Tim Bradner

Mineral exploration spending tops $300 million in 2011

Mining is growing fast in its economic punch in the state, new studies by the industry show.

In 2011 the industry employed 4,500 in producing mines exploration, up from 3,500 in 2010 in terms of equivalent full-time jobs, according to studies by McDowell Group, the Juneau-based consulting firm.

The average annual pay for a worker in mining reached $100,000 in 2011, up from an average of $95,000 the previous year. State revenues from mining totaled $148 million in 2011, 170 percent up from $58.9 million in 2010, which was also 40 percent up from 2009.

Study says Inlet gas discoveries won't stop shortage

Despite new natural gas discoveries in Alaska’s Cook Inlet utilities in the region will still experience shortages of gas supply by 2014 due to declining production in maturing fields, according to a new study of Cook Inlet gas reserves and regional demand released Monday.

The only practical alternative to deal with the shortfall is the import of liquefied natural gas, said Pete Stokes, commercial manager with Petrotechnical Resources of Alaska, an Anchorage-based consulting firm.

Miners busy with expansions, new projects

From far Southeast Alaska to the far Northwest, minerals companies are busy with projects. Alaska has seven producing mines now, one more than last year.

The new producing mine is Nixon Fork on the upper Kuskokwim River, a remote location where fuel and supplies must be flown in. Several new mines may move into production the coming years, all in different parts of the state.

Here’s a review of the producing mines and prospects around Alaska:

Southeast

Pebble debate breaks out between BBNC shareholders

JUNEAU — Sharp opinion differences over the proposed Pebble mine within the Bristol Bay community spilled out in Juneau March 19.

The occasion was an informal “lunch and learn” noon session for legislators and staff in the state capitol where Bristol Bay Native Corp., the regional Alaska Native corporation for the area, gave a presentation on its activities, finances and dividends paid to shareholders.

Shops empty as oil production declines

When a film producer called up CH2M Hill’s area manager Tom Maloney a few weeks ago to ask if the company’s empty fabrication shop could be used as space for film production, it was the last straw.

Maloney’s job includes keeping the shop full and its people working.

“I was tempted – it was revenue – but I just couldn’t let it happen on the odd chance that we might get some work into the shop,” Maloney said.

Repsol closes exploration well after gas blowout

Repsol E&P USA successfully secured and plugged its Qugruk No. 2 exploration well on the North Slope, the company said March 17.

Repsol encountered a shallow gas pocket and experienced a gas blowout at the well on Feb. 15, and although gas stopped flowing Feb. 16 the company has been working to thaw the rig and achieve control of the well since then.

There was no fire and no injuries in the incident. Gas was safely vented through a gas diverter system.

Repsol will abandon damaged Slope well

Repsol USA said it will plug and abandon its Qugruk No. 2 well after drilling crews were unable to repair damage in the well caused by a Feb. 15 gas blowout, a company spokesman said March 14.

“We are going to plug and abandon that wellbore,” Repsol spokesman Jan Sieving said in an emailed statement. “Currently we don’t have plans to re-drill at the location. All efforts are currently focused on safely securing and now plugging the well.”

State identifies challenges with oil shale plays

State agencies have identified some key technology and permitting challenges for a North Slope shale oil play, an official in the state Division of Oil and Gas says.

Alaska-based independent Great Bear Petroleum and Halliburton are working in a partnership to test the production potential of a large shale formation south of the producing Prudhoe Bay and Kuparuk Ruver fields, with the first two test wells planned this spring, said Greg Hobbs, a petroleum engineer in the state Division of Oil and Gas.

Senate on a slow track with work on state oil tax changes

With less than four weeks left in the 2012 legislative session, state senators are on the slow track in their work on changes to the state’s oil production tax.

The Senate Finance Committee took up Senate Bill 192 on March 13, a bill passed out of the Resources Committee on March 2. Sen. Bert Stedman, R-Sitka, co-chair of the finance committee, said the panel will continue working on the bill through to the end of the week of March 19.

Buccaneer Energy says its new Kenai gas well will produce

Buccaneer Energy’s new Kenai Loop No. 1 gas well near the city of Kenai is performing, producing about 5 million cubic feet of gas per day after about two weeks of steady production, the company says.

