Bristol Bay oil, gas leasing measure clears Legislature

Slow fishing has turned some Bristol sentiments pro-oil

Posted: Wednesday, March 17, 2004

Bills smoothing the way for the state to sell oil and gas leases in Bristol Bay next year have passed the Legislature.

The measures, which had already passed the Senate, were rushed through the House on Tuesday so Gov. Frank Murkowski can sign them during a trip to Dillingham on Wednesday.

Residents of the Bristol Bay region for years had been reluctant to support oil and gas development because of concerns about potential environmental damage to the region's salmon fisheries.

But with a continuing downturn in the fishing industry, some groups now support opening the area to onshore oil and gas development, including the Bristol Bay Native Corp.

"Hopefully, something will come of the lease sale and subsequent exploration that will be of benefit to the region," said Jim Hansen, lease sales manager for the state Division of Oil and Gas.

One bill the House approved Tuesday changes a law that says oil and gas lease sales can be added to the state lease schedule only once every two years - at the start of a new Legislature.

Senate Bill 265 would allow lease sales to be added at any time, although the state would still have to go through a lengthy public process before scheduled sales actually take place, Hansen said.

The change will let the state offer Bristol Bay oil and gas leases in October 2005, Hansen said. That's about two years earlier than would have been allowed under current law.

The proposed sale includes 1.5 million offshore acres and 3.5 million onshore acres in an area along the Alaska Peninsula from near King Salmon and Naknek to nearly as far south as Cold Bay.

Once the sale is on the state's schedule, the Department of Natural Resources can begin gathering public comments and other information. The department probably will make a preliminary decision on whether the sale is in the state's best interest in November and a final decision in July 2005, Hansen said.

Rep. Les Gara, D-Anchorage, expressed concerns about protection of habitat and access to fishing streams in the region, but he did not oppose the measures.

A letter of intent that accompanied the legislation states that any drilling of offshore prospects must be reached from onshore.

On the North Slope, oil companies have used directional drilling technology to drill from onshore facilities to as far as five miles off shore, Hansen said.

No wells have been drilled in the Bristol Bay area since the mid-1980s, and no oil or gas has been produced there. In 1995, the U.S. Geological Survey estimated that the Alaska Peninsula had a 1-in-20 chance of containing 447 million barrels of oil and 1.4 trillion cubic feet of gas.

The second bill approved Tuesday prevents companies from filing for a shallow natural gas lease or exploration license in the area before the sale goes on the schedule. The aim of that measure is to make sure the acreage the state hopes to sell isn't fragmented.

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