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September 2007

Vol. 12, No. 39 Week of September 30, 2007

BLM on aggressive schedule for NE NPR-A

Supplemental integrated activity plan/EIS to be final next summer; lease sale could occur in late summer or early fall 2008

Kristen Nelson

Petroleum News

The Bureau of Land Management has “been on a very aggressive timeline” for the National Petroleum Reserve-Alaska northeast planning area, BLM Alaska Associate State Director Julia Dougan told the Resource Development Council Sept. 20.

Dougan said BLM plans to finalize the supplemental integrated activity plan and environmental impact statement for northeast NPR-A “early in the summer of 2008. And we could hold a lease sale in the late summer or early fall of 2008.”

BLM completed an amendment to its northeast integrated activity plan in 2006, and planned to hold a lease sale based on the amended plan which included acreage north of Teshekpuk Lake, but the federal district court in Alaska said in September 2006 that the EIS “had not adequately addressed cumulative impacts.”

BLM put proposed lease sales in both the northeast and northwest planning areas on hold — although the courts had upheld the northwest plan — and “immediately began to prepare a supplemental plan and EIS” for the northeast planning area, Dougan said. The draft was released in August.

The public comment period on the draft closes Oct. 23. Dougan said what BLM wants is for “the public to identify substantive issues such as gaps in our analysis, corrections to the data we’ve used or feedback on the proposed mitigation measures. We really want to know whether or not the mitigation measures we have developed make it operationally feasible to develop oil and gas resources.”

1998 plan — 4 million acres

The initial integrated activity plan for NPR-A northeast, finalized in 1998, “made 4 million acres, generally south and west of Teshekpuk Lake, available for leasing,” Dougan said. BLM held lease sales in 1999 and 2002, leasing about 1.25 million acres of which some 800,000 acres are still under lease.

The president’s national energy policy, released in 2001, called on BLM to do two things in Alaska: consider further lease sales in NPR-A and “consider leasing lands that were not leased previously in the northeast part of NPR-A,” Dougan said. BLM completed planning for northwest NPR-A in 2004 and completed an amendment to the northeast plan in 2006.

“Both of these plans made additional lands available for leasing in the petroleum reserve,” she said.

The courts upheld the northwest plan, but not the amended northeast plan, “finding that our environmental impact statement had not adequately addressed cumulative impacts.”

BLM immediately began work on a supplemental plan and EIS, released in August. “The supplemental plan addresses the issues raised by the court and updates analysis that was done in the amendment,” she said.

The issues are the same, Dougan said, and include “concern about the compatibility of oil and gas development with sensitive habitat for waterfowl and caribou and also concern about the impact of energy development on the subsistence lifestyle of the North Slope Natives.”

$30 oil replaced with $50

The alternatives proposed “are essentially the same” as in 2006, she said, although this time BLM has not indicated a preferred alternative.

Analysis, however, has been expanded to include “cumulative impact analyses of oil and gas leasing in both northeast and northwest” planning areas. Also new is analysis of North Slope gas development and the Chukchi Sea oil and gas development being undertaken by the U.S. Minerals Management Service “as well as further expanding an outlook on climate change.”

The 2006 amended plan used a $30 oil price to determine what oil and gas might be developed, but prices have been well above that level, Dougan said.

The 2007 supplement discusses oil prices and uses a number around $50 a barrel. At prices around $30 per barrels, the supplement says, some 5.6 billion barrels would be economically recoverable from the combined northeast and northwest planning areas; at $50 per barrel, however, 8 billion barrels would be economically recoverable, some 4.3 billion barrels of which are estimated to be in the northeast planning area.

“While it is possible that actual development would not be greater than that analyzed” in the amended plan at $30 per barrel, BLM said in its introduction to changes between the plans that it wanted to reduce the chance that the amount of development might be understated.

Impact assessments in the supplemental also consider the proposed listing of the polar bear as a threatened species, Dougan said.

Public health impacts are addressed as a separate topic in the supplement.

“We did that working with the North Slope Borough,” she said.

“Another thing that’s changed — the North Slope Borough is now a formal cooperating agency in the process. And that relationship really gave BLM access to some special technical expertise and we also hope that it will avoid some duplication where we have overlapping responsibilities.”

Gas line not speculative

In the 2006 amended plan, BLM did not look at the impact of commercial gas development based on a gas pipeline. “Previously we had said that was too speculative, but we’ve now included that,” she said.

The supplemental plan notes that even if a natural gas pipeline is “built to take North Slope gas to market within the next decade, gas production for sale from NPR-A may still only occur decades hence” because the known and expected natural gas in the central North Slope would be taken to market first.

Gas sales from NPR-A would most likely occur using a buried pipeline to the Prudhoe Bay terminus of a gas sale pipeline to market. That buried gas line would parallel the sales oil pipeline.

BLM said in the supplemental that while there is no guarantee that current state and federal efforts “to encourage commercial gas development on the North Slope will bring gas to market,” important decisions on gas development will be made during preparation of the supplement or shortly thereafter, so the supplement does analyze “impacts of commercial gas development both within the planning area as a result of decisions in this plan and the cumulative impacts associated with gas development.”






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