Friday, July 31, 2015
Combined energy legislation introduced in the U.S. Senate, the Offshore Production and Energizing National Security Act (OPENS Act), would lift the ban on crude oil exports, provide for revenue sharing in the Alaska Outer Continental Shelf (OCS), and increase access to additional resources by requiring a minimum of three lease sales in each of the Beaufort, Chukchi, and Cook Inlet planning areas during any five-year period. Annual lease sales in the 8(g) coastal zone of the Beaufort and Cook Inlet planning areas in future five-year plans are also called for.
The bill, introduced by Sen. Lisa Murkowski (R-Alaska), also provides for establishing the Tribal Resilience Program, creating a fund for tribal entities to promote resilient communities through investments in energy systems and infrastructure to combat erosion and improve health and safety. In the near term, the legislation would direct funds for workforce development, investments in science, and permitting to ensure OCS oil has a pathway to the trans-Alaska oil pipeline. The OPENS Act also provides revenue sharing and key protections for OCS development in the Gulf of Mexico and the southern Atlantic, and improves permitting for OCS development. Noted is that allowing more exports from the Lower 48 will increase demand for North Slope crude oil at West Coast refineries by creating an outlet for oil produced in the Midcontinent.
“Alaska’s natural resources are vital to our prosperity,” said Murkowski. “With exploration proceeding in the Chukchi Sea, and the Alaska offshore emerging as a key part of our national energy security, it is critical that we ensure revenue sharing for the state and coastal communities. This is a matter of fairness that will create opportunities for Alaska tribal entities and allow us to invest in the workforce development, science, and infrastructure necessary to bring these vast resources to market.”
Alaska’s OCS in the Beaufort and Chukchi seas contains an estimated 23.6 Bbbl of oil and 104.4 Tcf of natural gas. In addition, Cook Inlet, which provides the natural gas supply for southcentral and interior Alaska, contains an estimated 19 Tcf of natural gas. Alaska currently receives 27% of revenues from oil and gas leasing and production in the 8(g) zone, the area between three and six miles from shore, but does not receive revenue sharing beyond the six-mile limit. This is in contrast to Gulf of Mexico states which, beginning in 2017, will share 37.5% up to a cap of $500 million annually from certain offshore production. Of the remaining funds, 50% is directed to the U.S. Treasury and 12.5% is directed to the Land and Water Conservation Fund. (LWCF). “LWCF funding may be an appropriate use of production revenues from the Gulf, but that fund has primarily been used to put more land in federal hands in recent years, and I oppose that in Alaska,” Murkowski said. “Alaska has unique energy and infrastructure challenges that demand a different policy that aligns with our most pressing needs.”
The bill, introduced by Sen. Lisa Murkowski (R-Alaska), also provides for establishing the Tribal Resilience Program, creating a fund for tribal entities to promote resilient communities through investments in energy systems and infrastructure to combat erosion and improve health and safety. In the near term, the legislation would direct funds for workforce development, investments in science, and permitting to ensure OCS oil has a pathway to the trans-Alaska oil pipeline. The OPENS Act also provides revenue sharing and key protections for OCS development in the Gulf of Mexico and the southern Atlantic, and improves permitting for OCS development. Noted is that allowing more exports from the Lower 48 will increase demand for North Slope crude oil at West Coast refineries by creating an outlet for oil produced in the Midcontinent.
“Alaska’s natural resources are vital to our prosperity,” said Murkowski. “With exploration proceeding in the Chukchi Sea, and the Alaska offshore emerging as a key part of our national energy security, it is critical that we ensure revenue sharing for the state and coastal communities. This is a matter of fairness that will create opportunities for Alaska tribal entities and allow us to invest in the workforce development, science, and infrastructure necessary to bring these vast resources to market.”
Alaska’s OCS in the Beaufort and Chukchi seas contains an estimated 23.6 Bbbl of oil and 104.4 Tcf of natural gas. In addition, Cook Inlet, which provides the natural gas supply for southcentral and interior Alaska, contains an estimated 19 Tcf of natural gas. Alaska currently receives 27% of revenues from oil and gas leasing and production in the 8(g) zone, the area between three and six miles from shore, but does not receive revenue sharing beyond the six-mile limit. This is in contrast to Gulf of Mexico states which, beginning in 2017, will share 37.5% up to a cap of $500 million annually from certain offshore production. Of the remaining funds, 50% is directed to the U.S. Treasury and 12.5% is directed to the Land and Water Conservation Fund. (LWCF). “LWCF funding may be an appropriate use of production revenues from the Gulf, but that fund has primarily been used to put more land in federal hands in recent years, and I oppose that in Alaska,” Murkowski said. “Alaska has unique energy and infrastructure challenges that demand a different policy that aligns with our most pressing needs.”