Production began Jan. 14, and the gas is being sold to both Enstar Natural Gas Co. and ConocoPhillips Alaska Inc. under contracts Buccaneer has signed with both companies.

Repsol's effort with Slope well delayed by blockage

Repsol E&P USA has encountered a new problem, a blockage in the well bore of its Qugruk No. 2 exploration well on the North Slope, which has delayed attempts to bring the well under control.

Repsol encountered a shallow gas pocket Feb. 15, which resulted in a gas blowout and evacuation of the rig. The well is on the Colville River delta, west of the producing Prudhoe Bay and Kuparuk River fields.

Hospitals doing OK, need help recruiting

Given the distances, high costs and problems in workforce recruitment, Alaska’s hospitals feel they’re doing OK in serving health care needs in the state.

National medical-care review groups seem to agree. Health Strong Index ranked two of the state’s smaller hospitals, South Peninsula Hospital in Homer and Ketchikan General Hospital, among the top 100 U.S. “critical access” hospitals.

Critical access is a special federal designation for small community hospitals that offer 24-hour emergency services.

BP finishes first test production well drilled to Sag River

BP has completed the first of five pilot wells drilled to test production from the Sag River formation that overlies the main producing reservoir of the Prudhoe Bay field, company officials told state legislators Feb. 23.

The test wells involve long, extended horizontal production wells, drilled from the surface at an angle and then turned horizontally to intercept the thin production layer of rocks.

USGS estimates on Slope shale oil, gas puts Alaska near top

The U.S. Geological Survey has estimated the potential of undiscovered, technically recoverable onshore shale oil and gas resources on the North Slope, with estimates ranging from zero to 2 billion barrels of oil and from zero to 80 trillion cubic feet of gas.

The starting point is zero because shale oil and gas have not actually been produced on the Slope and it is not known whether hydrocarbons can actually be produced, much less whether the production can be profitable.

Shell files "pre-emptive strike," seeks approval of process on spill plan

In what the company described as a “pre-emptive strike,” Shell asked an Alaska federal court for a declaratory judgment on the Department of the Interior’s approval of the company’s Chukchi Sea oil spill response plan, a company spokesman said Thursday.

“We’re not asking for the court to approve the plan but the government’s process in approving it,” company spokesman Curtis Smith said. “We believe any challenge to the approval will be on process, not the merits of the spill plan.”

Repsol works to thaw rig after gas blowout

Repsol E&P USA was working Feb. 22 to get its drill rig operational and the company’s Qugruk 2 exploration well in the Colville River delta on the North Slope back under control after a shallow gas blowout, officials with the Alaska Oil and Gas Conservation Commission said.

Air Force to assess impact of F-16s move from Eielson

Alaska military officials are doing their best to soothe ruffled feathers in Alaska over the U.S. Air Force announcement that 21 F-16s based at Eielson Air Force Base near Fairbanks will be relocated to Joint Base Elmendorf-Richardson in Anchorage in 2013.

The relocation of military personnel and families will adversely affect the Fairbanks-area economy.

Big issues loom, but legislators make progress on budget

JUNEAU — The Legislature passed day 40 in its 2012 session Feb. 24, with 50 days left to go before the required April 15 adjournment. The big issues, mainly oil taxes and school funding, are percolating mostly in the background, but lawmakers are making steady progress on their major responsibility, developing the state budget for the next fiscal year, which begins July 1.

Parnell not giving up on all-land gasline option

Alaska Gov. Sean Parnell is supporting continued work on a land natural gas pipeline to Canada although he is now urging North Slope producers to support an alternative pipeline to a possible large liquefied natural gas project at a southern Alaska port, a state official told a federal agency conducting an environmental review of the project Feb. 13.

Alaska's oil taxes too high, too complex, consultant tells legislators

A consultant retained by Alaska’s Legislature has recommended the state rein in taxes on oil production to attract industry investment but also to dismantle a complex set of exploration and development incentives that gives away too much, with the state paying as much as 80 percent of the cost of new exploration wells, state lawmakers were told in hearings Thursday.

The Legislature is reviewing the state tax system with hopes of encouraging new investment to slow or reverse a decline in production from the North Slope.

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