With 2.4 billion barrels of estimated reserves alone, Prudhoe Bay remains the nation’s largest oil field, Crockett said. All told, Alaska’s North Slope has just over 5 billion barrels of oil left. Even with prices well over $100 a barrel, Crockett said the domestic oil industry was looking elsewhere for more economic production.
“Interestingly enough, North Dakota has had a land rush of sorts, and they likely will surpass Alaska in production in three or four years. Their fiscal regime is better, they’re not troubled by geography, their costs are lower – their employees can get in their pickup trucks and drive home at night, while ours work two-weeks-on, two-weeks-off – so they have a very prolific resource that has just started to be developed. And they likely will surpass Alaska.”
The Alaska Oil and Gas Association, or “AOGA” as it is sometimes known, represents the thirteen North Slope oil producers, plus the Alyeska Pipeline Services Company. Crockett devoted much of her presentation to reminding Chamber members of the economic contribution of the industry to the state. In 2010, oil royalties and taxes contributed 89-percent of all non-restricted revenues to state government. The industry employs roughly 42,000 people.
Crockett noted that oil producers sank 18 exploratory wells in 2007. This year, that number will drop to one. Crockett echoed the message of the “Make Alaska Competitive Coalition,” which sent former University of Alaska president Mark Hamilton to speak to Sitka’s chamber in April.
Like the coalition, Crockett said AOGA supported the adoption of House Bill 110, which reflects the governor’s plans to lower taxes on the oil industry. Crockett laid the blame for falling exploration in Alaska on the state’s fiscal regime. “At $117 per barrel, this should be a signal to us why there’s no stampede,” she said.
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