House committee passes bill to promote NPR-A access

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, July 14 -- The US House Natural Resources Committee approved legislation aimed at removing bureaucratic obstacles and improving access to oil and gas within the National Petroleum Reserve-Alaska by 28 to 14 votes on July 13.

If it becomes law, HR 2150 would require annual lease sales in NPR-A areas having the most oil and gas resources, establish approval deadlines for infrastructure permits, require the US Interior secretary prepare a right-of-way plan detailing how future and existing leases are to be within 25 miles of an approved road or pipeline, and mandate an update comprehensive assessment of all oil and gas resources within the NPR-A.

The assessment would be done in consultation with Alaska state officials and the American Association of Petroleum Geologists.

The bill offers real steps to ensure oil and gas can be transported out of the reserve and help keep the Trans-Alaska Pipeline System full and functional, according to its sponsor, committee chairman Doc Hastings (R-Wash.).

The most immediate new source of Alaskan crude production is from Area CD-5 within NPR-A, Alaska Lt. Gov. Mead Treadwell told a conference on Arctic oil and gas resources at the Center for Strategic and International Studies on July 12. Alaska has scheduled a lease sale on state land adjacent to NPR-A, he noted, adding: “To the extent that oil is found there, it would show the American people that oil, in fact, is within reach in NPR-A.”

Pete Slaiby, vice-president of Shell Alaska, which is trying to move ahead on leases it obtained in the Beaufort and Chukchi Seas in 2008, concurred with Treadwell’s statement.

Shell’s plans include possibly constructing a pipeline with about half of TAPS’s transmission capacity from within NPR-A to the cross-state pipeline’s Pump Station 1, Slaiby said.

Thomas J. Barrett, president of Alyeska Pipeline Service Co. which has operated TAPS for Alaskan North Slope producers since it opened in 1977, said that the pipeline’s throughput decline has exceeded most expectations. Throughput is 555,000-600,000 b/d compared with nearly 2 million b/d at its peak in 1990.

“A substantial amount of capacity is in place to move 140 million bbl/year, more than four times what the Obama administration recently released from the Strategic Petroleum Reserve in response to high prices caused by unstable global oil markets,” he told the CSIS conference. “This is an important policy question – why we continue to rely on sometimes unfriendly nations for crude oil when we have such a large resource in Alaska.”

Onshore resources within the state could be developed to stop TAPS’s throughput decline, and development of offshore resources could begin to reverse it, Barrett said.

“If you compare TAPS to an automobile engine, its gauge is below the ‘add oil’ line,” he said.

Contact Nick Snow at [email protected].