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AIDEA looks to spend $20M to buy more leases, do seismic, in ANWR
Kay Cashman Petroleum News
In an Oct. 23 board meeting, the Alaska Industrial Development and Export Authority passed a resolution to spend up to $20 million to buy more leases in an expected second lease sale for the coastal plain of the Arctic National Wildlife Refuge, or ANWR, that is supposed to take place by Dec. 22, according to the 2017 Tax Cut and Jobs Act.
When Congress created the 19 million acre Arctic National Wildlife Refuge in 1980, it set aside 1.57 million acres of coastal plain for resource development, known as the 1002 Area, after a section of the law.
If passed, AIDEA's $20 million will be used to pay for any and all project expenses, including, but not limited to, costs of consultants and experts to analyze the geology of ANWR and provide advice, costs of bidding on tracts, costs to conduct seismic studies, litigation costs, and other costs deemed necessary by AIDEA Executive Director Randy Ruaro.
The 2017 Tax Cut and Jobs Act requires the Secretary of the Interior, through the Bureau of Land Management, or BLM, to conduct at least two area-wide lease sales, not less than 400,000 acres each, with the first lease sale having occurred in 2021.
AIDEA bid in the 2021 lease sale and was awarded several leases. The Oct. 23 resolution said the leases were later illegally cancelled by the federal government and are now the subject of litigation.
AIDEA's Oct. 23 resolution said the federal government is in the process of issuing a supplemental environmental review and Record of Decision that will culminate in a lease sale.
Resource potential The assessment of the 1002 Area's resource potential of 7.3 billion barrels of economically recoverable oil is based on 1,450 line miles of 2D seismic data undertaken by the U.S. Geological Survey, or USGS, for a 1987 report.
While this data has been repeatedly reinterpreted by geologists using the best available methods, the data itself is three decades old. Although valuable for understanding the area's general geologic characteristics, the data can be improved by detailed mapping of structural and stratigraphic prospects. More reliable oil and gas resource estimates can be obtained through a low-impact campaign of carefully planned 3D seismic surveys, the Oct. 23 AIDEA resolution said.
Public support For more than 40 years, Alaskans -- led by Native communities on the North Slope -- have urged Congress to open the 1002 Area for exploration, AIDEA said in its resolution.
Support for developing the 1002 Area comes from a wide cross-section of Alaskans, including the Voice of the Arctic lnupiat (a non-profit coalition comprised of 24 entities including tribal councils, regional organizations, municipal governments, and Alaska Native Claims Settlement Act, or ANSCA, corporations located in and around the 1002 Area), Gov. Mike Dunleavy, Alaska's Legislature, and all members of Alaska's congressional delegation since 1980.
In April 2021, the Alaska State Legislature passed House Joint Resolution 12, which urged Interior's BLM to honor the recent lease sales and proceed with permitting: "the Alaska State Legislature requests that the United States Department of the Interior, Bureau of Land Management, in considering the adjudication of the exploration and development permitting process, take into account the long history of safe and responsible oil and gas development on the North Slope of Alaska, the enormous benefits development of oil and gas resources in the coastal plain of the Arctic National Wildlife Refuge would bring to the state and the nation, the advances in oilfield technology that continue to shrink the impact area of oil and gas activities, and the support of residents from the North Slope Borough and across the North Slope of Alaska for oil and gas development in a portion of the coastal plain."
Statutory authority AIDEA is an independently governed, public corporation of the state of Alaska established by the Alaska Legislature in 1967 as the state's development finance authority to engage with public and private institutions with a mission to promote, develop, and advance the general prosperity and economic welfare of Alaskans.
Since inception, AIDEA has been responsible for directing more than $3 billion in economic development within Alaska through its programs and successful development project investments.
Resolution No. G20-31 defined AIDEA's statutory authority to undertake this development project through the Arctic Infrastructure Development Fund, or AIDF, which was set up by the Alaska Legislature to promote and provide financing for Arctic infrastructure development.
The AIDF can be increased with funds from several sources with the approval of AIDEA's board.
The project is an infrastructure development project located north of the Arctic Circle and AIDEA is specifically authorized to enter into lease agreements with government entities necessary to fulfill the purposes of the program as outlined in AS 44.88.830.
This proposal advances the public interest, job growth and economic development benefits that can be achieved by the North Slope region and to the state of Alaska through the production of oil and gas, AIDEA said in its Oct. 23 resolution.
Onerous conditions? In a recent interview with the Anchorage Daily News, Ruaro said that the Biden administration might meet the deadline for the second lease sale but could add requirements that make it impossible to develop for oil and gas production.
"The idea is to continue to support our leases that were awarded legally but that were canceled, and to be ready for a Record of Decision that's coming soon for this next sale," Ruaro told the publication, even if those conditions are considered illegal by AIDEA.
--KAY CASHMAN
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