Tim Bradner

Producing mines keep plugging; prospects seek investors

Alaska’s miners are doing okay, at least those with producing mines. That trend seems likely to continue into the new year.

But developers of new mines seem to be stuck, bogged down by a poor global investment climate in mining, and that seems likely to continue as well.

It’s an irony, because the experience at the Red Dog Mine north of Kotzebue, Greens Creek mine near Juneau, and the Fort Knox and Pogo gold mines in the Interior show that developers of metals mines can be profitable and overcome challenges of high costs, remoteness and regulatory hurdles.

Near-term effect of price plunge to be muted

There have been few other times when Alaska’s oil and gas industry started a new year with such uncertainty. Alaska North Slope sales prices ended the year at about half what they were six months ago in July.

The immediate impacts will certainly be less severe than they will be in the booming shale oil plays of North Dakota and Texas, were there are predictions that half the drill rigs working will be laid down within a few weeks.

Walker: Alaska will weather fiscal storm

Gov. Bill Walker is reaching out to community and business leaders to help guide him through some tough times with the state budget.

In a speech to the Anchorage Chamber of Commerce Dec. 15, Walker’s first address to a major business group since taking office Dec. 1, the governor promised to be honest and “blunt” about the state’s deteriorated fiscal position.

AIDEA expands study funds for Port Mac LNG

The State of Alaska has expanded its financial commitment in aiding a new Cook Inlet liquefied natural gas project being planned by Japanese companies. In its Dec. 16 board meeting the Alaska Industrial Development Authority, the state’s development finance corporation, agreed to expand the authority’s sharing of expenditures on feasibility studies from $240,000 to $440,000.

A 1 million to 1.5 million tons-per-year LNG project is proposed to be built in upper Cook Inlet adjacent to the Matanuska Susitna Borough’s Port MacKenzie across from Anchorage.

Walker faced with widening deficit scenario

Gov. Bill Walker faces a grim budget scenario that may distract the new governor from other priorities, like a natural gas pipeline and an expansion of Medicaid.

A template of a proposed fiscal year 2016 budget will be released Dec. 15, as required by law, but it will be empty of the real numbers Walker will propose to the Legislature in late January, the deadline for an amended budget.

Walker released former Gov. Sean Parnell’s “work in progress” capital and operating budgets Dec. 5 but warned that changes are coming.

State sees sharp drop in lost-time injuries

Alaska employers reported a dramatic 46 percent decrease in workplace injuries in 2014, with the accident rate dropped to 0.61 lost-time incidents per 100 employees, state Department of Labor and Workforce Development officials said in interviews.

Gasline efforts, Medicaid face challenges

In his first press conference since taking office Dec. 4, Gov. Bill Walker was circumspect on two hot-button items facing his new administration. Walker held a media availability Dec. 9 at the Governor’s Mansion in Juneau, which was also being opened to a public holiday reception.

Public hearings end for Chukchi lease sale SEIS

The U.S. Bureau of Ocean Energy Management wrapped up a schedule of six public hearings in Alaska Dec. 4 on a revised environmental impact statement for a 2008 Chukchi Sea Outer Continental Shelf lease sale.

The final hearing was held in Fairbanks on Dec. 4 on the draft supplemental EIS. Earlier, hearings were held in Kotezbue, Point Hope, Wainwright, Barrow and Anchorage.

Walker brings back several Palin officials

New Gov. Bill Walker took office Dec. 1 and ordered immediate changes in top echelons of state government. Walker brought back several top officials from Gov. Sarah Palin’s administration for senior positions in the natural resources and revenue departments.

Walker defeated former Gov. Sean Parnell by about 6,200 votes in the Nov. 4 Alaska elections. Parnell first took office in July 2009 when Palin resigned before the end of her term.

Native regional corps. exploring frontier basins

Oil prices may be in the pits but Alaska Native corporations are pushing ahead with exploration in largely-unexplored “frontier” basins in the state.

Ahtna Inc., the regional corporation for the Copper River area, plans to begin 40 miles of two-dimensional seismic survey on state lands west of Glennallen this month.

Ahtna and two partners hold a state exploration license in the area.

If the results are favorable Ahtna hopes to drill an exploration well, said Joe Bovee, Ahtna’s vice president for land and resources.

Caelus ready to give go-ahead for Nuna, seismic work

Caelus Energy is scheduled to give formal “sanction,” or approval, Dec. 31 for its $1.5 billion Nuna development project on the North Slope and will be mobilizing contractors to install a gravel pad and road in early 2015, a company official told state legislators in a Dec. 2 briefing.

