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Conoco-Phillips Plans New Well in Alaska National Petroleum Reserve

(Reuters) -ConocoPhillips has applied for permits to develop a new field in the National Petroleum Reserve in Alaska, a vast unit of federal land that has yet to yield commercially produced oil, according to the federal agency managing the reserve.

ConocoPhillips applied to drill a production well at a site it calls GMT1, part of the Greater Mooses Tooth unit established in an area where its exploration wells struck oil, Bureau of Land Management (BLM) spokeswoman Erin Curtis said on Friday.

The company has also applied for a permit to build roads and other infrastructure needed to access the site, Curtis said.

A decision by senior corporate leaders on whether to sanction the project is expected in the second half of 2014, said Amy Burnett, a spokeswoman for ConocoPhillips in Alaska.

The Indiana-sized reserve, on the western side of the North Slope, was established in 1923 by President Warren Harding to provide fuel to the military.

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Obama’s Great Alaska Shutout

President Obama is campaigning as a champion of the oil and gas boom he’s had nothing to do with, and even as his regulators try to stifle it. The latest example is the Interior Department’s little-noticed August decision to close off from drilling nearly half of the 23.5 million acre National Petroleum Reserve in Alaska.

The area is called the National Petroleum Reserve because in 1976 Congress designated it as a strategic oil and natural gas stockpile to meet the “energy needs of the nation.” Alaska favors exploration in nearly the entire reserve. The feds had been reviewing four potential development plans, and the state of Alaska had strongly objected to the most restrictive of the four. Sure enough, that was the plan Interior chose.

Interior Secretary Ken Salazar says his plan “will help the industry bring energy safely to market from this remote location, while also protecting wildlife and subsistence rights of Alaska Natives.” He added that the proposal will expand “safe and responsible oil and gas development, and builds on our efforts to help companies develop the infrastructure that’s needed to bring supplies online.”

The problem is almost no one in the energy industry and few in Alaska agree with him. In an August 22 letter to Mr. Salazar, the entire Alaska delegation in Congress—Senators Mark Begich and Lisa Murkowski and Representative Don Young—call it “the largest wholesale land withdrawal and blocking of access to an energy resource by the federal government in decades.” This decision, they add, “will cause serious harm to the economy and energy security of the United States, as well as to the state of Alaska.” Mr. Begich is a Democrat.

The letter also says the ruling “will significantly limit options for a pipeline” through the reserve. This pipeline has long been sought to transport oil and gas from the Chukchi Sea, the North Slope and future Arctic drilling. Mr. Salazar insists that a pipeline could still be built, but given the Obama Administration’s decision to block the Keystone XL pipeline, Alaskans are right to be skeptical.

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Industry Protests Obama’s Plan for Alaskan Oil Reserves

Photo credit: roger4336

A new proposal by the Obama administration to expand drilling to half of the National Petroleum Reserve in Alaska (NPR-A) has attracted criticism from the oil industry, as the plan still leaves a broad area off limits to new oil development. Interior Secretary Ken Salazar said new development will be permitted in an 11.8 million-acre geographical area, which purportedly holds about 549 million barrels of oil, while coastal regions such as Kasegaluk Lagoon and Peard Bay — where there is a higher concentration of seals and polar bears — will receive “special protection.”

According to the U.S. Geological Survey, the entire reserve harbors about 900 million barrels of oil, a region west of the Arctic National Wildlife Refuge approximately the size of Indiana. Opening up only half of this area to leasing is disappointing, says Erik Milito, a director at the American Petroleum Institute (API). “This falls short of where we need to be.”

In a conference call on Tuesday, API president and CEO Jack Gerard disputed President Obama’s so-called “all of the above” energy policy. “Today, we’re sending a letter to the White House to urge the president and his agencies to do more than merely talk about ‘all-of-the-above’ while they pursue policies that include ‘none-of- the-below,’” Gerard charged.

Gerard protested that the Obama administration’s plan to restrict this vast opportunity for oil development is unacceptable, and that it will further depress the nation’s capabilities to become more energy independent. “One half of the National Petroleum Reserve in Alaska, it was announced just yesterday [August 13], has been taken off limits,” Gerard affirmed. “This is an area by law dating back to the 1920s, [which] was specifically set aside in Alaska for oil and natural gas development. The announcement yesterday by Secretary [Ken] Salazar was essentially an announcement that we’re going to take everything that was legislatively set aside and we’re placing them off-limits.”

President Warren Harding established the NPR-A in 1923 as a resource for the U.S. Navy during a period when its ships were transferring over from coal to oil power. In 1976, the Naval Petroleum Reserves Production Act handed 23.5 million acres over to the Department of the Interior. Then in 1980, the Interior Department Appropriations Act appointed the agency’s Bureau of Land Management to administer oil leasing on the Alaskan land.

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Tentative oil plan for Alaska’s National Petroleum Reserve

The U.S. Interior Department opened the door to the possibility of an oil pipeline across the National Petroleum Reserve in Alaska and to oil and gas leasing on 11.8 million acres of it.

The draft development proposal unveiled Monday by U.S. Interior Secretary Ken Salazar represents the federal government’s first coordinated plan for the 22-million-acre reserve, which has seen limited oil production in recent years despite controversy over potential threats to wildlife.

The reserve, which lies west of the oil fields on Alaska’s North Slope, is home to the famous Western Arctic caribou herd, numbering about 325,000, and a smaller herd of 45,000 caribou that migrates near Teshekpuk Lake.

The largest single block of public land in the country, the reserve contains an estimated 549 million barrels of economically recoverable oil and 8.7 trillion cubic feet of natural gas.

The compromise plan — unveiled after a long study that collected more than 400,000 public comments — would continue to protect some of the most ecologically sensitive areas, including Teshekpuk Lake, home to tens of thousands of geese and brant that migrate to the far north during sunny Arctic summers.

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