Alaska Gov. Sarah Palin scolded ExxonMobil Corp. and other Point Thomson field leaseholders Jan. 19 for “warehousing” 8 trillion cubic feet of gas and 300 million barrels of condensates for almost 30 years.
In a speech before a major industry conference in Anchorage, Palin also defended the state's recent action to take back leases.
On Nov. 20 the Alaska Department of Natural Resources, under former Gov. Frank Murkowski, declared the Point Thomson Unit in default over the companies' failure to fulfill work commitments. ExxonMobil, Chevron USA and ConocoPhillips Alaska Inc. on Dec. 28 filed appeals in Alaska Superior Court contesting the state's action.
“Industry and the state must live by legal contracts and leases and unit agreements are contracts,” Palin told the conference. “The state must be trusted to keep its promises, and it's no different for industry. Warehousing Alaska's gas is not an option. We need action on developing Point Thomson.
“ExxonMobil and its partners have held the Point Thomson leases for 30 years,” she added. “After failing to provide the state with an acceptable plan of development, the Department of Natural Resources declined to renew the unit.”
Point Thomson leaseowners have argued that they have spent nearly $1 billion on drilling and other work over the years, but the major obstacle to development of the gas reserves has been the lack of a way to move the gas to market. The companies have proposed a natural gas pipeline but a contract reached last year with former Gov. Murkowski was not approved by the state Legislature.
Palin praised the entry of new companies coming into Alaska, companies such as ENI Petroleum Inc. and Shell Offshore Inc., as well as major independents who have been here for some time, like Anadarko Petroleum Co. and Pioneer Natural Resources Inc.
The lack of any mention by Palin of new development efforts such as in heavy and viscous oil by major North Slope producers BP (Alaska) Exploration Inc., ConocoPhillips and ExxonMobil was noted by many listeners at the conference.
The governor said she supports more oil and gas development and exploration in new areas, citing as an example her support for the U.S. Minerals Management Service's recent decision to hold an offshore lease sale in the North Aleutian Shelf, a region near a major salmon fishery in Bristol Bay.
The lease sale is controversial in coastal communities in Alaska, where commercial fishing is an important industry. Palin said she and her family have fished commercially for years in Bristol Bay and shares fishermens' concerns about offshore spills. She is convinced, however, the region can be developed safely.
The conference was sponsored by the Alaska Support Industry Alliance.
Tim Bradner can be reached at
tim.bradner@alaskajournal.com.
