President Barack Obama announced May 14 that he is ordering the Interior Department to conduct annual lease sales in Alaska’s National Petroleum Reserve, and speed up seismic work that is a precursor to drilling off the South and mid-Atlantic coasts. In his radio address, Obama said he would also extend oil company leases in both Alaska and the Gulf of Mexico—where work was delayed by the drilling moratorium imposed during last year’s devastating Deepwater Horizon oil spill. He said he is also ordering the Interior Department to hold a Gulf of Mexico lease sale this year and two in 2012, thereby completing the department’s five-year plan for the area. (WP, May 14)
The 23 million-acre National Petroleum Reserve-Alaska (NPRA)—about the size of the state of Indiana—was created in 1923 as a fuel source for the US military. It is located in the northwest corner of Alaska, just west of the Arctic National Wildlife Refuge, which the Bush administration tried to open for exploration (see map). In October, the US Geological Survey revealed that the reserve only holds about 896 million barrels of oil, or about a tenth of the 10.5 billion barrels it estimated for the NPRA in 2002. The error is apparently due to the companies exploring the NPRA finding more natural gas than oil. ConocoPhillips has been leading exploration efforts in the NPRA since the Bureau of Land Management began lease sales in 1999. Conoco is exploring in partnership with Anadarko Petroleum and Pioneer Natural Resources. (Reuters, May 4)
Obama also announced his administration will create a special team to work on Alaskan drilling permits, developing a plan to streamline leasing in the Last Frontier and encourage oil production in Alaskan waters. The state’s Republican Sen. Lisa Murkowski, a habitual critic of Obama, was heartened by his speech. “The president’s comments today were good, they were positive, they are certainly in the right direction,” she said. (KTVA Alaska, May 14)
The moves come as Shell Oil has submitted an offshore exploration plan for up to six exploratory wells in the Chukchi Sea off Alaska’s northwest shore over the next two years. The plan was submitted last week to the Bureau of Ocean Energy Management Regulation and Enforcement (BOEMRE). Shell has spent more than $3.5 billion in Alaska for outer continental shelf drilling, including $2.1 billion for Chukchi leases, but has drilled no new wells since 2008 because of legal challenges or its inability to obtain permits. (AP, May 12)
BOEMRE has approved two Shell exploration plans in the Gulf of Mexico since the moratorium was lifted in October.