09/08/2021 | News release | Distributed by Public on 09/08/2021 12:48
President Joe Biden's administration is reconsidering a recent decision to open up nearly 7mn acres of land in the National Petroleum Reserve in Alaska (NPR-A) to oil and gas leasing.
The leasing expansion, finalized during former president Donald Trump's last weeks in office, made nearly 60pc more land in NPR-A eligible for oil and gas development. Environmentalists and some local tribes opposed the change, particularly plans to allow leasing around Teshekpuk lake and other ecologically fragile areas that under existing federal law qualify for 'maximum' protections.
The Biden administration, in a court filing late yesterday, said although it has not made a final decision, an initial review found the NPR-A leasing change is 'inconsistent' with an executive order Biden signed on 20 January that aims to protect the environment and reduce greenhouse gas emissions. The US Bureau of Land Management (BLM) will halt leasing in the 7mn contested acres until the administration decides whether to release a new leasing plan.
'Until the evaluation is complete and considered by [Interior] Department officials for potential issuance of a new [leasing plan], the BLM will not offer tracts in an oil and gas lease sale in the NPR-A in areas newly opened to leasing,' the court filing said.
The new review adds further uncertainty to oil industry plans for expanded drilling in NPR-A, which covers 23mn acres and lies to the west of Prudhoe Bay. The US Congress authorized oil and gas leasing in the reserve in 1976, but it took until 2015 for commercial oil production to begin at a drilling site operated by US independent ConocoPhillips.
ConocoPhillips planned to start last winter on a new project in NPR-A, a 160,000 b/d project named the Willow project. But a judge threw out federal approval of the project because of flaws reviewing effects on climate change and polar bears. The ruling will leave it up to the Biden administration to decide whether the $2bn-$3bn project should move forward as proposed.
Other oil companies are also taking an interest in the Alaska reserve. Australian exploration company 88 Energy last month estimated there were 1.6bn bl of crude in a lease it holds in southeast portion of NPR-A, based on a well it drilled in April named Merlin-1. The company had considered tying in a potential project to the Willow oil project. After the court ruling, the company told investors its projects in NPR-A were distinct from Willow, in part because they were farther away from sensitive areas.
By Chris Knight