February 5, 2020                                                                                                                    Action Alert

Ted Murphy, Associate State Director
Bureau of Land Management, Alaska State Office
222 West 7thAvenue, Mailstop 13
Anchorage, AK 99513-7504

Re: Comments on the DEIS for the NPR-A IAP

Dear Mr. Murphy:

The Resource Development Council for Alaska, Inc. (RDC) is writing to comment on the Draft Environmental Impact Statement (DEIS) for the National Petroleum Reserve-Alaska (NPR-A) Integrated Activity Plan (IAP).

RDC is a statewide business association comprised of individuals and companies from Alaska’s fishing, forestry, mining, oil and gas, and tourism industries. RDC’s membership includes Alaska Native corporations, local communities, organized labor, and industry support firms. RDC’s purpose is to encourage a strong, diversified private sector in Alaska and expand the state’s economic base through the responsible development of our natural resources.

Given the outstanding track record of the oil and gas industry in the Alaska Arctic, as well as the technological advances of the past 40 years, RDC supports a new IAP for NPR-A that reopens all of NPR-A’s subsurface historically available to oil and gas leasing with reasonable and economically feasible stipulations that do not discourage the development and transport of energy resources.

Alternative C moves in the direction of this aim and Secretarial Order 3352 to “provide for clean and safe development of our Nation’s vast energy resources, while at the same time avoiding regulatory burdens that unnecessarily encumber production, constrain economic growth, and prevent job creation.” Alternative C allows more land to become open to resource development, with 75% of the NPR-A open for leasing. However, areas open for leasing are overlaid with timing limitations and no surface occupancy restrictions. While Alternative C is promising, new infrastructure is still prohibited on 5.1 million acres. Stipulations that are too restrictive would make development extremely challenging and potentially unfeasible. RDC urges the Bureau of Land Management (BLM) to be measured in their surface limitations and restrictions to promote the primary purpose of the NPR-A.  

WhileAlternative D increases land available for leasing and new infrastructure to 18.3 million acres, including all of the Teshekpuk Lake Special Area, surface occupancy restrictions and other stipulations must be practical, as well as technically and economically feasible.

Alternative D maximizes the areas available for leasing and resource development, including 81% of NPR-A available for leasing with 4.5 million acres prohibited from new infrastructure. All of the high potential Barrow Arch area would be available with timing limitations, surface use controls, and surface occupancy prohibitions. Alternative D is the most consistent with the aim of Secretarial Order 3352 and the purpose of the reserve, described in the Naval Petroleum Reserves Production Act of 1976 (NPR PA). However, as described in the more detailed comments below, Required Operating Procedure (ROP) C-2a could result in restricted or no winter exploration and K-9 could prevent economic development of resources. There are other problematic ROPs and K series requirements. In general BLM should eliminate measures that are too restrictive and would make exploration and development extremely challenging or infeasible (ROP C-2A and K-9); eliminate measures that are duplicative of other agency responsibilities (ROP A-10); eliminate measures that are not based on science (ROP E-11); or add unnecessary provisions that do not provide environmental (ROP E-12) or subsistence benefits (ROP F-4). The ROPs and K series requirements examples cited above are not exhaustive but are representative of measures that would make exploration and development under Alternative D problematic.

Contrary to Alternative C and D, Alternative B is inconsistent with BLM’s directive under Secretarial Order 3352 to develop a revised IAP. Alternative B further decreases the areas available for resource development with large swaths of the NPR-A completely off-limits from leasing, layered by leasing restrictions and large areas of “no surface occupancy” throughout the NPR-A. The expanded areas of restrictions on leasing and surface occupancy contained in Alternative B go so far as to overlap areas of existing leases which could undermine exploration and development areas leased to industry only one month ago. 

The IAP currently in place unnecessarily prohibits leasing and development of potentially oil-rich lands in much of Northeast NPR-A. The 3.1 million acres that were taken off the table in Northeast NPR-A was an overreach. As RDC has emphasized before, NPR-A is a petroleum reserve and surface resources and subsistence can be protected without unduly restricting highly prospective areas to leasing. It is our hope that a newly updated and implemented IAP would not only open highly prospective areas to exploration and development, it would not be so restrictive as to discourage such development. 

Decades of oil and gas activity on the North Slope clearly demonstrate industry has the ability to operate throughout the Arctic while maintaining the highest standards of safety and environmental sensitivity. New advances in technology have greatly reduced the footprint of development, allowing for greater consolidation of facilities and the preservation of more acreage within development zones for wildlife habitat. For example, as much as 60-plus square miles can now be developed from a single 12 to 14 acre gravel drill site. New drilling capabilities are being developed that may increase the subsurface development possible from the same size drill site to as much as 150-plus square miles. The net effect is an ever-decreasing impact on surface resources. 

