THE LINK FALL | OCTOBER 2024 The official magazine of the Alaska Support Industry Alliance INSIDE THIS ISSUE n Fairbanks Economic Updates n Managing The Boom n Keeping Alaska Workers n Elections Matter FOCUS ON FAIRBANKS: THE NEW BOOM www.AlaskaAlliance.com
At Santos, we are proud to develop the world-class Pikka Project on the North Slope. Phase 1 will develop about 400 million barrels from a single drill site with first oil expected in 2026. And we are even prouder that our interest in Pikka will be net-zero on Scope 1 & 2 emissions!
THE LINK: OCTOBER 2024 4 Alliance Members and Friends: It is my pleasure to write to you on the occasion of my personal favorite Alliance event, the Fairbanks Forum! I first attended the Forum in 2019, and it was not only my first time speaking at an Alliance event, but also my first time in Fairbanks at all! I fell in love with the geography, industry, culture, and people of Alaska’s Interior, and was struck by our Fairbanks members’ authentic connection with the resource industry. Mining, pipelining and trucking are historic traditions here. Our Fairbanks members certainly understand how prosperity happens in Alaska. And it’s been a prosperous year, coming into a busy winter! As you are undoubtedly aware, Manh Choh began production, and poured their first gold in July at Fort Knox. Manh Choh could produce more than 40,000 pounds of gold, employing Alaskans and supporting our economy. GVEA is partnered with industry leaders on an OCED award for a Long Duration Energy Storage project, with a capacity of 50MW and 1200 MWh — an energy storage solution that can deliver grid scale electricity for 24 hours. And of course, this winter on the Slope will be replete with large construction projects. Pikka is nearly 60 percent complete, and Santos is full speed ahead. Delivery of ConocoPhillips’ Willow project is also well underway. All of these projects rely heavily on the outstanding labor force in Fairbanks. Our next major event will be our Annual Meeting and Board Elections. Nominations are now closed, and I think you’ll be happy to see the slate of amazing candidates who have raised their hand. Remember to vote! At the same time, the presidency will pass to longtime Alliance supporter and board member Jeff Baker, of Michael Baker International. Jeff is going to bring three things to the table that are critical in 2025: n A steady hand on the wheel n Great decision-making n Deep expertise in our collective industries I have enjoyed getting to know Jeff in my time on the Board with him and have learned much from his thoughtful questions. He isn’t afraid to challenge consensus and have hard conversations. His commitment to this organization is incredible and I know the Alliance will flourish under his leadership. Serving as your President has been an honor, especially in a year marked by so much change. I believe this organization is ready to support our members in the future of industry in Alaska, which is turning out to be quite different from the past. Don’t be afraid of change — lead it, and the Alliance will be there to help. And never forget our history, which has so much to teach us. Welcome to Fairbanks, and thank you for your support Message From Liam Zsolt, Board of Directors President Connect with The Alliance We are working proactively to keep our members informed and connected via online platforms and events. Watch for our updates through email and social media. LinkedIn: www.linkedin.com/in/the-alliance-4939251b Facebook: www.facebook.com/alaskaalliance X (formerly Twitter): x.com/AKAlliance And if you’re not receiving our updates, email info@alaskaalliance.org. Stay up to date on our website at AlaskaAlliance.com.
3601 C Street, Suite 1424 Anchorage, Alaska 99503 www.petroak.com info@petroak.com Alaska’s Oil and Gas Consultants Geoscience Engineering Operations Project Management 907.272.1232
Page 10 Fairbanks continues solid economic trends The Fairbanks economy is booming, thanks to both vast new construction activity on Alaska’s North Slope and continuing mining success. Page 20 Pikka Project pushes toward first oil in 2026 The Santos Pikka Project is more than 60 percent through construction, with projects for first oil production now forecast for 2026, marking a dramatic positive shift for the Alaska economy. Page 26 Pipeline Training Center to aid future The Fairbanks Pipeline Training Center is using unique approaches to train the key employees that the oil and gas industry needs for planned growth on the North Slope. Page 34 Alaska mining projects making progress With first gold poured this summer, the Manh Choh Mine and Kinross Gold are establishing the new model for future mines in Alaska. FEATURES The Link is published in partnership with the Alaska Support Industry Alliance by Fireweed Strategies LLC, 4849 Potter Crest Circle, Anchorage, AK 99516. We actively seek contributions from Alliance members and the oil and gas and mining industry. For advertising information and story inquiries, email Lee.Leschper@FireweedStrategies.com. Our magazine is mailed at no charge throughout Alaska to those interested in resource development and a healthy Alaska economy. To subscribe, email Admin@FireweedStrategies.com. Publisher: Lee Leschper | Editor: Tim Bradner | Production, Design: Will Leschper Contributing Photographer: Judy Patrick THE LINK: OCTOBER 2024 6 ON THE COVER It’s a different kind of economic boom in Fairbanks in 2024, as construction work on the North Slope has created thousands of jobs and related work for support industries like pipeline supplier Flowline. That boost is tempered by local challenges with workforce and housing. Pictured is Laborer Foreman Anthony James, Laborers 942. Photo by Judy Patrick ON THIS PAGE ConocoPhillips has continued extensive new construction on Alaska’s North Slope in 2024 on the Willow Project, with first oil projected in 2026. Photo by Judy Patrick
