Declining Oil Production Cited As Threat To Alaskan Economy

April 2011 Vol. 238 No. 4

Alaska Sen. Lisa Murkowski warned state legislators that declining oil production presents a grave threat to the state’s economy. “Alaska’s oil production has declined 36% since 2003 even as production in many parts of the Lower 48 has increased,” Murkowski said in her annual address to the Legislature.

The state and federal governments should do everything possible to stimulate new oil development on the North Slope, including approval by legislators of Gov. Sean Parnell’s proposed changes to the state petroleum production tax, the GOP senator said.

New oil production could come from offshore or places now off-limits like the Arctic National Wildlife Refuge, but the state must also increase production from its own state-owned lands on the North Slope, she said. Murkowski also said it may be time to discuss other options for using North Slope gas than a pipeline to the Lower 48. A gas-to-liquids project may be worth considering.

“The things I’m saying may be hard for some to hear. I’m just asking you to think about this,” she said. “Right now we’re showing patience for AGIA,” the state’s agreement to support TransCanada Corp. with a subsidy.
“A big pipeline is still Alaska’s top choice and I’m doing everything possible at the federal level to make it happen,” she said. “A number of dominos must fall to make this happen. Building a gas-to-liquids plant would not foreclose our ability to build a gasline. There’s more than enough gas waiting to be developed.”
A gas-to-liquids plant either on the North Slope or near Fairbanks could make high-quality liquid fuels that could be shipped through the trans-Alaska oil pipeline.

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