September 8, 2010
Ms. Julia Dougan
Acting Alaska State Director
U.S. Bureau of Land Management
222 W. 7th Avenue
Anchorage, Alaska 99513-7504
Re: New IAP/EIS for National Petroleum Reserve-Alaska
Dear Ms. Dougan:
On behalf of the Resource Development Council for Alaska, Inc. (RDC), I am writing to comment on the preparation of a new Integrated Activity Plan/Environmental Impact Statement (IAP/EIS) for the National Petroleum Reserve-Alaska (NPR-A).
RDC is a statewide, non-profit, business association comprised of individuals and companies from Alaska’s oil and gas, mining, timber, tourism and fisheries industries. Our membership also includes Native regional and village corporations, local governments, organized labor and industry support firms. RDC’s mission is to help grow Alaska’s economy through the responsible development of natural resources.
As stated in our earlier comments on NPR-A, RDC believes full oil and gas leasing should occur across the petroleum reserve. In addition, RDC supports opening NPR-A to mineral entry, as well as industrial mineral and coal leasing. Moreover, the Bureau of Land Management (BLM) should make provisions for transportation corridors within NPR-A to facilitate future oil and gas development in the Outer Continental Shelf (OCS) and potential resource development in South NPR-A and elsewhere.
Oil and gas development
Three decades of oil and gas activity in the Arctic clearly demonstrate that industry has the capability to operate throughout Alaska’s North Slope while maintaining high standards of safety and environmental sensitivity. Advances in technology have greatly reduced industry’s footprint, allowing for the preservation of more surface acreage within the oil fields for wildlife habitat. In addition to technological advances, scientific studies conducted since 1998 have greatly improved the agency’s knowledge of the biological resources within the petroleum reserve.
Given NPR-A was specifically designated by Congress for the production of energy resources and the need for new oil production has increased, it is important BLM provide access to NPR-A’s best prospects. North Slope oil and gas deposits have occurred almost exclusively within a 25-mile strip of the Beaufort Sea coastline – a geologic structure known as the Barrow Arch. Acreage within this area could hold significant deposits and should be open to development.
RDC believes it is unnecessary for BLM to defer or withdraw highly prospective acreage in NPR-A from potential future lease sales. Areas withdrawn in previous planning processes are considered to be among the most oil-rich in NPR-A. These withdrawals and new ones would only serve to significantly reduce ultimate recovery of oil from the petroleum reserve with little or no benefit to the environment and wildlife. If BLM removes the best prospects from future leasing, there is unlikely to be significant industry interest going forward in the petroleum reserve. (BLM need only look at the results of the most recent lease sale, which clearly demonstrated industry disappointment in what was offered).
RDC is concerned with the alarming trend over the past 15 years of “locking up” potential oil-rich lands in NPR-A. Through the previous planning processes, 219,000 acres under Teshekpuk Lake were withheld from leasing and 430,000 acres north and east of the lake were deferred until 2018. In addition, 1.57 million acres in Northwestern NPR-A were deferred from leasing until 2014. Most recently, 170,000 acres south of Teshekpuk Lake were removed from the August 2010 lease sale because of migratory and caribou habitat concerns. We are very much concerned that the trend is clearly toward less leasing and less access. Much of the most prospective acreage within the Barrow Arch has now been removed or deferred, including those closest to potential future production. It is important to remember this is a petroleum reserve, not a wildlife refuge.
RDC understands the new plan will incorporate the most current information and develop management goals, objectives, and actions that would be consistent across the entire NPR-A. We also understand the planning effort will help identify management actions to mitigate impacts to resources from oil and gas leasing and other activities that may occur in NPR-A. It is our hope that such efforts will prevent future permitting issues, like the one at CD-5 where ConocoPhillips Alaska has hit a stone wall in advancing its project.
With climate change and polar bear critical habitat issues to be introduced into the new planning process, it is highly likely that anti-development forces will use these and other issues to demand the removal of additional acreage from exploration. Once areas have been removed from a sale or deferred from leasing, a dangerous precedent has been set. Assuredly, special interest groups will challenge any reinstatement in the future. Moreover, those who oppose new oil development in the Arctic are likely to demand permanent Wilderness protection of much, if not all, of the petroleum reserve’s coastal plain, thus blocking future oil and gas exploration and development inside an area specifically intended for oil development.
RDC recognizes coastal areas of the petroleum reserve contain large populations of waterfowl and caribou and are coveted by local residents for subsistence hunting. However, a variety of protective measures, operating procedures, standards, and stipulations are employed to mitigate impacts of energy development on other land uses and resources in areas where development currently occurs on the North Slope. We urge BLM to provide access to NPR-A’s prospective acreage while providing reasonable measures to mitigate impacts. These measures should be both technically and economically feasible.
