The Anchorage Economic Development Corporation released its annual Resource Extraction 10-Year Project Projection report on October 16. The report is sponsored by Northrim Bank and the research is supported by Petroleum News and North of 60 Mining News. The projection is in its 10th year after originating in 2004 from a request to the Kenai Peninsula Borough Mayor’s Oil and Gas office from the University of Alaska sponsored Workforce Development Conference. Its goal is to give perspective on what the future might hold for resource extraction projects in Alaska. The original projection spurred a more detailed projection that could be updated annually. This year’s projections focus on the State’s ongoing effort to bring North Slope natural gas to market, as well as other projects in various stages of planning and execution.
2014 has been a big year for Alaska’s resource extraction industry. The enactment of SB21 and the voters electing to keep the tax structure in place has resulted in more clarity of future conditions in the industry. There is optimism throughout the industry that the climate is good for development and production projects. Cook Inlet has already seen an increase in production. Since fiscal year 2010, production in Cook Inlet has nearly doubled going from 8,900 barrels a day to over 16,000 barrels per day in 2014.
The report predicts that the North Slope could see similar results in the coming years. With the stability for the future of the oil and gas industry, there is new hope that the decline in the production curve will flatten out. There are many proposed projects that are now moving forward towards new production on the North Slope.
It’s not all rosy for the oil and gas industry. There are still major issues for projects in the Outer Continental Shelf. With the current federal conditions, it is not likely that increased production will be seen in the near future.
The mining industry has had good progress with the momentum behind the Bokan Mountain and Donlin Gold mines. Both of these projects bring new investment and opportunity to mining in Alaska. There are still significant concerns for the progress of the Pebble Project. There is great uncertainty for the future of this major project.
The industry as a whole is driven by the effort to bring North Slope natural gas to market. The potential for an Alaska gas pipeline is a huge project and will bring significant investment and jobs to the state, both inside and out of the oil and gas industry. There have been substantial investments in this project, which bring hope that the pipeline may be a reality in the next 10 years.
The report shows that there is a potential for roughly 20,000 jobs at peak construction and $68 billion of private sector investments in 14 extraction projects that are proposed for Alaska in the next decade. The Resource Extraction 10-Year Projection outlines projects that are producing units, active drilling and exploration sites, projects in early stages and mining resources. The full report can be read at: http://aedcweb.com/images/10_15_2014_Resource_Extraction_Report-FINAL.pdf