Alaska Oil and Gas Association

Transcription

1 January/February 2008 straight talk Alaska Oil and Gas Association March/April Issue 2 In This Issue: Cover Story... 1 Member Spotlight... 2 Special Events... 3 On The Job... 3 Alyeska Escorts Eleven-Thousandth Tanker Safely Through Prince William Sound In Alaska s Prince William Sound, winter storms can drive ferocious winds and pounding waves into the Port of Valdez. Despite these conditions, heavily-laden crude oil tankers are escorted through this often brutal weather on a steady schedule. On Jan. 28, 2009, Alyeska Pipeline Service Company achieved an operational milestone when marine tanker Polar Resolution departed from the Valdez Marine Terminal under escort by tugs Alert and Aware. The people of Valdez are used to seeing the mighty tugs accompany the giant tankers, but this event was special as it marked the eleven-thousandth time a tanker has benefited from an escort as it journeys through the Sound, courtesy of Alyeska s Ship Escort/Response Vessel System, commonly referred to as SERVS. Technology Spotlight... 4 Executive Director s Message... 5 Save the Date... 6 This important achievement was reached thanks in part to sophisticated tugs and other state-of-the-art equipment, but primarily through the hard work and dedication of the people who work at SERVS. This is a great example of the work we do to protect the environment and transport oil safely day in and day out, said Kevin Hostler, Alyeska President and CEO. Alyeska s owner companies and marine shippers established SERVS in 1989 to provide world-class escort services to Trans- Alaska Pipeline System (TAPS) tankers that transit the waters of Prince William Sound, and to provide comprehensive protection and oil spill recovery strategies to protect the waters of the Sound. SERVS fulfills its prevention mission by providing two tugs, with a combined 20,000 HP, to escort each laden tanker from the (continued on page 2) Above: Lloyd Kompkoff has been the fishing vessel coordinator for SERVS since 2005, working with communities in Prince William Sound to protect the waters of Alaska. Above Left: Prevention response tug "Attentive." (Photos courtesy of Alyeska Pipeline Service Co.) -1-

2 What year did Flint Hills come to Alaska? Alaska Oil and Gas Association Member Spotlight Flint Hills Resources Where does Flint Hills operate in Alaska? The refinery and supply racks are located in North Pole, Alaska; a products terminal at the Fairbanks International Airport; and a products terminal and supply racks at the Port of Anchorage. Above: A Flint Hills employee loads jet fuel at a rail rack for shipment to Anchorage. Right: The Flint Hills crude unit #2 located at the North Pole refinery glows brightly in a cold December night. (Photos courtesy of Flint Hills) Where else does Flint Hills do business? Flint Hills Resources has refineries in Pine Bend, Minnesota, and Corpus Christi, Texas. There are petrochemical production facilities in Illinois, Michigan and Texas. The company also produces and markets asphalt in the Midwest and owns an interest in a base lube oil facility in Louisiana. How many employees does Flint Hills have in Alaska? 175 employees in Alaska. What types of products are refined at Flint Hills? Jet fuel, gasoline, high sulfur diesel, turbine fuels and asphalt. What type of expansion plans does Flint Hills have for Alaska? Expansion plans for Flint Hills Resources in Alaska are contingent on improved World economics that will result in increased demand for the products and on the economic climate for refining in Alaska. (Alyeska continued from page 1) terminal to just outside the entrance of Prince William Sound approximately 67 nautical miles away. An Enhanced Tractor Tug (ETT) or Prevention and Response Tug (PRT) is tethered to each laden tanker from the terminal through Valdez Narrows and Valdez Arm to Buoy 9. SERVS also maintains one of the largest inventories of oil spill response equipment in the world, and has the personnel and equipment to contain, control and recover 300,000 barrels of oil in 72 hours as required by law. More than 35 Alyeska employees and 300 contractor personnel are trained and available to conduct response operations, and some 350 fishing vessels in Prince William Sound and the surrounding communities of Homer, Seward and Kodiak are contracted for incident response. For twenty years, Alyeska has safely escorted tankers through Prince William Sound 11,000 times, to be exact. -2-

