2010 year in review: a year to remember.

• Author: Bohi, Heidi
• Position: YEAR IN REVIEW

From Pebble to Hickel, from Stimulus funds to a movie shot in Anchorage, from Stevens to wind farms, from OCS to Open Season--and not to mention elections--2010 was a high news year in Alaska.

OPEN SEASON

Hold the drum roll. It could be months until the results of open season--when bids were solicited from customers of the estimated $40 billion natural gas pipeline--are announced to the public, as two competing developers test the market.

Calgary-based TransCanada Corp., which is developing the Alaska Pipeline Project with Exxon Mobil Corp. and in conjunction with the State under the Alaska Gasline Inducement Act (AGIA), is one of the companies that concluded its open season this summer. Based on this proposal, there are two options. The first is a pipeline from the North Slope, through Alaska, the Yukon Territory and British Columbia, to Alberta, Canada, where the gas is delivered on existing pipeline systems serving major North American markets. The second option transports natural gas from the North Slope to Valdez, where it is converted to liquefied natural gas in a facility to be built by others, then shipped to domestic and international markets. Only one of the options will advance and it is likely that the results of the open season will determine the successful option.

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Denali--The Alaska Gas Pipeline, a collaborative effort between ConocoPhillips and BP, concluded its submission in October. It includes a gas-treatment plant (GTP) on the North Slope, transmission lines from Prudhoe Bay and Point Thomson fields to the GTP, an Alaska mainline that runs from the Slope to the Alaska-Yukon border, and a Canada mainline that transports gas from the Alaska-Yukon border to Alberta. Access points along the route also will help meet natural gas demand in Alaska and Canada communities.

For both, information was provided to potential shippers in Alaska and Canada on anticipated engineering design, commercial terms, estimated costs and timelines. Shippers assess this information and decide if they want to commit to long-term, contractual commitments to reserve capacity on the pipeline.

WALLY HICKEL PASSES

Just the name feels like pie and coffee on a December day, or the neighbor who's just always been there.

Wally Hickel--athlete, businessman, statesman, futurist, antagonist, author, advocate, frontiersman, family man and leading character in the story of Alaska. He died May 7, 2010, but he leaves a legacy that will keep him in our conversations for generations.

In his 90 years as one of the state's most important--some will say the most important--political personalities and entrepreneurs, whether perceived as the good guy or the bad guy, everyone agrees his influence on the development of Alaska is what makes it a state and not a refueling point.

He had only had four bosses of any consequence: his father, himself, the United States of America, and the State of Alaska. Originally from Kansas, he arrived in Alaska in 1940 and before the end of the decade formed Hickel Construction Co., building hundreds of homes, shopping centers, motels and the Hotel Captain Cook in downtown Anchorage. About this same time, he became a leading voice in the efforts to advance statehood and used his political clout in Congress and the Eisenhower administration to get the Alaska Statehood Act passed in 1958.

His first term as governor was from 1966 to 1969 and ended when he resigned to become Interior Secretary in the Nixon administration. He was fired after 22 months "for a mutual lack of respect," and returned to his beloved Alaska. As the state's eighth governor, from 1990-1994, he continued to advance the grand plans he was known for, ranging among building a gas pipeline--today one of the state's most promising potential developments--to an undersea railroad to Siberia and building a 2,000-mile pipeline down the Pacific Coast to carry fresh water from Alaska to areas in Southern California that typically suffer from water shortages. Although it was never built, along with several other unconventional ideas never realized, he will most be remembered for those that were accomplished such as helping open North Slope oil to development and getting the State's huge tax and royalty settlements with the petroleum industry, resulting in $4 billion for the Constitutional Budget Reserve fund.

"Sure, I'm a dreamer--that's what Wally Hickel is all about," he once said. In keeping with his final wishes, on May 18 Hickel was buried standing up at Anchorage Memorial Cemetery. "I want to be buried standing up, so when I get to heaven, I can come out fighting," he once told a friend.

ACES

Maybe there's some truth to the old adage that we treat the ones we love the worst.

And 2010 certainly felt that way to Alaska's largest producers in the oil and gas industry, as they continued to feel pangs from the State's current production tax, Alaska's Clear and Equitable Share (ACES). They say it is unfair because the tax increases with rising oil prices--there is a 25 percent baseline tax on all revenue from Alaska oil, which may increase to up to 50 percent as the price of a barrel of oil increases.

This undermines incentives to develop new oil resources and adds to the risk high taxes may drive business to other areas of the world where the business environment is friendlier and the profits more promising.

And the major players are not just posturing. ConocoPhillips cited ACES for the reason it scrapped a $300 million refinery project and why for the first time in more than 40 years, it is not exploring. BP Alaska delayed the development in the western region of the North Slope as a result of ACES and said its in-field drilling this year will be less than half of what it was in 2007.

Last year, the number of exploratory and development wells fell to the lowest levels in a decade. The number of new in-field wells drilled dropped from 166 in 2007 to 155 in 2008 and 147 last year, the Alaska Oil and Gas Association (AOGA) states. Well completions...