Citing a complete failure to take the State of Alaska’s views into consideration, Governor Sean Parnell has withdrawn the State as a cooperating agency in the federal land management process for the National Petroleum Reserve – Alaska (NPR-A). Parnell urged Interior Secretary Ken Salazar to start the process over and include input from the State.
In August, without providing any notice to the State or other cooperating agencies, Salazar announced millions of acres in NPR-A would be closed to development as part of a new land management plan for the energy reserve. The plan drew praise from environmental organizations, which circulated press releases within minutes of Salazar’s announcement, an indication they were briefed in advance of the news.
“Your recent surprise announcement of a preferred alternative effectively withdrawing millions of acres in NPR-A, and the complete failure of the Department of the Interior to take into account the State’s comments as a cooperating agency, shows a complete lack of respect for the views of the State,” Parnell wrote Salazar.
The State had provided comments supporting full development of oil and gas resources in NPR-A, with reasonable mitigation measures. The State’s recommendations were not included in the selected alternative.
The Bureau of Land Management’s (BLM) preferred alternative for the integrated activity plan for NPR-A provides the greatest environmental protection of four management options. It would open 11 million acres to leasing but would place 13 million acres in special conservation areas prohibiting development.
Under the preferred alternative, all of the highly prospective NPR-A coastline adjacent to the Beaufort Sea would be closed to development as well as some areas that had been open to leasing. Moreover, the establishment of special conservation areas could highly complicate and potentially preclude a pipeline across the energy reserve to bring Chukchi Sea oil to the Trans-Alaska Pipeline System (TAPS).
Parnell wrote Salazar that the State has critical concerns with the process and how decisions were made. He said the State voiced those concerns in 2010 when the U.S. Geological Survey released dramatically lower estimates for oil potential in NPR-A, on the eve of the new planning process. Parnell said that the USGS estimate failed in a number of ways, including an absence of estimates for unconventional oil and gas deposits. Nor did the estimate include any of the modern 3-D seismic volumes and data from several key exploration wells at the time of the evaluation.
The governor noted that BLM had promised “a collaborative and open process” in its NPR-A planning, but “BLM did not keep its promise.”
Only one or two meetings of BLM employees with all the cooperating agencies occurred, Parnell said. One of those meetings was after the announcement of the preferred alternative. At the latter meeting, BLM informed the State that the preferred alternative would not change, despite concerns expressed by the State, the North Slope Borough, and Arctic Slope Regional Corporation (ASRC).
The State provided comments during the process in support of full development in NPR-A with reasonable mitigation measures, and cited decades of experience in the Arctic where exploration and development have successfully coexisted with wildlife.
The State had warned BLM in February that based on the Alaska National Interest Lands Conservation Act, the agency was selectively disregarding congressional direction and inappropriately applying agency policy to NPR-A. The State told BLM that the most restrictive alternative would place wildlife protection above the primary purpose of NPR-A, exploration and development of oil and gas reserves.
In June, the State submitted detailed comments on the draft environmental impact statement, making it clear the planning process and several alternatives were “selectively disregarding” congressional direction.
Parnell said Salazar’s approach to the preferred alternative was “stealth” in nature and precluded the State and other cooperating agencies from suggesting and discussing other options as a preferred alternative or ways to mitigate impacts. The governor said a collaborative and cooperative process did not occur.
The plan prompted sharp criticism from Alaska’s congressional delegation. In a joint letter to Salazar, Senators Lisa Murkowski and Mark Begich, and Congressman Don Young said the preferred alternative “represents the largest wholesale land withdrawal and blocking of access to an energy resource by the federal government in decades.”
Given the significant new acreage put into special areas, the delegation said it does not see how the Department of the Interior could meet the stated purpose and need for NPR-A and its land management plan. The delegation warned that the preferred alternative will significantly limit options for a pipeline through NPR-A and will unnecessarily restrict access to rich oil and gas deposits.
ASRC called the preferred alternative counterintuitive to the intent of annual onshore lease sales as directed by the Obama administration in May 2011. “The Department of the Interior is locking up the most prospective areas for increased domestic energy supply, while proposing lease sales on tracts of land with low oil potential,” said ASRC President Rex Rock, Sr.
“The alternative preferred by Secretary Salazar in the NPR-A would restrict areas that have already been leased, where commercial potential has already been discovered,” said Richard Glenn, ASRC Executive Vice President of lands and natural resources. “Salazar’s choice would lock up large swaths of land with little or no benefit to wildlife resources found there and elsewhere throughout the petroleum reserve. The Interior’s preferred alternative is based on a mistaken idea that somehow development can proceed in one part of the petroleum reserve only by locking up lands in another part. It would turn back the clock on the achievements made to date that show that oil and gas exploration can coexist with wildlife populations and the subsistence needs of the people of the North Slope.”
Alaska geologist Richard Garrard was also highly critical of the proposed alternative, insisting it ignores the sub-surface geology and hydrocarbon potential of a strip of land within 25 miles of the Beaufort Sea coastline – a geologic structure known as the Barrow Arch. He explained that all of the current North Slope production comes from fields located along the Barrow Arch. He said the decision is bad news for the oil and gas industry and should be of great concern for Alaska and the longevity of TAPS.
Garrard was also disappointed that tracts closed to development under the preferred alternative include most of the areas where modern 3-D seismic and recent well data have been collected by industry since the resumption of leasing in 1999.
“What has just been decided by the Secretary of the Interior raises a key question – why have a national petroleum reserve in Alaska if those areas containing the best opportunity for new oil and gas discoveries are designated by the BLM as ‘unavailable’ for future exploration and production?” Garrard asked.
Governor Parnell said the only way to cure the defects in the NPR-A planning process is to start over. He said the first step would be a more accurate assessment of oil and gas resources in the energy reserve, involving State and other non-BLM geologists.
The final plan is to be finalized and put in effect by year-end.
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