Feds select Hilcorp’s plan for offshore oil prospect

Hilcorp Energy mostly got what it asked for in the Bureau of Ocean Energy Management’s environmental review of the company’s proposed Liberty offshore oil development released Thursday. The federal agency picked Hilcorp’s plan to construct a 24-acre gravel island in the federally-controlled shallow waters about six miles offshore and just east of Deadhorse in the Beaufort Sea as its preferred option for developing the estimated 330 million barrels of light crude oil at the heart of the project in its final environmental impact statement. Hilcorp Alaska leaders have said the project could produce between 60,000 and 70,000 barrels of oil at its peak. It is planned for a 15 to 20-year production life. The island, in 19 feet of water, would have a working surface area 9.3 acres, enough for 16 wells, with up to half of those being production wells and the rest reserved for injection and disposal purposes, according to the EIS. A 12-inch, roughly seven-mile, mostly subsea oil pipeline would connect the Liberty Island to onshore oil infrastructure near Deadhorse. Specifically, the pipeline would tie into the Badami oil line, which feeds the Trans-Alaska Pipeline System. The project would add oil to TAPS, but the majority of revenue from the production would go to federal coffers because the project would be in federal waters. Liberty is expected to cost about $1.5 billion overall, according to federal regulators. BOEM Acting Director Walter Cruickshank said the agency held meetings in the North Slope communities of Nuiqsut and Utqiagvik, as well as Fairbanks and Anchorage after the draft EIS was released about a year ago. “The final EIS incorporates input from those communities and the comments we received from other stakeholders, partner agencies and the general public. With that input, our scientists have produced a robust analysis that thoroughly analyzes the potential impacts of Hilcorp’s proposal,” Cruickshank said in a formal statement. Hilcorp Alaska spokeswoman Lori Nelson wrote in an emailed statement that the company is reviewing the EIS and is encouraged the project has taken another step forward. “The Liberty project will incorporate proven technologies already utilized in the shallow waters of Alaska’s Beaufort Sea, and would help generate new jobs, revenue and domestic energy,” Nelson wrote. She could not specify when the company hopes to begin constructing the project. Hilcorp Alaska officials have pointed to the four large existing North Slope oil development islands — Endicott, Spy, Oooguruk and Northstar — as strong evidence that Liberty can be done safely. The company is the majority owner and operator of the Northstar and Endicott fields, after purchasing BP’s interests in them in a 2014 deal that also gave it a 50 percent interest in Liberty. BP subsequently sold 10 percent of its stake in Liberty to ASRC Exploration. BP purchased Liberty from Shell in 1996 after Shell discovered the prospect with four exploration wells in the mid-1980s. BP first planned to build an island to develop Liberty but put those plans on hold in 2001 to further study the project, according to the EIS. In 2005 the London-based oil major proposed drilling ultra-extended-reach wells from onshore to eliminate the need for an island and minimize the project’s impacts on Alaska Native subsistence whaling hunts in the area. That plan was scrapped in 2012 and Hilcorp subsequently took over the project in 2014. Drilling from onshore would require drilling wells nearly a mile longer than the world record wellbore of 40,602 feet, according to BOEM. Alternative development options considered in the EIS considered included moving the man-made island up to 1.5 miles to keep the project away from the densest area of what is known as the “boulder patch,” an area of the seabed with small boulder substrate that “supports the richest and most diverse biological communities in the Beaufort Sea,” the EIS states. However, moving it about a mile east would require pipeline design changes to limit the risk of pipeline buckling or wear and moving it closer to shore — into state waters — would increase the average wellbore from about 13,900 feet to 17,200 feet, according to BOEM. Moving processing facilities off the manmade island was also considered as a means of reducing equipment noise and vibrations with the potential to impact marine mammals relied on for subsistence harvests. Leaders of Kuukpik Corp., the Alaska Native village corporation for Nuiqsut, wrote in earlier comments during the EIS process that the company doesn’t have a stance on the project, but urged BOEM officials to closely examine the impacts of abandoning the Liberty Island once production has ceased. Leaving the gravel island to wash away once all production and erosion protection equipment has been removed could at a minimum cause navigation hazards in a travel corridor frequently used by Native subsistence hunters, according to Kuukpik President Isaac Nukapigak. Doing so could also expose the Boulder Patch to artificial debris, Nukapigak also noted. Decommissioning the project through removing facilities and equipment, stripping the island of its erosion protection and letting the ocean reclaim the area was the procedure used for Tern Island and other gravel exploration islands built in the area during the 1980s and 1990s, according to the EIS. Elwood Brehmer can be reached at [email protected]

