Wednesday, March 23, 2011

Alyeska's Barrett calls for urgent action to increase oil production

JUNEAU, Alaska - Alaska's economic artery, the trans-Alaska pipeline, could require expensive upgrades or even shut down if more oil doesn't begin coursing through it soon, the line's operator said on March 18.

"This needs to be a wake-up call for the state," Tom Barrett, president of Alyeska Pipeline Service Co., told the House Finance Committee.

The testimony comes in the midst of a heated debate over whether to cut oil production taxes, as Gov. Sean Parnell has proposed.

Oil provides nearly 90 percent of Alaska's unrestricted revenue, and Parnell believes the tax change is needed to boost investment and increase declining production. He is getting support from prominent House Republicans, including Rep. Mike Hawker.

But House Democrats see the plan as little more than a corporate giveaway, and members of the Senate's bipartisan majority are have questioned whether the proposal will work as intended and not deplete the state's multibillion-dollar reserves.

While Barrett did not endorse Parnell's plan, he said in an interview that he would encourage lawmakers to do whatever they could "to get me more oil."

Barrett said he would like to move between more than 800,000 and one million barrels of oil a day. The total currently averages around 640,000 b/d and is declining.

He said it would take at least five years for an oil development project to get online; for a larger field, it would be about 10 years, he said.

"We are already, from my perspective, behind," he told the committee.

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