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Economic Report 1-2018

Economic Report 1-2018

In this Issue: Governor button-holes producer on natural gas BP holds Prudhoe production level; overall slope is up 1.4 percent Energy Chugach/ML&P utility deal CIRI, Chugach in a tiff over wind Health care Ketchikan looks at cost transparency Alaska health plan signups rise Bonds to fund program; companies asked for discount State to accelerate oil tax credit obligation payoff Credits to be eventually paid anyway, but state could pay faster Incentives were aimed at attracting new explorers Business Intelligence $45…

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Prices, projects: Things looking up a little in Alaska’s oilpatch

Prices, projects: Things looking up a little in Alaska’s oilpatch

Things are looking a little brighter in Alaska’s oilpatch? Job numbers have not yet ticked up and in fact they’re still slipping, though modestly now, after big cuts made in 2016 and 2017 as producing companies adjusted to the world of lower prices. But prices are rising, after a long slump. Even during the slump a number of new projects were being worked on and the brighter price outlook should cause some companies to push the green button on their…

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What a contrast! Legislators orderly, civil as they close 2018 session

What a contrast! Legislators orderly, civil as they close 2018 session

Was this a virus whipping through the state capitol in Juneau? As the Legislature shut down last Saturday, May 12, odd things happened: There was civility, cooperation, bipartisanship, and good feelings. “The House and Senate and both (Democrat and Republican) caucuses really came together this year,” House Speaker Bryce Edgmon said as the session ended. Things were much different than last year, when the House and Senate, Republicans and Democrats, were all at each others’ throats. There were extended special…

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POMV deal is done – stage being set for ending session

POMV deal is done – stage being set for ending session

At the end, it happened fast. The conference committee on SB 26 convened at 9 a.m. May 8, voted and sent the bill out eight minutes later. A few hours later both the House and Senate ratified the conference committee report, sending SB 26 on to the governor. After a year of agony and sniping over the proposal to use some of the Permanent Fund earnings for the budget the quick resolution seemed anticlimactic. But that’s the way these things…

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Are they close to a deal on fiscal gap?

Are they close to a deal on fiscal gap?

There seems to be a deal coming together on SB 26, the bill that sets a percent-of-market-draw,
or POMV, in statue as a rule for using Permanent Fund earnings to support the state budget. This is the remaining big issue of the 2018 session and if an agreement is made in the next couple of days a rush to adjournment could begin. An adjournment push should happen even if the deal does not come together, too. Word has been circulating in…

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Railbelt power grid moves slowly to modern era

Railbelt power grid moves slowly to modern era

A bill is pending in the state House that would put the state’s hammer on the six “railbelt” utilities that have been squabbling for years over uniform reliability standards and how to efficiently move power up and down the regional power transmission grid. Also, independent private power producers complain they are stymied in selling their power to customers through the grid by having to pay tolls all through the system. In some cases these have added up to some sales…

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BP holds Prudhoe production level; overall slope is up 1.4 percent

BP holds Prudhoe production level; overall slope is up 1.4 percent

BP stemmed production declines in the Prudhoe Bay eld for the third year, company officials told us. Prudhoe produces about half of total North Slope oil output, so performance of the 40-year- old eld is critical to supporting overall slope production, which has shown small increases over the last two years. Prudhoe maintained an average of 280,000 barrels per day in 2017, down only slightly from 280,700 in 2016 and 281,800 in 2015. BP is the Prudhoe eld operator. With…

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Governor button-holes producers on natural gas

Governor button-holes producers on natural gas

Gov. Bill Walker is holding meetings with North Slope producers, jawboning them about selling natural gas for the state-led Alaska LNG Project. So far meetings have been held with BP and ConocoPhillips and a meeting with ExxonMobil has either just been held or is planned soon. BP con rmed its meeting but the governor’s office would not comment. The governor’s idea, as sources explained to us, is for the companies to sell gas to the state-owned Alaska Gasline Development Corp….

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Bonds to fund program; companies asked for discount

Bonds to fund program; companies asked for discount

State to accelerate oil tax credit obligation payoff The state of Alaska plans to pay off $900 million in outstanding oil and gas investment tax credit obligations owed to companies. Money is owed to small and medium-sized companies, mostly independents, who were caught short when the state had to sharply cut reimbursements under the tax credit incentive program, under which the state had shared costs. Major Alaska producers were not eligible for the tax credit payments. The payments would be…

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North Slope oil production holds up

North Slope oil production holds up

It is a surprising accomplishment, but even as oil prices remain in the $50-plus per barrel range the North Slope producers have been able to maintain and even slightly increase production. The North Slope oil fields produced an average of 527,900 barrels per day over Fiscal Year 2017, the budget year ending last June 30, an increase over the average of 516,400 barrels per day producing over the prior year, FY 2016.