COMMENTARY: Hatcheries a vital source of abundance for Alaskans

Few things define Alaskans more than our love of salmon. Not surprisingly, salmon allocation decisions and fluctuations in resource abundance often spur bitter political battles between user groups. A robust public process rooted in best available science has long been the arbiter of such disputes. As an Alaskan born and raised on the Kenai, and in my current role as Mayor of Cordova, it is with deep consternation that I followed a recent Board of Fisheries evaluation of an emergency petition seeking to restrict hatchery salmon releases in Prince William Sound. The Board narrowly voted to reject the petition averting a dangerous departure from best available science, transparency, and public process; the principles that are the bedrock of our management system. The inconsistency of the Cook Inlet salmon runs over the past few years have now arbitrarily pointed to hatchery releases as the culprit. It is understandable that as demand for Cook Inlet salmon expands and catch rates go down, fishermen from all user groups are looking for answers. Unfortunately, we have little control over the likely cause cited by scientists: the recent ocean conditions wreaking havoc on the Gulf of Alaska’s ecosystem. Referred to as “the blob,” the mass of warm water that formed in 2013 and lingered through 2016 stripped the typically bountiful Gulf of Alaska of vital nutrients, creating cascading effects throughout the food chain. Scientists believe it to be responsible for mass die-offs of juvenile cod and salmon—impacts that are clearly visible in this year’s salmon runs. It is important to recognize the resounding success of the hatchery management program. Salmon hatcheries have been a key component of our state’s commercial, recreational, and subsistence fisheries since the 1970s. Alaska’s hatchery program provides immense economic and social benefit to the entire state, particularly coastal communities like Cordova. The enhanced commercial harvest leads to the creation of processing jobs, fisheries tax revenue, economic investment, and state general fund revenues. An often-overlooked fact is that hatcheries create significant sport fishing opportunities in Prince William Sound and statewide, which increases the summer tourism industry. These benefits are essential to our coastal communities as well as the state, particularly in times of decreasing state budget resources. It is also important that stakeholders remain engaged in the public process and resource management decisions. However, it is also important for Alaskans to remember that our fisheries have remained sustainable because of a commitment on behalf of managers and users who rely on the best available science and data to make informed decisions. Making knee-jerk decisions in response to fluctuations in salmon runs year by year will not serve Alaskans well, particularly when the execution of said decisions could reduce future run potential. The established public process and science-based management in Alaska will keep us moving down the healthy path of promoting and protecting sustainability, feeding Alaskans, feeding the world, and providing wild salmon to all Alaskans for generations to come. Clay Koplin, Mayor of Cordova, is a lifelong Alaskan who grew up on the Kenai River where he and his family participated in sports fisheries and founded, as a family, the largest lure manufacturing business in the state. He and his family have subsistence fished for salmon and shellfish, and participated in the first Kenai River personal use dipnet fishery. Clay has witnessed the contributions of salmon hatcheries and releases developed on the Kasilof River, Halibut Cove, Ship Creek and others to enhance opportunities for sportfishing and all user groups.

COMMENTARY: PFD should be enshrined in Constitution for all Alaskans

My roots in Alaska go deep. I’ve had incredible opportunities here. At 93, my greatest hope is that my children and future Alaskans continue thriving here in a land of opportunity. When I arrived in Alaska after WWII I was glad to be alive. I had served over two years with a naval construction battalion on Guadalcanal and the Solomon Islands. Malaria and other jungle diseases wracked by body. I was a wreck in some ways. But Alaska provided. Alaska healed me. I met the love of my life here and raised a family in Halibut Cove. Alaska provided abundant fish and spectacular land and seascapes that made me whole. The people of Alaska were hard working, thrifty, and committed to building a better future for everyone – my kind of people. We worked following the war to build a bright and inclusive future. Statehood was the goal. Control of our destiny was the value we cherished. We achieved statehood by working together, across party lines, over geographical boundaries and in spite of personal beliefs. It had to be done and it was. The great promise of statehood ensured Alaskans would obtain the land grants and control of our inshore fisheries we needed to thrive. We selected wisely, including the incomparable lands along the Sagavanirktok River near Prudhoe Bay that yielded a stupendous amount of oil revenue. When the oil revenue started rolling into our state coffers, Alaska’s great promise appeared to have been fulfilled. But the initial bonanza of oil revenues was spent like a sailor hitting port after a long voyage. Some of us worried about spending every cent of our non-renewable oil revenue without saving for the future. Visionary legislators like Oral Freeman and Hugh Malone led the call to save a slice of our oil revenue. They were assisted by my pool playing buddy, Governor Jay Hammond, who grew up poor in upstate New York and knew the value of savings. Working together with Alaskans from across the state, we established the Permanent Fund. We only saved only 25% of the oil revenues. The rest was available and spent by the politicians. Some of it even benefited the people. Jay Hammond convinced me and many other Alaskans the only way to fully protect our Permanent Fund was to make sure each and every Alaskan had a stake in the fund. Hammond believed as long as every Alaskan obtained an uncapped dividend each year, the voters would protect the Permanent forever. Which brings me to the point I want every Alaskan to consider. The Permanent Fund, now at $65 billion, has benefited all Alaskans for decades. The current law requiring the Permanent Fund Corporation to inflation proof the fund and then pay the PFD according to a legal formula, has been a boon for every Alaskan and the private sector. Alaskans are treated equally according to this distribution law. Whether you live in Bethel or Ketchikan, Anchorage or Fairbanks, the dividend is your legal right. And why not? The dividend came from our Permanent Fund savings account – a fund established in our Constitution using the oil wealth owned in common by all Alaskans. Politicians and special interests have tried to hijack your dividend since it was established. For the first time in history they’ve succeeded. In the last three years our politicians failed to address revenue shortfalls in a responsible way. Instead, they stole thousands of dollars from you by shorting your dividend so they can spend your money on projects and activities they believe are more important than your interests. As a group, our elected officials are addicted to spending. They’ve spent down most of the state’s savings account. Now they are ignoring the law and grabbing your PFD. Eventually they’ll go after the Permanent Fund if we let them. All of us who helped establish the Permanent Fund did so to pass along a little of the oil wealth to future generations. The PFD isn’t a welfare program or a rainy-day account for government. The PFD was established so every Alaskan would share equally in the Permanent Fund earnings and to provide a firewall between the grasping hands of politicians and special interests trying to rip off our communal savings. I came back from the war in the Pacific sure in the knowledge that Alaska was a great place to live and full of opportunity. The sea and the land provided. Life was good because we all worked hard, built a better future, and saved a portion of the bounty we inherited. Letting the politicians raid our savings and cut Alaskans’ PFD is political robbery. Anything short of full constitutional protection of the PFD is unjust and robs every Alaskan of their equal share of our savings. We must defend our Permanent Fund. To do that, the original PFD law must be protected in our Alaska Constitution. Clem Tillion is a former nine-term legislator and retired commercial fisherman residing in Halibut Cove near Homer. He is the president of the Permanent Fund Defenders (www.pfdak.com) and helped design the Permanent Fund with Gov. Jay Hammond and others.

