oil and gas

Bureau of Ocean Energy Management

The federal government said it will continue taking steps toward a potential oil and gas lease sale in Cook Inlet, after a Louisiana district court judge ordered the Biden Administration to resume its lease programs there and in the Gulf of Mexico.

The U.S. Department of the Interior has been at odds with several Republican states over the federal leasing program since Biden halted the two auctions and promised to review the program earlier this year. It was part of a larger executive order aimed at fighting climate change.

Rashah McChesney/Alaska Energy Desk

Two companies successfully bid on nearly 21,000 acres of oil and gas tracts in Cook Inlet this week.

HEX Group and Strong Energy Resources both purchased leases in the state’s spring sale, for a combined total of $450,000.  This is the first time a company other than Hilcorp Alaska has won leases in a state sale since 2015.

Alaska DEC

The federal agency that regulates pipeline safety is giving oil and gas company Hilcorp three more months to fix a line running under Cook Inlet.

Hilcorp’s line, which delivers fuel gas to a system of oil platforms in the inlet, sprung a leak last month. The 55-year-old pipe has leaked several times prior, most recently in 2019.

Alaska DEC

Energy company Hilcorp has been ordered to replace an undersea pipeline in Cook Inlet after it leaked gas last week, for the fifth time in the last several years.

In a corrective order dated April 6, the Pipeline and Hazardous Materials Safety Administration told Hilcorp it must temporarily repair the 55-year-old pipeline by April 17, permanently repair it by May 1 and submit a plan for the pipeline’s replacement within 45 days.

Department of Natural Resources, Division of Oil & Gas

The state has approved Hilcorp’s plans to drill two gas exploration wells near Anchor Point.

As early as Thursday, the company could start construction on a gravel exploration pad for the company’s Whiskey Gulch prospect. Hilcorp plans to drill two exploration wells there — an oil-gas combination well and gas-only well. An ENSTAR Natural Gas line runs by the site. 

Rashah McChesney/Alaska Energy Desk

Oil and gas leasing on federal lands and waters is on pause. That includes a sale in Alaska’s Cook Inlet that was originally slated for later this year and is now suspended indefinitely.

At the same time, the federal government is reviewing its energy program and gathering  input from industry experts, environmental advocates and tribal leaders across the country. Several representatives from those groups, including two from Alaska, weighed in on the program at an Interior Department forum Thursday.

Bureau of Ocean Energy Management

Hilcorp purchased several blocks of federal leases in Cook Inlet in 2017.

Before it can even think about exploring for oil and gas there, the company has to do a geohazard survey to gauge potential geological hazards in the area.

The company planned to survey four lease blocks last year but was delayed because of the pandemic. It estimates the survey will take about a month and will happen during fishing season in Lower Cook Inlet.

Rashah McChesney/Alaska Energy Desk

The federal government has hit pause on preparations for an oil lease sale in Cook Inlet, after President Joe Biden signed an executive order indefinitely halting new leases.

The Bureau of Ocean Energy Management was gearing up to solicit bids on 1 million acres in Cook Inlet’s federal waters later this year. But Biden said on Jan. 27 his administration wants to review the federal leasing program — one part of a broader order geared at combating climate change.

Department of Natural Resources, Division of Oil & Gas

Hilcorp, Alaska is looking to build two gas exploration wells near Anchor Point later this year.

The Texas-based company has requested approval from the Alaska Department of Natural Resources to build an oil-gas combination well and gas-only well in Whiskey Gulch, three miles northeast of Anchor Point. It also wants to build a gravel pad and access road on the privately owned property above the lease.

Sabine Poux/KDLL

Marathon Petroleum’s plan for the Kenai liquefied natural gas plant will not likely harm endangered Cook Inlet belugas, according to a Jan. 25 letter from the National Marine Fisheries Service.

That brings Marathon one step closer to reopening the Nikiski plant as an import facility. Marathon subsidiary Trans-Foreland Pipeline got the green light from the Federal Energy Regulatory Commission to reopen the plant in December.

Alaska SeaLife Center

The Alaska SeaLife Center in Seward is partnering with an oil spill response organization to rehabilitate oiled marine mammals in Western Alaska.

Through an agreement with nonprofit Alaska Chadux̂ Network, the center will treat marine mammals affected by spill pollution in a large chunk of Alaska waters.

The idea is to get wildlife experts to the scene of a spill as quickly as possible — like an oiled wildlife SWAT team, said Chip Arnold, chief operating officer for the SeaLife Center.

