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Alaska solicits Bristol Bay exploration license proposals
Kristen Nelson, Petroleum News editor-in-chief
The Alaska Department of Natural Resources began soliciting exploration license proposals July 25 for an area of approximately 3 million acres of state-owned and state-selected or top filed lands in the Bristol Bay region, north of the village of Naknek and east of Dillingham.
The area includes Bristol Bay Native Corp. land and federal acreage, and the state said that while an exploration license would be awarded only for state-owned lands, state-selected and top filed acreage may be added to the license during its primary term once the state has gained title.
Geologically, the state said, this area is considered part of the onshore extension of the Bristol Bay basin.
“Up to 6,500 feet of Tertiary strata may be present, some of which may possess very good reservoir qualities,” the state said, and characterized the area as having a moderate to high likelihood of hydrocarbons, “largely in the form of both conventional and unconventional gas accumulations.”
Prospective licensees must notify the state by Aug. 25 that they intend to submit proposals; proposals are due Sept. 23. Among other requirements, proposals must express a specific work commitment in dollars, be between 10,000 and 500,000 acres and be reasonably compact and contiguous. Areawide sale requires Legislature’s assistance Jim Hansen, Alaska Division of Oil and Gas lease sales manager, told Petroleum News July 23 that the governor is moving fast on Bristol Bay oil and gas, and the solicitation for exploration license proposals is just the division’s first step in the process.
The next step, an areawide oil and gas lease sale in the southern portion of the basin along the Alaska Peninsula, is targeted for 2005. But the Legislature will have to change state statute to make that date possible, Hansen said. Right now, under state law, oil and gas lease sales cannot be held unless included in leasing programs submitted to the Legislature during the two calendar years preceding the year in which the sale is held, and the five-year proposed oil and gas leasing program can only be presented to the Legislature “biennially… between the first and 15th day of the first regular session…”
The division has starting work on the process, Hansen said, but a sale can’t be added to the state schedule until the Legislature acts. Until a change is made in law, the earliest a Bristol Bay sale could be added to the schedule would be in January of 2005, and then he couldn’t be held for two years. Work beginning for best interest findings The division has begun work on best interest findings, a necessary step for both an exploration license and an areawide lease sale. Hansen said the division will request agency information July 29, which starts the information gathering process. He said the division has this on a fast track and hopes to have both best interest findings and a consistency determination with the Alaska Coastal Management Program in July 2004. There will be two findings, he said, one for the exploration license and one for the areawide sale, but a lot of the issues will be the same, and the division will be working on both at the same time.
If the division receives no letters of intent to submit an exploration license by the Aug. 25 deadline, then the focus will be on the areawide sale.
Adding an areawide sale isn’t the only thing that will require assistance from the Legislature, Hansen said. For state offshore acreage, and for waterways north of 57 degrees, 30 minutes north latitude and east of 159 degrees, 49 minutes west latitude within the Bristol Bay drainage, statute requires the Legislature to find “that entry will not constitute danger to the fishery” before any surface area entry is permitted for oil or gas leasing or for an exploration license.
Hansen said that requiring setbacks from streams is normal, and said the division would be working closely with the Office of Habitat Management and Permitting Overview and with the Department of Fish and Game.
The division is also working on a white paper highlighting Bristol Bay geology for the governor.
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