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Obama Removes Bristol Bay From Future Alaska Oil, NatGas Lease Sales

President Obama Tuesday extended indefinitely a four-year-old freeze for oil and natural gas leasing in the waters of Alaska's Bristol Bay, a move criticized by industry representatives.

"Bristol Bay has supported Native Americans in the Alaska region for centuries; it supports about $2 billion in the commercial fishing industry, supplies America with 40% of its wild-caught seafood, it is a beautiful natural wonder, and it's something that's too precious for us to just be putting out to the highest bidder," Obama said.

The withdrawal, issued under the authority granted the president under the Outer Continental Shelf Lands Act, prevents the area from being considered for any oil or gas leasing for exploration, development or production.

The North Aleutian Basin Planning Area, which includes Bristol Bay, consists of about 32.5 million acres, a portion of which was leased in the mid-1980s but never developed due to litigation, according to the White House.

In 2007, President George W. Bush set in motion a lease sale for 2011 that would have opened about 5.6 million acres -- about one-fifth of the planning area -- for drilling (see Daily GPIJuly 3, 2007).

But three years later, during Obama's first term, the Interior Department unveiled a plan to expand development of the entire Gulf of Mexico and increase exploratory activity in new frontier areas, while putting Bristol Bay off-limits as a national treasure (see Daily GPIApril 1, 2010). Pending lease sales under the existing 2007-2012 offshore plan for Bristol Bay were canceled and the area protected through 2017. Obama's action Tuesday extends that protection indefinitely.

"These waters are beautiful and valuable, and [Tuesday’s] action will ensure that future generations will be able to enjoy their bounty," said Interior Secretary Sally Jewell.

However, according to National Ocean Industries Association (NOIA) President Randall Luthi, Obama's decision to block leasing at Bristol Bay is another example of the administration stifling offshore drilling.

"It is hard to understand President Obama's all-of-the-above energy strategy when more offshore areas have been closed to oil and gas leasing under this administration than have been opened up," Luthi said. "Zero truly new acres of federal offshore areas have been opened up for oil and gas leasing over the past six years. In fact, more than 85% of the Outer Continental Shelf remains off the table to oil and gas leasing.

“It is disappointing to witness this continued pattern of unilaterally removing areas from consideration before fully understanding the amount and potential of energy resources they hold."

In 2010, Interior’s former Minerals Management Service (MMS) said "substantial amounts" of natural gas could exist in the North Aleutian Basin, which lies in the southern Bristol Bay region of the Bering Sea off the northern shore of Alaska, according to the Governmental Accountability Office (see Daily GPIApril 9, 2010).

To develop the North Aleutian Basin, MMS said at the time it would take four to six offshore oil and gas development platforms; undersea pipelines to bring oil and gas to an offshore hub; 25 miles of undersea pipeline from the offshore hub to the northern coast of the Alaska Peninsula; 50 miles of overland pipeline across the Alaska Peninsula to Balboa Bay; a liquefied natural gas (LNG) plant in Balboa Bay; a tanker terminal to Balboa Bay for LNG and oil tankers; and LNG tankers to transport natural gas to the U.S. West Coast. The infrastructure costs were estimated to be in the billions of dollars.

The timing of Obama's announcement was questioned by the ranking Republican on the Senate Energy and Natural Resources Committee, who hails from Alaska.

"Given the lack of interest by industry and the public divide over allowing oil and gas exploration in this area, I am not objecting to this decision at this time," Sen. Lisa Murkowski (R-AK) said. "I think we all recognize that these are some of our state's richest fishing waters. What I do not understand is why this decision could not be made within the context of the administration's upcoming plan for offshore leasing -- or at least announced at the same time.

"It is incredibly frustrating that this administration looks at Alaska -- with oil production at a fraction of the level it could be at, and with low oil prices about to force steep across-the-board budget cuts -- and decides that conservation is our most pressing need. We are not asking to produce everywhere -- but right now, we are not being allowed to produce anywhere.

“Despite strong support, we are seeing development blocked in the Chukchi, the Beaufort, in NPR-A [National Petroleum Reserve in Alaska], and on the Coastal Plain. What we need are decisions to open lands and waters in Alaska, not the familiar and frustrating pattern of shutting everything down."

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