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Alliance Members and Friends: It’s so great to be back in Fairbanks for our 13th annual Fairbanks Industry Update Forum. This is one of my favorite events of the year! There is so much good news to share from our oil and gas industry, our mining industry, and our emerging technologies. Alaska is on track for a strong future, based on the responsible development of our resources. Of course, we know there are barriers. Electing the right people at the state level and the national level on Nov. 5 will help pave the way for our future. The Alliance will be providing information about candidates on the state and national level as we get closer to the election, so that you will know which candidates align with our industries. Please remember to vote and encourage your friends and neighbors to do the same! The turnout for our primary was the third lowest in 50 years. Aside from elections, permitting reform at the national level may be the most significant thing that we can focus on in the near-term. It has been out of our grasp for so long, but in the lame duck session after the election, there is some hope that the Energy Permitting Reform Act of 2024 can be passed. This legislation was introduced by Senator Joe Manchin (I) — West Virginia and Senator John Barrasso(R) — Wyoming in July 2024. The act is meant to enhance energy security and accelerate the deployment of clean energy technologies necessary for decarbonization. Key components of the bill pertinent to our industries include: n Provisions that guarantee at least one offshore oil and gas lease sale per year in the Gulf of Mexico, from 2025 to 2029. n Closing a pathway by which the Biden administration was able to “pause” LNG export approvals. n Forcing the Energy Secretary to make an up or down decisions on LNG export applications within 90 days of environmental reviews being completed. Applications that go beyond the deadline would be deemed approved automatically. n Creating exemptions from some permitting rules for geothermal exploration, as well as some permitting relief for geothermal production. n Setting a 150-day deadline for seeking judicial review of agency actions could help limit the litigation that is one of the primary sources of project delays. We are monitoring the bill closely and will keep you apprised of its movements. If it looks like there is a chance for it to pass, it will be an allhands-on deck effort from Alaska to advocate for this important reform. I hope you enjoy your time at the forum today! Thank you for joining us. THE LINK: OCTOBER 2024 8 We remain focused on what’s best for our industries Message From CEO Rebecca Logan
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THE LINK: OCTOBER 2024 10 Fairbanks economy doing well thanks to Slope work, tourism Fairbanks companies like Flowline that support the oil and gas expansion on the North Slope are staying very busy filling the new demand, which creates positive ripples throughout the borough. Pictured is Laborer Flint Reynolds, Laborers 942. Photo by Judy Patrick
www.AlaskaAlliance.com 11 Reliable • Eco-friendly • Made for freight UNCOMPLICATE YOUR FREIGHT LOGISTICS Get a free quote: 800.321.6518 | AlaskaRailroad.com/Freight Borough looks to continue growth trend in future Fairbanks is doing well. But like most places, there are ups and downs. The Fairbanks Economic Development Corp. released its 2023 economic report July 30. The report includes trends into 2024. Key trends highlighted: On the upside: n The regional economy is stable; n jobs and wages are up, fueled by North Slope oil work; n another robust visitor season; n a stable military population; n and increasing enrollment at the University of Alaska Fairbanks. All of these are pillars of the community On the downside: n Childcare challenges continue to be a drag on the workforce, a common problem across Alaska; n a gradual outmigration of working age adults, which brings with it declining school populations, again a problem across Alaska except for the state’s Mat-Su region; n continued shortages of housing and high housing costs, again a familiar problem, n high energy costs for home-heating, electricity and transportation, problems that are exacerbated in Interior Alaska because of cold winters. The Fairbanks North Star Borough has seen a 2.5 percent population decline from 2014 to 2013 compared with a 0.24 percent decline for the statewide population and a 0.45 percent population increase for Anchorage. Among the bright spots: n Transportation and warehouse employment was up 10 percent in 2023, continuing into 2024, due to North Slope work and tourism; n Local hotel and motel bed tax revenue, reflecting tourism, was up 10 percent in 2023 over 2022. The January-May season (winter visitors) is up 31 percent in 2024 over the same period of 2023. The 2024 visitor season continued to be strong, CONTINUED on PAGE 12
THE LINK: OCTOBER 2024 12 CONTINUED from PAGE 11 The addition of several F-35 jet squadrons at Eielson has dramatically increased the military presence and economic impact in Fairbanks. Adequate housing and infrastructure are already limiting plans to expand that presence even more. although year-to-date 2024 showed a slight decrease in occupancy rates — 68 percent for the first half of 2024 compared with 70 percent for the same period of 2023. In the problem areas, workforce challenges continue. The trucking sector is busy with North Slope work but there are concerns about a shortage of drivers. The beginning of liquefied natural gas, or LNG, shipments by truck later this year from Hilcorp Energy’s new LNG plant at Prudhoe Bay to the Interior Gas Utility in Fairbanks will put further pressure on the demand for drivers and put more traffic on the Dalton Highway, the surface road link from the Interior to the North Slope. Maintenance on the state-operated Dalton Highway is an ongoing concern for truckers. Housing challenges are still there as well. Apartment rents are up 18 percent from 2019, for example. The lack of housing in the Fairbanks area is a problem in workforce recruitment and retention, and a drag on the economy. For example, the U.S. Air Force is delaying a decision to move four additional KC-135 aerial tankers to Eielson Air Force Base on concerns over availability housing for the 270 additional personnel and families that would come with the tankers. The