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BLM proposes unitization for National Petroleum Reserve-Alaska Local agency director Tom Fry says unitization “maximizes production while minimizing the environmental impact of development” Petroleum News Alaska
The Bureau of Land Management said April 26 it has published a proposed rule on unitization, suspensions and subsurface-storage agreements that relate to oil and gas activities in the National Petroleum Reserve-Alaska.
The proposed rule, which appeared in the Federal Register April 26, would add provisions dealing with these matters to the BLM’s existing NPR-A oil and gas regulations.
“This proposal, which would implement recent changes in a law that governs oil and gas activities in the NPR-A, complements May’s NPR-A oil and gas lease sale,” said BLM Acting Director Tom Fry. “Under this proposed rule, companies operating in the NPR-A would be able to ‘unitize’ their oil and gas leases. Unitization maximizes production while minimizing the environmental impact of development.”
Under a unit agreement, several lessees share in the risks and costs — as well as the potential benefits — of oil and gas exploration and development. Unitization also reduces impacts from drilling by enabling two or more leases to be in production using fewer wells.
Suspensions stop the clock Suspensions allow leases to be extended beyond their authorized time or term by “stopping the clock” under circumstances that are beyond the control of the operator. The BLM may suspend a lease term after discovery of producible oil or gas in order to allow time for the construction of a transportation system from the new well to a gathering or storage system or some other facility.
Because of the sensitivity of Alaska’s North Slope environment, the prospect of any surface-disturbing activity there requires careful planning for development and lead-time for construction. Lease suspensions would provide for such planning and lead-time.
Storage allowed in geological structures Subsurface storage agreements allow operators, for a fee, to store oil or gas on BLM-managed lands in existing geological structures rather than in oil or gas tanks. Little environmental risk is posed by this type of storage; the stored fluids are usually reinjected through existing surface and subsurface operating equipment from prior operations.
Subsurface storage agreements would facilitate production in the NPRA, where storage is necessary because, among other factors, the severe climate makes it difficult to construct distribution systems for the oil and gas.
Comments, which must be submitted in writing, should be sent no later than June 26, 2000, to: Bureau of Land Management, Administrative Record, Room 401 LS, 1849 C Street, NW, Washington, DC 20240.
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