State, industry scold feds for withholding best areas from NPR-A sale

Alaska officials and industry players expressed disappointment May 17 over acreage proposed for a federal lease sale in the National Petroleum Reserve-Alaska in November.

“It’s unfortunate that a lot of acreage with high potential or where modern seismic work has been done has been excluded. This doesn’t send a good message to the state or industry,” state oil and gas director Bill Barron said.

A notice calling for tract nominations was published May 16 in the Federal Register by the U.S. Bureau of Land Management, which administers the NPR-A. The notice outlines what areas BLM will consider for leasing and which areas will be closed.

Areas being considered for leasing are inland and south from a coastal region in the northeast NPR-A that is considered to have high potential. Environmental groups have focused an intense lobbying effort on the U.S. Department of the Interior to exclude the areas because of its use by waterfowl in the summer month.

This would be the BLM’s second sale in the NPR-A in two years. A similar sale was held last year. President Barack Obama has promised to hold annual lease sales in the reserve.

There was criticism from industry over the acreage selection.

“Yet again the BLM has totally ignored the geology and those areas most likely to contain commercial accumulations of hydrocarbons by including only the less prospective and geological high-risj tracts,” said Richard Garrard, a consultant to companies working in NPR-A and a vice president of the Alaska Geological Society.

Most areas considered high potential by federal, state and industry geologists are off-limits, Garrard said, particularly the Teshekpuk Lake region and areas to the west, which are also habitat for waterfowl.

Dan Seamount, a commissioner of the Alaska Oil and Gas Conservation Commission, noted the irony that the Interior Department is not offering the best NPR-A acreage for lease but has also refused to budget funds for the closure and cleanup of old exploration wells drilled by the government itself years ago, some of which are still open and leaking.

BLM Alaska officials confirmed that some old wells are within the areas that have been excluded but could not identify how many are open and not sealed off.

In its notice, BLM listed 630 tracts on 7.1 million acres in the 23-million-acre reserve for consideration in the November sale. Decisions on which leases will actually be offered will be made later, the agency said.

Interested parties have 45 days to offer nominations for leases to be offered after the May 16 date of publication in the Federal Register, BLM said in a press release.

In a related development, Barron, the state oil and gas director, said the state will conduct is annual North Slope “areawide” lease sale of unleased lands of state-owned acreage simultaneous with the federal NPR-A sale in November so that companies can bid on adjacent federal and state acreage along the Colville River eastern boundary of the NPR-A.

A similar simultaneous lease offering strategy was pursued by the state and BLM in the areawide sales late last year.

BLM officials would not specify a specific date for the November sale but Garrard said he was told that the sale is now planned for Nov. 7.

Tim Bradner can be reached at tim.bradner@alaskajournal.com.