Here's hoping the turkeys stay on the truck

Posted: Sunday, November 14, 2010

We are excited to have heard last week of plans from Buccaneer Alaska LLC to bring a jack-up drilling rig to Cook Inlet by next summer.

Our optimism is tempered with caution -- after all, a number of outfits have been attempting to bring a jack-up rig to the inlet for the past decade -- but the news is exciting nonetheless.

Mark Landt, a vice president with Houston, Texas-based Buccaneer, told the Kenai Chamber of Commerce that economic conditions are ideal to move forward with the project.

"With the revenue sources we call it sort of the perfect storm," Landt said, citing financial incentives, tax credits for inlet exploration, federal stimulus dollars and a good market for oil and natural gas.

Landt mentioned legislation pushed last session by Sen. Tom Wagoner of Kenai, as well as tax-exempt and low-interest bonds from the Alaska Industrial Development and Export Authority -- a good example of government creating a good environment for industry, rather than one which discourages new development.

So why the caution? Well, we've been down this path before, only to see the deal fall through at the last moment. Indeed, Landt likened the process to "herding turkeys onto flatbed." In past efforts, "as soon as we get all the turkeys up on the flatbed, one would fall off, so consequently nothing ever happened."

We are at a crucial point in development of Cook Inlet's oil and gas. The payoff is no longer attractive enough for large investment from the big producers, but the way has been cleared for smaller independent explorers to take over operations in the basin. Oil and gas exploration remains a key part of the Kenai Peninsula's economy. More exploration means more good jobs and more tax revenue for the borough, which in turn means better services to residents.

In addition, Landt said that after Buccaneer has done its drilling, he expects the jack-up rig to be used by other companies, in which case the rig would be in the basin for several years to come.

With reports of declining production and concerns over the availability of natural gas in the near future, not to mention a local economy hurting from a decline in tourism, this is the shot in the arm our region needs.

Here's hoping all the turkeys stay on the truck this time around. That would certainly give us something more to be thankful for when we're carving on own later this month.

In short: We are cautiously optimistic to see a jack-up rig arrive in Cook Inlet next summer, giving the oil and gas industry on the Peninsula a much-needed, and much appreciated, boost.

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