OCS Draft Proposed Program

March 9, 2018

Ms. Kelly Hammerle
National OCS Oil and Gas Leasing Manager 
Bureau of Ocean Energy Management
45600 Woodland Road, Mailstop VAM-LD
Sterling, Virginia 20166-9216

RE: Draft Proposed Program, 2019-2024 Outer Continental Shelf Leasing Program

Dear Ms. Hammerle:

The Resource Development Council for Alaska, Inc. (RDC) is writing to express strong support for including the prolific Chukchi and Beaufort seas, as well as Cook Inlet in the newly proposed 2019-2024 Outer Continental Shelf (OCS) oil and gas leasing Draft Proposed Program (DPP).

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.

In Alaska, RDC urges the Bureau of Ocean Energy Management (BOEM) to focus first and foremost on petroleum basins with the greatest resource potential – the Chukchi and Beaufort seas and Cook Inlet. In the Arctic, we urge BOEM to workclosely with Alaskans and subsistence hunters to ensure a balanced approach in Arctic lease sales. 

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 and Cook Inlet. 

The Chukchi and Beaufort seas form one of the most prospective basins in the world. Together, these areas are estimated to hold approximately 24 billion barrels of oil and 133 trillion cubic feet of natural gas. The Arctic’s untapped resources are of critical 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 a 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 natural gas production could amount to over $200 billion to federal, state and local governments.

Alaska offshore development 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 approximately 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 Alaska Arctic 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 much-needed infrastructure to the region and would also provide additional response capabilities in an area where shipping and other activities are increasing as the Arctic ice pack continues to recede. 

In addition to the Arctic, BOEM should also provide for lease sales in Cook Inlet, where offshore development has coexisted with other industries, including fishing, for more than 50 years. Cook Inlet production is vital to the energy security of Southcentral Alaska, the most populated region of the state, and is a cornerstone of the region’s economy. New production is also critical to future industrial development as Cook Inlet natural gas is anticipated to energize future mines in Southwest and Interior Alaska, as well as provide affordable energy to rural communities.

Elsewhere in the Alaska OCS, RDC supports seismic surveys to gather additional information on potential energy reserves. Alaska contains more than 1 billion acres of the nation’s 1.8 billion acres of federal offshore waters. It is by far the largest OCS jurisdiction in the nation, yet it has the least amount of data of all planning areas in the U.S. Advanced 3-D seismic surveys would be highly useful in formulating accurate resource assessments that can help determine whether future lease sales should even be considered in later OCS five-year leasing programs for planning areas outside the Arctic and Cook Inlet. However, wherever lease sales ultimately occur, steps should be taken to avoid impacts to other resources such as commercial and subsistence fisheries. 

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 8 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 in its new five-year program to provide access to prolific areas of the Chukchi and Beaufort seas, as well as Cook Inlet. 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 nation’s Outer Continental Shelf, including Alaska federal waters. Data gaps in planning areas should be addressed through research and seismic surveys to arrive at reliable resource assessments.

Thank you for the opportunity to submit comments on the proposed 2019-2024 DPP.


Resource Development Council