Administration says pipelines would be allowed in petroleum reserve

The Obama administration’s plan for managing wildlife and oil production in the 23-million-acre National Petroleum Reserve-Alaska will not prevent the construction of new pipelines that could carry crude across the state, Interior Secretary Ken Salazar said  Wednesday.

The Interior Department confirmed that policy regarding pipelines in  unveiling a final environmental assessment of the government’s proposed management program for the 89-year-old reserve in northwest Alaska.

In a memo to the Bureau of Land Management, Salazar emphasized the management program would not preclude pipelines beginning at offshore wells in the Chukchi and Beaufort seas and running through the reserve to link up with the Trans-Alaska Pipeline System in Prudhoe Bay.

The oil industry and its allies in Congress — including Alaska’s two senators — had complained that the  management plan would hamper development in the region. Executives with Shell Oil, which launched a new round of exploratory drilling in the Chukchi and Beaufort seas earlier this year, say a pipeline across petroleum reserve  is key to sending any crude produced  in those Arctic waters to the lower 48 states.

Democratic Sen. Mark Begich said Wednesday that  transportation capability through the reserve is “a vital link in bringing Alaska’s offshore resources to market.”

And Republican Sen. Lisa Murkowski said Salazar’s attempt to clarify that pipelines could traverse the reserve didn’t go far enough.

“I remain concerned . . . that the plan sets up roadblocks to an economically feasible project,” Murkowski said, adding that Salazar should make it clear that future federal reviews of potential pipeline routes and infrastructure would “not prohibit construction of an economic project.”

Some industry leaders also weren’t confident the memo does enough to pave the way for future pipelines that could run efficiently across the reserve, without making several detours around protected areas.

The administration’s preferred management plan would prevent any pipelines from passing through Teshekpuk Lake, which is home to caribou, and Kasegaluk Lagoon, one likely spot for a pipeline to come ashore. That appears to rule out a direct coastal route between the Chukchi Sea off northwest Alaska and the Alaska Pipeline’s ‘ pump station No. 1 in Prudhoe Bay.

Shell Alaska spokesman Curtis Smith said, however, that in endorsing the management plan, Salazar “acknowledges the importance of potential future pipelines across the (reserve) and underscores this administration’s ongoing effort to recognize the Arctic outer continental shelf as a resource base of national significance.”

Smith said the company will  work with the Bureau of Land Management as it finalizes the plan, including details related to potential future pipeline crossings.

The environmental impact statement released on Wednesday is one of the final steps before the Interior Department issues its final decision on how to manage the reserve for years to come. In August, the department unveiled its “preferred” management plan, which would allow oil and gas development in 11.8 million acres of the National Petroleum Reserve-Alaska while walling off the activity in other areas that are home to caribou herds and polar bears. Oil and gas drilling would be off limits in 13.35 million acres of the reserve.

According to the Interior Department, an estimated 549 million barrels of economically recoverable oil and 8.7 trillion cubic feet of economically recoverable natural gas lurk in the areas that would be available for leasing under the chosen plan.

But Murkowski estimated that  83.5 percent of the likely natural gas in the reserve would be locked up under the plan, and  Begich said it imposes  “unnecessary barriers” to new drilling leases in the reserve.

Salazar has said previously that the government’s preferred plan would allow a pipeline across the reserve, though it could be more difficult to route and build than the industry would prefer.

Environmentalists praised the administration’s approach.

Cindy Shogan, executive director of the Alaska Wilderness League, said the department “has chosen to celebrate the reserve as an amazing and wild place.”

“Interior has found a reasonable balance between the interests and needs of industry, conservation groups, Alaska Natives, sportsmen, businesses and organizations,” Shogan added.

Jamie Williams, president of The Wilderness Society, said the Interior Department was making “a fair decision that serves the nation well.”

“The oil industry will have access to 72 percent of the economically recoverable oil in the reserve, but special areas such as Teshekpuk Lake will have well-deserved protections from development,” Williams said.