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THE INDEPENDENTS 2003: Alaska’s future: More exploration
Frank Murkowski Governor of the state of Alaska
When the trans-Alaska pipeline system delivered its first drop of
oil in 1977, Alaska’s role as America’s most prolific oil province was no longer in doubt.
Designed to carry 2 million barrels of oil a day, because of declining production today the pipeline carries less than half of that. The well-known secret, Alaska’s major oil and gas producing fields like Prudhoe Bay and Cook Inlet are maturing.
Major oil and gas companies like ARCO, Exxon, BP and others helped push Alaska’s production for over a quarter of a century, and they represent an important part of Alaska’s industrial past. The independent producers represent Alaska’s future.
Tax credits to boost exploration In June of this year, I signed Senate Bill 185 into law. The bill contained several important tax credit provisions to encourage new exploration drilling for oil and gas.
In the oil-producing world, Alaska had lagged behind because the state did not offer exploration incentives that other regions did. As a result we did not see the capital influx that once was common place during the years following the Prudhoe Bay discovery.
Under SB 185, as passed by the Alaska State Legislature, the tax credit for exploration kicks in for exploration at least three miles from an existing well and at least 25 miles from a unit under a plan of development.
Contrary to popular belief, Alaska is not running out of oil. Our old fields may be maturing, but we have incredible potential in the National Petroleum Reserve-Alaska, and the 1002 area of the Arctic National Wildlife Refuge which together are estimated to hold billions and billions of barrels of oil.
Add to this the Bristol Bay region and numerous other areas that petroleum geologists have identified. These prospects represent significant projects outside the traditional North Slope deposits.
Independent oil and gas producers like EnCana, Armstrong, Anadarko, Forest Oil and Pioneer have the flexibility to look for new discoveries that might not interest the larger players, who focus on getting more from existing fields, instead of exploring for new ones.
Increased access a priority As the largest state in the Union, all of Alaska’s businesses know the challenges faced by access.
Several key transportation projects that would provide better access to resources are currently on the fast track towards completion.
Possibly the most significant is the road to Nuiqsut adjacent to the NPR-A. This project has the potential to open up vast tracts of state land rich in oil and gas deposits. The road would also provide access to NPR-A, a part of Alaska that has long been recognized as an area with immense oil and gas potential.
The Bristol Bay region represents an example of this administration’s commitment to resource development.
Known for its fisheries resources, the Bristol Bay region may also be rich in oil and gas deposits.
With the overwhelming support of the Bristol Bay communities, we are proceeding with exploration licensing to be followed up with several lease sales planned for the fall of 2004 and late 2005.
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