June 14, 2012
NPR-A IAP/EIS Comments
ECOM Project Office
1835 South Bragaw Street, Suite 490
Anchorage, AK 99508
Re: Draft IAP/EIS for National Petroleum Reserve-Alaska
To Whom It May Concern:
On behalf of the Resource Development Council for Alaska, Inc. (RDC), I am writing to comment on the Draft Integrated Activity Plan/Environmental Impact Statement (IAP/EIS) for the National Petroleum Reserve-Alaska (NPR-A). RDC strongly urges the Bureau of Land Management (BLM) to move forward with a comprehensive plan that allows for significantly expanded oil and gas exploration and development in NPR-A, as well as infrastructure development to carry offshore oil and gas resources to the Trans-Alaska Pipeline System (TAPS). The IAP/EIS should also consider opening NPR-A to mineral entry.
RDC is a statewide, non-profit, business association comprised of individuals and companies from Alaska’s oil and gas, mining, timber, tourism and fisheries industries. Our membership also includes Native regional and village corporations, local governments, organized labor and industry support firms. RDC’s mission is to help grow Alaska’s economy through the responsible development of natural resources.
As stated in our September 8, 2011 scoping comments on the IAP/EIS, RDC believes all of NPR-A should be open to oil and gas leasing, with surface protections that mitigate potential impacts but do not preclude development and transportation of onshore and offshore resources. Industry has proven responsible development can occur in sensitive areas.
BLM should include solid provisions in the IAP/EIS for efficient transportation corridors within NPR-A to facilitate future oil and gas development in the Outer Continental Shelf (OCS) and potential offshore development in state waters of the Beaufort Sea.
With regard to state leases in the Beaufort Sea, RDC is concerned that development of these assets could be hindered or precluded by the designation of Special Areas spanning the coastline. The Draft IAP/EIS currently precludes a pipeline corridor through the Special Areas, potentially stranding offshore reserves in the Beaufort Sea. The IAP/EIS should consider a pipeline corridor into the petroleum reserve for the efficient and safe transport of Beaufort Sea resources to market.
Given NPR-A is a petroleum reserve, BLM should manage the area in a manner that facilities oil and gas production and the development of vital infrastructure for both onshore and offshore development. The significant enlargement of Special Areas and proposed Wild and Scenic River designations, as recommended in Alternative B, could affect the ability of onshore and offshore operators to lease areas for development, as well as build and operate infrastructure necessary to transport oil and gas in an efficient manner to market. In addition, such designations would likely diminish the potential recovery of much needed energy resources for Alaska and the nation.
Alaska and the federal government have already designated significant portions of the state for conservation purposes. In fact, Alaska contains 90 percent of all national park lands, more than 80 percent of national wildlife refuge lands, and more than half of all federally-designated Wilderness. The Special Areas proposed for NPR-A are essentially de-facto wilderness that would block exploration of the most prospective areas of the energy reserve.
Although the IAP acknowledges that land management practices in NPR-A should provide for necessary pipelines and other infrastructure to carry OCS resources in the Chukchi Sea to TAPS, each of the proposed alternatives include significant restrictions which could inhibit permitting and construction of a pipeline across the reserve.
A pipeline is essential to deliver oil from the Chukchi Sea to TAPS. The potential 27 billion barrels of oil offshore could reduce the nation’s trade deficit by $25 billion annually, generate more than $193 billion in government revenues, create an annual average of 55,000 new jobs, $145 billion in new payroll, and add up to one million barrels per day to TAPS – Alaska’s economic lifeline.
Oil and gas development
Three decades of oil and gas activity in the Arctic clearly demonstrate that industry has the capability to operate throughout Alaska’s North Slope while maintaining high standards of safety and environmental sensitivity. Advances in technology have greatly reduced industry’s footprint, allowing for the preservation of more surface acreage within the oil fields for wildlife habitat. In addition to technological advances, scientific studies conducted since 1998 have greatly improved the agency’s knowledge of the biological resources within the petroleum reserve.
Given NPR-A was specifically designated by Congress for the production of energy resources and the need for new oil production has increased, it is important BLM provide access to NPR-A’s best prospects. However, the IAP/EIS does just the opposite in closing lands inside the reserve that are considered to be among the most oil-rich in NPR-A. 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. Acreage within this area could hold significant deposits and should be open to development. Yet under Alternatives B and C most of the highly prospective acreage would be off-limits.
These closures would only serve to significantly reduce ultimate recovery of oil from the petroleum reserve with little or no benefit to the environment and wildlife. If BLM removes the best prospects from future leasing, there is unlikely to be significant industry interest going forward in the petroleum reserve.
RDC is concerned with the alarming trend over the past 15 years of “locking up” potential oil-rich lands in NPR-A. Through the previous planning processes, 219,000 acres under Teshekpuk Lake were withheld from leasing and 430,000 acres north and east of the lake were deferred until 2018. In addition, 1.57 million acres in Northwestern NPR-A were deferred from leasing until 2014. More recently, hundreds of thousands of acres south of Teshekpuk Lake were removed from lease sales because of migratory and caribou habitat concerns. We are very much concerned that the trend is clearly toward less leasing and less access. Much of the most prospective acreage within the Barrow Arch has now been removed or deferred, including those closest to potential future production. It is important to remember this is a petroleum reserve.
With climate change and polar bear critical habitat introduced into the new planning process, anti-development forces are using these and other issues to demand the removal of additional acreage from exploration. Once areas have been removed, a dangerous precedent has been set. Assuredly, special interest groups will challenge any reinstatement in the future.
