April 11, 2006
Ms. Renee Orr
Five-Year Program Manager
U.S. Minerals Management Service (MS-4010)
381 Elden Street, Room 3120
Herndon, VA 20170
Dear Ms Orr:
The Resource Development Council (RDC) appreciates the opportunity to submit comments on the Draft Proposed Program for the Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2007-2012. Given the fact that Alaska’s extensive coastline, more than all the contiguous Lower 48 states combined, has high potential for oil and gas discoveries, the proposed five-year program is of much interest to RDC.
RDC is a statewide organization made up of all resource sectors, business associations, labor unions, Native corporations, tourism providers, local governments and individuals. 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.
RDC supports increased access to the American OCS and the proposed lease sale schedule for Alaska. Specifically, RDC supports option 2 for the Beaufort Sea (two sales in 2009 and 2011), option 1 for the Chukchi Sea (three sales in 2007, 2010 and 2012), option 1 for the North Aleutian (two sales in 2010 and 2012), and option 1 for Cook Inlet (two special interest sales in 2009 and 2011).
While RDC strongly supports the proposed schedule, new leasing should move forward only after proper local stakeholder consultation, planning and environmental analysis is undertaken.
Any leasing plan should consider conflict avoidance measures to minimize impacts to other resource industries and subsistence harvesters. Reasonable stipulations to protect scientifically-verified, environmentally-sensitive areas should be incorporated in the plan.
The proposed Alaska sales should move forward in a strong regulatory regime that protects the environment, other resource users and traditional ways of life. It is important OCS activities adhere to rigorous environmental standards. Final plans should ensure industry’s footprint is minimized and that biological resources, traditional lifestyles and the environment are protected.
RDC understands and recognizes the concerns local government, other resource users and industries, such as fishing, have regarding offshore activities in Alaska. Subsistence whaling is vitally important, both economically and culturally, to North Slope villages, and fishing is the foundation of the Bristol Bay economy. Fish harvested from Bristol Bay fill the freezers of many Alaskans, both urban and rural. The bay is the backbone of Alaska’s fishing industry. Our members in the oil and gas industry are working with stakeholders to reach a mutual understanding of how oil and gas activity can coexist with other industries and traditional lifestyles.
The oil and gas industry in Alaska and elsewhere has proven its ability to produce energy in an environmentally-safe and efficient manner. OCS development has an outstanding safety and environmental record spanning decades. Development has coexisted with other industries, including fishing, in the North Sea, the Gulf of Mexico and Cook Inlet. The National Academy of Science recently determined that less than one percent of all oil entering the seas is from drilling and exploration activities.
RDC encourages the Minerals Management Service (MMS) to include revenue sharing with states and local communities in its leasing plan. Areas most directly affected by oil and gas development should be allocated a share of the government revenues it generates.
It is absolutely essential MMS expand access to federal waters in the Lower 48 and Alaska. Otherwise, industry will be forced to produce in existing mature areas where production is peaking and where supplies are declining.
Alaska’s offshore contains reserves estimated at 27 billion barrels of oil and 132 trillion cubic feet of natural gas. The Chukchi Sea is considered by MMS as the most promising offshore petroleum basin in the U.S. Expanded access to Alaska’s offshore in an efficient and environmentally-sensitive way could significantly improve the nation’s domestic energy situation and provide economic stimulus to coastal communities and the state.
The U.S. is heavily reliant on foreign imports and Gulf of Mexico production. As a result, our energy position is becoming more susceptible to political unrest abroad, and the 2005 hurricanes have demonstrated the need to geographically diversify domestic supplies.
Given the long lead times for development, which can exceed ten years, MMS must proceed expeditiously with the proposed lease sales in the 2007-2012 plan. Otherwise, production from new areas could be pushed back well beyond 2020. Meanwhile, America’s energy situation is growing more desperate and a growing portion of its domestic energy production centered in the deep water Gulf of Mexico, an area with high exposure to dangerous hurricanes, and where the potential is high for supply disruptions.
Some 85 percent of the American OCS is currently off-limits to energy production. These off-limit areas were established 24 years ago under an entirely different energy picture than exists today. For the sake of America’s economy and energy security, it is imperative that the U.S. reverse this policy and geographically diversify its domestic energy supplies.
In conclusion, some insist that conservation and alternative energy sources are a better choice to new oil and gas activity offshore. While we agree America must advance its efforts toward conservation and alternatives, the transition period to new sources of energy will be lengthy. In the meantime, the U.S. has no choice but to boost conventional energy production both offshore and onshore. It is not an either or situation, but a three-legged stool supported by conventional energy production, stronger conservation measures and an eventual transition into alternative sources as they become technically and economically feasible.
Sincerely,
RESOURCE DEVELOPMENT COUNCIL for Alaska, Inc.
