Compass: Alaska's resources draw world's attention

By DAN SULLIVANJanuary 4, 2013 

With the New Year upon us, it's a good time to reflect on the positive activity during 2012 in the natural resources sector -- a critical part of Alaska's economy.

The North Slope's vast resources attracted interest from a diverse set of explorers, as evidenced by another robust state lease sale. After unnecessary federal delay, Conoco Phillips moved forward with its Alpine field expansion at CD-5, while ExxonMobil started development of hydrocarbons at Point Thomson, Alaska's largest undeveloped oil and gas field. Companies such as Repsol, Armstrong, Brooks Range, Nordaq, Great Bear and Riverstone expanded their investments in new oil plays.

Cook Inlet's renaissance kicked into high gear, with hundreds of millions of dollars in private-sector spending in 2012. Companies launched a new gas storage facility and brought two jack-up rigs to the Inlet for the first time in history. Two years ago many Alaskans believed the Cook Inlet basin was effectively dead. Now, at least 10 oil and gas wells are being drilled, we've seen record lease sales and world-class companies like Apache and Hilcorp are investing hundreds of millions.

Gov. Parnell laid out ambitious benchmarks for commercializing our abundant North Slope gas in his State of the State address last January -- including producer alignment on an Alaska LNG project and settlement of the Point Thomson litigation. The governor's benchmarks through the third quarter of 2012 were met. Importantly, the construction of the multibillion-dollar Point Thomson development is beginning, creating hundreds of jobs throughout Alaska. Also, the Alaska Gasline Development Corporation made progress on permitting an in-state gas line and signed a cooperation agreement with TransCanada to work on aligning the state's gas line efforts.

Our efforts in 2012 to aggressively promote the advantages of Alaska gas to buyers in Asia were fruitful. Huge gas purchasers such as Korea Gas are now expressing strong interest in Alaska LNG for meeting their energy needs.

Alaska's mineral sector flourished in 2012. For a second consecutive year, one third of U.S. exploration investment occurred in Alaska, and we again hosted a sold-out Critical and Strategic Minerals Summit in Fairbanks with an international audience. Our high standards and strong record of responsible development will ensure that Alaska's mineral sector continues to generate thousands of jobs and positive social impacts throughout the state.

The state's permitting reform efforts gained significant momentum in 2012 with bipartisan legislative support. DNR signed a memorandum of understanding with the North Slope Borough to deepen coordination on permitting North Slope development projects. We also slashed our backlog of pending permits and authorizations by nearly 40 percent. The goal of this reform effort is to modernize our system -- making it more timely, efficient, and certain -- without cutting corners on environmental protection.

At farmers markets and supermarkets, interest in "Alaskan Grown" produce -- another of our great resources -- continued to grow. Dedicated, innovative farmers throughout Alaska are creating new job opportunities for Alaskans and enhancing our food security.

Looking to the year ahead, we see significant opportunity. The International Energy Agency predicts the United States will overtake Saudi Arabia and Russia to become the world's largest oil and gas producer by 2020. Alaska should be in the forefront of this American energy renaissance rather than watch oil production continue to ebb. Competitive fiscal reforms are central to this goal and will be at the top of the agenda in the upcoming legislative session.

We will work to accelerate gas line development because of our urgent need for in-state energy and because the window of opportunity to sell Alaska LNG to Asian markets will not be open indefinitely.

The state has put forward a plan to address the energy needs of Interior and rural communities, and in Southcentral, with natural gas. The Parnell administration's budget proposes significant investment to move Alaska's gas to Alaskans, by truck, rail or pipeline, all on an expedited basis.

In 2012, we made strategic advances to utilize our natural resources to secure the future for our families and the next generation. If we continue to work together, 2013 will be even better.


Dan Sullivan is commissioner of the state Department of Natural Resources.

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