Headlamp – Just how bright is our future?

11.8 billion barrels are waiting. The Trump administration is taking its first administrative step toward allowing oil and natural gas drilling in Alaska’s Arctic National Wildlife Refuge (ANWR). The Interior Department’s Bureau of Land Management (BLM) released a notice Thursday that it is starting the “scoping” process for an environmental review to examine the impact of leasing drilling rights to companies in ANWR’s 1.6 million-acre coastal plain. The BLM will take public comments for 60 days and hold four meetings in Alaska to inform the public how it will conduct the environmental review, it said in the notice, which is set to be published Friday in the Federal Register. The notice comes just four months after Congress voted to allow drilling in the federally owned ANWR for the first time. Democrats had for decades successfully blocked efforts to open ANWR to rigs, but the GOP pushed the measure through as part of its Tax Cuts and Jobs Act. That law requires the BLM to hold at least two drilling rights lease sales in the next 10 years. Joseph Balash, Interior’s assistant secretary for land and mineral management, said last month that the first lease sale could be as soon as next year, the Anchorage Daily News reported. A draft environmental review, a final review, lease sales and applications to drill would be needed before any drilling, with the potential for lawsuits high at many of those steps.

New discovery means over 420 still have jobs. Recent exploration around the Pogo Mine near Delta Junction has shown promising evidence of more rich deposits of gold nearby. A Pogo geologist told a group of miners and industry officials early this month that more exploration will be needed before company officials can decide whether to expand the operation and develop the resources. But the officials are excited about the potential. Pogo Exploration Superintendent Gabe Graf’s Powerpoint was a largely technical talk, like most given during the Alaska Miners Association Biennial Conference. But in the course of the presentation, he offered a comment or two about some drilling done last year in the Goodpaster prospect that even a layman could easily understand. “… So we just turned the rig, drilling a shallower hole coming across,” Graf said. “And this hole, we hit 17-and-a-half feet of 1-point-seven-three-nine ounces per ton. Very good, very excited about that.” “It’s exciting for us, because it potentially means we continue to extend our mine life out there, and we continue to keep 320 employees,” Kennedy said. “We continue to keep 100-plus contractors employed. And we continue to be able to contribute to the community like we have been doing for the past 10 or 12 years.”

Higher oil prices have a positive impact on Alaska’s economy. North Slope oil prices this week rose to their highest level in more than three years, helping boost optimism that the battered Alaska economy could slowly be reversing course. “I have no doubt the higher prices are having a positive impact on the economy,” said Neal Fried, an economist with Alaska Department of Labor and Workforce Development. Exactly how much is hard to know at this point, Fried said. But there have been positive signs as North Slope oil prices reached $73 on Wednesday, with geopolitical tensions growing in the Middle East and elsewhere. High-paying employment in the Alaska oil industry is a leading indicator of statewide economic performance. Oil industry job losses have moderated after big cuts in recent years, Fried said. “Last year, companies were laying people off,” Fried said. “This year, in some cases, companies are actually hiring some people.” The higher price has led Petroleum Equipment and Services, providing drilling-related equipment and work to the oil industry, to anticipate additional work and add two employees to a staff of 20, said owner Kevin Durling. He said large oil companies are becoming profitable again after slashing expenses following the drop in oil prices that began in 2014. Work is modestly rising for industry support companies such as his. “Seventy (dollar) anything is good,” Durling said. Daily Alaska North Slope prices, as estimated by the state Department of Revenue, reached $70.22 on April 10 and have remained above $70 since. Improvements to the economy and hiring are expected to be gradual, assuming oil prices stay where they’re at or keep rising, economists said. Contractors still face a tough environment, said Rebecca Logan, general manager of the Alaska Support Industry Alliance. “(The price) is a great place to be and we hope it stays here, but it’s way too early to really make an impact,” Logan said.

 

First Reads:

Trump administration takes major step toward Alaska refuge drilling
The Hill, Timothy Cama, April 19, 2018

Pogo Mine officials “very excited” about two promising gold prospects under exploration
Alaska Public Media, Tim Ellis, April 19, 2018

North Slope oil has hit $70: What that means to Alaska’s economy, the oil industry and the state treasury
Anchorage Daily News, Alex DeMarban, April 19, 2018