22 ALASKA RESOURCE REVIEW WINTER 2025 that may suffer under the new carbon rules will be coming into a shrinking West Coast market the state once dominated. Alaska officials estimate the state’s current production, now about 480,000 barrels per day, could reach 600,000 and more with new North Slope projects starting in late 2025 and 2026 and continuing to 2029. Incoming President Donald Trump hopes to boost it further. Trump promises to open up prospective places in northern Alaska including the Arctic National Wildlife Refuge (ANWR) and send a flood of new production into domestic markets and Asia. It remains to be seen how industry will react to Trump’s initiative but he may be right about Asia. Occasional shipments are now made from Alaska to Japan and China when spot markets make it advantageous, said Ryan Fitzpatrick, commercial analyst in Alaska’s Department of Natural Resources, or DNR. “We see Asia as a potential growth market,” as North Slope production ramps up, he said. In the 1980s and 1990s, Alaska supplied almost all crude oil imported into California and the Pacific Northwest after the Trans Alaska Pipeline was built and when North Slope oil fields were flush, said John Crowther, deputy commissioner in Alaska’s DNR. This changed over the years. The state now produces about 25% of the 2 million barrels per day it did in the 1980s. This forced West Coast refineries to diversify their sources of supply. As Alaska producers now prepare to increase output, they may find a challenge to regaining market share. There also are fewer refineries. Some in California have shut down due to tightening environmental standards while others are blending crude oil with lighter fuels such as ethanol to better meet new rules. Also, North Slope producers are no longer selling to West Coast refineries they owned, and which were captive customers. For years, much North Slope oil went to ExxonMobil’s refinery at Long Beach, Calif., and BP’s at Cherry Point, Wash. But producers shed refineries over the years. ConocoPhillips, a major Alaska producer, sold off downstream assets, as has ExxonMobil in California. BP still owns Cherry Point but it is no longer an Alaska producer. Marathon Petroleum, which has a Washington state refinery, does not have its own production. It is a spinoff from Marathon Oil, which was once an Alaska producer. West Coast refineries were designed to process North Slope crude which still makes it efficient to process it. Also, a fleet of U.S.- built Jones Act tankers have operated for years between Alaska and the West Coast. These tankers are dedicated to the Alaska-Pacific Northwest trade, but they are aging and will have to be replaced with costly new Jones Act tankers if Alaska is to stay in the game. But that capital cost will further challenge Alaska producers in keeping Alaska oil competitive and defending a shrinking market share, and it may encourage them West Coast refineries were designed to process North Slope crude which still makes it efficient to process it. CONTINUED FROM PAGE 20
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