DOI Closes Half of Alaska Petroleum Reserve, Opens 12 Million Acres to Leasing

On Monday, Secretary of Interior Ken Salazar announced a management plan that would remove roughly half of the acreage available for oil and natural gas drilling in the 23 million-acre National Petroleum Reserve in Alaska. Under the proposal, drilling activities and potential pipeline construction development could occur in the remaining 12 million acres of the reserve that may connect exploration projects waiting federal approval in the Chukchi Sea.

The National Petroleum Reserve - Alaska (NPR-A) was originally created by President Warren Harding in 1923, formerly known as "Naval Petroleum Reserve No. 4", to ensure that the Navy had a strategic supply of oil available when it began converting the fleet from coal-burning vessels. Congress transferred jurisdiction of the 23 million acre site to the Bureau of Land Management in 1976 and lease sales began in the reserve in the early 1980s. A 2002 estimate by the US Geological Survey found that the NPR-A contained up to 13.2 billion barrels of technically recoverable reserves. The NPR-A is located near the North Slope and is home to large herds of caribou and other wildlife in addition to being an important resource for subsistence living for Alaska Natives.

Yesterday's announcement by Secretary Salazar was met with strong support from several environmental advocacy groups. Cindy Shogan, the Executive Director of the Alaska Wilderness League, said "We are encouraged by the Department of Interior's announcement to strike a needed balance between responsible development and conservation of special areas within the Reserve. In addition, today's announcement recognizes strong subsistence values that are critical for the Native communities on the North Slope." Both of Alaska's Senators, Mark Begich and Lisa Murkowski, expressed concern that with the new comprehensive management plan because it removes some of the most promising areas for resource development and creates several new regulatory designations and economic impediments to constructing needed pipeline infrastructure. During the comment period on the proposal, Senator Murkowski stated, "My chief concern with the planning effort is that even though the narrative says the plan will not make it impossible to select and permit a pipeline corridor across NPR-A to bring northern off-shore oil and natural gas to land, that the location of several of the proposed Wild and Scenic Rivers in two of the alternatives would force the pipeline onto a far southern route corridor, a route that might, depending on soil conditions, increase its cost to a prohibitive level and fail to allow for an efficient route for purposes of a common carrier line."

Expanding throughput, or volume, on the Trans Alaska Pipeline has been a key priority for many policymakers in Alaska as well as the oil industry for both economic and pipeline safety reasons.  Last year, the pipeline moved roughly 600,000 barrels per day and that figure is expected to continue declining without additional production in Alaska. Alyeska, the pipeline's operating company, conducted and produced an analysis that examined a host of potential consequences that could arise with continued lower throughputs. As volumes fall below 550,000 barrels per day, ice formations inside the pipe become more problematic and can cause corrosion in the pipe wall. Under a range of scenarios, an extreme case of volumes falling to 350,000 barrels per day would cause tremendous amounts of wax build-up, freezing, and corrosion that could pose serious integrity risks to the pipe. Additional heat and other mitigation measures to deal with the adverse operation conditions in Alaska would be necessary just to keep product moving. Oil pipe lines need turbulent flow to generate heat and prevent what are known as "slack line conditions." When slack line conditions occur, sophisticated leak detection systems have a much more difficult pinpointing leaks along right-of-ways.