Oil patch insider: Parks redo hangs on offshore O&G; Rivalry for oil investment heats up

Kay Cashman

Petroleum News

Conserving natural resources has “long been tied to and directly supported by oil and gas development in the United States,” Walter Cruickshank, Ph.D., acting director of Interior’s Bureau of Ocean Energy Management, wrote in a recent release.

“This may seem counterintuitive to some, but offshore energy development revenues from qualified leases go right back into conservation initiatives throughout the United States via the Land and Water Conservation Fund,” Cruickshank said in the story, which was first published by The Vindicator.

Established in 1964, the LWCF supports federal, state and local land, water and wetlands purchases to expand public access to public lands, “so more Americans can experience the great outdoors. It also awards federal matching grants that leverage public and private investment in America’s state and local recreation sites, such as parks and trails.”

These investments, he said, “strengthen our collective public and private conservation efforts and facilitate more outdoor recreation in communities throughout the country.”

LWCF grants, which are administered by Interior’s National Park Service, have helped state agencies and local communities acquire and develop nearly 7 million acres of land and easements. Federal acquisition funds are used to acquire lands, waters, and easements necessary to achieve the natural, cultural, wildlife, and recreation management objectives of federal land management agencies, Cruickshank said.

Although he did not mention Alaska, millions in LWCF grants have been invested in projects here since the program’s inception in 1965.

National lands in Alaska that have received support include Denali and Wrangell St. Elias national parks, Alaska Maritime, Kenai and Kodiak national wildlife refuges, and the Tongass and Chugach national forests. Priority projects are generally trail and facility upgrades or improvements, including support facilities, restrooms and campsites. Improved access to recreation areas, such as parking, boat launches, trailheads, signage, etc. is also a priority.

Locally sponsored projects vary widely. Examples include a skate park in Sitka, ball fields in Utqiaġvik (formerly Barrow), a rifle range in Kodiak, community garden in Bethel, ski area in Cordova and a swim beach in Fairbanks.

While more than $4.4 billion has been made available to state and local governments for more than 44,000 projects since the program was created, the LWCF has only been fully funded twice since it was created 56 years ago - a broken promise to the American people, Cruickshank opined.

When the Great American Outdoors Act was signed into law this year, it secured permanent funding for the LWCF into perpetuity at $900 million per year, which would effectively double the funding for the program in less than 5 years.

Cruickshank said the Act also provides funding for the National Park Service and Public Lands Legacy Restoration Fund for 5 years.

“As the acting director for the Bureau of Ocean Energy Management, I’m pleased to say that the largest source of funding for the LWCF is offshore oil and gas royalties. In fact, just last year, offshore oil and gas production contributed nearly $5 billion in direct payments to federal, state, and local governments and supported more than 275,000 jobs and about $60 billion worth of economic output across our nation,” he wrote.

The country is home to 422 national parks, 568 wildlife refuges and many other public recreation sites across the 500 million acres of public lands managed by the Department of the Interior.

Alaska must compete for oil investment

What the Wall Street Journal reported does not bode well for Alaska if Ballot Measure 1, the so-called Fair Share Act, passes and increases oil taxes by 150-300%, depending on the price of oil.

IHS Markit recently released an expert analysis of Alaska’s competitiveness in oil and gas markets, including an assessment of the impact of the tax increase proposed in Ballot Measure 1.

The analysis team concluded that the state’s oil and gas fiscal system will become one of the least competitive in the United States under Ballot Measure 1, coming at a time when other states have either introduced or are considering actions to incentivize industry investment.

Back to what the Wall Street Journal reported: “After decades of relative maturity, the oil market might be about to enter a second childhood.”

In that second childhood, producing nations will have to compete to persuade companies to drill in their region. Geography and geology can’t be changed, but politicians can adjust taxes and regulations, the article concluded.

The competition is going on now, Alan Gelder of researchers Wood Mackenzie was quoted as saying. Norway, Russia and Angola are among the countries considering new incentives.

The article is worth a read: https://www.wsj.com/articles/peak-oil-is-already-shifting-markets-11600863067?mod=itp_wsj&ru=yahoo

- KAY CASHMAN