Tim Bradner

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.

Gas no longer flowing at North Slope well blowout

Gas is no longer flowing on a shallow blowout at Repsol E&P USA's Qugruk 2 exploration well in the Colville River delta on the North Slope, but water is still being released and the well is not yet under control, an Alaska agency said Thursday morning.

"We were informed at 6 p.m. last night that the flow of gas has ceased but that the well is still blowing water. We were also told that well control people from Houston will be on the scene soon," said Cathy Foerster, a Commissioner with the Alaska Oil and Gas Conservation Commission.

State issues permits for Healy Clean Coal project restart

The state of Alaska has issued a key permit to allow a mothballed 50-megawatt coal power plant in Interior Alaska to restart, officials with Golden Valley Electric Association, the Interior Alaska electric cooperative, said Feb. 6.

Alaska’s Department of Environmental Conservation issued what is essentially a renewal of an air quality permit issued earlier for the Healy Clean Coal Project, which was built in the late 1990s to test experimental new air emissions technology, according to Brian Newton, Golden Valley’s president.

Alaska Supreme Court hears complex Point Thomson lawsuit

Alaska’s Supreme Court held a hearing Feb. 8 on one aspect of a complex lawsuit over state oil and gas leases at Point Thomson, a large gas and condensate discovery east of Prudhoe Bay on the North Slope. It will be some time before the court renders a decision, however.

The court heard arguments over a provision in the Point Thomson Unit agreement that sets standards by which the state, as landowner, can terminate the unit. That action would also lead to termination of the leases, attorneys familiar with the case said on background.

Legislature tackles oil taxes, pension debt, school funding and gas pipelines

State lawmakers are grappling with oil taxes, a $10-billion-plus pension liability, a $10 billion-plus budget, school funding and gas pipeline issues as the 2012 legislative session nears the 30-day mark in its scheduled 90-day session.

Lawmakers are to adjourn April 15, although they can vote for an extension.

Profits drive cost of health care; hospitals hit back

Hospital operators in the state are sharply critical of a state consultant’s report highlighting profit margins at large private hospitals as a factor in driving up costs of medical care in the state.

First FERC hearings on Watana hydro project planned

JUNEAU — Federal regulatory proceedings for the planned $5 billion-plus Watana hydro project on the Susitna River north of Anchorage are getting under way.

The Federal Energy Regulatory Commission will conduct  “scoping meetings”  in March for the hydro project, which is being developed by the Alaska Energy Authority, a state agency.

Russian tanker, U.S. icebreaker out of Bering Sea ice

The Coast Guard Cutter Healy, an icebreaker, and the Russian tanker T/V Renda broke out of the Bering Sea icepack Jan. 29, just 10 days after leaving Nome and delivering 1.4 million gallons of fuel, a spokeswoman for Vitus Marine LLC said.

Vitus Marine had contracted with Nome-based Sitnasuak Corp. to make arrangements for the Renda to deliver 1.4 million gallons of fuel to Nome, and for the Healy to break a path through ice for the tanker, according to Stacey Smith, spokeswoman for Vitus Marine.

Nenana basin could hold oil as well as gas

The Nenana Basin west of Fairbanks could hold oil as well as natural gas, officials with the state Division of Geological and Geophysical Survey and Doyon Ltd., which is leading exploration company in the region, told a state legislative committee in Juneau on Jan. 30.

First hearings hydro project planned for March

JUNEAU — The Alaska Energy Authority and the Federal Energy Regulatory Commission will conduct  “scoping meetings” in March for the planned $5 billion-plus Watana hydro project on the Susitna River north of Anchorage.

The meetings, planned for March 27 through March 30 in Anchorage, Wasilla, Talkneetna, Fairbanks and Glennallen, are the first step in a required federal environmental impact statement, or EIS, for the project, AEA officials told a state legislative committee in Juneau Jan. 26.

Hearing on coastal management initiative planned by Legislature

JUNEAU – The Judiciary committees of both the state House and Senate will conduct a joint hearing on a pending ballot proposition to reestablish a state coastal management program, Rep. Carl Gatto, R-Palmer, chairman of the House Judiciary Committee, said in a Jan. 23 briefing by House leaders.

