Prudhoe Bay Unit Plan of Development Approved at Last

Headlamp has been anxiously waiting for the Prudhoe Bay Plan of Development (POD) to be approved by the Department of Natural Resources (DNR). There was a collective sigh of relief when it was announced that DNR Commissioner Andy Mack had approved the plan submitted by BP and the working interest owners (WIO). But what took so long? An article in the Alaska Journal of Commerce (AJOC) may provide some insight.

According to emails obtained by the AJOC, Division of Oil & Gas Director Corri Feige wrote a letter approving the plan on September 16, 2016, but that letter was modified by Commissioner Mack before being sent to BP and the WIO’s on September 20th. The changes were few, but Headlamp believes they send a strong message.

As Tim Bradner writes in the AJOC article, “The difference appears to be that Feige requires the companies to document their efforts toward a generic major gas sale, while Mack’s version conditions future plan approval to showing their steps to support a state-led gas project.”

And there it is.

Headlamp continues to be disappointed and gravely concerned over the state’s efforts to charge forward with a state-led project that faces considerable economic challenges. Likewise, Headlamp fundamentally disagrees with the state’s recent actions of trying to force producing companies to reveal proprietary information related to the Prudhoe Bay unit.

Unfortunately, as Bradner points out the train has already left the station, “The transition from a privately-led to a state-led project is underway and will be completed by the end of the year.” This transition will be even harder now that the state has one less key member, as Director Feige’s letter of resignation is coincidentally dated September 20th.