New NPR-A assessment to spark debate over expanded drilling

By Margaret Kriz Hobson | 12/18/2017 07:17 AM EST

U.S. Geological Survey scientists are completing a new assessment of how much oil and gas is waiting to be discovered in the National Petroleum Reserve-Alaska and surrounding northwestern Alaska lands.

The report, expected to come out this week, will be in part based on data from three recent oil discoveries that suggest the NPR-A could hold far more oil than USGS projected seven years ago.

The 2010 report concluded that a scant 900 million barrels of undiscovered, technically recoverable oil could be found across the vast, 22.8-million-acre petroleum reserve, the nation’s largest single block of public land.

Advertisement

Over the last two years, however, oil companies have uncovered significant amounts of oil in North Slope geological structures that had been previously overlooked by earlier explorers. Armstrong Energy LLC, Caelus Energy LLC and ConocoPhillips Alaska each has announced massive new oil discoveries in or near the NPR-A. Taken together, those plays contain at least 3.5 billion barrels of technically recoverable oil.

USGS research geologist David Houseknecht has described the new discoveries as "game changers" for northeastern Alaska.

The forthcoming USGS assessment is certain to reignite a long-simmering debate over which parts of the NPR-A should be available for oil and gas development. The current integrated activity plan, issued in 2013, protects almost half of the reserve for wildlife habitat and subsistence hunting.

Now the Trump administration is pushing to overhaul that management plan to open some of those protected areas to energy exploration. At the same time, Alaska state officials are urging the Interior Department to permit construction of a network of roads through the petroleum reserve to connect eight isolated Native communities to the state’s limited road system (Energywire, Sept. 12).

In preparation for drafting a new integrated activity plan, the Bureau of Land Management this summer asked the public to comment on which NPR-A lands should be available for oil leasing, including territories that are currently protected under the 2013 management plan.

In response, regulators received tens of thousands of widely varying comments, with some recommending even more aggressive land preservation policies, while others called for the entire petroleum reserve to be opened to oil drilling.

Meanwhile, the oil industry has shown limited interest in the NPR-A lands now available for exploration. Early this month the federal government offered 1.4 million acres of petroleum reserve lands for oil and gas leasing — all of the lands currently open for development.

However, only seven bids were received, all of them from ConocoPhillips Alaska. In total, the company spent $1.1 million for 15,000 acres of lands adjacent to its existing oil operations in the reserve.

ConocoPhillips gears up

The USGS assessment isn’t likely to come as a complete surprise to ConocoPhillips, which has been studying Alaska’s northwestern lands for more than two decades.

In the early 1990s, the company began exploring the area around the Colville River, which forms the eastern border of the NPR-A. In 1999, Conoco acquired area leases in the government’s first NPR-A oil and gas lease sale.

By 2003, the company had developed a long-term master plan to build a string of oil operations in the reserve, complete with pipelines and roads connecting those potential fields to its Alpine oil production site on state lands.

Now ConocoPhillips, which bills itself as "Alaska’s oil company," owns the only oil production operations in the NPR-A. In 2015, the company began pumping oil at its Colville Delta play. Late next year, oil production is slated to begin at its Greater Mooses Tooth 1 field.

Meanwhile, BLM is putting the finishing touches on a draft supplemental environmental impact statement for the company’s third petroleum reserve operation, Greater Mooses Tooth 2. ConocoPhillips officials say the draft SEIS is due to be released before the end of the year. The company plans to begin drilling at the site in 2020 and to begin pumping oil a year later.

A year ago, the company announced its most promising oil discovery in the NPR-A: the Willow oil play, which holds at least 300 million barrels of oil. That field is located 28 miles west of Alpine.

ConocoPhillips made the find in early 2016 but didn’t announce it until after BLM’s December 2016 lease sale for the NPR-A. At that auction, the firm scooped up 600,000 acres of petroleum reserve lands, essentially taking ownership of the entire oil-rich northeastern corner of the petroleum reserve.

During this winter’s ice-road season, the company plans to drill four exploration wells near the Willow site and a fifth well on state lands just outside the NPR-A. ConocoPhillips has also scheduled new seismic studies on 160,000 acres of nearby state lands.

However, under the existing federal management plan for the petroleum reserve, ConocoPhillips cannot extend its chain of oil development projects farther west due to current restrictions on oil and gas leasing in the neighboring Teshekpuk Lake special area.

That 3.65-million-acre region is protected as an important habitat for migrating shorebirds and waterfowl. The Teshekpuk Lake area is also the calving grounds for caribou, an essential part of the subsistence diet for many North Slope Alaska Native communities. More than a half-million caribou journey to NPR-A every year.

Now the company is pushing the Trump administration to open up some of that protected land.

‘Way of life’

Alaska’s North Slope Native communities have had mixed reactions to industry suggestions that Interior should expand oil development in the petroleum reserve.

The North Slope Borough, a regional governmental body that encompasses the entire NPR-A, maintains that the Teshekpuk Lake special area is far bigger than it needs to be. In comments filed with the BLM, Borough Mayor Harry Brower Jr. explained that "according to our wildlife biologist, the boundaries for the Teshekpuk Lake area are too large and incorporate areas that are neither critical for wildlife or subsistence hunting."

The borough, which receives revenue from oil operations on the North Slope, acknowledged that oil development in the special area could affect the Teshekpuk caribou herd.

But Brower said that "a compromise is possible wherein more of the Teshekpuk Lake special area can be open to leasing, and robust permit stipulations and best management practices would prevent significant impacts to wildlife."

However, several other Native Alaskan groups warned that oil exploration and development could cause air pollution on the North Slope and devastate the caribou herds that many northern Alaska Native communities rely on for their subsistence diets.

The Inupiat Community of the Arctic Slope, a regional tribal government group on the North Slope, said that additional oil drilling in the protected regions of the NPR-A "will make it harder to feed ourselves, as well as make it more expensive if the herd both declines in number and has their migration pattern altered by developments."

"The calving grounds in the NPR-A and the insect relief areas are very important and must stay protected," said George Edwardson, president of the tribal group. "If they are not, it will have devastating effects on our community and way of life."

Suggested Articles