Agreement Clears Way for Potential NPR-A Production
December 05, 2011
The National Petroleum Reserve-Alaska is a 22.6 million acre area managed by the Department of the Interior’s Bureau of Land Management. The NPRA is an important resource for domestic oil development. Estimates indicate that the NPRA contains more than one billion barrels of technically recoverable oil. If this project goes forward, it could add to what is poised to be the busiest exploration season in the past two decades, all occurring under the current ACES tax law, with exploration drilling announcements already made by Great Bear, Repsol, Ultra Star, Linc Energy, and Brooks Range Petroleum. The agreement in principle confirms that the construction of a pipeline and bridge over the Nigliq Channel of the Colville River is acceptable to the resource agencies so long as the permit application includes conditions that reflect agreements reached among the company, FWS, and the EPA. The conditions include engineering changes and substantial mitigation proposed by the company based on consultations with the resource agencies. The company has also agreed to allow other companies that develop leases in the NPRA to use the same crossing, rather than seek approval for additional channel crossings in the area. This approach will reduce the environmental impacts associated with development of existing and future leases in the NPRA west of the Colville River. “To harness Alaska’s tremendous energy potential for our nation, we must continue to find ways to responsibly expand opportunities for exploration, development, and delivery of resources from the National Petroleum Reserve-Alaska” said Interior Deputy Secretary David J. Hayes, who facilitated the discussions among the resource agencies and the company. Hayes serves as Chair of the President’s Interagency Working Group on Coordination of Domestic Energy Development and Permitting in Alaska. “I applaud the hard work and collaboration by all parties – including the company and federal agencies – to develop a proposal that meets both the energy objectives of the CD-5 project and that mitigates potential environmental impacts.” Earlier this year, the President Obama announced that the Department of the Interior will hold annual lease sales in the NPR-A. The next lease sale will take place on Wednesday, December 7. President Obama issued an Executive Order establishing the President’s Interagency Working Group on Coordination of Domestic Energy Development and Permitting in Alaska on July 12, 2011. The State of Alaska has been instrumental in persuading federal agencies to reconsider the 2010 decision to deny a permit for this project. Alaska's Governor Sean Parnell and state agencies have submitted numerous letters and expert reports to federal agencies reviewing the project and Governor Parnell (R) welcomed today's news. “We believe the state’s input and advocacy helped in achieving this positive outcome, and we will continue to monitor this project through the permitting process,” Governor Parnell said. The agreement comes two days before the state and the Bureau of Land Management are to have simultaneous lease sales. Wednesday’s sales now come with potentially fewer restrictions as the state works toward fulfilling a goal of increasing pipeline throughput to 1 million barrels a day. “Each new field brought online gets us a step closer to energy independence and opportunities for Alaskans,” Governor Parnell said. U.S. Senator Lisa Murkowski (R-Alaska), also welcomed the agreement in principle between Environmental Protection Agency and U.S. Fish and Wildlife Service to allow construction of a road across the Colville River, clearing the way for U.S. Army Corps of Engineers to approve the first oil and natural gas production from the National Petroleum Reserve-Alaska (NPR-A). In a prepared statement Murkowski said, “This agreement is long overdue, but no less welcomed.” Murkowski said, “With this agreement I expect the Corps to move quickly to approve the proposed bridge and allow access to the oil and natural gas reserves within the National Petroleum Reserve. That approval will finally be a reality, along with the jobs, federal revenue and energy security that have long been more promise than reality.” According to Murkowski, the agreement between the EPA and USFWS on ConocoPhillips’ proposed bridge across the Colville River positions the CD-5 project for final approval by the U.S. Army Corps of Engineers within a matter of weeks. Once final approval is granted, ConocoPhillips can finally begin developing its leases at the CD-5 oilfield on the eastern edge of NPR-A. ConocoPhillips, along with its partner Anadarko Petroleum, has been working for nearly a decade to develop the oil and gas reserves at CD-5, a satellite of ConocoPhillips’ Alpine field on the western edge of the North Slope. “I’ve had numerous disagreements with the administration on Alaska issues, but I appreciate the involvement of the White House and the Interior Department in removing this particular roadblock to improving our nation’s energy security,” Murkowski said. “ I hope this important step will lead to further improvements in how applications to drill for oil in Alaska are handled and help the president carry out his May 14 pledge to accelerate development within the NPR-A.” U.S. Sen. Mark Begich (D-AK) released the following statement regarding today's announcement by the Department of Interior (DOI) that the U.S. Fish & Wildlife Service and the Environmental Protection Agency have reached an agreement in principle with ConocoPhillips regarding the company’s proposed Alpine Satellite Development Plan (CD-5) in the National Petroleum Reserve –Alaska (NPRA). According to the DOI, the agreement in principle confirms construction of a pipeline and bridge over the Colville River will move forward. In a prepared statement Begich said, “This is a great way to ring in the holiday season at a time when Alaska’s oil and gas industry needs to hear some good news on the development front. Senator Begich said, “It’s been a long and sometimes frustrating process to get to this decision. I commend ConocoPhillips and the Interior Department for sticking with it. This foothold into the National Petroleum Reserve-Alaska will bring new jobs and millions of barrels of oil to help fill the pipeline.” From day one in the Senate, Sen. Begich has pushed the Obama Administration to grant ConocoPhillips the permit for the CD-5 project, including trips to the field by Interior Secretary Ken Salazar and Army Corps of Engineers Assistant Secretary Jo-Ellen Darcy. This summer, Begich brought Darcy to Alaska and highlighted the importance of CD-5 at a roundtable meeting in Fairbanks and has also taken other steps over the past three years to push for the permit. Since coming into office in January 2009, Sen. Begich has pushed the Obama Administration to expand development options in Alaska’s Arctic. Through Begich’s efforts, there is also exploration and development pending in the Beaufort and Chukchi Seas. In a prepared statement Congressman Don Young (R-AK) said, “While I welcome today’s announcement by the Obama Administration, the fact of the matter is that this should have happened sooner. The CD-5 project is an important project not only because it will create jobs for Alaskans, but also because it will put this nation on a path towards becoming energy independent. I hope to learn more in the coming days as the conditions of this agreement become clearer; until then, I'm cautiously optimistic that this will in fact lead to the development of the CD-5 project.” Today, Alaska House Democrats welcomed the news that federal agencies have reached an agreement in principle with ConocoPhillips that could allow the company to go forward with its plans for a major new development in the National Petroleum Reserve – Alaska (NPR-A). ConocoPhillips first applied for its permit to expand the Alpine field into the NPR-A over a year ago. Alaska House Democrats have been pressing the federal agencies to resolve their concerns over the permits so ConocoPhillips could move ahead with the Alpine satellite field. “I’m excited that Conoco will finally be able to move ahead with this important new development and that Alaskans will at last be able to share the jobs and benefits of tapping the resources in the NPR-A.” said Rep. Bob Miller (D-Fairbanks). “I hope this project will be able to move forward this drilling season.” “I am excited to hear the forward progress on the bridge permit,” said Minority Whip Rep. Berta Gardner (D-Anchorage). “This will not only help ConocoPhillips with development of their leases in NPR-A, but other current and future NPR-A leaseholders as well.” “We wanted the feds to know this was a bi-partisan, Alaska issue. We need the oil development, and Conoco has announced it will develop in NPR-A under the existing ACES tax law once it gets the bridge permit it applied for over a year ago” said Rep. Les Gara (D-Anchorage). “What’s the point of having a national petroleum reserve if you can’t access it for oil development?” asked Rep. Pete Petersen (D-Anchorage). “It’s too bad it’s been delayed this long, but I’m encouraged that this new development should get going soon. “This is exactly what Alaska needs to get the North Slope’s oil and gas exploration and development back on track,” said Senator Hollis French (D-Anchorage). “Not only will this extend the life of the pipeline, it will also create much-needed jobs and boost the economy.” Regarding a letter written to several federal officials in February of 2011 by 14 Alaska Democrats encouraging them to reverse the decision by the Army Corps of Engineers to deny a permit for ConocoPhillips to build the bridge and pipeline, Senator French said, “We wanted to show the federal government that Alaska is unified in this issue. He said, “Whether you are Republican or Democrat, it doesn’t matter. We all know we need to spark more exploration and development. That’s exactly what today’s decision does.” Senator French is a former North Slope oil worker. Senator French says he would also like to thank Alaska’s delegation in Washington, DC for fighting hard to make sure Alaska’s interests weren’t forgotten during the years-long struggle to get the necessary permits to build the bridge and pipeline. “Senators Begich and Murkowski, as well as Representative Young, pushed the Obama administration to grant the permit for the CD-5 development, including trips to the field by Interior Secretary Ken Salazar and Army Corps of Engineers Assistant Secretary Jo-Ellen Darcy,” said Senator French.
Edited by Mary Kauffman, SitNews
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