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Federal oil reserve holds potential to play key role in long-term policy

Posted: Monday, August 18, 2003

President Bush's national energy policy sets forth a long-term strategy aimed at ensuring a reliable supply of affordable energy for America's families, businesses and industries. The policy, as the president has put it, "plans for the future but meets the needs of today," and reflects his view that America can develop its natural resources while protecting the environment.

Alaskans are well aware of how important oil production is to the nation's energy supply, as well as to the state's budget. Just 15 years ago, in 1988, oil flowing through the trans-Alaska pipeline peaked at 2.1 million barrels a day. In Alaska, oil reserves have diminished and today's

production has fallen by more than 50 percent. In response, oil companies have adopted cost-saving strategies, including employee layoffs, work reassignments and pump station closings.

But there is a bright spot on the northern horizon. The 23-million-acre National Petroleum Reserve-Alaska (NPR-A), managed by the Bureau of Land Management, has proven potential for more oil reservoirs.

In recent years, oil companies have expressed a renewed interest in this area due to improved technology and higher oil prices. The BLM held lease sales for the northeast portion of the reserve in 1999 and 2002, after completing a two-year environmental planning process. These sales generated more than $167 million in bonus bids for 193 tracts, and lease payments continue to generate another $5.8 million annually. The federal government shares this revenue with the state of Alaska on a 50-50 basis. The state, in turn, uses the money to aid local communities affected by the oil development.

U.S. Geological Survey and BLM studies indicate the NPR-A could contain as much as nine billion barrels of technically recoverable oil. Unlike Prudhoe Bay, this oil is not in one "elephant-size" field, but rather in several small satellite fields. To date, industry has drilled 14 exploratory wells and ConocoPhillips has announced commercial discoveries of oil in small satellite fields adjacent to the state's Alpine oil field.

The BLM is working with industry, the North Slope Borough and North Slope residents to ensure exploration efforts are conducted in ways that minimize disruption to subsistence activities and the environment. State and federal governments require frozen ground and snow cover before winter oil activities begin. The recent trend toward warmer winter temperatures has shortened the exploration season to less than 100 days. This doesn't allow time to construct long ice roads as oil crews venture west of the Colville

River, farther from existing infrastructure.

Oil companies are developing techniques to cope with a shorter season. During the winter of 2001-2002, one company cached a drill rig and supplies on an insulated ice pad custom-designed to remain frozen in summer. This kept equipment and supplies closer to their work area and gave them a jumpstart on drilling operations the following winter. It also reduced the miles of ice roads needed to supply their operations.

Last winter the federal government, in cooperation with industry, funded an experimental gas hydrate drilling project using a new arctic drilling platform. The design came from off-shore drilling this platform sits above the tundra on support posts, reducing the need for time- and water-consuming construction of ice pads.

The BLM believes the federal government can help industry find new ways to obtain oil at a reasonable cost. We are examining existing federal rules to see if they reflect the realities of arctic oil development and changing them where necessary.

All leases in the NPR-A must be consistent with overall planning decisions. The BLM is working on several land use plans for the NPR-A this year. We expect to publish a final plan for leasing in an 8.8-million-acre area in the northwest part of the reserve. We will publish a draft plan for 890,000 acres near the Colville River delta that will analyze the effects of developing several small satellite fields that would feed into the state's Alpine recovery facility.

Continual advancements in oil development technology and the acquisition of research data have created the need to update existing land use plans. With public input, we will modify the 1998 plan for the northeast part of the reserve, taking into account technology advances made in the last five years and more closely matching the land management standards being proposed in the northwest plan. We also will examine whether acreage in the northeast portion currently closed to exploration can be opened, and under what conditions.

BLM surface protection specialists must continually monitor industry activities. There are world-class biological values in portions of the

NPR-A. Each summer thousands of waterfowl return to Teshekpuk Lake to nest and molt in a shallow-water habitat that protects them from predators. Shorebirds migrate vast distances to feast on the lake's insects each summer. The Teshekpuk Caribou Herd stays in the vicinity of the lake year-round.

The BLM, Alaska Fish and Game, and the North Slope Borough's Wildlife Department conduct studies on a host of subjects, including air quality, subsistence harvest, caribou movement, caribou interactions with oil and gas infrastructure, the effects of ice roads on vegetation, and the effects of seismic activities on over-wintering fish. Research results are shared.

The BLM believes that what we learn in the NPR-A can be applied elsewhere on the North Slope, and conversely, much of what is learned elsewhere on the North Slope can be applied to the NPR-A. Toward that end, we are cooperating with state and federal agencies and the North Slope Borough to develop a North Slope Science Strategy that will help avoid duplication of research and help allocate funds for research, inventories and monitoring in those areas that will do the most good.

Continued public interest and active involvement in the BLM's planning processes for the NPR-A will help ensure that this federal oil reserve contributes significantly to America's energy needs while minimizing effects on the people, plants and animals of that area.

Kathleen Clarke became director for the Bureau of Land Management in August 2001. Her agency manages 261 million acres of public land, most of it in 12 western states, including Alaska. The NPR-A is the largest contiguous parcel of land managed by the BLM in the United States, and the oil and gas program is just one of the many resource programs administered

under the BLM's multiple-use mission. Clarke revisited Alaska this month.



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