Alaska may open up again for oil leasing, but risks linger
ANCHORAGE, Alaska — President Donald Trump’s plan to open America’s oceans to petroleum drilling drew condemnation from West Coast and Florida governors but was welcomed in the state where most lease sales could be held.
Alaska Gov. Bill Walker, an independent facing reelection this year, embraced Interior Secretary Ryan Zinke’s proposed 19 lease sales in the state, including six in the potentially oil rich but environmentally sensitive Arctic Ocean waters.
“The Department of Interior’s draft five-year offshore leasing plan is an important step toward allowing Alaskans to responsibly develop our natural resources as we see fit,” he said Thursday.
But the big question is whether oil companies will commit the substantial resources it would take to invest in a frontier area where the cost of drilling is extremely high compared to other regions — and simultaneously face the wrath of environmental groups fiercely opposed to Arctic offshore drilling.
Royal Dutch Shell spent $2.1 billion on Chukchi Sea leases in 2008, invested another $5 billion overall in U.S. Arctic waters, and pulled out after drilling a dry hole in 2015. Oil companies closely watched Shell’s experience, said Mark Barteau, director of the University of Michigan Energy Institute.
“There’s lower hanging fruit elsewhere,” Barteau said. “It’s all about going after the easy stuff first.”
Shell has no current plans to pursue future offshore Alaska exploration, said Shell spokesman Curtis Smith in an email. It was too early to know how Trump’s draft five-year plan would play into future portfolio decisions.
“Given the desire to keep pace with natural field decline and the inherent uncertainty associated with exploration, more options are always preferable when it comes to potential lease acreage — both on and offshore,” he said.
The Beaufort Sea, off Alaska’s north coast, holds an estimated 8.9 billion barrels of oil, and the Chukchi, off Alaska’s northwest coast, holds an estimated 15.4 billion barrels.
Arctic waters also provide habitat for threatened polar bears, walruses and bowhead whales and are the home of Inupiat villages. Hanging over any Arctic water sales is the question of whether spills — which drilling critics say are inevitable — can be cleaned up in ice-choked or icecovered water along coastline with negligible infrastructure compared to the Gulf of Mexico and other drilling regions. Alaska’s bitter cold, fierce storms and darkness in winter add to the challenge.
“With an oil spill impossible to contain or clean up in these remote waters, today’s decision needlessly places in harm’s way the wildlife, cultures and communities that have long called this region home,” said Brad Ack, the World Wildlife Fund’s senior vice president for oceans.