OCS Comments

Letter of Support (4/5/2016)
Action Alert
Alaska Coalition Letter (6/16/2016)
Press Release: Alaska Coalition Support OCS Development


April 22, 2016

Ms. Kelly Hammerle
Five Year Program Manager
Bureau of Ocean Energy Management
45600 Woodland Road, VAM-LD
Sterling, VA 20166

RE: Proposed 2017-2022 OCS Oil & Gas Leasing Program and Draft Environmental Impact Statement (BOEM 2016-0003)

Dear Ms. Hammerle:

On behalf of the Resource Development Council for Alaska, Inc. (RDC), I am writing to urge the Bureau of Ocean Energy Management (BOEM) to finalize the Proposed 2017-2022 Outer Continental Shelf (OCS) Oil & Gas Leasing Program (Proposed Program) and a Draft Programmatic Environmental Impact Statement (DPEIS) that includes the Alaska Arctic OCS without any further exclusions or restrictions.

RDC is an Alaska-based business association comprised of individuals and companies from Alaska’s oil and gas, mining, timber, tourism, and fisheries industries, as well as Alaska Native corporations, local communities, organized labor, and industry support firms. RDC’s purpose is to link these diverse interests together to encourage a strong, diversified private sector in Alaska and expand the state’s economic base through the responsible development of our natural resources.

With regard to the DPEIS, RDC strongly supports Alternative A, which includes new lease sales in the Chukchi and Beaufort Seas, as well as Cook Inlet. Alternative A represents 41 percent of the estimated contributions to the overall amount of the OCS barrels of oil equivalent expected to be produced, nearly equal to the entire Gulf of Mexico potential. Conversely, we are strongly opposed to the Reduced Proposal Alternatives B1b (Beaufort Sea) and B2b (Chukchi Sea), which would remove more than 8 million acres of the most prospective areas from future lease sales. This would essentially have the same impact of having no leasing in these program areas.

Specifically, the Cross Island Environmentally Important Area, including virtually all of the area north of Prudhoe Bay and 12.2 percent of the geologic plays in the Beaufort Sea, would close promising prospects near existing infrastructure, which could minimize future impacts and extend the life of existing facilities.

In recent years, the federal government has removed over 42 million acres of Alaskan waters from potential leasing. Combined with other recent actions that have raised regulatory uncertainty and discouraged prospects for Alaskan development, further reductions in the potential leasing area would compromise the long-term energy and economic security of Alaska and the nation. Moreover, it is premature to exclude additional acreage at the DPEIS stage, given more specific environmental information and review will be considered at later decision stages, and further closures and new restrictions in the Alaska region may make Arctic development economically impractical.

Through decades of Arctic experience, industry has shown that impacts to both onshore and marine mammal subsistence activity can be avoided and mitigated through close cooperation and communication with primary subsistence users. Moreover, major investments in research in the Arctic OCS over decades by industry, government, and academia provide a solid foundation for responsible development that minimizes risks to other resources and the environment. Furthermore, industry and regulators continue to adapt to the challenges of operating in the Arctic and new technologies will further ensure that development and environmental protection can coexist in the region. Operators have taken great strides to implement lessons learned and enhance prevention and response capabilities. Through smart planning, Arctic offshore energy development and subsistence lifestyles can be compatible.

Alaskans recognize the vital role oil and gas development plays in our state’s economy and more than 72 percent of residents support offshore development in the Arctic. One cannot overstate the importance of oil and gas to Alaska. Oil production accounts for more than one-third of the economic activity in the state. It provides and funds thousands of private and public sector jobs, as well as critical public services. It’s clear that Alaskans and our state’s economy would benefit significantly from increased oil production. In fact, the very concept of Alaska’s statehood is predicated on the development of our natural resources.

More than five decades ago when Alaska statehood was debated, many politicians in Washington, D.C. doubted this northern territory could build an economy and contribute to the union. Alaskans joined together to convince Congress that development of Alaska’s vast resources could establish and sustain a strong private sector economy. Washington responded by adding a 49th star to the American flag. We remind federal policy makers that Alaska was allowed to join the union because of the expectation that the development of our natural resources would sustain our economy.

Now, more than 50 years later, Alaska’s economic lifeline, the Trans-Alaska Pipeline System (TAPS), is starved for oil. It’s not because we have depleted our natural resources. In fact, there is more oil in place onshore and offshore the North Slope than what we have developed since statehood. The challenge is achieving access to the resource.

TAPS has played a critical role in our nation's energy security, carrying more than 17 billion barrels of oil to West-Coast markets. It is a critical and strategic link to the nation’s long-term energy security. However, throughput in TAPS peaked at 2.1 million barrels per day in 1988 and the pipeline is now running at three quarters empty. With its enormous resource potential, the Alaska OCS likely contains enough oil to at least double TAPS throughput, extend the longevity of the pipeline, and sustain our state’s economy for decades.

It is vital that the United States maintain opportunities to develop offshore oil and gas, particularly in the resource-rich Beaufort and Chukchi seas. The region holds an estimated 27 billion barrels of oil and 132 trillion cubic feet of natural gas. It would constitute the eighth largest oil resource in the world, ahead of Nigeria, Libya, Russia, and Norway. Development of these immense energy resources would create an estimated 54,700 jobs and $193 billion in government revenue.

As the Proposed Program notes, the Arctic areas are especially promising to help meet the country's long-term energy needs. Energy development in the U.S. Arctic would also significantly bolster the nation's influence in a strategically critical area, bring much needed infrastructure to the region, and provide additional response capabilities in an area where shipping and other activities are increasing. Moreover, OCS development would also reduce economic risks for the proposed Alaska LNG Project, a clean energy priority of the Obama administration.

RDC and many Alaskans share President Obama’s view that America needs to conserve more and put new emphasis on renewable and alternative energy. By doing so, the nation can ultimately break its heavy reliance on fossil fuels. However, America still needs to pursue oil and gas production, given the fact it will take decades before renewable energy becomes a dominant energy source. Moreover, Alaska OCS production will be needed to offset a projected sharp decline in shale production in the coming decades.

For the benefit of Alaskans as well as businesses and consumers across the country, RDC respectfully urges BOEM to continue to include leasing opportunities in the Chukchi and Beaufort seas, as well as Cook Inlet, in the final plan. Given the extensive areas that have been removed from leasing in recent years, RDC strongly opposes additional exclusions and closures – actions that will have the same effect of closing an area to leasing. We also support efforts to expand revenue sharing to all states with adjacent offshore oil and gas activity, including Alaska. Revenue sharing would ensure Alaska is adequately positioned to bear the costs related to offshore development and have access to the same benefits as other states with offshore activity.

RDC appreciates the opportunity to comment on the Proposed Program and DPEIS.


Resource Development Council for Alaska, Inc.