The discovery and development of new oil and gas deposits will benefit Alaska and local communities. State and local revenues derived from production will help sustain important services. New industry activity will also provide thousands of job opportunities, boost the local, state, and national economy, and refill the Trans-Alaska Pipeline System (TAPS), which is currently running at approximately one-quarter capacity. Development of new energy deposits will also reduce reliance on imported oil and help maintain American energy dominance. 

Given NPR-A was specifically designated by Congress for the production of energy resources, it is important the BLM provide access to prospects with the highest potential. 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. Several large discoveries have been announced in recent years within the arch in two little-explored reservoirs that extend into the energy reserve – the Nanushuk and Torok formations. Exploration efforts targeting the Nanushuk formation in 2015 resulted in a major discovery in the Pikka Unit, an area comprised of State of Alaska leases north of the village of Nuiqsut. Two wells drilled in 2017 at a prospect known as Horseshoe showed new evidence of a large find that extended the already huge Nanushuk play by an additional 20 miles. The Horseshoe wells confirmed the Nanushuk reservoir as a significant emerging opportunity on the North Slope and a potential game changer with approximately one billion barrels of conventional oil. Geologists believe the discoveries in the relatively shallow reservoir increase the likelihood of large oil discoveries in NPR-A. 

In addition, a major discovery of up to 750 million barrels of oil has occurred at the Willow prospect in Northeastern NPR-A and early exploration hints at a potential multi-billion barrel field at Smith Bay, located in State waters off the northern coast of the energy reserve. More than 400,000 barrels a day in new production could come from these and other projects on state and federal lands in the area.

The highly-promising Nanushuk reservoir indicates NPR-A’s energy reserves may be much higher than estimated under the previous administration. Federal geologists estimated the energy reserve contained approximately 10 billion barrels of recoverable oil, but those projections were sharply reduced to less than 850 million barrels in 2010. Following that dramatic revision, nearly half of the reserve was put off-limits to development, including large swaths of highly-prospective lands within the Barrow Arch. However, in light of the recent finds, the U.S. Geological Survey has since revised its mean estimate of oil reserves in NPR-A to approximately 8.7 billion barrels.

In December 2019, BLM held yet another successful lease sale in the NPR-A, generating $11,268,709; with the State of Alaska entitled to 50%. According to the Alaska Journal of Commerce, other than 2016, when companies spent $18.8 million on leases, it is the largest collective bid amount for an NPR-A lease sale since 2008. The results of the State’s December 2019 lease sale were similarly major, with a combined $7.8 million in bids for areas in the Beaufort Sea and North Slope sales. The results of these sales signal industry’s continued interest and commitment to developing Alaska’s great resource potential. BLM should include these results in their analysis, recognizing that continued leasing with reasonable terms provides a significant source of revenue to the BLM, State of Alaska, and local communities. A revised IAP for the NPR-A aligned with the directive under Secretarial Order 3352 will ensure this trend continues.

RDC is concerned with the alarming trend over the past two decades of “locking up” oil-rich lands in NPR-A and the Alaska Arctic Outer Continental Shelf. The trend clearly had been toward less leasing and less access. Much of the most prospective acreage within the Barrow Arch has been removed from leasing, including those closest to potential future production. To much protest, the 2013 IAP for the NPR-A did just this, locking up highly prospective areas and layering surface protections prohibitive to leasing or development.

RDC strongly supports an updated IAP for NPR-A that incorporates the most current information and new management goals, objectives, and actions that would be consistent across the entire energy reserve. It is our hope that such a plan would re-open oil-rich areas in the northeastern areas of the reserve with practical, reasonable, and economically feasible stipulations. To this end, RDC recommends the following: 

