BLM announces lease sale

The U.S. Bureau of Land Management will hold its annual National Petroleum Reserve – Alaska lease sale Dec. 12, the agency announced Thursday.

Meanwhile, the state of Alaska will hold a lease sale of state-owned North Slope lands, previously announced, this Wednesday, Nov.15.

In the NPR-A 254 tracts will be offered in the northeast and central parts of the 23-million-acre reserve but only some of these will attract bids. The reserve is in the western North Slope, west of major producing fields on state-owned lands in the central slope area.

The sealed bid opening will be conducted video livestream, said Ted Murphy, the BLM’s acting Alaska director.

“The tracts offered support (Interior Secretary Ryan Zinke’s) goal to strengthen our energy development. This year’s lease sale demonstrates our commitment to continue Alaska energy production in the National Petroleum Reserve and create jobs and revenue for the state,” Murphy said in a statement.

NPR-A has attracted a great deal of interest after recent oil discoveries in the reserve by ConocoPhillips. One discovery, GMT-1, was recently put into production and construction will start this winter at a second, GMT-2. A third discovery, Willow, is also planned for development but it has not yet been approved.

Despite the discoveries, industry sources say the most prospective parts of the federal reserve, coastal areas that are in sensitive wetlands, are still off-limits to leasing. That may dampen some enthusiasm for bidding.

Also, ConocoPhillips has scooped up large leaseholdings in the northeast reserve area near where it has made discoveries and plans further exploration. The company already has a large land position and whether it can commit to further expansion, through bidding in the federal sale, is uncertain.

Some geologists believe the geologic formations where ConocoPhillips has found oil extend broadly across the central part of the reserve, however.

Meanwhile, the Interior Department, under Zinke, is reported to have started the process to shrink the coastal protected areas, which were expanded under former Interior Secretary Sally Jewell. That process is not yet complete, however.

Alaska has a stake in the NPR-A leasing because the state will receive half of federal revenues, royalties and lease bonuses, under a 1976 law passed by Congress.

The state’s sale scheduled for Wednesday is an “areawide” sale that will offer all unleased state lands in the central North Slope, the offshore state-owned submerged lands to the state’s three-mile territorial limit, and the Brooks Range foothills of the southern North Slope.

BLM usually holds its annual lease offering in the NPR-A in tandem with the state’s annual areawide lease sale, but this year the federal sale is delayed.

Federal officials did not offer a reason why the NPR-A sale is being held later than usual but sources in industry said it may be because the BLM’s geologic and leasing staff are heavily engaged in the Interior Department’s preparation for lease sales in the Arctic National Wildlife Refuge near the Canada border on the eastern North Slope. BLM is managing preparations for that sale.

U.S. conservation groups criticized the lease offering. “Auctioning off Alaska’s wilderness to oil companies accelerates the extinction crisis and climate chaos. The Trump administration wants to industrialize this pristine home to millions of caribou, migratory birds and other wildlife,” said Miyoko Sakashita, oceans program director with the Center for Biological Diversity.

“The Northern Alaska frontier is one of the biggest stretches of untrammeled wilderness left in the world. Scientists say protecting these large ecosystems is crucial to maintaining our planet’s biodiversity,” Sakashita said.