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Morning Headlamp - Lawmakers to Examine AGDC's Legal Authority

Morning Headlamp, Dec. 29, 2016


A legislative committee has ordered an audit that could determine whether the Alaska Gasline Development Corp., has the legal authority to spend money set aside for the smaller gasline. For the state to take over planning for the Alaska LNG project this year from oil companies ExxonMobil, BP and ConocoPhillips, the AGDC is planning on using all $100 million it has in the bank, including funds appropriated by the Legislature for the Alaska Stand Alone Pipeline project. Keith Meyer, president of the AGDC, asserts that his agency has about $100 million to spend on the project. But the audit will address questions about the agency's legal authority to spend all that money, including $27 million in a fund to support ASAP. Some legislators have said the smaller project would reduce in-state energy costs and serve as a backup in case a larger project failed.


Careful what you wish for. According to the Alaska Journal of Commerce, a more accurate method of forecasting oil and gas production has recently been employed, but Alaskans may not like the result. The Department of Revenue used to farm out the semi-annual oil production forecasts published early each spring and late each fall to an outside consultant. However, in an effort to save money while at the same time produce better results, Revenue officials turned to their Department of Natural Resource colleagues. The new production forecast methodology uses more detailed, field-specific data that should generate more accurate numbers, according to Division of Oil and Gas Director Chantal Walsh.


North Slope operators are now expected to produce an average of 490,300 barrels per day, instead of the 507,100 barrels per day projected in the Spring 2016 Revenue Book published last March. The 490,300-barrel per day average would be a decline of about 5 percent from the 514,900 barrels per day produced in FY 2016. Headlamp notes that the actual production number for FY 16 was 531,000 barrels per day. Such a significant change in the forecasted production deserves an explanation and also highlights the need for Alaska to do all it can to increase production and put more oil in the pipeline. The result of doing so will mean more tax revenue, more jobs, and a better economy for all Alaskans. 


New infrastructure legislation passed by Congress this month could send millions of dollars to rural Alaska to fund water infrastructure upgrades. The law, named the "Water Infrastructure Improvements for the Nation Act of 2016," is a recasting of a water infrastructure bill that provides government funding for drinking water, flood management and sewer programs across the country, among other infrastructure projects. "For Alaska, investment in such infrastructure is crucial. More than 3,300 rural Alaska homes lack running water and a flush toilet, which leads to serious health issues. This is unacceptable," Alaska Sen. Dan Sullivan said.


First Reads

State's new method leads to lower production forecast
Alaska Journal of Commerce, Elwood Brehmer, December 28, 2016

The year in review: 2016, a new era in Alaska Politics
KTVA, Liz Raines, December 28, 2016

Bans on oil and gas leasing robs Alaska of potential jobs, revenue
Juneau Empire, December 28, 2016

Congress votes to send millions of dollars to rural Alaska for water infrastructure
Alaska Dispatch News, Erica Martinson, December 28, 2016

Legislative audit to investigate money transfers at state-led gas line agency
Alaska Dispatch News, Alex DeMarban, December 28, 2016

Flint Hills demolishing North Pole refinery
Fairbanks Daily News Miner, Amanda Bohman, December 28, 2016


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