Comment Letter in support of Beaufort Sea Lease Sale

View RDC's action alert

May 30, 2018

Dr. James Kendall
Bureau of Ocean Energy Management, Alaska OCS Region 3801 Centerpoint Drive, Suite 500
Anchorage, AK 99503-5823

Re: Proposed 2019 oil and gas lease sale in the Beaufort Sea Planning Area

Dear Dr. Kendall:

The Resource Development Council for Alaska, Inc. (RDC) is writing to express strong support for a 2019 oil and gas lease sale in the Beaufort Sea Planning Area, as included in the 2019- 2024 Outer Continental Shelf (OCS) Oil and Gas Leasing Draft Proposed Program (DPP) published in January.

RDC is an Alaskan business association comprised of individuals and companies from Alaska’s oil and gas, mining, forest products, tourism and fisheries industries. RDC’s membership includes Alaska Native corporations, local communities, organized labor, and industry support firms. RDC’s purpose is to encourage a strong, diversified private sector in Alaska and expand the state’s economic base through the responsible development of our natural resources.

RDC urges the Bureau of Ocean Energy Management (BOEM) to move forward with lease sales in petroleum basins with the greatest resource potential. Given the Beaufort Sea is relatively close to existing infrastructure on the North Slope and the area has been extensively studied, a lease sale in 2019 makes sense in the early stages of the proposed five-year leasing program. However, we encourage BOEM to work closely with Alaskans and subsistence hunters to ensure a balanced approach to the lease sale.

Impacts to marine mammal subsistence activity can be avoided and mitigated through close cooperation and communication with subsistence users, and other actions. Newly instituted technologies will further ensure that development and environmental protection can continue to coexist in the Arctic.

The Beaufort Sea is a highly prospective basin. Its untapped resources are of significant importance to both Alaska and the United States and have the potential to serve as a key component of our nation’s energy portfolio in the coming decades.

Oil and gas development offshore the North Slope is predicted to produce an annual average of 35,000 direct and indirect jobs over the next half century for Alaska alone. Those jobs would represent an estimated total payroll of over $70 billion. From an economic standpoint, Arctic OCS development would represent a windfall for the national economy. Revenues generated from Arctic OCS oil and gas production could amount to over $200 billion to federal, state and local governments.

New oil production in the Beaufort Sea would serve to help maintain the integrity of the Trans- Alaska Pipeline System (TAPS). The pipeline, which came on line over 40 years ago, has safely transported more than 17 billion barrels of oil. TAPS reached peak throughput in 1988 at two million barrels a day, at which time accounted for 25 percent of domestic production. However, throughput is now less than 530,000 barrels per day, despite the Arctic’s vast resources – both onshore and offshore. Future offshore access and production would reverse the decline, allowing for TAPS to remain viable for decades. In contrast, excluding the Beaufort Sea from future lease sales could lead to the premature shutdown of TAPS and compromise the long-term energy and economic security of Alaska and the nation.

Offshore development would bring additional infrastructure to the region and would also provide increased response capabilities in an area where shipping and other activities are increasing as the Arctic ice pack continues to recede.

RDC acknowledges there are special interests that are opposed to further development of America’s energy resources – both offshore and onshore. They advocate for leaving oil in the ground, but even in an era of climate change, reality requires continued development of America’s oil and gas resources. While renewable and alternative energy will make up a growing part of the U.S. energy portfolio, they will not significantly reduce our reliance on oil in the near or mid-term, given they are projected to account for a relatively small percentage of America’s energy portfolio for decades. In fact, the U.S. Energy Information Administration projects fossil fuels will account for approximately 70% of American energy consumption in 2050.

Despite growing Lower 48 production, America is still importing foreign oil – approximately eight million barrels daily to meet its energy needs. With the long-term decline in North Slope production, West Coast refineries have been forced to import more oil from foreign sources. New Alaska production has the potential to feed these refineries with American oil, further reducing imports. Moreover, new production would provide a bridge to the alternative and renewable energy sources of the future.

In conclusion, RDC encourages BOEM to move forward with a Beaufort Sea lease sale in 2019. Including the most prospective areas of the Alaska Arctic for potential oil and gas discovery is consistent with advancing the goal of moving America from simply aspiring for energy independence to attaining energy dominance. It is also important to maintain a broad, consistent schedule of lease sales across the Alaska’s Arctic Outer Continental Shelf.

Thank you for the opportunity to submit comments on the proposed Beaufort Sea lease sale. 

Resource Development Council for Alaska, Inc.