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Alaska North Slope lease sales postponed until January

Highlights

Election uncertainties could cause delays

BLM might be weighing how to integrate new lands

Nanushuk formation extends to possible acreage

Anchorage — Two Alaska North Slope lease sales normally held in November or December have been postponed until January, state official said Oct. 23

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Likewise, a federal lease sale in the National Petroleum Reserve-Alaska, or NPR-A, also typically held near the end of the year is likely to be delayed, as is a sale of leases in the Arctic National Wildlife Refuge that Interior Department officials hoped to conduct in 2020.

The state sales, "areawide" offerings of unleased state acreage in the central North Slope and state-owned submerged lands in the Alaskan Beaufort Sea, are delayed until Jan. 13 due to procedural reasons, said Tom Stokes, director of the state Division of Oil and Gas.

"This is our first Northern Alaska lease sale through EnergyNet (online bids). We are using the extra time to improve data availability and GIS shape files for their site. Public notice is anticipated by November 20. We will have our (on-line) 'bid openings' at 9:00 AM January 13," Stokes said in an email.

The U.S. Bureau of Land Management has given no reason why it has not scheduled its normal end-of-year sale in the NPR-A, also an areawide sale, which have been held annually since 2010.

It could be related to uncertainties over a possible change in the federal administration after the Nov. 3 election or the outcome of a pending state ballot initiative in Alaska's elections held the same day and that would raise taxes on oil and gas, including production from federal lands.

Low crude oil prices could discourage company participation, too. The BLM has had NPR-A lease sales in the past during low-price cycles when no bidders showed up. All three factors could discourage industry competition for leases.

Another consideration BLM managers could be weighing is how to integrate new lands in the reserve being made available for leasing in the upcoming sale. A new land management plan has been finalized to reopen large blocks of acreage closed by President Barack Obama's administration. The plan awaits only a final agency signature and that could come by the end of the month – in the next few days – BLM Alaska spokesperson Lesli Ellis said.

BLM must give a 30-day notice of a lease sale before it is held, Ellis said. In theory, final approval of the plan could allow newly-offered acreage to be offered in a December lease sale, but it seems unlikely, according to sources. BLM is now looking at a date sometime in January, the sources said.

The new land plan would open areas in the northeast part of the reserve that are considered highly prospective for discoveries but that were closed by former Interior Secretary Sally Jewell to protect sensitive wildlife habitat.

Richard Garrard, an exploration geologist familiar with the NPR-A, said industry could be very interested in the area. Some of these lands were leased in years of the Bush administration prior to Obama, Garrard said. Exploration wells were also drilled prior to the closure by Jewell.

There's now new interest among companies, Garrard said, because seismic data recently made available by the state of Alaska shows indications that the promising Nanushuk geologic formation, in which companies have made major discoveries on nearby lands, extends through the area that could be made available.

"Interest in the leasing and development of the NPR-A remains generally strong. In 2019 BLM had one of its most successful NPR-A sales in recent years, generating $11,268,709," Ellis said.

As for the Arctic National Wildlife Refuge, a Record of Decision on leasing was signed in August, but while BLM had hoped to have a sale in the refuge's 1.5-milion-acre coastal plain by the end of 2020 the actual deadline for a sale in federal law is the end of 2021, Ellis said.

Although ANWR is managed by the U.S. Fish and Wildlife Service the BLM was given responsibility to carry out lease sales under the 2019 federal tax act, which included provisions allowing leasing in the coastal plain, which is considered the part of the refuge most prospective for discoveries.

Lawsuits have already been filed by conservation groups seeking to block ANWR lease sales and polar bear protection is one of the major points at issue. The major challenge is the ability of companies to spot polar bear dens as they are exploring in winter. Polar bears are protected under federal law and procedures used to spot dens in winter, when they are snow-covered, are considered ineffective in terrain of the coastal plain.