Released December 02, 2019 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The U.S. Bureau of Land Management (BLM) will take comments through January 21, 2020, on a draft integrated activity plan and environmental impact statement regarding Oil & Gas development in roughly 23 million acres of land in the National Petroleum Reserve in Alaska (NPR-A).
Public meetings also will be held in eight Alaskan communities in 2020.
The nearly 500-page draft environmental impact statement (EIS), under development for a year and released November 21, listed four options for future development of NPR-A:
The BLM's EIS was prepared under policy guidance provided in 2017 by the U.S. secretary of the interior, which envisions "clean and safe development in the NPR-A while avoiding regulatory burdens that unnecessarily encumber energy production, constrain economic growth and prevent job creation," according to a news release accompanying the draft documents. The EIS process begun a year ago was part of an effort to "develop a new management strategy" for all BLM-managed public lands in the NPR-A, the agency added.
"With advancements in technology and increased knowledge of the area, it was prudent to develop a new plan that provides greater economic development of our resources while still providing protections for important resources and subsistence access," said BLM Alaska State Director Chad Padgett. "This is one of several actions we are taking to further expand responsible energy development based on substantial input, and we will continue seeking public input in this phase of the analysis."
The new land-management strategy was necessary, the BLM said, in part because of a 2017 study from the U.S. Geological Survey (USGS) that estimated a significantly higher amount of technically recoverable oil in the NPR-A. Also, the draft plan had information on caribou herds that was not available when an earlier plan was developed.
Crude oil production in Alaska had been declining since the late 1980s, when it peaked at about 2 million barrels per day (BBL/d), according to the U.S. Energy Information Administration (EIA). The state's oil production was about 479,000 BBL/d in 2018, the EIA said.
Click on the image at right to see a graphic on Alaskan crude oil production.
Recent estimates of hydrocarbon resources in the NPR-A could reverse the declining trend, although production from the acreage in question would be years away and may never happen even if the land is leased.
The USGS study said 8.7 billion barrels of crude oil was the mean estimate of undiscovered, technically recoverable resources that could lie under the 23 million acres of Alaskan land. The estimates contained in the mean ranged from about 21.5 billion barrels (5% probability) to 7 billion barrels (50% probability) to 1.8 billion barrels (95% probability).
Regarding undiscovered, technically recoverable natural gas resources, the USGS study said a mean estimate 24.5 trillion cubic feet (Tcf) of associated and non-associated natural gas could lie underneath the land. That mean reflected a range from 72.5 Tcf (5% probability) to 16.9 Tcf (50% probability) to 3.6 Tcf (95% probability).
The USGS study also assessed the land for the potential presence of natural gas liquids (NGLs). The agency's mean estimate of NGLs was 226 million barrels. The mean estimate reflected a range of 671 million barrels (5% probability) to 152 million barrels (50% probability) to 31 million barrels (95% probability).
The BLM's environmental assessment, which cost the government about $2.7 million to produce, also included three hypothetical crude oil production scenarios. In the "low" scenario, oil production would peak at about 120,000 BBL/d sometime in the next 20 years, then decline by 8% per year. In the "medium" scenario, production could reach 210,000 BBL/d sometime in the next 20 years, then decline by 8% annually after that. In the "high" scenario, production could reach a maximum of about 500,000 BBL/d sometime in the next two decades, then decline by 8% per year after that.
During scoping meetings held in Alaskan communities in late 2018 and early 2019, concerns were raised about the potential impacts that development could have on fish and wildlife, including caribou and other large land and marine mammals, migratory birds, fish and other aquatic species. Protection was sought for all current and potential future drinking water sources, including rivers.
The BLM's EIS does not project governmental revenue that could be garnered from leasing land for development. Nor does it calculate the costs beyond land leases to develop that land and extract hydrocarbons. But it does note that the Oil & Gas Industry is the largest component of the Alaskan economy, accounting for about 10% of the state's total gross domestic product (GDP) in 2017. The industry employed 9,365 workers in Alaska in 2018. Oil & Gas drilling also created thousands of additional indirect jobs in security, catering, lodging, facilities management, engineering and logistics. Jobs in the Oil &Gas extraction sector are the highest-paying jobs in the state, with an average yearly wage of about $225,000. "Economic events affecting the petroleum industry ripple through the state's entire economy," the EIS noted.
The BLM manages more than 245 million acres of public land located primarily in 12 western states, including Alaska. The BLM also administers 700 million acres of sub-surface mineral estate throughout the nation.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook-Twitter-LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Public meetings also will be held in eight Alaskan communities in 2020.
