Oil and gas: slowing or growing? A look at Alaska's leading resource.

• Author: Liles, Patricia

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Busy with new North Slope discoveries, continued maintenance and development of legacy fields and talks about a gas pipeline, Alaska's oil and gas industry seems to be booming.

Yet all of this activity--including new field development--has not stemmed the decline in North Slope oil production. Total oil produced on the Slope fell below the 300 million barrel mark in 2006, the first time since the start of oil production in 1977.

And the 285.2 million barrels of oil actually produced in 2006 was 10 percent less than what was forecasted by state officials during the prior year, according to Division of Oil & Gas annual reports for 2006 and 2007. In the 2006 annual report, state officials predicted annual North Slope oil production would first fall below 300 million barrels in 2013.

"You can look at any forecast out there ... all show a continual decline in throughput, even in the face of all the recent development," said Jim Bowles, president of ConocoPhillips Alaska, in a late January telephone interview. "Historically, the state has over-predicted oil. They tend to over-predict what actually occurred."

He anticipates a continued decline in oil production on the North Slope, despite the flurry of activity by new developers and existing producers.

"My sense is, at high oil prices, many folks will say there's money to be made with smaller deposits of oil. The very small deposits that are being developed are why we see activity, but they probably will not provide real long delivery," Bowles said. "They're not moving the needle much on oil. There may be a lot of activity going on, but not a lot of new, sustained oil being developed. It's not changing the direction of the decline."

The potential to halt or even reverse the trend exists, as state and federal geologists estimate the amount of undiscovered oil and gas on the Slope and offshore in the billions of barrels of crude and trillions of cubic feet of gas. But access to those new resources is becoming increasingly dependent on court rulings, rather than industry activity.

"Our plans for 2008 are still being fine-tuned as we await a decision from the 9th Circuit Court and pursue the necessary permits to conduct meaningful work during the next open water season. We are hopeful, of course, that we will be successful on those fronts and that we will work this summer," said Rick Fox, Shell's asset manager for Alaska, in early February.

Shell planned in 2007 to complete two to three exploration wells on its Sivulliq prospect, located about 14 miles offshore in 98 feet of water, a program...