Democrats Introduce Bill to Increase North Slope CompetitionNew producers need fair access to processing facilities
JUNEAU - Today, Representative David Guttenberg (D-Fairbanks) introduced legislation to increase oil industry competition on the North Slope by leveling the playing field for new producers looking to access existing oil pipelines and processing facilities that feed the Trans Alaska Pipeline System (TAPS).
"We all want more exploration and more jobs on the Slope," said Rep. Guttenberg. "This bill would level the playing field so new, independent producers have a fair chance to make a profit in Alaska."
Around the world, when major oil fields are in decline, smaller independent producers come in to get the most out of the aging fields. Many of the smaller remaining pools of oil are too small to justify building new facilities. Often, a new producer in Alaska has to negotiate with its much larger competitors who own the necessary "upstream" pipelines and processing facilities in order to get its oil into TAPS.
There is no process available now to make sure potential North Slope producers have a fair chance to buy space for their oil in those facilities.
"In essence we have 'stranded oil'-oil producers cannot produce until they know they won't lose all their profits getting their oil into the pipeline. Alaska cannot afford this obstacle to oil production. Passage of HB XXX would help solve the problem," said Rep. Gardner.
The bill addresses oil and water separators and other facilities that convert fluids from the well into pipeline quality crude oil for TAPS. Rep. Guttenberg's bill, HB 138, would classify these facilities as "utilities." This allows the Regulatory Commission of Alaska to set up a process so that new producers get a fair chance to access the facilities, and the owners of those facilities get a fair return for granting that access.
"This is a complicated issue that insiders have known about for years. Alaska needs to address it if we want to grow investment and increase competition on the Slope," said Rep. Guttenberg. "Alaskans have a vested interest in making sure our resources have a fair chance to get to market."
"When it comes to creating good jobs for Alaskans, opening up the North Slope to more competition has to be part of the equation," said Rep. Kerttula. "I hope this starts a serious conversation about how to address the obstacles new producers face in Alaska."
WATCH the VIDEO: Rep. Guttenberg's statements on HB 138 (High definition, TV quality video is available upon request).
Posted: February 2, 2011
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