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Vol. 15, No. 35 Week of August 29, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

BLM to promote NPR-A

Dougan: Agency’s duty to encourage oil, gas development, predictability for industry

By Alan Bailey

Petroleum News

The U.S. Bureau of Land Management’s upcoming integrated activity plan and associated environmental impact statement for the National Petroleum Reserve-Alaska, or NPR-A, will improve the level of certainty for oil and gas leasing in the reserve, and the planning process will provide a transparent forum for addressing environmental issues associated with industrial development, Julia Dougan, BLM Alaska acting state director, told Petroleum News Aug. 20. BLM recently announced its intention to develop a new plan for the whole of NPR-A.

Under the terms of the 1970’s federal legislation establishing NPR-A as a BLM-managed petroleum reserve, BLM has to promote development of the reserve’s petroleum resources while also ensuring adequate protection for the region’s environment, Dougan said.

“The Secretary (of the Interior) and the BLM director recognize that NPR-A is really a huge piece of the future of traditional energy development in the United States. I think they want to get that certainty out there,” Dougan said. “… Let’s together determine where we’re going to develop oil and gas, and where we’re not in this reserve, so that industry can move forward with its plans.”

Addressing past inconsistencies

In the past, BLM has split NPR-A into three distinct planning areas, covering the northeastern, northwestern and southern parts of the reserve. But with no plan having been completed for the southern sector, with plans being developed at different times for the two northerly areas, and with environmental issues constantly changing, there have been inconsistent rules and varying environmental protections applied to different parts of the reserve.

A new plan for the whole of NPR-A will bring much-needed consistency, especially given the emergence of much new information about environmental issues such as climate change, the status of the regional caribou herd, the regional hydrology and the specification of polar bear critical habitat around the coast, Dougan said.

“It’s really to ensure that we have consistent decisions and protections across the entire reserve, because we don’t right now,” she said. “… I think another big part is to give industry certainty about what areas will or will not be available.”

Focused lease sales

And to improve the efficiency of the lease sale process, BLM anticipates that in future it will schedule smaller, more focused NPR-A lease sales than in the past. Rather than offering land tracts across broad swathes of the reserve, the agency wants to work with industry to ask for expressions of interest in specific areas in order to focus lease sales on acreage where there is industry demand, Dougan said.

“It takes a lot of work to do a lease sale and we’d like to hear what people have to say,” she said.

But, if some acreage is not offered in one lease sale, that does not signal that BLM has decided to withdraw that acreage from future leasing. For example, although the last NPR-A lease sale only included tracts in the northeast of the reserve, BLM is aware of industry interest in the northwest.

“Because of some of the inconsistencies in planning we didn’t feel comfortable offering those northwest tracts,” Dougan said. “We thought we would put industry in a situation where they might bid on things that might be problematic later. We don’t want that to happen.”

And in the southern part of NPR-A, an area thought to be more prospective for natural gas than for oil, the prospect of a major North Slope gas line or a “bullet” gas line to Southcentral Alaska may trigger new exploration interest, thus elevating the importance of including this area in the activity planning scope.

However, although BLM will likely review any public comments relating to coal or metal mining, federal statutes prohibit BLM from issuing coal leases in the reserve or opening the reserve for mining claims, Dougan said. So the agency will exclude mining activities from the new plan — opening NPR-A for mining would require Congressional action, she said.

But oil and gas development, in itself, presents some challenging issues in finding the appropriate balance between industrial activity and environmental protection.

The issue of Teshekpuk Lake

Possibly the single most sensitive issue is the question of potential development in the area around Teshekpuk Lake in northeast NPR-A. This particular area abounds with birdlife at certain times of the year but also sits right over a geologic structure known as the Barrow Arch that offers some of the highest oil discovery potential in the reserve — most of the existing North Slope oil fields, including giant Prudhoe Bay, are on the Barrow Arch.

Although the lake itself will likely remain off limits for oil and gas drilling, for example, there is scope for a public discussion of options for the land around the lake, and whether there are reasonable mitigation measures that might enable both energy exploration and environmental protection, Dougan said.

However, there are no easy answers — allowing exploration during the winter when the birds are not there, for example, would still leave the question of how to permit the subsequent construction of long-term oil facilities that would need to be compatible with the huge spring population of breeding waterfowl.

BLM wants to hear from industry its views on what forms of environmental mitigation might be both technically and economically feasible within NPR-A. For example, modern techniques such as directional drilling with horizontal departures of several miles might provide a means of working around the need to limit the construction of surface facilities in some parts of the reserve, Dougan said.

Extending infrastructure into NPR-A

And, although BLM does not have a direct role in the current controversy over the U.S. Army Corps of Engineers’ refusal to allow ConocoPhillips to construct a bridge across the Nigliq Channel of the Colville River, for oil development in the extreme northeast of NPR-A, the agency hopes that some form of agreement can be reached on how the North Slope oil infrastructure could be extended west into the reserve.

“We are very concerned because development in NPR-A is less likely to take place without some certainty for that access,” Dougan said. “… If that type of access will not be allowed, then industry has to look at things differently. (Then) it’s that cost difference. It’s the investment difference.”

Cumulative impacts, ‘edge matching

But when it comes to developing the EIS for the new NPR-A plan, BLM will take into account the cumulative impacts of oil and gas activities across the northern Alaska region. For example, offshore oil and gas development could drive a need for new onshore oil and gas infrastructure.

“I think that’s owed to the public, to try to see it in the most comprehensive way that we can,” Dougan said.

And Interior Secretary Ken Salazar has emphasized the importance of coordinating the NPR-A plan with other plans from other jurisdictions around the perimeter of the reserve, Dougan said.

“He really expects us to look beyond our own jurisdiction, do what he calls ‘edge matching,’” she said.

Appeals and litigation over government agency decisions have become de rigueur in response to oil and gas development plans in recent years. Dougan said that she supports the public’s right to challenge government decisions through the courts. However, she hopes that, by engaging the public during the scoping and development of the new NPR-A plan, BLM will be able to address public concerns up front: The idea is to facilitate discussion and take account of the issues that people raise.

“That’s always the goal,” Dougan said. “People will have felt that they’re heard and we’ve considered their input.”

Then, by following the requirements of the National Environmental Policy Act in preparing a thorough environmental impact statement, BLM anticipates a result that could be defended in court, if necessary.

“What makes something legally defensible, generally, is did you follow your required process, and we intend to do that,” Dougan said.

Challenging timeframe of two years

But BLM wants to develop the new plan within two years, a timeframe likely to prove challenging given the complex issues surrounding potential oil and gas development in NPR-A — preparing a plan for all 23 million acres of the reserve will prove to be one of the biggest planning exercises that BLM has ever undertaken.

“It is a large challenge, especially in an area that is of national, if not international, interest,” Dougan said.

Success will depend on collaboration with the public and with other state and federal agencies, she said. The North Slope Borough; the U.S. Fish and Wildlife Service; the Bureau of Ocean Energy Management, Regulation and Enforcement; and the State of Alaska are all signing up as cooperating government agencies, to participate in the plan development. And the North Slope Borough has been organizing meetings in North Slope communities as part of the scoping phase of the project.

BLM hopes to complete this scoping phase by Oct. 5, with the agency using the scoping comments to formulate plan alternatives in time for the publication of a draft plan in January 2012 for public review.

The agency has currently planned public scoping meetings in Anaktuvuk Pass, Anchorage, Atqasuk, Barrow, Nuiqsut and Wainwright, with further meetings possible, depending on the level of community interest. The public can also submit comments through the BLM Alaska website at www.blm.gov/ak.



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