July 7, 2008
Mr. John Goll
U.S. Minerals Management Service Alaska OCS Region
3801 Centerpoint Drive, Suite 500
Anchorage, AK 99503-5823
Attn: Sale 214 CALL
Dear Mr. Goll:
The Resource Development Council (RDC) is writing to express its support for Lease Sale 214 in the North Aleutian Basin Planning Area.
RDC is a statewide, non-profit, membership-funded organization founded in 1975. The RDC membership is 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.
RDC supports increased access to the American Outer Continental Shelf (OCS) and the proposed lease sale in the North Aleutian Basin. Given the threat rising energy prices pose to America’s economy and the lifestyles of our citizens, it is imperative the Minerals Management Service (MMS) expand access to federal waters to ensure adequate supplies of oil and gas to U.S. consumers. Otherwise, industry will be forced to produce from existing mature areas where production is peaking and supplies are declining.
While RDC strongly supports a lease sale in the North Aleutian Basin, 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 into the plan. 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 is vitally important, both economically and culturally, to the region, and fishing is the foundation of the Bristol Bay economy.
New Offshore Development Can Occur Without Significant Impacts
RDC is confident offshore leasing, exploration, development, and production can occur without significant impacts to the environment and other resource users. 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 has determined that less than one percent of all oil entering the seas is from drilling and exploration activities.
RDC believes MMS and the oil and gas industry take environmental considerations seriously. In fact, MMS has funded nearly $300 million for environmental studies related to Alaska waters. Since 2000, it has had 30-40 active environmental studies each year offshore Alaska, totaling over $45 million. Eleven more studies have been commissioned this year, and work is underway to adapt an ice-ocean circulation model of the Bering Sea to the specific oceanographic conditions within Bristol Bay. This study will aid in determining necessary actions to protect the area.
In addition, MMS and the National Oceanic and Atmospheric Administration are collaborating in a multi-year study of the distribution, relative abundance, and habitat use of the North Pacific right whales in the Bering Sea. MMS is planning to begin three new studies that will focus on subsistence activities, salmon life cycles, juvenile fish, and the settling behavior of the red king crab. Other studies will include a wide variety of seabirds and waterfowl including critical habitat for the Steller’s eider.
All of this activity and research gives RDC a high level of confidence that oil and gas leasing, exploration, and development can occur in the North Aleutian basin in an environmentally-responsible manner.
OCS Development Would Benefit Local Communities and Alaska
Expanded access to Alaska’s offshore, including the North Aleutian Basin, in an efficient and environmentally-sensitive way, would not only significantly improve the nation’s domestic energy situation, it would provide economic stimulus to coastal communities and the state, and generate scores of new jobs for local residents. It would also serve as an important new local source of fuel and energy. In addition, industry’s presence would likely lead to improved search and rescue operations as has been the case in other offshore areas of Alaska and the Lower 48.
Benefits to local communities and the state would be enhanced should MMS include a revenue sharing component with Alaska 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. RDC strongly supports local revenue sharing and we encourage MMS to advocate for such a component.
Meeting Future Energy Needs Will Require Increased Access To OCS
Currently, 86 percent of the OCS is off limits to development. Yet most of the nation’s oil and gas is located offshore an estimated 86 billion barrels of oil and 420 trillion cubic feet of natural gas. Onshore, 60 percent of the lands that have potential as domestic sources of oil and gas are presently closed to leasing.
Meeting future U.S. energy demand will require increased access to onshore and offshore areas containing oil and gas deposits. In fact, given the impact high energy prices have on Americans, our economy, and national security, RDC would argue that MMS and other government agencies have a moral obligation to develop domestic sources of energy, both onshore and offshore. Offshore areas were placed off limits 25 years ago under an entirely different energy and regulatory picture than exists today. For the sake of America’s economy and energy security, it is imperative the U.S. reverse this policy and geographically diversify its domestic energy supplies. After all, every barrel of oil not developed in America will simply be imported from overseas where environmental regulations are often weaker and emissions from production activities are higher than from domestic operations.
In conclusion, RDC is confident offshore leasing, exploration, development, and production can occur without significant impacts to the environment and other resource users. While some insist that conservation and alternative energy sources are a better choice to new oil and gas activity offshore, the transition period to new sources of energy will be lengthy. In the meantime, the U.S. has no choice but to boost conventional domestic energy production both offshore and onshore. It is not an either/or situation, but a three-legged stool supported by conventional, preferably domestic, energy production, stronger conservation measures, and an eventual transition into alternative sources as they become technically and economically feasible.
Thank you for the opportunity to comment on this important issue.
Resource Development Council for Alaska, Inc.