oil and gas update - akml.org...onshore north slope conventional 5 bbo and 35 tcf gas heavy/viscous...

Oil and Gas UpdateAlaska Municipal League Fly-in

February 21, 2018

2AOGA Oil & Gas UpdateAlaska Municipal LeagueFebruary 21, 2018

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• Employed 5,033 workers in Alaska• 4,275 AK residents earning $749 million in wages

• Spent $4.6 billion with ~1,000 Alaska vendors• $1 million in spending for each Primary Company job

• Generated multiplier effect resulting in 41,300 jobs and $2.4 billion in wages

Total: 45,575 jobs & $3.1 billion in wages

AOGA Oil & Gas UpdateAlaska Municipal LeagueFebruary 21, 2018

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• State agency operations: 19,500 jobs

• State programs: 19,600 jobs

• Capital spending: 10,400 jobs

• PFD Distribution: 4,200 jobs

• Local govt. operations & projects: 4,600 jobs

Total: 58,300 jobs & $2.9 billion in wages


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• 103,875 total jobs

• 32% of all jobs in Alaska

• $6.0 billion in wages

• 35% of all Alaska wages

• Compared to…

• Seafood: 60,000 jobs/$2.1 billion in wages

• Visitor Industry: 40,000 jobs/$1.4 billion in wages

• Mining: 9,000 jobs/$700 million in wages


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• Oil production is ~540,000 barrels/day – increase came from several fields

• Oil remains the largest taxpayer in Alaska, with four different sources of oil revenue comprising 65-75% of the state’s general fund, i.e. spending money

• Companies need tax credits paid sooner rather than later

• Opportunity of federal alignment

• The fish habitat permit (“salmon”) initiative is a major threat to Alaska’s local communities and economy


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Source: DNR Presentation 10/25/17



Caelus’ Nuna ProjectEst. ~15,000 barrels per day at peak

Glacier Oil & GasFuture plans at Badami

Hilcorp’s Liberty ProjectEst. ~60,000 barrels per day at peak


Pikka Project by Armstrong, Repsol, & Oil Search

Est. ~120,000 barrels per day at peak

eniFour exploration wells approved

for 2017-2019

(First well spud on Christmas night!)

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Source: Fall 2012 & 2017 Revenue Sources Books, Dept. of Revenue

442,900bpd

546,360bpd

Fore

cast

ed

bp

d in

FY

18

Forecasted FY18 North Slope Oil ProductionFall 2012 vs Fall 2017

Fall 2012Forecast

Fall 2017Forecast

Difference in Production

103,460 bpdAdditional barrels per day

(bpd) projected in FY18 North Slope production than in FY12

Difference in Revenue

~$300 millionAccording to the Fall 2012 production forecast, FY18 State projected revenue

is about $300 million less than projections in the Fall 2017 forecast


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Note: Figures reflect unrestricted general fund (UGF) dollars

Increased FY18 revenues resulting from improved North Slope production will provide funding for important government services

DEC, F&G, DNR, DOR, and Law

COMBINED

$318 million

Public Safety

$159 million

Corrections

$267 million

Court System

$105 million

UA System

$317 million ~$300 million state revenue

could fund


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$1,561.175%

$497.324%

$23.21%

FY18 Unrestricted General Fund (UGF) Revenues

Petroleum Non-Petroleum Investment

$442.9 million

FY17 local property taxes

~$2.4 billionPredicted total State & local communities total in FY18

$393 million

FY18 restricted revenue

Source: Fall 2017 Revenue Sources Book, Department of Revenue

values in millions


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Source: USGS

RESOURCE POTENTIAL

STATE LAND FEDERAL LAND

Cook Inlet

599 mbo and 19 tcf gas

Onshore North Slope

Conventional5 bbo and 35 tcf gas

Heavy/Viscous24-33 bbo

Unconventional2 bbo and 12 tcf gas

Offshore Arctic

27 bbo and 132 tcf gas

NPR-A

8.8 bbo and 39.2 tcf gas

ANWR

10 bbo and 3.5 tcf gas

mbo - million barrels of oil bbo - billion barrels of oil tcf - trillion cubic feet



December 20, 2017


• Today, Alaska is only capturing 1.7% of total US investment, or ~$1.9 billion in capital

• Based on recent history, at least $3.6 billion of Alaska capital investment is needed to grow production.

• How does Alaska compete for the investment capital necessary to grow production beyond 2018?

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Dates Tax Policy ChangeIncrease/ Decrease?