The hearing is required by law, Gatto said. Statue statutes require the Legislature to conduct a hearing on a possible ballot proposition within 30 days of petitions for a citizen initiative being turned into the Lieutenant Governor.

Lawmakers dig into agency budgets; oil tax, education top issues

JUNEAU — State legislators were engaged mostly in overviews of state agency budgets and programs as they ended the second week of their 2012 session, but there was plenty of discussion in the background on key issues that are shaping up.

Education funding, coastal management and oil and gas taxes are likely to be the flash points for lawmakers in the weeks ahead.

But one controversial issue likely to take up a lot of time, at least near-term and in the House Judiciary Committee at first, is cell phone regulation, according to committee chairman Rep. Carl Gatto, R-Palmer.

Report: Alaska health care industry booming

The health care industry is booming in Alaska, and growth will continue. Health care providers pay a $1.53 billion annual statewide payroll with nearly $1 billion of that in the Anchorage and Matanuska-Susitna regions of Southcentral Alaska.

Jobs in health care totaled 31,800 in 2010, up 46 percent in 10 years. The growth rate is five times the rate of the state’s overall population, and three times that of all other sectors of the economy.

Tanker and icebreaker head home from Nome

The transfer of 1 million gallons of diesel and 300,000 gallons of gasoline from a Russian tanker to onshore storage tanks in the iced-in city of Nome, Alaska has been completed, U.S. Coast Guard officials said Friday.

The tanker T/V Renda and the U.S. Coast Guard Cutter Healy, a medium icebreaker, are preparing to depart Nome today. The Heavy must cut a path through about 360 miles of sea ice to reach open waters of the Bering Sea, Coast Guard spokesman David Mosely said.

State of the State: Parnell lays out 2012 benchmarks for LNG deal

In his annual State of the State address, Alaska Gov. Sean Parnell laid out benchmarks he hopes North Slope producers will reach in 2012 on a possible deal to build a natural gas pipeline and liquefied natural gas project.

Parnell spoke to a combined audience of the state House and Senate in the state capitol in Juneau Wednesday night.

Gov. Parnell says he's upbeat about state's economy

Gov. Sean Parnell presented an upbeat picture of Alaska’s prospects, but also highlighted the state’s immediate challenges in a keynote address to the Alaska Support Industry Alliance’s annual Meet Alaska conference in Anchorage Jan. 6.

Parnell first applauded the Alliance and its industrial service and support company members.

Slope producers lay out scenario with proposed oil changes

North Slope oil producers have laid out their vision of what’s possible with new oil development if the state Legislature makes changes in the state’s oil production tax. They’ve also highlighted the problems they face under the status quo.

BP Exploration (Alaska) Inc. President John Minge said he believes there is about $5 billion in projects the producers could tackle if lawmakers pass Gov. Sean Parnell’s House Bill 110 or something like it this year. Many of the projects are within the existing producing fields.

Congress cuts funding for Alaska federal gas coordinator by 75%

The budget for the Alaska federal pipeline coordinator has been reduced by 75 percent to $1 million for federal fiscal year 2012, Larry Persily, director of the office said Jan. 4.

The action was taken in the House-Senate budget conference committee. It is an indication that some in Congress doubt a proposed $40 billion-plus Alaska natural gas pipeline will be built anytime soon.

Judge dismisses government's move to revoke BP's probation

U.S. District Court Judge Ralph Beistline dismissed a claim by the U.S. Justice Department that BP had violated terms of a probation order when a field pipeline ruptured and spilled oil in 2009.

BP was on probation over a series of spills in 2006 from Prudhoe Bay field pipelines that were caused by corrosion. The company paid a $20 million penalty over violations resulting from the spills.

The probation had been scheduled to end Nov. 30, 2010. The Justice Department filed its petition for a revocation of the probation Nov. 16, 2010.

China top market for Alaska exports

China will emerge as Alaska’s top export customer for 2011 when final trade statistics are counted for the last two months of the year, state officials say.

As of Nov. 1, the value of Alaska exports to the Asian giant had reached $1.3 billion, a 52.5 percent increase over the same 10-month, January-October period for 2010, U.S. exports statistics show.

The numbers will change when November and December figures are added but those will not change the overall trend, according to Patricia Eckert, associate director for International Trade in the governor’s office.


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