Oil and Gas Update. Alaska Municipal League Fly-in

Transcription

1 Oil and Gas Update Fly-in

2 2

3 Employed 5,033 workers in Alaska 4,275 AK residents earning $749 million in wages Spent $4.6 billion with ~1,000 Alaska vendors $1 million in spending for each Primary Company job Generated multiplier effect resulting in 41,300 jobs and $2.4 billion in wages Total: 45,575 jobs & $3.1 billion in wages 3

4 State agency operations: 19,500 jobs State programs: 19,600 jobs Capital spending: 10,400 jobs PFD Distribution: 4,200 jobs Local govt. operations & projects: 4,600 jobs Total: 58,300 jobs & $2.9 billion in wages 4

5 103,875 total jobs 32% of all jobs in Alaska $6.0 billion in wages 35% of all Alaska wages Compared to Seafood: 60,000 jobs/$2.1 billion in wages Visitor Industry: 40,000 jobs/$1.4 billion in wages Mining: 9,000 jobs/$700 million in wages 5

6 Oil production is ~540,000 barrels/day increase came from several fields Oil remains the largest taxpayer in Alaska, with four different sources of oil revenue comprising 65-75% of the state s general fund, i.e. spending money Companies need tax credits paid sooner rather than later Opportunity of federal alignment The fish habitat permit ( salmon ) initiative is a major threat to Alaska s local communities and economy 6

7 7

8 Source: DNR Presentation 10/25/17 8

9 Glacier Oil & Gas Future plans at Badami Caelus Nuna Project Est. ~15,000 barrels per day at peak Hilcorp s Liberty Project Est. ~60,000 barrels per day at peak 9

10 Pikka Project by Armstrong, Repsol, & Oil Search Est. ~120,000 barrels per day at peak eni Four exploration wells approved for (First well spud on Christmas night!) 10

11 Forecasted bpd in FY18 Forecasted FY18 North Slope Oil Production Fall 2012 vs Fall ,900 bpd 546,360 bpd Difference in Production 103,460 bpd Additional barrels per day (bpd) projected in FY18 North Slope production than in FY12 Difference in Revenue ~$300 million Fall 2012 Forecast Fall 2017 Forecast Source: Fall 2012 & 2017 Revenue Sources Books, Dept. of Revenue According to the Fall 2012 production forecast, FY18 State projected revenue is about $300 million less than projections in the Fall 2017 forecast 11

12 Increased FY18 revenues resulting from improved North Slope production will provide funding for important government services DEC, F&G, DNR, DOR, and Law COMBINED $318 million UA System $317 million ~$300 million state revenue could fund Public Safety $159 million Court System $105 million Corrections $267 million Note: Figures reflect unrestricted general fund (UGF) dollars 12

13 FY18 Unrestricted General Fund (UGF) Revenues values in millions $ % $23.2 1% $442.9 million FY17 local property taxes $393 million FY18 restricted revenue $1, % Petroleum Non-Petroleum Investment ~$2.4 billion Predicted total State & local communities total in FY18 Source: Fall 2017 Revenue Sources Book, Department of Revenue 13

14 RESOURCE POTENTIAL STATE LAND FEDERAL LAND Cook Inlet 599 mbo and 19 tcf gas Onshore North Slope Conventional 5 bbo and 35 tcf gas Heavy/Viscous bbo Unconventional 2 bbo and 12 tcf gas Offshore Arctic 27 bbo and 132 tcf gas NPR-A 8.8 bbo and 39.2 tcf gas ANWR 10 bbo and 3.5 tcf gas mbo - million barrels of oil bbo - billion barrels of oil tcf - trillion cubic feet Source: USGS 14

15 December 20,

16 Today, Alaska is only capturing 1.7% of total US investment, or ~$1.9 billion in capital Based on recent history, at least $3.6 billion of Alaska capital investment is needed to grow production. How does Alaska compete for the investment capital necessary to grow production beyond 2018? 16

17 Dates Feb March 2006 April July 2007 July Tax Policy Change Aggregated ELF - Administrative decision altering gross production tax Petroleum Production Tax (PPT) Alaska's Clear and Equitable Share (ACES) 2010 Cook Inlet Recovery Act Increase/ Decrease? Tax Increase Tax Increase Tax Increase Incentives for Industry 2014 SB 21 Both 2016 HB Gov. Walker's oil tax reform Tax Increase AOGA Position Opposed Opposed Final Version Opposed Supported Supported, with concerns Opposed 2017 HB 111 Tax Increase Opposed 2018 Proposed HB 288 Tax Increase Opposed 17

