Regulatory and fiscal stability are key
to vibrant resource industry
It’s a new day on the North Slope despite the challenges that come with operating in the Arctic – high costs, harsh weather, supply chain issues, legal hurdles and struggles to find adequate financing.
For the first time in a long time North Slope production is projected to remain stable in the near term and increase in the late 2020s. This is excellent news for Alaska. Resource industries, particularly oil and gas, form the backbone of our economy. They are labor intensive, pay some of the best wages in the state and require continued capital investment to maintain or expand production levels. Production is key to jobs and revenue for Alaska.
We cannot control many of the challenges Arctic operations bring, but we can maintain stable tax policies that attract the capital needed to keep our resource industries healthy so they can produce jobs and revenues for Alaskans.
What’s at stake
$3.1B
State & Local Revenue
FY19
77,600
Alaskan Jobs Supported
Direct/Indirect
$549M
Grow the Permanent Fund
FY22 Dedicated Revenues to Corpus
$4.4B
Spending with Local Businesses
Annual
Source: “The Role of the Oil and Gas Industry in Alaska’s Economy,” January 2020, McKinley Research
Letter from the co-chairs
Dear KEEP Alaska Competitive Coalition Supporter,
Alaskans have good cause for celebration. The recently approved Willow project can reverse the last 10 years of population decline and outmigration, provide hundreds of jobs, dramatically increase Alaska’s oil production, fund state services for the next 40 years, provide permanence to the PFD and the Permanent Fund and revitalize Alaska’s economy. At peak production, this major oil project on the North Slope will increase oil production in Alaska by up to 180,000 barrels per day.
Last fall, Santos sanctioned over $2.6 billion to start phase one of the Pikka project, which will produce up to 80,000 barrels per day, giving us another reason to celebrate. This, combined with the Willow project, could mean up to 50% more oil flowing through the pipeline.
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There’s been a string of good news from the North Slope, including the latest from Australia’s 88 Energy Limited.
The company has been flow-testing one zone of its Hickory-1 well and confirmed a light oil discovery. The Hickory-1 discovery well is located in 88 Energy’s Project Phoenix, on state lands adjacent to the Dalton Highway and the trans-Alaska pipeline.
The test produced a peak flow rate of more than 70 barrels of oil per day, with gravities between 39.9 to 41.4 API, representing a light crude oil. Additionally, some natural gas liquids (NGLs) were produced but not measured.
“The completion of flow testing in this zone and recovery to surface of light oil, in addition to NGLs and associated gas, confirms our understanding of the substantial potential of these reservoirs. Significantly, these flow rates were achieved from only a 20-foot perforated section in a vertical well with a low volume stimulation over a short period,” 88 Energy Managing Director Ashley Gilbert said.
“As previously highlighted, production rates in long horizontal production wells are typically multiples of 6 to 12 times higher than tested in vertical wells, as evidenced in many Lower 48 analogs." More here: www.rigzone.com/news/88_energy_confirms_light_oil_discovery_in_alaska_asset-03-apr-2024-176286-ar...
When the North Slope hums, the sound reverberates throughout the state.
Thanks to Santos’ Pikka Project, the Dalton Highway from Interior Alaska to the North Slope has been extraordinarily busy as trucks haul supplies – and a lot of modules – for the new field. Now ConocoPhillips is ramping up to do major hauling for Willow. Twelve modules for Willow’s operations center are currently being fabricated and will be moved to the slope this quarter. That will involve about 3,000 tons to be transported. The operations center will be located about a mile away from the planned Willow processing plant and will include utilities and facilities for 500 people.
All this building and moving creates jobs that pay good wages, good work for the fabrication and transportation shops, and revenues for the state through fuel and corporate income taxes. When it’s all over, Alaska will have seen a $106 billion shot in the economy.
ConocoPhillips also has a major seismic program underway in the area for the planned development wells, says business reporter Tim Bradner. SAExploration, a subsidiary of Kuukpik Corp., the Alaska Native village corporation for Nuiqsut, has 150 people on the project. Nuiqsut is a small Iñupiat village near the Alpine field.
Photo courtesy Lynden Transport
It’s taken the oil patch a long, long time to recover from the pandemic, but February’s numbers are encouraging.
February employment figures from the state Department of Labor and Workforce Development show a 6.8% increase in oil industry jobs over February 2023. That means 7,900 people are now at work, boosted by the big North Slope projects underway this winter.
“The industry’s workforce has been increasing and showed a 4.1% gain in December (the most recent prior data). It’s likely the oil and gas job data understates the effect of the slope work,” writes veteran industry reporter Tim Bradner.
“Transportation employment, boosted by sharply increased trucking on the Dalton Highway to the Slope, was up 6.2% in February and 3.3% in December.
Transportation is included with warehouse work and utilities in the labor department data, but most of the gain is in transportation, in trucking.”
The mission of KEEP Alaska Competitive is to promote and preserve competitive, fair and stable taxes on Alaska’s resource industries to enhance investment, jobs and production to secure Alaska’s long term economic future.