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Vol. 25, No.34 Week of August 23, 2020
Providing coverage of Alaska and northern Canada's oil and gas industry

ANWR ROD approved

Lease sale next; wildlife, lands, waters, and indigenous uses protected

Steve Sutherlin

Petroleum News

U.S. Secretary of the Interior David L. Bernhardt signed a Record of Decision Aug. 17, approving the Coastal Plain Oil and Gas Leasing Program in the Arctic National Wildlife Refuge.

“I do believe there certainly could be a lease sale by the end of the year,” Bernhardt said in the press conference announcing the decision.

The leasing program is required by law in the Tax Cuts and Jobs Act of 2017 (Public Law 115-97), which was passed by Congress and signed into law by President Donald Trump on Dec. 22, 2017. The first of two congressionally mandated lease sales in the area must be held no later than the end of 2021.

The act sets the royalty rate for leases at 16.67%, with 50% of adjusted bonus, rental and royalty receipts derived from the program directed to the State of Alaska.

The decision makes approximately 1,563,500 acres - or the entire program area - available for oil and gas leasing, leaving 92% of the 19.3-million-acre refuge off-limits to energy development by law.

In order to protect the unique character of the coastal plain, strict lease stipulations governing potential future exploration, development and transportation cover more than 60% of the program area.

Approximately 359,400 acres - 23% of lands available - will be subject to no surface occupancy stipulations within barrier islands and important aquatic habitats including rivers and streams, nearshore marine waters, and lagoons.

Approximately 721,200 acres - 46% of lands available - will be subject to operational timing limitations in primary calving habitat area for the Porcupine caribou herd.

The entire project area is subject to 44 required operating procedures, ROP, which apply to oil and gas activities to avoid, minimize, and mitigate potential adverse impacts on resources and uses.

One ROP calls for temporary ice roads and drilling pads for exploration, to minimize surface impacts. Construction of gravel roads and pads will be prohibited for exploratory drilling. Use of a previously constructed road or pad may be permitted if environmentally preferred.

“Subsistence uses of coastal plain resources by rural Alaska residents and indigenous communities in Canada was given important consideration, in recognition of the life-sustaining customary and traditional uses of these resources,” the ROD said.

The decision also factored economic and community development opportunities to local residents and Alaska Native communities within and near the coastal plain.

Much of the economic and community development that has occurred in Native communities on the North Slope has been a direct result of oil and gas development, which provides job opportunities and substantial property taxes and other funding for community infrastructure development such as new schools, healthcare centers, roads, and drinking water, wastewater, and other utility systems, the ROD said.

Access for activities assured

The act states that the secretary, acting through the U.S. Bureau of Land Management, “shall issue any rights-of-way or easements across the Coastal Plain for the exploration, development, production, or transportation necessary to carry out this section.” BLM said it interprets the plain language of the provision to require that it authorize any such rights-of-way necessary to carry out the coastal plain oil and gas program.

The waterway setbacks seek to minimize disruption of natural flow patterns and changes to water quality, and prevent the loss or change to vegetative and physical characteristics of floodplain and riparian areas, springs and aufeis; the loss of spawning, rearing or overwintering fish habitat; the loss of cultural and paleontological resources; the loss of raptor habitat; impacts on subsistence cabins and campsites; and the disruption of subsistence activities.

But the decision recognizes that setbacks may not be practical in river deltas. In these situations, an exception may be granted if the operator can demonstrate there are no practical alternatives to locating facilities in these areas, that the proposed actions would maintain or enhance resource functions, and that permanent facilities are designed to withstand a 100-year flood.

Nearshore marine protections are in place Exploratory drill pads, production drill pads or a central oil or gas processing facility will not be permitted in nearshore marine waters, lagoons or barrier islands within the boundaries of the coastal plain.

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