State lawmakers question Point Thomson data

Posted: Wednesday, June 18, 2008

ANCHORAGE - During testimony on Tuesday regarding development of oil and gas reserves at Point Thomson, lawmakers questioned the accuracy of geologic studies presented by the state, worrying that their decision on a natural gas pipeline could be based on incomplete data.

Most of the data on which the studies are based is incomplete and comes directly from Exxon Mobil Corp. The oil company gathered the data more than 20 years ago during a burst of exploratory activity, but has not drilled a new well since 1982, according to testimony.

"How can we make a good decision about Point Thomson if the data is not good?" said state Sen. Bill Wielechowski, D-Anchorage.

Studies of oil and gas reservoirs routinely cost tens of millions of dollars because of drilling and other expenses, meaning that oil companies are often the only entities with the money to gather such information.

"We did the best evaluation we could do, given the data provided," said Anil Chopra, president and CEO of PetroTel Inc., an energy consultancy based in Dallas hired by the state.

The meeting was part of a 60-day special session called by Gov. Sarah Palin to convince the Legislature that TransCanada Corp. deserves a license to build a pipeline that would ship Alaska's natural gas to various markets across North America.

Last year, the Legislature passed the Alaska Gasline Inducement Act, calling for bidders to guarantee progress toward pipeline construction and be friendly toward new exploration.

With its reportedly rich stores of natural gas, Point Thomson has long been considered a crucial piece of the gas pipeline plan.

The session on Tuesday underscored how little the state actually knows about Point Thomson. Exxon has the right to keep such proprietary information under lock and key.

"A lot of the data is questionable for one reason or another," said Cathy Foerster, commissioner of the state's independent Oil and Gas Conservation Commission. "Until we start production, it's all interpretation and predictions."

Foerster said her agency, which is not required to adhere to the administration's agenda, is working with oil companies to share data and better understand the oil and gas formations at Point Thomson.

Point Thomson has sat mostly idle for years, prompting a recent move by the state to revoke leases held by owners, including Exxon Mobil.

Alaska Natural Resources Commissioner Tom Irwin earlier this month reaffirmed his decision to break up the Point Thomson oil and gas field. Irwin had decided in April that the leases should be terminated because the companies failed to fulfill longstanding commitments to start development.

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