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DNR working permitting, shale task force Commissioner tells House Resources new hires reducing permitting backlog; Oil & Gas director says task force has handle on issues Kristen Nelson Petroleum News
A number of oil and gas issues were on the table Jan. 20 when Commissioner of Natural Resources Dan Sullivan updated the House Resources Committee on the department’s activities.
Extra money the Legislature provided to the department last year helped reduce the backlog of applications in the Division of Mining, Land and Water, Sullivan said.
Since approval of the extra funding the division has “made very significant progress” on the backlog and has also “chosen a system to revamp the technical aspects of our system within DNR.”
Brent Goodrum, director of the Division of Mining, Land and Water, told the committee the division has hired and trained some 31 employees since the extra funding was approved.
Significant work has been done on the backlog of authorizations, with a reduction of almost 20 percent, he said. At year end there were 2,095 authorizations, but Goodrum said that was a reduction of 560 from the number on July 1.
He said the division is also looking at better tools and will begin a pilot project in February to improve the process.
Gravel roads, investment The committee co-chairs, Rep. Paul Seaton, R-Homer, and Rep. Eric Feige, R-Chickaloon, told Sullivan they were concerned about the policy of requiring ice roads for winter work.
Seaton asked whether it wouldn’t be better to have gravel roads rather than repeatedly building ice roads, and suggested the committee hold hearings on whether gravel roads are warranted. Feige noted that since the state contributes a lot to the cost of winter work through tax credits, a lot of Alaska’s money soaks into the ground when the ice roads melt.
Sullivan said the roads to resources concept looks at that issue, and noted that there has been focus on a road to Umiat. He said the department has been working with stakeholders, but said DNR “probably got a bit of a late start … getting focus with the local communities and the stakeholders in the area.”
Seaton suggested that hearings in House Resources could involve local communities and provide balance on that issue.
Seaton also said he was concerned about facility access and asked Sullivan if DNR was working on facilities access issues with companies already active on the North Slope.
Sullivan said a lot of the work of the shale task force was focused on infrastructure, but said that while DNR has “continually looked at facilities access issues” those have played out through commercial deals between private parties.
Sullivan cited some progress in dealing with the federal government over the past year, particularly in the decision on the road to CD-5 in the National Petroleum Reserve-Alaska. Getting the decision the state felt was correct (after the Army Corps of Engineers originally denied ConocoPhillips Alaska’s application for a bridge across the Nigliq Channel of the Colville River) took two years and a lot of additional work, he said.
But it feels like two steps forward and one step back, Sullivan said, noting the state has had “some issues with the EIS at Point Thomson that are troubling to us” and is in close discussions about those issues with the federal government.
Point Thomson is near the Arctic National Wildlife Refuge, Sullivan said, and the state feels the federal government is bootstrapping “ANWR-related issues onto state lands, which we certainly don’t think is a way to move forward on our resource development, nor do we think that they have the legal authority to do those things.”
Shale task force Division of Oil and Gas Director Bill Barron gave the committee a North Slope shale oil development update (see Great Bear update on page 1 of this issue).
The Division of Oil and Gas has the lead on the shale task force, which also includes the Alaska Oil and Gas Conservation Commission, the Department of Fish and Game, the Department of Environmental Conservation and the Department of Transportation and Public Facilities, Barron said.
The task force has looked at existing permits required for drilling and facilities, and determined that the statutes and regulations in place “should be more than adequate to satisfy the drilling and development of shale operations,” he said.
AOGCC is reviewing their statutes and regulations relative to hydraulic fracturing, and Barron said that while he didn’t mean to speak for the commission, since more than 25 percent of existing wells in Alaska have already been fractured he didn’t think there would be major changes required.
The task force is now looking at how to achieve permitting efficiencies for shale development plans. Barron said there are a lot of ways to do shale development, but there will be a lot of permits and activity and the task force is trying to figure out if there are “ways to package or bundle or group permits relative to, say, a pad.” The idea, he said, is that once you understand the pad area, “can you streamline some of the permitting relative to those locations.”
The state is also engaging with federal agencies. Barron said that at this juncture it appears the U.S. Army Corps of Engineers will be the lead federal agency for shale development projects.
He said he’s asked the task force to focus on the infrastructure needed for shale development.
“Infrastructure will be key and sharing that infrastructure will be an advantage not only for the state but also for the operating companies, so we’re encouraging that activity,” Barron said.
Gravel sources, water sources, water disposal and water re-use will all play into a major shale operation, “which is heavily dependent on hydraulic fracturing, which is 90-some odd percent water driven.”
Environmental base data A proposal went to the governor for $1.1 million, which the governor included in his budget for fiscal year 2013.
“A million dollars of that is associated with environmental baseline work,” Barron said. The task force is looking at areas of concern or data that the group “believes is necessary to adequately establish baseline environmental work” for the shale area that has been leased by Great Bear and Royale.
Barron said the issue the task force is addressing here is that there are a lot of times when federal agencies will take the word of a state agency over that of an independent company, so the objective is to “try and help those companies establish what that baseline is.”
The remaining $100,000 is for the Division of Geological and Geophysical Surveys to work on an overall geological assessment of North Slope shale oil potential, Barron said.
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