked through.”
Though the company hasn’t decided on a course of action yet, Newcomer said that would happen over the next year or so as “the impact of the regulations” became clearer.
North Slope gas Newcomer acknowledged that a natural gas pipeline to Interior Alaska would likely decrease that region’s demand for Williams’ heating fuels. Williams Energy is the United States’ second largest transporter of natural gas and wants to become a player in the development of Alaska’s natural gas.
“You could say that natural gas is in our blood,” said Newcomer. “We would like to participate in whatever project is found to be feasible to bring North Slope gas to market. Whether it be compressed gas, LNG or GTL’s, we have the pedigree and experience to be there.”
Echoes for Alaska’s leaders Newcomer said Alaska had to stop relying on natural resources as its only economic base. “We must find other avenues to economic growth or Alaska’s future will be in great jeopardy.”
He said it would take the combined efforts of government leadership and the business community to accomplish such an undertaking: “But it must be done and we can’t wait, wringing our hands in hope of finding another Prudhoe Bay to bail us out.”
He cited the “fledgling” air cargo industry as an example whose potential should be recognized and nurtured to ensure its success. And, Newcomer concluded, “There need to be many more such examples.”
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