In an interview published in this week’s Petroleum News (“Wielechowski remains critical of HB 110“), Senator Bill Wielechowski argues that, under their state oil & gas leases, producers are required to undertake additional drilling when they can make a “reasonable profit.” (“I think you need to look at the legal obligation the companies incur when they take out a lease. Their obligations require them to develop the lease when they can make a reasonable profit.”).
This repeats an argument I first heard the Senator make repeatedly at a debate earlier this month with Senator Cathy Giessel and which he then repeated in a subsequent, extended exchange on Facebook following that debate. (“The leases … say they must produce, drill, develop when they can make a reasonable profit.”)
The problem? The leases which cover the vast majority of the existing North Slope fields don’t say what Senator Wielechowski says they do. Continue reading
Thoughts on Alaska Oil & Gas 