Gulf spill could affect Alaska's offshore oil development

Anchorage Daily NewsMay 2, 2010 

The oil gushing from a Gulf of Mexico oil well has the potential to touch Alaska in many ways.

Alaska is next in line, nationally, for offshore oil development in federal waters — Shell Oil hopes to drill exploration wells in the Beaufort and Chukchi seas this summer, opening a controversial new frontier for the state's oil industry.

Investors' jitters over future offshore oil production could boost Alaska oil prices — it happened Thursday, when the price for Alaska crude jumped by $2.70 to $83.97.

National outrage could dim the prospects of an offshore oil boom in Alaska's Arctic waters, which federal scientists say could hold some of the biggest oil and gas deposits in the country.

Or, the Gulf disaster could have the less-dramatic effect of prompting new state or federal rules for preventing disasters at oil rigs and offshore wells, including the ones in Alaska.

State oil and gas regulators have no say over oil and gas projects in federal waters, but they said Friday they are closely watching the aftermath of the Deepwater Horizon rig explosion and sinking to find out what went wrong.

That's because they regulate offshore development in Cook Inlet and in state waters off the North Slope, home to a growing number of oil fields. And also because they are worried that federal officials may overreact, said Kevin Banks, state Oil and Gas Division director.

"We are concerned because of the potential for a real backlash and people seeking to shut (offshore drilling) down," he said.

Offshore oil development isn't the only part of Alaska's oil industry that could be affected by the Gulf spill.

Major industry catastrophes, such as the 1989 Exxon Valdez spill, can lead to costly, far-reaching changes that have nothing to do with pumping oil from federal waters. Already some environmental groups said they plan to use the Gulf spill in their campaign to permanently close off oil-company access to the promising coastal plain of the Arctic National Wildlife Refuge.

Read more of this story at adn.com

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