|The entire NPRA area joins ANWR in now been deemed "Off Limits' by the Obama Administration|
President Obama is campaigning as a champion of the oil and gas boom he's had nothing to do with, and even as his regulators try to stifle it. The latest example is the Interior Department's little-noticed August decision to close off from drilling nearly half of the 23.5 million acre National Petroleum Reserve in Alaska.
The area is called the National Petroleum Reserve because in 1976 Congress designated it as a strategic oil and natural gas stockpile to meet the "energy needs of the nation." Alaska favors exploration in nearly the entire reserve. The feds had been reviewing four potential development plans, and the state of Alaska had strongly objected to the most restrictive of the four. Sure enough, that was the plan Interior chose.
Interior Secretary Ken Salazar says his plan "will help the industry bring energy safely to market from this remote location, while also protecting wildlife and subsistence rights of Alaska Natives." He added that the proposal will expand "safe and responsible oil and gas development, and builds on our efforts to help companies develop the infrastructure that's needed to bring supplies online. The problem is almost no one in the energy industry and few in Alaska agree with him. In an August 22 letter to Mr. Salazar, the entire Alaska delegation in Congress:
|The Areas we WERE drilling were relatively tiny, in comparison to the size of Alaska or even the U.S.A.|
Senators Mark Begich and Lisa Murkowski and Representative Don Young—call it "the largest wholesale land withdrawal and blocking of access to an energy resource by the federal government in decades." This decision, they add, "will cause serious harm to the economy and energy security of the United States, as well as to the state of Alaska." Mr. Begich is a Democrat.
The letter also says the ruling "will significantly limit options for a pipeline" through the reserve. This pipeline has long been sought to transport oil and gas from the Chukchi Sea, the North Slope and future Arctic drilling. Mr. Salazar insists that a pipeline could still be built, but given the Obama Administration's decision to block the Keystone XL pipeline, Alaskans are right to be skeptical.
Alaskans also worry that the National Petroleum Reserve will become the same political football as the Arctic National Wildlife Reserve, or ANWR, which Washington has barred from drilling because of dubious environmental objections. The greens now want Congress to rename the energy reserve the "Western Arctic Reserve" to give the false impression that it is a fragile wildlife area. Some parts of the area are environmentally sensitive, but those 1.5 million acres (around Teshekpuk Lake) had already been set aside. Most of the other 11.5 million acres are almost indistinguishable from acreage owned by the state that is being drilled safely nearby.
The feds and Alaskan officials disagree about how much oil and natural gas is in the petroleum reserve. Some early federal estimates put the range between six and 15 billion barrels of oil, but in its latest survey the Bureau of Land Management projects closer to one billion. State officials and industry experts put the figure much higher based on the earlier surveys and improved drilling techniques.
The truth is no one knows. Prudhoe Bay turned out to be much more productive than originally believed, but surely the best strategy is to allow private drillers to risk their own money to find out. The oil and gas industry isn't in the business of drilling dry holes on purpose.
The Interior power play couldn't come at a worse time for Alaska, whose economy and government are heavily reliant on oil jobs and revenues. As recently as the 1980s, the Trans-Alaska Pipeline carried some 2.2 million barrels of oil a day from the North Slope to the port of Valdez. Yet as the once-rich fields of Prudhoe Bay and the Kuparuk River have declined, oil flow has dropped to one-third of that volume. North Dakota recently passed Alaska as the second highest oil-producing state behind Texas.
The problem isn't that Alaska is running out of oil but that federal rules are preventing the state from developing those resources. No matter what Mr. Obama says now, in a second term his great Alaska energy shutout will continue.
This story originated on WSJ