Feds set ground rules for ConocoPhillips project in Alaska

WASHINGTON — ConocoPhillips’ plans for the first oil production facilities from federal lands in Alaska moved one step closer to reality  Wednesday, as the Interior Department released a  key environmental study on the project.

Although it is not a final verdict, the assessment by Interior’s Bureau of Land Management sets the stage for approval later this year by outlining steps ConocoPhillips would have to take to mitigate environmental effects while boring up to 33 wells at its Greater Mooses Tooth site.

“Reaching this stage of permitting is a major milestone for the project and for the future of balanced, responsible federal oil production in the National Petroleum Reserve-Alaska,” said Bureau director Neil Kornze.

If ConocoPhillips wins final approval, the resulting wells would send new supplies to the  Trans-Alaska Pipeline System, which needs steady deliveries of crude to keep flowing.

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The company is asking permission to build an 11.8-acre drilling pad inside the National Petroleum Reserve-Alaska, a  23-million-acre region in northwest Alaska that was set aside because of its oil and gas potential 91 years ago. Any oil pulled from wells at the Greater Mooses Tooth site would be processed  17 miles away, at the existing Alpine production facility on state lands. Anadarko Petroleum Corp. has a 22 percent working interest in both the Greater Mooses Tooth wells and the Alpine facility.

In the environmental impact statement released Wednesday, the Bureau of Land Management recommended the company be allowed to build an 8.5-mile gravel road that would provide access to the site in case of oil spills and other emergencies.

ConocoPhillips’ request was for a shorter 7.7-mile access road, which would have involved two bridges at creek and river crossings. BLM’s alternative approach avoids one of the bridges but may hike costs because of the extra distance.

The bureau said both its recommended plan and ConocoPhillip’s proposal substantially pare the need for aircraft overflights over other alternatives, limiting disturbances to caribou and other local wildlife as well as the communities that live on Alaska’s North Slope. Additional aircraft and traffic requirements could be imposed as part of any final approval, BLM said.

The BLM said it could impose other requirements when it formally decides on the project, including possibly creating a compensatory mitigation fund with money used to promote conservation and restoration inside the reserve. ConocoPhillips also could be forced to develop a long-term regional mitigation and monitoring strategy, the agency said.

Sen. Lisa Murkowski, R-Alaska, said she welcomes the progress but worries about those additional requirements that could appear in the bureau’s formal decision on the project.

“Federal leaseholders need to have a permitting process that is timely and predictable in order to invest the billions of dollars it takes to develop America’s energy resources,” she said in a statement.

ConocoPhillips said long lead times for lining up supplies and equipment mean that permitting delays could put off the start of construction. “We need to purchase long-lead materials early in 2015 for winter construction in 2016,” the company said in an e-mailed statement.

the company has not yet made a final investment decision in the project, while permitting is under way. A ConocoPhillips spokeswoman said a final investment decision is now planned for the first quarter of 2015.

Environmentalists were disappointed with the Interior Department’s approach. They said the proposed access road would permanently damage the region’s wetlands and tundra, with long-lasting impacts on the region’s wild animals and the native Alaskans that depend on them for food and clothing.

“Development must be done right, and that means using good scientific data and doing a thorough analysis of all available options,” said Nicole Whittington-Evans, Alaska regional director for The Wilderness Society. “The standards for Greater Mooses Tooth 1 should set a high bar for safety, environmental protection and industry accountability.”

The Greater Mooses Tooth project would complement ConocoPhillips’ nearby CD5 development, now under construction. The company hopes to start drill site facilities in winter 2015, with a plan for at least 15 wells and production of as much as 16,000 barrels of oil per day.

Greater Mooses Tooth is projected to add up to 30,000 barrels of oil per day to the Trans-Alaska Pipeline System that carries crude 800 miles, from Prudhoe Bay to Valdez.

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