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Oil and Gas taking cuts in new budget State Pipeline Coordinator’s Office will lose director, deputy director, get senior manager; become part of Division of Oil and Gas Kristen Nelson Petroleum News
Faced with falling revenues, agencies across the state are looking for places to cut, and as part of that the Alaska Department of Natural Resources is combining two divisions.
DNR Commissioner Mark Myers told a House Finance subcommittee Feb. 6 that DNR will be merging the State Pipeline Coordinator’s Office into the Division of Oil and Gas, replacing a director and deputy director with a senior manager.
Jean Davis, director of DNR’s Support Services Division, said $644,000 in reductions are proposed for the Division of Oil and Gas in fiscal year 2016, with the restructuring primarily in the director’s office and in a couple of work areas. She said the division has been working hard on process improvements with a lot of strategic changes. Five positions are proposed for deletion, including two student interns, positions currently vacant. Of the regular positions, one is currently filled.
Davis said reductions from the merger of the State Pipeline Coordinator’s Office into the Division of Oil and Gas come to more than $500,000, and include three position reductions. With the coordinator’s office reporting to the division, there will be a saving on management, she said.
Alaska LNG DNR has taken on a major responsibility for Alaska LNG under Senate Bill 138, Myers said.
DNR Deputy Commissioner Marty Rutherford heads the Alaska LNG team and Myers said the funding for that function under DNR includes Department of Law and consultants.
He described it as the equivalent of the state developing a national oil company. The state will take 25 percent of the gas, and will act like an energy company, owning and marketing the gas, or contracting out the gas marketing.
The Alaska Gasline Development Corp. is the state’s representative for the liquefied natural gas facility, he said, while TransCanada is the state’s agent for the pipeline and the gas treatment plant.
The state’s natural gas, however, is the responsibility of DNR and the Department of Revenue, and will require detailed contracts with producers.
The budget request for North Slope Gas Commercialization, headed by Rutherford, is eight full-time budgeted positions, according to a DNR overview, $13.225 million in unrestricted general fund, and represents 7.6 percent of DNR’s fiscal year 2016 operating budget request.
Myers noted that even with the add-on for Alaska LNG, DNR’s overall budget is still down. So while DNR took the lightest cut of the state’s departments, it absorbed a lot of cuts to add Alaska LNG, he said.
The fiscal year budget request for the Division of Oil and Gas is $23.095 million, 13.2 percent of DNR’s FY 2016 budget request, covering 125 full and part-time positions.
Other divisions of interest for oil and gas include the Division of Geological and Geophysical Surveys, with 52 full and part-time positions and a budget request of $8.622 million, 4.9 percent of DNR’s request; and the Division of Mining, Land and Water, with 210 full and part-time budgeted positions and a $26.596 million budget request, 15.2 percent of DNR’s request.
DNR’s budget request for FY 2016 is $175.146 million, down from $178.330 million in FY 2015.
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