Oil Patch Insider

Truth or chatter? President to lift Bristol Bay drilling moratorium

Depending on who you talk to the rumor that President Bush will lift the Bristol Bay drilling moratorium is either a formal request from the Department of Interior he is planning to grant in time for the area to be included in the department’s 2007-2012 federal offshore oil and gas lease sale schedule OR it’s a rumor the environmental community has started to drum up opposition to something they expect to happen.

To date, the only press releases on the subject are from environmental groups claiming their sources say the president is planning to lift the ban after Alaska’s new governor, Sarah Palin, takes office Dec. 4.

All indications are that they are right, although the timing probably has more to do with getting the Bristol Bay leases in Interior’s leasing schedule than it has to do with Palin taking office. Although she has not come out in support of lifting the ban, lame duck Gov. Frank Murkowski has.

The current moratorium against oil and gas drilling in the federal waters of the North Aleutian basin, of which Bristol Bay is a part, expires in 2012. It was put in place by the president’s father, President George Herbert Bush, following the oil spill in Prince William Sound in March 1989. President Bill Clinton extended the moratorium in 1998; it now expires June 30, 2012.

In 2003, a Congressional moratorium expired, and U.S. Sen. Ted Stevens, R-Alaska, began lobbying the White House to lift the executive ban.

The presidential moratorium is reportedly unpopular within the Bush administration, which in July wanted to include language in the energy bill that would have required a lease sale in Bristol Bay.

The provision didn’t make it into the final bill, but was indicative of the president’s interest in promoting energy development in the area.

In a Nov. 30 Petroleum News interview with John Katz, the director of the governor’s office in Washington, D.C., noted that the “public comment period on the federal five-year OCS schedule has closed (Nov. 27) and there were several comments relating to the moratorium in Bristol Bay. I am relatively certain the environmental community has seen that.”

Katz said he didn’t know “the timing or the content of the Bush administration’s decision on the Bristol Bay moratorium,” but he said “the first decision would be whether or not to lift the moratorium and the second would be how to configure an oil and gas lease sale if the moratorium is lifted.”

“As of a day or so ago there was no definitive information coming on that from the Bush administration, but I am sure you are aware of Gov. Murkowski’s letter to the Interior Department expressing support for lifting the moratorium based on strong local support for doing so.”

The State of Alaska, with support from local communities and Native organizations, held a state oil and gas lease sale on the Alaska Peninsula in October 2005 and in that same month Murkowski told the Minerals Management Service: “I hope that public and industry input will provide the Secretary and the state with adequate information to decide whether or not to ask the President to lift the current withdrawal and allow a sale during the 2007-2012 program.”

In April of 2006, the governor told MMS he believes “there is widespread local support for leasing in the North Aleutian Basin planning area,” but also pointed out that local support “is directed primarily to the portion of the planning area that was included in Lease Sale 92, held in 1985. This area is located a good distance away from the Bristol Bay fisheries, which are the subject of much of the local concern,” the governor said.

Murkowski recommended that lease sales in the North Aleutian planning area be included in the 2007-12 five-year sale program, and MMS did include two such sales, in 2010 and 2012, noting that those sales would be held only if the president chooses to modify the withdrawal.

MMS says anticipated production from the North Aleutian basin is 200 million barrels of oil and 5 trillion cubic feet of natural gas.

—Kay Cashman & Kristen Nelson