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BLM decision opens door for first oil production in nation's largest reserve

  • Author: Alex DeMarban
  • Updated: September 28, 2016
  • Published February 13, 2015

The Obama administration has agreed to support a ConocoPhillips plan that would open the nation's largest reserve to oil and gas activity, allowing an eight-mile gravel road to be carved through a creek setback meant to protect a traditional Native hunting area.

Conservation groups decried the record of decision issued Friday by the Bureau of Land Management, saying it would hurt habitat and wild resources in the Indiana-sized National Petroleum Reserve-Alaska.

The agency, however, said it was selecting the development alternative that was chosen as the least environmentally destructive by the U.S. Army Corps of Engineers.

ConocoPhillips said on Friday it was happy so far but was reviewing details of the decision, which includes mitigation measures that will also affect the project.

"We are pleased that the BLM has approved a road route that the U.S. Army Corps of Engineers selected in its record of decision," said Amy Burnett, a communications specialist with the company. "We are reviewing the details of the (record of decision) and cannot comment on the exact details until the review is complete."

While BLM's decision authorizes development at the field in the reserve's northeastern corner -- called Greater Mooses Tooth Unit 1 -- ConocoPhillips must still acquire a drilling permit and right-of-way approval. The company has said the field could produce up to 30,000 barrels daily, infusing the trans-Alaska pipeline with new oil and providing new revenue for a resource-dependent state recently battered by the plunge in oil prices.

ConocoPhillips had recently said it will delay a final investment decision for the project in part because of permitting delays -- it had expected project approval last fall -- though it plans to continue shooting seismic surveys and advancing engineering efforts this year.

ConocoPhillips had made the road through the setback a top demand but also said the mitigation requirements must be acceptable for the project to move forward.

A statement from BLM announcing the decision said the agency is working with ConocoPhillips on safe and responsible energy development.

"The strategic planning and mitigation measures agreed to by ConocoPhillips are important as we continue to support thoughtful and balanced development in this region and are critical to compensating for the impacts of this project," said Janice Schneider, assistant secretary for Land and Minerals Management.

The requirements include an $8 million contribution from ConocoPhillips into a compensatory mitigation fund, the statement said. Mitigation projects supported by the fund will be developed through a transparent process.

Also, a regional mitigation strategy will be developed with input from multiple stakeholders, including the region's Native residents, to determine the best measures for future development. It will benefit subsistence users most directly impacted by the project.

Several "best-management practices" will be required to minimize impacts, including "robust" spill prevention and response measures.

The project calls for construction of a 12-acre drilling pad to support up to 33 development and injection wells.

The road to the development -- stemming off another ConocoPhillips project outside the federal reserve -- will encroach into the three-mile-wide Fish Creek setback, an important subsistence area for the residents of the nearby Inupiat village of Nuiqsut.

Still, the road and an elevated pipeline will remain 2.5 miles from the creek at their nearest point.

The setback is one of the "special areas" receiving unique protection in BLM's reserve management plan created in 2013, which also includes the Colville River special area, important for peregrine falcons, and Teshukpuk Lake, used by large numbers of migratory birds.

The 23-million-acre reserve was established in 1923 to provide an emergency oil supply for the U.S. Navy. No commercial project has yet occurred there.

Representatives of several environmental groups blasted BLM's decision in a statement sent early to media, more than three hours before the agency publicly released its decision.

The Alaska Wilderness League and five other groups said the road would cause lasting effects on the habitat, wildlife and subsistence values in the reserve.

Cindy Shogan, executive director of Alaska Wilderness League, said her group is disappointed because the decision does not prioritize the most environmentally sensitive approach and sets the tone for future development in the reserve.

"BLM has fallen short on its duty to manage our public lands with the strongest protections for the Arctic's fragile wetlands and wildlife," said Lindsey Hajduk, Alaska program director for the Conservation Lands Foundation. "The only good that can come out of this decision is if BLM steps up and further protects the reserve's special areas for future generations to enjoy."

The project had divided BLM and the U.S. Army Corps of Engineers. The Corps had said it would issue a wetlands permits based on Conoco's plan, saying it was the least environmentally destructive in part because it requires less gravel fill and a shorter road. BLM, which manages the reserve and has the final authority, had initially said it preferred an alternative plan with a road that would not violate the Fish Creek setback.

But BLM promised a final decision that would be "federally unified," with robust mitigation measures.

Nuiqsut, about 600 miles north of Anchorage with a population of 450, was also divided. The tribal government did not want the road passing through the Fish Creek setback. But the Alaska Native village corporation supported Conoco's plan, saying it was better for the environment.

The decision from BLM was expected to be the third strike in what Sen. Lisa Murkowski has termed a "triple gut punch" against Alaska thrown by the Obama administration. The Interior Department, which oversees the BLM, has recently said it will seek further protection against oil and gas development in the coastal plain of the Arctic National Wildlife Refuge. It also removed areas of the U.S. Arctic Ocean from oil and gas leasing, such as the Hanna Shoal, a biological hot spot for species including walrus.

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