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Bush Administration to Allow Oil, Gas Leasing in Previously Closed North Slope Area

Less than a month after Congress voted to deny producers access to the energy-rich Arctic National Wildlife Refuge (ANWR), the Interior Department last week announced that it will make available hundreds of thousands of acres of North Slope tundra for oil and natural gas leasing.

Interior said it plans to open 390,000 additional acres in the 4.6 million-acre northeast corner of the National Petroleum Reserve-Alaska (NPR-A) possibly as early as next fall. The available acres, which had been withheld from leasing previously due to environmental and wildlife sensitivities, include areas north of Teshekpuk Lake to the Beaufort Sea in northern Alaska. Interior has deferred leasing in the area south of Teshekpuk Lake (211,000 acres).

This action by Interior fulfilled a 2002 recommendation by President Bush in his national energy policy that Secretary Gale Norton consider "additional environmentally responsible oil and gas development" in the NPR-A.

The Northeast corner of the NPRA was opened to leasing in 1999. Since then, two lease sales have been held, which have resulted in a number of wells drilled and significant discoveries, according to Interior. Last week's acreage offering was excluded from the two prior sales due to fact that the area is prone to erosion and is home to migratory bird habitats, caribou and other wildlife.

Interior's announcement makes a total of 4.39 million acres, or 95% of the northeastern section of the NPR-A planning area, available for oil and gas leasing. The U.S. Geological Survey reports that federal lands in the entire NPR-A, which span 23 million acres, hold a mean estimate of 60 Tcf of undiscovered, technically recoverable natural gas reserves, and a mean estimate of 9.3 billion barrels of undiscovered, technically recoverable oil reserves. Gas production, however, is constrained due to the lack of pipeline infrastructure.

Interior believes that the Northeast corner of the NPR-A contains enough oil and gas resources to help stem the production decline from the maturing fields in the North Slope.

Both Sen. Pete Domenici (R-NM), chairman of the Senate Energy and Natural Resources Committee, and Alaska Gov. Frank Murkowski lauded Interior's move. "We have streamlined the leasing process in approved drilling areas to avoid years of unnecessary delay and expensive red tape. I look forward to seeing these new procedures implemented in the NPR-A," Domenici said.

"[This] announcement from the Interior Department is very good news for our state," Murkowski said. "Alaskans have proven that we can develop our tremendous oil and gas reserves in environmentally responsible ways while at the same time protecting subsistence resources."

The move by Interior to allow leasing in a previously closed portion of the NPR-A was a major victory for Alaska, coming only weeks after congressional lawmakers opted not to open the coastal plain of Alaska's ANWR to oil and gas exploration and production. But it was a significant setback for environmentalists and other opponents of drilling in Alaska.

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