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Interior includes Alaska sales in 5-year Proposed Atlantic sale dropped from plan; no Pacific areas were proposed; 10 Gulf of Mexico sales in proposal, three Alaska sales KRISTEN NELSON Petroleum News
The U.S. Department of the Interior and the Bureau of Ocean Energy Management have dropped Atlantic sales from the 2017-22 proposed outer continental shelf lease sale program, but did include three sales in Alaska - the Beaufort and Chukchi seas and Cook Inlet.
Beaufort and Chukchi sales previously proposed for 2017 and 2016 respectively were dropped from the current five-year sale plan in October. Secretary of the Interior Sally Jewell attributed those cancellations to Shell pulling out of its offshore Alaska Arctic exploration program, acreage already under lease and market conditions.
In a March 15 announcement on the new plan Jewell called the 13 potential sales in the 2017-22 proposed program, 10 in the Gulf of Mexico and three in Alaska “a balanced proposal that protects sensitive resources and supports safe and responsible development of the nation’s domestic energy resources to create jobs and reduce our dependence on foreign oil.”
Disappointed by Arctic inclusion There were opposite and somewhat predictable reactions.
“We are disappointed that BOEM dismissed major risks and climate change concerns, and has moved a step closer to finalizing plans for further oil and gas leasing in the Arctic Ocean,” said Lois Epstein, Arctic program director for The Wilderness Society. She said the organization was pleased “the administration has raised the bar with higher operational standards for environmental and climate protection” and hopes that, based on its recent agreement with Canada (see story on page 1) the administration will “remove all of the Arctic Ocean from the final version of BOEM’s five-year plan.”
“While we are disappointed that Arctic leases are still in the 5-year plan, we appreciate that the administration is taking places off the table, like the Atlantic, and allowing for additional protections in the Arctic Ocean,” said Cindy Shogan, executive director of the Alaska Wilderness League.
Shogan noted that if the Obama administration is to stay in line with its recent agreement with Canada and climate goals set out in Paris, it would have to take Arctic leases out of the final five-year plan.
Mixed reactions from officials Alaska Gov. Bill Walker said he was pleased that Jewell was including the three Alaska sales in the five-year plan. He said he has had many meetings with the secretary over the past year “to discuss our access to our resources,” emphasizing “the need for forward planning and ensuring that Alaska is part of the Interior’s five-year leasing plan.”
Walker said he would work closely with Arctic communities as the department’s development decisions move forward so lease sales “benefit Alaska economically, but also limit risks to other activities.”
The reaction from Alaska’s congressional delegation, all Republicans, was largely negative.
Sen. Lisa Murkowski said the maintenance of limited lease sales on the Alaska OCS was welcome news, but said the administration’s cancellation of a sale in the Atlantic offshore “undermines the energy security of our country and is an ominous warning to Alaskans. As easily as the Atlantic was taken off the table, the proposed sales in the Cook Inlet, Beaufort Sea, and the Chukchi Sea could suffer the same fate in further reviews.”
Sen. Dan Sullivan said the inclusion of Alaska OCS areas was akin to a car dealer announcing a sale, but providing no car keys. “For production to be realized and for Alaska to benefit, there needs to be regulatory certainty and a willingness on the part of the Executive Branch to work with, instead of against, lease holders.”
Congressmen Don Young said “the plan does nothing to roll back the harmful decision last year to take massive portions of the Beaufort and Chukchi Seas off the table for future oil and gas leases ... (and) leaves the door open for further areas to be put off limits as the Program is finalized.”
Industry response Alaska Oil and Gas Association President and CEO Kara Moriarty said inclusion of the three Alaska sales in the five-year draft plan was good news, but noted that “OCS exploration and development still faces very serious challenges as a result of burdensome and, in some instances, impracticable regulatory requirements, as well as Federal efforts to designate vast areas of the Arctic as critical habitat for currently healthy and abundant Arctic species.”
Speaking to the overall plan, Jack Gerard, president and CEO of the American Petroleum Institute, said “The decision appeases extremists who seek to stop oil and natural gas production,” increasing the cost of energy for Americans and closing the door to new jobs, investments and increased energy security.
Additional Arctic considerations The department and BOEM said North Slope communities noted additional areas which might not be appropriate for oil and gas leasing during public meetings to scope the environmental impact statement for the five-year plan.
“Using significant input and traditional knowledge from these communities, as well as other public comments and the best available science, BOEM has identified several areas where there is potential conflict between oil and gas activities and important ecological resources and subsistence activities. These areas are labeled ‘environmentally important areas’ in the EIS and are analyzed therein.”
The agency said it is seeking additional input on resources and activities in those areas.
Six environmentally important areas are identified for the Alaska OCS sales:
•Barrow Canyon (Beaufort Sea): important for migration and foraging for beluga, bowhead whales, gray whales and seabirds; in the vicinity of the North Slope Borough, at nexus of Chukchi and Beaufort seas, and important for subsistence hunting;
•Camden Bay (Beaufort Sea): important to bowhead, beluga and seal feeding and an important bowhead whale subsistence hunting area in the fall;
•Cross Island (Beaufort Sea): important and historically significant subsistence hunting area; important to bowhead whale migration, beluga whales, pinnipeds and feed and denning area for polar bear; highlighted by several stakeholders during scoping;
•Kaktovik (Beaufort Sea): subsistence use around existing presidential withdrawal highlighted during public scoping as important ecologically and for subsistence use;
•Hanna Shoal (Chukchi Sea): walrus foraging area around current Hanna Shoal presidential withdrawal; includes corridor from Hanna Shoal to existing Chukchi Corridor presidential withdrawal; important habitat for Pacific walrus;
•Beluga whale critical habitat (Cook Inlet): critical habitat for Cook Inlet distinct population segment of beluga whales; federally designated under Endangered Species Act.
The draft proposed program was released in January 2015. In conjunction with the proposed program, Interior is publishing a draft programmatic environmental impact statement. Both will be available for public comment following publication of the documents in the Federal Register. BOEM will hold public scoping meetings and accept comments for 90 days on the proposed program and for 45 days on the draft programmatic EIS.
A final programmatic EIS and proposed final program will then be prepared.
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