The nearly 500-page draft environmental impact statement (EIS), under development for a year and released November 21, listed four options for future development of NPR-A:
- Alternative A: This would keep the existing development plans in place. The existing plans, adopted in 2013, would open about 11.8 million acres of land for leasing. New infrastructure would be prohibited on 8.3 million acres.
- Alternative B: Slightly less land, 11.4 million acres, would become available for leasing, but new pipelines and processing infrastructure would be prohibited on about 10.5 million acres of land.
- Alternative C: Acreage available for leasing would increase to 17.1 million acres, roughly 75% of the NPR-A's 23 million acres of land. New infrastructure would be prohibited on 5.1 million acres.
- Alternative D: This option would open the most land, 18.3 million acres, to future development while prohibiting infrastructure on the fewest acres, 4.5 million acres.
The BLM's EIS was prepared under policy guidance provided in 2017 by the U.S. secretary of the interior, which envisions "clean and safe development in the NPR-A while avoiding regulatory burdens that unnecessarily encumber energy production, constrain economic growth and prevent job creation," according to a news release accompanying the draft documents. The EIS process begun a year ago was part of an effort to "develop a new management strategy" for all BLM-managed public lands in the NPR-A, the agency added.
"With advancements in technology and increased knowledge of the area, it was prudent to develop a new plan that provides greater economic development of our resources while still providing protections for important resources and subsistence access," said BLM Alaska State Director Chad Padgett. "This is one of several actions we are taking to further expand responsible energy development based on substantial input, and we will continue seeking public input in this phase of the analysis."
The new land-management strategy was necessary, the BLM said, in part because of a 2017 study from the U.S. Geological Survey (USGS) that estimated a significantly higher amount of technically recoverable oil in the NPR-A. Also, the draft plan had information on caribou herds that was not available when an earlier plan was developed.
Crude oil production in Alaska had been declining since the late 1980s, when it peaked at about 2 million barrels per day (BBL/d), according to the U.S. Energy Information Administration (EIA). The state's oil production was about 479,000 BBL/d in 2018, the EIA said.
Recent estimates of hydrocarbon resources in the NPR-A could reverse the declining trend, although production from the acreage in question would be years away and may never happen even if the land is leased.
The USGS study said 8.7 billion barrels of crude oil was the mean estimate of undiscovered, technically recoverable resources that could lie under the 23 million acres of Alaskan land. The estimates contained in the mean ranged from about 21.5 billion barrels (5% probability) to 7 billion barrels (50% probability) to 1.8 billion barrels (95% probability).
Regarding undiscovered, technically recoverable natural gas resources, the USGS study said a mean estimate 24.5 trillion cubic feet (Tcf) of associated and non-associated natural gas could lie underneath the land. That mean reflected a range from 72.5 Tcf (5% probability) to 16.9 Tcf (50% probability) to 3.6 Tcf (95% probability).
The USGS study also assessed the land for the potential presence of natural gas liquids (NGLs). The agency's mean estimate of NGLs was 226 million barrels. The mean estimate reflected a range of 671 million barrels (5% probability) to 152 million barrels (50% probability) to 31 million barrels (95% probability).
The BLM's environmental assessment, which cost the government about $2.7 million to produce, also included three hypothetical crude oil production scenarios. In the "low" scenario, oil production would peak at about 120,000 BBL/d sometime in the next 20 years, then decline by 8% per year. In the "medium" scenario, production could reach 210,000 BBL/d sometime in the next 20 years, then decline by 8% annually after that. In the "high" scenario, production could reach a maximum of about 500,000 BBL/d sometime in the next two decades, then decline by 8% per year after that.
During scoping meetings held in Alaskan communities in late 2018 and early 2019, concerns were raised about the potential impacts that development could have on fish and wildlife, including caribou and other large land and marine mammals, migratory birds, fish and other aquatic species. Protection was sought for all current and potential future drinking water sources, including rivers.
The BLM's EIS does not project governmental revenue that could be garnered from leasing land for development. Nor does it calculate the costs beyond land leases to develop that land and extract hydrocarbons. But it does note that the Oil & Gas Industry is the largest component of the Alaskan economy, accounting for about 10% of the state's total gross domestic product (GDP) in 2017. The industry employed 9,365 workers in Alaska in 2018. Oil & Gas drilling also created thousands of additional indirect jobs in security, catering, lodging, facilities management, engineering and logistics. Jobs in the Oil &Gas extraction sector are the highest-paying jobs in the state, with an average yearly wage of about $225,000. "Economic events affecting the petroleum industry ripple through the state's entire economy," the EIS noted.
The BLM manages more than 245 million acres of public land located primarily in 12 western states, including Alaska. The BLM also administers 700 million acres of sub-surface mineral estate throughout the nation.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook-Twitter-LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
