A new report on the merits of developing Alaska's Arctic Outer Continental Shelf (OCS) states the move would create "significant economic effects," and would generate thousands of jobs and billions in payroll and tax revenue.

The Feb. 18 report, titled "Potential National-Level Benefits of Alaska OCS Development," is a continuation of a 2009 study, both of which were commissioned by Shell Exploration and Production. It was compiled by Northern Economics Inc., an Anchorage firm, and the University of Alaska Anchorage's Institute of Social and Economic Research.

Researchers said development of oil and gas resources from the OCS in the Beaufort Sea could generate $97 billion in federal, state and local tax revenues for the next 50 years. Drilling in the OCS in the Chukchi Sea could generate $96 billion. Both figures were using 2010 dollars.

The report also said that for the next 50 years, an annual average of 54,700 jobs could be created nationwide from drilling in the OCS of both seas. Beaufort development alone would create 30,100 jobs while Chukchi would make 24,600, according to the report. It estimates the cumulative payroll from jobs at both seas would total $145 billion in 2010 dollars.

Production-wise, the report said the Beaufort OCS contained a mean average of 5.97 billion bbl of oil and condensates, and 15.97 Tcf of gas, while the Chukchi OCS had 8.38 billion bbl/34.43 Tcf.

The report envisioned the construction of seven offshore production platforms and 235 miles of pipeline in the Beaufort OCS, while the Chukchi would have four platforms and 680 miles of pipeline. Oil would begin flowing from Beaufort in 2019 and from Chukchi in 2022, while gas flows would start in 2029 in Beaufort and 2036 in Chukchi.

Daily peak production was estimated at 1.17 million b/d and 883 MMcf/d from Beaufort, and 565,000 b/d along with 1,421 MMcf/d from Chukchi.

Royal Dutch Shell plc, the leading acreage holder in Alaska's OCS, announced Feb. 3 that it was shelving plans to drill there in 2011, but hoped to restart the long-delayed project in 2012 (see Daily GPI, Feb. 4). The company had been working for several years to gain federal and state approval for the drilling, but in January Alaska Native and environmental groups successfully challenged air permits issued to Shell by the Environmental Protection Agency (see Daily GPI, Jan. 5). The company also blamed the Macondo well blowout for the delay.

In late January the Bureau of Ocean Energy Management, Regulation and Enforcement began to solicit comments on Shell Offshore Inc.'s supplemental exploration plans in the Alaskan deepwater (see Daily GPI, Jan. 31).

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