|
Alaskans head to D.C. for oil hearing House subcommittee uses North Slope access and infrastructure issues to debate domestic energy policies; Young gets fiery Eric Lidji For Petroleum News
As the largest private infrastructure project in American history, the trans-Alaska oil pipeline makes for a convenient symbol whenever national policymakers discuss domestic energy issues. Congress used the aging pipeline last summer to symbolize the possibility that a major oil spill, like the one then occurring in the Gulf of Mexico, could happen in other parts of the country. This summer, with gasoline prices on the rise, Congress is using the 800-mile pipeline to symbolize flagging domestic production.
The Energy and Minerals Subcommittee of the House Committee on Natural Resources brought Alaska State, Native and industry representatives to Washington, D.C., on June 2 to talk about the obstacles preventing increased production from Alaska. While the hearing raised few issues not already hotly debated, it did feature some hot debates, as Republicans claimed that the Obama Administration is holding up development and Democrats claimed that industry couldn’t yet be counted on to develop the Arctic safely.
“Utilizing these resources will help lessen our foreign dependence, create jobs and keep revenue here in the U.S.,” Chairman Doug Lamborn, a Colorado Republican, said in his opening statements. “But accessing these resources is also the main source of frustration.” He pointed in particular to the National Petroleum Reserve-Alaska, where development is on hold while ConocoPhillips seeks federal permits for infrastructure.
But Ranking Member Rush Holt, a New Jersey Democrat, said “We also must look at the bigger picture” before pushing ahead to increase domestic production in remote regions, including global warming, aging infrastructure, offshore emergency response and the possibility that emerging shale oil plays in the Lower 48 might undermine Alaska oil.
“You could drill from Asbury Park to the Bering Strait and this country will not, for the foreseeable future, ever again produce half as much oil as we use,” Holt said.
“Wrong-minded” policies With the U.S. Geologic Survey estimating that Alaska accounts for more than 30 percent of the technically recoverable oil and gas reserves remaining in the country, Alaska is still a world-class hydrocarbon basin, Alaska Department of Natural Resources Commission Dan Sullivan said. The state wants to increase production and protect the environment, but “we are missing a critical partner in the development of Alaska’s massive hydrocarbon resources and that partner is the federal government,” he added.
Sullivan asked Congress to promote a new state goal to increase throughput on the pipeline to 1 million barrels per day by 2020, to reform the federal permitting process and to increase its oversight of the federal agencies that manage resource development, arguing that “some of these decisions are made with little regard to national policy set by Congress and federal law and I think it’s important to keep close vigilance on that.”
Sullivan showed the committee an image familiar in Alaska, a decades-long chart showing a declining curve. While it measured oil production from the North Slope, it symbolized the fate of North Slope communities, according to Richard Glenn, executive vice president of lands and natural resources for Arctic Slope Regional Corp.
Glenn recalled the “hard-scrabble” days before oil production, when most North Slope communities didn’t have indoor plumbing, electric power or elementary schools, and said that said he didn’t believe those communities could survive without Arctic development.
“So that curve means something different to me than it does to a lot of you,” he said.
Major changes announced The hearing came a few weeks after President Barack Obama announced major changes to the domestic oil policy, including annual lease sales in NPR-A, the end of moratoria in offshore basins and a coordination team to speed up Alaska drilling permits.
But because of “wrong-minded” policies in Washington, prospective areas in Arctic Alaska, like NPR-A and the outer continental shelf, remain undeveloped, Glenn said. “While the rest of the world was fixed to the events of the Gulf of Mexico, we looked at the safety measures of the explorers in Alaska’s OCS and we were favorably impressed,” he said.
That view, though, does not take into account the various lawsuits from Native groups on the North Slope that have held up development in both the Beaufort and Chukchi Seas.
In order to open up northern Alaska, policymakers must streamline the regulatory process and give regulators the resources they need, according to David Lawrence, executive vice president of exploration for Shell, the frontrunner in Alaska offshore exploration.
Despite spending nearly $4 billion on federal leases and an exploration plan in recent years, Lawrence said Shell remains unable to drill in the Arctic OCS because of federal permitting delays. “This is highly unusual,” he said. “When the federal government holds a sale, it is saying OCS exploration and development is desired. If a company presents a plan and it meets all regulatory requirements, that plan should be permitted.”
“This is not your time” Holt asked the presenters a series of pointed questions based on the findings of the National Commission on the Deepwater Horizon Oil Spill and Offshore Drilling, demanding only a yes or no answer: Did Lawrence disagree with the conclusion that our understanding of the Arctic remained “inadequate?” Did Sullivan believe that offshore drilling should continue despite statistics showing increased levels of injury and death?
Rep. Don Young wasn’t having it.
“It’s hard for a person to sit by and listen to someone talk about something they don’t know about,” Young, a member of the subcommittee, told Holt. When Holt interjected a comment during questioning, Young said, “This is not your time. Remember that.”
By assigning blame for delays, Congress could overlook its ability to give agencies the resources they need to do work quickly, according to Rep. John Sarbanes, a Democrat from Maryland. “That’s a fair case to make, because sometimes the bureaucracy can be an impediment, but that doesn’t speak to the good intentions of the agencies.”
But “good intentions” can quickly become a “utopian world” if left unchecked, according to Rep. Jeff Landry, a Louisiana Republican. “Wouldn’t you say that you know how to protect your home better than me?” he asked Glenn and Sullivan, who both agreed.
| 