Good Morning!
It’s always a great pleasure to update the members of the RDC on what’s happening on the public lands managed by BLM.
In early October, I gave a speech in Anchorage at the 8th World Wilderness Congress, on behalf of our Director. I was sitting at the far end of the table and was the last to speak. So I had the opportunity to listen to the speeches of all the folks on the stage. Essentially, these leaders of various National and Canadian agencies proclaimed that their major challenge was to protect the “Crown Jewels” they are entrusted to manage, from being loved to death.
I was impressed by their passion and dedication to their mission.
Eventually, it was my turn to speak. I told the large audience that I appreciated how difficult the challenges faced by these other agencies are. I explained that BLM also has many little known “Crown Jewels”. But, we are a multiple-use agency. Our job is to protect the “Family Jewels” of the Nation, the natural resources that people use and need every day!
This BLM mission is something I am very passionate about and so are the men and women I work with every day!
Recent natural disasters and rising gasoline prices have reminded Americans how dependent we are on reliable supplies of energy. Beyond the impact from these events, the United States faces an ever-widening gap between its production and consumption of energy. This gap, if not closed, poses long-term risk to the US economy and to America’s national security.
We must not lose sight of this fact: Diversification of our Nation’s energy supply is a key goal for this Administration and must remain a top priority for our Nation’s economic and national security.
I was in Denver last week and happened to pick up a copy of USA Today on Tuesday. I noticed a full page ad taken out by the American Petroleum Institute. It talked about natural gas, all of its uses and the Nation’s need for more of it. Central to the ad, are a couple of sentences I’d like to repeat for you. “America has enough recoverable natural gas still underground to heat 125 million homes for 120 years. However, much of it is out of reach, particularly on non-park lands in the West and under the waters off our coasts where access has been prohibited or severely restricted by government.”
It doesn’t even mention Alaska, but Alaska will clearly play a significant role in maintaining and expanding the Nation’s diverse energy supply. Much of the Nation’s oil, gas and coal resources are in Alaska on the lands that we manage for everyone and we are doing all we can to increase and expedite appropriate access to those resources.
(ENERGY POLICY ACT)
The Energy Policy Act passed on August 8th and has been signed by President Bush. There are 53 sections which BLM has partial or primary responsibility for implementing. The legislation covers everything from incentives for unconventional fuels such as tar sands and gas hydrates, to streamlining NEPA requirements.
The goal of all of these measures is to increase the domestic energy supply. Some of these mandates come with funding and some do not. The Administration is placing a great deal of emphasis on implementing the Energy Policy Act, so BLM is very busy.
One of the more innovative measures of the act is Section 365, which mandates establishment of seven “pilot offices” for the purpose of improving permit coordination. This provision does not, at present, include Alaska
There are three sections of the Energy Policy Act which are specifically limited to Alaska. They are: (1) Section 347, Oil and Gas Leasing in the NPR-A; (2) Section 348, North Slope Science Initiative; and (3) Section 353, Gas Hydrate Production Incentive.
Section 347 lets us extend leases in NPR-A which contain a well certified as capable of producing and renew leases non-competitively for an additional ten years at a cost of $100/acre, if lessees can demonstrate due diligence. This section also amends unitization requirements. The final language represents a compromise reached between BLM, the State of Alaska, ASRC, and industry. We are currently ahead of schedule in writing regulations to incorporate this legislation, with a public release of draft regulations expected in March.
The legislation also authorizes creation of the North Slope Science Initiative. This effort is aimed at developing a unified and coordinated approach across the North Slope to inform the decision and permitting processes for oil and gas exploration and development activities. It is not about developing a science strategy to stop or slow things down, it’s about getting necessary information to make and defend our decisions. The Act instructed the Secretary to create a Science Technical Advisory Committee to assist in this process. The charter for this group has been approved by the Secretary and the call for nominations of scientists from multiple disciplines resulted in 66 nominations for the Secretary to consider. This group is not limited in scope to the biological sciences. It has been designed to incorporate the full spectrum of science involved in development issues, from petroleum engineering and biology to socio-economics. Selected scientists will come from government, industry, the Universities and the public at large.
Section 353, the Gas Hydrate Production Incentive, allows the Secretary of the Interior to grant royalty relief for natural gas produced from gas hydrate resources under an eligible lease. If gas hydrates ever get into production, there are some spectacular possibilities for Alaska. Consider that known North Slope gas totals 35 trillion cubic feet, but there is an estimated onshore resource of 590 trillion cubic feet of gas in hydrate form and even more offshore. That’s almost 17 times greater!
