Elwood Brehmer

Commission sticks with 10 days for comment on fracking

Nobody appears happy with the Alaska Oil and Gas Commission’s proposal for notifying the public about plans to hydraulic fracture oil and gas wells in the state.

The commission has suggested providing 10-day periods for public comment on well fracking applications immediately following the publishing of redacted versions of the applications to the commission’s website.

The proposed regulatory change followed a mid-December public hearing on the issue requested by Bob Shavelson, a director of the Homer-based local environmental watchdog group Cook Inletkeeper.

Japanese consortium drops Cook Inlet LNG effort

A global buyer’s market for liquefied natural gas has doomed a Southcentral gas export project.

Resources Energy Inc., a consortium of Japanese companies and municipal governments interested in Alaska’s natural gas, is stopping its work to develop a small Cook Inlet LNG plant and will close its Anchorage office on March 30.

Depressed LNG prices stemming from a global oversupply forced the venture’s hand, according to REI President Eiji Hoshio in a letter provided to the Journal.

Budget bills on the move; oil tax hike heard in House Finance

JUNEAU — The major budget bills are moving in the Legislature and the state House may have the most controversial bill of the legislative session, a bill raising oil taxes, ready for floor action the week of March 27.

Last week the Senate passed its Permanent Fund restructuring bill, Senate Bill 26, which makes a major dent in the projected $2.8 billion deficit in fiscal year 2018, the budget year that begins July 1.

Pebble, EPA pushing to settle lawsuit

With the sides reportedly closing in on a settlement, an Alaska federal judge agreed to hit pause on Pebble Limited Partnership’s lawsuit against the Environmental Protection Agency one more time.

On March 20 U.S. District Court of Alaska Judge H. Russel Holland signed an order to stay proceedings in the suit until May 4, the deadline by which he expects Pebble and the EPA to have reached a deal to close the case, the order states.

Explorers ready to spud Slope shale well

A small exploration partnership is prepping to drill a second well in the coming weeks into a shale prospect in a little-explored portion of the North Slope.

Australian-based 88 Energy Ltd. announced in a March 21 release that Doyon Drilling Inc.’s Arctic Fox drilling rig had reached the Franklin Bluffs gravel pad, putting the company on schedule to spud the Icewine-2 appraisal well in April.

88 Energy is the majority owner in its partnership with Houston-based Burgundy Xploration; they operate under Accumulate Energy, which is an 88 Energy subsidiary.

North Slope powers take on state over rich oil leases

ConocoPhillips insists demands by top state Natural Resources officials to push the company to drill contested leases near a North Slope village and put up millions in bonds to back the activity are arbitrary and based on a flawed recollection of key events.

The biggest North Slope oil producer made the claims in a March 15 filing requesting DNR Commissioner Andy Mack reverse his mid-February decision to prevent the company from adding the leases to the large Colville River oil unit it operates.

Oil tax bill moves on party vote

Debate on the House Majority’s oil tax and credit bill focused less on its broad monetary implications and more on late changes to that minority Republicans argue were not adequately vetted before the legislation was moved out of the Resources Committee March 14.

The Democrat-led House Bill 111, introduced by Resource Co-Chairs and Anchorage Reps. Geran Tarr and Andy Josephson, was sent to the Finance Committee for further examination after a 5-4, party line vote.

Boosted by broadband, Alaska Communications posts net gain

Alaska Communications Systems Group Inc. reported net income of nearly $2.4 million in 2016 and a $195 million credit and loan package that will help refinance existing debt, company officials said in a March 14 investor call.

Net income in 2016 —Alaska Communications’ first year as solely a broadband and IT service provider — was down 81 percent for the year, but up nearly five-fold year-over-year in the fourth quarter at $1.6 million.

Village corporation says ConocoPhillips will drop drilling effort

Despite state demands, ConocoPhillips will not drill North Slope acreage this winter that it spent most of 2016 trying to acquire, according to an executive of the company that controls access to the land.

Kuukpik Corp. CEO Lanston Chinn said in a March 10 interview that his company was recently informed by ConocoPhillips officials that the major producer would not drill an oil exploration well on jointly held leases near the Native village of Nuiqsut in the remaining weeks of the waning North Slope winter work season.

Armstrong says oil prospect could double in size

Spanish oil major and North Slope explorer Repsol excited Alaskans last Thursday with a promising but ambiguous press release that hinted about success in the company’s joint drilling program this winter.