The IAP/EIS may not label its Special Areas as federally-designated Wilderness, but it has the same impact on future development. This point should be acknowledged in the document. It should also be acknowledged in the IAP/EIS that oil and gas reserve estimates in the petroleum reserve are highly uncertain and will not be confirmed until drilling actually occurs. The U.S. Geological Survey originally estimated that NPR-A could contain approximately 10 billion barrels of oil, but the latest estimate was sharply revised downward. Predictably, some non-development groups have suggested the resources in place are insignificant and not worth developing. However, it should be acknowledged that the area has the potential to contain significant reserves. In addition, the IAP/EIS should point out that if any exploratory drilling were to occur, it would take place in the winter to avoid impacts on wildlife, habitat, and waterfowl.
RDC recognizes coastal areas of the petroleum reserve contain large populations of waterfowl and caribou and are coveted by local residents for subsistence hunting. However, a variety of protective measures, operating procedures, standards, and stipulations can be employed to mitigate impacts. These measures are in place elsewhere on the North Slope where energy development is occurring and they have successfully mitigated impacts.
We urge BLM through the IAP to provide access to NPR-A’s prospective acreage while providing reasonable measures to mitigate impacts. These measures should be both technically and economically feasible.
The final plan should encourage access, expansion of important infrastructure into the petroleum reserve, and plant the seed for industry interest in future lease sales. Such a plan is vital and most appropriate to encourage energy exploration and production inside a petroleum reserve – and access for development of offshore resources in the OCS – at a time when there is an ever-increasing need for new domestic energy production.
In fact, BLM has a moral obligation to open NPR-A’s highly prospective acreage to exploration, given the nation imports more than 50 percent of the oil it consumes and the threat high energy prices pose to Americans. Moreover, new energy production from the petroleum reserve is essential to maintaining a viable trans-Alaska oil pipeline, which is now operating at one-third the volume reached 20 years ago. It is unreasonable to expect state lands to continue to support the oil pipeline when most of the North Slope’s remaining oil is located on federal lands. If most of the coastal areas of NPR-A are removed from exploration, then most of the energy reserve’s potential will be gutted and industry interest and investment will move beyond Alaska.
In the best interest of Alaska and the nation, RDC urges BLM to refrain from setting aside highly prospective lands from development and move forward with clear and transparent actions that open NPR-A to its intended use – responsible oil and gas exploration, development, and production. Continued withdrawal of prospective lands is detrimental to improving the North Slope exploration investment climate and ultimate production. Such action will only serve to increase America’s reliance on foreign oil and weaken our economy.
Interestingly, had sensitive wildlife and wetland areas along the central North Slope coastal plain been withdrawn from exploration in the 1960s, there would have been no discovery of oil at Prudhoe Bay, Kuparuk, and other North Slope oil fields. Alaska would not have the economy and public infrastructure it has in place today, and the nation would have been forced to import at least an additional 16 billion barrels of oil over the past thirty years at a staggering cost. Instead, North Slope oil fields have elevated Alaska’s economy over the past 30 years and the Central Arctic caribou herd has grown from 5,000 animals in 1970 to over 65,000 today.
Minerals and coal leasing
RDC supports opening NPR-A to mineral entry, as well as industrial mineral and coal leasing. We understand BLM does not have the authority to open the energy reserve to mineral entry, however, it can and should make such a recommendation to Congress. Ironically, the U.S. Fish and Wildlife Service does not have the authority to designate Wilderness in the Arctic National Wildlife Refuge, yet under a current planning process it is actively considering new Wilderness designations and has said it has the authority through the Secretary of Interior to make such a recommendation to Congress. If that is indeed the case, then BLM should pursue a similar approach for opening NPR-A to mineral entry.
Such an option should be included in the IAP/EIS. Provisions for a transportation corridor in South NPR-A should also be considered to facilitate potential future mineral development.
Given the outstanding track record of the mining industry in the arctic and sub-arctic, the technological advances of the past decade, and the increasing need for strategic minerals, it makes sense to open the area to mineral exploration.
Specifically, the northern foothills of the Brooks Range have significant potential for base metals discoveries similar to the rich zinc and lead ores found at Red Dog Mine. It is well known that the region also holds significant deposits of copper and iron, as well as some of the most significant coal deposits anywhere in the world. In fact, America is called the “Saudi Arabia of coal,” partly because of the reserve base inside NPR-A. This coal resource could potentially be converted to high grade liquid fuel that could be transported and provide for U.S. fuel needs for more than an entire century.
The mining industry has proven it can explore and develop potential reserves in a way that minimizes impacts on the environment, traditional subsistence activities and cultural resources. Industry has taken the best practices and technology of the past 30 years of arctic development in both Alaska and Canada and has applied them to the latest generation of mineral development. This has led to a new and higher standard for responsible development and has reduced industry’s footprint in sensitive areas.
The discovery and development of new oil, gas, mineral and coal deposits in NPR-A will benefit Alaska, local communities and the nation. Revenues generated from such development will help sustain important local and state services. Industry activity will also provide new job opportunities for local residents and boost the economy. Development of new energy and mineral deposits will also enhance the nation’s economy and security.
The nearly 90-year old NPR-A was specifically set aside because of its energy potential. Access to NPR-A, including its massive coal deposits, should be accommodated.
RDC encourages BLM to significantly expand oil and gas leasing in the petroleum reserve, including the highest prospective areas, with surface protections that mitigate impacts but which do not preclude development and transportation of onshore and offshore resources. Industry has proven responsible development can occur in sensitive areas. The reserve should also be opened to mineral entry to facilitate future exploration of needed mineral resources. The areas with high mineral and coal potential should not be placed in non-development management units that would preclude future development. Foreclosing future development opportunities would block the benefits of valuable mineral and energy resources to future generations.
Please manage the petroleum reserve to be a true energy and mineral reserve. Thank you for your consideration of our comments and concerns.
Resource Development Council for Alaska, Inc.