Alaska Gov. Sarah Palin, who last year revamped a long-proposed plan for an Alaska natural gas pipeline, was elected chair of the Interstate Oil and Gas Compact Commission (IOGCC) for the coming year. Palin, who took office last December, is the only chair in the history of the interstate compact to have served as a past official representative to the organization. Previously, she was chair of the Alaska Oil and Gas Conservation Commission, which regulates the state’s oil and gas industry. Through its Chairman’s Stewardship Awards the IOGCC also recognized five oil- and gas-related projects that it said “demonstrate superior environmental stewardship.” BP America Production Co. received the “large company” award for its project “to challenge conventional wisdom in venting wells to reduce greenhouse gas emissions.” In the “small company” category, Questar Exploration and Production was recognized for taking “a large step forward in ensuring the future of oil and gas development” with its liquids gathering gas system. The Cooperative Sagebrush Initiative was presented with the IOGCC’s environmental partnership award for its work “to enhance resources for conservation of habitats” across an 11-state sagebrush biome. Two organizations were honored for their energy education efforts. The Fort Worth Chamber of Commerce was recognized for its annual Barnett Shale Expo, which was designed to educate the public and stakeholders about how gas exploration could benefit the region. The Michigan Oil and Gas Producers Education Foundation also was honored for assisting Michigan Oil and Gas Association members to develop educational projects and programs.

The Wyoming office of the federal Bureau of Land Management (BLM) on Tuesday (Oct. 2) will offer a total of 162,476 acres in 184 state parcels for lease in an oral oil and natural gas auction. Auction rules call for a $2/acre minimum bid in bonuses on any parcel, which requires a buyer to pay the bid price for the right to obtain the federal lease in addition to a standard $1.50/acre rental on the lease. BLM also will charge winning bidders $140/parcel to help cover administrative costs. Oil and gas operations on BLM-administered public lands and federal mineral estate in Wyoming produced 28.5 bbl/d of oil and 1.3 MMcf/d of gas in 2006. About 64% of Wyoming’s homes also are heated with natural gas. If the lease becomes producing, the federal government will collect a royalty on production. Leases are for a primary term of 10 years and will be continued as long as oil or gas is producing in paying quantities. Last year, total mineral royalties of $1.7 billion were collected and shared equally with the state. The auction is scheduled to begin at 8 a.m. MDT at the Holiday Inn in Cheyenne, WY. A complete list of parcels is available on the Wyoming BLM website at www.blm.gov/wy/st/en/programs/energy/Oil_and_Gas/Leasing.html. Interactive maps showing the location of the upcoming lease sale parcels in Wyoming may be found at www.geocommunicator.gov.

The Board of Water and Power Commissioners at the Los Angeles Department of Water and Power (LADWP) recently approved annual budgets for the utility’s natural gas purchases exceeding $500 million annually in the 2008-2009 fiscal year before tapering off significantly through 2016-2017 with the advent of renewables and a more diversified generation portfolio. Gas volumes used for electricity production by the LADWP are estimated to hit nearly 80 Bcf in fiscal year 2008-2009, dropping off rapidly and bottoming out at about 30 Bcf in 2014-2015 before heading upward in 2016-2017 to 32 Bcf. Natural gas costs annually are expected to run about $523 million in the 2008-2009 fiscal year and then drop off sharply to $205 million in 2014-2015 before picking up again. Transportation costs and financial transaction costs add about $100 million/year to the overall gas budget, LADWP said.

El Paso Corp. completed the acquisition of Peoples Energy Production Co. through indirect subsidiary El Paso E&P Co. LP. The purchase price was $879.1 million in cash, which reflected customary closing adjustments. The deal was announced in August (see NGI, Aug. 20). It adds more than 600 proved and probable drilling locations in the ArkLaTex, Texas Gulf Coast, San Juan and Arkoma basins, and in Mississippi. Peoples, a former subsidiary of Houston-based Integrys Energy Group, brings an estimated 305 Bcfe of proved reserves with current production of 72 MMcfe/d. About 42% of its properties are proved developed with a 12-year reserve life. Nearly 80% of the reserves are in El Paso’s core areas: 50% in the ArkLaTex region and 30% located along the Texas Gulf Coast. In the ArkLaTex, Peoples current output is 25 MMcfe/d; proven reserves are 146 Bcfe. Along the Texas Gulf Coast, production is 32 MMcfe/d and proved reserves total 98 Bcfe. The other properties produce a total of 15 MMcfe/d with 61 Bcfe of proved reserves.

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