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AOGCC approves billing to industry for fiscal year 1998 calendar year volumes of oil, gas, water as reported by operators basis of cost allocations Kristen Nelson PNA News Editor
The Alaska Oil and Gas Conservation Commission met July 1 to approve cost allocations to industry. The Legislature approved a new funding method for the commission this year. The commission’s budget is approved by the Legislature, and then the commission bills the operators of the state’s fields based on the volume of produced oil, produced gas, injected water, injected gas and disposal water.
The commission’s fiscal year 2000 budget of $3 million includes a one-time item of $321,900 to cover the cost of moving the agency in with the Regulatory Commission of Alaska.
Dividing it up The budget approved by the Legislature includes an estimated $10,000 which the commission will recover through permitting fees. And, as industry attendees at the July 1 meeting pointed out, it also includes $100,000 from the U.S. Environmental Protection Agency to fund the commission’s supervision of downhole waste disposal. With those items deleted from the approved budget, $2.9 million remained to be split up among the state’s oil and gas producers.
The Legislature mandated that the cost of the commission be split according to the volumes of oil and gas produced and gas and water injected (including water disposal). The commission receives production figures from the operators by pool within each field and will bill the operators with subtotals shown for each pool. Figures provided by the commission show a total volume of 2.54 trillion barrels (oil, water and gas equivalent) based on calendar year 1998 figures with any corrections received by the commission through the end of May. Approximately 17 percent of that total, 429 million barrels, is oil; 41 percent (1.05 trillion barrel equivalents) is gas — produced and reinjected; and 42 percent (1.06 trillion barrels) is water.
Prudhoe Bay, which includes the main Prudhoe Bay reservoir as well as Lisburne, Niakuk, West Beach, North Prudhoe and Midnight Sun, is 65.2 percent of the total bill: $1.9 million.
The Kuparuk River field is next, almost $490,000, 16.7 percent of the total. Point McIntyre, with 6.3 percent of volume, comes to almost $185,000. Endicott accounts for 5.3 percent of volume and will be billed more that $155,000.
Jack Hartz, the commission’s petroleum reservoir engineer, said that while the methodology is different than for the old conservation tax, the percentages by field are similar.
The commission was concerned to control administrative costs for the new program and had planned to send a single annual bill, payable within 20 days. Because of the size of some of the bills industry requested and the commission agreed that the annual bill can be paid either annually or in quarterly installments.
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