3 Special Events AOGCC Celebrates 50 Year Anniversary The Alaska Oil and Gas Conservation Commission (AOGCC) was created in 1958 to regulate the safe production of Alaska s oil and gas resource. AOGCC serves a vital role and shares a common mission with the Alaska Oil and Gas Association: Provide for the long-term viability of Alaska s oil and gas. The AOGCC is similar to other agencies in oil and gas producing states which regulate the oil and gas industry. The primary responsibilities of this independent, quasi-judicial agency are to prevent waste during oil and gas production, provide oversight of well drilling, maximize the potential of all oil and gas reserves in Alaska and mitigate risks for underground water. with the AOGCC. The AOGCC also actively monitors and inspects current oil and gas work, both on the North Slope and in Cook Inlet to ensure the safety of the operations. The Commission is comprised of three individuals appointed by the governor. State law requires that a petroleum engineer, a geologist and a public member fill the three seats on the Commission. Currently, the Commission is chaired by Dan Seamount (geologist), with Cathy Foerster (petroleum engineer) and John Norman (public member) serving as the other two appointed commissioners. If an oil company wants to drill an exploration or production well, or make modifications to existing exploration or development plans, they work directly AOGCC inspector Lou Grimaldi, at right, inspects a Kenai Peninsula oil production well. At left is Steve Tressler, of Peak Oilfield Services Co. (Photos courtesy of AOGCC) The agency was created before production began in Alaska, as it was recognized that there would need to be an agency to provide this type of oversight. For the past 50 years, AOGCC has dutifully fulfilled its obligation to the state and continues to serve an important role in the production of Alaska oil and gas resources. Visit AOGCC s Web site at for information. On the Job Andy Mumford, Operations Financial Analyst, Petro Star Inc. His name is Andy Mumford and he s called Alaska home for nearly 27 years, having moved to Barrow from Wyoming when he was less than a year old. He now lives in Fairbanks and works for Petro Star Inc. at the North Pole Beaverbrook office as an operations financial analyst and price book coordinator. A subsidiary of Arctic Slope Regional Corp. (ASRC), Petro Star Inc. was established by a group of veteran petroleum industry professionals in It is the only Alaskan-owned refining and fuel marketing operation in the state. Its six divisions include aviation, heating fuel, lubricants, marine, refining, and retail food and convenience stores. Andy works primarily on the heating fuel and retail side. I analyze everything in our operations which include volume at the pumps, total inside sales by category, to profit and loss statements and then submit scorecards identifying financial performance by location Andy Mumford On the Job at Petro Star in Barrow. to management. Andy said. The best part of my job is being able to interact with each store. It s always (continued on page 4) -3-

4 Technology Spotlight Offshore Spill Response Technology The history of offshore exploration and production operations around the world confirms that large spills are extremely rare events. In 2003 the National Academy of Sciences reported that only 1 percent of the oil discharges in North American waters are related to the extraction of petroleum, and only a fraction of those are from drilling operations. There has never been an oil spill caused by a blowout from offshore exploration and production drilling in state and federal waters off Alaska or in the Canadian Arctic. According to the U.S. Coast Guard classification, there have been no major spills from U.S. exploration or production platforms since In the unlikely event of a spill, several response techniques are typically employed. They include mechanical recovery, dispersants (chemical agents used to reduce the effect of oil spills by changing the chemical and physical properties of the oil), and controlled in-situ burning (ignition and burning of an oil spill on the surface of the water). Detection and monitoring of oil spills are important components of spill response. Tracking an oil spill can be accomplished through airplane and helicopter surveys, Forward Looking Infrared Radar (FLIR) systems, Global Positioning Systems (GPS), digital cameras, etc. In addition, tracking buoys and various types of radar reflectors can be launched from vessels on location at the beginning of a spill and at appropriate intervals thereafter to help track the oil. Specialized icestrengthened beacons have been used successfully for many years to track ice movements over an entire winter season throughout the polar basin. GPR tests in Norway. Techniques for detecting and tracking oil under ice include drilling holes and trenches in ice, using Autonomous Underwater Vehicles (AUVs), or surfaceoperated, portable Ground Penetrating Radar (GPR). Off-the-shelf GPR systems are capable of airborne (helicopter) mapping of oil on the ice surface buried under snow. Alaska Clean Seas (ACS) recently acquired a GPR system to deal with the potential for pipeline spills under the snow in Prudhoe Bay fields. Industry continues to fund projects that improve the ability to detect oil under ice. The most recent project aims at evaluating a feasibility of Nuclear Magnetic Resonance (NMR) for oil detection under ice. NMR has been used to characterize ground-water aquifers for well logging and reservoir rock core analysis in the oil industry. For applications in oil spill detection, a very important aspect of NMR is that the presence of snow or ice does not interfere with detection, and gives a promise of successful detection of oil under ice. (On the Job continued from page 3) different I m never really sure what I m going to do every day, and that keeps it interesting. An ASRC shareholder, Mr. Mumford started out as a seasonal laborer at Sourdough Fuel, another ASRC subsidiary, the summer after his senior year of high school. The goal was to raise money for college. He enrolled in the University of Alaska Fairbanks in the autumn of 2000, and then continued working for Sourdough Fuel over Christmas break and a second summer before being approached by Operations Manager Doug Richmond, who offered him one of the company s coveted internships. The internship was with Sourdough Fuel s marketing department, and it proved a good fit. A self-described numbers guy, Andy said he gained valuable experience working on the administrative side of things. I ended up receiving a degree in business finance, so numbers -4-

