Tim Bradner

Parnell withdraws state cooperation in NPR-A land planning

Alaska Gov. Sean Parnell has withdrawn the state as a “cooperating agency” with the U.S. Bureau of Land Management on National Petroleum Reserve-Alaska issues.

The governor also asked Interior Secretary Ken Salazar to redo the department’s long-range land management plan for the NPR-A. Parnell is unhappy that Interior has classified about half of the 23-million-acre petroleum reserve off-limits to drilling without giving prior notice to the state or any other cooperating agency.

Shell gives up completing wells

Shell has given up drilling to hydrocarbon depths on its Chukchi Sea and Beaufort Sea exploration wells this year following damage to an undersea spill containment dome during tests in Puget Sound.

The damage cannot be repaired in time for the spill response barge, the Arctic Challenger, to reach the Arctic, Shell spokesman Curtis Smith said.

EPA fuel regs will raise cruise costs 70 percent by 2015

Another major headache is confronting cruise companies operating to Alaska. New U.S. Environmental Protection Agency offshore emissions rules for ocean vessels in U.S. coastal areas effective that went into effect Aug. 1 have raised fuel costs by about 40 percent for cruise ships operating to Alaska.

A further tightening of emission limits effective in 2015 will raise that to almost 70 percent over previous costs. To absorb that cost, the per passenger price of a typical seven-day cruise would have to go up $126.

Port of Anchorage plan to be ready by spring

A U.S. Army Corps of Engineers assessment of the Port of Anchorage expansion project is due in late October and port officials aim to have a revamped plan ready by next spring, port manager Rich Wilson says.

In November, voters will be asked to approve $50 million for the Port of Anchorage as part of a statewide, $453.5 million general obligation bond proposition to fund transportation projects.

“By next spring our team is anticipating presenting a plan for building port facilities that meet updated business requirements,” Wilson said.

State issues new report detailing hydrocarbon and geothermal resources in rural areas

A new report detailing fossil fuel and geothermal potential in unexplored areas of Alaska was released Sept. 7 by the Alaska Division of Geological and Geophysical Surveys.

The 144-page study, four years in development, is intended primarily to aid small rural communities in looking for more affordable, local sources of energy, state natural resources commissioner Dan Sullivan said.

“We know that the high cost of energy is the primary concern and challenge for many communities. Our goal is to assist them in making energy development decisions,” Sullivan said.

Looking at shale oil issues in Alaska

Great Bear Petroleum and its partner, Halliburton, are now drilling into North Slope shale rocks, extracting core samples and conducting tests to see if oil can be extracted from the shale.

The first test well, Alcor No. 1, about 17 miles south of Deadhorse, at Prudhoe Bay, has now been completed, said Great Bear’s president, Ed Duncan.

A second test, Merak No. 1, is being drilled about one and a half miles south of the Alcor well and is expected to be at the point for its first core to be extracted in mid-September.

Statoil delays Arctic offshore drilling

Statoil has delayed its first exploration drilling in the Chukchi Sea until at least 2015 because of continued regulatory uncertainties facing Shell’s efforts to drill, a Statoil official in Houston said Sept. 7.

This is a delay of one year from the previous plan. Statoil had been planning to drill its first well in 2014.

Alaska battles reputation as a tough place to do business

Alaska is now attracting more interest from the world’s petroleum and minerals industries, Alaska Natural Resources Commissioner Dan Sullivan says.

However, the state still has a lingering reputation as a tough place to do business that is casting a long shadow, he said.

Sullivan spoke to business and community leaders in Anchorage Sept. 6 at the Resource Development Council’s first fall bi-weekly meeting of fall 2012.

Vitus bringing competition to Alaska

The scrappy entrepreneurs who organized last winter’s emergency shipment of fuel through frozen seas to Nome are at it again.

Mark Smith and Justin Charon, who own and manage Vitus Marine along with Shaen Tartar, another partner, are busy delivering fuel this summer to remote western Alaska rural communities using new, technologically-advanced tug and barge units.

They are now also developing an independent 5 million-gallon bulk fuel storage plant at Port MacKenzie, the Matanuska-Susitna Borough’s port on Knik Arm across from Anchorage.

Anchorage 49th State Angel Fund will award $4.1M in 2012

Anchorage’s new city-run 49th State Angel Fund is off to a good start in stimulating local entrepreneurs with small business startups or expansions.

There were 25 direct applications from businesses and three from private or institutional investment funds in the first round of applications that closed Aug. 5, according to Joe Morrison, the Municipality of Anchorage’s manager for the program.