drain of working-age adults out of the Fairbanks is the major concern for community leaders. The overall population is stable, although slightly down — a 0.7 percent decline between 2019 and 2023 — but the working age population is down 2 percent. That’s a problem shared with other Alaska communities, like Anchorage. With it comes a 5.9 percent decline in the K-12 school population, however. That, and a failure of the state to provide more funding, has caused the local school district to close three schools this year including one on Eielson Air Force Base, which has not gone over well with top Alaska military commanders. On the other side, the population of senior citizens is up sharply, by 22.9 percent between 2018 and 2023. More senior citizens strengthen the economy with pensions and other retirement income, and it increases demand for health care, strengthening that sector. Overall, things are good for Fairbanks. The labor force is stable, average annual wage income was up 22 percent in 2023 from 2018, and freight landed at Fairbanks International Airport, a key indicator, was up 140 percent in 2023 over 2019 due to North Slope work. — Tim Bradner
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THE LINK: OCTOBER 2024 14 Energy, housing remain atop list of lingering issues Fairbanks may have some problems, like many cities. But it has the tools to solve them and a lot of ways to do it. That’s Jomo Stewart’s assessment, upbeat but also cautious. Stewart is president of Fairbanks Economic Development Corp., or FEDC, the Interior city’s community development organization. Fairbanks’ top two problems are energy and housing, Stewart said. The high cost of heating is something that just comes with the Interior city’s northern climate, but it also brings issues unique to the Interior community, like air pollution from particulate matter on frigid winter days. What will reduce the problems is natural gas in Fairbanks and nearby North Pole because gas is a clean-burning fuel that doesn’t release harmful pollutants like those from wood-burning stoves commonly used in the Interior. This is a federal regulatory issue as well as a health problem. Fairbanks has been declared a winter air quality “non-attainment” area by the U.S. Environmental Protection Agency which can bring Fairbanks has tools to solve challenges Photo by Lee Leschper Stewart is president of Fairbanks Economic Development Corp., the Interior city’s community development organization.
www.AlaskaAlliance.com 15 penalties affecting federal funds if it isn’t addressed. The community and the state Department of Environmental Conservation have been working with the EPA on a plan to be brought into compliance with federal air quality standards. Steps like a wood stove “changeout” program have been organized by the Fairbanks North Star Borough. Old, less efficient wood stoves have been traded in for modern, more efficient stoves, Stewart said. The same thing has been done with older oil-burning furnaces being exchanged for newer, cleaner, and more efficient ones. Natural gas appears the best solution and although not all parts of the Fairbanks area can be served by gas distribution systems many can be. The Interior Gas Utility, or IGU, the regional utility, is gradually expanding its distribution system with state financial help through the Alaska Industrial Development and Export Authority, the state’s development finance corporation. Fairbanks had a small, privately-owned gas utility for several years serving homes and businesses in the core community downtown, but a public utility was needed to expand the system and fully address winter air pollution. IGU was organized as a part of the Fairbanks North Star Borough. The state Legislature stepped in to fund its expansion through AIDEA, which continues to be involved. The newest development on local gas service, however, is that a new liquefied natural gas, or LNG, plant is being completed at Prudhoe Bay by Harvest Alaska, a Hilcorp Energy affiliate, which will make the large reserves of North Slope gas available to the Interior. The LNG will be transported by truck down the Dalton Highway just as LNG is now trucked to the Interior from a small gas liquefaction plant in the Matanuska-Susitna Borough north of Anchorage, which depends on Cook Inlet gas. Cook Inlet gas will be running short, however, but access to the North Slope now gives the Interior a security of supply it didn’t have previously, Stewart says. But while it is secure it won’t be cheap. Though the price of delivered fuel comes with a “convenience” premium against a lower price if customers haul their own, the rate tends to increase over the winter heating season as demand increases. Natural gas prices locally are currently in line with “haul your own” fuel. Sometimes oil is higher and sometimes lower. LNG trucked from the North will make gas a bit more expensive at times because of the trucking, but the advantages of having a secure supply of clean-burning fuel may outweigh that. There may be no escaping the burden of high heating costs in a cold climate, however. A new University of Alaska study estimates that Fairbanks residents pay about 10 percent to 12 percent of household income on energy, but Stewart thinks the burden might be higher. Housing is another seemingly intractable problem for Fairbanks, but in this case it’s a problem shared with many other Alaska communities. Rising costs of construction and materials and scarcity of labor play a part in this in Fairbanks along with high interest rates. “We’re not alone in this. Many communities share this problem,” Stewart said, and if solutions are developed elsewhere, they can be adopted in Fairbanks. One advantage for the Interior is the Cold Climate Research Center in Fairbanks, a nonprofit that develops new building and insulation techniques to make buildings more energy efficient. Systems developed at the cold climate center have been adopted by many local builders, Stewart said. — Tim Bradner Since before construction and in the many decades since, the Trans-Alaska Pipeline and the supporting industries serving it, remain the core of Fairbanks’ economy.
