Kara Moriarty, President and CEO of the Alaska Oil and Gas Association, gives a presentation to the joint Kenai and Soldotna Chambers of Commerce at the Kenai Visitors Center in Kenai, Alaska on Wednesday, Aug. 21, 2019. (Photo by Brian Mazurek/Peninsula Clarion)

Kara Moriarty, President and CEO of the Alaska Oil and Gas Association, gives a presentation to the joint Kenai and Soldotna Chambers of Commerce at the Kenai Visitors Center in Kenai, Alaska on Wednesday, Aug. 21, 2019. (Photo by Brian Mazurek/Peninsula Clarion)

Alaska Oil and Gas Association president predicts decades of increased oil production

By 2040 there could be rates of production as high as 1 million barrels a day in ANWR alone.

Soldotna Chamber of Commerce members last week got an update on the future of oil and gas in the state at their first joint luncheon since July.

At the Wednesday, Aug. 21 luncheon, Kara Moriarty, President and CEO of the Alaska Oil and Gas Association, broke down the industry’s outlook for the next couple of decades and addressed the renewed conversation around tax credits for oil companies.

Moriarty started the presentation by speaking about a new initiative from the oil and gas association that highlights the individuals working in the industry. A Facebook Page for Alaska Oil and Gas features videos and testimonials that “celebrate the people and the pride and the petroleum industry.”

“It may seem funny to you in Kenai that we need to do something like this, but you’re an unusual community compared to the rest of the state because the industry really is right in your backyard,” Moriarty said. “We’re trying to provide an opportunity for the rest of Alaska to see what life is really like for those of us who live and work in the industry.”

Moriarty also highlighted the statewide economic impact of the oil and gas industry. According to data from the McDowell group, the industry provides over 103,000 direct jobs and more than $6 billion in wages each year. When including indirect jobs, the McDowell study showed that the oil and gas industry represents about one-third of all jobs in Alaska.

In addition, information compiled by oil and gas association and presented to the Alaska House Resources Committee in May showed that the industry provided $3 billion dollars in total revenue to the state and local governments during Fiscal Year 2020.

Moriarty said that the oil and gas industry operates primarily in the Cook Inlet and the North Slope. There are also three refineries in the state: The Marathon refinery in Nikiski and two refineries owned by Petro Star in Valdez and the North Pole.

Looking to the future, Moriarty said that the North Slope is set to experience a “renaissance” in terms of renewed growth in production within the next decade. Moriarty said that this past year was the most successful season in terms of exploration that the state has seen in over 15 years. As part of the presentation, Moriarty shared a map of the National Petroleum Reserve in Alaska (NPRA) that illustrated the various projects being proposed in the area.

Companies like Oil Search and Hilcorp are looking to infield developments in the NPRA, and Moriarty said that if all goes according to plan, oil production could increase significantly.

“Now all of those fields aren’t going to come online all at the same time,” Moriarty said. “But if they are all successful … we could honestly see in five to seven years a couple hundred thousand more barrels being produced.”

On Tuesday, BP announced that it would be selling all of its interests in Alaska to Hilcorp for $5.6 billion. Moriarty told the Clarion yesterday wthat the news of the sale bolstered the notion that companies are committed to increase production both on the North Slope and in Prudhoe Bay.

“I have no doubt Hilcorp will do everything they can to expand BP’s existing operations, and this is another opportunity to see what they can do with Prudhoe Bay,” she said.

Looking at the long-term outlook for the industry, the impending lease sale in the Arctic National Wildlife Refuge (ANWR) could also mean a huge boost in production for the next generation of oil and gas. The federal Energy Information Administration recently updated their long-term outlook for oil and gas production to account for potential production in ANWR.

According to information from the Energy Information Administration, even without production in ANWR the U.S. has become the largest petroleum producer in the world, passing Saudi Arabia in 2018. The U.S. currently produces about 12 million barrels of oil per day and is also the world’s largest producer of natural gas, producing more than 110 million cubic feet per day.

Moriarty said that with a successful lease sale, by 2040 there could be rates of production as high as 1 million barrels a day in ANWR alone. Moriarty said that this increase in production is necessary to meet a global increase in demand for oil and natural gas. The International Energy Association’s 2018 World Energy Outlook outlines the potential for oil demand to increase steadily over the next few decades, with demand peaking at 106 million barrels per day in 2040. The increased demand is expected to come primarily from countries in the Asia Pacific region.

