July 20, 2008

Oil Lease Bids Set for Alaskan Land


ANCHORAGE, Alaska -- For the fifth time in a decade, the federal government will allow companies to bid for oil and gas leases in the sprawling National Petroleum Reserve-Alaska, officials announced Wednesday.

No oil or gas production has resulted from previous lease sales. However, o%- cials of the Bureau of Land Management touted the sale, the fifth since 1999, as an opportunity to offset high fuel costs.

The government estimates that the roughly 3 million acres it plans to put up for bid this fall could yield several billion barrels of oil and a significant amount of natural gas.

Oil companies face difficult hurdles in getting the fuels to market. The Colville River separates reserve lands from the massive Prudhoe Bay oil field and its satellites to the east. The lack of roads, pipelines and other infrastructure in the reserve makes production risky.

ConocoPhillips, Anadarko Petroleum Corp. and Pioneer Natural Resources returned 300,000 acres in the reserve to the federal government late last year, saying the land did not contain enough oil and gas to justify the high costs of extraction and transportation.

Those companies and others continue to pay for the rights to extract fossil fuels from more than 3 million acres, secured in previous lease sales.

ConocoPhillips and Anadarko Petroleum did not return messages left Wednesday afternoon.

Oil companies have paid $5 to $950 an acre for leasing rights, plus annual rent of $3 to $5 per acre, to the state and federal governments, BLM records show.

In a small victory for conservation groups, the agency decided early this year not to open land near Teshekpuk Lake, an important caribou and waterfowl habitat, for this round of leasing.

The government carved out 23 million acres for the NPR-A in 1923 for energy development.

Originally published by JEANNETTE J. LEE Associated Press.

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