Updated: Offshore leasing plan excludes Arctic

Shell's Noble Discoverer rig, in Unalaska in 2012. (KUCB-Unalaska file photo)
Shell’s Noble Discoverer rig, in Unalaska in 2012. (KUCB-Unalaska file photo)

UPDATE: 3:24 p.m. by Rachel Waldholz and Liz Ruskin

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The Obama administration has removed the Arctic Ocean from any new oil and gas leasing for the next five years.

The Interior Department announced its new plan for offshore leasing Friday morning.

The plan does not include any new lease sales in the Beaufort or Chukchi Seas off Alaska — which had been included in an earlier draft.

It does include one lease sale in northern Cook Inlet, in 2021.

In a written statement, Interior Secretary Sally Jewell said the department is forgoing lease sales in the Beaufort and Chukchi due to the “unique and challenging Arctic environment and industry’s declining interest in the area.”

In the year since Shell abandoned its effort to drill in the region, several companies have given up offshore leases they already held.

The decision is a win for environmentalists, who have pushed to place the Arctic off-limits to drilling because of the potential effect on climate change and the risk of a possible oil spill.

Niel Lawrence, with Natural Resources Defense Council, said it would take a decade or more to produce oil from the Arctic.

“We’ll be in a world that does not need that oil, that has moved on from fossil fuels,” Lawrence said. “Flooding the world with more oil could really hurt efforts to contain climate change and keep it from being really disastrous.”

But the decision was blasted by industry groups and Alaska’s elected officials. Governor Bill Walker released a statement saying he is “disappointed.” Sen. Lisa Murkowski called the decision short-sighted.

“You’ve got a decision that effectively is going to send all of the benefits of production overseas,” Murkowski said. “It’s stunning. And, I don’t know. I’m frustrated.”

Her view was echoed by Lucas Frances of the Arctic Energy Center, a partnership between the Alaska Oil and Gas Association and the Independent Petroleum Association of America. He said the U.S. is missing an opportunity to project strength in the Arctic.

“The U.S. has that opportunity to be a leader in this space,” Frances said. “But in removing Arctic leases, the potential sale of Arctic leases, it removed the investments that could be made down the road.”

Meanwhile, the Arctic Slope Regional Corporation released a statement saying the decision “cripples” North Slope communities’ ability to pursue economic development. In a speech at the Resource Development Council conference in Anchorage earlier this week, CEO Rex Rock, Sr., said removing the possibility of new Arctic exploration ignores local voices.

“Slamming the door shut on opportunity does nothing to help my region or my people, either now, or in the future,” Rock said.

The decision would be difficult for the incoming Trump administration to immediately undo. Replacing the plan would require going through much of the public process again, likely taking years.

Meanwhile, environmentalists are holding out hope for a more permanent withdrawal of Arctic waters from oil and gas leasing, under a special section of the law. That’s a separate decision, which would come from the White House.

Elizabeth Harball contributed to this report. 


Original story by Liz Ruskin

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The U.S. Interior Department has announced its new five-year plan for oil and gas leasing in federal waters, and it does not include any new lease sales in the Arctic. The plan calls for one lease sale for northern Cook Inlet, in 2021.

Interior Secretary Sally Jewell, in a written statement, said the department was forgoing lease sales in the Beaufort and Chukchi due to the “unique and challenging Arctic environment and industry’s declining interest in the area.”

The decision is a boon for environmental groups. They’ve lobbied the administration to exclude the Arctic from the five-year lease plan, which runs from 2017 to 2022.
Advocates for oil development say the exclusion of Arctic lease sales sends a bad message to industry and makes it harder to include the Arctic in future five-year plans.
Technically, Congress could overturn this lease plan, but it will be a tough sell for lawmakers who like the 10 Gulf of Mexico lease sales the plan calls for.
This is a breaking story. Check back for more details.