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Feds expect ‘interesting’ NPR-A sale With September NPR-A lease sale now past the date of appeal, Interior Department official expects companies to show up and bid By Eric Lidji Petroleum News
With a series of lawsuits finally resolved, a new round of environmental studies completed and calls in Washington for increased domestic oil production, an upcoming federal lease sale in the National Petroleum Reserve-Alaska should be worth watching, according to a U.S. Interior Department official speaking in Alaska on Aug. 14.
“I think we’re anticipating that it will be a very interesting sale,” said Stephen Allred, assistant Interior Secretary for land and minerals said during a speech to the Resource Development Council for Alaska.
Speaking to the Reuters news agency after his talk, Allred said the Sept. 24 lease sale covering around 4.8 million acres of the reserve should draw bidding from oil companies.
“I think we’re going to see a lot of interest,” Allred told Reuters. “We know there’s a substantial resource up there. We also know it’s a challenge to develop it.”
Officials with the Bureau of Land Management in Alaska, the branch of the federal agency responsible for the sale, couldn’t elaborate about which companies or how many companies have expressed interest, citing the “sealed bid” nature of the sale.
The NPR-A lease sale follows a sale of federal leases in the Chukchi Sea back in February that brought in $2.7 billion in high bids.
Shift to federal lands Much of the existing oil and gas development across the country is on state and private land, but Allred expects a “shift” toward federal property in the coming years as declining productions prompts a search for large resources.
“Because that’s where those energy sources are,” Allred said.
Only around 30 percent of domestic energy production, both traditional and renewable, occurs on federal lands and waters, but Allred said the government believes its onshore and offshore properties contain 62 percent of the oil and 40 percent of the natural gas remaining to be found in the United States.
“Onshore, we still have tremendous amounts of energy that are available… A lot of that’s in northern Alaska,” Allred said, citing the conventional oil resources of the NPR-A and the Arctic National Wildlife Refuge on opposite ends of the North Slope.
The federal government believes the 23-million acre NPR-A holds 10 billion barrels of technically recoverable oil and 70 trillion cubic feet of natural gas, Allred said.
The land up for sale next month could hold around 8 billion barrels of oil, Allred said.
Even though the prospective nature of the reserve is generally accepted, previous oil prices weren’t able to offset the high costs of connecting the isolated region back to existing infrastructure in the central North Slope.
Last year, ConocoPhillips and partners Anadarko Petroleum and Pioneer Natural Resources gave back around 300,000 acres of leases in the reserve because of noncommercial finds and high costs.
Currently, only around 3 million acres of the reserve are under lease.
Lease sale past appeal date The upcoming lease sale covers portions of the northeastern and northwestern planning areas of the reserve, some of which federal officials originally intended to offer in 2006.
But a coalition of environmental groups challenged that proposal, citing concerns about the impacts oil and gas drilling might have on the wildlife around Teshekpuk Lake.
The matter wound through federal court, eventually leading to a new environmental review of the region and a July decision to defer leasing any land north and east of the lake for 10 years. The environmental groups involved in the lawsuit accepted that decision.
“For once, we may have a document that we can rely upon as we go forward without additional litigation,” Allred said.
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