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Arctic Energy Center Weekly Roundup 12/9/16-12/16/16

Industry interest alive and well in Alaska


Published:

WEEKLY ROUNDUP
December 9 - 16, 2016

 

This Week on AEC

In the News

Bidders snap up state, federal leases on North Slope.
E&E News. Alaska officials were all smiles yesterday morning as the Division of Oil and Gas opened $17.8 million in winning bids for oil and gas leases on state lands in northern Alaska. Hours later, the Bureau of Land Management held a separate lease sale for National Petroleum Reserve-Alaska lands, generating $18.8 million in sales. The state is due to receive half of those proceeds. BLM received 92 bids for 67 tracts of land in the reserve — the most bids received by BLM for a single sale in that region since 2010. Five industry groups sought the federal leases. The most successful bidder was ConocoPhillips Alaska Inc. in combination with Anadarko E&P Onshore LLC, which submitted 65 bids, winning all of them. This year, Armstrong Energy spent the most for a single state bid, paying $111 per acre for one North Slope tract. The Denver-based independent is currently exploring for resources on lands located east of Alaska's oil-rich Prudhoe Bay and Kuparuk River units. The Alaska agency said six industry groups submitted bids in the North Slope sale, with Burgundy Xploration offering to buy the most lands. Other bidder groups included Accumulate Energy Alaska in partnership with Burgundy, Alliance Exploration, ConocoPhillips Alaska, and Caracol Petroleum together with TP North Slope Development. Three companies bid for Beaufort Sea offshore lands: Narwal, Eni Petroleum US and a group identified as Alaska LLC.
 
Governor Walker Applauds State Oil and Gas Lease Sales (Press Release). Office of Gov. Bill Walker. Governor Bill Walker applauded the successful lease sales held by the Alaska Division of Oil and Gas today, which received 410 bids from companies and investors for oil and gas leases on state land. Bids for oil and gas leases on the North Slope and Beaufort Sea totaled $17.8 million. “This is great news—for the state and the industry,” said Governor Walker. “As Alaska grapples with a $3.5 billion deficit, these $17.8 million oil and gas lease sales are the first stage to getting much-needed production in our state.” On the North Slope, the division received 402 bids on 384 tracts totaling 599,880 acres, making it the second largest sale by acreage since area wide oil and gas leasing began in 1998. Winning bids on the North Slope totaled $16,900,490. The division received $870,431 for eight bids on seven tracts totaling 33,460 acres in the Beaufort Sea.
 
Bishop Reacts to Disastrous Alaska Announcement. House Committee on Natural Resources. Today, President Obama issued Executive Order 13689 on the Northern Bering Sea Climate Resilience. The order withdraws 40,300 square miles from oil and natural gas leasing using the Outer Continental Shelf Lands Act. Chairman Rob Bishop (R-UT) released the following statement:   “This administration has obeyed every directive from environmentalists to starve the Trans-Alaska Pipeline System and block responsible development. Today’s action will make the Bering Strait a choke point for any vessel seeking to reach Alaska Natives on the North Slope who want to see economic development on their lands. Alaskans want a brighter future with growing jobs, rising incomes and a healthy economy. Unfortunately, that doesn’t fit with President Obama’s dubious legacy.”
 
Obama declares vast areas of Alaskan coast off-limits to drilling. The Washington Times. President Obama used his executive authority Friday to close more than 40,000 square miles of Alaska’s coast from oil and gas leases. The president’s order covering the waters offshore of Nome and surrounding St. Lawrence Island also create a 112,300-square-mile area, named the Northern Bering Sea Climate Resilience Area, where a task force will be required to help coordinate federal activities “focusing a locally tailored collection of protections related to oil and gas, shipping and fishing,” the White House said. The move comes one day after Alaska’s congressional delegation sent Mr. Obama a letter objecting to the closing of offshore waters from future oil and gas leases. “The governor of Alaska, the leadership of the North Slope and northwest Arctic boroughs, the majority of the tribal leadership representing Alaska natives who live in the Arctic, a supermajority of the members of the Alaska state legislature, and an overwhelming majority of the Alaskan people also oppose the withdrawal of acreage in these areas,” wrote Sens. Lisa Murkowski and Dan Sullivan, and Rep. Don Young, all Republicans.

Weekly Voices
 
High hopes. Ketchikan Daily News. Our fingers are crossed that the results of Wednesday’s federal and state oil-lease sales are as positive as they seem. Bidders tallied a total of $18.8 million in high bids covering 614,000 acres within the National Petroleum Reserve-Alaska, according to the Alaska Dispatch News. It’s said to be the biggest annual sale in that area since 2004. Meanwhile, a state sale of oil and gas leases in the Beaufort Sea and North Slope areas attracted $17.8 million from a total of 410 bids. Ketchikan is long way from Alaska’s oil- and gas-producing regions but we well understand the importance of energy extraction revenue for the State of Alaska and services it provides here. We also know that jobs and other economic activity related to energy production from state and federal lands are tremendously important to Alaska’s overall economy. Leases that result in production, jobs and revenue are good things. We’ll also take heart in the view that Wednesday’s bidding represents continued interest in Alaska energy production. News from the global oil industry hasn’t been great for some time, and it’s good to hear something positive in Alaska.
 
With Trump vowing to increase offshore drilling, Obama should try to prevent future oil and gas exploration. (Editorial). LA Times.  Obama should go further and ban drilling in federal waters in the Arctic and off the Atlantic coast (which some Democratic senators, mostly from the East Coast, have called for). The administration recently adopted its 2017-2022 plan for offshore energy development, which would allow new leases in 10 areas of the Gulf of Mexico, and another lease in Alaska’s Cook Inlet. But allowing any additional wells ramps up the risk — spills at sea are exceedingly more difficult to clean up than on land, and the oil they unleash spreads with the currents. The U.S. should move away from offshore drilling, which accounts for about 16% of U.S. production. Global warming is real, and human use of fossil fuels is largely responsible for it. The world needs to ratchet back both production and use of oil if it is to stave off catastrophic climate change. Yes, the world needs oil, but it also needs to transition away from it. And the United States needs to protect its coastlines from dangerous oil spills. While the federal government doesn’t have much sway on drilling in state waters — Alaska has a number of active platforms within three miles of shore — it does have control over the exploitation of federal waters. Obama should impose a ban on future drilling there, even if it will be left to the environmental activists to make sure  it sticks.
 
 
 
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