Clock ticks on ANWR seismic survey plan

  • In this undated photo provided by the U.S. Fish and Wildlife Service, an airplane flies over caribou from the Porcupine Caribou Herd on the coastal plain of the Arctic National Wildlife Refuge in northeast Alaska. The Trump administration is moving toward oil and gas drilling in Alaska's Arctic National Wildlife Refuge. A notice being published Friday, April 20, 2018, in the Federal Register starts a 60-day review to sell oil and gas leases in the remote refuge. Oil and gas drilling in the pristine area in northeastern Alaska is a longtime Republican priority that most Democrats fiercely oppose. (U.S. Fish and Wildlife Service via AP)

If the Bureau of Land Management is going to lease parts of the Arctic National Wildlife Refuge for oil exploration next year, it may have to do so with very limited information available for bidders.

Assistant Interior Secretary Joe Balash said officials from the U.S. Fish and Wildlife Service continue to work with SAExploration Inc. on issues pertaining to the Endangered Species Act and the Marine Mammal Protection Act for the company’s application to conduct a 3-D seismic survey over the ANWR coastal plain this winter.

However, he acknowledged that the schedule for such a survey — which can only be done while the tundra is frozen and snow-covered — is starting to be squeezed as BLM is required to issue a public notice and hold a comment period before the seismic survey plan is officially approved.

“At this point it is getting very tight if their activities are going to begin in January,” Balash said during a Nov. 19 call with reporters conducted to discuss BLM’s work to revise the land-use plan for the National Petroleum Reserve-Alaska.

SAExploration submitted the original Marsh Creek 3-D seismic survey plan to Interior last spring in partnership with Alaska Native corporations Kuukpik Corp., Kaktovik Inupiat Corp. and Arctic Slope Regional Corp.

ASRC and Kaktovik Inupiat Corp., commonly known as KIC, hold surface and subsurface mineral rights to significant portions of the roughly 1.6 million-acre ANWR coastal plain — the area of the refuge opened for oil and gas exploration in the tax cut package that Congress passed about a year ago.

The Marsh Creek plan called for SAE to conduct a seismic program covering 2,602 square miles over two winters, with initial work starting Dec. 10 of this year.

In late May the Washington Post reported that the Fish and Wildlife Service deemed the 34-page plan application incomplete because it didn’t evaluate potential impacts to wildlife the large seismic shoot could have.

Balash said it was too soon to tell if the agencies and the companies would be able to work something out for work to now start in January.

“It all depends on the schedule that A, can be authorized, and B, that the applicant would be able to complete the activities that would be of value to them and their potential customers,” he said.

Balash is a former Alaska Department of Natural Resources commissioner.

President Barack Obama’s Interior Secretary Sally Jewell rejected a similar seismic survey plan submitted by the State of Alaska when Balash led DNR in 2013, contending her authority to approve the activity expired in 1987 based on an interpretation of the 1980 Alaska National Interest Lands Conservation Act. The state lost a subsequent U.S. District Court appeal.

The state’s plan was estimated to cost roughly $50 million; it’s unclear how much the private consortium expects to spend.

Last year outgoing Gov. Bill Walker proposed spending $10 million of state funds to support such work but that appropriation was later removed from his budget plan.

A new seismic survey would likely be very valuable to oil and gas companies interested in bidding on ANWR leases, as the only resource estimates the U.S. Geological survey has done are based on old information compiled with old, 2-D technology.

How many companies will want to explore the area is uncertain given the associated political controversy and the fact that it would be a very expensive greenfield mission while long-term oil prices are very uncertain.

Additionally, new Nanushuk and Torok geologic formation discoveries in and around the NPR-A on the western North Slope have drawn major interest from the industry and development in the NPR-A is already underway.

Interior officials have said they want to hold the first ANWR lease sale sometime in 2019.

The most informed estimate on ANWR’s coastal plain area came from the U.S. Geological Survey in 1998, which made a “mean” estimate of 7.7 billion barrels of recoverable oil that could be discovered. “Mean” is basically the midpoint between high and low estimates.

Whether oil is really there isn’t known for sure.

The USGS worked with data from 1,180 miles of 2-D seismic program conducted between 1983 and 1985, plus what is known about the regional geology.

The only exploration well drilled in ANWR, in a 91,000-acre in-holding of private lands owned by Kaktovik Inupiat Corp. and Arctic Slope Regional Corp., was drilled in the early 1980s by BP and Chevron Corp., and the results are still secret.

BLM is also working on the first draft of an environmental impact statement required before a lease sale can be held. Balash said the draft is “very, very close” but the agency isn’t quite ready to publish it. It should be available in the coming weeks, he added.

On Nov. 14, Energy Information Administration Assistant Administrator Ian Mead said in a presentation to the Resource Development Council for Alaska that the agency base estimate is oil production from ANWR could peak at 880,000 barrels per day in 2041. That assumes oil would begin to flow in 2030, but is also based on the now 20-year old USGS resource assessment.

State DNR and Revenue officials told legislators in 2015 that ANWR oil development could net the state $150 billion of revenue if production goes through 2075, but that was also based on an average price of $110 per barrel.

11/28/2018 - 11:06am