|
Administration talks opportunities at RDC Governor, AGDC president, DNR commissioner bring positive view of North Slope developments, gas line work to annual conference KRISTEN NELSON Petroleum News
The state administration put its collective foot forward with positive messages at the Resource Development Council annual conference in Anchorage Nov. 16 and 17.
Gov. Bill Walker said Nov. 16 that he’s convinced the state’s fiscal issue will be resolved and talked about what his administration has done to assure that oil and gas is a continuing part of Alaska’s future, including pushing for an Alaskan as Interior secretary in the Trump administration, or at least a western person.
He called tax credits the biggest oil tax issue for the state and said they would have been paid off as part of the fiscal plan - but that didn’t pass the Legislature, so the state paid off what was statutorily required.
On development at Greater Mooses Tooth in the National Petroleum Reserve-Alaska, Walker said the administration has been to Washington, D.C., and made calls to move forward federal approval on those projects. On federal issues he said mitigation costs extracted out of projects in Alaska makes it less likely projects will happen.
Walker mentioned a Bureau of Land Management request for what he called duplicate GMT air monitoring, and said the administration pushed back on that.
As for what the state can do to reduce project costs on the Slope, Walker said the administration has been in discussions on putting together “Deadhorse East” - perhaps a toll road built by the state on the Slope similar to the Red Dog Mine road.
Removal of Alaska from the current five-year federal outer continental leasing program was still a rumor when Walker spoke, and he said the state did everything it could to see that Alaska was left in the five-year plan, including discussions with Interior Secretary Jewell when she was in Fairbanks. The state also made nominations for the sale.
Walker called for working together collaboratively for a healthy oil and gas industry to ensure the state can be competitive with other parts of the world.
The resources team Walker said he believes the administration has the right team in place for oil and gas development, including Department of Natural Resources Commissioner Andy Mack, John Hendrix as oil and gas advisor, DNR Deputy Commissioner Mark Wiggins and Division of Oil and Gas Director Chantal Walsh.
Mack, speaking Nov. 17, told the conference that the entire oil and gas team now has experience working projects and knowing what a private balance sheet looks like.
Mack spent four years with a private equity firm and said he looked at balance sheets in Alaska which were getting smaller month over month.
Oil has funded the state in the past and there are significant opportunities for new oil, which the state needs to protect, he said, citing work by BlueCrest, Furie and Hilcorp in Cook Inlet, by Doyon and Ahtna in the Interior, as well as numerous North Slope projects: reinvestment by BP, Armstrong’s Pikka discovery, ConocoPhillips at Greater Mooses Tooth and Fiord West and Hilcorp at Milne Point.
With the change in administrations in D.C., Mack said the state has to be prepared to work for a reset on anything the outgoing administration does to prevent development.
AKLNG Keith Meyer, president of the Alaska Gasline Development Corp., speaking Nov. 16, said he thinks it’s going to be a great time to be developing an infrastructure or energy project in Alaska.
Since AGDC is owned by the state it would bring the maximum value to Alaska through infrastructure development, he said.
Meyer said that while there is a current surplus of LNG as a result of developments following the 2009-11 demand pull, industry expects a return to equilibrium in the 2020s and Alaska wants to be there to meet 2023-25 demand.
But an Alaska project has to be competitive, he said, as some 800 million tons of projects will be chasing an un-served demand of some 100 million tons in that 2020s window.
He said AGDC is targeting the end of the year to complete the transition to a state-led LNG project, but won’t be doing it alone. He said the Alaska LNG project can be made attractive to infrastructure funds and infrastructure investors. The project has a proven resource and is in the neighborhood of the major Asia Pacific market.
The project is marketing itself as the neighborhood supplier, he said, and has the advantage of a direct route - the gas doesn’t have to go through a third nation, and would provide seven day delivery door to door to Asia Pacific markets.
AGDC is looking at getting third-party low cost financing and a tax exemption from the federal government.
Meyer said the stable energy source an AKLNG project would provide would assist large mining projects with getting financing.
And while the project would need large investors, there would also be the opportunity, Meyer said, for Alaska investors such as Native regional corporations to participate.
| 