Zinke orders new looks at Arctic oil development

It’s safe to say the Alaska Oil and Gas Association won the day Wednesday.

Not only did new Interior Secretary Ryan Zinke deliver the keynote address at the association’s annual conference, he signed a secretarial order directing Interior agencies to review management and leasing of the North Slope National Petroleum Reserve-Alaska and conduct a new oil and gas resource assessment of the Arctic National Wildlife Refuge coastal plain.

According to Zinke, it is believed to be the first secretarial order signed in Alaska.

During a press conference following his speech, Zinke questioned the rationale of the decision by President Barack Obama’s administration to make roughly half of the 22 million-acre NPR-A off limits to oil and gas leasing.

“In military terms it’s almost been a delaying, rear-guard action over the past administration,” Zinke said. “When you look at the area that was off limits in the National Petroleum Reserve — arguably the most productive areas.”

Interior’s 2013 Integrated Activity Plan for the NPR-A, which is the Bureau of Land Management’s plan for how to manage the area, prohibited leasing in much of the northeast portion of the reserve that is closest to existing Slope oil infrastructure. That area also contains Teshepuk Lake, a massive breeding ground for waterfowl and caribou.

The 2013 NPR-A plan potentially kept 350 million barrels of recoverable oil and 45 trillion cubic feet of natural gas away from development, according to Interior estimates.

In 2010, when oil prices were about twice what they are today, the U.S. Geological Survey estimated the NPR-A held nearly 900 million barrels of economically recoverable oil.

In January, ConocoPhillips announced that it believes its Willow discovery on the eastern edge of the NPR-A holds 300 million recoverable barrels of oil.

The ever-controversial Arctic National Wildlife Refuge — on the other side of the North Slope from NPR-A — could hold upwards of 10 billion barrels of oil, with more than 7.6 billion barrels in the 1002 coastal plain area, according to a 1998 USGS evaluation.

The 1.5 million-acre 1002 Section of the 19 million-acre refuge was carved out by Congress in 1980 and left open to the prospect of petroleum development because of that potential.

To date, one well — the results of which are still confidential — has been drilled into the ANWR coastal plain in 1985. A 2-D seismic survey was also conducted in the 1980s and is the main source of information about its oil potential.

Zinke referenced President Donald Trump’s directive to him to make America “energy dominant” time and again during his five days in Alaska and it was a frequently used phrase Wednesday.

“Energy dominance can’t happen unless Alaska is a partner,” Zinke said.

Gov. Bill Walker, who has long pushed for exploring ANWR, compared the significance of Zinke’s action today to Vice President Spiro Agnew’s 1973 tiebreaking vote in the Senate in favor of constructing the trans-Alaska pipeline.

“This is a day we have waited for for a long time,” Walker said.

While the impact of Zinke’s order almost assuredly won’t be as immediate, the excitement among resource development advocates at the AOGA conference couldn’t be oversold.

“The attitude of partnering…We had to play defense for so long we forgot what offense is like and now we’re going to be able to work in partnership (with the federal administration),” Walker said, referencing land management battles with the Obama administration.

The ANWR coastal plain assessment will be done by federal and likely state geologists and Zinke said he wants to include industry as well to continue fostering the partnership mentality he is working to instill across his department.

Today’s 3-D seismic technology should also provide a much better resource estimate than what was capable in prior exploration.

In 2013, former Gov. Sean Parnell and then-Alaska Department of Natural Resources Commissioner turned U.S. Sen. Dan Sullivan submitted an ANWR Section 1002 exploration plan to the Interior Department that estimated a winter seismic shoot would cost approximately $50 million.

Regardless of what is found, opening the ANWR coastal plain to development and oil production requires congressional approval, which is still a long ways off.

“It’s hard to make decisions unless you know what’s there, so we’re giving the green light to do the (ANWR) assessment,” Zinke said.

And on the day he signed the order, The Wilderness Society released an update to its report against oil activity in ANWR entitled, “Too Wild to Drill.”

Zinke, who in his address to AOGA described himself as a “Teddy Roosevelt Republican,” said he strongly supports the National Environmental Policy Act, which prescribes the process to evaluate large development projects across the U.S.

However, he stressed NEPA should not be used to manipulate conservation or development decisions, as Republicans have regularly accused the Obama administration of doing.

“Nothing I signed today skirts NEPA,” Zinke said. “Nothing I signed today diminishes or relaxes environmental protections that are necessary.”

Elwood Brehmer can be reached at [email protected].

06/07/2017 - 1:46pm