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Vol. 17, No. 27 Week of July 01, 2012
Providing coverage of Alaska and northern Canada's oil and gas industry

OCS sales in 2016-2017

Interior delays sales one year to accommodate studies; removes some acreage

Eric Lidji

For Petroleum News

The U.S. Department of the Interior is delaying two Arctic outer continental shelf lease sales by one year to accommodate additional environmental evaluations of the region.

When the department unveils its final proposed Five Year Outer Continental Shelf Oil and Gas Leasing Program it will include a sale in the Chukchi Sea in 2016 and a sale in the Beaufort Sea in 2017, a year later than the dates originally proposed last November, Secretary Ken Salazar announced June 26 while at a conference in Trondheim, Norway.

Additionally, the leasing program will exclude an area north of Barrow — “one that has not historically attracted industry interest and that has very high subsistence value to Native Alaskan communities,” Salazar said — and will maintain a 25-mile buffer along the coast of the Chukchi considered to be an important region for Native subsistence use.

While details remained scarce at the press conference, Bureau of Ocean Energy Management Director Tommy Beaudreau suggested the Hanna Shoal region, some 100 miles off the coast of Wainwright, would not be included in the upcoming lease sale.

The BOEM kicked off a five-year $5.6 million study of the Hanna Shoal last October, looking at both a core area and the broader region to understand its importance to the Chukchi ecosystem. “We defined that very clearly as an area of ongoing scientific study, an area of concern for us that has to be closely analyzed and scrutinized before we develop the configuration of any potential lease sale in the Chukchi,” Beaudreau said.

The delay is an attempt to “tailor” lease sales to the areas with the fewest conflicts.

“We will have a real focus on the science effort to get input from all the relevant parties to help in that exercise. We want to make sure that we get it right and so we are not going to rush the process,” Interior Department Deputy Secretary David J. Hayes said.

Salazar described the efforts as part of a “targeted leasing” approach. “Our goal is to maximize the availability of oil and gas resources in those areas that we are making available for leasing, while minimizing potential conflicts with environmentally sensitive areas and the Native Alaskan communities that rely on the ocean for subsistence use,” Salazar said. “To achieve this, we are taking a different approach — a more strategic approach — than the past. Specifically, we intend to gather information from industry, Native Alaskan communities, the scientific community, and the public to identify specific high-resource, low-conflict areas that are best suited for exploration and development.”

The Interior Department released the full plan after Petroleum News went to print.

Delegation pleased, wary

While the Alaska Congressional Delegation praised the news that the federal government would soon lock down lease sale dates, they worried about the particulars of the news.

“With the future of the leasing program squared away, I will be working on ensuring we have all the tools to transition from successful exploration to responsible production,” Sen. Mark Begich said in a statement. “That includes good science and monitoring programs, coordinated agency action, revenue sharing for the state and local communities, job training programs for Alaskans, and a serious look at how we safely bring oil ashore via pipelines through the National Petroleum Reserve-Alaska.”

Sen. Lisa Murkowski called the announcement “welcome,” but noted “the failure to hold annual lease sales in Alaska’s waters falls short of expectations. I’m also concerned by the administration’s plans to place undisclosed amounts of acreage off limits and impose additional layers of regulation on the Arctic — above and beyond rules already in place.”



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