Thread by @mattbuxton

The Senate Finance Committee is underway. On today's agenda is a look at the state's production forecast (which plays into revenue and therefore the budget).

Watch: ktoo.org/gavel/video/20…
Docs: akleg.gov/basis/Meeting/…

#akleg

Sen. Stedman is opening up with an introduction of committee staff as well as legislative aides. When he gets to Sen. Bishop's team, Stedman says: "His duties are whatever his boss assigns him."

Sen. Stedman on the budget process: "We will pull out of the non-reoccurring funds ... and boil it down to the base budget."

"It's very important that we have a base document to go through" instead of the Gov's budget that he claims "is balanced when it's not."

Sen. Stedman says that they need to get the budget down to basics before the #akleg dealing with all the one-time funding Dunleavy's using to balance the budget. He says it'll help identifying structural deficits and other financial problems.

Co-chair Sen. Bishop has a few safety reminders, including that the refinished tables have sharp edges.

"Please be careful, don't bump into any of these staff tables. ... We have several ways out of this building in an emergency."

Then he points out the various exits.

Commissioner Fiege, who's also one of the five Dunleavy-aligned Permanent Fund Board of Trustees to vote for executive director Angela Rodell, opens up with a phoned-in statement.

She's says "highly politically charged global environment" is making it tougher to invest in oil.

The committee doesn't have any questions.

Onto the presentation, which is being given by petroleum reservoir engineer Pascal Umekwe.

akleg.gov/basis/get_docu…

There's a question about how the production forecast translates to revenue at diff prices.

Sen. Stedman adds "not all oil is the same" when it comes to the state's budget. State only gets big bucks for oil produced on state land, other oil helps with the tariff rate.

Sen. Wielechowski asks whether the oil production agreement at Point Thompson is still in place or whether the state has let them off the hook.

Umekwe says they'll have a written update but says their gas production has been pretty high.

A lot of in-the-weeds technical speak. Sen. Stedman asking about processing capacity and what Hilcorp's arrival has done to Prudhoe Bay when it comes to processing facilities.

"It's a substantial bottleneck and has been for years."

However, we've yet to hear "de-bottlenecking."

Sen. Wielechowski homes in on it. Apparently, there's an access issue between Oil Search and ConocoPhillips over processing facilities? He's asking whether the state is working to encourage negotiations between the two, noting the state has interest in seeing this oil produced.

Commissioner Fiege says that Oil Search always planned on building its own water processing facility parallel to the one owned by ConocoPhillips. She notes there is negotiations about other infrastructure use, says the state's standing by but could maybe get involved.

Sen. Stedman says, basically, time is money, is there a sense of urgency on this?

Comm. Fiege says they're closely monitoring it. Timeline sounds like a few months?

Sen. von Imhof: What's the state doing to "guarantee that lessors can access their parcels in a timely manner and in cost-effective manner? It's a problem now."

Fiege says it's nuanced. Typically, producers had shared financial interest over the infrastructure. But not here.

She says the state has a path to actions through laws and regulations should the negotiations fail. She says under state leases, there's an expectation that access cannot be exclusive. Lotsa layers on the onion.

Sen. Wielechowski goes back to the Point Thompson issues. Fiege says the production extension was inked under the Walker administration to give Exxon more time to reach a major gas sale. She says the field had long-running technical issues and now has a new operator in Hilcorp.

Sen. Stedman says they'll plan a more rigorous hearing delving into Point Thompson, noting that the state has invested between $3B and $4B in the field through the state's credit program.

And now we're getting into Cook Inlet gas production, supply availability, gas price to Anchorage.

Between this and processing facilities, it's starting to feel a lot like 2012.

Here's the production outlook from the state with a range of best-case, expected-case, worst-case and also the blue line that includes operator expectations.

Sen. Wielechowski, who's getting back into 2012 form, notes that the state has typically been more conservative than the operator projections. He says he's concerned that the state's mid-range and high-range forecast coming in above the operator outlook is concerning.

In the out years, there's a difference of about 200K barrels a day.

Umekwe notes the state's forecast includes things Pikka, which they hope would come online by then.

Stedman reminds everyone once more that not all oil is the same and it's something to consider on revenue.

Sen. Wielechowski asks for a list of information on the leasing efforts in the state. He talks about the state being responsible for seeing development, but says that profitable fields are being given breaks for what they should be doing anyways.

A final note from the administration thanking the Legislature for the funds to sue the federal government over oil and gas development.

That's it for the hearing. They'll be back at 1 p.m. with a hearing on Sen. Micciche's alcohol law rewrite. Sounds like this could be the year!