Trump Administration Aims to Open More Arctic Areas for Oil

(Bloomberg) -- U.S. Interior Secretary Ryan Zinke issued a directive aimed at spurring oil and natural gas development in Alaska, including a move to assess just how much crude might be lurking under the Arctic National Wildlife Refuge.

Zinke's order, signed during a visit to Anchorage, also compels a rewrite of a 2013 plan that limited oil and natural gas development in the National Petroleum Reserve in Alaska. The move responds to complaints from oil companies and state officials that the Obama administration was too restrictive, blocking drilling in promising areas while hampering their ability to build pipelines across the 23-million-acre reserve.

"This is land that was set up with the sole intention of oil and gas production; however, years of politics over policy put roughly half of the NPR-A off-limits," Zinke said in a statement announcing the move. "Using this land for its original intent will create good-paying jobs and revenue."

Unlike the petroleum reserve, which was specifically designated for energy development, Congress established the Arctic National Wildlife Refuge in 1980 to protect the 19-million-acre territory along Alaska's northeast frontier. But ANWR's estimated 12 billion barrels of crude has drawn interest from energy companies and their political allies, including Senator Lisa Murkowski, an Alaska Republican. 

President Donald Trump already has proposed raising $1.8 billion over the next decade by opening up parts of that refuge for oil and gas development, which would require a change in the law by Congress. And that idea is anathema to environmentalists, who have successfully blocked ANWR drilling plans from advancing on Capitol Hill for decades by raising concerns about threats to the polar bears, caribou and other animals that live and travel through the territory.

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The NPR-A was established roughly a century ago as a potential oil resource for the U.S. Navy. The U.S. Geological Survey estimates the reserve contains about 895 million barrels of economically recoverable oil. But development has been slow, in part because of logistical and legal hurdles to launching activity even on leased acreage in the refuge.

Zinke's order compels Interior Department officials to deliver a blueprint for reworking a plan governing activity in the reserve that strikes an "appropriate" balance of promoting development while protecting other resources.

Moves to relax rules governing development in the NPR-A could benefit ConocoPhillips, whose Colville-Delta 5 field marked the reserve's first oil production in 2015. The company added more NPR-A acreage to its portfolio during a lease sale last December and is developing other projects there.

Zinke vowed his effort would not skirt required environmental reviews. 

‘Sensitive Area'

"We understand it's a sensitive area up there," Zinke said during a news conference in Anchorage, noting that native Alaskans depend on the land for their subsistence way of life.

Alaska Governor Bill Walker called the announcement the start of a "new chapter" for the state, coming amid concerns about declining oil flows through the Trans-Alaska Pipeline System. 

"The timing couldn't be better," Walker said.

Environmental advocates argued President Barack Obama's administration rightly walled off development in 11.8 million acres of the reserve home to caribou herds and polar bears -- and those protections shouldn't be undone now. 

"It's hard to see how they could open up more land to development without putting at risk some pretty sensitive areas," said Kate Kelly, public lands director at the Center for American Progress. "Zinke might give lip service to balance, but this announcement shows the scales are tipped pretty far in industry's favor."

Assessment Updates

Zinke's directive also compels a plan for updating assessments of how much undiscovered, technically recoverable oil and gas is located on Alaska's North Slope, focusing closely on the potential in NPR-A and the Arctic National Wildlife Refuge.

The Interior Department, under Obama, rejected a bid to allow seismic testing aimed at documenting potential oil and gas resources under the Arctic refuge's coastal plain.

But now, Zinke says he is "giving the green light" for both industry and the federal government to look for resources in the refuge. Conservationists said Zinke's move was unnecessary and could jeopardize wildlife and wild places in Alaska. 

Alaska is already open for drilling "with abundant leasing and opportunities for more on state and federal lands," said Nada Culver, a senior counsel with The Wilderness Society. "We don't need to risk native communities and the wildlife on which they depend -- and we need to recognize that some places are too important and fragile to risk at all."

To contact the reporter on this story: Jennifer A. Dlouhy in Washington at jdlouhy1@bloomberg.net.

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Mark Drajem, C. Thompson