Oil and gas leases in the National Petroleum Reserve-Alaska went on the auction block in Anchorage on Wednesday. Nobody much seems to have cared. Two companies submitted 14 bids, and the winners totaled less than $900,000. The highest bid for an individual parcel of about $75,000 would have bought about 40 acres of farm land in Nebraska.
It was a humble sum compared to Royal Dutch Shell's $2.8 billion bid, back in 2008, for just a portion of lease area 193 in the hard-to-develop Chukchi Sea west of NPR-A. Shell Oil has spent billions since trying to drill an exploratory well, but has yet to do so.
The federal Bureau of Land Management, which managed the NPR-A sale, summed the latest lease sale up pretty well in a media statement:
At the lease sale held in Anchorage today, the high bids totaled $898,900 on 14 tracts on approximately 160,088 acres of the 22.8-million-acre reserve. Today's sale builds on the current 177 authorized oil and gas leases encompassing 1.4 million acres in the Northeast and Northwest NPR-A planning areas.
"Today was the eighth sale we’ve held since 1999," said BLM-Alaska State Director Bud Cribley. "We worked to offer tracts based on public comments, natural resource information, resource potential, and industry interest. Today's sale included a new bidder for the offered NPR-A tracts. I am pleased at the interest these sales generate."
The BLM offered 398 tracts comprising about 4.5 million acres in this sale. The highest bid of $74,100, or $6.51 per acre, was offered by Woodstone Resources, LLC for tract 2012-L-086, located in the Northeast planning area. The State of Alaska will receive 50 percent of the NPR-A lease sale bid receipts, or $449,450.
It was unclear what the state intended to do with its new windfall. Farmland in Nebraska is now going for $1,833 per acre on average -- or about 281 times what you'd have to pay per acre for an oil lease near Alaska's Arctic coast.
Contact Craig Medred at craig(at)alaskadispatch.com