Titled, “Repsol Makes the Largest U.S. Onshore Oil Discovery in 30 Years,” the statement substantiated previous estimates that its in-permitting Nanushuk prospect holds at least 1.2 billion barrels of light oil recoverable at a rate up to 120,000 barrels per day.

Amended oil tax bill tempers increases, reworks deductions

Democrats in the House Resources Committee are amending their oil tax and credit bill and the changes indicate some advice from the Legislature’s consultant was taken to heart.

The official second draft of House Bill 111, the legislation put forth by Anchorage Democrats and Resource Co-chairs Reps. Andy Josephson and Geran Tarr about a month ago, was made public Friday afternoon.

Permitting process starts for Ambler road

Development of the Ambler Mining District road project is now in federal hands.

The Bureau of Land Management issued a Federal Register notice Feb. 28 requesting public input regarding what topics the agency should consider in drafting the environmental impact statement, or EIS, for the mining access road.

Oil and gas consultant urges tax simplicity, preserving deductions

The Legislature’s new consultant took the ongoing oil tax and credit debate in a new direction that momentarily eased partisan stances.

Instead of approving or denouncing the oil production tax changes proposed in the House Resources Committee, Rich Ruggiero, managing partner of the petroleum consultant firm Castle Gap Advisors repeatedly emphasized a need to abridge the contentious tax when providing advice to legislators.

“If I were to give you a recommendation from afar, it’s to simplify (the production tax),” Ruggiero said.

Industry reps voice concerns over proposed oil tax bill

Oil industry players made their pitch to the House Resources Committee against further oil tax changes in the last days of February, which included direct criticisms of the Legislature’s new oil and gas policy consultant.

Health care consumes three-fourths of budget supplemental

At $67.3 million in General Fund requests, the 2017 fiscal year supplemental budget is among the smallest in recent years, but this year’s ask is dominated by a cost that is straining nearly every sector of Alaska, and that is health care.

Less $15 million for wildfire suppression — a retroactive payment that varies greatly by amount but is an annual request — health care-related appropriations comprise $40.8 million, or 78 percent of the 2017 supplemental budget.

Not coincidentally, Alaska has the highest health care costs in the nation.

Senate puts forth spending cap, annual Fund draw

Senate Republican leaders have put forth their own plan to employ the Permanent Fund for deficit reduction that nearly matches Gov. Bill Walker’s proposal.

The one marked difference is the Senate Majority’s legislation, Senate Bill 70, includes a $4.1 billion spending limit on unrestricted General Fund appropriations for the annual operating budget.

ConocoPhillips reviewing state decision to rescind unit expansion

Department of Natural Resources Commissioner Andy Mack has rescinded approval to expand the Colville River oil and gas unit to include sought-after North Slope leases held by ConocoPhillips’ after the company backed off from a plan to drill the acreage.

Mack issued the determination Feb. 17, which conditionally reverses his Nov. 4, 2016, decision to add 9,146 acres over 22 leases to the Colville River Unit.

Legislature continues digging in to oil tax changes

The House Resources Committee is in its second consecutive year of analyzing the state’s oil tax system with Zapruder film-like scrutiny as the Democrats now leading the committee look to implement tax changes former House and Senate Republican leaders balked at last year.

Debate on House Bill 111, the proposal introduced by Resource co-chairs Reps. Geran Tarr and Andy Josephson, both Anchorage Democrats, has not ramped up yet.

State agency will work to keep graphite refinery in Alaska

The state infrastructure bank is partnering with a junior graphite mining company in an effort to keep Alaska’s natural resources in state a little longer.

A memorandum of understanding, or MOU, signed Feb. 7 by leaders of the Alaska Industrial Development and Export Authority and Graphite One Resources Inc. aims to find a suitable site for a value-added graphite processing facility in conjunction with the mine the company is working to develop.

Alyeska: tug concerns a result of incomplete information

Alyeska Pipeline Service Co. remains confident in the ability of the incoming fleet of oil tanker escort tugs to continue safe operations out of the Valdez marine terminal in spite of vessel design concerns raised by a third-party naval architect.

Alyeska spokeswoman Michelle Egan said many of the potential performance shortcomings identified by marine engineer Robert Allan were due to a simple lack of timely and detailed information about the tug designs.

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