State OKs Prudhoe development plan but still demands more details

Gov. Bill Walker's battle for gas-line project information from the state's major oil producers hasn't come to an end, but his administration has agreed to approve the Prudhoe Bay annual development plan that had been left hanging by the governor's demands.

The approval by newly hired Commissioner Andy Mack of the Alaska Department of Natural Resources, dated Tuesday, allows Prudhoe Bay operator BP and major partners ExxonMobil and ConocoPhillips to continue operations at the large oil field as previously planned, from Nov. 1 to June 30.

The plan, focused on the steps to produce oil at Prudhoe Bay as the annual plan has traditionally done, had been expected to begin July 1. But the date was delayed after the administration rejected the original proposal submitted by the companies in March, calling it incomplete. The state sought additional details in the plan about the producers' efforts to prepare for a major gas line project.

Critics of the governor feared his administration might refuse to approve the plan, leading to a protracted court battle over control of the state leases between the state and the oil companies at Prudhoe, Alaska's largest oil field.

Mack's decision replaced a slightly different letter of approval that turned out to be a false start. That letter was dated Friday and signed by Corri Feige, director of the Alaska Division of Oil and Gas. That letter took "considerable work" to complete, she said, and was approved by the governor's staff and Mack, Feige said in an email sent Tuesday informing staff about Mack's decision.

Feige initially thought her letter would be the final decision, but additional information led Mack to issue a new final decision, Feige wrote.

Feige, who did not describe the additional information Mack received, also sent another email to her colleagues Tuesday: She informed them she'd be leaving her position on Oct. 3.

Feige has not responded to questions seeking details about her departure. Diane Hunt, special projects and external relations coordinator in the director's office, said Feige was not available Thursday.

BP received Mack's final decision on Tuesday, but not the earlier letter from Feige, said Dawn Patience, a spokeswoman with BP.

Feige has been at the center of the state's fight for gas-marketing details for months. It was started in January by Mark Myers, former commissioner of the Alaska Department of Natural Resources who retired in February.

Mack is currently in Asia with the governor and other state officials, in an effort to find utilities that might commit to buying the state's natural gas. He and other officials with Natural Resources could not immediately be reached for comment on Thursday.

The request for gas-marketing information was a departure from the traditional details long associated with the annual development plans that focus on steps the companies take to extract oil, including re-injecting the huge volumes of Prudhoe Bay gas underground to help stimulate production of more valuable oil.

Walker has sought to advance a gas line project that would begin selling North Slope natural gas overseas to Asian markets.

For months, the producers refused to provide the gas-marketing details sought by the state, citing confidentiality agreements and anti-trust concerns that, they said, barred them from sharing the information in the public plan. BP had said appropriate collective marketing information has been shared with state officials who have signed confidentiality agreements connected to the $55 billion Alaska liquefied natural gas project. But BP said it couldn't share such information with regulatory officials in the Division of Oil and Gas.

BP's revised plan on Sept. 1 didn't provide the details the state sought.

The approval letter from Mack said the revised plan of development does not "discuss specific actions" the producers will take in the development plan to support a state-led gas project. But it says the producers this year have committed to taking those steps.

Noting actions taken by the producers to satisfy the state's demands outside the plan, Mack said the Division of Oil and Gas will accept the revised 2016 plan, but "with the understanding that the unit operator will be required to describe the specific, measurable, verifiable actions" the unit will take this year to support a state-led project.

BP maintained on Thursday that its development plan met the requirements of the law.

"As BP said previously, we believe our (plan of development) submittal satisfied all of the Prudhoe Bay Unit Agreements and the POD regulation requirements," BP's Patience wrote in an email.