THE LINK: OCTOBER 2024 16 Efforts aimed at potentially aiding coal power plants The University of Alaska Fairbanks (UAF) is in the lead on technical research related to Alaska’s proposed new underground carbon storage programs with Cook Inlet the first to develop followed by Interior Alaska. Interior underground storage, in saline aquifers, would allow coalfired power plants in the region to capture carbon dioxide and store it permanently underground. Storage in the interior will be phase two, however. Phase one is storing the carbon in known natural gas reservoirs that have spare “pore space,” which could include depleted reservoirs. UAF has been developing the proposed Cook Inlet study for some time with the U.S. Department of Energy, which recently approved $11 million in federal funds to support the work. This required $2 million in additional matching funds from the state, which the Legislature provided, and Gov. Mike Dunleavy approved in the current year state budget. The UAF and DOE work will define UAF leading research into carbon capture Photos Courtesy UAF
www.AlaskaAlliance.com 17 technical characteristics of potential Cook Inlet Basin gas reservoirs suitable for underground storage. For an industrial developer wishing to store carbon dioxide and receive federal tax credits, which can be up to $80 per ton, the U.S. Environmental Protection Agency must certify the reservoir. EPA, in turn, will require third parties to do independent verification of the reservoir characteristics, which is what UAF will do in its study. The focus of the certification is the capability of the reservoir to permanently contain the carbon dioxide and prevent it from leaking back out to the atmosphere. This research will start with the Beluga gas field owned by Chugach Electric Association and Hilcorp Energy, and where Hilcorp is the operator. Beluga is a good place to begin because Hilcorp will be able to provide a great deal of data. There are other potential storage reservoirs in the region which will be included in the project. The research will not identify a source of the carbon dioxide, but the gas could come from several potential projects including a restarted Agrium fertilizer plant at Nikiski, near Kenai, or a possible large coal-fired power plant that could be built near Skwentna, in the western Mat-Su region. Large coal resources been identified in the area and a separate UAF study, done last years, showed that a carbon capture project at a new coal plant with the carbon dioxide shipped by pipeline to the Beluga gas field for storage might be economically feasible. Capture of carbon in a coal power plant emissions stack is mechanically much simpler than carbon capture in a natural gas plant because the carbon dioxide is more concentrated. It has also been demonstrated in practice and is considered a mature technology as compared with capture of carbon from natural gas. As part of the new UAF study, the Skwentna area will be studied for the presence of underground saline reservoirs where carbon dioxide could also be stored. A phase two of this, under a potential new USF/DOE program, would take a look at Interior Alaska injection sites, mostly likely in saline reservoirs if they can be located. This would allow for carbon dioxide to be captured at Interior coal plants and for the gas to be injected underground. Capturing the carbon in a coal plant removes the biggest objection to coal as a fuel, which is that it releases the gas into the atmosphere. If the carbon is removed and stored underground, the objections are no longer valid. The DOE is reported to be preparing to issue a “Notice of Opportunity” this fall to fund the phase two research, but an industry partner is needed for the application. Just as in phase one a local match will be required. Given the importance of inexpensive coal-fired power in the Interior the regional legislative delegation will seek that in an appropriation. — Tim Bradner UA President Pat Pitney said UA’s three universities are working together well on collaborative programs to share knowledge, maximize access and leverage the strength and expertise.
THE LINK: OCTOBER 2024 18 Federal funding also on rise after 2019 budget cuts The University of Alaska has turned the corner on student enrollments, ending years of decline. University of Alaska Fairbanks, or UAF, the historic first college formed in the system in 1917, is showing the strongest growth. UAF is also the university’s main research center, attracting substantial federal funding for research. This continues a trend of recovery for the university from sharp budget cuts ordered by Gov. Mike Dunleavy in 2019 which hit the University of Alaska Fairbanks hardest. The cuts caused a major loss of experienced faculty across the UA system that were followed by declines in enrollment. Budgets have been gradually strengthened and enrollment is now increasing. Near the start of the University’s fall 2024 classes, 16,868 students have registered in the University of Alaska system for 162,762 student credit hours, the university’s Board of Regents was told last at its September meeting. This represents a 2.1 percent increase in headcount UAF making gains on student enrollment Photo Courtesy UAF
