Offshore leasing plan leaves door open to Arctic drilling – for now

The Obama Administration today released its draft plan for offshore oil and gas drilling over the next five years.

The proposal keeps the door open to more drilling in the Arctic Ocean — for now.

But one option the administration is considering would offer no new leases at all.

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Shell's Polar Pioneer leaving Dutch Harbor on Monday, Oct. 12, heading for Washington State. (Photo: John Ryan, KUCB)
Shell’s Polar Pioneer leaving Dutch Harbor on Monday, Oct. 12, heading for Washington State. (Photo: John Ryan, KUCB)

The Department of the Interior plans for offshore oil and gas leases in five-year cycles; the current proposal covers 2017 – 2022. The draft includes three potential lease sales in Alaska: two in the Arctic – in the Beaufort and Chukchi Seas – and one in the federally owned part of Cook Inlet.

On a call with reporters, Interior Secretary Sally Jewell said the proposal takes a “balanced approach” to oil and gas development.

The priority, she said, is “focusing potential lease sales in areas with highest resource potential, greatest industry interest and established infrastructure, while removing certain areas for consideration that we know are not appropriate for leasing.”

So far, the administration isn’t removing any areas in Alaska from potential oil and gas drilling. But in a statement, the Department said it is considering several alternatives, including one that would offer no new leases.

The draft proposal also identifies several “environmentally important areas” that may be singled out for more protection. Jewell said those areas were chosen, in part, after input from North Slope communities.

“Over the course of this last comment period, we heard from several communities along Alaska’s North Slope who were concerned about oil and gas activities impacting their traditional subsistence practices,” Jewell said. “This administration is keenly aware of that issue.”

In late 2014 and early 2015, the Obama administration permanently removed almost 10 million acres of the Chuckchi and Beaufort Seas and all of Bristol Bay from oil and gas leasing.

Sarah Erkmann, external affairs manager for the Alaska Oil and Gas Association, said the draft proposal sends a “mixed message.”

“On the one hand, we’re glad to see that the three areas we were concerned about were included in this last proposal,” she said. “On the other hand, there’s no certainty they will stay there. And uncertainty is what ends up killing projects.”

Right now there aren’t any offshore projects planned for the Arctic — except Hilcorp’s near-shore Liberty Project. That’s been true since Shell abandoned its efforts in the Chukchi Sea last September.

But, Erkmann said, if the administration pulls the Arctic from its plans, that will send the wrong message.

“If the government were to not hold a lease sale, that would only accelerate the pullback from the Arctic,” she said.

Conservationists had a different response.

“There is no good reason to sell additional leases in the Arctic Ocean,” said Michael LeVine, of the environmental group Oceana.  “Companies have not been able to explore the leases that they bought in the 2000s, and in fact some are walking away from those investments.”

There has been no offshore lease sale in the Arctic since 2008. The Interior Department had scheduled sales for the current cycle, but canceled them this past fall, saying there was not enough industry interest.

The public has 90 days to comment on the proposal before it is finalized.