North Slope oil throughput back above 500,000 barrels a day, former commissioner says

North Slope oil moving through the Trans-Alaska Pipeline System has climbed back above 500,000 barrels a day, Joe Balash told a Resource Development Council breakfast forum on Thursday, Oct. 1. Department of Revenue daily figures put Sept. 30 at 551,247 barrels, though September averaged 499,703; February 2022 was the last month to average more than 500,000. Balash, a former state Natural Resources commissioner whose company is developing the Pikka oil field, shared the stage with Keep Alaska Competitive's co-chairs, who are organizing against new oil taxes they expect to see next legislative session.

The state forecast 518,500 barrels a day for the fiscal year that began July 1; daily figures averaged about 454,000 in July and 457,000 in August. Balash said Pikka, which began continuous production this year, had "gotten up over 70,000 barrels" the day before he spoke.

Balash noted the gains came before Willow, ConocoPhillips' National Petroleum Reserve-Alaska project, comes online. ConocoPhillips expects first oil in early 2029 and a peak of about 180,000 barrels a day, which Balash said will push the curve higher toward decade's end. The Revenue Department's spring forecast includes Willow starting in fiscal 2029.

Co-chair Jim Jansen said: "We are now seeing forecasts in the range of 700,000 barrels per day by 2032. It could not have happened with ACES," referring to the 2007 tax system. The spring forecast puts fiscal 2032 at about 622,000 barrels a day, peaking near 651,000 in fiscal 2034. Of the state's forecast, Balash said, "It's a dashed line because it's just a forecast," noting that it is risk-weighted and that there is "a lot of optimism within the industry."

Because pipeline costs are largely fixed, more oil also lowers the per-barrel tariff. "Our 80,000 barrels a day from Pikka is going to reduce the TAPS tariff by more than $1 per barrel," Balash said, over the first 10 years, putting the Treasury effect at "about $35 million for every $1 difference" in price realized.

The presenters credited the 2013 tax law, SB 21. "We have had 14 years of tax stability, which has reversed the production decline," Jansen said. Balash said the tax change "coincided with the drilling of a well called the Qugruk 3," which discovered Pikka.