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February 2006

Vol. 11, No. 7 Week of February 12, 2006

MMS plans to study leasing North Aleutian basin’s OCS

2007-12 five-year plan includes proposed sales in Chukchi Sea, Beaufort Sea

Kristen Nelson

Petroleum News

Responding to a request from Gov. Frank Murkowski the Department of the Interior’s Minerals Management Service has included a study of the North Aleutian basin in its draft 2007-2012 outer continental shelf leasing plan.

The North Aleutian basin planning area is currently withdrawn from leasing by presidential order.

The draft plan includes Alaska sales in the Beaufort and Chukchi seas and Cook Inlet.

MMS said Feb. 8 that Gov. Murkowski requested that the North Aleutian area be included so that the public can provide information which would allow the state and the Interior secretary “to decide whether or not to ask the President to lift the current withdrawal and allow a sale during the 2007-2012 program.” MMS said it included the North Aleutian basin planning area in the 2007-12 draft program in order to have the opportunity to gather further information.

MMS Director Johnnie Burton said the agency would be looking for public comment in further North Aleutian basin studies to allow the agency “to understand better the environmental impact that drilling would have in this area. There would be a draft EIS,” she said, and that would “teach us a little bit more about the area.” She said there would be more comments from people who live in the area and “all of the pieces of information are going to help us formulate a better understanding of this area.” Burton said she knows that the governor of Alaska “is very much interested in learning more and so are the local governments.”

She noted that Congress lifted its moratorium three years ago, although the area is still under presidential withdrawal.

If the information gathered on the area leads MMS, and the governor, “to say that maybe this is a good area to lease, then the president will have to take a look at it and decide if he wants to modify his withdrawal,” Burton said.

U.S. Sen. Lisa Murkowski said in a Feb. 8 statement that the decision by MMS will allow additional time to study whether leasing can safely be done in the North Aleutian area in the future; she called the MMS decision “the continuation of a very thoughtful and reasonable process.”

Cook Inlet a special interest area

While multiple sales are proposed for the Beaufort Sea (2009 and 2011) and Chukchi Sea (2007, 2010 and 2012), the Cook Inlet planning area is included on the schedule as a special interest sale area. Before MMS proceeds with 2009 and 2011 sales, it will issue a request for nominations and comments and will move forward with the sales only after consideration of the comments. If comments do not support a sale, the sale will be postponed and a request for nominations and comments issued in the following year, a process which would proceed throughout the five-year schedule until a sale is held or the schedule expires.

There were no bids in the most recent MMS Cook Inlet sale in 2004. MMS said the governor and the Kenai Peninsula Borough supported the current approach, while Cook Inlet Keeper and a consortium of 28 environmental groups believe further sales should not occur due to lack of industry interest. Three oil and gas companies expressed interest in the area.

The 2007 Chukchi Sea is continued from the previous five-year schedule, MMS said, due to the time needed to complete the necessary pre-lease steps and environmental documentation.

While the governor supported Chukchi Sea leasing, he told MMS it should only occur with adequate local stakeholder consultation, planning and environmental analysis. Nine companies expressed interest in the area; the same number expressed interest in the Beaufort Sea OCS area. The governor supports inclusion of the Beaufort Sea and asks companies to work with local communities.

The North Slope Borough believes oil and gas leasing should be focused onshore, and questions why both the Beaufort and Chukchi Seas are not off limits to drilling like so much of the Lower 48. The Northwest Arctic Borough and the Native Village of Point Hope also oppose leasing, along with environmental groups.

North Aleutian basin

The Aleutians East and Lake and Peninsula boroughs, the City of Wasilla and the Becharof Corp. supported inclusion of the North Aleutian planning area. The Bristol Bay Borough and Choggiung Ltd. opposed inclusion. The U.S. Fish and Wildlife Service recommended retention of the moratoria and 41 environmental organizations opposed lifting the presidential withdrawal, MMS said. Of some 40 commenters recommending expanded access to the Alaska OCS, 18 specifically mentioned the area.

MMS said 11 oil and gas companies expressed interest in the North Aleutian basin, making it the second most mentioned area nationwide after the Eastern Gulf of Mexico.

The area is under presidential withdrawal through 2012, and was under annual congressional restrictions from fiscal year 1990 through fiscal year 2003. MMS said there has been no exploratory activity in the area and there are no existing leases.

Two North Aleutian basin sales, in 2010 and 2012, are on a potential lease sale schedule for areas subject to restrictions.






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