Posted on 06/16/2011 2:44:48 PM PDT by thackney
The government will sell oil and gas drilling leases in Alaska’s National Petroleum Reserve by the end of this year, Interior Secretary Ken Salazar announced today.
The move builds on President Barack Obama’s May 14 announcement that the Interior Department would begin conducting annual lease sales for tracts inside the 23-million-acre reserve on Alaska’s North Slope.
Salazar’s announcement came at the end of a nearly two-hour House Natural Resources subcommittee hearing on Republican legislation that would mandate annual lease sales in the reserve and speed up federal permitting of roads, pipelines and other infrastructure needed to support oil and gas development in the region.
Salazar said the commitment to annual lease sales is “part of President Obama’s comprehensive energy strategy” and one of several “concrete steps to continue to expand responsible and safe domestic oil production.”
But Rep. Doc Hastings, R-Wash., said the administration wasn’t going far enough.
“Producing oil and natural gas in the NPR-A is pointless if there’s no way to get it out of there,” said Hastings, the bill sponsor. “The real problem is the federal government’s blocking and delaying of permits for necessary roads, bridges and pipelines needed to transport the energy out of the (reserve).”
To prepare for the 2011 lease sale, the Interior Department will solicit expressions of interest by oil and gas companies who may have their eyes on tracts in the reserve, said Mike Pool, deputy director of the Bureau of Land Management.
“This affords industry (the chance) to express to BLM certain parcels or tracts that they would like to see offered for the lease sale come December,” Pool told the House panel. The Bureau of Land Management still may put additional tracts on the auction block, he stressed.
Hastings’ bill would go further by also:
•requiring government agencies to issue infrastructure permits tied to oil and gas development in the reserve no more than 60 days after essential drilling permits are issued by the Interior Department. •forcing the Interior Department to prepare a right-of-way plan that details how existing and future leases would be within 25 miles of an approved road or pipeline. •mandating an updated assessment of the oil and natural gas resources in the reserve, because current estimates have been criticized as too low. The U.S. Geological Survey estimated last year that there are roughly 900 million barrels of oil in the NPR-A, which was established as a petroleum reserve in 1923 and first opened for drilling in 1998. Earlier calculations were much higher, with estimates of 2.7 billion barrels of oil and 114.36 trillion cubic feet of natural gas in the reserve.
Given the designation as an oil and gas reserve — and not a specially protected wilderness area or other landmark — extracting energy from the region should be straightforward, said Sen. Lisa Murkowski, R-Alaska.
“If we can’t be producing from the National Petroleum Reserve, where in the world can we get it from?” Murkowski said. “I would suggest . . . that we’ve got a permitting problem. We don’t have a leasing problem.”
“The leases are out there,” Murkowski added. But “without some assurance of basic use and enjoyment of the property, purchasing a lease would be very risky business.”
Although 1.6 million acres — spanning 191 tracts — are now leased in the reserve, relatively little drilling has gone on there. Companies have increasingly given up their leases to drill, with 64 leases relinquished in fiscal 2010 and 60 already handed back to the government this year.
Murkowski and other Republicans highlighted the long-running bid by ConocoPhillips to build a bridge and pipeline over the Colville River Delta to access its drill site in the reserve. For some GOP lawmakers and industry allies, the company’s six-year quest has become a symbol of environmental regulation run amok.
Federal agencies have squared off on the project, with the Environmental Protection Agency generally opposing ConocoPhillips’ plan in favor of a road-less approach combining flights with an underwater pipeline.
Murkowski said she was “cautiously optimistic” the project would be resolved, following negotiations with administration officials. But, she said, “if every time a leaseholder wants to produce from the NPR-A they’ve got to come to Congress and essentially have a congressional hearing, we’re not going to be in a better position next go around.”
Alaskan officials and oil industry leaders today warned that the viability of the 800-mile-long Trans Alaska pipeline is in jeopardy without robust production from the reserve. Low volumes of oil traveling in the pipeline has already slowed the speed of that crude, and officials warn that if the volume shrinks much further, it could stop flowing altogether.
That could hurt Western consumers and refineries who depend on oil from Alaska, said Charles Drevna, head of the National Petrochemical and Refiners Association.
Drevna said that if Western states had been starved of Alaskan crude in 2010, they would have imported more than 73 percent of their oil.
“Our nation needs to ensure that there are minimal constraints to critical energy arteries — roads, bridges and pipelines — that move reliable and secure American energy sources to manufacturers that produce useful American products,” Drevna said. “Unfortunately, too often multiple government agencies create years of bureaucratic delays in approving a permit for a road, a bridge or other needed infrastructure.”
Democrats and administration officials took a dim view of Hastings’ bill.
Rep. Rush Holt, D-N.J., said it would be wasteful to force the government to map “out a spiderweb of roads and pipelines before we even know where future oil and gas production may take place.”
The BLM’s Pool also took issue with bill’s road-mapping requirement, which he said would force the government to “pre-approve rights-of-way on millions of acres of lands that industry may never seek to develop.”
Pool also warned that the legislation’s requirement for annual lease sales in areas of the reserve most likely to produce commercial quantities of oil and natural gas could conflict with decisions the agency has already reached about the best spots to sell. “These decisions balance protection of wildlife, habitat and subsistence values with oil and gas exploration,” Pool said.
