Resource Development Council

RDC urges feds to move forward with OCS lease sales

RDC has urged the Bureau of Ocean Energy Management (BOEM) to maintain all of the proposed leasing areas in the Alaska Outer Continental Shelf (OCS) and to resist additional restrictions on leasing in the Arctic OCS and Cook Inlet.

In response to the request for comments regarding the Draft Proposed 2017-2022 OCS Oil & Gas Leasing Program, RDC said the proposed lease sales in the new five-year plan should not be cut back further. Since January alone, the Department of Interior moved to forever block energy development on the coastal plain of ANWR, America’s greatest onshore energy prospect, and closed nearly 10 million acres of offshore areas to development, essentially putting off limits more than 10 billion barrels of oil.

These federal actions come at a time when Alaskans are facing a multi-billion dollar deficit due to low oil prices and low production. Throughput in the Trans-Alaska Pipeline System (TAPS) peaked at 2.1 million barrels per day in 1988 and the pipeline is now running at three quarters empty. With its enormous resource potential, the Alaska OCS likely contains enough oil to at least double TAPS throughput, extend the longevity of the pipeline, and sustain Alaska’s economy for decades.

TAPS has played a critical role in our nation’s energy security, carrying more than 17 billion barrels of oil to West Coast markets. It is the economic lifeblood of Alaska’s economy and a critical link to the nation’s long-term energy security.

RDC noted in its comments that one cannot overstate the importance of oil and gas to Alaska. Oil production accounts for more than one-third of the economic activity in the state. It provides and funds thousands of private and public sector jobs, as well as critical public services.

RDC also reminded the federal agency that the very concept of Alaska’s statehood is predicated on the development of its natural resources.

More than five decades ago when Alaska statehood was debated, many politicians in Washington, D.C. doubted this northern territory could build an economy and contribute to the union. Alaskans joined together to convince Congress that development of Alaska’s vast resources could establish and sustain a strong private sector economy. Washington responded by adding a 49th star to the American flag.

“We remind federal policy makers that Alaska was allowed to join the union because of the expectation that the development of our natural resources would sustain our economy,” RDC said. “Now, more than 50 years later, our economic lifeline, TAPS, is starved for oil. It’s not because we have depleted our natural resources. In fact, there is more oil in place onshore and offshore the North Slope than what we have developed since statehood. The challenge is achieving access to the resource.”

With America still importing more than a quarter of its oil, America needs Alaska oil, RDC said. In the future, that need will grow as oil production from shale formations in the Lower 48 are projected to be in steady decline beyond 2025.

The National Petroleum Council, an advisory commission to the U.S. Department of Energy, recently warned that the U.S. should immediately begin exploring the Arctic off Alaska or risk a renewed reliance on imported oil. The NPC explained the shale boom will not last beyond the next decade and that it could take more than 15 years to bring Arctic oil into production. Such production has the potential to offset declining shale production and keep foreign imports from rising sharply.

“It is vital that the United States maintain and accelerate opportunities to develop offshore oil and gas, particularly in the resource-rich Beaufort and Chukchi Seas,” RDC said in its comments.

The Alaska Beaufort and Chukchi seas hold an estimated 23.6 billion barrels of oil and 104 trillion cubic feet of natural gas, the development of which would create 54,700 jobs and $193 billion in government revenue. Resource development in the U.S. Arctic would also significantly bolster the nation’s influence in a strategically critical area.

RDC expressed confidence that with reasonable regulation and advancing technologies, development of Arctic energy resources can proceed safely.

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