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Hello Friends,
As co-chair of the Senate Resources Committee, I first hosted legislative hearings on the North Slope shale oil development in February, 2011. Since then, I have been actively engaged in the shale oil discussion and I have become increasingly optimistic that this activity will benefit Fairbanks and all of Alaska.
As a result of the Alaska Shale Conferencein Anchorage two months ago and the recent featurein the Washington Post about the potential for Alaska’s shale oil to fill the pipeline, there is growing interest in this community about the North Slope’s current shale oil activity.
People in Fairbanks are beginning to ask:
- What is shale oil and what is the shale oil resource potential on the North Slope?
- Is it likely that the shale oil development in Alaska will become a reality? If so, when?
- If the shale oil development is successful, how can Fairbanks capture as much of the economic benefit as possible?
It is important for this community to learn more about the opportunities and issues that shale oil development may soon bring to Fairbanks. Therefore, on Thursday, September 27, I will be hosting a panel discussion and town hall meeting – North Slope Shale Oil: Opportunities and Issues for Fairbanks.
Please save the date and join me next week to begin this important discussion here in Fairbanks.
What: North Slope Shale Oil: Opportunities and Issues for Fairbanks
When: Thursday, September 27, 3pm to 5pm
Where: Carlson Center, Pioneer Room (snacks and beverages provided)
Confirmed panelists include:
- Ed Duncan (President, Great Bear Petroleum Company, Anchorage)
- Mark Myers (Vice Chancellor for Research, UAF; former Director of the Alaska Division of Oil & Gas)
- Jim Sampson (Director, Fairbanks Pipeline Training Center)
Additional panelists may be forthcoming. Following presentations from each panelist, we will engage the audience in a discussion about the North Slope shale oil opportunities and issues. Presentations and discussion will include topics such as:
- How does the resource base compare to North Dakota’s Bakken and Texas’ Eagleford shale plays?
- Should Alaska expect a “boom” like North Dakota and Texas? What are the similarities and differences?
- Does Interior Alaska have the work force necessary to support the shale oil development?
- What is the potential impact on the local economy, jobs, infrastructure, housing, property values, and schools – as well as City, Borough, and State services?
- What are the environmental risks in Alaska? How can those risks be mitigated?
- What other issues and challenges should be expected?
BACKGROUND: NORTH SLOPE SHALE OIL
News of Alaska’s vast shale oil potential is now spreading across America. On August 26, a Washington Post feature story titled, “Alaska pursuing unconventional shale oil development to fill its pipeline,” began by stating, “Canada may have its Albertan oil sands, and North Dakota has its Bakken oil formation. But don’t count Alaska out when it comes to producing unconventional oil.”
While the news is finally reaching a wider national audience, it is not new information here in Alaska. Great Bear Petroleum Company leased 500,000 acres in the 2010 North Slope lease sale. On April 25th, 2012, Ed Duncan testified before the Senate Resources Committee. The Alaska Public Radio Network followed the hearing and offered Alaskans an update on Great Bear’s progress: “Great Bear plans to be getting into full production by 2015. [Ed] Duncan anticipates having as many as two hundred wells a year – not seasonal, but year-round. The biggest problem Duncan sees right now is finding the tens of thousands of people to work in the new shale industry – as well as training them and finding accommodations for them to live.”
In the same feature, APRN reported that Duncan told the committee, “It’s not a challenge we can solve on our own. It’s a giant challenge for the state of Alaska. We all may be willing to do everything we can from a technical perspective, but if we don’t have people in the field to run the rigs, drill the wells, lay the pipe, weld the pipe, we’re stuck.”
Great Bear is not the only company in pursuit of Alaska’s shale oil. In the North Slope lease sale of 2011, Royale Energy of San Diego leased over 100,000 acres to join the hunt for shale oil. Royale’s Vice President for Exploration and Production told the Anchorage Daily News (February 8, 2012), “The potential reward in Alaska is huge. No other shale opportunity comes close to this, not only in the Lower 48 but in other parts of the world that we can access. This is a prime shale play.”
In response to this new activity, the State of Alaskahas created a Shale Task Force. In a memo addressed to task force members last year, DNR Commissioner Dan Sullivan wroteon September 12, 2011, “Shale exploration and development in the North Slope area is expected to be the focus of increasing interest and activity beginning this year. We must prepare for the intensity this type of unconventional resource play requires. Current shale plays in North Dakota, South Texas, and Pennsylvania have shown the level of drilling, well stimulations, support services, and impact on infrastructure could exceed all activity levels seen in Alaska.”
One year after writing that memo to the Shale Task Force members, Commissioner Sullivan told an audience at a Resource Development Council breakfast in Anchorage on September 6, 2012, “You have the shale play that is happening and you have private equity investment that’s now being pumped into Alaska focused on the shale play by Great Bear and a very prominent private equity company called Riverstone [Holdings], probably the best in the class in terms of energy that are investing in Alaska … We probably have more shale up here than anybody and we’ve got companies investing.”
The potential for Alaska’s shale oil development is enormous. Tens of millions of dollars are being spent by the private sector right now, and the State of Alaska’s Shale Task Force is currently working “to identify potential impacts and propose plausible solutions prior to full shale exploration and development activities commencing (Commissioner Sullivan, Shale Task Force memo, September 12, 2011).”
FAIRBANKS NEEDS TO BE INFORMED AND PREPARED.
Please join panel members and me at the Carlson Center on Thursday, September 27, 3pm to 5pm, to participate in the discussion. RSVPs are requested but not required. We’d like to be sure to have enough handouts, beverages, and snacks for everyone.
Please let me know if you have any questions or comments.
Sincerely,
Joe
P.S. Ironically, as I was about to hit SEND on this message, I received my emailed copy of this week’s Petroleum News. In an article about the current efforts to unlock the vast shale resources on the North Slope, there is an article titled, “The Oil’s There: Great Bear says it wants to accelerate its North Slope shale oil program.” The story ends with a quote from Ed Duncan, who says, “We’re going to need lots of people. We’ve got a big thing, we believe, that’s about to happen.”
If you would like additional information about Alaska’s shale oil activity, here are some articles that provide good background material:
- Alaska pursuing unconventional shale oil development to fill its pipeline(Washington Post, August 26, 2012)
- Shale oil exploration arrives in Alaska(Fairbanks Daily News-Miner, August 1, 2012)
- Exploratory shale wells coming within month(Alaska Public Radio Network, April 25, 2012)
- New shale player Royale hopes to drill up to 6 Slope wells(Anchorage Daily News, February 18, 2012)
- Shale oil could be “game changer” for Slope(Alaska Journal of Commerce, September 22, 2011)
- Great Bear betting big on Alaska’s shale oil: Firm CEO stuns Legislature with ambitious design(Anchorage Daily News, March 5, 2011)
Senator Joe Paskvan
1292 Sadler Way, #308
Fairbanks, AK 99701
(907) 451-4347 (Phone)
(907) 451-4348 (Fax)
Sen.Joe.Paskvan@legis.state.ak.us
Representing Fairbanks and Fort Wainwright
North Slope Shale Oil: Opportunities ...Date and Time
Thursday Sep 27, 2012
3:00 PM - 5:00 PM AKDTThursday, September 27
3pm - 5pmLocation
Carlson Center
Fees/Admission
Free and open to the public
Contact Information
Senator Joe Paskvan, (907) 451-4347
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