MACC calls for ACES reform
Change ACES and producers commit to increased investment
The North Slope's three major producers have all pledged a renewed commitment to unlock Alaska's huge oil and gas potential once ACES is reformed and the business climate improves.
BP Exploration (Alaska), Inc. "We all agree we are not limited by the opportunities; we are limited by the competitiveness and commercial viability of many of our projects," said BP Alaska President John Mingé during an April 14, 2011 speech in Anchorage. "These projects would be competitive in other parts of the world, but they aren't here in Alaska under the current tax regime."
Jim Mulva, Chairman and CEO of ConocoPhillips, agreed.
ConocoPhillips "Alaska has tremendous resource potential, and we at ConocoPhillips have over 50 years in Alaska in solving technical and environmental challenges associated with oil development. We support improving the investment climate and believe changing oil taxes will lead to a better future with more production and jobs for Alaska families than the current path we are on," he said in an ad that appeared in newspapers across the state in April.
ExxonMobil Production Co. ExxonMobil Production Co. President Rich Krueger echoed the sentiment in an April 16 opinion piece in the Juneau Empire.
"It is our firm belief that passage of the governor's proposed changes to ACES, in its current form, will support additional investments in Alaska that will lead to greater development and production," Krueger wrote.
BP and ConocoPhillips have listed an estimated $5 billion in projects they will pursue in the near term "if the business environment is changed."
The producers' commitments:
- Increase drilling activity on the North Slope, which will increase production and create hundreds of new jobs as every rig requires 100-150 workers.
- Work to advance the $1.5-2 billion Gas Partial Processing Plant in the western Prudhoe Bay oil field. The project would separate gas from the oil, water and gas that comes out of wells. Gas would be re-injected underground.
- Work to advance I Pad, which will result in 50 new wells to access about 80 million barrels of additional reserves.
- Aggressively move to pursue more satellite developments at Kuparuk, Alpine, Milne Point and Point McIntyre.
MACC Co-Chair discusses danger of mushrooming state spending
Northrim Bank "Since ACES went into effect, we've watched oil production slide about 26 percent while state spending has increased approximately 60 percent," Marc Langland, Chairman of Northrim Bank, wrote in an Oct. 24 Anchorage Daily News Compass piece.
"Ever-growing spending levels are simply unsustainable, particularly with the impending crisis of declining oil production. That paradigm, among all others, poses the greatest threat to Alaska's credit rating."
Click here to read Langland's column.
MACC accepts no money from North Slope producers.
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Posted: October 27, 2011