Corps may delay Point Thomson decision until November

The U.S. Army Corps of Engineers may delay its record of decision and final approval of the environmental impact statement for the ExxonMobil-led Point Thomson gas cycling and condensate production project to Nov. 21.

An approval date that late could jeopardize a start on construction this winter and cause the multi-billion-dollar project a year delay in completion. Point Thomson is currently scheduled to begin production in 2016 but that depends on approval of key federal permits by October.

“We are still hopeful we can finish the Record of Decision on the Point Thomson permit application by the target date of Sept. 21,” Corps spokeswoman Pat Richardson in a statement Aug. 15. “The target dates are estimated dates only and are established based on the volume and complexity of information we are reviewing in order to make a decision to ensure we are approving the least environmentally damaging practicable alternative.”

In a statement, ExxonMobil said, “The U.S. Army Corps of Engineers approval is critical to progressing the project work required to put Point Thomson into production during winter 2015/16. We will assess any schedule impacts following the Corps of Engineer’s final decision.”

Alaska U.S. Sen. Lisa Murkowski and Gov. Sean Parnell criticized the U.S. Army Corps of Engineers for any delay in the record of decision.

Parnell is asking Interior Secretary Ken Salazar to intervene with the Corps to keep the project on schedule. In a comment during a press conference Aug. 13 in Anchorage, Salazar said he received Parnell’s letter and has asked Deputy Interior Secretary David Hayes, who is in charge of a federal regulatory streamlining project, to discuss the matter with the Corps.

Separately, state Commissioner of Natural Resources Dan Sullivan said state officials would turn up the heat on the Corps to get the agency to stick to the September deadlines. Sullivan said that he had been assured by federal officials as recently as two weeks ago that the ROD approval was on schedule.

“I was told the schedule was firm and that there would be no slippage. Now we learn that may not be the case,” Sullivan said.

The final environmental impact statement for Point Thompson was approved in late July. Normally the Record of Decision, the final step, is approved 30 days later. Once those decisions are made key federal permits like the Clean Water Act Section 404 permits can be issued.

No construction can be started until that permit is issued. Sullivan said the state is on track to issue about 100 needed state permits by late September. ExxonMobil has told state legislators that as many as 1,000 jobs could be created during construction this winter.

Point Thomson is a large gas and condensate discovery 60 miles east of Prudhoe Bay. ExxonMobil and other leaseowners, BP and ConocoPhillips, plan a gas cycling and condensate production project. ExxonMobil, BP and ConocoPhillips, the owners, are planning a project to recycle gas and produce 10,000 barrels per day of liquid condensates in the first phase of a development project.

The condensates would be moved to Prudhoe Bay by pipeline and mixed with crude oil in the Trans Alaska Pipeline System.

In her statement, Murkowski said, “This unexpected delay threatens to set production at Point Thomson back another year, costing the state of Alaska both jobs and millions of barrels of oil that is needed to boost throughput in the trans-Alaska oil pipeline.”

A Murkowski staff member in Washington said the senator will attempt to meet with the Corps to urge action on the ROD.

Murkowski is the ranking minority member on the Senate Energy and Natural Resources Committee.

Congressional staff in Washington, D.C., said they had been told by ExxonMobil that it needs the ROD and permits in October to allow time to mobilize contractors and get an ice road under construction to Point Thomson, which is about 60 miles east of Prudhoe Bay on the North Slope.

Other work planned for this winter include an airstrip, gravel roads and installation of vertical support members for a 22-inch pipeline.

Parnell wrote a letter to Salazar Aug. 11 asking for help because of the Interior Secretary’s initiative to improve the performance of federal permitting on energy projects in Alaska.

“As the lead federal agency, the Corps had recently committed to issue the ROD by Sept. 21. On Aug. 1 senior state of Alaska officials were given assurances by senior Corps and Department of the Interior officials that the Corps’ Alaska District would meet that deadline,” Parnell said in the Aug. 11 letter to Salazar.

“State officials have been working hard over the past two years in processing approximately 100 state permits required for the Point Thomson project. The state remains ready to issue these permits as early as next month, enabling construction this winter. If the Corps does not issue its ROD on of near the original target date of September another winter construction season will be lost.”

The Point Thomson gas and condensate discovery was made in the 1970s but its development was delayed due to lack of a natural gas pipeline. ExxonMobil more recently developed the plan to produce the gas, strip liquid condensates, reinject the gas and then ship the liquids to TAPS through the new 22-inch gas pipeline.

08/15/2012 - 6:09pm