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Touting Alaska gas in nation’s capital DNR commissioner goes to Washington, DC, to talk up state’s energy agenda, and to urge prompt Point Thomson permitting Wesley Loy For Petroleum News
Dan Sullivan, Alaska’s natural resources commissioner, recently lit out for Washington, D.C., with a 22-page presentation under his arm titled, “Alaska Gas Opportunities.”
By the time his weeklong visit was over, the report was marked up and dog-eared from showing it over and over to senior Obama administration officials, business people, diplomats and one notably contrarian congressman.
Sullivan’s inspiration for the April 23-27 trip was the recent evolution of Alaska’s energy development strategy.
On March 30, the three major oil companies operating in Alaska — BP, ConocoPhillips and ExxonMobil — said they would work together to assess a possible liquefied natural gas export project. Sullivan’s boss, Gov. Sean Parnell, had encouraged the companies to align on the LNG idea, a departure from their previous focus on constructing a gas pipeline into Canada.
On the same day, the state announced it had finalized a settlement with ExxonMobil over the disputed Point Thomson field. The field is considered important for any gas development, holding perhaps a quarter of the North Slope’s gas reserves.
‘Not just waiting’ Sullivan, in a May 7 interview with Petroleum News, said he took the Washington trip to tout Alaska’s “comparative advantages,” and to urge federal officials not to allow further permitting delays for the inaugural Point Thomson development.
ExxonMobil is waiting for a wetlands permit from the U.S. Army Corps of Engineers for its planned gas condensate project at Point Thomson, located on the Beaufort Sea coast next to the Arctic National Wildlife Refuge. The company’s original target date for first production has slipped by more than a year due to repeated delays in finishing an environmental impact statement. The Corps now expects to issue the final EIS in June.
With the alignment of the major oil companies, and the strong market for gas in Asia, the time to promote Alaska is now, he said.
“We’re not just waiting,” Sullivan said.
That presentation he took on his trip was designed to explain, starting with the basics, what Alaska has to offer in terms of billions of barrels of oil and many trillions of cubic feet of gas.
Sullivan pointed out that Alaska already has a long and unique record of Asian exports via the ConocoPhillips LNG facility on Cook Inlet.
Further, Sullivan made sure to point out that Alaska gas is “not part of the shale LNG export debate in the Lower 48,” as Alaska exports wouldn’t affect Lower 48 gas supply and prices.
And he explained that exporting North Slope gas would “help Americans — they’re called Alaskans.”
Long visitation list Certainly, Sullivan knows his way around Washington. Under President George W. Bush, Sullivan served as the assistant secretary of state for economic, energy and business affairs.
After that, he served as Alaska’s attorney general from June 2009 until December 2010, when Parnell appointed him natural resources commissioner.
Sullivan’s Washington visitation list was lengthy. He said he had meetings with:
• Deputy Secretary of Energy Daniel Poneman, the department’s second highest ranking official.
• Deputy Interior Secretary David Hayes, the department’s second highest ranking official.
• Bob Cekuta, principal deputy assistant secretary in the State Department’s new Bureau of Energy Resources, assigned to Tokyo from 2007-09.
• White House official Heather Zichal, the deputy assistant to the president for energy and climate change.
• Daniel Yergin, prize-winning author, CNBC energy analyst and chairman and founder of IHS Cambridge Energy Research Associates.
• Ichiro Fujisaki, Japan ambassador to the United States.
Sullivan said he also made a presentation at the Center for Strategic and International Studies, heard from Goldman Sachs investment bankers on global LNG trends, and met with potential LNG customers.
Export resistance Sullivan isn’t the first Alaska official to come calling in the nation’s capital, and he surely won’t be the last.
The fact is, gas development has defied one Alaska governor after another. Any project to develop the state’s gas involves long lead times, enormous cost and huge risk. And so the gas has stayed stuck in the ground decades after its discovery.
An explosion of shale gas in the Lower 48 has stoked interest in possible U.S. gas exports, and this in turn has provoked a backlash from people such as Rep. Ed Markey, D-Mass. He has introduced bills to discourage exports, saying the gas is needed at home.
After the announcement about BP, ConocoPhillips and ExxonMobil aligning on a possible Alaska LNG project, Markey put out a March 21 press release saying in part: “When we bought Alaska from the Russians for only $7 million, we got a great deal. If America now turns around and allows the big oil companies to sell off America’s natural gas resources in Alaska and elsewhere to the Chinese, Uncle Sam really would deserve to be called Uncle Sucker.”
Markey asserted that exporting Alaska gas could increase domestic prices, hurting American manufacturing.
Naturally, Sullivan made a point of meeting with Markey, too, during his Washington week.
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