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BLM Decision Sets Stage for Major NPR-A Lease Sale

September 4, 2008

By Snow, Nick

The US Bureau of Land Management issued a record of decision that sets the stage for a major lease sale in the National Petroleum Reserve-Alaska’s northeast portion. Land in the NPR-A’s northwest section also will be offered in the sale expected in the fall, the US Department of the Interior agency said on July 16. It said that the acreage, which will become available in the two sections, could result in as much as 8.4 billion bbl of oil being developed.

Several trillion cubic feet of natural gas also might be produced for shipment to markets in the Lower 48 states on pipelines which have been proposed, BLM added.

Officials emphasized that the announcement was not a response to a proposal by US House Democrats last week to require BLM to offer more leases within the NPR-A as an alternative to Congress authorizing leasing on the Arctic National Wildlife Refuge’s coastal plain.

“We’ve been on a track to complete this planning process for some time. We completed this final [environmental impact statement] a month ago and made no secret about making a final decision after the 30 days we were required to wait. I don’t think this has anything to do with whatever is happening on the Hill,” Deputy BLM Director Henri Bisson told reporters during a teleconference.

“This is an opportunity for what we hope will be a major lease sale for land in the northeast NPR-A in October that has not been leased as well as for land in the northwest NPR-A. I think we’ve achieved a pretty good balance and that most people will be satisfied,” he said. The decision includes a 10-year deferral of leasing on land north and east of Teshepuk Lake, Bisson said.

Wildlife protection

Tom Lonnie, BLM ‘s Alaska state director, said that the decision provides for protection of high-value wildlife, including caribou and water fowl, and meets North Slope residents’ subsistence needs while making land with high oil and gas potential available for leasing.

He said that the plan includes protections for polar bears, including requirements to consider impacts on areas the animals use for dens. The polar bear’s listing as a threatened species means that BLM will continue to work closely with the US Fish and Wildlife Service on future oil and gas activities, he said.

The NPR-A’s supplement final plan under which the leases will be issued has phased leasing and performance-based measures as major components, according to Lonnie. Production of oil from this area will assure that the Trans- Alaska Pipeline System remains viable, he explained. TAPS throughput currently is around 700,000 b/d, down from its full 2.1 million b/d capacity, he said.

ConocoPhillips has production just outside the NPR-A and has estimated that production from leases within the reserve could begin as early as 2012, Lonnie said. Existing infrastructure just east of the NPR-A connects with TAPS, he said.

“It’s impossible to anticipate the size of production. It’s always possible that there will be a discovery offshore and a pipeline would be brought in further west, which would allow us to hook in earlier,” Lonnie added.

“It’s also important to understand that NPR-A has future natural gas resources that potentially could be more important than oil, so any gas pipeline that is constructed will use them heavily,” said Bisson. Producers which have expressed interest include Anadarko Petroleum Corp. and Pioneer Natural Resources Co., he said.

Nick Snow

Washington Editor

Copyright PennWell Corporation Aug 4, 2008

(c) 2008 Oil & Gas Journal. Provided by ProQuest LLC. All rights Reserved.