This morning Alaska Department of Natural Resources Commissioner Dan Sullivan (NGP Stock Photo) briefed the Alaska Export Council in Anchorage on the Administration’s strategy for increasing Trans Alaska Pipeline System (TAPS) throughput and managing gas pipeline development.

"I want to give you a very detailed view of Governor Sean Parnell’s one-million-barrel-per-day-within-10-years-strategy," he said, "and what we are doing to implement it."

Sullivan began by reviewing the important direction Alaska’s constitution gave public officials to "maximize" the development of natural resources.  He emphasized the huge resources available to the state and nation saying that only seventeen countries in the world have more land mass than Alaska.

He said, "The number one challenge facing the State is reversing the declining throughput in the trans alaska oil pipeline."  Sullivan noted that TAPS once transported 2.2 million barrels per day and provided over 20 percent of the nation’s domestic supply.  He said that TAPS is still, "…one of the most important pieces of energy infrastructure in America," and that even in decline transports over 11% of the country’s domestic oil supply. 

He said that the billions of barrels of oil and trillions of feet of natural gas and huge estimates of other resource reserves were world class and, "off the charts".  "We are still a very promising place to develop resources," he said.

Strategic direction the Administration is taking includes enhancing Alaska’s global competitiveness and investment climate which is affected by remoteness to the markets, high overall costs–including some of the world’s highest environmental standards.  To improve the investment climate, Sullivan said the Governor remains committed to oil tax reform.  "We think reforming the production tax and its progressivity feature will result in more investment not less."

As to reported increases in exploratory interest, Sullivan said that while companies are looking and exploring because Alaska has rich resources, that is no guarantee of future production.  "We compete globally for capital investment and that is a fact," he said.

Sullivan also explained the Administration’s commitment to improve the efficiency and timiliness of  the permitting system, providing incentives and "new opportunities" for future phases of natural resource development (i.e. oil shale), and promoting partnerships with the federal government.  

Sullivan said that a dramatically changing economic market, such as that which the advent of an dramatically expanding gas shale industry has provided, means Alaska should approach the gas pipeline issue with "humility and flexibility".