Alaska’s North Slope hydrocarbon potential is world class, but constrictive federal regulations continue to stifle investment. It’s not from lack of industry’s commitment, as we’ve witnessed billions invested to explore for domestic energy resources off Alaska’s coastline. If the federal government continues to stand in the way of Arctic development, they will allow a massively valuable resource go to waste and with it, American jobs.
Just yesterday, Platts reported on the valuable rocks of Alaska’s North Slope saying:
“What keeps the industry interested, and busy, is that really the rocks are great. State geologists say the North Slope has one of the largest oil-generating systems of the world.”
Despite the price downturn, producers are still interested in the oil riches the Arctic has to offer. Hilcorp is moving forward with its Liberty project in the Beaufort Sea, making this project to potentially be the first Outer Continental Shelf (OCS) development in federal Arctic waters.
Additionally, a November North Slope lease sale coordinated by the Alaska Division of Oil and Gas brought in $9.5 million to the state, further proving that companies (large and small) want a piece of the North Slope oil pie. This industry investment in the Arctic equates to jobs and tax dollars for Alaskans.
Unfortunately this continued interested in the American Arctic will be short-lived if federal regulations continue to dissuade producers from investing in the region. Constrictive policies have already driven some companies out of the Alaskan Arctic, and the state (and our nation) can’t afford to lose any more investment. According to API’s Upstream Operations Director Erik Milito:
“The Obama administration could squander major domestic crude oil resource opportunities in Alaska if it persists in imposing overly stringent leasing restrictions and operating regulations”
Milito goes on to describe how other nations, such as Russia and Norway are moving forward with Arctic operations, while the U.S. government continues to thwart the Arctic projects of its own producers. For the sake of Alaskans, this pattern cannot continue. We need clear implementation of regulations for drilling in the Arctic, but the expected overlay of new Arctic regulations in 2016 simply brings more uncertainty.
The massive reserve potential of Alaska’s North Slope and the OCS can be a huge asset to the state and our entire nation. It’s time to stop moving the federal goal posts, and allow America to develop our own resources. Alaska’s experts know well that “The rocks are fundamental” when it comes to finding oil, but without realistic regulations, there’s little incentive to invest in that potential.