www.AlaskaAlliance.com 19 (344) and a 4.2 percent increase in credit hours registration (6,499) year-over-year. The credit hours are important because they represent tuition revenue to the university, which is paid on a credit-hour basis. Among the three universities in the UA system, University of Alaska Fairbanks, or UAF, showed the strongest percentage gains with a 3.1 percent increase in headcount and a 4.1 percent increase in credit hours billed. The University of Alaska Anchorage, the largest unit in the UA system, saw a 1.7 percent gain in head count and a 4.7 percent increase in credit hours billed. University of Alaska Southeast, or UAS, the smallest unit in UA, the headcount is up 3.9 percent with credit hours billed up 0.7 percent. Significantly, over 13,000 applications were made to UA for the fall 2024 semester, up 20.3 percent from applications made for fall 2023. UAF showed the biggest gain in new applications at 50.6 percent year-overyear. UAA saw a 5.4 percent increase in applications while UAS was up 3.5 percent in applications over 2023. UAF Chancellor Dan White was upbeat in briefing to the university regents. “What us propelling us are the things that attract students, like sports, the Alaska outdoors, updated facilities,” he said. There’s also reduced reliance on state funding,” because higher enrollment brings more revenue, White said. “Our applications are up 51 percent enrollment continues to grow and retention (of staff and faculty) is improving, and research is growing. We think we’re in the right place at the right time,” the chancellor said. Despite that, UAF faces challenges, including in deferred maintenance of aging buildings. UAF has the oldest facilities in the UA system. “Moore and Bartlett (student dormitories) are almost 60 years old,” White said. The Legislature has been unable to significantly fund a backlog of deferred maintenance that is now over a billion dollars, much of it on the UAF campus. At the request of Gov. Mike Dunleavy the university put together a plan to finance the deferred maintenance as an alternative to appropriations made annually by the Legislature, which are typically less that the annual addition to the backlog. The Legislature failed to act on the proposal, however. On a more upbeat note, UA President Pat Pitney told the regents that UA’s three universities are working together well on collaborative programs, “to share knowledge, maximize access and leverage the strength and expertise that we have,” she said. On another positive note, the Rasmuson Foundation, Alaska’s major philantropic organization, has mounted a program to attract foundations and donors from the Lower 48 to support UA ans providing its own support through the university’s Arctic Leadership Program. Rasmuson recently brought a group of funders from the Lower 48 to visit UA leaders and including visits to outlying campuses. Rasmuson itself has pledged $5 million spread over the next five years to support the university, Pitney said. — Tim Bradner
THE LINK: OCTOBER 2024 20 Santos Ltd. eyes 80,000 barrels per day in initial phase Australian-owned Santos, Ltd. is pushing toward a startup of its Pikka project in the first half of 2026. The company is at 60 percent completion at Pikka, Santos CEO Kevin Gallagher told the Alaska Oil and Gas Association’s midyear conference Aug. 29. Santos owns 51 percent of Pikka with Repsol, based in Madrid, as a 49 percent minority owner. Pikka will produce 80,000 barrels per day at peak in its phase one and will proceed to a phase two with additional wells and production pads at the completion of phase one, Santos has said previously. Engineering and design work is already underway for phase two. Pikka is one of two major new North Slope development projects, the other being ConocoPhillips’ Willow, also under construction. Willow is on federal lands in the National Petroleum Reserve-Alaska and is to begin production in 2029 with an expected peak rate of 180,000 barrels per day. Gallagher told attendees at the Push is on for ‘first oil’ at Pikka project in ’26 Photo Courtesy Santos Ltd.
www.AlaskaAlliance.com 21 WWW.SHEETMETALINC.COM WE’RE MORE THAN JUST ALASKA'S PREMIER METAL FABRICATION FACILITY HVAC • PLUMBING & HEATING • CONTROLS • SERVICE & MAINTENANCE • CERTIFIED AIR BALANCING • UV LIGHTING ONE SOLUTION. ONE COMPANY. AOGA conference that 40 miles of 120 miles of pipeline planned for Pikka are now constructed along with all of the 4,842 vertical support members, or VSMs, needed to support elevated pipelines. Pipelines are built aboveground on the North Slope, supported by the VSMs, to prevent warming of permafrost that underlies the surface. Santos has also drilled 11 production wells for Pikka, or 42 percent of the drilling needed, Gallagher said. Overall infrastructure for Pikka is 44 percent complete, he said. Santos has a high expectation that Pikka’s production wells will perform as expected, Gallagher told the analysts. “Six of the wells have been stimulated and ‘flowed back.’ Postwell modeling results achieved the pre-drill average rate requirements needed to fill the (production) facility in 2026,” he said. The performance of Pikka’s wells will be closely watched because they will be first wells producing from the Nanushuk, a geological formation across much of the western North Slope that is now considered to have major potential for new oil. Companies working on the North Slope have long known about the Nanushuk and that it contains oil, but until recently the belief was that the oil could not be produced economically. Santos believes it can now do that through a combination of new technologies such as horizontal drilling of production wells and pre-production flow tests referenced by Gallagher seem to bear that out. It’s a big bet, however, because Santos and Repsol hold major leaseholders in two adjacent discoveries south of Pikka, Quokka and Horseshoe, which could extend new development across a large area south of Pikka where Santos and Repsol also hold state leases. Pikka, Quokka and Horseshoe are on state lands southeast of the producing Alpine field, which is owned by ConocoPhillips. The large Kuparuk River and Prudhoe Bay fields, the largest on the North Slope, are further east. Being on state lands is considered an advantage because changing federal land policies, which are now more restrictive, could impede future expansions of Willow or development of new discoveries like it within the petroleum reserve. ConocoPhillips and other companies holding leases in the NPR-A are particularly concerned about a set of new land-use rules implemented by the U.S. Bureau of Land Management, or BLM, which administers lands in the petroleum reserve. BLM is part of the U.S. Department of the Interior. The companies’ work at Pikka and Willow have meanwhile set off a mini-boom in oil and gas activity on the North Slope. Oil and gas work had lagged on the slope since an oil price crash in 2015 and 2016 that was followed by low oil prices during the Covid 19 pandemic. However, the industry has still not recovered to its pre-price cash levels of 2014. Employment in the industry is still about half of its 2014 levels, according to Alaska Department of Labor and Workforce Development data. — Tim Bradner
