September 17, 2009
Ms. Renee Orr, Chief Leasing Division
Minerals Management Service
4010 381 Eldon Street
Herndon, VA 20170-4817
Re: 2010-2015 Oil and Gas Leasing in the Outer Continental Shelf
Dear Ms. Orr:
The Resource Development Council (RDC) appreciates the opportunity to submit comments on the 2010-2015 program for Oil and Gas Leasing in the Outer Continental Shelf (OCS). RDC supports the Draft Proposed Five-Year Program for 2010-2015 and encourages the Minerals Management Service to provide for a seamless transition to new oil and gas leasing programs in the future that will expand access to the nation’s OCS energy resources.
RDC is a statewide membership-funded organization founded in 1975. Our 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 strongly supports access to the OCS, especially in the Chukchi and Beaufort seas, and the North Aleutian Basin. The responsible development of potentially-immense oil and gas deposits in Alaska would significantly boost Alaska’s economy, extend the life of the trans-Alaska oil pipeline, improve the economic viability of the proposed natural gas pipeline from the North Slope to the Lower 48 and reduce America’s reliance on foreign energy.
A comprehensive energy plan for the nation must include Alaska, which accounts for over 30 percent of the nation’s technically recoverable oil and gas resources. The Alaska OCS is an important future source of U.S. energy supply with an estimated 27 billion barrels of oil and 132 trillion cubic feet of natural gas potentially in place. By comparison, total production from the North Slope over the past 32 years has been approximately 15.5 billion barrels.
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 reliance on foreign oil. Yet while America must conserve more and move toward renewable energy, it still needs to pursue new oil and gas production, given the fact it will take decades before renewables become a dominant energy source. Even with the Obama administration’s goal to decrease dependence on oil, it is projected that fossil fuels will still account for two-thirds of this nation’s energy consumption in 2025. Where will the oil come from to meet this demand? The OCS is the most logical choice, given its immense potential. If not the OCS, then where? For every barrel of oil not developed domestically, the nation will have little choice but to import another from overseas – where weaker environmental regulations often apply. One way or another, that barrel of oil will be consumed in America. Given economic and geopolitical concerns, that barrel should be produced here in the U.S. – under American laws, regulations and oversight, and by American workers.
RDC would like to express disappointment and concern regarding the letter 67 members of Congress sent to President Obama urging him to develop a “Arctic conservation and energy plan.” The recommendations set forth in the letter would suspend virtually all new oil and gas exploration – both onshore and offshore – in Alaska’s Arctic. The letter and its recommendations were advanced under the false premise that industrial activity in the region is “ill-planned” and is not based on sound science. We strongly disagree. In our view, the recommendations are an excuse to prevent new exploration and development until sometime in the distance future, if ever.
RDC supports offshore exploration because it is confident operations can occur safely. Offshore development has an outstanding record in Alaska and elsewhere. Moreover, advances in technology have dramatically reduced industry’s footprint, providing an additional measure of confidence. Energy development in the arctic is subject to in-depth analysis by federal law, a stringent permitting process and oversight by state and federal agencies. In every instance, development is preceded by extensive studies. The North Slope and the offshore is now perhaps the most studied energy basin in America.
RDC recognizes that subsistence whaling is vitally important, both economically and culturally to North Slope villages, and that commercial fishing historically has been the primary industry in the North Aleutian Basin. RDC believes that seasonal restrictions as necessary and/or deferral of specific tracts, should be considered to avoid potential conflicts with subsistence whaling in the Arctic and fishing in the Bering Sea, as opposed to outright cancellation or indefinite deferral of entire lease sales. Industry and government working together have the ability to protect subsistence and fishery resources while producing needed domestic energy for the nation. Strong regulatory oversight, combined with other mitigation measures, can be employed to protect all resource and subsistence users.
To help address local socio-economic impacts, RDC strongly supports sharing federal royalty payments from production in federal waters with coastal states and local communities. Such a measure is critical to local Alaska communities in the Arctic and the North Aleutian Basin. Revenue sharing would significantly benefit local communities and facilitate a healthy partnership among federal, state and local agencies.
Given its potential for immense recoverable reserves and enormous economic benefits to the state and nation, the Alaska OCS should be opened to responsible development. The Alaska OCS has the potential to sharply increase throughput in the oil pipeline, which is currently operating at one-third of its peak capacity reached in the late 1980s. Without new significant discoveries of oil, the pipeline could be uneconomic to operate at some point after 2020. Moreover, OCS gas reserves would significantly improve the long-term economic viability of the proposed gas pipeline from the North Slope to the Lower 48 – a clean energy priority project of the Obama administration. To become a reality, the pipeline requires additional gas reserves beyond what has already been discovered onshore.
With its enormous potential reserves, the OCS can sustain Alaska’s economy for generations, creating tens of thousands of jobs and generating hundreds of billions of dollars in federal, state and local government revenues. According to a recent University of Alaska study, OCS production could provide an annual average of 35,000 jobs for 50 years and $72 billion in new payroll.
Given demand for energy will rise as the economy recovers, America must continue to pursue new oil and gas development, even as the nation slowly transitions to the new energy sources of the future. Increased emphasis on renewable energy should not preclude or require less oil and gas development. America needs more of both to reduce its reliance on foreign oil. Development of OCS oil and gas resources will buy America the time it needs to develop the alternative and renewable energy resources that will someday assist in the nation achieving energy independence.
Thank you for the opportunity to provide comments on a comprehensive offshore energy development plan.
Sincerely,
Resource Development Council for Alaska, Inc.
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