GUEST COMMENTARY: Passing the baton for a competitive Alaska
I’ve learned that getting old is much like a mature oilfield. There comes a time to pass the reins in order to remain competitive and productive, a time for the younger and more energetic to take the lead. That’s how we keep our businesses — and our oilfields — competitive and productive.
Here at Lynden, young, smart, hardworking people continue to replace us old warhorses. The same happened in Cook Inlet, and now it’s spreading across the North Slope. These transitions are natural, appropriate and good for Alaskans.
The time has come for BP to sell its aging Alaska assets, just like Chevron, Shell and Marathon did in Cook Inlet. Prudhoe Bay is in decline and as it enters its twilight years, it needs a different kind of operator, one that can bring innovation to old problems, one that can reduce costs and operate more efficiently. It also needs a tax and regulatory environment that is stable and competitive.
We all know that BP has worked hard to slow the severe decline at Prudhoe Bay. For two years after Senate Bill 21 passed, production actually increased. But BP was struggling to bring investment dollars to Alaska with Prudhoe Bay competing against projects in more than 78 countries across the globe.
I have worked with BP in Alaska for nearly 50 years and admire their accomplishments, their generous support of our charities, their employment of so many outstanding Alaskans and Alaska contractors and their positive economic impact on our state.
That said, BP understands that mature, high-cost oilfields require nimble operators. We should be thankful that they turned to a company like Hilcorp.
Hilcorp is a proven entity that not only turned Cook Inlet around, it is working miracles at North Star and Milne Point. It knows how to make older, declining fields productive again, and it has not hesitated to make the investment needed to breathe new life into these aging assets.
As Alaska grapples with recession and budget constraints, it is critical that we do everything possible to keep our resource industries competitive, that we attract new investment and grow our oil production. That’s the best way to provide good jobs, to pay for our government services, including schools and roads, and to support our charities and our Permanent Fund.
That’s why it is important that we support companies like Hilcorp, which is willing to invest the billions of dollars it takes to acquire old fields and make them productive again. That’s their job. Our role is to ensure our state is competitive in the global marketplace and stop threatening the industry with increased taxes and unstable tax policies.
Increased production is essential to maintaining a healthy economy. Transition from retiring Alaskans to the next generation of employees and from the large oil companies to smaller, more aggressive and nimble companies is not only a natural progression, it is healthy for Alaska.
Jim Jansen is the Chairman of the Lynden Companies and a Co-Chair of the KEEP Alaska Competitive Coalition.