“The exciting thing about the contract with Chadux̂ is that their whole paradigm of oiled wildlife response is rapid response," he said.

Bureau of Ocean Energy Management

The federal government has released a draft environmental impact statement on an oil and gas lease sale in Cook Inlet, tentatively scheduled for late 2021.

BOEM is planning to solicit bids on over 1 million acres in the inlet’s federal waters, which includes anything more than three miles offshore. The agency first published its notice of intent in September and released the EIS draft Wednesday.

Some fishermen and conservationists say that wasn’t enough time.

Sabine Poux/KDLL

The Kenai liquefied natural gas plant, which exported natural gas overseas from Nikiski for nearly four decades, got federal approval to start importing natural gas. That could give parent company Marathon Petroleum a more cost-effective way to power its crude oil refinery down the street. 

Marathon subsidiary Trans-Foreland Pipeline applied last year to reactivate the historic plant as an import facility.

ConocoPhillips

Drivers headed out the Kenai Spur Highway to Nikiski pass through a highly industrialized area with huge tanks, fences, and smokestacks. Those are shared among the old Nutrien fertilizer facility, the Kenai Liquefied Natural Gas terminal, and the Marathon Petroleum refinery (which most locals still call Tesoro). Most peninsula residents know what they are, but may not know that the Kenai LNG Plant actually represents a significant piece of oil and gas history.

Elizabeth Earl / KDLL

This fall, Alaskans will vote on yet another sharply divisive ballot initiative about the state’s tax structure on oil production.

Ballot measure one, commonly known as Alaska’s Fair Share, would increase taxes on oil companies that produce at least 40,000 barrels of oil per day and more than 400 million barrels total north of 68 degrees latitude—which is north of the Arctic circle. The sponsors say it’s targeting the largest producers on the North Slope and reverses some of the changes made in 2014 under Senate Bill 21, which added tax credits and aimed to draw additional exploration and investment in Alaska.

Alaska Division of Oil and Gas

A Cook Inlet oil and gas producer has asked the state for permission to suspend operations in two area until at least April 2021.

AK LNG

Since the state announced Nikiski as the chosen site for its liquefied natural gas plant project about six years ago, Kenai Peninsula residents have had an ear to the ground for developments. The project would use an 807-mile pipeline from the North Slope to deliver natural gas to a plant in Nikiski, where it would be liquefied and shipped out to international markets, all for a price tag of about $45 billion.

Since 2017, the state has been heading up the project alone through the Alaska Gasline Development Corporation. The project partners, including ConocoPhillips, BP and ExxonMobil, shied away from it after a number of international LNG plants came online, pushing down prices and making Alaska’s project too expensive to be competitive. But the state has pressed on, gathering permits and information. On Thursday, the Federal Energy Regulatory Commission gave the state the green light to build and operate the project.

Now it’s just a matter of how to pay for it. This is the last year the state is going to go it alone —it’s either find other sponsors or sponsors or sell the assets.

Marathon Petroleum’s Kenai Refinery is pushing back its scheduled turnaround out of caution due to the COVID-19 pandemic.

A turnaround involves hundreds of contractors, locally and from out of the area, coming to the refinery to perform maintenance, upgrades and inspections. The company issued a statement Wednesday saying that delaying the annual turnaround is in the interest of the health of staff and contractors.

ECON 919 - Cutting regulations to court investment

Oct 18, 2019

 

This week, Governor Mike Dunleavy was in Homer Thursday to speak to the Alaska Homebuilders Association. His talk highlighted not just what he sees as Alaska’s best economic opportunities, but also the hurdles in accessing some of those opportunities. But the big question, he said, is about politics.

 

 


Environmental groups challenge Hilcorp plans

Sep 5, 2019

 

Hilcorp will face a legal battle before it can begin its proposed seismic testing in Cook Inlet near Homer.

Panel to review Cook Inlet infrastructure

Mar 18, 2019
Alaska Department of Natural Resources

 

A panel of experts has been named to take a look at the pipeline infrastructure of Cook Inlet and make recommendations that will help ensure continued safe operation.

Assembly approves Anchor Point lease for Hilcorp

Nov 26, 2018

Oil and gas exploration on the southern peninsula has picked up considerably the past several years. Hilcorp has been responsible for much of the activity. The company recently leased nearly 20 acres from the Kenai Peninsula Borough near Anchor Point.