Draft lease plan would open most of Alaska OCS

  • The Polar Pioneer, leased to Shell by Transocean, is seen working in the Chukchi Sea after starting drilling July 30, 2015. Shell did not make an economic find in the one well it drilled after spending more than $7 billion over seven years. (Courtesy Photo/Mark Fink/Shell)

The Interior Department’s latest offshore oil and gas leasing proposal released Thursday juxtaposes the plan put in place late in the Obama administration in almost every way.

For starters, it would put nearly all federal waters off Alaska up for sale.

Published by the Bureau of Ocean Energy Management, the draft 2019-2024 National Outer Continental Shelf Oil and Gas Leasing Program calls for 19 lease sales covering 11 of the 12 designated sale areas off the coast of Alaska.

The only area not included in the plan is the North Aleutian Basin, which is Bristol Bay and the surrounding waters. It was withdrawn from potential leasing by President Barack Obama in 2014.

The current 2017-2022 OCS lease plan calls for a single Alaska sale for the federal waters of southern Cook Inlet in 2021.

Similarly, the draft plan would make 90 percent of the total OCS acreage nationwide available for leasing. The current schedule puts 94 percent of leasable OCS areas off limits, according to the Interior Department.

Interior Secretary Ryan Zinke said providing opportunities to for companies to develop offshore resources would not only help achieve the Trump administration’s goal of national energy security, but also provide “billions of dollars to fund the conservation of our coastlines, public lands and parks.”

The Land and Water Conservation Fund, which provides money to states, local governments and federal agencies for environmental restoration and conservation programs, is funded primarily with OCS lease revenue.

“Today’s announcement lays out the options that are on the table and starts a lengthy and robust public comment period,” Zinke said further. “Just like mining, not all areas are appropriate for offshore drilling, and we will take that into consideration in the coming weeks. The important thing is we strike the right balance to protect our coasts and people while still empower America to achieve American energy dominance.”

Sen. Lisa Murkowski, who chairs the Senate Energy and Natural Resources Committee, echoed Zinke’s sentiment in a statement from her office.

“This draft program is another positive step as we week to reinforce our nation’s status as a global energy leader,” she said. “Secretary Zinke’s ‘blank slate’ approach launches a new discussion with local stakeholders to determine where responsible energy development should take place. While nothing in this proposal is final, it is good to see the administration seeking to expand access in places like Alaska, rather than limiting our opportunities.”

Murkowski and Sen. Dan Sullivan were among 36 Republican senators who in July signed a joint letter to Zinke requesting his department put together a new OCS plan.

Likewise, Gov. Bill Walker said the draft proposal is “an important step toward allowing Alaskans to responsibly develop our natural resources as we see fit.”

The Alaska leasing schedule proposes three sales each in the Chukchi and Beaufort seas off the North Slope in alternating years over the 2019-2024 period. It would also add a second Cook Inlet sale in 2023 in addition to the 2021 sale in the current schedule and one sale each in 2023 covering the 11 other areas that include the federal waters of Southeast, Kodiak, the Aleutians and the Bering Sea.

When in draft form the current 2017-2022 OCS lease schedule included one sale each in the Beaufort and Chukchi seas, but they were culled from the final plan.

The Wilderness Society’s Arctic Program Director Lois Epstein, based in Anchorage, said in a formal response that the challenges posed by offshore drilling in the Arctic would put sensitive coastal habitat and the subsistence resources coastal Alaska residents rely at unnecessary risk.

“Re-doing the five-year program reflects this administration’s eagerness to sell out our public lands and water and pursue fossil fuel energy development everywhere. This is part of a wholesale assault on Alaska’s Arctic, with congress opening the Arctic National Wildlife Refuge’s coastal plain to oil drilling and the Trump administration seeking to revise the scientifically sound National Petroleum Reserve-Alaska management plan so it allows drilling even in currently protected, sensitive habitat,” Epstein said.

BOEM will begin holding public meetings on the draft plan, which still requires an environmental impact statement review, Jan. 16 in Maryland. The Alaska meeting is scheduled for Jan. 23 at the Dena’ina Convention Center in Anchorage.

While the debate over whether or not to allow drilling is a one for politicians, whether or not industry will want to actually sink a bit anywhere is unknown.

Shell’s foray into Chukchi Sea exploration ended in 2015 after the company — which needed federal court orders to remove protesters that tried to block its ships — spent $7 billion over several years to drill one well that ultimately turned out to be a dry hole.

BOEM’s mean estimate for undiscovered but recoverable oil and gas in the areas of the Beaufort Sea up to roughly 50 miles offshore is for 8.9 billion barrels of oil and nearly 28 trillion cubic feet of natural gas. That estimate, updated in late December, added roughly 700 million barrels of oil to the 2016 assessment based on the presumption that the onshore Nanushuk and Torok geologic formation oil plays — the sources of recent large onshore discoveries — extend into federal waters.

The Beaufort Sea gas estimate did not change significantly.

BOEM estimates the Chukchi Sea off the western North Slope holds 15.3 billion barrels of undiscovered oil and 76.7 trillion feet of yet-to-be-found natural gas.

The agency also estimates the other vast unexplored areas that could be opened to leasing hold just about 1 billion barrels of oil.

Elwood Brehmer can be reached at [email protected].

01/05/2018 - 8:46am