ConocoPhillips has been trying to get permits for NPRA for 6 years. The government sold the leases, the exploratory drilling was completed, but they cannot get the permits for production facilities.
don’t wait, sell permits now
That sounds like quintessential Obama, have a press conference announcing the selling of leases, then simply refuse to allow them to build anything there behind the scenes.
The only reason we pull oil from that Godforsaken part of the world is so we can sell them weapons and get our money back.
Heck oh mighty, (oh, excuse my french) we still celebrate Columbus day because he was willing to risk his life falling off the edge of the 'erf, just so he wouldn't have to deal with the mid-east devils.
Let’s keep in mind here that NPR-A has already been determined to be largely empty and so this is somewhat silly. As you can see here:
2002 — “The assessment estimates (Table 1) that there is between 5.9 and 13.2 billion barrels of oil (BBO) of technically recoverable oil and between 39.1 and 83.2 trillion cubic feet (TCF) of natural gas on federal lands within NRPA.”
In January last year, after exploratory drilling was completed in the most promising locales based on seismic studies, the USGS released this assessment:
2010: An assessment by the United States Geological Survey (USGS) in 2010 estimated that the amount of oil yet to be discovered in the NPRA is only one-tenth of what was believed to be there in the previous assessment, completed in 2002.[2]
The new USGS estimate now says the NPRA contained approximately “896 million barrels of conventional, undiscovered oil”.[2] The reason for the decrease is because of new exploratory drilling, which showed that many areas that were believed to hold oil actually hold natural gas.
The estimates of the amount of undiscovered natural gas in the region also fell, from “61 trillion cubic feet of undiscovered, conventional, non-associated gas” in the 2002 estimate, to 53 trillion cubic feet in the 2010 estimate.
This is a gas field, not an oil field.
896 million barrels is worth going after, but a field like that is only going to do maybe 50,000 barrels/day. That doesn’t come close to offsetting the plummet in Prudhoe Bay’s production, which was multiple million barrels/day at one point and is now down to just 600K bpd, and falling relentlessly every year as the field dies/goes empty.
So, why is it necessary to wait seven months? With this bunch, they're just as likely to use a few delaying tactics like this and then never issue them if reelected.
Rep. Doc Hastings, R-Wash., said the administration wasn't going far enough. "Producing oil and natural gas in the NPR-A is pointless if there's no way to get it out of there... The real problem is the federal government's blocking and delaying of permits for necessary roads, bridges and pipelines needed to transport the energy out of the (reserve)."
[snip] The government will sell oil and gas drilling leases in Alaska’s National Petroleum Reserve by the end of this year, Interior Secretary Ken Salazar announced today. [/snip]
Obama Admin Objects to Alaska Oil and Gas Development Bill
New York Times | 6/16/11 | Phil Taylor
Posted on 06/16/2011 6:23:01 PM PDT by Nachum
http://www.freerepublic.com/focus/news/2735851/posts
It is very light oil and condensate, even higher that what has been produced from the nearby Alpine and Fjord fields.
ConocoPhillips and Anadarko announce NPRA discoveries
http://juneauempire.com/stories/050509/reg_436594807.shtml
May 05, 2009
USGS report reduces estimate of oil in petroleum reserve
http://www.adn.com/2010/10/26/1519692/report-slashes-estimate-of-amount.html
October 27th, 2010
...
And yet, the agency scientist who published the new estimates cautioned against overreacting. He stressed on Tuesday that the reserve does hold some decent-sized accumulations of oil — particularly in the northeast, near Teshekpuk Lake — and its potential for gas is “just phenomenal.”
...
Some geologists in Alaska are having a hard time believing the NPRA contains 90 percent less oil than the Geological Survey estimated just eight years ago.
“It makes NPRA — the bulk of NPRA — very questionable with regard to oil,” said David Hite, an Alaska petroleum geologist and private consultant.
...
Hite and other geologists in Alaska said they need to look more carefully at the agency’s findings before they feel confident accepting it.
“It seems somewhat controversial to me,” said Dick Garrard, geoscience manager for FEX, the Alaska subsidiary of a Canadian energy firm called Talisman.
...
The new report, however, shows that one of the most promising places for oil exploration in NPRA is in one of its most environmentally sensitive areas, near Teshekpuk Lake.
But environmentalists have fought in court to protect the area from development, citing its importance for migratory birds.
I’m sure you’re aware that light condensate has only 60% of the BTUs of proper crude.
And doesn't require as much energy to process into fuel. Heavy hydrocarbons have to be cracked prior to being used for most fuels.
The north slope is looking at producing more and more heavy crude. To blend it with some lights will make it easier to keep the pipeline flowing without adding heaters along the way.
of proper crude
Proper crude? Using this analogy the heavy, thick bitumen produced from Venezulea's poorest fields most be most proper, as they have the most BTU's per barrel.
I was on the preliminary engineering team for the ConocoPhillips fields back in 2005~2006. I know the value of the fields and why ConocoPhillips has fought for years to get approval to produce them. Don't try to make the NPRA as not worth going after.
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