NPR-A sale plan carries heavy restrictions

• BLM'S leasing plan for NPR-A [259,198 bytes]

Interior Sec. Bruce Babbitt's plan to lease most of the northeast quadrant of the National Petroleum Reserve-Alaska (NPR-A) carries some extensive environmental stipulations. If the plan is approved, a lease sale could be held as early as next summer (OGJ, Aug. 10, 1998, Newsletter). The reserve was established 75 years ago to provide the U.S. Navy with a source of oil. Parts of NPR-A were leased and drilled in the early 1980s. The last sale, in 1984, drew no bids. Discoveries west of Prudhoe Bay field have increased industry interest in the NPR-A lands west of the Colville River (OGJ, Dec. 8, 1997, p. 24; Jan. 20, 1997, p. 33). Babbitt disclosed the plan for leasing 87% of the 4.6 million-acre area after the Bureau of Land Management (BLM) studied the issue for 18 months. Tom Allen, the head of BLM's Alaska office, said the entire quadrant contains a recoverable oil resource postulated at 500 million-2.2 billion bbl, based on oil prices of $18-20/bbl. He did not have a reserves figure for the areas proposed for leasing.

Details

The plan prohibits surface disturbance on a third of the area with "sensitive wildlife habitats" but would allow directional drilling under those areas. Leasing would be barred in 580,000 acres around and north of Teshekpuk Lake, where the tundra and many shallow lakes attract molting geese, and where the Teshekpuk Lake caribou herd calves in most years. Interior said 900,000 acres would be available for leasing near certain rivers and streams that are raptor habitats, but there would either be a ban on all surface activity there or such activity would be limited to drilling and essential road and/or pipeline crossings. The leasing plan bans construction of conventional roads, allowing only ice roads in the winter and helicopter deliveries in the summer. Special stipulations would protect native hunting and fishing. Under the plan, North Slope citizens would be consulted before BLM approves industry activities that may affect them. It establishes a subsistence advisory panel and an interagency research and monitoring team to monitor compliance with stipulations on surface activities. BLM will accept comments on the plan through Sept. 8. Babbitt may approve it by yearend. If he does, a lease sale could follow in 6 months.

Babbitt's views

The Interior Secretary visited the NPR-A area in a trip last summer and declared it a "biological wonderland." Babbitt said the plan marks "a new departure in oil leasing programs, a more scientific approach. We have carried the process to a new level of sophistication. "I know the oil companies will not be entirely satisfied with this plan, but I'd like to see industry step forward and say this plan ought to be accepted." He said leasing was barred on most of the NPR-A coastal plain because "scientists have told us these areas cannot be compromised by surface developments." Babbitt stressed that leasing of NPR-A does not mean that Interior would consider leasing the Arctic National Wildlife Refuge Coastal Plain east of Prudhoe Bay field with similar environmental stipulations. "There should be places on this planet where we do not take risks, where we set aside places exclusively for the use of God's creations without interference from us," he said.

He urged the oil industry to drop all efforts to lease the ANWR Coastal Plain.

Reactions

Several environmental organizations said they oppose leasing NPR-A and would consider a lawsuit to block it. The American Petroleum Institute said Babbitt's decision to conditionally open part of NPR-A "unfortunately fails to recognize the enormous strides in arctic environmental protection made by the oil and gas industry." API noted that the best prospects, on the NPR-A coastal plain, will not be offered for leasing: "The oil industry has demonstrated that it can preserve the environment and develop oil and gas fields. State-of-the-art operating methods, pioneered in Alaska, would allow exploration to proceed without significant environmental impact or harm to wildlife, yet bolster the domestic production that is vital to America's energy security. "The industry has shown that it can design and build facilities that do not adversely impact fish, birds, caribou, and other wildlife. New drilling technologies and 3D seismic surveys utilize less surface area, reducing the industry's footprint dramatically. That footprint is a small fraction of what it was when the first drilling pad was constructed on the North Slope." The Independent Petroleum Association of America said Babbitt should have offered more land for leasing: "Access to public lands for domestic oil and gas development will help decrease our reliance on foreign oil." The Interstate Oil & Gas Compact Commission (Iogcc) called Babbitt's action a victory for states' rights. Wyoming Gov. Jim Geringer, Iogcc chairman, said the decision will benefit Alaska "and all states with an interest in natural resource development. Alaska has demonstrated that it will keep a balance between the need for new oil and gas resources and the need to protect its unique environment." Sen. Frank Murkowski (R-Alas.) said the decision was "a first step, but only a first step, in understanding the petroleum potential of the reserve. "The new stipulations the Interior Department placed on development in NPR-A should not be used as an across-the-board approach to raise the bar on development standards in Alaska. Each case should be taken individually. "I am disappointed that more of the high-potential oil areas were not offered for lease. This will obviously reduce the bids received. I don't think this document necessarily reflects the recognition that the (industry) footprint can be very small." Murkowski said he anticipated the Interior action by adding a provision to the Interior appropriations bill that clarified that NPR-A leases would be for 10 years and allowed unit agreements and pooling of leases.

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