Tim Bradner

Caelus plans fracking technology with a twist

When Caelus Energy begins development of its Nuna project on the North Slope it will employ technologies borrowed from the Lower 48 shale oil industry, but with a twist.

The company plans to use large-scale hydraulic fracturing on its oil production wells, though not to the degree used in the North Dakota Bakken and the Texas Eagleford shale producing regions.

Legislature gets to work on Medicaid reform, expansion

JUNEAU — Legislators are getting down to business on reforming the state’s bloated Medicaid system.

A committee in the state House took up Gov. Bill Walker’s bill to expand, but also reform, Medicaid, while a Senate committee took up a bill by Sen. Pete Kelly, R-Fairbanks, to reform, but not expand, the program.

ConocoPhillips moves ahead with Slope project at Kuparuk

ConocoPhillips announced it is proceeding with another North Slope oil project despite the sharp slump in prices. The company said March 23 it will develop a $460 million viscous oil expansion project in the Kuparuk River field on the Slope.

The 1H Northeast West Sak, or NEWS, project will add 8,000 barrels per day to Kuparuk field production at peak production, ConocoPhillips said in its announcement.

Caelus sanctions Nuna development

Caelus Energy has given formal approval for its new $1.5 billion Nuna oil project on the North Slope and has started construction, the company confirmed Friday.

A letter notifying the state Department of Natural Resources of the approval was sent to the agency March 10 to satisfy a requirement of a temporary state royalty modification for the Nuna project.

Gravel mining and hauling for a 2.5-mile access road and 22-acre drillsite began Jan. 25, Caelus Vice President Pat Foley told state Deputy Natural Resources Commissioner Marty Rutherford in the letter.

AGDC board adopts 'to-do' list for Walker's state-led pipeline

There may still be uncertainties about Gov. Bill Walker’s expectations for a larger state-led gas pipeline, but the board of the Alaska Gasline Development Corp. has adopted a cautious, step-by-step strategy for investigating an expanded project.

AGDC has currently developed the state-led Alaska Stand Alone Gas Pipeline, or ASAP, as a fallback to get North Slope natural gas to Alaska communities in case a large industry-led gas project falters. ASAP is now designed to move 500 million cubic feet of gas daily.

AGDC needs spending freeze lifted

The first new jobs created by Gov. Bill Walker’s new gas pipeline plan may well be in California, it appears.

Following the governor’s directions, the state-owned Alaska Gasline Development Corp. has initiated a study of costs to do engineering to scale-up a state-backed North Slope natural gas pipeline, the Alaska Stand-Alone Gas Pipeline. The state pipeline is now planned with a capacity to move 500 million cubic feet per day. The governor wants to increase it to as much as 2.6 billion cubic feet per day.

Walker introduces legislation to expand Medicaid

Bowing to legislators’ requests, Gov. Bill Walker introduced legislation March 17 setting out a broad framework for reform of the state-managed Medicaid program and also expanding the program to provide health coverage to an estimated 40,000 uninsured Alaskans.

Earlier in the week, Sen. Pete Kelly, R-Fairbanks, introduced Senate Bill 74, setting out several provisions for reform of Medicaid but without an expansion of coverage.

Key decisions due at end of March for Shell

A key federal decision is shaping up for Shell at the end of this month.

The U.S. Bureau of Ocean Energy Management, or BOEM, expects to issue a final decision by March 31 on a revised environmental impact statement of the Chukchi Sea 2008 Outer Continental Shelf lease sale that has been contested in court by environmental groups, the director of the agency said March 13.

Abigail Hopper, director of the BOEM, said a Record of Decision on a revised supplemental environmental impact statement, or SEIS, is to be issued.

Production to decline 4.1% this year

North Slope production is declining again after producing companies managed to stem the drop in output last year, according to data from the state Department of Revenue.

For the last half of 2014, production averaged 487,864 barrels per day compared with an average of 520,557 barrels per day for the same period of 2013, a 6.3 percent decline.

These are confirmed production numbers, according to Cherie Nienhuis, an analyst with the Revenue Department’s Tax Division.

AGDC board approves study for larger gasline, but needs spending freeze lifted

The first new jobs created by Gov. Bill Walker’s new gas pipeline plan may well be in California, it appears.

Following the governor’s directions, the state-owned Alaska Gasline Development Corp. has initiated a study of costs to do engineering to scale-up a state-backed North Slope natural gas pipeline, the Alaska Stand-Alone Gas Pipeline. The state pipeline is now planned with a capacity to move 500 million cubic feet per day. The governor wants to increase it to as much as 2.6 billion cubic feet per day.