5 Alaska Oil and Gas Association AOGA Executive Director Message Upcoming Challenges By Marilyn Crockett, Executive Director In previous issues of Straight Talk I ve written about the challenges facing Alaska and its oil and gas industry environmental lawsuits, changes to the state s permitting system which threaten to undermine the permitting process, Endangered Species Act listings of polar bears and Cook Inlet beluga whales, and the threats posed by Alaska oil production decline on the State of Alaska, among others. While some of the challenges facing the energy industry are beyond our immediate control as humans (harsh operating environment, remote location), we do have the ability to influence the challenges I ve mentioned previously and the new ones which have recently surfaced. While on the one hand we feel somewhat removed by events in Washington, DC, turns out they will have a very direct impact on Alaska. We start with Department of Interior Secretary Salazar s decision to postpone for six months the process to establish the next five-year MMS OCS leasing program. We are encouraged by the Secretary s public statements that oil and gas resources will play a role in the new administration s energy program, but given the time it takes to develop oil and gas projects in Alaska, any delay is cause for concern. On April 14, Alaskans will have an opportunity to tell the Secretary, face-to-face in Anchorage, how important Alaska is to the nation s energy security. We move on to the Omnibus budget which provides funding for the federal government for the remainder of Buried within this huge package is a rider which allows President Obama, without an opportunity for the public to comment, to withdraw or reissue regulations governing activities legally conducted in the arctic associated with the listing of polar bears as threatened under the ESA. Senators Murkowski and Begich put up a valiant effort to thwart this attack on public process. We trust that should President Obama decide to revisit the regulations he will provide the opportunity for Alaskans to put forward their views, and that he will consider those views before adopting changes to these important rules. Finally, and most importantly, the President s 2010 budget proposal proposes $80 billion in new taxes on the oil and gas industry taxes which will impact every sector of the industry in Alaska on top of what was considered to be an unprecedented tax increase levied in late 2007 by the Alaska Legislature. Given these events we encourage every Alaskan to make their views heard on Capitol Hill. The future of the nation, and indeed, Alaska, is at stake. come easily to me, he said. I d rather be dealing with numbers and the retail store employees than sitting behind a desk doing paperwork. Andy has seen the Fairbanks area grow and change a lot over the years, but his love for hockey has remained a constant. He played hockey in high school and moved on to play junior hockey for the Fairbanks Ice Dogs, and he now coaches a youth hockey team. Playing hockey, coaching hockey that s what keeps me in Fairbanks, he said. Although Andy s brother and sister moved to Anchorage, his mom and dad still live and work in Fairbanks, Mr. Mumford says the family ties are strong: His mom also works for Petro Star Inc., and his sister works for ASRC. Thanks to hard work, on-the-job training, and a strong commitment to ASRC, at only 27 years old, Andy Mumford has become a valued member of the Petro Star Inc. team. -5-

6 WHAT A DIFFERENCE A YEAR MAKES AOGA members will provide insight into how Alaska s oil and gas industry is responding to the dramatic changes over the past year. Alaska Oil and Gas Association Annual Luncheon Sheraton Hotel, Anchorage, AK $30 per person/$240 tables of 8 Doors open at 11:30. Luncheon begins at Noon. Don t miss it! RSVP today by visiting or by calling Save the Date Wednesday, May 13, straight talk PRSRT STD U.S. Postage PAID 121 W. Fireweed Lane, Suite 207, Anchorage, AK ph AOGA Staff Marilyn Crockett, Executive Director Kara Moriarty, Deputy Director Tamara Sheffield, Support Services PERMIT NO. 69 ANCHORAGE, AK