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Peregrine drilling exception from Biden admin seems likely
Kay Cashman Petroleum News
It might be wishful thinking, but as of the evening of Jan. 27 an exception to the Biden administration’s 60-day freeze on drilling permits looks possible for 88 Energy’s first of two Peregrine Project oil exploration wells. If that happens the company said it plans to immediately restart field operations, which were halted Jan. 21.
Scott de la Vega, Biden’s acting secretary of the Interior, effectively shut down 88 Energy subsidiary Emerald House’s winter exploration drilling program in the National Petroleum Reserve-Alaska on the afternoon of Jan. 21 when he emailed Order 3395 to the project operator. The order had been signed the day before.
De la Vega’s unanticipated action transferred the authority of local Interior bureaus and offices to issue, revise, or amend any and all permits, authorizations or plans of operations for “purposes of reviewing the questions of fact, law, and policy they raise” for up to 60 days.
The order delayed issuance of the last of the company’s permits for two NPR-A wells, forcing 88 Energy to shut down exploration operations until late March, which was too close to the end of the North Slope winter drilling season to restart operations in 2021.
De la Vega’s order transferred the power to issue permits to top agency people in the Lower 48 - all Biden political appointees.
National Wildlife Federation official Final approval for 88 Energy’s Peregrine wells, Merlin 1 and Harrier 1, rests with appointee Laura Daniel Davis, principal deputy assistant secretary of Land and Minerals Management, who most recently was the chief of policy and advocacy for the National Wildlife Federation. Prior to that Davis served as chief of staff to Interior Secretaries Sally Jewell and Ken Salazar in the Obama administration.
Before the surprise order from de la Vega, 88 Energy had said the Alaska office of the Bureau of Land Management, which was reviewing the drilling permit for the first well, Merlin 1, “indicated that it is now very close to being complete with only minor outstanding items,” and was “anticipated to be complete by Jan. 28.”
Positive indicators next Shortly thereafter more promising news came from Interior, starting with 88 Energy receiving “confirmation” from the Alaska BLM office that Davis intended to sign the permit.
In the meantime, Alaska’s congressional delegation was meeting with White House staff, explaining among other things that a 60-day delay during the short winter drilling season effectively delayed drilling for one year on the North Slope.
Then on Jan. 27 a group of Native leaders issued a press release saying de la Vega’s directive and other orders from President Joe Biden resulted in “considerable economic impacts on the indigenous people of the North Slope of Alaska.”
Also, on Jan. 27 a fact sheet from Interior said Biden’s latest executive order relating to oil and gas leasing and activities on federal lands allowed permitting and permitted operations to continue as normal on existing leases.
It likely helped that 88 Energy already had all its other federal approvals for Peregrine Project exploration, including the NPR-A right-of-way permit from BLM.
On Jan. 27 the company’s managing director David Wall told Petroleum News: “We have everything except the permit to drill. The snow road (95 miles long) is 30 percent or more complete already.”
An operations update that same day from 88 Energy said the Merlin 1 drilling permit “is anticipated to be complete by Thursday 28th January,” the day Petroleum News goes to press.
The cost of the exploration program to date (Jan. 27) is approximately $3 million per Corri Feige, commissioner of the Alaska Department of Natural Resources, including the cost of mobilization for All American Rig 111.
Feige also said that permitting decisions were often deferred to Washington, D.C., top agency officials during the Obama-Biden administration, slowing the process.
88 Energy’s wells will target the prolific Nanushuk formation. Merlin 1 is considered a direct analogy to ConocoPhillips Willow oil discovery, while ConocoPhillips’ Harpoon prospect is interpreted to lie on the same sequence boundaries as Harrier 1. They are two of just three total exploration wells being drilled on the North Slope this winter.
- KAY CASHMAN
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