HOME PAGE SUBSCRIPTIONS, Print Editions, Newsletter PRODUCTS READ THE PETROLEUM NEWS ARCHIVE! ADVERTISING INFORMATION EVENTS

Providing coverage of Alaska and northern Canada's oil and gas industry
December 2017

Vol. 22, No. 53 Week of December 31, 2017

President signs tax bill opening ANWR

Statute requires two oil and gas lease sales within 10 years in the 1002 area of the refuge coastal plain; limits surface impact

Alan Bailey

Petroleum News

On Dec. 22 President Trump signed into law House Resolution 1, a major overhaul of the U.S. tax system, which also includes provisions opening the coastal plain of the Arctic National Wildlife Refuge for oil and gas exploration and development. The bill marks the end of a decades long effort to have Congress open the ANWR coastal plain to oil and gas, under the terms of the Alaska National Interest Lands Conservation Act. Section 1002 of this act allows oil and gas activities in a specified area of the coastal plain, if Congress passes a statute approving the opening. HR 1 meets that statutory requirement.

Highly prospective

The so-called 1002 area is thought to be highly prospective for oil and gas. And, being on the coastal plain of the North Slope, not too distant from existing infrastructure, development could presumably be economically viable. The statute that has now been passed limits surface development to just 2,000 acres, the assumption being that modern directional drilling could access a much larger area of the subsurface. However, with seismic data for the region being limited to old, relatively sparse, 2-D seismic, new seismic surveying would presumably be needed to identify potential drilling targets, especially in the more western part of the region where the subsurface rock strata are relatively undeformed.

The statute requires the secretary of the U.S. Department of the Interior to hold at least two areawide lease sales within 10 years, with the first sale taking place within four years and the second within seven years. Each lease sale must encompass at least 400,000 acres, including areas with the highest potential for hydrocarbon discoveries.

Federal management of the oil and gas program will be subject to the same statutes and regulations as those that apply to the National Petroleum Reserve-Alaska. The royalty rate for oil production from ANWR will be 16.67 percent, with 50 percent of the royalties going to Alaska and the remainder to the federal government. The statute also requires the secretary of the Interior to issue any necessary rights of way for access across the ANWR coastal plain for oil and gas related activities.

Alaska delegation delighted

U.S. Sen. Lisa Murkowski, R-Alaska, who wrote the ANWR language in HR 1, appeared behind the president on the steps of the White House following the signing of the bill. Murkowski had previously commented that the new statute was “an opportunity for Alaskans that will bring many bright days into the future.”

Other members of the Alaska congressional delegation, all of whom have been staunch supporters of the legislation, also expressed their delight at the bill’s passage.

“For decades, Alaskans have fought for the right and opportunity –- against an unwilling federal government - to allow Alaska to develop the 1002 Area of the Arctic National Wildlife Refuge so that we can strengthen our communities and build a better life for our children,” said U.S. Sen. Dan Sullivan, R-Alaska. “But for decades, we’ve been denied that right. Today that has changed. I want to thank all of the hundreds - if not thousands of Alaskans - who have spent countless hours over the years to get this done.”

“This is a historic moment for Alaskans and I am incredibly proud of the work this delegation has done over the years to open the 1002 Area of ANWR,” said Congressman Don Young, R-Alaska. “Congress specifically set aside this land to be used for responsible resource development and it was always intended to unleash America’s potential energy production.”

ASRC satisfaction

Arctic Slope Regional Corp., the Native regional corporation for the North Slope, expressed its satisfaction with the passage of the legislation.

“This is a very important milestone for ASRC as well as our region”, said Rex A. Rock Sr., ASRC president and CEO. “Unlocking the energy potential of a small portion of ANWR’s coastal plain means economic growth for Kaktovik, and economic revitalization for our North Slope communities as well as the rest of the state.”

However, some from the Alaska Native communities have expressed concern at the potential impact of oil and gas activities on the ANWR coastal plain. In particular, the Gwich’in people of the Alaska Interior worry about the potential impact on the Porcupine caribou herd, a primary subsistence resource for Interior communities.

Environmentalist opposition

And protecting ANWR from industrial activity has become a prime objective of environmental organizations, which argue that oil and gas development poses an unacceptable risk to the region’s wildlife and fragile ecosystem.

“Today truly is a dark day for wildlife conservation, and it is a deep betrayal of the will of the American people.” said Jamie Rappaport Clark, president and CEO of Defenders of Wildlife, following final passage of the bill. “But even following this irresponsible vote, the fight to save the Arctic is not over. Defenders of Wildlife and our supporters are committed to saving this irreplaceable wilderness.”






Petroleum News - Phone: 1-907 522-9469 - Fax: 1-907 522-9583
[email protected] --- http://www.petroleumnews.com ---
S U B S C R I B E

Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA)©2013 All rights reserved. The content of this article and web site may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law subject to criminal and civil penalties.