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National Petroleum Reserve-Alaska (2-2-05)

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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).

Recent Action

The Bureau of Land Management announced final plans on January 28th for expanding oil and gas leasing in the northeast corner of Alaska's National Petroleum Reserve, allowing access to about 2 billion barrels of oil and 3.5 trillion cubic feet of gas that are now off-limits. The final environmental impact statement endorses new leasing on about 389,000 acres of the reserve's northeast planning areas. It expands a Clinton administration plan that opened about 4 million acres of the northeast area to energy development.

The final plan prevents, at least for now, leasing on 211,000 acres of the sensitive Teshekpuk Lake ecosystem. But it sanctions development in areas north of the lake that were not available under a draft unveiled last year, albeit with "no surface occupancy" restrictions on production that will prompt use of so-called directional drilling, BLM spokeswoman Jody Weil told Greenwire. Overall, the plan means that about 95 percent of the 4.6 million northeastern portion of the reserve would be open to leasing, and Weil said a lease sale for the newly available areas could be held as soon as July of this year.

BLM project leader Susan Childs said in an interview that the plan will allow development while protecting wildlife habitat and subsistence needs of local populations. BLM is touting several measures it says will minimize the plan's effect on wildlife, such as limiting surface disturbance to 300 acres per lease in tracts north of Teshekpuk Lake and minimizing disruption of caribou movement by requiring pipelines to be a minimum of 7 feet off the ground.

Likewise, Alaska officials praised the plan. John Katz, Alaska's director of state/federal relations and special counsel to the governor, told Greenwire that it provides a "good balance between the need to develop domestic petroleum sources and protect native subsistence uses and wildlife habitat."

Not suprisingly, environmnetalists disagreed with BLM's assessment of the plan's wildlife impact. Historically, environmentalists have challenged BLM decisions to open other areas of the 23.5 million acre reserve, which according to U.S. Geological Survey estimates contains between 5.9 billion and 13.2 billion barrels of oil. (2/2/2005)

Previous Action


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.

In May 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.

In January 2004, 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. In March 2004, 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.


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 108th Congress.

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

Contributed by David R. Millar AGI/AAPG Fall Semester Intern; Emily Lehr Wallace AGI Government Affairs Program

Last Updated: February 2, 2005


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