  • BLM should integrate more performance-based requirements where possible in their (ROPs). A number of requirements included in the 2013 IAP were unduly burdensome to industry and created impacts themselves through increased activity and aircraft in the area. BLM should be thoughtful and balanced in creating this framework of requirements. 
  • BLM should avoid expanding areas of No Surface Occupancy or adding new No Surface Occupancy restrictions that would not meet the objectives of Secretarial Order 3352 or the NPR PA. As an example, the seven mile no surface occupancy over the Colville River proposed in Alternative B would restrict development of this high potential and high interest area to a degree which could be prohibitive to industry. Areas with large surface and access restrictions are not aligned with Secretarial Order 3352 and the NPR PA, and therefore should be removed from the IAP.  Industry has a proven track record of operating in a safe and environmentally sensitive manner; BLM should collaborate with industry to design balanced mitigation measures rather than implementing outright restrictions on resource development activity. 
  • BLM should eliminate the K-9 prohibition on “major construction activity” from May 20 to August 20. This is a vague restriction that might be applied in a way that prevents economic development of leases, and would be a disincentive to bidding on leases made available under an expanded leasing program south of Teshekpuk Lake under Alternative C or D. Although a version of this requirement applies under the existing IAP, it does not apply in any areas that are proposed for development.
  • BLM should eliminate proposed ROP C-2a, which would impose an entirely new and unnecessary requirement for three inches of snow water equivalent above the highest vegetated surface prior to approval of tundra travel. This is a solution in search of a problem, and may dramatically restrict seismic data acquisition, exploratory drilling, and other activities that depend on tundra travel. Instead of imposing a new and unnecessary requirement, BLM should continue to follow the proven practices used by the State of Alaska and the North Slope Borough to approve tundra travel.
  • It should be explicitly stated in the IAP that existing leases will not be held to any closure, buffers, or no surface occupancy restrictions. In the event of an extension or renewal, industry should have the certainty that BLM will not introduce new lease stipulations which would impact access to and development of their lease. 
  • Where appropriate, BLM should defer to other agencies’ expertise and authority in their ROPs. For instance, ROP A-10 should defer to the State of Alaska Department of Environmental Conservation in their jurisdiction and expertise governing air quality. Under ROP A-10, BLM could require air quality modelling for virtually any development without clear justification. If unjustified, air quality modelling can cause significant delays to project with little environmental benefit. RDC recommends BLM only conduct air quality modelling and monitoring when it is environmentally and scientifically defensible and revise ROP A-10 as appropriate. Across all the ROPs, the IAP should be focused and clear on BLM’s authority. 
  • BLM should confirm that the final analysis of impacts to caribou, particularly the Teshekpuk Lake Caribou Herd, is based in sound science and not assumptions. Within their analysis, BLM should be sure to include information about the Central Arctic Caribou Herd and its proliferation in the presence of industry. The Central Arctic Caribou herd calves in the heart of the Prudhoe Bay, and as the data indicates, mitigation measures and balanced land management have been successful at managing this resource in the presence of resource development for over 40 years. In the IAP, BLM states that the population and health of the Teshekpuk Lake Caribou Herd is stable and has even increased over the same period industry activity has increased in the NPR-A. Despite this data on both herds, BLM implies the health of the herd is in jeopardy. As BLM considers potential impacts to the Teshekpuk Lake Caribou Herd from resource development, they should not exclude the very real example of success on the other side of the Colville River, or the success of industry efforts to mitigate impacts to the Teshekpuk Lake Caribou Herd with development in the NPR-A to date. Alarmist statements about the potential demise of the Teshekpuk Lake Caribou Herd when the data does not demonstrate this has occurred to any degree is not constructive and not supported by science. 
  • Restrictions on aircraft use in the NPR-A and the requirement for industry to develop an Aircraft Use Plan should be extended to all users of the NPR-A, including government entities and environmental organizations. As a general comment, by standardizing the requirements placed on industry for all users BLM can manage potential impacts more comprehensively.  
  • BLM does not have the authority under the NPR PA or the Alaska National Interest Land Conservation Act (ANILCA) to designate any rivers as Wild and Scenic or consider any areas of the NPR-A as wilderness. The NPR-A should be managed in a manner consistent with the express intent of Congress under the NPR PA and honor the agreement forged between the State of Alaska and the federal government under ANILCA.  

In general, BLM should only add new operational requirements and limitations after they have performed a gap analysis on the effectiveness of the existing 270 or so best management practices and stipulations. 

Conclusion

RDC encourages the BLM to ultimately produce a plan that demonstrates federal lands in Alaska are open for business. 

The development of new energy deposits in NPR-A will benefit Alaska, local communities, and the nation. Revenues derived from new production will help sustain important state services. Industry activity will also provide new job opportunities for local residents and others while boosting the economy. Increased access to NPR-A can be accommodated without sacrificing the traditional ways of life, especially the subsistence needs of Northwest Alaska residents. Re-opening highly-prospective areas of NPR-A to future lease sales would maintain American energy dominance and reduce foreign imports into West Coast refineries.

Thank you for the opportunity to provide comments on Draft Integrated Activity Plan and Draft Environmental Impact Statement for NPR-A.

Sincerely,
RDC