Monthly Archives: August 2011

Alaska Oil| What I am learning from Norway (update for Day 6)

Earlier this month I wrote and published here a commentary on Why I am going to Norway.  This is the week that the Institute of the North policy tour is in the country.  Nils Andreassen, the Managing Director of the Institute, is posting daily notes on the meetings underway as part of the tour.  A link to those notes and the initial draft of the trip report is available here.

For my small part, I will post daily updates on the important points I am taking away  (in 140 characters or less) here, at my Facebook page and at the Perkins Coie Alaska Oil & Gas page .  At the end of the tour, I will gather my notes into a commentary on “What I learned from Norway.”  For the moment, however, please read below or click on either source to follow what, to me, are the important daily points of learning. Continue reading

Les Gara’s Differing Standards

In an Anchorage Daily News’ Compass piece today, Les Gara charges that some have “engaged in the politics of deception and personal attack” on him and Sen. Hollis French.  He says “[p]eople are entitled to their opinions. But they are not entitled to make up their own facts.”

Funny, “deception, personal attack and making up his own facts” was exactly the approach Les himself was taking just the other day in responding to a piece that I wrote for these pages, which later was reprinted by the Alaska Dispatch (“North Slope employment study:  Useful, but not determinative“). Continue reading

Alaska Oil| Why I am going to Norway

Earlier this year, the Institute of the North announced that it was organizing a policy trip to Norway, among other things to enable a closer look at the system Norway uses to encourage oil and gas development in the country.  Given the timing — the trip was originally scheduled to occur during what became the month that the Legislature was in special session — and the participants — the delegation included several Legislators — the trip received a fair amount of press.  The trip also received extensive criticism from Paul Jenkins and other so-called “conservative” commentators.

The trip later was rescheduled and takes place toward the end of this month.  While Jenkins’ and other’s similar criticism of the effort unfortunately may have caused some to change their plans, I am continuing to go — at my expense — because I believe that Norway’s oil policy potentially has something significant to offer Alaska and warrants a closer look. Continue reading

Alaska Oil| Misreading the Signals

Senator Joe Paskvan (D-Fairbanks) issued a press release yesterday in response to an article that appeared in this week’s edition of Petroleum News (“North Slope Booms:  Upcoming exploration drilling season shaping up to be busiest in decades“).  Sen. Paskvan’s press release includes the following statements:

It appears that Alaska’s tax credits under its production tax system are working to promote capital expenditures, including new exploration wells. Good news for the industry and the state, which relies upon the industry for revenues to its treasury. Exploration should mean increased oil production and increased throughput down the pipeline.

The names of the well drillers may not be familiar to many Alaskans. They include Great Bear Petroleum, Linc Energy, Repsol, Brooks Range Petroleum and UltraStar. This is strong evidence that the independents in the oil industry are both looking at Alaska as a place to do business and that they are actually coming to Alaska to develop our abundant oil resources.

This is good news, but I do not want to be overly optimistic until I have the opportunity to talk directly with the companies.  As we all know, there is always the potential for a gap between the plan and the performance.   I hope that the Alaska public will join me in learning more about today’s announcement.

The caution reflected in the last paragraph is highly appropriate.  Some observers are beginning badly to misread the signals that are being sent by recent developments and Senator Paskvan should be careful about falling into that group. Continue reading

Alaska Oil| North Slope employment study: Useful, but not Determinative

The Alaska Dispatch today carries a story on the North Slope employment study commissioned by the Senate Finance Committee last week.   According to the story, the study is to analyze “North Slope oil field hiring practices in an effort to figure out whether it’s true that the coveted jobs are not going to Alaskans and why.”

The study may produce interesting data, but the story raises a concern about how at least one Senator intends to use the data the study produces.  The article reports that the study and related hearings that Senator Dennis Egan (D-Juneau) plans on holding are  “aimed at getting oil industry officials and workers to shed light on the existing situation [the apparent underemployment of Alaska workers on the North Slope] and how it can be improved. Otherwise, it makes no sense for the state to give away state money when it is getting no new jobs in return, he said.” Continue reading

Alaska Oil| A Better “Picture Worth a Thousand Words”

Hollis French and Les Gara recently made much of a picture French snapped on his iPhone while “touring” the Portland Harbor.  That picture was much ado about nothing. At best, the oil & gas rigs featured in French’s picture brought the number currently operating in Alaska to a grand total of six .   That compares in the current week to  866 in Texas, 189 in Oklahoma,  175 in Louisiana, 161 in North Dakota, 114 in Pennsylvania, 84 in New Mexico, 67 in Colorado, 46 each in California (yes, Jerry Brown’s California) and Wyoming, 31 in Arkansas and 2o in West Virginia. Continue reading

Alaska Gas| The ADN editorial is wrong.

From the Anchorage Daily News editorial page, July 31, 2011:

Our View:  Initiative Required … Dan Fauske, head of the Alaska Gasline Development Corporation, and Bill Walker, general counsel to the Alaska Gasline Port Authority, provided reports on two very different megaprojects this month. … Both argue for state ownership of a pipeline to tap Alaska’s treasure of North Slope gas. Both require Alaskans’ initiative to secure our own energy and wider economic future. … Lawmakers and the governor need to vet both of these proposals, and if either makes sense, put the wherewithal of the state behind it — and we don’t mean with another round of studies. Alaska has the resources to take care of its own energy needs and gain by world demand. We need to get them out of the ground.

The ADN is wrong. The next step should be an Open Season by both projects. Prove that there is market demand before committing significant state funds. Consistent with recent ISER studies, Alaska needs to ensure that any use of state money produces returns at least as strong as those earned by the Permanent Fund. Sinking state money into projects without demonstrated market support undermines future Alaskans.