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National Petroleum Reserve-Alaska (4-13-04)

Increasing domestic energy production has been a central goal in congressional efforts to pass comprehensive energy legislation. The bill passed by the House (H.R. 6) in April 2003 would expand oil production in the Arctic National Wildlife Refuge (ANWR). While ANWR has been the focal point in the controversy over opening federal lands to oil exploration, administration moves to encourage drilling in the National Petroleum Reserve in Alaska (NPRA) have recieved far less attention. NPRA is a 23 million acre site on the northern coast of Alaska. In 1999 a federal lease sale was held in the northeastern region of the reserve and a number of exploration wells have been drilled that encountered oil and natural gas. A map of Alaska's Arctic coast shows both NPRA and ANWR in relationship to Prudhoe Bay -- the central focus of petroleum exploration -- and the Trans-Alaskan Pipeline System (TAPS).

Most Recent Action

On March 31st the State of Alaska announced that it would sell leases for oil and gas exploration for 350,000 acres of offshore areas immediately north of the Arctic National Wildlife Refuge (ANWR). Additionally, the state will offer up to 670,000 acres of state-managed lands north of the nearby National Petroleum Reserve-Alaska (NPR-A) for exploration and development in an October lease sale.

In January Interior Department Secretary Gale Norton approved a plan that would open almost 8.8 million acres in NPR-A. The Interior Department is also considering revising 1998 rules for oil and gas activity in the northeastern area of NPR-A because it believes that the rules are keeping about 2 billion barrels of oil unavailable. The group Earthjustice has filed a lawsuit on behalf of the Wilderness Society and six other plaintiffs that says that the Interior Department's plan to open most of the 8.8 million-acre northwest area of NPR-A to exploration violates the Endangered Species Act and the National Environmental Protection Act.

Although drilling has been approved, new offshore ventures will still not provide oil and gas from Alaska's North Slope immediately. Many miles of pipeline still need to be built to connect the offshore areas to the 800-mile trans-Alaska Pipeline System. According to Greenwire, Alaska state officials believe that it will take at least six years before oil would be brought to market and at least seven to 11 years before natural gas would be brought to market. (4/13/04)

On January 22nd, Interior Secretary Gale Norton signed a plan that would open most of the northwest area of the National Petroleum Reserve - Alaska (NPR-A) to oil and gas exploration. The plan prohibits surface occupancy along coastal rivers, deep-water lakes and the Kasegaluk Lagoon Special Area. The Bureau of Land Management (BLM) will accept industry bids for selected tracts until February 9th and plans to hold the lease sale on June 2, 2004. The total amount of oil that could be recovered is comparable to what the United States imports from Saudi Arabia over a three to six year period. Whether the natural gas that could be recovered is economically viable depends on the construction of a pipeline to ship it to market.

A coalition of 13 environmental groups including World Wildlife Fund, Earthjustice and the Sierra Club sent a letter to BLM expressing strong concerns about the plan and asked for additional site-specific environmental study before the tracts are leased. The letter said that the groups do not completely oppose oil and gas leasing in NPR-A, however Greenwire reported that they "expect [that] such a leasing program would balance development and conservation in a scientifically responsible manner." The United States currently imports more than half of its petroleum supply and that number could increase to two-thirds by 2020. Sen. Lisa Murkowski (R-AK) used the news to call for a quick passage of the energy bill, which would expand oil and gas lease extensions from three years to 10 years, but would keep the primary leases at 10 years. (1/28/04)

A Department of the Interior official announced on June 13, 2003, that the Bush Administration intends to issue more oil drilling lease sales for the northeastern corner of the NPRA starting in June 2005. Deputy Assistant Secretary for Lands and Minerals Management Patty Morrison, speaking in Anchorage at the annual meeting of the Resource Development Council for Alaska, declared the intention of the Bureau of Land Management (BLM) to complete its environmental impact statement by December 2004. Though the Clinton Administration designated 4 million acres in the reserve for lease in 1999, it did not make available much of the area surrounding Teshekpuk Lake because the lake is considered a critical habitat for migrating waterfowl. Morrison emphasized that the lease sales would allow companies to bid on areas that are the most productive, including the Teshekpuk Lake area near the Arctic Ocean coastline. She said that this area probably contains 2 billion barrels of oil and should therefore be open for leasing. Exploratory drilling following the 1999 lease sales revealed commercial quantities of oil along the eastern border of the reserve, but no commercial oil production has yet been pursued in the NPRA. Morrison said the U.S. Minerals Management Service (MMS) also plans eight outer-continental shelf lease sales off Alaska's coasts in the next five years, starting with a September 2003 Beaufort Sea sale. (6-17-03)

Previous Action

On May 16th, 2002, the U.S. Geological Survey (USGS) released its re-assessment of the undiscovered oil and natural gas resources within the NPRA. The last assessment was completed in 1980 and reported that the technically recoverable oil in the area on federal lands totaled between 0.3 and 5.4 billion barrels of oil (BBO). According to the new assessment, which includes an economic analysis of the technically recoverable resources, there is between 1.3 and 5.6 BBO that are considered economically recoverable at market prices between $22 and $30 per barrel. It also estimates that there is between 39.1 and 83.2 trillion cubic feet (TCF) of natural gas on federal lands within NPRA, but that the economic viability of these resources depends on transporting them to markets in the lower 48 states. According to the USGS fact sheet (045-02), the "increase in estimated oil resources is largely the result of the recognition of new plays based on oil accumulations recently discovered just east of NPRA." Included in the assessment is a comparison of the resources available in NPRA (using the 2002 assessment figures) and ANWR (using the 1998 assessment figures). Additional details on the USGS assessment are available in AGI's Update on National Petroleum Reserve-Alaska, 107th Congress, and in a May 2002 Geotimes article.

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 (DOI) and renamed as the National Petroleum Reserve - Alaska (NPRA) in 1976 by the Naval Petroleum Reserves Production Act. DOI sold several leases in the 1980s, but only two exploratory wells were drilled. Neither wells resulted in industry developing any petroleum resources. In May 1999, the Bureau of Land Management (BLM) held another federal lease sale in the northeastern section of NPRA that resulted in 133 leases. Several exploratory wells have been drilled in these areas and many have encountered oil and gas resources. Additional wells are scheduled to be drilled in 2002. This northeastern section of NPRA is adjactant the Alpine oil field that was announced in 1996. The Alpine field is estimated to contain about 429 million barrels of recoverable oil.

Both BLM and the Minerals Management Service (MMS) are moving ahead with plans for future leasing activities in NPRA. BLM opened another NPRA lease sale in June 2002. MMS, which oversees oil and gas production from the outer continental shelf, announced in the September 19, 2001, Federal Register its consideration of three lease sales in the Beaufort Sea that is off the northeastern section of NPRA. Preleasing activities include a call for information and a Notice of Intent to Prepare an Environmental Impact Statement (EIS). These preparations would allow MMS to hold a lease sale in fall 2003.

Additional information on events from previous Congresses is available at AGI's Update on National Petroleum Reserve-Alaska 107th Congress.


Sources: E&E News Publications, Department of the Interior, Greenwire, Reuters, U.S. Geological Survey, and Washington Post.
Background section includes material from AGI's Update on National Petroleum Reserve-Alaska for the 107th Congress.

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

Contributed by Margaret A. Baker, AGI Government Affairs Program; Brett Beaulieu, AGI/AIPG 2003 Summer Intern and Gayle Levy, AGI/AAPG 2004 Spring Semester Intern

Last Updated: April 13, 2004


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