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Reform coming on how state manages land Proposed regulations would let DNR authorize oil and gas exploration and development generally over large geographical areas Wesley Loy For Petroleum News
The Alaska Department of Natural Resources is proposing new regulations that could revolutionize exploration and development approvals on state land.
The regulations spring from enabling legislation (House Bill 129) state lawmakers passed in April.
Gov. Sean Parnell offered the legislation as part of his efforts to reform permitting and quickly boost Alaska’s oil and gas production.
The new law allows DNR to “review and authorize oil and gas exploration or development across a geographical area rather than by individual project,” says a four-page explanatory letter posted online at http://tinyurl.com/pkjo7ls.
Fewer steps Within an area authorized for exploration or development, an oil and gas lessee still would have to submit a plan of operations for DNR approval before work begins, the explainer says.
If the plan complies with certain terms and conditions, DNR may approve such plans “without a separate public notice.”
The Parnell administration says the bill will cut out “repetitive” steps in the permitting process, such as some of the public notice and comment periods associated with pushing a project through the seismic, exploratory drilling and development phases.
Some industry players endorsed the legislation, saying it would provide relief from the current “inefficient and cumbersome” permitting process.
But critics, including environmentalists, said allowing DNR to establish “general conditions” for exploration and development would short-circuit public review of specific project plans.
Size limits specified The lands DNR could approve for exploration and development would be within previously offered oil and gas lease sale areas.
The proposed regulations include limits on the size of these areas, though they still could be very large.
“A geographical area for exploration will not exceed 35 percent of a lease sale area,” the explainer says. “For the North Slope Areawide lease sale area, that means a single geographical area for exploration will not exceed 1.785 million acres. A geographical area for development will not exceed 300,000 acres. For comparison, the Prudhoe Bay Unit on the North Slope is about 255,000 acres.”
DNR would exclude land adjacent to incorporated communities, such as Nuiqsut on the North Slope and Homer on the Kenai Peninsula, as well as unincorporated communities with a population of more than 200 people.
The proposed regulations spell out the criteria and information DNR will consider when authorizing exploration or development in a geographical area. The administration says people will have a chance for input at the front-end of the process.
An exploration and development authorization could last up to 10 years.
“Under the new law, the DNR and the public can look holistically at a broader geographical area when evaluating how oil and gas exploration or development should occur on state land,” the explainer says. “Through this process, the DNR can minimize adverse effects on state land and resources, ensure the state is developing its resources by making them available for maximum use consistent with the public interest, and provide an opportunity for the public to comprehensively review oil and gas activities within a geographical area. For the lessee, a geographical area approval also provides certainty about conditions under which it can explore or develop in that area. And when approving exploration or development for a geographical area, the DNR will still be able to safeguard environmental, subsistence, community, recreational, and historical concerns through special stipulations and conditions.”
The new law does not cover the transportation, or pipeline, phase of oil and gas development. Transportation will continue to be evaluated under existing laws and regulations, the explainer says.
The state has set an Aug. 19 deadline for people to comment on the proposed regulations.
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