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Interior proposes opening 7 million acres in Alaska petroleum reserve to leasing

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Interior proposes opening 7 million acres in Alaska petroleum reserve to leasing

Highlights

Interior would offer 18.6 mil acres of 23 mil-acre National Petroleum Reserve

Ecologically sensitive coastal lands now protected would be included

No guarantee leases to be sold if federal administration changes

Anchorage — The US Department of the Interior will open 7 million acres of additional Alaska lands to oil and natural gas leasing in a plan released June 25.

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Interior officials have approved a Final Environmental Impact Statement for a revised land management plan in the 23 million-acre National Petroleum Reserve-Alaska.

NPR-A is west of currently producing fields on the North Slope, which are on state-owned lands.

A Record of Decision, formally approving the new plan, is expected in 30 days, Interior said in a statement.

Agency officials chose the most aggressive alternative under the plan, which would open 18.6 million acres of the 23 million-acre reserve to exploration including ecologically sensitive coastal wetlands now in protected areas.

About 11.6 million acres are now open to leasing.

The Bureau of Land Management, the Interior agency responsible for administration of the reserve, rejected alternatives that would have opened smaller amounts of acreage to new leasing while also preserving habitat.

Industry and state of Alaska officials have long complained that Interior secretaries under previous administrations, most recently Sally Jewell under President Barack Obama, put the areas of NPR-A with the best prospects for discoveries into conservation zones and therefore off-limits to drilling.

These are coastal lands along on the Barrow Arch, a major northwest-southeast geologic formation that offers conditions ripe for petroleum accumulations.

Large producing oil fields on the North Slope east of the NPR-A, such as Prudhoe Bay, and the Kuparuk River and Alpine fields, are situated along the Barrow Arch.

State and federal geologists say the region has highest potential for new discoveries in the NPR-A, but is also prime wetlands habitat for migrating waterfowl and caribou.

Interior's move is certain to stir a new tempest among conservation groups, adding one more political controversy for President Donald Trump in a presidential election year.

Protection of coastal habitat in the reserve, particularly areas around Teshekpuk Lake, a large coastal water body known for its nesting habitat, have ranked high on the priority list for national conservation groups, almost as high as the Arctic National Wildlife Refuge in the eastern part of the North Slope.

Alaska Governor Mike Dunleavy praised Interior's decision. "My administration welcomes the responsible investment and development that will occur as a result of this action," the governor said in a statement.

Dunleavy said he was pleased that Interior considered, "local understanding of the subtle environmental nuance that is Alaska's North Slope," a reference to information provided to BLM by the state and the North Slope Borough, the regional municipality that supports more exploration in the reserve.

Doug Vincent-Lang, Commissioner of Alaska's Department of Fish and Game, said: "I feel confident that the oil and gas resources in the petroleum reserve can be developed in a manner that conserves the fish and wildlife resources and their uses."

The option in the Final Environmental Impact Statement approved is "Alternative E," which opens most of the NPR-A to leasing but also keeps 4 million acres under protection.

In the high potential area, which is in the northeast part of the reserve, this includes submerged lands beneath Teshekpuk Lake that would remain closed until there were further improvements in horizontal drilling, according to the FEIS document.

Also, certain areas in the nearby Utukok River Special Use Area would remain closed to protect caribou migration corridors.

NPR-A was created in 1923 by President Warren Harding as a petroleum reserve for the US Navy, although no commercial-scale discoveries were made until recent years. ConocoPhillips, the most active explorer, has made a number of discoveries in the northeast part of the reserve near the Alpine field, which is on state lands and is owned and operated by the company.

BLM's analyses of petroleum potential in the area to be opened includes low, medium and high production scenarios that could produce from 120,000 b/d to 500,000 b/d over the next 20 years.

ConocoPhillips' Willow discovery, which is near the area that would be open, is in an advanced stage of planning and has about 300 million barrels of recoverable reserves, BLM said in the FEIS document. Willow will be capable of producing 160,000 b/d with a possible startup in 2025, the agency said in its analysis.

Approval of the new plan will allow BLM to offer the new acreage for leasing in its annual area-wide NPR-A lease sales, but it may be too late to do so in the 2020 annual sale, which will likely occur in December. The soonest the new acreage could be offered is in the 2021 sale.

That will be after the presidential election. Just because the land management plan is changed does not mean leases will be offered and if there is a change in the federal administration it is possible the area may not be leased, and that restrictions will be imposed again.