Nathaniel Herz’s recent commentary about Cook Inlet gas left out some historical perspective. A successful oil company strategy has been to publish information that their fields were getting too depleted to provide what was needed. That scare has always gotten the state to provide tax relief or other monetary assistance to encourage more drilling and production. The most egregious example is S B21, which provided lucrative credits without getting the promised results, including increased revenue. The state has already responded to Hilcorp with reduced royalties, and Herz noted that this will not be enough.
I recall that when Hilcorp took over Cook Inlet and a good bit of Prudhoe Bay, it was noted that their business model had been to purchase aging fields and “bleed them dry.” I also remember that the contracts allegedly included requirements to do serious development. Instead of holding them solely responsible, the state again seems intent on subsidizing required work.
Hilcorp’s Alaska profits should be put into the exploration and development of what is supposed to be extensive potential for gas extraction in Cook Inlet.
But, knowing what I know about the history of state and oil company interactions, I’m seriously looking at getting a geothermal heat pump. I’ve already been solarized.
— Jon Sharpe
Anchorage
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