It’s no secret that Alaska’s economy has been facing challenges as oil and gas companies scale back production, reducing the revenues that have historically supported 90 percent of the state’s activities. Increasing oil and gas production can help get Alaska’s economy back on track, and the National Petroleum Reserve in Alaska (NPRA) and its bountiful reserves offer a tremendous opportunity to boost production and, in turn, put revenue back into the state’s coffers.
The NPRA, located at the northern tip of Alaska and bordering the Arctic Ocean, is now the largest single block of federally managed land in the U.S., spanning nearly 23 million acres. A 2010 review of the area by the U.S. Geological Survey found that it could contain 896 million barrels of oil, on top of the massive gas reserves it also houses.
Like America’s offshore Arctic, the NPRA has a rich history of being a strategic energy region. The land was originally set aside by President Harding in 1923 to be an emergency oil supply for the Navy. Later on, in 1976, the land was transferred to the Department of the Interior, specifically the Bureau of Land Management, and given the NPRA name that we now use today. The Alpine oil field was discovered in the mid-1990s and it remains one of the United States’ largest onshore oil discoveries of the last 25 years. The BLM spent many years developing and redeveloping land-use plans for the region before finally releasing a plan for the entire NPRA in 2012.
At the moment, ConocoPhillips, which considers Alaska a bright spot in its portfolio, is the most prominent producer working on natural resource development in the NPRA. Last November, the company’s leadership approved a $900 million plan for the eastern end of its Greater Mooses Tooth Development located on the North Slope. ConocoPhillips announced it would be working with the Alaska Native corporations in the area and that it expected production to come online by 2018.
This week, it was reported that the company is making headway in another NPRA field, CD5, and is seeing positive results from its drilling activities, as Alaska Dispatch News described:
“ConocoPhillips is enjoying better-than-expected success with a small field that recently began producing the reserve’s first commercial oil. CD5, as it’s called, is a stepping stone to larger prospects the company wants to develop in the NPRA.”
In addition to CD5, the company also has plans for a two-well exploration program to commence this year in the Western end of the Greater Mooses Tooth unit. The company has taken a new approach in Alaska: Instead of drilling “wildcat wells” on isolated leases, it is now focused on making more modest discoveries near existing infrastructure. Last December, CEO Ryan Lance explained how the strategic shift is making it possible for the company to “deliver stable production for a decade”:
“Over the past couple of years, we’ve been able to change the profile of our Alaska business. We’ve transformed the declining production base into one that can deliver stable production for a decade.”
Production from the NPRA could also help with the Trans Alaska Pipeline System’s (TAPS) throughput problem, which is jeopardizing the pipeline’s livelihood. Even though the pipeline has served as the “backbone” of Alaska’s economy for decades, it is now seeing a major decline in the amount of oil flowing through it, and further declines could lead to an eventual shutdown if costs become too high. Increasing production in the NPRA could help give TAPS the boost it desperately needs. As Gov. Walker (I) has said, “We need to get some oil in the pipeline. … We need to do it as quickly as possible.”
The NPRA presents a valuable opportunity that the people of Alaska and Americans across the country can greatly benefit from. As regulators in DC consider new requirements for Arctic operations, we hope they reflect upon the historic intent of the NPRA and the importance of energy development. Americans, TAPS, and Alaska’s economy all stand to benefit from it.
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