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February 05, 2010 --- Vol. 16, No. 12February 2010

Corps denies ConocoPhillips CD-5 permit; company to appeal

ConocoPhillips Alaska plans to appeal a decision, announced today by the U.S. Army Corps of Engineers, denying the company’s application for drill pad CD-5 west of the Colville River Delta in the National Petroleum Reserve-Alaska.

The corps said the area west of the main Alpine field should be developed with directional drilling.

“We are disappointed with the Corps of Engineers decision,” ConocoPhillips Alaska spokeswoman Natalie Lowman told Petroleum News.

“We have diligently tried to permit this project for almost five years and we intend to exercise our right to appeal the denial,” she said.

The project includes a new drilling pad, CD-5, one major and two smaller bridge crossings and a road connection to the main Alpine field facilities.

The corps said in a statement that it “has determined that there are other practicable alternatives that would have less adverse impact on the aquatic ecosystem and still meet the overall project purpose.”

“Other alternatives with less environmental impacts could include horizontal directional drilling but would require new permit applications,” the corps said.

Alaska’s senators both issued statements.

“I am alarmed and amazed by this short-sighted decision, which totally ignores the economics of future energy development in all of northern Alaska,” said U.S. Sen. Lisa Murkowski, R-Alaska.

“Directional drilling can work in ANWR because the oil is concentrated in the northwest corner. That is an entirely different situation than the vast and widely distributed deposits in the NPRA, however, and the administration knows it.”

“If allowed to stand, this myopic decision will kill all future oil development from the nation’s largest designated petroleum reserve and probably stop all future natural gas production from the area as well,” Murkowski said. “The loss of energy potential is staggering for the nation and it would happen for absolutely no environmentally sound reason.”

U.S. Sen. Mark Begich, D-Alaska, said, “Today’s announcement by the Army Corps that Conoco-Phillips’ permit is not approved is obviously disappointing to me and the many Alaskans who are eager to develop the oil and gas potential in the NPR-A. Conoco-Phillips had already announced they wouldn’t be able to proceed with development next season,”

“After the parties worked together for years to get agreement on NPRA development, I am deeply disappointed the first project just got knocked off track,” he said.

Begich said the decision shows “that Alaska needs a comprehensive plan to allow development in the NPR-A to happen expeditiously and responsibly.”

See story in Feb. 14 issue, available online at noon, Friday, Feb. 12 at www.PetroleumNews.com

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