KTUU.com | Alaska's news and information source | Feds lease 1.5M acres of National Petroleum Reserve

Feds lease 1.5M acres of National Petroleum Reserve

by Jason Lamb
Wednesday, Sept. 24, 2008

ANCHORAGE, Alaska-- Representatives from oil and gas companies put millions of dollars on the table Wednesday to gain rights to possibly drill in a controversial corner of the National Petroleum Reserve.

It's a chunk of Alaska land the size of Connecticut and Rhode Island combined.

The National Bureau of Land Management held the auction at the Loussac Library. The auction drew dozens of hopefuls and when it was over, the Bureau of Land Management had leased more than 1.5 million acres of land.

The bureau sold only a third of its tracts. Totaling up Wednesday's sales, the BLM raked in nearly $31 million, of which the state of Alaska gets half.

 "We've made acreage available for future exploration and potential development of both oil and gas from the petroleum reserve," said Tom Lonnie of BLM.

The United States Geological Survey estimates there's 9.3 billion barrels of recoverable oil underneath the territory, and oil companies want a piece of it.

"We bid on 47 blocks, and won 33. I think we won the ones we really wanted, and we are pleased with the results," said David Brown of Conoco Phillips.

Bids for each tract of land averaged around $100,000 to $200,000.

Petro Hunt, a company based in Texas, had the largest bid at nearly $650,000 for a tract.

"The area is under evaluated, it needs further work, and now that we've acquired leases, we're ready to head down that road of analyzing further what has been done in the past and seeing what we can do to enhance it," said W. Hubbard Hunt of Perto-Hunt.

While the oil companies were eager to get the rights to develop the area, there was opposition to the auction.

The Alaska Wilderness League set up a website about the sale that used some harsh language. But representatives from the Alaska Wilderness Society at the auction had a more friendly approach.

"The conservation community supports some oil and gas development in NPR-A. We've mostly worked to make sure the biological and cultural priorities are protected," said Eleanor Huffines of the Wilderness Society.

The Wilderness Society says its main concern was protected.

"The best thing from our perspective is that the BLM did not offer the tracts north of Teshekpuk Lake which our agency and our partners recognize are too important for biological and cultural reasons," said Huffines.

Each of the land leases will last for 10 years.

Contact Jason Lamb at jlamb@ktuu.com