oil & gAs
Doyon Limited Pioneers Frontier Basins Map: Alaska Department of Natural Resources
Middle Earth pushes oil and gas exploration in Alaska’s quiet corners BY ZAZ HOLLANDER
T
he state’s latest oil and gas exploration incentive program, dubbed Frontier Basins, is also known as Middle Earth. Set aside fantastical images of J.R.R. Tolkien’s world of hobbits and elves. This Middle Earth earned the name for its general location between existing incentive programs for oil and gas production on the North Slope and Cook Inlet—and state officials and potential oil and gas producers hope this Middle Earth is very real. The Frontier Basins/Middle Earth program, created by legislation dur-
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ing the last session in Juneau, provides major incentives for companies drilling exploratory oil or gas wells or obtaining seismic data in six areas. The state will pay up to 80 percent or $25 million in exploration costs and 75 percent or $7.5 million of seismic costs for qualifying work. Any production that results gets a tax break. In return, the state gets access to seismic data otherwise kept confidential. The statute limited eligibility to sedimentary basins in the state’s less-explored and hard-to-reach regions: the Kotzebue and Selawik Basins; Nenana
and Yukon Flats; Emmonak; Glennallen and Copper River area; and the Alaska Peninsula near Egegik and Port Moller. State officials and lawmakers want more seismic information and exploration in “frontier” plays otherwise too risky and expensive to work. But they also hope to provide new energy sources for Fairbanks and rural communities throughout the state. “Around the state there’s all kinds of need for local-use energy,” says Paul Decker, a petroleum geologist with the Alaska Division of Oil & Gas and man-
www.akbizmag.com • Alaska Business Monthly • February 2013