By October 19, 2015 Read More →

Alaska offshore drilling: Murkowski says Interior Dept. decision ‘short-sighted’

Murkowski blames Obama Administration for Alaska offshore drilling future lease sales cancelled

Alaska offshore drilling

Future Alaska offshore drilling leases cancelled and current leases in Arctic waters will not be extended.  Shell photo.

Late last week the Interior Department announced it is cancelling future lease sales and will not extend current leases in Arctic waters off Alaska’s northern coast.

Alaska offshore drilling

US Sen. Lisa Murkowski says the feds have shown a pattern of hostility towards Alaska energy production.

Alaska Senator Lisa Murkowski calls the decision “short-sighted” and says the move betrays the Interior Department’s commitments to Alaska as well as the best interests of the nation’s long-term energy security.

Alaska’s Arctic waters hold an estimated 24 billion barrels of oil and 104 trillion cubic feet of natural gas.

Murkowski adds the move is “the latest in a destructive pattern of hostility toward energy production in our state that began the first day this administration took office, and continued ever since”.

The decision comes shortly after Shell pulled out of drilling exploration in the Chukchi Sea following disappointing results in the area.  Prior to leaving the northern waters, the company invested upward of $7 billion on Arctic exploration.

Curtis Smith, spokesperson for Shell said the company disagrees with the agency’s decision not to extend current leases.

“When it comes to frontier exploration in Alaska, one size does not fit all,” Smith told the Associated Press by email. “We continue to believe the 10-year primary lease term needs to be extended.”

Independent Alaska Gov. Bill Walker said he met with Jewell in Washington, D.C., earlier in the month about extending Shell’s leases and opening up a small part of the Arctic National Wildlife Refuge to drilling. He says his goal was to get more oil in the trans-Alaska pipeline.  Walker says the pipeline is running at about a quarter of its capacity.

Alaska offshore drilling

Ind. Gov. Bill Walker says he was left with a “loss of hope” following the Department of Interior’s decision.

Walker said Interior’s decision left him with a “loss of hope, in some respects” about accomplishing that.

“That pretty much shut down offshore. The only thing left is onshore,” he said of the agency’s announcement. “We know where the oil is. We just don’t have access to it.”

In a press release, the Director of the American Petroleum Institute, Erik Milito said policy decisions by the administration have thwarted investment decisions related to Alaskan Outer Continental Shelf development.

“While it is not surprising that Interior canceled the remaining lease sales because there was an absence of nominations, it is the significant regulatory uncertainty that has created the reluctance on the part of our industry”, says Milito.

As well as cancelling future lease sales offshore, Murkowski says the Department of Interior earlier announced it was locking up millions of acres of Alaska’s richest oil and natural gas prospects on the Arctic coastal plain.

The Arctic coastal plain lies in northeast Alaska at the edge of the Beaufort Sea.

“Interior has also taken more than 11 million acres of the National Petroleum Reserve-Alaska off the table. It has made it nearly impossible for companies to navigate the permitting process, which dramatically limited Shell’s ability to drill to just 163 out of more than 2,800 days. ”

Murkowski says Jewell and the Department of Interior should remember that the North Slope was nearly abandoned after 14 dry holes were drilled.  Despite the setbacks, oil companies continued to search for oil and discovered Prudhoe Bay which resulted in the over 17 billion barrels of oil and “a generation of opportunity for Alaska”.

“It is absurd that Interior has created a regulatory environment where operators cannot have commercially viable exploration programs, because so many requirements and hurdles have been put in place, and then blames them for not moving forward”, says Murkowski.  She adds “there is not a lack of interest in the Arctic – if anything, what we are seeing is a lack of interest in working with the current leadership of the Interior Department.”



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