Alaska governor vows to accelerate state oil-drilling leases

McClatchy NewspapersJune 30, 2011 

WASHINGTON — Vowing to have the trans-Alaska pipeline pumping as much as 1 million barrels of oil a day by the end of the next decade, Alaska Gov. Sean Parnell said Thursday that he'd be aggressively promoting new leases on state land.

Parnell, a Republican who's been critical of the pace of oil and gas development on federal lands in the state during the Obama administration, said his major concern was keeping the 800-mile trans-Alaska pipeline full enough of oil to keep it operational.

A study released Wednesday by the pipeline's operator, Alyeska Pipeline Service Co., found that the aging pipeline can be operated safely at levels as low as 350,000 barrels a day, but only if the company addresses some of the problems of low flow, including corrosion and ice and wax buildup. It's been averaging 596,433 barrels a day this year, down from its 2 million gallon-a-day peak at the height of the state's oil boom.

"We've got to arrest that decline and fill that pipeline," Parnell said.

Parnell said he'd be heavily promoting leases on 14.7 million acres of state land, where Alaska can better control the speed of development.

Among the more puzzling offerings to be available in the state's annual October lease sale: parcels in the state waters of the Beaufort Sea, off the coast of the Arctic National Wildlife Refuge.

The state has offered leases previously in the three-mile zone it controls offshore from the vast refuge, but none is active, and there's been little action in nearly two decades. Most of the recent offshore development in Arctic Alaska has focused on prospects in the federal waters of the Chukchi Sea to the northwest.

On Thursday, Dan Sullivan, the state's commissioner of natural resources, said the state wasn't deliberately provoking the federal government by offering leases in state waters off the coast of what's considered a national environmental symbol.

The state and the congressional delegation have been particularly upset about delays in air-quality permits that have held up Shell's exploratory drilling in the Beaufort Sea, as well as a dispute with the Army Corp of Engineers that's delayed construction onshore of a bridge in the National Petroleum Reserve Alaska. Parnell also has been active in a coalition of governors that's pressing the federal government to pursue offshore drilling more actively on the outer continental shelf.

His remarks came at a news conference at the U.S. Chamber of Commerce's "Institute for 21st Century Energy." Parnell appeared over a video link. Sullivan, who's made several trips to Washington lately to press for more oil and gas development in Alaska, attended the news conference in person.

Already, the Obama administration has said it will speed up leasing in the National Petroleum Reserve Alaska, and state officials and the congressional delegation have met with the White House about accelerating exploration in the Arctic.

Interior Secretary Ken Salazar said Thursday that the administration's approach in the federal waters of the Arctic had been to proceed, but to do so with "full cognition of the risks that are ever-present in the Arctic."

Salazar said he was unfamiliar with the state's leasing plan as presented Thursday, but he reiterated the Obama administration's commitment to keeping the Arctic National Wildlife Refuge off limits to development.

Environmentalists say they're puzzled by some of the state's lease offerings, and that most of the parcels highlighted Thursday already are offered up for lease each October.

Athan Manuel of the Sierra Club, who's long monitored the environmental battles over ANWR, called it an "aggressive" but "desperate" move on the part of a state worried about keeping oil — and revenue — flowing through the pipeline.

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