Arctic National Wildlife Refuge

The western boundary of the Arctic National Wildlife Refuge, located on Alaska’s North Slope, has been redrawn and 2 oil and gas exploration leases pending since 2011 have been awarded. There has been a longstanding discrepancy with regard to ANWR’s western boundary – covering roughly 20,000 acres – with US Fish & Wildlife Service maps depicting the Staines River as the boundary, while legal descriptions indicated the Canning River as the refuge’s territorial extent.

Needless to say, this uncertainty complicated oil and gas leasing in the region, “particularly on tidal and submerged lands along the Beaufort Sea coast,” according to an Alaskan Department of Natural Resources statement. ANWR’s western boundary is miles from the reportedly $4 billion Point Thompson gas field being developed by ExxonMobil. Point Thompson’s development is also a critical component of the $40 billion to $60 billion Alaska LNG project.

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The state has been working to gain control over the acreage since 2011 so that it may lease the land to oil and gas companies, thus generating considerable revenue on which the state relies. “My administration began a thorough review of the boundary dispute after the Department of Natural Resources received bids in 2011 for oil and gas tracts on tidal and submerged lands at the state-federal boundary,” said Governor Sean Parnell in a recent statement.

“I’m pleased that we are now able to award these leases to the 2011 bidders and clarify the acreage that is available for oil and gas exploration in this highly-prospective region,” said Natural Resources Commissioner Joe Balash in a statement.

This decision and subsequent lease award is sure to perturb environmental groups seeking to limit oil and gas development activity in the region. Importantly, upcoming November 19th North Slope and Beaufort Sea oil and gas lease sales will be based on the clarified ANWR boundary.

The state is in a difficult position, heavily reliant on oil and gas revenue that has decreased in recent years as oil production declines. Revenue from untapped natural gas reserves could potentially backfill some of the state’s lost oil revenue, while condensate extracted from the gas stream would help increase dwindling volumes flowing through the Trans-Alaska Pipeline. But at the same time, protecting the pristine Alaskan wilderness is an equally high priority for the state government and population.

With memories of the 1989 Exxon Valdez oil spill still fresh and Shell’s much more recent offshore exploration mishaps very much on people’s minds, hydrocarbon development in the region’s sensitive ecosystems remains highly controversial. This ANWR boundary change and the upcoming lease sale will likely return Alaskan oil and gas development issues to the headlines in coming weeks.