AOGA: fostering long-term viability of the oil and gas industry: agency a major player in resource decisions.

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The Alaska Oil and Gas Association (AOGA), an oil industry trade association, celebrated its 40th anniversary last year. The original office opened in 1966 as the Alaska Division of the Western Oil and Gas Association (WOGA), headed by Bill Bishop, the Richfield oil geologist who is often credited with the 1957 Swanson River discovery. Bill Hopkins started working for Bishop in 1968 as the organization's information officer, right at the time of the $1 billion lease sale at Prudhoe Bay.

"Environmental issues were starting to become very important--and that's when the professional environmental groups began to get some muscle and target Alaska," said Hopkins, who served as AOGA's executive director from 1972 through 1993.

The lion's share of WOGA's work, however, was focused on regulatory issues. The oil industry was a new industry in a new state, and regulation in Alaska was a blank slate. WOGA and the industry worked with the state, and Alaska borrowed regulations from other western states, particularly for land laws.

"In Texas, you had close alliances with the people who owned the land--ranchers and farmers," said Hopkins. Not so with the oil industry in Alaska. The federal government and the state owned most of the land, and there were no established relationships. WOGA committees worked day after day to review and comment on the proposed regulations, so agencies could understand the industry's concerns.

BIG CHANGES

In 1989, AOGA totally separated from WOGA, and became a standalone nonprofit oil and gas trade association. That was also the year that the State changed the Economic Limit Factor, or ELF, which resulted in substantially increased taxes on Prudhoe Bay and Kuparuk while limiting or eliminating taxes on other fields.

Hopkins retired in 1993 and Judy Brady became AOGA's executive director after a career in business and a stint as commissioner of Alaska's Department of Natural Resources.

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At that time, oil was $18 a barrel and Prudhoe Bay had already started to decline. Leasing, in particular, was a critical issue for AOGA and its members. There were court cases on every sale, disputing the process or the documentation. Whole tracts were eliminated. Professional environmental groups were focused on every lease sale. "On State lands, we'd been leasing for 30 years, but each lease was treated like it was new," said Brady.

AOGA's staff and committees spent thousands of hours studying the proposed leasing regulations and preparing public testimony, and in 1996 the Alaska Legislature enacted an area-wide leasing program. Under area-wide leasing, the state makes a "best interest finding" on a large area, and lease sales within that area occur annually for 10 years. "It was litigated once and the issues were resolved," said Brady. "And, it made a huge difference-the State could count on lease revenues and the companies could count on leases being available."

FOCUS, FOCUS, FOCUS

With this big breakthrough on leasing, AOGA focused its attention on permitting. "We have a very complex permitting system, with interconnected issues and organizations, including local, federal and State agencies and other interest groups," said Brady. "The State has streamlined some of its permitting, but we have a long way to go."

AOGA doesn't work on every industry issue. With a diverse membership in a highly competitive industry, members can't always agree on a position. From Native land claims and pipeline construction in the 1970s to the gas line contract in 2006, there were many issues that affected each company differently. One thing the industry did agree on, however, was taxation.

As oil prices started to move up in 2003, AOGA worked to educate legislators and the public about how the oil tax system worked-at a combined 67 percent with State and federal taxes, the tax burden for companies operating in Alaska was the highest in North America. "The State must get their fair share, but that needs to be balanced with the need to maintain and increase industry investment," said Brady.

In 2006, Measure 2, the gas reserves tax initiative, was on the ballot. AOGA led an aggressive campaign to educate the public, working with many organizations and companies that agreed that a tax on a resource not yet produced could set a precedent for taxes on their industries. Early polls showed that the majority of Alaskans would support the tax, but at the end of the day, voters defeated the measure. "With Measure 2, we had a good story, a true story," said Brady. "We were able to tell it, and people were willing to listen."

HELLO, GOODBYE

AOGA staff knows they represent an industry--not just one or two companies--and that industry is vital to Alaska. "The companies are part of a family. Most of them have been here for years. People who work in the industry have pride in their companies, pride in their state and pride in the work they do. Alaska is part of their home and their heritage," said Brady. "They feel a sense of accomplishment in a job well done, and one of AOGA's responsibilities is to tell their story."

Brady retired in June 2007, and AOGA's board of directors selected Marilyn Crockett, a 37-year employee of the organization, to be its executive director. AOGA now has four fulltime staff members including Crockett. Deputy Director Kara Moriarty is responsible for external affairs, legislative issues and community affairs. Sami Glascott handles regulatory affairs, and Tamara Sheffield, a 27-year employee, "does everything and can field almost every call," according to Crockett. AOGA does not have a full time lobbyist, but Crockett and Moriarty are registered lobbyists and go to Juneau on an as-needed basis.

At one time, 29 companies belonged to the association, but as companies came and went, and merged, that number shrank. Now, AOGA's 17 members include oil and gas explorers, the three in-state refiners, Alyeska Pipeline Service Co. and Agrium. There are a number of members with no current production that are new to the state.

"AOGA plays an important role for these new companies," said Crockett. "We help them get to know the area's politics and people and give them a short course on Alaska's laws and regulations."

AOGA has done public opinion polling for 25 years, and Crockett is proud that the public sees AOGA as a trusted organization that presents the facts. "The member companies speak with one voice, and it's a powerful voice," said Crockett. "They spend time studying the issues and they have a compelling message."