Obama Drilling Expansion In Alaska Falls Short For Some

October 2012, Vol. 67 No. 10

ConocoPhillips Alaska, among the most active companies exploring for oil and gas in northern Alaska, found a lot not to like in the Obama administration decision in mid-August with regard to development of the 22.8 million acre National Petroleum Reserve-Alaska.

"ConocoPhillips is disappointed that the Dept. of the Interior chose a version of Alternative B, which was our least desirable option of the four presented by the Bureau of Land Management for management of NPR-A," says Natalie M. Lowman, director of communications, ConocoPhillips Alaska. "The proposed version of Alternative B chosen by the DOI also takes a significant amount of acreage off the market for future leasing. This not only decreases access to prospective areas, but also closes off lands with known oil discoveries."

When the Interior Department announced its "preferred" option on August 13 -- a final decision will be made in November -- it blessed a mid-point option of opening 11.8 million acres. That decision included a green light for a pipeline to be built through the NPR-A to carry oil and gas from the Beaufort and Chukchi Seas. Both ConocoPhillips and Shell plan to drill exploratory wells in the Chukchi Sea over the next few years. Kelly Op de Weegh, a spokeswoman for Shell Oil, says her company is in the early phases of exploring a pipeline route from Chukchi to the TransAlaska pipeline. A route through the NPR-A is a possibility. "At this point we are doing scientific studies in an effort to understand the permafrost, the wildlife and topography," she explains.

"Any company that is planning to drill exploratory wells in the Chukchi (and portions of the Beaufort) is likely to be discussing how to get any possible future discoveries of oil and gas through NPR-A," adds Lowman from ConocoPhillips Alaska.

ConocoPhillips, British Petroleum, Anadarko, Total E&P and Fex LP have all been granted leases in parts of the 1.5 million acres of the NPR-A which have been open since 1999. No oil well has been drilled, as companies have gone through a long permit application process and environmental reviews. ConocoPhillips says it will drill the first well but not until 2015.