The Trump administration said Wednesday it plans in December to auction all available tracts within the 22.8-million-acre National Petroleum Reserve in Alaska (NPR-A) for oil and natural gas development.
The Department of Interior’s (DOI) Bureau of Land Management (BLM) said it would offer 900 tracts totaling 10.3 million acres in the lease sale, the largest in the reserve’s history. The tracts constitute all of the remaining acreage available for development following a 2013 record of decision enacted during the Obama administration.
The BLM said oil produced from the December lease sale — the 13th in the NPR-A since 1999 — would help replenish the Trans-Alaska Pipeline System (TAPS), an issue pushed by Republicans in Alaska and Washington, DC.
“In May, I put my hand on TAPS and pledged to help fill it by putting Alaskans back to work on the North Slope,” said DOI Secretary Ryan Zinke. “This large and unprecedented sale in Alaska will help achieve our goal of American energy dominance. Responsible development of petroleum resources in Alaska means creating good-paying local jobs and revenue for the communities while protecting vital subsistence resources that Alaska Native communities depend on.”
According to the BLM, there are 189 authorized leases in the NPR-A covering more than 1.37 million acres. Bids received from the 12 previous sales generated more than $280 million, half of which was paid to Alaska.
The leases would have primary terms of 10 years, with a minimum bid for tracts deemed to have a high potential for oil and gas of $25/acre. A fixed royalty rate of 16.66%, couple with a rental rate and minimum royalty of $5/acre, would also apply. For low potential tracts, the minimum bid is $5/acre, with a 12.5% fixed royalty rate, and a rental rate and minimum royalty of $3/acre.
The BLM would accept bids until Dec. 4. The winning bidders would be announced in Anchorage two days after bids are unsealed.
Alaska’s Congressional delegation, all Republicans, heralded the move.
“I thank the administration for recognizing that Alaska has a leading role to play in America’s energy dominance and welcome its desire to increase access to the resources within our state’s 23-million acre NPR-A,” said Sen. Lisa Murkowski, chair of the Senate Energy and Natural Resources Committee. “Responsible development in the NPR-A will strengthen our economy, begin to refill our TAPS and generate new wealth to create prosperity and reduce our deficits. Those are substantial benefits — and this lease sale is a key step to gaining them.”
Sen. Dan Sullivan said “exploration and development of the NPR-A offers a promising opportunity to fill TAPS, boost Alaska’s economy and protect America’s energy security. After years of cutting of access to development, jobs and growth, the DOI is now working with Alaska to put people back to work and ensure American energy dominance.”
Rep. Don Young told Alaska Public Media that the decision to put the tracts up for auction “is a testament to our work to spearhead new development and fight back against the status quo that has underserved Alaskan communities and interests for years. The NPR-A was always intended for development, not to be locked away in perpetuity like the previous administration attempted.”
Alaska Gov. Bill Walker, an independent, said the lease sale “is great news for Alaska, as we seek to fill TAPS and build a Stronger Alaska. I thank Secretary Zinke and the BLM for recognizing the need for increased access to NPR-A. I wholeheartedly agree with Secretary Zinke’s statement that responsible resource development in Alaska is key to America’s energy dominance.”
Conversely, environmental groups said they were dissatisfied with the decision.
“Americans should not stand by and allow our public lands to be plundered without restraint,” said the Wilderness Society’s Nicole Whittington-Evans, Alaska regional director. “We need a thoughtful, careful approach that emphasizes responsible development and recognizes that some places are simply too special to drill.”
The announcement of the NPR-A lease sale came one day after the DOI proposed offering nearly 77 million acres in the Gulf of Mexico for oil and natural gas exploration at its next lease sale, which is scheduled for March. If realized, the sale would be the largest oil and gas lease sale in U.S. history.
© 2023 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 | ISSN © 1532-1266 |