Interior Secretary Ryan Zinke made it very clear that boosting energy production in Alaska would be a major part of the Trump administration’s plan for U.S. “energy dominance.”
“The road to energy dominance goes through the great state of Alaska,” Zinke said in a speech at the conservative Heritage Foundation in Washington, D.C., on Friday.
Zinke touted Interior’s first successful sale of leases in Alaska’s Cook Inlet since 2008. That lease sale attracted more than $3 million in high bids for offshore drilling rights across 76,000 acres.
Zinke ordered officials in May to open the National Petroleum Reserve-Alaska (NPR-A), and the department more recently allowed seismic studies in the Arctic National Wildlife Refuge (ANWR).
NPR-A was set aside by Congress for oil and gas production, but the Obama administration put roughly half the 22.8 million acre region off-limits to drilling. Experts estimate that the region holds 895 million barrels of oil and 52.8 trillion cubic feet of natural gas.
Alaska natives living near the NPR-A support efforts to open the region up to drilling, Zinke said. Alaska lawmakers have also pushed the Trump administration to do more to encourage energy production.
“The last administration turned their back on these patriotic and enormously proud people,” Zinke said, adding that “They have the right to make their own decisions.”
Alaska will once again, Zine’s remarks suggest, play a major role in energy policy. The Obama administration prioritized conservation over oil and gas production, closing off onshore and offshore areas to drilling.
However, Alaska’s energy woes began long before Obama took office.
Oil production peaked in 1988 at 2 million barrels per day, and natural gas production peaked in 1994 at 524,000 million cubic feet. Both oil and gas production have significantly declined from their peaks, according to federal data.
Alaska’s oil industry says higher taxes have hurt production, but the region has also faced competition from easier to produce foreign oil. In recent years, the U.S. oil and gas industry has shifted to focusing on fracking into shale formations.
But the major threat to the viability of Alaska’s oil industry is the Trans-Alaska Pipeline (TAP).
The 800-mile pipeline transports North Slope oil to the coast where it can be shipped to west coast refineries. Pipeline capacity has fallen 39 percent in the last decade.
If pipeline capacity falls further, the system could be shut down to prevent any problems. The Energy Information Administration said the pipeline could shut down as soon as 2026 if production keeps declining.
It’s not all doom and gloom, however. Caelus Energy found a massive oil patch on Alaska’s northern coast in 2016, which was estimated to hold as much as 6 billion barrels of oil.
TAP did see an uptick in the amount of oil it transported in 2016 due to a new, high-performing oilfield coming online.
“We have a great opportunity to fuel the world,” Zinke said.
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