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North America's Source for Oil and Gas News
April 2004

Vol. 9, No. 14 Week of April 04, 2004

Offshore ANWR opens

With U.S. gridlocked on energy issues, Alaska to lease lands off ANWR, NPR-A

Kristen Nelson

Petroleum News Editor-in-Chief

With the rest of the nation gridlocked on energy issues, Alaska is moving ahead, Alaska Gov. Frank Murkowski said March 31, announcing that some 350,000 acres in state waters off the Arctic National Wildlife Refuge will be included in the state’s October Beaufort Sea areawide oil and gas lease sale along with some 670,000 acres off the National Petroleum Reserve-Alaska.

Speaking from the offices of the American Gas Association in Washington, D.C., Murkowski put the state’s decision in a national context.

“Many of us are of the opinion we’re being held hostage by OPEC, and have been for some time.” And while some have indicated there’s little we can do about U.S. energy supply, “I beg to differ,” Murkowski said, noting that Alaska once provided 2 million barrels a day of oil for the country, some 20 to 25 percent of U.S. production.

The governor cited a recent analysis of ANWR resource potential from the Energy Information Administration which used U.S. Geological Survey estimates and concluded production from the coastal plain could peak at 900,000 barrels per day, or as much as 1.6 million bpd, depending on whether actual oil discoveries hit the mid-range USGS estimate, or the high-end estimate.

U.S. politics have thwarted state action, governor says

Those 1.6 million barrels could be flowing today, Murkowski said, if President Clinton had not vetoed Congressional approval of exploration in the coastal plain. “President Bush has strongly endorsed the opening of this area,” the governor said, noting that it has become an issue in the presidential race: “I think John Kerry has indicated that he had the pleasure of voting against it seven times.

“I don’t know what Senator Kerry has in mind, whether it’s that we should pick up our bicycles and drop our cars as the Chinese drop their bicycles and pick up their cars…”

There seems to be a lack of understanding that oil is what moves our cars, ships and planes, the governor said, and blamed extreme environmentalists for thwarting Alaska’s oil production potential.

He said when Congress discussed ANWR exploration in the past, environmentalists said exploration should be in “what used to be the Naval Petroleum Reserve No. 4, or NPR-A. …

“During the ANWR debate the environmentalists said, move over there, that’s a Naval Petroleum Reserve, that’s where you should go,” Murkowski related.

Leasing and exploration are now under way in NPR-A, but, he said: “Now we see that suits are being brought by the environmental community on virtually every proposed lease sale in the area.”

The Department of Interior is being sued over leasing in NPR-A, “and some of the mischaracterizations of the area are rather insidious as far as we’re concerned,” with NPR-A “now called the ‘western Arctic refuge.’

“See how the nomenclature creeps over to what was designated as a petroleum reserve, and is now in the minds of some a western Arctic refuge.

“Environmental groups have, of course, significant influence in the Congress, and I think Americans should be incensed at the environmental manipulations,” Murkowski said.

Offshore work would be based on EnCana’s McCovey agreement

In addition to plans to lease offshore ANWR and NPR-A, the state is moving ahead with plans for an offshore stratigraphic well, Murkowski said (see story on page 11).

The governor said he has discussed the offshore leasing with North Slope Borough officials and said Tom Irwin, commissioner of the Alaska Department of Natural Resources, would be discussing the leasing with North Slope residents.

Exploration in state waters off ANWR would be done on the same basis as drilling done at EnCana’s McCovey prospect offshore Prudhoe Bay: that agreement, the governor said, included requirements “for special drilling limitations during these whale migrations, both in the spring and in the fall.”

The Alaska Division of Oil and Gas said last July that it was reevaluating the Beaufort Sea areas which had been deferred from earlier areawide lease sales, and asked for comments on whether the deferrals should remain intact, be reduced in size or eliminated entirely. The division also asked whether existing mitigation measures were sufficient to protect subsistence gathering activities and bowhead whale harvesting. A sales notice for the October 2004 Beaufort Sea lease sale is expected out this July.

Petition filed to protect the yellow-billed loon under the Endangered Species Act

The Center for Biological Diversity, Trustees for Alaska and Pacific Environment said March 30 that they have petitioned the U.S. Fish and Wildlife Service to list the yellow-billed loon under the federal Endangered Species Act.

The groups said in a statement that the loon’s primary U.S. breeding grounds are in the National Petroleum Reserve-Alaska. The birds breed in Canada, the United States and Eurasia, with an estimated 18 percent of the worldwide population in the NPR-A.

“Population numbers of the yellow-billed loon are alarmingly low, and the Bush Administration’s actions are threatening their critical breeding habitat in Alaska,” Corrie Bosman, Alaska program director for the Center for Biological Diversity, said in the groups’ statement.

The groups said the yellow-billed loon has an estimated global population of only 16,650. “Because of its small global population and the numerous threats facing this species, we are hopeful the USFWS will recognize the immediate need to protect this species under the ESA,” Bosman said.

The Center for Biological Diversity filed the petition on behalf of the U.S.-based Natural Resource Defense Council, Pacific Environment and Trustees for Alaska, as well as seven Russian partners including the Kamchatka League of Independent Experts, Taiga Ranger, Wild Nature of Sakhalin and the Kamchatka Branch of the Pacific Institute of Geography.

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