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Vol. 24, No.45 Week of November 10, 2019
Providing coverage of Alaska and northern Canada's oil and gas industry

BLM aims to get it right; carefully prepares for ANWR 1002 lease sale

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Kay Cashman

Petroleum Nws

The oil and gas lease sale planned by the U.S. Department of the Interior for the petroleum rich ANWR 1002 area will likely be held next year versus by the end of December.

“We are still working through the process and want to get this right,” Derrick Henry, public affairs specialist at Interior’s Bureau of Land Management told Petroleum News Nov. 4.

“We are working under the timeframe established in the Tax Cuts and Jobs Act of 2017, which directs the Secretary of the Interior through the BLM to establish the lease sales. The Act requires a lease sale within 4 years of enactment, which is 2021,” he said.

The Act also calls for at least two areawide lease sales in the 1002 area by December 2024.

In July, Joe Balash, then-Interior assistant secretary, gave December as a rough estimate for the first lease sale.

“The preliminary final EIS (environmental impact statement) has gone to cooperators for review. … I will conduct government to government meetings in Arctic Village on the 8th and Kaktovik on the 9th (of August). … We should be able to publish the final EIS in early September,” Balash said.

The process that was supposed to follow was BLM issuing a record of decision, the step that finalizes the EIS.

But no record of decision followed because of the care the agency is taking to make sure it does everything correctly, undoubtedly a reaction to promised challenges from anti-development groups.

Call for nominations, comments

Once the record of decision is published, BLM will issue a call for nominations and comments, which gives industry, conservation groups, Native communities and other stakeholders the opportunity to provide input as to which tracts should be included or excluded from the lease sale.

This process does not have a mandated timeline, but BLM normally allows 30 days.

That accomplished, the agency will be able to schedule the first lease sale in a proposed notice of sale that will include specifics of the sale, such as royalty rates for certain tracts, rental rates and minimum bid amounts, lease sizes, and projected oil and gas potential and distance from existing infrastructure for various areas.

Normally tracts having the highest potential and being closest to infrastructure are the smallest. Once the notice of sale is issued a 30-day clock starts ticking on the final comment period.

Most of 1.57 million acres

In the preliminary final EIS that BLM published in September, it had selected option B as a preferred alternative, which opens almost all the 1.57 million-acre ANWR 1002 area to oil and gas leasing.

The 1002 portion of the 19 million-acre Arctic National Wildlife Refuge is a narrow strip of coastline that had been set aside by Congress for potential development because of its hydrocarbon rich geology.

“This alternative offers the opportunity to lease the entire program area while providing protections for the many important resources and uses identified through scoping and public comments within the program area,” Chad Padgett, Alaska state director for BLM, said in an introductory message in September’s preliminary final EIS.

B is the least restrictive of the four alternatives analyzed by BLM and several cooperating federal and state agencies. Still, it requires 359,400 acres to be designated for no surface occupancy restrictions. Option A, the no-action alternative was rejected because it would not have allowed any leasing and so it was out of compliance with the 2017 federal Tax Cuts and Jobs Act that mandated oil and gas leasing in the ANWR 1002 area.

- KAY CASHMAN



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