To end her presentation, Moriarty spoke about the latest initiative to reform the current tax structure in Alaska in regards to the oil and gas industry. On Aug. 16, an application was submitted for a ballot initiative called the Fair Share Act that would increase the state’s share of revenues from oil production by increasing taxes on oil companies and eliminating the per-barrel tax credit that is currently in place.

The per-barrel credit, enacted through the Legislature in 2013 with the passage of SB 21, acts as a tax deduction for oil production that is adjusted as the price of oil fluctuates. Moriarty said that the goal of the per-barrel credit is to keep the tax rate competitive when oil prices are low, and the credit diminishes based on rising price. Prior to the passage of SB 21, oil production was taxed at a flat 35%. According to a presentation by Alaska’s Department of Revenue to the House Resources Committee on April 22 of this year, the effective production tax rate with the per-barrel credit has averaged about 24% since fiscal year 2014.

“I’m an Alaskan, I’ve got three kids in school, I understand the state has a serious fiscal challenge,” Moriarty said. “So some think this a really easy fix, we can just go get a billion or two from the oil and gas industry, but in the end that will not be the long-term solution and we’ll be worse off long-term than in the short-term.”

More in News

Lydia Jacoby of the United States, sees the results after winning the final of the women’s 100-meter breaststroke at the 2020 Summer Olympics, Tuesday, July 27, 2021, in Tokyo, Japan. (AP Photo / Martin Meissner)
Seward buzzing over Jacoby’s victory

SEWARD — An Olympic buzz permeates an Alaska coastal community thousands of… Continue reading

FILE - A sign advises shoppers to wear masks outside of a store Monday, July 19, 2021, in the Fairfax district of Los Angeles. Infections are climbing across the U.S. and mask mandates and other COVID-19 prevention measures are making a comeback in some places as health officials issue increasingly dire warnings about the highly contagious delta variant. But in a possible sign that the warnings are getting through to more Americans, vaccination rates are creeping up again, offering hope that the nation could yet break free of the coronavirus if people who have been reluctant to receive the shot are finally inoculated. (AP Photo/Marcio Jose Sanchez, File)
CDC changes course on indoor masks in some parts of the US

The Centers for Disease Control and Prevention changed course Tuesday on some… Continue reading

Alaska State Troopers and local law enforcement agencies in Ketchikan arrested a woman on Friday, Feb. 5, 2021 in possession of more than a quarter of a million dollars worth of drugs at the Ketchikan International Airport. (Michael Penn / Juneau Empire File)
Semi-truck crash marks fourth major car accident in 10 days

There was another vehicle accident on the Sterling Highway this morning, according… Continue reading

Resurrection Bay is seen from Seward, Alaska on Saturday, July 24, 2021. (Camille Botello / Peninsula Clarion)
Seward approves construction of animal shelter

The Seward City Council approved up to $1,930,500 for the construction of… Continue reading

Alaska Senate President Peter Micciche speaks to reporters after a Senate floor session on the opening day of the second special legislative session on Wednesday, June 23, 2021, in Juneau, Alaska. Gov. Mike Dunleavy called the special session to address the budget. (AP Photo/Becky Bohrer)
Per diems add up for lawmakers

State lawmakers could make more than $85,000 in per diem payments and… Continue reading

Daniel Balserak and Luke Konson fish for salmon in Alaska. The pair has been traveling the country and catching every official state fish for the past 11 months. (Photo provided)
A gap year like no other

High school graduates defer college enrollment to fish in every state

Hikers look at the Harding Icefield in August 2015 in Kenai Fjords National Park, just outside of Seward, Alaska. (Photo by Jeff Helminiak/Peninsula Clarion)
Hiker rescued from Harding Icefield Trail

A hiker was airlifted off of the Harding Icefield Trail in Kenai… Continue reading

COVID-19 cases are rising and health officials say new variants are spurring the increase, even among the vaccinated. But health officials note the majority of hospitalizations and deaths are occurring in unvaccinated people. (Michael Lockett / Juneau Empire file)
COVID-19 surge continues

‘They’re getting sicker this time around’

Alaska State Troopers logo.
Weekend car accident leaves 1 dead

Alaska State Troopers reported another car accident fatality over the weekend, marking… Continue reading

Most Read