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AOGCC, with new members on board, tackles old and new business Commission members talk about role of commission, preliminary response to permanent fund board request, continuing streamlining Kristen Nelson PNA Editor-in-Chief
The Alaska Oil and Gas Conservation Commission's three commissioners — two of them appointed by Gov. Frank Murkowski in February — are continuing to streamline the commission's business process, have a regulatory change in the works for shallow gas drilling and are finalizing a preliminary response to the request of the Alaska Permanent Fund Board that the commission investigate ways to increase North Slope oil recovery.
More important, with the new commissioners confirmed by the Legislature March 5, members are looking at the direction of the commission. Newly appointed commissioners Sarah Palin and Randy Ruedrich, and Dan Seamount, who has served on the commission since January 2000, talked to Petroleum News Alaska March 3, working day nine for Palin and Ruedrich. Many agencies involved Palin said the request from the Alaska Permanent Fund Corp. board of trustees that the commission investigate whether the state is getting the maximum amount of oil from its leases and House Bill 69, now in the Senate, “An Act relating to regulation of shallow natural gas leasing and closely related energy projects,” are indications that the Legislature and other agencies “may want this commission to shift gears a bit.”
The request from the permanent fund board, Palin said, asks the commission to do things beyond its purview:
“So we'll have to get the appropriate agencies onboard to work together in answering this.”
Seamount said the commission is working on a preliminary response to the permanent fund board. “I think the response to this resolution's going out pretty fast,” he said.
Ruedrich said there have been some tentative contacts with other agencies on the fund board request.
The Legislature, the departments of Natural Resources, Revenue and Environmental Conservation, and the Regulatory Commission of Alaska, all “have a portion of the petroleum regulation and revenue activity,” he said.
Ruedrich said he wants to know: “Are we on the same page? Are we at least in the same book? How can we become more attuned to our leaseholder producer community?”
And in addition to the significant players, he said, “we need to figure out .. who else — by statute, by custom, by evolution — has become a participant in this and … is all this helping? If not, what do we do to fix it?”
Public perspective Palin brings an outsider's perspective to the commission.
“It's an exciting opportunity and transition time is the best time to seize an opportunity,” she said. “This is a great opportunity for the commission to work real closely with these other agencies.”
“We know that oil and gas is Alaska's bread and butter,” she said, and “all these agencies have a stake in this.”
By statute the commission has a geologist, an engineer and a public member. Seamount holds the geologist seat, Ruedrich the engineer seat and Palin the public seat.
Palin said she believes one of the roles of the public member is outreach, both to the public and to other agencies, “letting people know what this commission does.”
Seamount noted that Palin, who was elected twice to the Wasilla city council and twice as mayor of that city, also brings management talents to the commission.
Balancing role Ruedrich said the public member also has a balancing role that “may not be explicitly obvious.”
When the commission deals with issues of geology, he said, “the engineer becomes nearly as uninformed as the public member in terms of the technology there. … correspondingly when we deal with the subsurface engineering… the geology member tends to be more parallel to the public member in that role.”
If the public member were either a geologist or an engineer, he said, it would probably cause the commission to “skew one direction or the other in terms of what was important.
“So the public member brings a balancing aspect to the perspective. … not everything is about metering oil and not everything is about reservoir management and not everything is about correlative rights…,” he said. Long-time commission client Ruedrich brings an interesting perspective to the commission.
“I have been a client of this commission off and on since 1972,” he said. “In 1975 … I was one of the co-authors of the principle document that our Arctic well design is based on.”
He says “most people have always viewed coming to the commission with some concern” out or respect for the commission or “sometimes downright fear of what was going to happen next.” The commission, he said, has “never been taken lightly.
“We have never been a lapdog for anybody in the industry.”
Ruedrich says he remembers when the companies went into the commission for the pool rules hearing for Prudhoe Bay development. “That was a bid day and we had several engineers work for literally months to prepare for those hears.” The hearings lasted two days. “They were very short. And very straightforward.” In the works Continuing work for the commission — in addition to its normal duties — includes the A-22 well explosion at Prudhoe Bay last year. The “investigation is still ongoing and may lead to various considerations,” Ruedrich said.
Seamount said BP Exploration (Alaska) Inc., the Prudhoe Bay field operator, will be providing the commission with additional information on the explosion. The commission has already determined, he noted, that there will be a new rule on annual pressure, the cause of the explosion.
Seamount said the commission's business process review continues. He is working on a proposed reorganization of the commission's staff. “There will be some changes as far as task allocation and teams,” he said, and changes to the commission's web page will make it easy for companies to identify the lead person for a specific application.
And a change in the commission's regulations for shallow gas drilling goes out for public notice this week, Ruedrich said.
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