Cutting Arctic leases will eliminate opportunities in Alaska, rest of America

UPI-01UPI | July 22, 2016 | Randall Luthi

The United States’ Outer Continental Shelf is the source of huge opportunity for our country, supporting thousands of well-paying jobs and offering a supply of reasonably priced, reliable energy, which could meet our needs for decades. Despite this potential, the federal government has restricted access to more than 85 percent of America’s offshore areas to oil and gas exploration and worse, is now rumored to be cutting one of the few remaining areas.

Smoke signals from Washington, D.C., suggest the administration is considering removing all or part of the Arctic from the next five-year offshore oil and gas leasing program. That decision would mean there will be no prospect of even exploring for reserves until 2023 at the earliest, and with long lead in times, production could be delayed until well into the 2030s, or beyond.

The United States’ Outer Continental Shelf is the source of huge opportunity for our country, supporting thousands of well-paying jobs and offering a supply of reasonably priced, reliable energy, which could meet our needs for decades. Despite this potential, the federal government has restricted access to more than 85 percent of America’s offshore areas to oil and gas exploration and worse, is now rumored to be cutting one of the few remaining areas.

Smoke signals from Washington, D.C., suggest the administration is considering removing all or part of the Arctic from the next five-year offshore oil and gas leasing program. That decision would mean there will be no prospect of even exploring for reserves until 2023 at the earliest, and with long lead in times, production could be delayed until well into the 2030s, or beyond.

Clearly, this decision would have a huge impact on the state. Alaska relies on the oil and gas industry for roughly 90 percent of its income, especially Alaskan Native communities of the North Slope which depend hugely on revenues generated by offshore drilling projects. In fact, 72 percent of Alaskans support offshore development, knowing that it is the economic foundation of the state. Effectively banning new offshore production for the next 20 years would deal a body blow to the entire state economy.

But it will also come with major ramifications for the rest of the country. The U.S. Arctic is estimated to hold 34 billion barrels of oil, enough to cover about 15 years of domestic imports at 2015 levels. That resource can play a sizable role in ensuring our future energy security. In addition, new offshore oil sources would help refill the trans-Alaska pipeline, which is vital to Alaskans and the U.S. energy market.

According to the National Petroleum Council’s Arctic Potential report, “If development starts now, the long lead times necessary to bring on new crude oil production from Alaska would coincide with a long-term expected decline of U.S. Lower 48 production. Alaskan opportunities can play an important role in extending U.S. energy security in the decades of the 2030s and 2040s.”

Read the full editorial here.

Randall Luthi is the president of NOIA.