Anchorage Daily News

JUNEAU -- The government this fall plans to offer oil drillers potentially millions of acres for lease in a giant federal tract on the North Slope.

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Wednesday's announcement was largely a formality, as the Bureau of Land Management already had unveiled its leasing plan in May.

The plan drew generally positive response from the oil industry, from environmentalists who previously had gone to court to block leasing, and from Democratic and Republican congressmen who are bullish on drilling in the tract, known as the National Petroleum Reserve-Alaska.

"The rapid increase in energy costs facing our nation is driven by a worldwide imbalance in energy supply and demand," said Interior Secretary Dirk Kempthorne. "Developing the NPR-A in an environmentally sound manner will contribute to our domestic oil and natural gas supplies. Together with new production from other offshore and onshore areas, these increased supplies will help stabilize energy costs."

Land available for lease in the Indiana-sized reserve could hold as much as 8.4 billion barrels of oil plus trillions of cubic feet of natural gas, federal officials said.

The government plans to hold "a major lease sale" this fall, probably in October, with the number of acres offered depending on industry interest, officials said.

Stan Senner, who heads Audubon Alaska, said he was pleased the government's leasing plan defers leasing for 10 years in wetlands vital to migratory birds around giant Teshekpuk Lake, in the reserve's northeast corner.

"We are pleased that BLM has recognized the importance of the Teshekpuk wetlands and that there is no immediate threat of leasing," he said. "We do believe, however, that the wetlands deserve permanent protection."

Audubon joined other conservation groups in a lawsuit to block leasing in the Teshekpuk area and won a ruling in 2006 that forced the BLM to revamp its leasing plan.

The plan approved Wednesday is the result.

While 3.9 million acres in the reserve's northeast section will be available immediately for oil and gas leasing, 219,000 acres of Teshekpuk Lake and islands will not be leased, and leasing will be deferred for a decade on 430,000 acres of wetlands north and east of the lake.

The plan also has provisions to safeguard polar bears and Native subsistence hunting and fishing.

The BLM plans to offer additional acreage for lease in the reserve's northwest section.

President Warren Harding set aside the reserve for its oil potential in 1923, but it has yet to produce oil as the industry has concentrated on the Prudhoe Bay area to the east.

The government already has leased millions of acres in the reserve and some companies have drilled exploratory wells and signaled finds in recent years. But the reserve is remote and lacks roads and pipelines for producing oil.

Conoco Phillips has led the drilling in the reserve.

"Conoco Phillips supports the BLM decision and its goal to improve America's energy security by allowing for increased domestic oil and natural gas production," the company said Wednesday.

In Washington, D.C., congressmen dueling to show the public that they're doing something about high gasoline prices also hailed the BLM action.

"This announcement shows that Democrats are right to push for a rapid leasing of the NPR-A," said House Majority Leader Steny Hoyer, D-Md., who has been pushing a bill to speed up leasing in the reserve.

Rep. Don Young, R-Alaska, said he's "hoping that the Democratic leadership will immediately request that their allies in the extreme environmental community stop their frivolous lawsuits against existing leases in the NPR-A, and ask them not to file additional lawsuits against the pending lease sale."

Find Wesley Loy online at adn.com/contact/wloy or call him in Juneau at 586-1531.

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