Beaufort Activity Continues, Despite Arctic Ban

January 18, 2017 in Blog

When President Obama permanently banned huge regions of the Arctic and Atlantic from offshore exploration, he left a small sliver of the Beufort Sea alone, for the time being. This tiny area of open Arctic waters is bustling with activity, despite activist claims that the area is “uneconomical” in the current price environment.

Alaska Natural Resources commissioner Andy Mack explained Alaska’s frustration at the latest five year plan and the President’s Arctic ban:

“Consider those two decisions — to eliminate lease sales in the five-year plan and then withdraw everything except this one sliver,” Mack said. “It’s not being intellectually honest to say that they opened this area for development. For her to say that they didn’t withdraw the entire ocean — like we were supposed to pat them on the back — no”

Mack went on to describe the argument Alaska made to Secretary Jewell for keeping the Arctic open:

“We were very clear that the entire Chukchi and the entire Beaufort were important to us geologically [for oil development]. We also proposed that the five-year plan look at areas where we felt there was high potential and public support for development.”

It appears that energy companies agree with Mack’s geological assessment of the region, based on the volume of exploration operations that are taking place there. Companies such as Hilcorp and Eni SpA are both actively working with regulators to move forward with operations in the region. Additionally, Shell, Repsol, BP, and the Arctic Slope Regional Corporation (ASRC) all have partial or complete ownership of leases in the area.

If companies are willing to spend millions in the small portion of the U.S. Arctic that is open, imagine the benefits Alaskans would see if more of the waters were open for exploration. The revenues and job creating opportunities would be tremendous, and they would directly benefit the folks who the administration failed to consult when it announced its series of choking drilling regulations. As Alaska Governor Bill Walker stated:

“This unprecedented move marginalizes the voices of those who call the Arctic home and have asked for responsible resource development to lower the cost of energy to heat houses and businesses […] No one is more invested than Alaskans to ensure that the habitats within the Arctic are protected. To lock it up against any further exploration or development activity is akin to saying that the voices of activists who live in Lower 48 cities have a greater stake than those to whom the Arctic is our front yard and our back yard.”

The Outer Continental Shelf Lands Act, which the President used to enforce the Arctic ban, requires the administration to consult with Governor of the state which the new restrictions will apply to. Governor Walker has repeatedly indicated that he would like to see the Beaufort and Chukchi Seas open for development. Walker described how the ban and the OCS leasing plan ignored the recommendations he and Commissioner Mack gave the administration.

“During my phone call with Secretary Sally Jewell earlier today, she acknowledged that she and her team at the U.S. Department of the Interior took into consideration the requests that Department of Natural Resources Commissioner Andy Mack and I made during multiple meetings with her in Washington, D.C., and in Fairbanks. We highlighted the areas of the Arctic most likely to provide revenue to the state. These efforts are reflected in that those regions were not included in the administration’s final decision. However, this concession is not satisfactory because the administration has already failed to include these same areas in its most recent five-year leasing plan.”

Despite the massive blows dealt to America’s Arctic energy program at the end of 2016, energy explorers remain active in the limited area left open by the government. Additionally, the Alaskan government has indicated repeatedly that it and the people of the North Slope support reopening the Arctic for energy exploration. Even though the President’s Arctic ban was a crushing announcement, it has not decreased the industry, Alaskan government, or local people’s interest in the region.