Oil executives outline production challenges: fiscal, bureaucratic issues lead organizations' list.

• Author: Kalytiak, Tracy
• Position: Oil & Gas

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Teasing out the future of Alaska's foremost resource industry isn't an easy task at a time of economic turbulence--especially when the state is also beset with environmental, legal and bureaucratic challenges.

"Clarity in the oil patch? Let's see," joked Marilyn Crockett, who has worked for the Alaska Oil and Gas Association for 40 years and has served as its executive director since 2007. She then illustrated her point to the audience at the Alaska Resource Development Council's annual conference the November by displaying a Ouija board and crystal ball.

Luminaries from the state's most prominent oil and gas companies put forward their views of the future during conference presentations, offering glimpses of obstacles and opportunities they will face in the short and long terms.

These leaders included John Minge, regional president, BP Exploration (Alaska) Inc.; David A. Moles, Alaska representative and development manager, Eni Petroleum; Michael Wilems, facilities manager, Alaska and Gulf of Mexico, Statoil USA E&P; Emma Cochrane, manager, Business Planning and Analysis, ExxonMobil Gas and Power Marketing Co.; Trond-Erik Johansen, president, ConocoPhillips Alaska Inc.; and Peter Slaiby, vice president, Alaska Exploration and Appraisal, Shell Alaska.

Crockett outlined the most pressing challenges the oil and gas industry faces in Alaska:

* The Outer Continental Shelf moratorium and directive from Washington, D.C., which is still in place. "There still has been no lifting of that, Shell has not been able to move forward yet with its permits for its drilling program," Crockett said.

* Endangered Species Act listings, which are "going to continue to plague not only oil and gas but any developer who is trying to undertake activities in areas where either a critter has been listed or critical habitat has been designated," she said. "We're going to see a lot more of that."

* The U.S. Bureau of Land Management's revision of its integrated activity plan for National Petroleum Reserve-Alaska. "One would hope that the outcome of that would be the continuation of oil and gas leasing within the NPR-A, but we're seeing some pretty frightening indicators that they also may be looking at wilderness designations and other designations for this area," Crockett said. "That is going to further reduce the interest in this area.

* The U.S. Fish and Wildlife Service's revision of the comprehensive conservation plan for the Arctic National Wildlife Refuge. "I know probably everyone in this room has seen the press traffic and e-mails, especially from RDC, about the potential the outcome for this could be very, very disappointing," Crockett said. "There's discussion of wilderness review and wilderness designation. There is consideration of designating wild and scenic rivers within the ANWR coastal plain. So it will take all of us to remain engaged, but that's very serious."

* National Ocean Policy: "The implications of what could happen if the policy is enacted, moves forward in a way that zones off areas of the state's oceans to certain activities or prohibits certain activities, would be huge, especially for Alaska," Crockett said.

* Long lead times, up-front investments: "There is so much time involved, obviously, in staging equipment and staging materials, and getting your personnel and getting boats ready. You have to make those investments when you have no certainty the day before you have to send those ships out you're going to get your permits, and that's an issue that really, really needs to be addressed," Crockett said. "It's particularly alarming that governments are willing to hold lease sales, they're willing to let us buy the opportunity to drill, but the staffing resources in the agencies that have to issue the permits that we must have in order to...