State receives $40 million from lease sales in NPR-A

Petroleum News Alaska Staff

The state of Alaska has received $40.2 million from the U.S. government as its share of revenues from last spring’s sales of oil and gas leases in the National Petroleum Reserve-Alaska, Gov. Tony Knowles said Jan. 10.

“NPR-A has paid off for Alaska,” Knowles said. “Receipt of these funds culminates years of work by my administration to promote responsible oil development in the reserve. Opening this section of Alaska is important to assure the nation a continued supply of needed oil. It’s meant significant revenues that will benefit the state and subsequent development of the reserve will provide up to 4,200 construction jobs and up to 1,400 jobs during production.”

Knowles’ efforts to open the petroleum reserve to leasing began in 1996. Stressing the state’s “doing it right” philosophy of development, Knowles accompanied the Interior Secretary Bruce Babbitt to the reserve the following year. Following a thorough environmental review process, Babbitt decided in October of 1998 to proceed with leasing in the 4.6-million acre northeastern corner of the refuge.

The sale, the largest on-land federal oil lease sale ever, was held in May of last year, drawing bids on 135 tracts from six companies.

The state received a wire transfer today from the federal Bureau of Land Management for $40,222,795.50.

By state statute, communities impacted by NPR-A can apply to use the funds for planning, construction, maintenance and operation of essential public facilities that alleviate the impacts of development. Of the remainder, half will be deposited in the Permanent Fund; one half of 1 percent will go into the state’s Public School Fund; and the remainder goes into the state’s General Fund.