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To fuel our future, we need to go further, fast {Alaska Oil}
Anchorage Daily News ^ | December 17th, 2011 | TIM BRADNER

Posted on 12/18/2011 5:06:14 AM PST by thackney

state budget, released Thursday along with state revenue and oil production forecasts, reflect some disturbing trends: less revenue, higher costs and trouble ahead. The budget proposal shows the kinds of forces driving the state operating budget ever upward, like increases in Medicaid, state employee contracts and a new prison.


On the revenue side, we see continued declines in oil production in a state where oil revenues pay for 90 percent of the budget. There is a good reason to believe the state's production forecast is actually a tad optimistic: It includes new oil projects still being evaluated. If some of the new oil doesn't show up, as has often happened, the decline steepens.


The results of the Dec. 7 state oil lease sale weren't particularly encouraging. The sale wasn't a bust but it wasn't wildly successful, either. Basically, companies already on the Slope bid to add acreage, although there were two new companies, both small firms.

More exploratory drilling is planned this winter and that's encouraging, but with one exception the companies say their expectations are modest. No major discoveries, in other words. The exception is Great Bear Petroleum, a small company that will test a new idea that oil can be produced from shale rocks on the North Slope similar to the way it's being done in North Dakota and Texas. If this works, it could be a game-changer for the Slope. But it will take Great Bear at least two years to find out if the idea is workable.


The governor says the state's tax on oil production is too high and discourages investment precisely in the places where new oil can be developed quickly -- in existing oil fields. Parnell's proposal to reduce the tax as an incentive for additional production...

(Excerpt) Read more at ...

TOPICS: News/Current Events; US: Alaska
KEYWORDS: energy; northslope; oil; tax

1 posted on 12/18/2011 5:06:16 AM PST by thackney
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BREAKING NEWS: State predicts oil production to drop to 574,000 barrels per day in fiscal 2012

By Tim Bradner Alaska Journal of Commerce
The state revenue department estimates that oil production will decline to an average of 574,000 barrels per day for the state’s current fiscal year, 2012, from an average 603,000 barrels per day in fiscal 2011, the financial year which concluded June 30, according to the state’s annual production forecast released Thursday.

The expected rate of decline is 4.7 percent between fiscals 2011 and 2012.

The forecast is for a further decline to an average of 555,000 barrels a day for fiscal year 2013, which begins July 2012, the department said. This assumes a production decline rate of 3.3 percent.

However, state Revenue Commissioner Byran Butcher warned that the production decline could be more severe, because the department assumes that some projects now being evaluated or planned will actually move to production.

“Without these layers (of new production) the production decline could be as high as 9.1 percent,” instead of 4.7 percent, Butcher said in his letter to Gov. Sean Parnell, which accompanied the revenue forecast.

Between fiscals 2010 and 2011, production declined at 6.3 percent, Butcher said.

“The forecast includes a much greater decline from the currently producing sectors offset by potential new development from projects now under development or under evaluation. Most of the opportunities to add production are from continued satellite (field) development at Alpine, at the Nanuq and Alpine West satellites, continued developments of the Oooguruk and Nikaitchuq fields and expanded viscous or heavy oil development,” such as in the Orion satellite of the Prudhoe Bay field, Butcher said in the letter.

The Oooguruk field is operated by Pioneer Natural Resources while Nikaitchuq is operated by Eni Oil and Gas. The Alpine field is operated by ConocoPhillips.

If production rates do drop to the 550,000 barrels per day average in fiscal 2013, they are in the range where Alyeska Pipeline Service Co. has predicted operating problems with the Trans-Alaska Pipeline System. Alyeska said there are likely to be more unexpected winter shutdowns, such as occurred over a one-week period last January, as throughput continued to drop.

The pipeline company is taking steps to deal with the lower throughput issues, including the addition of heaters at critical points along the 800-mile pipeline, Alyeska President Tom Barrett has said previously.

In terms of revenues, high oil prices will push total Alaska revenues to $8.9 billion for 2012, a $1.1 billion increase over revenues in fiscal 2011, but the forecast for 2013 is for a moderation of income to $8.2 billion due mainly to expectations of lower production.

The revenue department expects ANS crude oil sales prices to average $109.33 per barrel in fiscal 2012 and remain basically stable through 2013 at $109.47 per barrel, according to the forecast.

Oil production taxes and royalties provide 90 percent of total state revenues, the revenue department said.

2 posted on 12/18/2011 5:14:54 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney

The USA has enough home brew energy in the form of coal,oil, natural gas and political hot air to power this nation for the next two centuries or more. Probably more if we eliminate the political hot air resource.

3 posted on 12/18/2011 6:52:06 AM PST by Don Corleone ("Oil the the cannoli. Take it to the Mattress.")
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To: Don Corleone

The new prison is what got me. There are thousands of islands on the Aleutians. Just place them each on one of them.

4 posted on 12/18/2011 6:58:27 AM PST by DIRTYSECRET
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To: AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; ColdOne; Convert from ECUSA; ...

Thanks thackney.

5 posted on 12/19/2011 6:31:00 PM PST by SunkenCiv (Merry Christmas, Happy New Year! May 2013 be even Happier!)
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