RDC’s 23rd Annual Conference Presentations
Henri Bisson, Alaska Director, Bureau of Land Management
Good morning!
I sincerely appreciate being here this morning. As a relatively new arrival to Alaska, I have to tell you that I’ve been heavily focused on learning the BLM business here in Alaska. And, as I look at our business, I’m constantly asking my staff what we need to do to streamline our processes, to help our users be successful on public lands, and to encourage responsible development of our enormous resource base.
The one question they won’t answer is how long I have to be here before they stop calling me a “Cheechako.”
As you are aware, the land pattern in Alaska continues to change as BLM implements the Alaska Land Transfer Program.
When it is all over, of the 365 million acres in this state, BLM will still be responsible for 18% of the land base in Alaska.
Next to the holdings of the Alaska Department of Natural Resources, BLM will have the second largest economic engine in this State. The pistons that power the engine are maintaining or improving opportunities to develop these resources. That’s what we’re trying to do on the North Slope.
In 2001, the President adopted a National Energy Policy which identified a major role for the public lands and resources to meet our Nations’ increasing energy needs.
BLM – Alaska is responsible for fully implementing 8 of the 40 National Energy Tasks.
BLM Alaska Initiatives include: improving land-use planning; improving permitting timeliness; and, maintaining or improving our transportation infrastructure.
Public lands are made available for leasing only after they have been evaluated through BLM’s multiple-use planning process.
We are currently undertaking a major effort to update the land use plans which are the basis for all of our actions, including oil and gas leasing and development.
While we have a number of plans underway or soon to begin that have oil and gas leasing implications, I want to mention 3 that are relevant to this topic.
1. We are currently nearing completion of the draft NPRA-NW plan. This draft will be released in mid-January and will offer alternatives that could lead to additional new oil and gas leasing in NPRA. In addition, we’re looking at alternative mitigation measures and stipulations to ensure responsible exploration, but more adaptive ways to get the job done.
2. We will begin evaluating oil and gas leasing in the Southwestern portion of NPRA in 2004.
3. The third issue I wanted to mention is that we are strongly considering amending the NPRA Northeast plan. If we decide to proceed with that amendment, I hope that we would begin by the middle of this coming calendar year and complete the process by the end of 2004. We would propose to revisit several issues including the areas that are available for leasing in NPR-A Northeast and we would propose to change the exploration and development stipulations and mitigation measures to be identical to the ones that are being developed in the on-going NPRA-NW plan. If you think this is something we ought to be doing, I’d appreciate hearing from you.
Relative to permitting and timeliness, the Bureau is working on various actions to expedite internal administrative process, such as the processing of Applications for Permits to Drill (APDs).
We continue to cooperate and consult with the oil and gas industry regarding efforts to more efficiently process drilling permits.
We’re working with the oil and gas industry to improve business processes through the use of electronic commerce.
BLM is part of a multi-agency effort to inventory oil and gas reserves and resources on onshore public lands, and to identify the impediments and restrictions to accessing, leasing and developing those resources. This is the EPCA study that Congress has mandated and which will soon be released.
BLM will continue ongoing operations associated with existing leases within the NPR-A area, but we are considering a “performance-based” procedure, where the agency outlines its land use goals and desires, leaving the details to be developed and proposed by industry.
BLM recently published a final rule on unitization for oil and gas activities in the National Petroleum Reserve-Alaska (NPR-A). The new rule facilitates development and: allows for suspensions; sets lease terms at 10 years; allows for subsurface storage; and allows for unitization.
Lease suspensions will allow much-needed time to plan for development and construction on Alaska’s sensitive North Slope environment. The suspensions would allow leases to be extended beyond their authorized time or term by “stopping the clock” under circumstances that are beyond the control of the operator. Leasees are not required to pay rental or royalty during the suspension.
We may also suspend a lease term after discovery of producible oil or gas to allow time for the construction of a transportation system from the new well to a gathering or storage system or some other facility.
Subsurface storage agreements will assist production in the NPR-A by allowing operators, for a fee, to store oil or gas in existing geological structures rather than in above-ground tanks while waiting for distribution. Severe climate or other factors often make it difficult to construct distribution and storage systems for the oil and gas, and little environmental risk is posed by this type of storage.
The new NPR-A unitization regulations that were put into effect last spring have caused a great deal of concern here in Alaska. I’m going to try to do something about those concerns.
On December 12, we’re hosting a workshop with industry, AOGA, and North Slope landowners, including ASRC and Alaska’s DNR to try to reach consensus on changes that may be necessary to improve the regulations. We will have representatives from MMS, our WO and our Solicitor’s Office with us. If we reach consensus, I’ll be the first one on the plane back to DC to brief our Director, Assistant Secretary and Deputy Secretary of the need to change the regulations. We will protect the public trust relative to our royalties, but there is a lot of room for discussion.
Relative to transportation and infrastructure, we are near completion of the right-of-way renewal for TAPS.
There are currently two federal rights-of-way in place for an Alaska natural gas pipeline project.
If we get additional applications for a new gas line, we will work as hard as we can to expedite that process.
I would like to share the results of recent oil and gas leasing with you for a minute. Be aware that we plan to hold a third lease sale in NPRA Northeast in 2004 and if a decision is made for new leasing in NPRA Northwest, we plan to hold our first lease sale also in 2004.
In May 1999, BLM offered 3.9 million acres for lease in Eastern NPR-A. Industry paid over $104 million for 133 tracts (870,000 acres). This was the first sale in the reserve since 1984. The leases are for a period of 10 years.
In June 2002, BLM offered 3 million acres for lease in the 2nd NPR-A sale. Industry paid over $63.8 million for 60 tracts (579,269 acres). Two companies that have not been active in the reserve in the past also submitted bids: TotalFinaElf and EnCana Oil and Gas.
As I said before, BLM will prepare to potentially hold lease sales in other NPR-A sectors, with the first sale scheduled for 2004 for NPRA-Northwest and a third lease sale for NPR-A Northeast as well.
Despite rumors to the contrary, at this time, we do not have a firm proposal in hand for full-field development of some of the existing leases in NPR-A. We expect a decision soon on whether one company will initiate such a proposal, but we are having preliminary discussions.
If a plan were submitted today, BLM is committed to completing the EIS by July 2004.
If the decision is made to allow development, BLM would anticipate the first production from NPR-A in 2007.
I hope this information is useful to you. I encourage you to work with us as we move to encourage and permit responsible oil and gas exploration and development in the National Petroleum Reserve – Alaska.
