The People of America's Oil and Natural Gas Indusry

Energy From Arctic, Alaska Critical to U.S. Security

Mark Green

Mark Green
Posted October 12, 2016

Last week’s discovery of 6 billion barrels of oil in Alaska’s Smith Bay, which would increase the state’s reserves 80 percent, underscores the need for the United States to continue safe development of its Arctic resources.

Though the oil is beneath relatively shallow waters owned by the state off Alaska’s North Slope, the discovery signals that the geology there, potentially onshore in the northern portion of the National Petroleum Reserve-Alaska and in the offshore of the Beaufort and Chukchi seas holds considerable promise.

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Dallas-based Caelus Energy expects to find even bigger reserves and plans more test wells next winter. “Like all big fields, this one will probably grow,” Caelus CEO Jim Musselman told the Alaska Dispatch News. “We don't think we've drilled the best channels yet.”

The discovery comes with the federal Bureau of Ocean Energy Management (BOEM) nearing completion of its new five-year offshore leasing program, which will blueprint federal lease sales from 2017-2022. There’s concern BOEM’s leasing plan might omit Arctic sales, which U.S. Sen. Lisa Murkowski of Alaska says is critical to the state economy and U.S. energy security:

“To forsake Alaska oil and gas will be to forsake America’s energy security in a world that is using more energy, not less. It will leave us an economic and environmental disadvantage.”

Development of the Smith Bay reserve could provide 200,000 barrels per day of light crude oil that would provide the Trans-Alaska Pipeline System with throughput volumes needed to extend the pipeline’s long-term viability. Musselman, from the company’s news release:

“This discovery could be really exciting for the State of Alaska. It has the size and scale to play a meaningful role in sustaining the Alaskan oil business over the next three or four decades.”

For the rest of the U.S., the Smith Bay discovery reiterates the need for responsible development of our offshore energy. Together, the Beaufort and Chukchi seas could hold 23.6 billion barrels of oil and 104.4 trillion cubic feet of natural gas. Industry has the technology and the experience to safely develop these oil and gas reserves.

More broadly, future offshore energy development – in the Arctic, the Gulf of Mexico, the Atlantic and other areas – is critically important to sustaining and extending America’s energy revolution, one that has made the U.S. the world’s No. 1 oil and natural gas producer. BOEM’s next leasing plan will largely define whether the United States is going to harness its offshore energy wealth or fall behind other nations as the world looks to a future in which increased demand for oil is a virtual certainty. API Upstream Group Director Erik Milito:

“Energy security depends on our ability to produce domestic oil and natural gas. The administration should not exclude additional areas or reduce the number of proposed lease sales. Too many promising areas, like the Atlantic, are already excluded, taking off the table hundreds of thousands of potential jobs and tens of billions of dollars in government revenue that more forward-looking policy would support.”

ABOUT THE AUTHOR

Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.