President Obama’s recent invitation to open an area in Alaska to energy drilling is playing to poor reviews from industry leaders and administration critics, who say the move is an attempt to mislead the public about the administration’s willingness to open federal lands to more oil and gas production.
Over the weekend during a brief refueling stop in Alaska on the way to the nuclear summit in Seoul, Mr. Obama issued a release inviting industry input on an oil and gas lease sale in Alaska’s Cook Inlet.
“Today’s announcement is part of our commitment to increasing safe and responsible domestic oil and gas production as part of an all-of-the-above energy strategy for America,” said Secretary of the Interior Kenneth L. Salazar. “We will continue to support efforts to safely expand offshore oil and gas exploration, using the best science to assess where recoverable resources lie and providing industry with abundant opportunity to lease and develop areas that contain those resources.”
But the Cook Inlet, off the coast of South-Central Alaska is the oldest oil field in the state, dating back to the early 1960s, and industry organizations are ridiculing the move as an attempt to try to dress up an old leasing area the industry has had little to no interest in drilling in for years. In fact, two previous Cook Inlet sales in 2009 and 2011 were either canceled or put on hold because of lack of industry interest.
“Oil production has been tapering off there – that’s true for any old oil field,” said Benjamin Cole of the industry-funded Institute for Energy Research. “It’s not economic for the industry to put oil wells there.”
Mr. Cole compared the administration’s lease sale offer in the Cook Inlet to a used-car dealer offering a 1962 Ford with 350,000 miles on it.
“It may be a good car, may have been a good car for all those people who learned to drive on it, but it may not make economic sense to lease it again,” he said.
A spokesman for the House Natural Resources Committee said the panel would not have an official response but argued this “latest political move is really much ado about nothing.”
The Cook Inlet lease sale was part of President George W. Bush’s 2007-12 plan for drilling in the outer continental shelf, which the Obama administration canceled and then delayed coming up with its own five-year proposal until last year.
“This is another case of President Obama canceling a lease sale that was scheduled by a previous administration and then trying to take credit for possibly allowing it to happen,” said committee spokesman Spencer Pederson. “Also, the Cook Inlet is mostly natural gas, so if the administration is using this to distract Americans from noticing gasoline prices have doubled under President Obama, House Republicans have a list of places we would suggest the administration open for American oil production to help lower prices at the pump.”
A Department of Interior spokeswoman declined to comment on the claims about the Cook Inlet, but pointed to an Interior Department estimate that the area could contain more than 1 billion barrels of undiscovered oil and 1.2 trillion cubic feet of natural gas.
The same report estimated another area off Alaska, the Chukchi Sea, could contain an estimated 15.4 billion barrels of oil and 76.8 trillion cubic feet of natural gas.
ConocoPhillips Alaska operates the Kenai liquefied natural gas export terminal in the Cook Inlet Area and has expressed interest in the drilling in the Interior Department’s latest lease sale opportunity.
In contrast, oil companies jumped at the chance to drill in the Chukchi Sea when the Bush administration offered a lease sale for a portion of it in 2008.
But more than a dozen environmental organizations have tried to derail drilling in the Chukchi Sea scheduled to start in July by challenging the drilling plans of companies such as Royal Dutch Shell in court.
Sabrina Fang, a spokeswoman for the American Petroleum Institute, says the industry has only marginal interest in the Cook Inlet and would much prefer to see more permitting opportunities in the Chukchi Seas, as well as Beaufort Sea, another area off Northern Alaska, which is home to one of the largest colonies of Beluga whales.
“Leasing in areas that have been available for years is not the forward-thinking energy policy needed to increase future energy security,” Ms. Fang said. “If the administration was serious about Alaska oil and gas exploration, then they would schedule lease sales in these areas before 2015 and 2016.”
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