Providing coverage of Alaska and northern Canada's oil and gas industry
June 2018

Vol. 23, No.23 Week of June 10, 2018

Balash promotes more federal cooperation

Says that Interior is going to work in partnership with the state and other North Slope landowners to encourage Alaska oil and gas development

Alan Bailey

Petroleum News

During a speech at the Alaska Oil and Gas Association’s annual conference on May 31 Joe Balash, assistant secretary for lands and minerals management in the U.S. Department of the Interior, said that the federal administration is intent on taking more of a partnership approach when working with the state and other land owners for the development of oil and gas in Alaska.

“We are about to turn a major corner and things north of the Brooks Range are about to change in some pretty astounding ways, in ways that I personally find to be very positive for the future of our nation and for our great state,” Balash said.

Interior manages 72 million surface acres and 220 million subsurface acres onshore Alaska, and more than 1 billion acres of lands offshore the state, he said.

NPR-A developments

Of particular interest at present is the National Petroleum Reserve-Alaska, where ConocoPhillips is pursuing an oil development strategy in the Greater Mooses Tooth unit, and where the company is assessing a major oil find in its Willow prospect.

“Taking a look at the onshore, we’re jump starting Alaska energy production from the federal land base on the North Slope, specifically in the NPR-A,” Balash said.

The GMT-1 development will result in the first production entirely from federal land in the NPR-A, and in March Interior released the draft environmental impact statement for the GMT-2 development.

“This is a huge opportunity for the federal government,” Balash said. “The sharing of that royalty revenue with the state will help with the fiscal conditions and in turn will provide additional, critical throughput into TAPS (the trans-Alaska pipeline).”

Once Interior has completed its review of the GMT-2 development, it will turn its attention to Willow, where ConocoPhillips has conducted drilling that yielded very promising results, Balash said.

Challenges and rewards

The challenge in Alaska does not so much revolve around finding oil as around making money from an oil discovery, Balash commented. But the benefits from successful development come, not just in terms of financial reward, but also in terms of impacts on the social fabric of communities, the impacts of stable jobs and income on people’s wellbeing. And, for rural communities, development enables people to continue their traditional way of life while also receiving a cash income, Balash said.

“That’s something that, I think, sometimes gets lost in the arguments around whether or not to develop our resources,” he said.

Balash cited the example of the Red Dog mine where, he said, data have provided evidence for the manner in which the mine development and operation have improved people’s health in the local community.

ANWR coastal plain

At the eastern end of the North Slope the federal tax bill passed in November has opened the coastal plain of the Arctic National Wildlife Refuge for oil and gas activities. Currently the Bureau of Land Management, an agency within Interior, is conducting a 50-day public comment period for the scoping of an environmental impact statement for oil and gas lease sales in the refuge. Balash said he has been made responsible by Interior Secretary Ryan Zinke for the completion of the EIS and the conducting of a successful lease sale. Under the terms of the National Environmental Policy Act, the development of an EIS is a necessary step towards a lease sale.

The Gwich’in people from the Yukon Flats region of Interior Alaska and the nearby region of western Canada are vehemently opposed to oil and gas development in the ANWR coastal plain because of concerns about potential impacts on the Porcupine caribou herd that forms a key subsistence resource for the Interior communities - the caribou calve on the coastal plain during the summer. But people in the industry, and the federal and state regulators, also care about the continued success of the caribou, Balash said.

“So the real challenge to us is to find the balance in crafting the stipulations and best management practices that will allow exploration and development to take place in a way that does not do harm to that herd and to people that depend upon it,” he said.

Balash commented that he had just spent a couple of days in Arctic Village, home to some of the Gwich’in, and had enjoyed caribou meat prepared in a variety of ways. He was about to travel to other North Slope communities, including the village of Kaktovik, on the northern edge of ANWR.

EIS efficiency

In more general terms, when it comes to the preparation of environmental impact statements, Interior is figuring out how to simplify the process, to reduce the timeframe involved and the size of the resulting documentation. The process, as it stands, takes too long, costs too much and is too complicated, Balash said. Moreover, the resulting documents are too large to be of practical value. Having a 2,400-page EIS does nothing to advance the interests of transparency and the understanding by the public and the regulators of the issues involved, Balash suggested.

A group of expert witnesses and stakeholders, convened at the direction of Interior Secretary Ryan Zinke, has made recommendations for the improvement of the EIS process. And Deputy Secretary of the Interior David Bernhardt has issued an order, placing a limit on the time taken for EIS preparation and on the number of pages in an EIS document.

“I’m pleased to report that just two weeks ago we moved our first draft EIS for a coal project in the Colorado region through the process in a manner that not only met those requirements but actually beat them,” Balash said, adding that improved ways of conducting internal reviews would lead to the greatest time savings.

Reducing the time taken for the EIS development would reduce the long project lead time that erodes into the net present value of a project, Balash said.

North Slope roads

Balash also commented on the Arctic Strategic Transportation and Resources, or ASTAR, program, a program to develop an all-season road network connecting North Slope communities. As previously reported in Petroleum News, the Alaska Department of Natural Resources has been working with the North Slope Borough on this program, carrying out stakeholder outreach and assessing project economics.

“I could not overstate how big this is,” Balash said, commenting on the shrinking length of the winter off-road travel season on the North Slope and the potential for a road network to reduce operational costs for the oil industry.

Offshore lease sales

In the federal offshore, the federal administration is re-examining the five-year lease sale program and issued a new draft plan in January. Interior received more than 1.86 million comments on that draft plan, Balash said. The Outer Continental Shelf Lands Act requires the government to take into account the view of local communities and the state governors - Alaskans and the Alaska regional Native corporations have indicated that their views have previously been disregarded, Balash said.

For this new iteration of the five-year plan, Interior has heard, for example, from the North Slope whaling captains and from the state. At this stage, the intent is to have another version of the plan published later this year, to include a lease sale for the Beaufort Sea, Balash said.

Balash also commented that past federal challenges to Alaska resource development came from personnel and policies in Washington DC, and not from federal personnel in Alaska.

“It is my sincere hope that we can institute some changes here in the way we do our business on the federal side of the table,” Balash said. “And I ask that all of you take that with a new view too.”

BLM retains ANWR public comment deadline

The federal Bureau of Land Management announced on June 4 that it will not extend the public comment period for the scoping of an environmental impact statement for an oil and gas lease sale program for the coastal plain of the Arctic National Wildlife Refuge. As previously determined, the comment period will end on June 19, the agency said.

The question of opening the ANWR coastal plain for oil and gas activities is highly contentious, being strongly opposed by environmental organizations while strongly supported by Alaska lawmakers and proponents of oil and gas development. While some people from North Slope communities have expressed support for the opening, the Gwich’in people from the Yukon Flats region of Interior Alaska and the nearby region of western Canada remain opposed because of concerns about potential impacts on the Porcupine caribou, a vital subsistence resource for Interior communities.

The purpose of the EIS is to analyze the potential environmental impacts of different leasing alternatives. The EIS may also consider any exploration, development and production activities that may result from the leasing.

“I have heard diverse and extensive messages across the state regarding thoughts, interests and concerns of a broad range of stakeholders, and these consistent messages will inform the development of the EIS,” said Joe Balash, U.S. Department of Interior assistant secretary for land and minerals. “The heartfelt and quality comments we have received to date are what we have come to expect from Alaskans. I sincerely appreciate the interest shown in the coastal plain EIS.”

Interior Secretary Ryan Zinke has made Balash responsible for the completion of the EIS and for the ANWR lease sale program.


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