The BLM, along with MMS, USGS and DOE, are writing regulations to implement this section of the legislation.
There is one more provision in the Energy Policy Act that has some potential to affect our programs here. It is Section 349: Orphaned, Abandoned, or Idled Wells on Federal Land. This section provides the Secretary the ability to reimburse companies, either through royalty relief or direct reimbursement, for remediation work done on old wells which were left in unacceptable condition.
This applies to our situation in the NPR-A with regard to legacy wells drilled from the mid forties to the early 80’s. Many of these wells were left in less than perfect condition and the BLM has inherited the task of monitoring and/or cleaning up these sites. We are hopeful that we can now persuade explorers in the general area of some of these old wells to help us with remediation efforts and we will now be able to offer some financial incentives to do so.
(GAS PIPELINE)
Now let’s turn to the gas pipeline. Obviously, there is a lot of discussion and negotiation occurring between the State and the Producers. BLM is not involved in those discussions. However, while we are in the on-deck circle waiting to engage, we are not idle. We are anxious because we know we will have a huge workload to complete in a short period of time.
Right now BLM is developing a business plan to determine how to handle issues and identify staffing and budget needs. During the project’s siting phase, BLM will issue the right-of-way for the federal portion of the route and will coordinate with the State to make sure the federal and state ROWs are consistent.
We also expect to authorize temporary uses on Federally managed lands that will be needed to support the project, such as temporary roads, material sites, construction camps, storage areas, etc.
Whatever route is chosen, BLM will be there to assist in any way we can.
For those of you who are interested, our latest external newsletter has a major feature story on the gas line and its impact on the infrastructure of Alaska. It’s quite interesting and I’ll leave a few copies here for you to pick up.
(NPR-A))
This summer we launched a new planning effort for the southern third of the National Petroleum Reserve. As part of the scoping process, we held 17 public meetings in 4 months throughout Alaska. The meetings were attended by more than 200 people.
We believe this area is very promising for gas potential, but currently NPR-A is closed to coal leasing and mineral entry.
To find out more about the mineral potential in the Reserve, this past summer we allocated about $950 thousand through a cooperative agreement with the Alaska DGGS for some airborne geophysical survey work. We wanted to supplement known geological information to help assess mineral potential in the Southern NPR-A. The project covered 1,500 square miles in the Howard Pass Quadrangle, including a major lead-silver-zinc deposit at Drenchwater Creek. The State will release the raw data in the spring. We also spent another $50,000 through an interagency agreement with the US Geological Survey for a detailed geophysical gravity survey of known barite deposits and stream sediment sampling to attempt to correlate mineral occurrences with trace elements such as vanadium. We expect a preliminary report in the Spring.
We are currently processing APD’s for the first two wells tied to our latest round of leasing in NPR-A. They would be drilled in the northwest portion of the NPR-A by FEX. These wells would further define the Barrow Arch potential, to the west of existing development. We still have a lawsuit pending that challenges our plan for the northwest. Even though we prevailed in District Court last January, an appeal was filed. In September, oral arguments were presented to the 9th Circuit Court in Seattle, but I don’t have any word yet on how soon a decision will come down. We are very hopeful we will prevail.
Also, I wish I could tell you something more about our proposal to expand leasing in the northeast portion of the NPR-A, but our proposed Record of Decision is still being reviewed by senior staff and our attorneys in D.C. I can’t tell you when that will occur either.
(OTHER LAND USE PLANS)
We currently have three other land use plans underway in Alaska at various stages of development. Watch for our releases and pay attention to the plans, we really need your input in the development of these far reaching decisions for BLM-administered lands.
This past year, thanks to the hard work of my staff and new tools provided by passage of the Alaska Accelerated Land Conveyance Act, we were able to convey 566 native allotments, 1.4 million acres to the State and 2 million acres to Alaska Native Corporations. This is a very significant achievement for my staff!
We also completed 5 recordable Disclaimers of Interest to the State for several rivers and lakes. Just yesterday, I signed the first RDI for this year for the Salcha River. We investigated 215 sites under the ANILCA Mineral Assessment Program and are on schedule to complete a report to Congress, due next June, to recommend what should happen with outdated withdrawals on more than 53 million acres.
That’s a lot of ground to cover, so this concludes my remarks for this morning. We continue to face a variety of challenges to meet the nation’s growing energy needs. Prices are high and the opportunities are great. These are exciting times in Alaska and I look forward to reporting additional developments to you in the future.