18 Question Does HB 288 help achieve this goal? Source: Alaska Department of Commerce. Northern Opportunity: Alaska s Economic Development Strategy, Pg

19 Paid for by Stand for Alaska, 200 West 34th Avenue, PMB 1219, Anchorage, AK Marleanna Hall, chair, Aaron Schutt and Joey Merrick, co-chairs, approved this message. Top contributors are ConocoPhillips, Hecla Mining Company, and Kinross Fort Knox. 19

20 Cannot understate the consequences of this initiative Virtually impossible to permit large projects: o o o o o o Parks, Seward, or Denali Highways Prudhoe Bay Chena River Flood Control Project Trans-Alaska Pipeline System Red Dog Mine Potential LNG Pipeline Projects that interfere with anadromous fish habitat cannot be permitted including state & local government projects 20

21 The Alaska LNG project would be virtually impossible to permit. - AGDC President Keith Meyer 21

22 State of Alaska Anadromous Fish Act Water Use Act Special Area Permitting Program Federal Government Clean Water Act Section 404 Clean Water Act Section 401 (as implemented by ADEC) Clean Water Act Section 402 (as implemented by ADEC) Magnuson-Sevens Fishery Conservation & Management Act Rivers and Harbors Act National Environmental Policy Act 22

23 Become a part of the coalition at: Air Liquide Alaska Drilling and Completions Alaska Enterprise Solutions, Inc. Alaska Marine Lines Alaska Forest Association Alaska Miners Association Alaska Oil and Gas Association Alaska Supply Chain International Alaska Support Industry Alliance Alaska Truckers Association Alaska West Express Alaska Wins Amak Towing Americans for Prosperity- Alaska ANCSA Regional Association Arctic Controls Aspen Suites Hotels Anchorage Aspen Suites Hotels Juneau Aspen Hotels Kenai Aspen Hotels Sitka Aspen Hotels Soldotna Beacon Occupational Health Beadventures Bering Marine Corporation BlueCrest Blueprint Alaska BP Alaska Brilliant Media Strategies Brooks Camp Brooks Range Supply Caelus Energy Alaska CIRI CLIA Alaska Coastal Helicopters Coeur Alaska - Kensington Gold Mine Colville CONAM ConocoPhillips Alaska Consumer Energy Alliance Alaska Council of Alaska Producers Cruise Line Agencies of Alaska Cruz Companies Deadhorse Aviation Center, LLC Denali Asphalt Denali Drilling Denali Industrial Supply Dittman Research Donlin Gold Doyon Ltd. ENSTAR ExxonMobil Fairbanks Economic Develop. Corp. Fairweather, LLC First Things First Alaska Foundation Flavin Photography Flowline Alaska Frontier Supply Company GBR Oilfield Services Glacier Oil and Gas Corp. Global Diving and Salvage Greater Fairbanks Chamber of Commerce Hecla Greens Creek Mining Co. Hilcorp Judy Patrick Photography Juneau 1, LLC Kinross Fort Knox Knik Construction Koncor Forest Products Laborers' Local 341 Laborers' Local 942 Lynden Lynden Air Cargo Lynden International Lynden Logistics Lynden Transport MAP Consulting Mark K. Johnson, Attorney at Law MatSu Business Alliance MSI Communications MSI Communications North Pacific Maritime Northern Industrial Training Northstar Helicopters Northstar Stevedoring Equipment North Slope Borough Pebble Partnership PRL Logistics Resource Development Council Security Aviation Southeast Stevedoring SRK Stoel Rives Strands Salon Sumitomo Metal Mining Pogo, LLC Survey Point Holdings Teamsters Local 959 Teck Temsco Helicopters The Associated General Contractors of Alaska The Cannery Lodge The Carter Company Thompson & Company Transportation Institute Usibelli Coal Mine Westward Fishing Company Paid for by Stand for Alaska, 200 West 34th Avenue, PMB 1219, Anchorage, AK Marleanna Hall, chair, Aaron Schutt and Joey Merrick, co-chairs, approved this message. Top contributors are ConocoPhillips, Hecla Mining Company, and Kinross Fort Knox. 23