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Update on National Petroleum Reserve - Alaska (5-11-00)

On August 7, 1998, Interior Secretary Bruce Babbitt announced that the Department of Interior (DOI) had completed an 18-month study on the feasibility of drilling in the northeast portion of the National Petroleum Reserve - Alaska (NPR-A). The report recommends opening 4 million acres (87 percent) of the area studied for leasing. Development in 20 percent of that area deemed environmentally sensitive will be limited by prohibiting oil and gas surface pipelines but can be accessed though directional drilling. A map of the area from the BLM report is included at the end of this update. The Minerals Management Service estimates that the northeast corner contains a mean of 3.1 billion barrels of technically recoverable oil and 9.9 trillion cubic feet of gas.

In making the announcement, Babbitt said: "This is a good plan, based on sound science and a very public outreach process. Will everyone get what they want? No, they won't. We have barred, or limited oil and gas development in key environmentally sensitive areas...[but also are] allowing oil and gas development on almost four million acres." His prediction was correct, as he has been criticized from both sides of the aisle for allowing too much drilling and not enough. Bill Reffalt of the Wilderness Society stated: "The world is awash in oil. Why are we in such a big hurry to start developing oil and gas at a fairly substantial cost to the environment?" Several oil companies, on the other hand, have asserted that by using the latest technologies they can extract oil without damaging the ecosystems and should have access to the entire area. An official from the Independent Petroleum Association of America said that some drilling is better than none at all and "it boils down to looking at the glass half-full or half-empty."  See below for an overview of the process used to arrive at the plan and for details on the final plan and an American Association of Petroleum Geologists position statement in support of exploration and development in NPR-A.

Most Recent Action
The Bureau of Land Management has recently released a rule regarding the National Petroleum Reserve for public comment.  The new rule would allow oil companies to unitize their leases in the NPR-A, and would allow BLM to waive, suspend, or reduce rents or royalties for NPR-A leases.
The deadline for comment is June 26th, and details on how to submit a comment can be found on the BLM Website.

Administrative Action During the 106th Congress
On May 5, 1999, the federal government sold $105 million worth of drilling rights in the National Petroleum Reserve - Alaska, primarily to BP Exploration (Alaska) Inc. and Arco Alaska Inc. The Bureau of Land Management estimates the land contains between 500 million and 2 billion barrels of oil. Several environmental organizations filed suit to block the sale when it was announced last fall. The groups claim that the Administration failed to meet the requirements of the National Environmental Policy Act of 1969 (NEPA) in developing an environmental impact statement for the proposal. The groups contend that the Department of the Interior failed to address wildlife issues and the cumulative impact of oil exploration on Alaska's North Slope.

Background
In 1923, President Harding set aside a 23 million acre petroleum reserve in Alaska to provide an emergency oil supply for the US Navy. The area, Naval Petroleum Reserve No. 4, was placed under the management of the Department of the Interior and slightly renamed as the National Petroleum Reserve- Alaska (NPR-A) in 1976 by the Naval Petroleum Reserves Production Act. DOI sold several leases in the area in the 1980s, but none were developed and all have expired.

Because production in other Alaska reserves has slowed in recent years, oil companies and Alaskan leadership have been pushing to open the area for development. The Alaska congressional delegation and Governor Tony Knowles (D) have been pressing the Administration to open NPR-A. Environmental groups have opposed such a move, pointing to the current drop in oil prices. Supporters counter that the NPR-A fields would not begin production for 10-15 years by which time the oil markets are likely to be substantially different. Of primary concern for industry and the state is maintaining flow rates in the Trans Alaska Pipeline System as the fields at Prudhoe Bay are exhausted. Others see opening NPR-A as a way to decrease pressure on allowing exploration of the Arctic National Wildlife Refuge (ANWR), also on the North Slope.

The Process
In February 1997, DOI began to prepare an Integrated Activity Plan/Environmental Impact Statement (IAP/EIS) for the 4.6-million-acre northeastern area of the NPR-A. The Bureau of Land Management led the project, which also involved the Minerals Management Service, Fish and Wildlife Service, and US Geological Survey. DOI also worked to include the state of Alaska, North Slope Borough, Alaska Natives, local residents, industry, and conservationists in the process. The IAP/EIS aimed to answer two questions: First, what protections and enhanced management will be implemented for surface resources, such as wildlife, wildlife habitat, fisheries, paleontological, subsistence and recreational resources? Second, whether BLM should conduct oil and gas lease sales in the planning area, and if so, which lands should be made available for leasing? After announcing the intent to prepare an IAP/EIS in February 1997, DOI held scoping meetings, a public science symposium, a stipulation workshop, a subsistence workshop, and issued periodic newsletters to interested parties. BLM released a draft plan in November 1997 and posted it on the web to facilitate public comments. In addition, BLM held 9 public hearings on the draft plan and 10 addition hearings on the subsistence issue. All told, the agency had received approximately 7,000 written comments when the comment period closed on March 12, 1998.

Final Report
The final report was issued on August 7, 1998. It states that 4 million acres (87 percent) of the area studied will be available for leasing. Development in 20 percent of that area will be limited by prohibiting oil and gas surface pipelines but can be accessed by directional drilling. The areas where leasing is prohibited or restricted fall mainly around the Teshekpuk Lake and Colville River, which provide habitats for molting geese, caribou, raptors and passerine. The plan also prohibits oil and gas facilities in riparian areas identified by the North Slope residents and governments as areas important for subsistence and forms a Subsistence Advisory Panel.


AAPG Policy Statement on NPR-A
The American Association of Petroleum Geologists, an international organization, supports access to the National Petroleum Reserve-Alaska (NPR-A) for petroleum exploration and development activities. In more than thirty years of modern era exploration and commercial production from the North Slope of Alaska, the petroleum industry has demonstrated its ability to protect the environment while producing a very significant part, sometimes exceeding 25%, of the nation's daily production. It is in the best interest of the United States to allow exploration and development activities in NPR-Alaska, one of the most prospective areas of the country.

Rationale
For the last thirty years, the petroleum exploration industry has shown that rather than closing areas for oil and gas activities, it is much more advantageous to allow exploration and development activities to take place while addressing social, environmental and technical concerns through lease stipulations and the permitting process. Under a "collaborative" environment among industry, federal and state governments, and the native organizations, the petroleum industry has continuously refined the technology for seismic acquisition, and drilling and production on the North Slope. In this manner, the economic benefits have accrued to many, while other interests have simultaneously been protected. Therefore, rather than closing certain NPR-A areas to petroleum exploration and development, we believe that environmental, social, and technical challenges can be addressed through lease and permit stipulations.

NPR-A Background Information

Figure II.C.1 from Northeast National Petroleum Reserve - Alaska Final Integrated Activity Plan/Environmental Impact Statement, Volume 1. Map of NPR-A showing the preferred alternative for oil and gas exploration. 


Sources: BLM website, Environment and Energy Weekly, Washington Post, Greenwire


Please send any comments or requests for information to the AGI Government Affairs Program at govt@agiweb.org.

Contributed by Kasey Shewey White and Dave Applegate, AGI Government Affairs Program and Alison Alcott AAPG/AGI Geoscience Policy Intern

Posted: August 21, 1998; Last updated May 10, 2000


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