RDC Comment Letter: Support of ENI Exploration Plan, Nikaitchuq North Exploration Drilling Project

June 30, 2017

Mr. David Johnston, Regional Supervisor
Office of Leasing and Plans
Bureau of Ocean Energy Management, Alaska OCS Region
3801 Centerpoint Drive, Suite 500
Anchorage, AK 99503-5823

Re: ENI Exploration Plan, Nikaitchuq North Exploration Drilling Project

Dear Mr. Johnston:

The Resource Development Council for Alaska, Inc. (RDC) is writing to express support for the Exploration Plan (EP) prepared by Eni US Operating Co. Inc. (Eni) for its proposed Nikaitchuq North Exploration Drilling Project in the Beaufort Sea.

RDC is a statewide 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.

Eni is proposing to drill into the federal submerged lands of the Beaufort Sea from its Spy Island Drillsite (SID), a pre-existing facility located on an artificial gravel island within the barrier islands and outside the fall migration path of the bowhead whale. The company is currently producing up to 22,000 barrels of oil per day on its state leases within its Nikaitchuq Unit from Spy Island. There are currently four oil and gas producing islands in the Beaufort Sea: Spy Island, Northstar Island, Endicott Island, and Oooguruk Island.

As outlined in the EP, Eni is proposing to drill two main wellbores, with a lateral sidetrack, from Spy Island that will reach into the company’s federal Harrison Bay leases. The EP clearly describes Eni’s drilling processes and actions the company will take to meet important safety and environmental standards and to protect access to subsistence resources. 

The Nikaichuq North Exploration Drilling Project has been designed to minimize impacts to biological populations and habitats by using existing infrastructure, limit operational windows, following other measures designed to mitigate impact, and conduct activities in a manner similar to Eni’s current practices. Moreover, the company will only conduct drilling operations during the winter, mitigating other potential impacts as fewer species of marine mammals are present in winter. 

Exploration, development, and production operations will be conducted in a manner that prevents unreasonable conflicts between industry and subsistence activities, including but not limited to, bowhead whale subsistence hunting. Eni is working with subsistence users in the area to mitigate the chances for conflict by discussing and signing a Conflict Avoidance Agreement. The company has existing procedures in place to mitigate impacts to wildlife.

North Slope oil and gas exploration, development, and production are the lifeblood to the economy of Alaska, the North Slope Borough, and local communities. The responsible development of Alaska’s oil and gas resources have generated contracts for service providers and provided billions of dollars in royalty and tax revenue to local, state, and federal governments. Oil revenues provide and fund thousands of private and public sector jobs, as well as critical public services and infrastructure. It’s clear that Alaskans and our state’s economy would benefit significantly from increased oil production. In fact, the very concept of Alaska’s statehood is predicated on the development of natural resources.

However, the Trans-Alaska Pipeline System (TAPS), is now starved for oil, operating at one-fourth its capacity. It’s not because Alaska has depleted its natural resources. In fact, there is more oil in place onshore and offshore the North Slope than what has been developed since statehood. The challenge is achieving access to the resource.

Unfortunately, there are special interests in our nation that are opposed to further development of America’s energy resources. They advocate 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 foreign sources of oil in the near or mid-term, given they are projected to account for a relatively small percentage of America’s energy in 2030. The health of our economy and national security will require utilization of both conventional and unconventional energy sources. 

Every barrel of oil not developed in America will simply be imported from overseas where environmental regulations are often weaker and emissions from production activities are higher than from domestic operations.  To further reduce our reliance on foreign sources of oil, America must continue to pursue responsible oil and gas development onshore and offshore Alaska, where over 30 percent of the nation’s technically recoverable resources reside. New production from Alaska would provide a bridge to the alternative and renewable energy sources of the future. 

In conclusion, RDC encourages the Bureau of Ocean Energy Management to move forward with this project so drilling can get underway in December, as outlined in the plan. Clearly, Eni can conduct the Nikaitchuq North Exploration Drilling Project in a responsible and safe manner. Thank you for the opportunity to submit comments on the project. 


Resource Development Council for Alaska, Inc.