Photos by Judy Patrick
Alaska Oil and Gas Association awards Several present and past Alliance members were honored by the Alaska Oil and Gas Association (AOGA) with its 2024 AOGA Industry Awards at the association’s annual conference in August. Contractor of the Year (Above Left) The Contractor of the Year Award for Safety Performance, sponsored by the Alaska Support Industry Alliance, went to Cruz Construction, an Alaska-based heavy civil and oil field support company. Cruz excelled in safety and performance while completing the 2024 winter components of the Phase 1 STP Civil-Mining project at Oliktok Point for Santos’ Pikka project. Cruz worked 72,225 hours with a peak manpower of seventy-eight personnel, reporting only one minor injury. Lifetime Achievement (Above Right) Lisa Pekich, with ConocoPhillips Alaska for 33 years, received the Marilyn Crockett Lifetime Achievement Award. Since 2011, Pekich has directed ConocoPhillips Alaska’s community relations and village outreach team, transforming it into a model of effective community engagement. Her leadership in the Willow project and commitment to community responsiveness highlight her impact. Pekich also serves on the Ilisaġvik College Foundation board, advocating for tribal education and workforce development. The Lifetime Achievement Award is named in honor of the former AOGA executive director Marilyn Crockett, who dedicated her fortyone-year career to, as she stated, “growing Alaska’s economy through a vibrant oil and gas sector in the state.” Project of the Year (Below Left) Alyeska Pipeline Service Company won the AOGA Project of the Year for Environmental Stewardship and Innovation, sponsored by Stoel Rives, the third time the award has gone to the Trans-Alaska Pipeline System operator. Alyeska is evolving its operations to meet the changing needs of Alaska’s oil industry with a long-term “TAPS 100” philosophy, including the reduced use of pump stations. stations by 2034, and it has provided conceptual plans for legacy equipment removal at Pump Stations 1, 3, 4, and 9. Rising Star (Above) Julianne Lamb, a geologist with Santos Alaska, received the Rising Star Award, which honors a young professional oil and gas industry employee under the age of 35 who has made an immediate and definitive impact on the oil and gas industry in Alaska. After moving to Alaska in 2020, Lamb led the charge to bring “GeoIsotopes” to Santos Alaska in 2023. This technology provides unique insights into reservoir characteristics and seal integrity through a deep understanding of source rocks and migration pathways. Now a key figure in Alaska’s carbon capture and storage industry, Julianne’s work ensures safe, long-term CO2 storage.
Hilcorp Alaska hopes to duplicate its success in building Milbe Point production at Nikaitchuq, a small Beaufort Sea offshore field now owned by Eni. Hilcorp announced June 26 it will purchase the Alaska oil-producing assets of Eni Oil and Gas. Eni owns Nikaitchuq and Oooguruk, another small field nearby. Assuming the deal goes through, Hilcorp plans to apply new technology developed to produce viscous oil at Milne Point at Nikaitchuq, which also has viscous oil. Hilcorp developed a new polymer process for Milne Point that has boosted production. Nikaitchuk produced an average of 16,000 barrels per day in 2023 while Oooguruk produced an average 6,000 barrels per day that year. Eni Alaska is a subsidiary of Eni, a major international company based in Rome. No purchase price was given in the transaction. Hilcorp is now operator of the large Prudhoe Bay field, where it is a one-third owner along with co-owners ConocoPhillips and Exxon Mobil. Prudhoe now produces about 300,000 barrels per day. Hilcorp is also operator and sole owner of the Milne Point field, now producing 40,000 barrels per day. The company also owns and operates oil and gas production facilities in Cook Inlet, in southern Alaska. “The addition of the Oooguruk and Nikaitchuq assets seamlessly integrates with Hilcorp Alaska’s existing portfolio, presenting us with an exceptional opportunity to invest and optimize operations in a way that will drive increased production,” Hilcorp Energy CEO Greg Lalicker said when the purchase was announced. “We will leverage our experience gained at Milne Point to further enhance the development of these assets, building upon the success achieved by Eni,” he said. A key factor in the acquisition is that Hilcorp’s experience in developing large viscous oil deposits in the Milne Point field can be applied at Nikaitchchuq, which also produces viscous oil. Viscous oil is thicker, cooler, and more difficult to produce than conventional “light” crude oil produced on the North Slope. Hilcorp’s development of new technology, such as a polymer flood procedure for enhancing the Milne Point viscous oil production. could also play a role at Nikaitchchuq, industry sources said. The company is working with the University of Alaska Fairbanks on using a variation of the polymer flood and a solvent flood to produce a very large undeveloped heavy oil resource found at the Milne Point field and in other North Slope fields. Hilcorp has a reputation for acquiring mature producing assets and expanding production with aggressive redevelopment. The company acquired Milne Point from BP in 2015 and increased its production from 18,400 barrels per day in 2014 to 50,000 barrels