Salazar announces expedited NPR-A lease sale by yearend

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, June 17 -- The US Bureau of Land Management will accelerate a lease sale within the National Petroleum Reserve-Alaska so that it will take place before the end of 2011, with subsequent lease sales annually, US Sec. of the Interior Ken Salazar said. BLM will publish a Federal Register notice in the near future inviting interested parties to comment on or nominate possible tracts within the vast area on Alaska’s North Slope.

Salazar’s announcement came as the US House Natural Resources Committee’s Energy and Minerals Subcommittee held a hearing on a bill to improve access to oil and gas resources within the reserve. Doc Hastings (R-Wash.), the full committee’s chairman and HR 2150’s sponsor, said requiring annual NPR-A lease sales was a good step, but it would not be enough if other federal agencies block and delay permits for the necessary roads, bridges, and pipelines to get the oil and gas out of the reserve.

In his written testimony, Joe Balash, deputy commissioner of Alaska’s Department of Natural Resources, said Alaska considers leasing within NPR-A a logical first step in expanding oil and gas development on federally controlled state land. He said in his written testimony that possibly the most ambitious feature of Hastings’ bill is its call for approved rights-of-way for roads, pipelines, and other surface infrastructure to ensure all leases are within 25 miles of the state’s approved route plans.

But Deputy BLM Director Mike Pool said Interior was concerned about several of HR 2150’s provisions, including a requirement that the secretary consult with the US Department of Transportation on all surface disturbance instead of only major roads and pipelines; a requirement that the secretary ensure that other federal permitting agencies meet the bill’s deadlines; and an implication that all requested permits must be issued regardless of a proposed action’s potential impacts or the availability of alternatives.

Also testifying were US Sen. Lisa Murkowski (R-Alas.), the Energy and Natural Resources Committee’s ranking minority member; Charles T. Drevna, president of the National Petrochemical & Refiners Association; Tim Sharp, business manager and secretary-treasurer of the Alaska District Council of Laborers in Anchorage; and Eric Myers, policy director of Audubon Alaska in Anchorage.

Salazar also said he would issue a secretarial memorandum directing the US Bureau of Ocean Energy Management, Regulation, and Enforcement to issue a notice to lessees and operators describing how operators can seek a 1-year extension of qualifying offshore leases.

He said to qualify, leaseholders must demonstrate that there was no oil or gas production on the lease as of May 15, 2011; that the lease is in deep water (greater than 500 ft); and that the lease is scheduled to expire on or before Dec. 31, 2015. The extensions will give operators and lessees more time to proceed with exploration and development of their tracts while fully complying with new safety, environmental, spill response, and containment requirements, Salazar said.

Contact Nick Snow at nicks@pennwell.com.

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