AOGA Position

Feb. 2005 - March 2006

Aggregated ELF - Administrative decision altering gross production tax

Tax Increase Opposed

April 2006 - July 2007

Petroleum Production Tax (PPT) Tax IncreaseOpposed Final

Version

July 2007 - 2013Alaska's Clear and Equitable Share (ACES)


2010 Cook Inlet Recovery ActIncentives for

IndustrySupported

2014 SB 21 BothSupported, with

concerns

2016HB 247 - Gov. Walker's oil tax reform


2017 HB 111 Tax Increase Opposed

2018 Proposed HB 288 Tax Increase Opposed


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Does HB 288 help achieve

this goal?

Question

Source: Alaska Department of Commerce. Northern Opportunity: Alaska’s Economic Development Strategy, Pg 17. 2018.


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Paid for by Stand for Alaska, 200 West 34th Avenue, PMB 1219, Anchorage, AK 99503. Marleanna Hall, chair, Aaron Schutt and Joey Merrick, co-chairs, approved this message. Top contributors are ConocoPhillips, Hecla Mining Company, and Kinross Fort Knox.


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• Cannot understate the consequences of this initiative

• Virtually impossible to permit large projects:o Parks, Seward, or Denali Highwayso Prudhoe Bay o Chena River Flood Control Project o Trans-Alaska Pipeline System o Red Dog Mine o Potential LNG Pipeline

• Projects that interfere with anadromous fish habitat cannot be permitted – including state & local government projects



- AGDC President Keith Meyer

The Alaska LNG project “would be virtually impossible to permit.”

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State of Alaska

• Anadromous Fish Act• Water Use Act• Special Area Permitting Program

Federal Government

• Clean Water Act Section 404 • Clean Water Act Section 401 (as implemented by ADEC)• Clean Water Act Section 402 (as implemented by ADEC)• Magnuson-Sevens Fishery Conservation & Management Act• Rivers and Harbors Act• National Environmental Policy Act


23

Paid for by Stand for Alaska, 200 West 34th Avenue, PMB 1219, Anchorage, AK 99503. Marleanna Hall, chair, Aaron Schutt and Joey Merrick, co-chairs, approved this message. Top contributors are ConocoPhillips, Hecla Mining Company, and Kinross Fort Knox.

Air LiquideAlaska Drilling and CompletionsAlaska Enterprise Solutions, Inc.Alaska Marine LinesAlaska Forest AssociationAlaska Miners AssociationAlaska Oil and Gas AssociationAlaska Supply Chain InternationalAlaska Support Industry AllianceAlaska Truckers AssociationAlaska West ExpressAlaska WinsAmak TowingAmericans for Prosperity- AlaskaANCSA Regional AssociationArctic ControlsAspen Suites Hotels AnchorageAspen Suites Hotels JuneauAspen Hotels KenaiAspen Hotels SitkaAspen Hotels SoldotnaBeacon Occupational HealthBeadventuresBering Marine CorporationBlueCrestBlueprint Alaska

BP AlaskaBrilliant Media StrategiesBrooks CampBrooks Range SupplyCaelus Energy AlaskaCIRICLIA AlaskaCoastal HelicoptersCoeur Alaska - Kensington Gold MineColvilleCONAMConocoPhillips AlaskaConsumer Energy Alliance AlaskaCouncil of Alaska ProducersCruise Line Agencies of AlaskaCruz CompaniesDeadhorse Aviation Center, LLCDenali AsphaltDenali DrillingDenali Industrial SupplyDittman ResearchDonlin GoldDoyon Ltd.ENSTARExxonMobilFairbanks Economic Develop. Corp.

Fairweather, LLCFirst Things First Alaska FoundationFlavin PhotographyFlowline AlaskaFrontier Supply CompanyGBR Oilfield ServicesGlacier Oil and Gas Corp.Global Diving and SalvageGreater Fairbanks Chamber of CommerceHecla Greens Creek Mining Co.HilcorpJudy Patrick PhotographyJuneau 1, LLCKinross Fort KnoxKnik ConstructionKoncor Forest ProductsLaborers' Local 341Laborers' Local 942LyndenLynden Air CargoLynden InternationalLynden LogisticsLynden TransportMAP ConsultingMark K. Johnson, Attorney at LawMatSu Business AllianceMSI Communications

MSI CommunicationsNorth Pacific MaritimeNorthern Industrial TrainingNorthstar HelicoptersNorthstar Stevedoring EquipmentNorth Slope BoroughPebble PartnershipPRL LogisticsResource Development CouncilSecurity AviationSoutheast StevedoringSRKStoel RivesStrands SalonSumitomo Metal Mining Pogo, LLCSurvey Point HoldingsTeamsters Local 959TeckTemsco HelicoptersThe Associated General Contractors of AlaskaThe Cannery LodgeThe Carter CompanyThompson & CompanyTransportation InstituteUsibelli Coal MineWestward Fishing Company


Become a part of the coalition at:

www.standforak.com

oil and gas update - akml.org...onshore north slope conventional 5 bbo and 35 tcf gas heavy/viscous...

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