per day currently. With development of a new production pad Hilcorp expects to expand Milne Point to 60,000 barrels per day over the next three years, according to industry sources. The company has also managed, as operator, to keep Prudhoe Bay field production stable at about 300,000 barrels per day since becoming operator in 2020. Prudhoe is a mature field that first began producing in 1977. In contrast, other large but mature fields on the North Slope have been declining in production. The company has done this through a combination of new drilling, repairing old wells and upgrading and expanding processing facilities. — Tim Bradner THE LINK: OCTOBER 2024 24 Manh Choh: from groundbreaking to production in less than a year. Now, that’s something to celebrate! – Terence Watungwa Vice President, Kinross Alaska CREATING NEW JOBS & GOLDEN OPPORTUNITIES FOR ALASKA’S INTERIOR Hilcorp expects new tech to boost output
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THE LINK: OCTOBER 2024 26 Fairbanks pipeline training setting high standard
Training center is the only one of its kind in country BY HARRY WHITED Alaska oil producers sometimes disagree but they all agree the state’s biggest industry needs more skilled workers. The Fairbanks Pipeline Training Center is working hard to fill that need with a unique approach. Amy Schumacher, Director of the Fairbanks Pipeline Training Center, said that the FPTC is the only one of its kind in the nation, with the unique approach of attempting to get all of the trades to work together and buy into multi-craft training. Schumacher said that the concept of bringing all of the trades together originated from a class the FPTC offered in 1998. She said that the mission at FPTC has always been the same, helping Alaskans obtain oil and gas jobs so that this may help and propel their future apprenticeships and careers. Though their history is filled with innovation, the FPTC is still looking toward development. One of these developments is an initiative to incorporate more rural Alaskans into the program. Schumacher said one of the ways the FPTC is working to achieve this is by bringing rural Alaskans to a “camp” that simulates the environment of working up North. The camp also grants people going through the program the opportunity to acquire skills they would need on the North Slope. Schumacher said the FPTC has also considered sending instructors out to rural communities to train on the equipment that the community can already provide. “That’s the potential for the future,” she said. “We want Alaskans to fill these seats.” Another development at FPTC is the expansion of one of its camps. As it stands now, the camp can hold 25 beds but is soon growing to accommodate 12 additional beds. Schumacher said this expansion is a vital part of the training atmosphere for the FPTC. The expansion will ensure the camp does not “overflow” during pipeline training season, which is an obstacle that the FPTC has solved by putting people in nearby hotels. Though this first solution remedied the overflow, Schumacher said that the FPTC wanted to try to keep people together to best simulate the conditions on the North Slope. “The idea of the camp is to have cohesion and camaraderie. “We want to house everybody together so that they have a good feel for what the North Slope is going to feel like,” Schumacher said. An additional expansion will be a classroom, she said. With the help of an EDA grant, the FPTC is working on acquiring heavy equipment like loaders, bulldozers, and a crane to best help people going through the program. The camp, which is like a little hotel equipped with sleeping areas, fullsized kitchens, and a camp manager’s suite, is a big priority when it comes to helping people, especially young people going through the program, she said. Schumacher said FPTC makes it a priority to liven the environment of the camp. “Especially with younger groups or rural Alaskans, we like to bring in an elder,” Schumacher said. “They kind of look over and manage the camp and make sure that everybody is minding their P’s and Q’s.” Schumacher mentioned the demographics of some of the people who partake in these courses at the FPTC. Students range widely, with introductory classes being attended by anyone ages 14 to 26. Different training levels on the course also mean age differences. Schumacher cites the example of a 75-year-old man working in their program. The FPTC works with Alaskans to develop an outline of how they want to contribute to the state and their career. “We create pathways for people to line up their careers,” Schumacher said. She gave an example that someone could take a class offered by the FPTC, then link up with the Teamsters union, becoming a career Teamster. That process could be difficult to achieve had it not been through a program that is directly oriented to career growth. The FPTC is a large and functional facility with five buildings, each specializing in a particular training. n Building A: Trades facility n Building B: Leased to UAF where it has its process technology facilities n Building C: Main classroom facility n Building D: Plumbers and pipefitters facility n Building E: Camp. With all of the new projects coming to the North Slope, Schumacher emphasized how imperative it is to incorporate Alaskans into these programs so that they may find bountiful employment within their home state. Schumacher said the FPTC expects it to be bustling for the next five to seven years with all of the work that is coming to the North Slope and the number of Alaskans who are willing to go up there to do the good work for themselves, their families, and their communities. More information: www.fairbankspipelinetrainin.com/about-us Harry Whited is an Anchorage native, a journalism student at the University of Kansas, and a regular contributor to The Link www.AlaskaAlliance.com 27 Class members undergo training that simulates an in-the-field environment.