Caelus plans to employ about 500 contractor employees this winter on the construction and two large three-dimensional seismic programs, company vice president Pat Foley told the Legislature’s Budget and Audit Committee.

Corps publishes scoping report for Alaska Stand Alone Pipeline SEIS

Even as the state administration changes in Juneau, work is continuing on the state’s backup “Alaska Stand Alone Pipeline,” or ASAP, a plan for a 36-inch natural gas pipeline from the North Slope to Southcentral Alaska.

The latest development is publication by the U.S. Army Corps of Engineers and its contractor, ERM Alaska Inc., of summaries of “scoping” sessions held by the Corps on a supplemental environmental impact statement, or SEIS, for the project.

GTL on North Slope could slash low-sulfur diesel prices

Ohio-based Velocys Inc. is interested in Alaska. A local firm, Alaska Natural Gas-to-Liquids, is working on a proposed gas-to-liquids plant at Prudhoe Bay using Veolocys’ technology to make fuel for the oil field operators and contractors from natural gas, which could be made available by North Slope producers.

The plant would make ultra-low sulfur diesel, but gasoline and methanol can also be made if customers desire those products, according to ANGTL President Richard Peterson.

Joint venture enables production at Mustang

Brooks Range Petroleum will begin drilling this winter on production wells for the new Mustang oil field on the North Slope. The first release of funding from investors, which includes the Alaska Industrial Development and Export Authority, was made Oct. 29 and will finance the drilling as well as development of an oil and gas processing facility and connecting pipelines.

Record crowd expected at miners convention

The annual Alaska Miners Association convention will set another attendance record this year with about 1,000 signed up to attend so far, AMA Executive Director Deantha Crockett said.

It is also marks the 75th anniversary of the AMA, making it one of the state’s oldest trade and professional organizations. The AMA was organized in 1939 to give the mining industry, then one of the territory’s two industries (the other being fishing) a way to present a united front in dealing with new land policies being formed in Washington, D.C.

Not much has changed, Crockett said.

Huge spikes for individual health plans but not for groups

The huge spike in health insurance premiums in the individual market due to the Affordable Health Care Act hasn’t materialized for employer groups plans, the major player in Alaska health insurance says.

Premera Blue Cross Blue Shield predicts premiums will rise “in the single digits” for most group policies in 2015.

The increases will range between 5 percent and 10 percent depending on the group, according to Jim Grazko, president of Premera Blue Cross Blue Shield of Alaska.

Producers sanction new drill site at Kuparuk River field

ConocoPhillips and its partners in the Kuparuk River field have approved a new drill site in the southern part of the field that will add 8,000 barrels per day of new production beginning in late 2015, ConocoPhillips said in an Oct. 24 press release.

“Plans for construction will move forward. This is the first new drill site at Kuparuk in nearly 12 years,” company spokeswomen Amy Burnett said. “It is expected to add about 8,000 barrels per day at peak production,” she said.

It will take a period for production to build to the peak, Burnett said.

State claims 20,000 acres on edge of ANWR

Alaska is laying claim to a sliver of what the U.S. Fish and Wildlife Service thinks is the Arctic National Wildlife Refuge along the northwest boundary of the refuge.

The state is citing a defect in the federal agency’s interpretation of the refuge boundary. The Fish and Wildlife Service administers ANWR.

Gov. Sean Parnell said ownership of the land, which totals about 20,000 acres of onshore lands and 3,000 acres of tidal and submerged lands, by the state has important implications for oil and gas development on the eastern North Slope.

Judge hears case on Interior effort to dismiss road lawsuit

There were new rounds of legal jousting in an Alaska U.S. District Court in Anchorage Oct. 20 as federal attorneys representing Interior Secretary Sally Jewell, residents of King Cove and the State of Alaska sparred over Jewell’s denial of permission for the state to build a 11-mile gravel road completing a connection from King Cove to Cold Bay that would aid emergency medical evacuations.

District Court Judge Russel Holland listened to both sides and said he will make a decision on the Interior Department’s motion to dismiss the lawsuit, “as quickly as I can.”

Wide coalition forms to oppose marijuana legalization

Alaska employers should brace for problems if a ballot proposition legalizing marijuana sales and use is approved in the November state general election, critics of the measure say.

Ballot Measure 2, legalizing marijuana, is virtual similar to a Colorado measure passed in 2012 that is now causing big problems in the state.

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