Anchorage has received $13.2 million in federal funds under the State Small Business Credit Initiative to start the program, and is the first U.S. city to receive such an allocation.

Fire Island, Eva Creek set to begin producing wind power

The new Fire Island 17.6 megawatt wind power project developed by Cook Inlet Region Inc. will be generating power in a week or two.

Commissioning of the 11 wind turbines on the island is expected to be completed by Sept. 8 or 9 and a 72-hour test of the facility is expected the week of Sept. 10.

“After that, the contractors turn the keys over to us,” CIRI spokesman Jim Jager said.

Meanwhile, a second wind power project will be supplying electricity to the Southcentral–Interior Alaska “railbelt” power grid in late October.

Shell drillship ready to work at Chukchi Sea

Shell’s drillship Noble Discoverer is in the Chukchi Sea and was preparing to begin site preparation for drilling at the company’s Burger prospect on Sept. 6 or 7, company officials said.

Bad weather caused some delays. The drillship was held about 10 miles south of Burger earlier in the week as Shell waited for rough seas to settle, company spokesman Curtis Smith said.

Effort to obtain North Slope propane may have hit a dead end

An effort to bring propane from the North Slope for use in home heating and possibly as a vehicle fuel may have hit a dead end.

The Alaska Oil and Gas Conservation Commission ruled Aug. 17 that the practice by Prudhoe Bay producers to inject propane that is part of natural gas produced with crude oil back into the underground reservoir does not constitute “waste.”

LNG is an option for Hawaii, but major obstacles loom

Hawaii is looking at the possibility of purchasing liquefied natural gas from Alaska, but it is unlikely to happen anytime soon even though LNG could be purchased today, in theory, from the ConocoPhillips plant in Kenai.

That’s what Hawaiian officials told a gathering of business leaders convened in Anchorage by Alaska U.S. Sen. Mark Begich on Aug. 23.

There’s also a problem long-familiar to Alaskans, the U.S. Jones Act, which requires shipments between U.S. ports to be done in American-built and manned vessels. Currently there are no U.S.-built LNG carriers.

Doyon to spend $37M on exploration

Doyon Ltd., the Interior Alaska Native regional corporation, says it will spend $37 million this year on several oil and gas projects in Interior Alaska and will drill second a test well in the prospective Nenana Basin, west of Fairbanks, this winter.

Doyon will also be the first explorer to take advantage of a new Alaska exploration incentive that will have the state pay for 80 percent of the well and extend preferential state tax treatment, Doyon CEO Aaron Schutt said in a Aug. 27 briefing in Fairbanks.

Legislators ask Parnell for local guarantees on LNG export renewal

Seven Alaska legislators asked Gov. Sean Parnell to seek explicit guarantees in a renewal of a federal license for liquefied natural gas exports from Alaska that local natural gas needs will be met by producers before gas is exported.

The request was made in a letter sent to Parnell on Aug. 24.

An LNG export license issued by the U.S. Department of Energy that is currently held by ConocoPhillips for its Kenai LNG plant will expire in March 2013.

Dispute resolved over gas for Southcentral winter storage

Marathon Oil and Cook Inlet Natural Gas Storage Alaska resolved a contract dispute that had threatened gas supplies for a new gas storage facility in Alaska, the companies announced late Friday.

CINGSA, which operates the facility behalf of utility customers, said the dispute over a 2011 contract with Marathon had left it short of “pad” gas needed to pressurize the reservoir so that gas can be withdrawn this winter at rates customers need.

UAF needs $200M power plant replacement, sooner rather than later

The University of Alaska Fairbanks coal-fired power plant is almost half a century old and badly needs to be replaced soon.

It’s going to be a big-ticket item, though. Preliminary cost estimates are in the $200 million range, according to Bob Shefchik, UAF’s executive officer.

Alaska's delegation scolds Interior Secretary

Alaska’s Congressional delegation sent a sternly-worded letter to Interior Secretary Ken Salazar on Aug. 22 protesting the Interior Department’s selection of a preferred management plan for the National Petroleum Reserve-Alaska that would put about half the 23-million-acre reserve into special conservation areas.

“The selection of Alternative B-2 in the National Petroleum Reserve Environmental Impact Statement represents the largest wholesale land withdrawal and blocking of access to an energy resource in decades,” the letter stated.

A whole lot of hydrates, potentially

Government and industry scientists say they are making good progress toward production of methane gas from hydrates, a potentially vast hydrocarbon resource. Methane is the main component of natural gas.

This is still a science project, but knowledge is being gained step-by-step, researchers with the Department of Energy, the U.S. Geological Survey and industry said in interviews with the Journal.

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