Offshore Arctic Development; Alaskans Look North to Future
Alaska’s state motto, “North to the Future,” represents our state as a land of promise. Alaskans believe in that promise, and in an overwhelming response to the Department of Interior’s Bureau of Ocean Energy Management (BOEM) proposed 2017-2022 Oil and Gas Lease Program, groups representing thousands of Alaska Natives, and other concerned citizens said the future should include exploration of offshore oil and gas. Over the three-month public comment period ending June 16, Alaskans underscored the significant economic opportunities and national energy security benefits which rest solely on the Arctic outer continental shelf (OCS) land leases included in the proposal.
Now, all eyes are on the Obama Administration to heed these Alaskan voices. Overwhelming support exists for Arctic OCS development, and Alaska leasing should stay in the five-year plan. Unfortunately, the curtailment of promising OCS development in the United States is not a novel concept. More than 42 million acres of Alaskan waters have already been eliminated from potential leasing. We have already witnessed the elimination of all lease sales in the Atlantic region in BOEM’S plan. As a result, the proposed plan reflects only three potential sales in the Chukchi Sea, Beaufort Sea, and Cook Inlet planning areas.
The economic impact of banning offshore oil and gas development will be most acutely felt here in Alaska. The essential role that energy production plays in this state is well-acknowledged. Last year, the industry provided 90 percent of Alaska’s total revenue, revenue for schools, roads, public safety, and welfare. It is responsible for one-third of all jobs and generated the $53.9 billion Alaska Permanent Fund, which pays a yearly dividend to Alaskan residents. Further, recent analysis confirmed offshore development could create up to 55,000 jobs annually and deliver an estimated payroll of $145 billion over the next 50 years.
The administration’s ultimate decision will impact the nation, not just Alaska. Development of this region’s offshore oil and gas resources will prove critical to American energy security, in part, through bolstering the Trans Alaska Pipeline System which remains a key energy conduit that has supplied domestic energy to the U.S. for almost 40 years.
The 800-mile pipeline, or “TAPS” as it is known, has played a valuable role in transporting oil produced on the North Slope of Alaska south to the Continental U.S. At its peak, TAPS moved more than 2 million barrels daily. Today, it flows at just a quarter of that rate.
This decline in production represents a problem for the pipeline’s long-term viability, as lower flow levels slow the movement of crude oil and allow for ice formation and other low-flow complications throughout the system. Without new sources of oil, operations will become challenged to keep the system functioning year-round, potentially jeopardizing all North Slope oil and gas production. But with Alaska’s vast offshore oil resources, we can ensure the long-term viability of TAPS – and U.S. energy security.
The ramifications of excluding Arctic locations from the OCS leasing program would have a substantial impact on U.S. medium and long-term energy security. But the limited number of proposed lease areas in the plan is cause for equal concern for the nation.
The Energy Information Administration (EIA) expects oil and gas production from the Lower 48 states to decline starting in 2030. Prevention of Arctic OCS development now would mean eliminating future opportunity and risk a return to the 1970’s energy price volatility that first prompted the construction of TAPS.
Oil and gas production is not new to Alaska and fair access to the state’s resources is essential to our economy and America’s energy security. The Obama Administration’s Interior Department must take these realities into consideration and retain the Beaufort, Cook Inlet and Chukchi Seas leases when it announces the final program. Blessed with abundant natural resources, Alaska is indeed a land of promise; let’s not allow that promise to go unfulfilled.