Campaigns target workers who can field varying jobs BY HARRY WHITED Young Alaskans are leaving the state. Alaska’s population has steadily declined since 2022, according to multiple sources. One of the reasons for the “outmigration” of young people in Alaska is the lack of jobs and career opportunities. Adam Weinert, Special Assistant to the Commissioner, said that the Alaska Department of Labor and Workforce Development has conducted several media campaigns focusing on the careers and jobs available to young Alaskans through the Alaska Job Center Network. “We did a digital campaign and are now engaged in a radio campaign in rural Alaska communities to raise awareness of the career and training support offered through our Job Centers,” Weinert said. This campaign is just one of many campaigns targeted to instill a reason to stay and work in Alaska. Weinert said other organizations and campaigns in the state have pursued this same mission: The Alaska Vocational and Technical Center conducted a two-month TV media campaign to increase awareness of careers and education that can be provided through the AVTEC The Alaska Department of Education and Early Development partnered with the DOWLD and is in the process of hiring “career guides” in Fairbanks, Bethel, and Ketchikan. These guides will work in their communities, both local and surrounding, to engage with high school youth about career opportunities in Alaska. Weinert said the DOWLD’s in-state advertising campaigns target youth, ages 18-35. The goal is the same for everyone: To get people to stay and allow them to flourish within the state. Weinert explained why he thinks Alaska is facing a large outmigration and the rough blueprint to combat it. “Many young people seek educational and career opportunities elsewhere. To address this, we are working to improve the visibility and accessibility of local opportunities through targeted outreach and partnerships with educational institutions,” Weinert said. However, it is not just an abundance of jobs that is necessary to attract young people to the state. There are other variables. Weinert detailed some of these other amenities from a recent AEDC economic forecast. “(The forecast) suggested the need for enhancing the quality of life, including affordable housing, social amenities and robust career pathways; all crucial in retaining young Alaskans,” Weinert said. But why young Alaskans? When it comes to creating jobs and building careers why is there a large push to bring in a younger crowd? Weinert said that Alaska is a great place for a young person to have a career. “There are great industries to participate in that allow a person to succeed in their career while enjoying all that Alaska has to offer,” Weinert said. Alaska does offer advantages for the young and the eager. On Facebook, there is a group called Anchorage History where people can post pictures of nostalgic Alaska locations and have discussions about them. However, one trend observed in that group is that people will commonly post pictures of either themselves or their parents when they first moved to Alaska. In these pictures, the people look young and happy, either in front of their tiny new house or packed into a car that is filled with all of their earthly belongings. They are on the cusp of a completely new life, one filled with promise. These energetic and enthusiastic people helped contribute to Alaska’s growth. Campaigns targeted at keeping youth are vital to Alaska’s progression. The presence of jobs and opportunities THE LINK: OCTOBER 2024 28 State aiming to keep young Alaskans here Alaska has always been a place where young adults can find work and adventure.
www.AlaskaAlliance.com 29 OIL & GAS CONSTRUCTION SERVICES | MINING CONSTRUCTION & MAINTENANCE | POWERPLANT CONSTRUCTION | PIPELINE CONSTRUCTION | REMOTE VILLAGE INFRASTRUCTURE TELECOMMUNICATIONS | DESIGN BUILD & EPC | GENERAL CONTRACTING & MANAGEMENT | PROFESSIONAL PLACEMENT & STAFFING Commitment to Safety & Quality | Anchorage · Kenai · Deadhorse | www.conamco.com | 907-278-6600 BUILDING ALASKA ONE OUNCE AT A TIME CONAM’s track record of successful projects has proven that resource development can be done responsibly while protecting Alaska’s fragile environment. Our firm understanding of Alaska’s unique challenges and commitment to HSSE and planning have translated into satisfied mining clients across the state. We get dirty so you get the pay dirt. is what will keep them here. According to a 1970 census of the population of the state of Alaska conducted by the Department of Commerce, the median age of ALL Alaskans in 1970 was 22.9 years of age. During this time there was steady income growth and population growth. “All industries in Alaska benefit from a diverse and skilled workforce,” Weinert said. When it comes to education requirements, Weinert said that it varies depending on the industry. “Some (industries) require a bachelor’s degree or completion of an apprenticeship or vocational training. Some industries have looked to lower entry-level requirements by transitioning to a competency-based, or skills-based form of hiring,” Weinert said. Weinert also said that Governor Mike Dunleavy has worked to incorporate a competency-based employment model for state jobs through Administrative Order No. 343. In AO No. 343, Dunleavy addresses the need to tackle the problem of the state’s labor shortage and how the state must be “flexible” when looking at a group of job candidates. “The state must have the flexibility to review different factors when evaluating an individual’s ability to successfully perform a job,” Dunleavy said. While all industries benefit from a large and diverse workforce, certain industries could best utilize younger employees, Weinert said. “The oil, gas and mining industries, along with healthcare and construction, stand to gain significantly from an influx of new workers, given the current demand for skilled labor in these sectors.” He added that the demand for certified plumbers, electricians and people in the construction trade is expected to go up. This outreach is targeted toward a range of people and demographics. One of those includes people living in the state with legal immigration status. “DOWLD is re-establishing the Office of Citizenship Assistance,” Weinert said. The OCA will work directly with legal immigrants and help them get connected with career opportunities within the state. This would also work to ensure that legal immigrants have access to federal and state resources as well as information afforded to all Alaskans under state law. “We’re working now to get the office established,” Weinert said. It seems as if Alaska is on the cusp of a great amelioration. Decisions are being made to draw people to Alaska to work. An influx that would hopefully mirror the gold rush or the oil boom. As time passes, more jobs should open up and the state might see another “golden age.” “With our current labor shortage, it’s never been a better time to be a young Alaskan,” Weinert said, “the career opportunities are endless.” Harry Whited is a lifelong Alaskan studying Journalism at the University of Kansas. He is a regular contributor to the University Daily Kansan and recently garnered the Edgar Wolfe Award in short fiction writing. He enjoys returning to his home state of Alaska to enjoy the abundant outdoor opportunities with his family and friends.
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