A nice little graph, from Kevin Banks (ADNR) presentation to the Alaska Legislature.
Historic & Projected Oil Production
Bottom line – Prudhoe Bay (PBU) was, and is, the major oil source for Alaska and it’s declining. The rate of decline can be slowed by improved by technology, but there are no new elephant fields to take its place. Alaska’s oil gravy train is running out of steam. New areas that have potential for large resources are all offshore in federal waters. While royalty agreements would ensure a sizeable chunk of revenue for the state, the amount would be much less than royalties and lease payments on state lands.
Exploration Wells in Alaska, by year
Exploration activity appears to be more closely tied to oil price changes than production. When the price of crude oil goes up, exploration goes up. When prices fall, exploration activity falls off. We’re seeing that now, with oil companies scaling back or canceling exploration projects in response to the fall in crude oil prices.
