Diary

Governor Palin Testifies on AK's Outer Continental Shelf and Announces Point Thomson Oil Rig Mobilization (Updated: 2306 EDT)

Alaska Governor Sarah Palin on April 14, 2009 testified “before Secretary of the Interior Ken Salazar in a federal hearing in Anchorage, urging the Obama administration to” permit responsible development of oil and gas resources in Alaska’s Outer Continental Shelf (OCS) in a five-year leasing program (Testimony Release, 2009, ¶1).

“A national energy policy that includes conservation, expanded renewable sources and wise, responsible use of conventional fuels such as coal, oil and natural gas will create jobs here in America, protect our national security by reducing America’s dangerous dependence on foreign oil, and confront the dangers of global warming,” Salazar said in his confirmation hearing. Governor Palin concurred (Testimony Transcript, 2009, p. 1).

While the Governor supports the use of alternative energy sources, she said they are insufficient to meet increasing demand spurred by economic and population growth. This necessarily means that hydro-carbons will continue to play an important role and our country should be increasing domestic production of these resources and decreasing foreign imports of them (Testimony Transcript, 2009, p. 1).

She indicated that according to the US Geological Survey, Alaska is second only to the Gulf of Mexico for petroleum potential, and “second only to the West Siberian Basin in total Arctic petroleum potential and the highest Arctic potential for oil” (Testimony Transcript, 2009, p. 1).

She cited the US Geological Survey’s findings that Alaska’s OCS contains “mean technically recoverable resources of approximately 30 billion barrels of oil, 6 Billion barrels of natural gas liquids and 221 trillion cubic feet of conventional natural gas” (Testimony Transcript, 2009, p. 1).

Further, continued decline in North Slope Oil production could lead to the closure of the Trans-Alaskan Pipeline, followed by the cessation of oil production from that region of the state (Testimony Transcript, 2009, p. 2). The time from land lease to production can reach or exceed 10 years, thus delaying OCS production can have cascading consequences, leading to a premature shutdown of the Trans-Alaskan Pipeline. The final consequence is even greater dependence on foreign oil, placing the United States’ destiny even more at the mercy of nations with conflicting interests (Testimony Transcript, 2009, p. 2).

Governor Palin highlighted the Alaska Gasline Inducement Act (AGIA), for which field crews were “gathering geotechnical data” as she gave her testimony. “The applicant ([TransCanada] Alaska) is preparing for an open season in 2010” (Testimony Transcript, 2009, p. 2). The pipeline will originate in the North Slope and deliver natural gas to a hub in Alberta, Canada, thence to the 48 conterminous states (or Lower-48 as more commonly referred to).

OCS development helps support the project’s economic viability and the pipeline’s longevity (Testimony Transcript, 2009, p. 2). Both the US Geological Survey and the Minerals Management Service estimate that Arctic Alaska contains “over 220 trillion cubic feet of proven and undiscovered, mean, conventional, technically recoverable natural gas,” while both agencies estimate “over 100 trillion cubic feet of undiscovered, mean, unconventional, technically recoverable natural gas” (Testimony Transcript, 2009, p. 2).

Governor Palin cited an Energy Information Agency report which stated that providing this resource to the Lower-48 states via the AGIA project could lower natural gas prices by 63 cents per thousand cubic feet in 2022 (Testimony Transcript, 2009, p. 3).

While some want to shut down OCS development, citing environmental concerns, doing so precludes bringing low carbon-footprint natural gas to market. Further, the OCS is a perfect place for renewable energy sources such as wind and tidal power. Governor Palin noted that closing development on Alaska’s OCS would also foreclose the possibility of using these renewable sources (Testimony Transcript, 2009, p. 3).

According the American Petroleum Institute, Governor Palin said, “Alaska has decades of experience in safely extracting oil & gas from our resource basins throughout the state, including Arctic Alaska. Over this history the technology in the industry has become extremely sophisticated, allowing for directional drilling from a single surface location for miles in all directions. Additionally, the footprints left by drilling activities have shrunk from around 65 acres in 1977 to as little as 9 acres” (Testimony Transcript, 2009, p. 4).