State estimates $150B to treasury if ANWR ever opened

Alaskans have long believed oil discovered in the coastal plain of the Arctic National Wildlife Refuge could help keep the Trans-Alaska Pipeline System operating and also replenish the state treasury.

It may be a pipe dream because the federal government shows no sign of opening the coastal plain to further exploration and Congressional approval is required for any exploratory drilling or leasing.

Exploration payrolls down as producing mines add jobs

Minerals employment and industry spending dropped in 2014 compared with 2013 and 2012 but the decline is attributed mostly to sharp declines in expenditures for exploration.

The state’s larger producing mines added jobs in all three years, according to the latest minerals industry economic report by McDowell Group.

The report was recently released by the Alaska Miners Association. McDowell Group is a Juneau-based economic research firm. 

Walker outburst further strains relations with legislators

Gov. Bill Walker’s temper tantrum against House leaders in a March 2 press conference has brought his relations with the House, and quite likely the Senate, to a frigid level, posing a threat to the governor’s major initiative, an expansion of Medicaid.

Medicaid expansion was already in trouble in the House, but the sour relationship has almost certainly doomed any chance of it happening this session. Health and Social Services Commissioner Val Davidson had hoped to get the expansion underway July 1.

Alaska LNG Project partners discuss progress

Things were going well for the large Alaska LNG Project as of Feb. 18.

North Slope producers and the president of Alaska Gasline Development Corp., the state-owned gas company, presented an update on the Alaska LNG Project to the Senate Resources Committee.

Steady progress was being made in negotiations of key agreements needed in 2015, which would set the stage for a critical decision in 2016 on proceeding to detailed engineering, the group said.

State geologists raise estimates for Inlet gas

State geologists have now increased the amount of natural gas they believe can be economically produced from known fields in Cook Inlet.

The state Division of Oil and Gas concluded, in a recent study, that there may be 440 billion cubic feet more gas in the Inlet’s gas fields than previously estimated.

About 1.1 trillion cubic feet of recoverable gas reserves were estimated in a 2009 resource assessment by the division, and the new figure is about 1.54 trillion cubic feet of gas, according to Paul Decker, acting director of the state Division of Oil and Gas.

Interior Dept. releases proposed Arctic drilling rules

The U.S. Interior Department issued its long-awaited special Arctic drilling rules Friday. The proposed rule will be held for a 60-day public review period before being finalized, the department said in its announcement.

“The proposed Arctic-specific regulations released today focus solely on offshore exploration drilling operations within the Beaufort and Chukchi Sea OCS planning areas,” the agency said.

BLM awards $10M contract for NPR-A legacy well cleanup

The U.S. Bureau of Land Management has let a $10 million contract to Marsh Creek LLC to remediate abandoned oil wells drilled decades ago at Umiat in the National Petroleum Reserve-Alaska.

This is the first phase of what will be a $50-million program to clean old well sites in the federal reserve, BLM’s Alaska manager, Bud Cribley, said in an interview.

The agency is tapping $50 million made available through efforts by Alaska U.S. Sen. Lisa Murkowski.

Leaders rally against Army force reductions

Community leaders in Anchorage and Fairbanks are rolling out the red carpet for a Pentagon team visiting Alaska that is considering possible reductions of Army troops at Joint Base Elmendorf-Richardson in Anchorage and Fort Wainwright in Fairbanks.

The visitors will be in Anchorage Feb. 23 and in Fairbanks Feb. 24.

The loss of a major combat unit at either base could be severe, said Bill Popp, president of Anchorage Economic Development Corp.

Sharp questions in opening hearings for Medicaid plan

Medicaid expansion is taking on a partisan edge in Juneau, to no surprise.

Hearings on the plan by Gov. Bill Walker opened Feb. 16 in a House Finance subcommittee. Department of Health and Social Services Commissioner Valerie Davidson made the case for expansion, citing improved health care for Alaskans, lower near-term costs to the state budget, and lower costs for many employers if workers have better access to health care.

BLM tacks $8M fee onto GMT-1 project permit

The U.S. Bureau of Land Management has approved construction of the first oilfield access road into the National Petroleum Reserve-Alaska.

But part of the deal announced Feb. 13 involves ConocoPhillips Alaska Inc. paying $8 million in additional mitigation into a fund for the petroleum reserve, although the payments would not be related to ConocoPhillips’ activities.

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