Alaska’s role in America’s energy independence plan

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Oil production along Alaska’s North Slope is declining due to aging oilfields in the area; this in conjunction with lower crude oil prices is causing a fiscal crisis to develop in the State.  “Without new drilling, the 800-mile-long trans-Alaska oil pipeline could be forced to shut down in as little as 10 years,” Alaskan governor Sarah Palin said, but Department of the Interior Secretary Ken Salazar may soon provide relief to the State through the development of a comprehensive new national OCS leasing plan for America’s coastal waters.

The OCS leasing plan put forth in the last weeks of the Bush Administration, which opened up over 50 million more acres off Alaska’s coasts for drilling, was recently vacated by a three-judge panel of the US Court of Appeals for the District of Columbia Circuit because “the agency did not properly account for environmental risks to the Beaufort and Chukchi Seas in northern Alaska”, causing many drilling projects in Alaska to be put on hold until the DOI can develop a new OCS leasing plan.  

The Beaufort Sea runs along Alaska’s northern shore east of Barrow; the Chukchi Sea is off Alaska’s northwestern and western coast and is bordered by Russia to the west, the Arctic Ocean to the north, and the Bering Strait to the south.

While a national OCS leasing plan must also include provisions for offshore drilling in the Gulf of Mexico and along the East and West Coasts, Alaska, for now, has come into the mainstream because of the abundance of oil and natural gas resources in the region and the need for America to become more energy independent.  It is estimated that the Chukchi Sea alone contains “an estimated 15 billion barrels of recoverable oil and 77 trillion cubic feet (Tcf) of gas,” according to the Minerals Management Service.

The United States currently consumes roughly 20 million bbls of oil per day; so, the oil from the Chukchi Sea alone has the potential to meet all U.S. petroleum needs for two years.  The U.S. consumes roughly 60 billion cubic feet of natural gas per day; so, Chukchi alone could meet U.S. natural gas needs for about 3.5 years.  These timeframes of energy independence broaden when reserves in the Beaufort Sea and along Alaska’s North Slope are included, but these figures do not take into account the local environmental impacts or the costs associated with continuing to burn fossil fuels, the main points of contention that caused the Bush Administration’s OCS leasing plan to be vacated in the first place.  The EPA’s recent ruling on greenhouse gases will also undoubtedly contribute to the final OCS plan adopted by Salazar’s staff.

Alaskan Republican Senator Lisa Murkowski is concerned that Secretary Salazar’s holding period on OCS development is causing serious harm to the oil and gas industries. “This decision has cast doubt on badly needed development off Alaska and in the Gulf of Mexico,” she said.  Republican spokesman for the Senate energy panel, Robert Dillon “estimated about $9 billion worth of sales is at stake, and that Interior runs the danger of lawsuits from leaseholders if it sweeps all existing and potential leases under the same umbrella”.  The American Petroleum Institute said in a statement, “it would be a disservice to all Americans, and a devastating blow to the economy, if this decision were to delay further the development of vital oil and natural gas resources”.

The US Appeals Court Chief Judge, David Sentelle, who ultimately ruled for vacating the Bush-Cheney OCS leasing plan, stated that “the Secretary must first conduct a more complete comparative analysis of the environmental sensitivity of different areas of the OCS and must at least attempt to identify those areas whose environment and marine productivity are most and lease sensitive to OCS activity".  Republicans and representatives from the oil and gas industry, unhappy about the decision, are pressing the DOI to draft a plan quickly so that offshore oil and gas development does not grind to a halt.

While environmentalists hailed the decision as a victory, Alaskan governor Sarah Palin said, “unfortunately, while we have been struggling to persuade the Obama Administration not to undo the opportunities for offshore drilling, an appeals court has stepped in at the bidding of short-sighted environmentalists and pre-empted the federal-state dialogue”; but environmentalists argue that drilling for oil and gas in environmentally sensitive regions at a time when global emissions from fossil fuels are causing climate change and massive animal and plant extinctions is the only thinking here that can be considered short-sighted.

Without additional oil finds in Alaska’s northern regions, financial conditions may prevent the necessary maintenance of the pipeline from being performed, and ultimately cause the pipeline to be shut down.  The flow from the Alaskan pipeline accounts for about 20% of all U.S. annual oil production, so without an electric vehicle revolution, America will simply have to import more oil from countries like Canada, Saudi Arabia, Iran, Mexico, and Venezuela if we don’t open up more of Alaska to drilling.  

Alyeska Pipeline Service Co. is responsible for operating and maintaining the pipeline.  Alyeska is owned by six pipeline companies: BP Pipelines (Alaska) Inc., Exxon Pipeline Co., Mobile Alaska Pipeline Co., Amerada Hess Pipeline Corp., Phillips Alaska Pipeline Corp., and Unocal Pipeline Co.  Without a doubt, there will be countless lawsuits filed on behalf of oil and gas development companies if the leases in the region cannot support the continued operation of the Alaskan pipeline.

The Obama Administration is in the difficult position of weighing the country’s energy demands and the need to protect America’s natural resources and environmental health, but the allure of energy independence from harvesting Alaska’s fossil fuel resources is hard to ignore.  “The Alaskan offshore area is home to some of the most prolific, undeveloped hydrocarbon basins in the world, reserves that would not only fuel Alaska's economy for decades to come, but oil and gas reserves that would also provide the nation with much-needed energy security," a general manager from Shell said.

The Center for Biological Diversity (CBD) would like for the DOI to consider potential climate change impacts, as well as violations of provisions in the Endangered Species Act and the National Environmental Policy Act that drilling in Alaska would cause, but Justice Sentelle ruled these concerns from CBD as irrelevant.

“It is beyond the pale of stupidity that, in the face of everything that's happening in the Arctic, that we would launch a drilling program," said Jim Ayers from the marine conservation group Oceana; but without a drilling program or a renewable energy infrastructure in place, America’s energy demand will continue to outstrip our domestic energy supply, and we will have to rely on dwindling oil resources elsewhere in the world.

See the original article HERE.

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