Tim Bradner

February 17, 2009 - Week in review

Several bills were active in legislative committees in Juneau last week as the 2009 session slowly gathered momentum. Hearings were held on bills to change the state’s coastal management program, to increase the state’s minimum wage and to impose "price-gouging" penalties on Alaska refineries selling gasoline.

These particular proposals are being pushed by Democrats, who have clout in the Legislature by virtue of a coalition organization in the state Senate that puts Democrats in positions to advance their proposals.

Denali group to build gas treatment plant

ConocoPhillips President Jim Bowles (left), listens to BP’s Doug Suttles shortly after Denali, the Alaska Gas Pipeline, was formed June 2008. The Denali group recently signed a contract with an engineering firm to build a gas treatment plant, a major step toward the gas pipeline project.
File Photo/Rob Stapleton/AJOC

Coal is a bright spot in Alaska exporting

Even amid a global recession, one Alaska resource commodity is doing well in export markets. Surprisingly, it is coal.

Usibelli Coal Mine Inc. experienced a strong upturn in coal exports in 2008 from its mine in Healy, located south of Fairbanks. So far, sales for 2009 are looking pretty good, according to Steve Denton, Usibelli’s vice president for business development.

Bills aim to control gas prices

JUNEAU - A battle over legislation to punish Alaska refineries if they overcharge for gasoline is shaping up in the Legislature. Several bills have been introduced in the state House and Senate, and a report issued by the House Judiciary committee Jan. 30 may add fuel to the controversy.

The legislation, House Bill 68 and Senate Bill 54, is being pushed by five Democrats in the state House and four Democrats in the Senate.

Natural gas cooperative formed to help utilities buy gas

A member-owned Alaska natural gas cooperative has been formed to allow the state’s small electric utilities to negotiate and purchase gas more efficiently than the utilities could do on their own, according to Harold Heinze, one of the three founders of the co-op.

Heinze, a former Atlantic Richfield Co. senior manager, currently is the executive director of the Alaska Natural Gas Development Authority, or ANGDA, a state corporation responsible for facilitating the supply of gas to Alaska communities.

Lawmakers hustle for state share

JUNEAU - State administration officials and legislators are hustling to stay abreast of a federal stimulus package that is evolving fast in Congress, and which could bring to Alaska an additional $800 million to $1 billion in federal funds.

Gov. Sarah Palin had asked for a much smaller portion of federal funds for Alaska, but the state’s congressional delegation is working to get a larger share.

Legislative week in review

Legislators in Juneau were focused on the prospect of a billion dollars of federal stimulus money for Alaska as the second week of the 2009 session ended Friday, Jan. 30. A few details were emerging on how the money might be appropriated if the package passes Congress. It has been approved by the U.S. House but not the Senate. Both the House-passed and Senate-pending versions channel the federal money through existing programs with states, thus avoiding the taint of "earmarks," or special designations.

Wobbly energy market may crimp Alaska gas line

The global recession has created new uncertainties for a $30 billion-plus Alaska natural gas pipeline, according to the companies involved in the project and to independent analyst Wood MacKenzie.

But pipeline developers BP and ConocoPhillips are taking the long view and see present low prices as a cyclical wobbles in energy markets, company representatives told members of the Alaska Support Industry Alliance during its "Meet Alaska" conference in Anchorage Jan. 23.

Seven crew rescued after supply vessel sinks

A 166-foot platform supply vessel, the M/V Monarch, sank in Cook Inlet after being pinned against the Granite Point oil production platform by heavy ice. Seven crewmembers on the vessel were rescued and evacuated by helicopter from the platform along with eight platform personnel.

Palin unveils renewable energy plan

Gov. Sarah Palin on Jan. 16 unveiled a new state energy development plan focused on renewable energy sources and set a long-range goal of generating 50 percent of the state’s electricity with renewable resources by 2025.

