Dear Million-Barrel Team,
Welcome aboard. We don't envy you, but we're glad such apparently experienced people are going to be working on fulfilling Gov. Parnell's goal to get at least one million barrels of something to flow through the trans-Alaska pipeline by the year 2021.
Like many Alaskans, we The Concerned have been concerned about the future of the pipeline lately, especially since we became momentarily convinced during the Legislative session that it might shut down very, very soon. We know how important oil revenue is to the state, and we know that the major oil fields that initiated the situation are already into their slow, certain decline.
None of us are surprised about that, though. Everyone has known since the pipeline went online that the supply of oil on Alaska's North Slope -- while massive -- is finite, either economically or physically. Yet nearly every year since the peak throughput was realized, tense discussions crop up about finding ways to get producers to produce more oil and boost the state's major industry, while at the same time hastening its zero sum.
Right now, the flow through the pipeline is estimated right around 640,000 barrels of oil and other petroleum liquids per day. By the time the goal's deadline comes around, according to the Department of Revenue, if today's status quo persists and currently planned developments come online, in 2020, the total throughput will still be about a half-million barrels short of the new goal. You might already be aware of that tough reality.
This new goal is ambitious, sure. But maybe not impossible, given how little Alaska seems to know about what's actually out there under the ground, and what's politically and economically possible. Plus, we always love to see Alaska governments make plans that look more than two years ahead, even if they seem to lack specifics.
So we respect the effort you're all about to make, but we're concerned that when it comes to crude oil, you've been given a standard that you lack the means to achieve. So much of the goal depends on factors out of Alaska's hands that it ultimately seems a little mean to you guys. Aiming for the stars and hitting the moon is fine, but only if the moon will do, and only if you have the tools to make the shot.
Which is where the feds come in. Basically all of the remaining, potentially sweet, sweet unexplored land in and around in Alaska is controlled not by the state, but by federal agencies. As part of the million-barrel goal, Gov. Parnell has written a letter seeking federal legislation that would do a number of things to compel federal benevolence. The most significant part of that, of course, is opening thus-far unexplored federal lands in Alaska to industrial curiosity.
The initial phase of the plan concentrates on things Alaska has some control over -- things on state land like scraping the last bits out of legacy fields, bringing satellite fields online near existing infrastructure, developing more near-offshore areas, and pumping more shale and heavy oil.
After that, though, the list reads like a 20-year litany of thwarted Alaska desires. All the favorites are on there. National Petroleum Reserve-Alaska figures prominently in the middle years, particularly the "CD-5" complex. That project comes with a ramped-up production estimate of between 15,000 and 18,000 barrels per day and would allow expansion to other small fields nearby. All of that sounds great, but we're concerned that's where the effort will end, about 6 years away, still hundreds of thousands of barrels a day short.
At the 10-year end of the bench, our old friend ANWR is even on there, sharing a hotdog with a large-diameter natural gas line. We The Concerned have come to believe over the last few decades that ANWR is politically impossible to explore, let alone develop, no matter how many times The Concerned's favorite economic fallacy ("energy independence") is used in support of opening it.
Aside from being skeptical about this whole thing -- despite the administration's obviously serious intentions to reach it -- we're concerned about other things too.
Some of us are concerned that some parts of the pipeline system might not be ready to handle the new volume if they really have to start cranking out the product again. Others of us are concerned that the state is swimming in budget surplus, and is hyperventilating due to making so much noise about ramping up production -- more noise even than the entities that own the line.
The rest of us wonder if it's not just about making a lot of noise, that maybe it's not just about preserving big state budgets. Maybe it's actually about stopping the line from reaching a catastrophically low volume, as many contend. We're not accountants or anything, but We The Concerned are positive the coalition of the TAPS owners won't walk away from a conduit that still has several decades of life left and leads to such a still-promising oil patch. Companies usually do what makes sense, and leaving potentially hundreds of billions of dollars in the ground forever doesn't make sense.
Even though we don't agree on the finer points, we're all concerned about who will be held accountable if this million-barrel goal should happen to fall through. We don't want to sound mean here, but in ten years, Alaska will have a different governor, and probably different management of the Natural Resources and Revenue departments as well as their constituent divisions. Maybe you'll all stick around, but judging from the last ten years, it's unlikely. And who knows, maybe some of you even have ambitions beyond natural resources administration.
Mainly we're Concerned that the state's looking at a big, showy national solution instead of coming up with concrete measures it has the power and knowledge to effectively bring about. Maybe if the federal government doesn't turn out convinced in seven years, it'll be time to start thinking about increasing the percentage of gas liquids that head down the line. Who knows if that'll work, though. Alaska still doesn't seem to know much about its main industry, and it's not like there's a fertilizer plant or gas export terminal waiting to use the products. Even what power Alaska seems to have over these matters seems to us The Concerned as politically difficult as instituting a statewide income tax or diversifying its economy.