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Permit Denial for ConocoPhillips Comes Under Fire

February 15, 2010
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Both of Alaska's U.S. senators blasted the Obama administration's denial of ConocoPhillips' permit application to construct a bridge to access what would have been the first oil and natural gas leases in the National Petroleum Reserve-Alaska (NPR-A). The administration insisted that the producer instead should use directional drilling for the development.

Opponents of developing the Arctic National Wildlife Refuge (ANWR) and Alaska's offshore areas repeatedly have pointed to the 23 million-acre NPR-A as an alternative for producers. But Republican Sen. Lisa Murkowski contends that the U.S. Army Corps of Engineers' denial of the permit to build a bridge over the Colville River, which forms the southeastern border of the NPR-A, effectively places NPR-A resources off-limits.

"I am alarmed and amazed by this short-sighted decision, which totally ignores the economics of future development in all of northern Alaska," she said. "Directional drilling can work in ANWR because the oil is concentrated in the northwest corner. That is an entirely different situation than the vast and widely distributed deposits in the NPR-A, however, and the administration knows it," Murkowski noted.

The decision by the Army Corps "is obviously disappointing to me and the many Alaskans who are eager to develop the oil and gas potential in the NPR-A...I hope that in the coming months both the company and the permitting agencies can work together to get this valuable project moving forward both economically and in an environmentally responsible way," said Democratic Sen. Mark Begich.

While one oil deposit that ConocoPhillips is trying to access may be within reach using directional drilling, Murkowski said known deposits that are next in line for development are more than 10 miles away from existing infrastructure and far outside the technological scope of extended reach drilling. The bridge and the related pipelines are essential for additional oil and gas development from the NPR-A.

"If allowed to stand, this myopic decision will kill all future oil development from the nation's largest designated petroleum reserves and probably stop all future natural gas production from the area as well," Murkowski said. Although ConocoPhillips may reapply for the permit, it is clear that they have lost another drilling season because of this regulatory overreach, she noted.

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