Road map for ANWR drilling gets clearer
Published: Monday, March 12, 2018
ANCHORAGE, Alaska — The Trump administration is taking the first steps in the long journey to opening oil drilling in the Arctic National Wildlife Refuge coastal plain.
Three months after Congress used a controversial Republican tax reform plan to allow energy development on ANWR's northern plain, Interior Deputy Secretary David Bernhardt outlined the road map regulators will use to comply with myriad environmental laws governing oil development in Alaska.
Speaking at an Alaska Support Industry Alliance breakfast last week, Bernhardt said the Bureau of Land Management is poised to begin the initial scoping process for leasing in ANWR and plans to hold public meetings and open a 60-day comment period on the scoping proposal.
Once comments are in hand, federal regulators are likely to begin drafting an environmental impact statement on leasing in the Arctic refuge, Bernhardt said. He said that he's aiming to complete the EIS within a year but noted that Interior Assistant Secretary for Land and Minerals Management Joe Balash has suggested that the yearlong timeline might be overly optimistic.
Alaska Sen. Lisa Murkowski (R) recently said that Interior is moving aggressively to lay the groundwork for oil and gas lease sales in the coastal plain before the end of President Trump's first term.
"There is a strong commitment to work with us to get these leases out before the end of this term," Murkowski explained last month at an Anchorage business meeting. "Because once you get those leases out into the hands of those who can then move forward, it's tougher" for environmentalists to file court challenges against leasing in the Arctic refuge.
However, Bernhardt observed that companies interested in conducting seismic studies in ANWR's coastal plain would face an additional round of regulatory oversight under the National Environmental Policy Act, Endangered Species Act and Marine Mammal Protection Act.
"There are a number of hoops that somebody would have to jump through if we were to process a [seismic] application," he said.
Currently, the only seismic data available on the coastal plain were developed in the 1980s using antiquated 2-D technology. Based on those studies, the U.S. Geological Survey in 1998 estimated that the coastal plain, adjacent Native-owned lands and nearby state waters, is likely to contain a mean volume of 10.4 billion barrels of oil.
Last year, Interior Secretary Ryan Zinke issued a secretarial order directing USGS to reprocess the vintage data in hopes of developing a clearer picture of ANWR's oil potential. Under that plan, USGS work was slated to be completed by this summer, with a full assessment of the coastal plain's oil and gas potential expected in late 2018.
Now, however, Bernhardt is suggesting that the directive to reprocess the old seismic data may not be necessary, due to Congress' decision to allow leasing in part of ANWR.
"At one time we thought that [reprocessed seismic] information might be useful in informing people" of the oil potential on the coastal plain, Bernhardt explained.
He predicted that the oil industry is likely to seek a federal permit to conduct advanced 3-D seismic research in the coastal plain, which would be far more useful than the existing information.
'We've got a shot at this'
The 19-million-acre Arctic refuge was created by Congress in 1980 under the Alaska National Interest Lands Conservation Act and included Section 1002, which set aside the 1.5-million-acre coastal plain for further oil and gas evaluation.
Over the years, the Alaska congressional delegation repeatedly tried to persuade Congress and the White House to allow oil and gas leasing in the 1002 area. Each time, however, the Alaskans were thwarted by Senate Democrats and environmental opponents.
Then, in 2016, the tide turned. After Trump was elected president, Senate Energy and Natural Resources Chairwoman Murkowski saw a new opportunity.
In January, with the GOP controlling the House, Senate and White House, Murkowski launched a low-key campaign to open ANWR's coastal plain to oil leasing.
From the beginning, Murkowski acknowledged that she wasn't likely to get the 60 votes needed to prevent a filibuster in the Senate. Instead she focused on a budget reconciliation bill, which can be passed by a simple majority vote.
"I said reconciliation is going to be our goal," she recalled. "So I went to [Senate Majority Leader] Mitch [McConnell] and said we've got a shot at this. Will you back me up on it?"
McConnell agreed but told Murkowski to get the blessings of Senate Budget Chairman Mike Enzi (R-Wyo.). McConnell also directed her to add her provisions to the second budget reconciliation bill, rather than proposing them for the first bill.
"So I said OK," Murkowski said. "And then we went to Enzi and he said: 'Yep, I'm good. I'll work with you on this on one condition. You've got to make sure that it [provides] 50 percent [of the oil drilling revenues] to the federal government."
In agreeing to that provision, Murkowski was waiving the state's right under the Alaska Statehood Act to 90 percent of the oil royalty money from ANWR.
"That was when we really got things going, but we did it quietly," she said. "Because we knew that the effort [by environmentalists] to erode and undercut would be there just as it historically had been."
Critical seismic findings
Meanwhile, Alaska state officials have repeatedly sought federal permission to answer the decades-old question of how much oil is actually available in the Arctic refuge's coastal plain.
In 2013, then-Gov. Sean Parnell (R) unsuccessfully petitioned the Obama administration to allow the state to conduct seismic testing on the coastal plain. After Interior rejected that request, Parnell filed suit in the U.S. District Court for the District of Alaska but lost. The state of Alaska's case was handled by now-Interior Deputy Secretary Bernhardt.
More recently, Alaska Gov. Bill Walker (I) announced plans for the state to conduct seismic studies and has asked the Alaska Legislature to provide $10 million for exploration. That request is pending in the state House.
Alaska Department of Natural Resources Commissioner Andy Mack said the state would partner with other oil and gas companies to pay for a new round of studies, which the state would in turn make available to the public.
"Our goal is to increase the level of interest in the lease-sales stage, and eventually in oil and gas development and production in the 1002" area of the Arctic refuge, he said.
Mack noted that the state is currently sharing seismic data that it received from companies that participated in the now-defunct Alaska state tax credit plan.
Under that program, the state partially reimbursed oil companies for the cost of exploration on Alaska's North Slope. In return, the companies agreed to let the state share the seismic findings 10 years after the exploration was completed.
"That data has been a huge driver of the renaissance [in oil development] we're seeing on the North Slope," Mack said.
However, some state legislators worry that new seismic studies could work against the state if they indicate that the coastal plain holds less oil than USGS has predicted.
But Mack argued it's worth the risk. "We are pretty positive about" the oil potential in ANWR's coastal plain, he said. "You never want to get ahead of yourself. There's never a guaranteed well. But we are excited."