Parnell includes shale oil money in 2013 budget

Alaska Gov. Sean Parnell's proposed capital budget for fiscal year 2013 features several items of interest to the oil and gas industry.

The proposal includes $1.1 million to encourage exploration and development of shale oil deposits in Alaska. The bulk of the money, $1 million, would be used to "develop an inventory of environmental data to support permitting for shale oil development," a project summary says.

The data will include the identification and delineation of wetlands and streams, surveys of animal and fish populations and habitat, and surveys of subsistence activities and "other potential resource conflicts."

The state will provide the data to North Slope shale oil developers for use in completing environmental impact statements required for federal permits.

"In absence of this state data collection effort," the project summary says, "... data will be more costly (to developers) and development may be slowed."

"Moreover," the summary says, "federal agencies tend to give more credence to data acquired by state agencies as opposed to third-party collection under contract to industry."

Another $100,000 is proposed in fiscal year 2013 for a "geologic assessment of North Slope shale oil potential." A project summary indicates the state would contribute $300,000 more in 2014.

"The North Slope remains under-explored relative to other sedimentary basins around the world."

The primary purpose of the two-phase project is to acquire "a comprehensive new geologic data set" to benefit explorers, especially smaller independents who rely on publicly available maps and technical reports from the state.

The shale oil project summary continues:

"The North Slope petroleum system includes three excellent organic-rich, source rock intervals -- a characteristic that is required for the successful creation of shale oil accumulations. Industry has recently recognized this potential, as indicated by one company (Great Bear) spending more than $6.5 million to lease about 500,000 acres of state land for the stated purpose of exploring for shale oil resources."

The governor's capital budget also includes $200,000 to fund phase three of a three-year project to assess natural gas potential in prospective unexplored basins near Alaska transportation corridors and population centers.

Previous funding totaled $1 million to evaluate the Nenana and Susitna basins. The $200,000 request will go toward finishing that work, with data to be made available for public release to encourage exploration investment, according to the Department of Natural Resources.

Parnell also is proposing $160,000 for Arctic Power, an organization that has lobbied for almost a dozen years to open the coastal plain of the Arctic National Wildlife Refuge for oil and gas exploration and development. A project summary indicates the state has contributed between $120,000 and $3.75 million in every annual budget since 2000.

The governor's capital budget proposes $1.5 million, including $1 million in state general funds and $500,000 in federal receipts, to continue a study to identify potential sites for a deepwater port along the Arctic Ocean coast.

Such a port could support oil and gas industry efforts in the remote region, as well as U.S. Coast Guard operations.

A project summary contemplates further spending in fiscal years 2014 and 2015. The port study is being done in conjunction with the U.S. Army Corps of Engineers.

Alaska legislators will consider the governor's budget when they open their next session on Jan. 17.

Source: http://www.adn.com/2011/12/23/2232274/parnell-includes-shale-oil-money.html

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