By Tim Bradner
Alaska Journal of Commerce

A broad range of resource challenges and opportunities faced by Alaskans will be outlined Nov. 14 and 15 in the Resource Development Council's “Alaska Resources 2008” conference in Anchorage.

It is RDC's 28th annual conference. The meeting brings business and community leaders from several industries and regions of the state together.

Key issues faced this year include a natural gas pipeline, the effects of higher state taxes on North Slope oil and gas development, and new challenges faced in the state's mining industry. Other issues include challenges the state faces in maintaining and building infrastructure as federal appropriations decline.

As RDC's conference convenes, legislators in Juneau, meeting in special session, will be finishing a revision to the state's oil and gas production tax that may impose higher taxes on the industry.

Gov. Sarah Palin called the special session to ask lawmakers to vote again on the state's oil production tax after concerns arose that the Legislature was illegally influenced in their approval of the petroleum profits tax in 2006.

Palin also asked for an increase in the tax, but state legislators may go beyond what the governor had asked for in hiking the tax.

RDC is concerned that higher taxes may dampen new investment needed on the North Slope, which is seeing a decline in oil production. North Slope oil producers say they need to invest about $2 billion a year to keep the decline rate in production at about 6 percent a year, and to double their investment if the decline rate is to be slowed even further.

Production has decreased at rates far higher than 6 percent in the last two years, however. Last year production declined more than 12 percent. The drop in previous years was at nearly 8 percent.

At those rates North Slope production could be down to about 300,000 barrels per day within eight to 10 years, rates that may be insufficient to operate the trans-Alaska oil pipeline as it is currently configured.

Meanwhile, proposals are due Nov. 30 for applications under Palin's Alaska Gasline Inducement Act, a law approved by the Legislature last spring to solicit proposals to build a North Slope gas pipeline. Major North Slope producers, who own rights to produce the gas, have said they will not submit proposals because the terms of the governor's AGIA are too restrictive. RDC is following the gas pipeline issue closely.

In mining, development of a large copper-gold-molybdenum deposit at Pebble, near Illiamna, is fast becoming a major statewide issue. A coalition of sports fish lodge owners, environmental groups and communities in the Bristol Bay region oppose the mine. But communities close to the mine that would benefit from employment opportunities are keeping an open mind.

RDC also is closely watching a proposed statewide ballot initiative that would impose strict new environmental controls on development projects. Although the ballot proposition is aimed at stopping the Pebble mine, it could also block other new mining projects, including the Donlin Creek gold mine, and affect producing mines like the Red Dog Mine near Kotzebue, the Fort Knox Mine near Fairbanks, the Pogo gold mine near Delta and the Greens Creek mine near Juneau.

Lt. Gov. Sean Parnell initially disqualified the ballot initiative as an illegal appropriation of state resources, but a state superior court judge overruled Parnell after the petitioners appealed his decision. The state is appealing the question to the state Supreme Court.

Tim Bradner can be reached at tim.bradner@alaskajournal.com.