A Kenai lawmaker wants to woo Cook Inlet oil and gas producers to drill exploratory wells deeper into the basin in search of more resources.
Senator Tom Wagoner, R- Kenai, introduced Senate Bill 290 on Monday, a piece of legislation he said would "incentivize drilling down to a much deeper level then anyone has before, looking for new traces of hydrocarbons."
The bill proposes a credit against future production tax for drilling down to 20,000 feet, a depth that has not been reached in the inlet because of a lack of equipment, according to Wagoner.
"Basically, what we're doing is, there's already an incentive that pays for a fairly good-sized percentage of an exploratory well," he said. "What this will do is pick up the balance of that cost."
He said some inlet producers have sought to explore deeper beneath the inlet.
"I've consulted with geologists and they think it's a good idea, all we have to do is get a few companies that think it's a good idea," he said. "We really think that there's some companies that will drill into deeper zones if they can get the credits for it."
In response to a Clarion inquiry sent to Chevron asking if the incentives offered by the bill would be enough for the company to consider drilling an exploration well, a spokesperson for Chevron said it's their policy not to comment on future exploration potential.
A call placed to Marilyn Crockett, executive director of the Alaska Oil and Gas Association, was not immediately returned on Tuesday.
According to The Associated Press, Crockett told the Senate Finance Committee on Tuesday that Alaska's oil and gas production tax isn't succeeding in attracting the kinds of investment and development it was meant to.
Wagoner said exploration could yield information about what gas reserves Southcentral may have access too.
"I think everybody realizes that if we drill down deep, every time there's just as much a chance of hitting gas as there is oil," he said. "With the shortage of gas reserves in Cook Inlet, any gas we find is money in the bank for Alaska."
The bill was referred to the Senate Resources Committee.
Dante Petri can be reached at email@example.com.
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