Healy power plant sparks to life under new agreement

The state-owned Alaska Industrial Development and Export Authority’s board approved an agreement Jan. 14 to sell a mothballed 50-megawatt coal-fired power plant in Healy to Golden Valley Electric Association, the electric cooperative serving Interior Alaska.

The Healy Clean Coal Project is located near a coal mine in Healy owned by Usibelli Coal Mine Inc. and a smaller 25-megawatt coal-fired power plant now owned by GVEA.

CIRI cautiously optimistic about business in 2009

Cook Inlet Region Inc., the Anchorage-based Alaska Native regional corporation, is optimistic about 2009 and sees opportunities for the future.

"There is no doubt the recession will test Alaska businesses this year, but we remain cautiously optimistic. CIRI is prepared to pursue opportunities and these appear to be growing," Sophie Minich, the corporation’s chief operating officer, told the Anchorage Chamber of Commerce Jan. 16.

Gas supplies strained in recent cold spell

Alaska utility managers told the Regulatory Commission of Alaska that natural gas and electricity supplies were strained during Southcentral Alaska’;s recent cold snap, but the system held together with only a few minor mechanical hiccups.

Still, declining production from gas wells in the region meant that things were right at the edge and a disruption could have caused serious problems.

North Slope producers do better than expected in sustaining production

North Slope oil operators did better than expected in sustaining production last year, but the decline rate is expected to steepen this year.

Production from the Slope declined 3.9 percent over a 12-month period of 2008, compared to the same months in 2007, figures provided by the Alaska Department of Revenue indicate. The state revenue department had forecast a 5.8 percent decline.

Legislative session to start Jan. 20

Lawmakers are gathering in Juneau for the start of the 2009 state legislative session. As the formal session kicks off Jan. 20, the big issue - no surprise - is money.

Unlike the last four years, when rising oil prices brought a gusher of cash to the treasury, prices are now down and legislators and executive branch officials are staring at possible big budget deficits.

On the political front, there is great curiosity as to how Gov. Sarah Palin, fresh from the national campaign stage, will treat the Legislature and how lawmakers will treat her proposals.

Alliance Meet Alaska

Movers and shakers among Alaska’;s oil services and contracting companies gather in Anchorage Jan. 23, to discuss the uncertain state of state’;s petroleum industry, which directly and indirectly supports one-third of the Alaska’;s economy and about 90 percent of the state budget.

Prosperity site links local info

An Anchorage-based Internet information service that helps employees stay in touch with political events and state and federal legislation has been growing by leaps and bounds since its inception just over a year ago.

The main Web page for Prosperity Alaska, a nonprofit project, had more than 10,000 hits in December, up from 150 in December 2007.

That’;s according to Heath Hilyard, a former legislative assistant in Juneau who runs Prosperity Alaska as a sideline to his job as business development manager for Advanced Supply Chain International.

Enstar secures enough gas for 2009, future supplies still short

It was nip and tuck, but Enstar Natural Gas Co. secured enough gas to cover a projected 2.1 billion cubic feet supply shortfall in 2009 after state regulators approved one-year contracts for the utility with Cook Inlet producers, Enstar spokesman Curtis Thayer said.

The agreement is only a band-aid though, and more serious gas supply issues loom for Enstar over the next three years. In 2011 and 2012, the utility will be short about a third of its annual need for gas.

Oil, gas cutbacks likely to level employment growth

Prudhoe Bay oil wells will continue to provide oil for the Trans Alaska Pipeline. Onshore exploration for new fields continues.
File photo/Rob Stapleton/AJOC

State sees 3.8 percent oil production decline next year

Alaska North Slope oil production is expected to average 689,000 barrels per day this year, a decline of 3.8 percent from last year, state revenue forecasters said in a revenue forecast released in Juneau Dec. 9.

For 2010, the department anticipates further production declines to 665,000 barrels per day, the report said. The production decline from existing fields will be partially offset by production coming from new fields.


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