Alaska does not receive any revenue from OCS development. Governor Palin wants that changed, not just for her state, but any state in which OCS development occurs. “I strongly support changes to federal law to provide states and coastal communities with a fair percentage of direct revenues from royalties, bonus bids, and rental fees derived from all OCS activities off their coast,” she said (Testimony Transcript, 2009, p. 4). This position is reflective of the populism inherent to both her state’s constitution and herself.

Finally, exemption of particularly sensitive areas and seasonal drilling restrictions ensure that development is done responsibly. “Alaska has proven that these resources can be developed safely, but Arctic exploration and development is a slow demanding process. Delays or major restrictions in accessing these resources for environmentally responsible development are not in the national interest or the interests of the State of Alaska,” Governor Palin concluded (Testimony Transcript, 2009, p. 5).


Point Thomson Drilling Mobilization

ExxonMobil has “mobilized the movement of equipment, materials, and components of the Nabors 27E drilling rig out to a staging area near the Point Thomson pad. The equipment is being moved across a fifty mile ice road from Deadhorse” (Point Thomson, 2009, ¶1). (Author’s Note: ExxonMobil has not provided a corresponding release on this; their last release on the subject goes back to February 19 2009, which corresponds directly with Governor Palin’s contract enforcement release noted below.).

On February 19, 2009, Governor Palin had announced that her administration was enforcing contracts on Exxon-Mobil to develop on lands the company had leased – Point Thomson in particular. “It confirms that the decision we made to adhere to commitments and the state constitution is correct. It’s all about protecting Alaska while working with the oil industry to responsibly and ethically develop Alaska’s rich resources” (Point Thomson, 2009, ¶2) .

The work related preparing the two wells have employed 250 individuals and 60 contractors and companies (Point Thomson, 2009, ¶3).

Commentary

Governor Palin’s forté clearly is on energy matters and she has demonstrated her expertise on this subject time and time again. Both her testimony before Secretary Salazar and her handling of the Exxon-Mobil matter a few months ago clearly reflect this expertise. Governor Palin is one of the few who understand the complex inter-relationship between domestic energy production, prices of fuels and electricity, national security, and environmental responsibility. Had her administration not enforced these contracts, there would likely be no mobilization to drill new wells. Achieving results is the mark of a seasoned executive.

While the Governor’s testimony transcript was paraphrased and direct-quoted in portions, the entire document is a worthwhile read and is an interesting case study on speech patterns — an aspect of Governor Palin that is frequently severely, but unjustly criticized.

This transcript clearly demonstrates Governor Palin’s ability to build a case on complex subject matter, and present it succinctly in easily understood language. All her speeches are in this format. The Governor uses the same APA citation and reference model this author uses. Perusing this document as a speech shows that her skills in this area are considerable and not given their proper due. She did not require the services of a teleprompter. Governor Palin knew the content cold. She did her testimony the old fashioned way — flicking her eyes down to read the copy, then speaking the words looking ahead to Secretary Salazar, who she was addressing. These are crystal clear indications of a subject matter expert discussing something with which she is very comfortable.

References

Governor lauds mobilization at Point Thomson. (2009, April 13). State of Alaska, Governor. Retrieved April 15, 2009 from: http://www.gov.state.ak.us/news.php?id=1746

Governor Palin testifies on outer continental shelf. State of Alaska, Governor. Retrieved April 15, 2009 from: http://www.gov.state.ak.us/news.php?id=1749

Palin, S.L.H. (2009, April 14). Testimony transcript on development of Alaska’s Outer Continental Shelf – Delivered during Secretary Salazar’s April 14, 2009 visit to Alaska. State of Alaska, Governor. Retrieved April 15, 2009 from: http://www.gov.state.ak.us/pdf/GovPalinRemarks-SectSalazar_Apr14-2009.pdf

Ross, M. (2009, February 19). ExxonMobil announces plan to put Alaska’s Point Thomson Field on production. ExxonMobil.. Retrieved April 15, 2009 from: http://www.businesswire.com/portal/site/exxonmobil/index.jsp?ndmViewId=news_view&ndmConfigId=1001106&newsId=20080219006751&newsLang=en

Updated to repair two grammatical errors.