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Last updated: 04/26/00

BLM Proposes Unitization, Other Regulations for National Petroleum Reserve in Alaska

The Bureau of Land Management today published a proposed rule on unitization, suspensions, and subsurface-storage agreements that relate to oil and gas activities in the National Petroleum Reserve-Alaska (NPRA). The proposed rule, which appears in today's Federal Register, would add provisions dealing with these matters to the BLM's existing NPRA oil and gas regulations.

"This proposal, which would implement recent changes in a law that governs oil and gas activities in the NPRA, complements May's NPRA oil and gas lease sale," said BLM Acting Director Tom Fry. "Under this proposed rule, companies operating in the NPRA would be able to 'unitize' their oil and gas leases. Unitization maximizes production while minimizing the environmental impact of development." Under a unit agreement, several lessees share in the risks and costs -- as well as the potential benefits -- of oil and gas exploration and development. Unitization also reduces impacts from drilling by enabling two or more leases to be in prduction using fewer wells.

Suspensions allow leases to be extended beyond their authorized time or term by "stopping the clock" under circumstances that are beyond the control of the operator. The BLM may suspend a lease term after discovery of producible oil or gas in order to allow time for the construction of a transportation system from the new well to a gathering or storage system or some other facility. Because of the sensitivity of Alaska's North Slope environment, the prospect of any surface-disturbing activity there requires careful planning for development and lead-time for construction. Lease suspensions would provide for such planning and lead-time.

Subsurface storage agreements allow operators, for a fee, to store oil or gas on BLM-managed lands in existing geological structures rather than in oil or gas tanks. Little environmental risk is posed by this type of storage; the stored fluids are usually reinjected through existing surface and subsurface operating equipment from prior operations. Subsurface storage agreements would facilitate production in the NPRA, where storage is necessary because, among other factors, the severe climate makes it difficult to construct distribution systems for the oil and gas.

The BLM encourages all interested parties to comment on this proposed rule. Comments, which must be submitted in writing, should be sent no later than June 26, 2000 to the following address: Bureau of Land Management, Administrative Record, Room 401 LS, 1849 C Street, N.W., Washington, D.C. 20240. Comments may also be sent electronically via the Internet to: WOComments@wo.blm.gov. Anyone submitting comments electronically should include "attn: AD13" in the message, along with the sender's name and address.