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.
Want a better snapshot of Alaska’s current oil patch condition? Take a look instead at the picture above, which captures a comparison of actual Alaska North Slope oil production so far for the current state fiscal year, compared with the levels forecast by the Department of Revenue just a few short months ago. The original is at the Department of Revenue’s website. The statistics are updated weekly.
The results? Average annual Alaska North Slope production now is forecast by the Department to fall for the first time since the early 1980’s to a level below 600,000 barrels/day. Think that will be offset by higher than forecasted prices? Probably not. The same page shows that the average actual realized price also is beginning to drop below the levels previously predicted.
In a May report, University of Alaska Anchorage Institute of Social and Economic Research (“ISER”) economic guru Scott Goldsmith predicted that, at current production and spending rates, Alaska Government will need to start drawing from savings (i.e., engage in deficit spending) by FY 2018. The picture above indicates that day of reckoning may be upon Alaskans even sooner.
Now that is a “picture worth a thousand words,” and I didn’t even have to take out my iPhone.