OPINION: Thank you for not voting

Forgive two movie references between the headline and this lede, but Everything is Awesome if turnout is any indication about how Alaskans are feeling about the state of the state. Recession, unemployment, negative migration, addiction, crime and the Permanent Fund Dividend have dominated the news and internet comments for the past three years, yet fewer than 1 in 5 Alaskans cast ballots in the Aug. 21 primary. There are plenty of good reasons for that. The Democrat race for governor was essentially uncontested, there was no U.S. Senate race or ballot initiatives, the incumbent Gov. Bill Walker wasn’t on the ballot and as usual many House and Senate races had fewer choices than an election in North Korea. As expected, former state Sen. Mike Dunleavy crushed latecomer and former Lt. Gov. Mead Treadwell in the GOP primary by a 2-1 margin. Treadwell, who vastly overestimated his name recognition and ability to parachute into the race at the filing deadline as a last-ditch alternative to Dunleavy for the party establishment, sang a song of sour grapes as the results came in. "We have to bring the Republican Party together because right now the ideas that we brought forward on trying to save jobs, build jobs in this economy, having experienced people run this thing, we did not get very much attention,” Treadwell told the Anchorage Daily News. “The biggest issue was who was tallest." Unconstrained by holding any elected office, Treadwell had more than a year to run, make his case and raise money to earn the GOP nod — there was even a gap where Dunleavy suspended his campaign for health reasons — but he apparently believed he could stroll to a win in a couple months if only he’d gotten more attention. Note to Mead: You can’t beat something with nothing, and looking for scapegoats anywhere but the mirror is a bigger waste of time than your short-lived campaign. But back to the turnout, which while largely explainable was baffling in a few notable contested races. In Eagle River, the race to fill former Sen. Anna MacKinnon’s seat between two well-known politicians was a blowout win for Rep. Lora Reinbold over Rep. Dan Saddler by nearly 800 votes but fewer than 5,000 people voted in a district of nearly 29,000 registered voters. In House District 25, House Minority Leader Charisse Millett was sacked by newcomer Josh Revak with neither accumulating even 1,000 votes. With turnout of just 11 percent, Revak had a lead of 916 to 685 in a district with more than 14,000 voters. But wait, it gets worse. Over in Muldoon, House Rules Chair and the Legislature’s most prolific fundraiser Rep. Gabrielle LeDoux couldn’t even turn out 300 people to vote for her. She ended the night trailing by 3 votes, 294-291, and may yet pull out a win, but it is still a pathetic showing for the would-be kingmaker. LeDoux and Millett, who both voted for fully funding the PFD this past session, may well go down to defeat, and even in races where candidates made it an issue the results were decidedly mixed. Paying a “full” dividend is just not an animating issue for the majority of Alaskans, despite what Dunleavy’s win might indicate. The issue did appear to bite a member of the Senate Majority leadership with Peter Miccicche trailing by 12 votes in his race on the Kenai Peninsula. But like Millett, his loss, if it holds, can just as easily be blamed on complacency as a reduced PFD that is still bigger than all but seven that have been paid in state history. Whether the internet-amplified anger over the PFD translates to a Legislature that will send a formula-funded dividend to the governor’s desk remains to be seen, but if Tuesday was any indication the issue did not drive turnout in any race. The math of a three-way contest rather than the math of calculating the PFD still appears to be the most decisive factor heading into November. Andrew Jensen can be reached at [email protected]

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