Last week I gave a speech to the Alaska Support Industry Alliance discussing Judge Gleason’s recent decision on TAPS. The overheads I used for the speech are posted on these pages here.
In order to set the context for my remarks, at the outset I quoted a couple of pieces on the subject from Fairbanks Daily News-Miner columnist Dermot Cole’s column and blog. In one column, published on January 1, 2012, Dermot argued that Judge Gleason’s decision was a “good news for Alaskans.” (” … But the good news for Alaskans is that numerous oil company documents and expert testimony shows there is no reason to believe the pipeline will be shut down this decade or for a long time after. To the contrary, the oil companies are booking reserves far into the future and making plans to run the pipeline at lower rates, which means more decades of operation for the pipeline.”)
In my comments to the Alliance, I took issue with Dermot’s conclusion and suggested that the decision was largely irrelevant to the issue of Alaska’s economic well being. As I explained in the speech, the important factor in that regard is production rate — not reserve life — and Judge Gleason’s decision didn’t deal at all with current production rates. The further explanation of that view is reflected in the slides. Continue reading