RDC strongly encourages the BLM to move forward with a comprehensive and consistent plan for NPR-A that will allow oil and gas exploration across the petroleum reserve’s most prospective lands while mitigating potential impacts on the environment, wildlife, and other resource users. BLM should craft a plan that encourages access, expansion of important infrastructure into the petroleum reserve, and plants the seed for industry interest in future lease sales. Such a plan is vital and most appropriate to encourage energy exploration and production inside a petroleum reserve – and access for development of offshore resources in the OCS – at a time when there is an ever-increasing need for new domestic energy production.
In fact, BLM has a moral obligation to open NPR-A’s highly prospective acreage to exploration, given the nation is now importing 60 percent of the oil it consumes and the threat high energy prices pose to Americans. Moreover, new energy production from the petroleum reserve is essential to maintaining a viable trans-Alaska oil pipeline, which is now operating at one-third the volume reached 20 years ago. It is unreasonable to expect state lands to continue to support the oil pipeline when most of the North Slope’s remaining 20 billion-plus barrels of oil is located on federal lands. If much of the coastal areas of NPR-A are removed from exploration, then most of the energy reserve’s potential will be gutted and industry interest and investment will move beyond Alaska.
Industry has invested significant resources into a large 3-D seismic program in NPR-A and considerable additional resources have been invested to interpret data and prepare for competitive bidding. This investment could be at risk, depending on the final determinations of the new planning process.
In the best interest of Alaska and the nation, RDC urges BLM to refrain from deferring highly prospective lands from development and move forward with clear and transparent actions that open NPR-A to its intended use – responsible oil and gas exploration, development, and production. Continued deferral and withdrawal of prospective lands is detrimental to improving the North Slope exploration investment climate and ultimate production. Such action will only serve to increase America’s reliance on foreign oil, weaken our economy, and jeopardize national security.
Interestingly, had sensitive wildlife and wetland areas along the central North Slope coastal plain been withdrawn from exploration in the 1960s, there would have been no discovery of oil at Prudhoe Bay, Kuparuk, and other North Slope oil fields. Alaska would not have the economy and public infrastructure it has in place today, and the nation would have been forced to import at least an additional 16 billion barrels of oil over the past thirty years at a staggering cost. Instead, North Slope oil fields have elevated Alaska’s economy over the past 30 years and the Central Arctic caribou herd has grown from 5,000 animals in 1970 to over 65,000 today. Development can be and is done right in Alaska.
We hope the new plan signals to resource industries that federal land in Alaska is open for business.
Minerals and coal leasing
Given the outstanding track record of the mining industry in the arctic and sub-arctic, the technological advances of the past decade, and the increasing need for strategic minerals, RDC also supports opening NPR-A to mineral entry, as well as industrial mineral and coal leasing. In addition, RDC encourages BLM to make provisions for transportation corridors to facilitate future resource development. RDC acknowledges that before the mining of minerals and coal can occur, an act of Congress would be required to open NPR-A to mineral entry. We strongly encourage BLM to advance such a recommendation.
Specifically, the northern foothills of the Brooks Range have significant potential for base metals discoveries similar to the rich zinc and lead ores found at Red Dog Mine. It is well known that the region also holds significant deposits of copper and iron, as well as some of the most significant coal deposits anywhere in the world. In fact, America is called the “Saudi Arabia of coal,” partly because of the reserve base inside NPR-A.
NPR-A should be managed with a true multiple use philosophy, allowing for the coexistence of development, recreation and subsistence uses. RDC opposes new single-purpose, highly-restrictive conservation units in NPR-A, given its energy and mineral-rich lands and potential future development. Moreover, Alaska already has an overwhelming majority of the nation’s public lands closed to development. Environmental concerns and habitat issues can be adequately addressed through lease stipulations and the permitting process.
Decades of mining activity clearly demonstrate industry has the capability to operate throughout the arctic and sub-arctic while maintaining the highest standards of safety and environmental sensitivity. New advances in technology have reduced the footprint of development, allowing for greater consolidation of facilities and the preservation of more acreage within development zones for wildlife habitat.
The mining industry has proven it can explore and develop potential reserves in a way that minimizes impacts on the environment, traditional subsistence activities and cultural resources. Industry has taken the best practices and technology of the past 30 years of arctic development in both Alaska and Canada and has applied them to the latest generation of mineral development. This has led to a new and higher standard for responsible development and has reduced industry’s footprint in sensitive areas.
The discovery and development of new oil, gas, mineral and coal deposits in NPR-A will benefit Alaska, local communities and the nation. Everyone who lives in Alaska will gain from new discoveries through the state and local revenues derived from production. These revenues will help sustain important state services to residents. Industry activity will also provide new job opportunities for local residents and boost the local economy. Development of new energy and mineral deposits will also enhance the nation’s economy and security. NPR-A is an 80-plus year-old petroleum reserve — specifically set aside because of its energy and mineral potential. Access to the entire NPR-A should be accommodated. Thank you for your consideration of our comments and concerns.
Resource Development Council for Alaska, Inc.
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