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In petition, environmentalists see future end to Alaska North Slope oil production

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In petition, environmentalists see future end to Alaska North Slope oil production

Jun 18, 2024 | 7:37 pm ET
By Yereth Rosen
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In petition, environmentalists see future end to Alaska North Slope oil production
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The trans-Alaska pipeline is seen on Sept. 19, 2022, in Fairbanks. This portion of the pipeline, 450 miles south of Prudhoe Bay, has been transformed into a visitor pullout with an Alaska map sculpture and other features. The current right-of-way authorization that allows the Trans Alaska Pipeline System to operate will expire in 2034. (Photo by Yereth Rosen/Alaska Beacon)

When Kay Brown was director of the Alaska Division of Oil and Gas in the 1980s, her job was to make sure the state got the maximum benefit from its abundant fossil fuel.

At the time, North Slope activity was on the rise and Alaska was on its way to supplying a quarter of the nation’s domestically produced oil.

Now the producing oil fields are mature, Alaska production is down to less than a quarter of its late-1980s peak and climate change impacts have become dramatic in the state and elsewhere in the far north.

And Brown, who went on to become a state legislator and leader of the state Democratic party, is among a group of environmentalists urging the federal and state governments to prepare for an eventual end to North Slope oil production and transit through the pipeline.

She is now Arctic policy director for Pacific Environment, one of six groups that on Wednesday submitted a petition to the Department of the Interior for an environmental study of ways to phase out Alaska oil production.

I’ve done a 180 in my thinking about the value of oil and gas in the state of Alaska,” Brown said in an interview. “Clearly, we’ve had a good run and made a lot of money for a lot of people, including the public treasury, and provided a lot of public services with it.” 

However, with all the emerging information about fossil fuels’ role in climate change, she said, she is certain that oil’s position in the world economy will decline, and that Alaska should plan accordingly.

“We need to think about other alternatives that will not wreck the planet and that will provide jobs and prosperity and lower costs — and lower energy costs,” she said.

The petition that Pacific Environment and the other groups filed with the Department of the Interior targets the 2034 deadline for a renewal of the federal right-of-way permit that allows the Trans Alaska Pipeline System to operate.

Interior’s Bureau of Land Management, as it analyzes TAPS, “must also begin to plan for the necessary decommissioning of the pipeline and phasedown of the fossil fuel extraction the pipeline enables,” the petition said.

The first right-of-way granted to Alyeska Pipeline Service Co., the consortium that operates the pipeline and its marine terminal, was issued in 1974 and had a 30-year duration – covering what was, at the time, the estimated lifespan of the system. That right-of-way was renewed for another 30 years in 2003.

While the current right-of-way does not expire for 12 years, the petitioners say the Department of the Interior should get to work right away.

Kay Brown, a former Alaska Division of Oil and Gas director and legislator, is seen at Anchorage's Westchester Lagoon on Thursday. (Photo by Yereth Rosen/Alaska Beacon)
Kay Brown, a former Alaska Division of Oil and Gas director and legislator, is seen at Anchorage’s Westchester Lagoon on Thursday. Brown is now among those urging Alaskans to start planning for a long-term future beyond oil production. (Photo by Yereth Rosen/Alaska Beacon)

“The longer we ignore and put off the inevitable, the harder it’s going to get and the more painful it will be,” said Cooper Freeman, Alaska director for the Center for Biological Diversity, one of six petitioning groups.

This time around, the petition says, the department should take a hard look at the way the pipeline system’s operations contribute to global climate change, as well as the way that climate change, through impacts like permafrost thaw, has destabilized and created possible new operational hazards for TAPS.

Climate change impacts were not much considered when the right-of-way was renewed the last time.

The 2002 environmental impact statement that led to the 2003 renewal mentioned climate change only a few times, and only in the context of its impact to the pipeline system rather than the way the system’s operation affects the global climate.

In a passage about the geologic processes, the environmental report suggested that any effects of climate change on the system would be manageable. “The impacts may be further complicated by the current warming trend of the climate that may affect the TAPS. Because the TAPS has been in operation for more than 25 years, most of the current impacts have been observed and have become part of the existing environment,” the document said. As for permafrost thaw, impacts to the pipeline’s vertical support members, or VSMs – the devices that hold the pipeline suspended above ground — were expected to vary, “ranging from insignificant to credible,” the document said. Considering the system’s engineering, location, geology “and the experience gained in the last 25 years of pipeline operations, it is concluded that the impact of the warming on the VSMs is of limited extent,” the document said.

The six environmental groups’ petition, aside from seeking a more complete review of climate change, asks for reviews of other impacts and operational issues.

One is the obligation of the oil companies to remove the pipeline and its associated infrastructure once they are no longer needed, a duty called Dismantling, Removal and Restoration, or DR&R.

The petitioners want the next right-of-way to require an escrow account for DR&R obligations that go beyond existing promises that, they say, could be broken.

A common pattern and problem nationwide, Freeman said, is that these duties wind up falling on the taxpayers when oil fields are abandoned, after big companies sell out to smaller companies with fewer resources.

The question of financial wherewithal to handle DR&R obligations and other costs has become more prominent since 2020, when Texas-based Hilcorp Energy Corp., a smaller independent, acquired all of the North Slope assets formerly held by energy giant BP. The city of Valdez and other parties are seeking more access to financial information that Hilcorp, as a privately held company, is keeping confidential. Last month, the Alaska Supreme Court partially affirmed and partially reversed a lower court ruling, thus allowing Valdez to continue its legal attempts to obtain that financial information.

The idea of planning for an end to North Slope oil production, however, runs counter to prevailing sentiment among Alaska’s oil industry and political leaders.

On social media, Gov. Mike Dunleavy blasted the petition.

Kirk Johnson, senior vice president for global operations at ConocoPhillips, speaks on June 12, 2024 at the annual membership luncheon held in Anchorage by the Resource Development Council for Alaska. (Photo by Yereth Rosen/Alaska Beacon)
Kirk Johnson, senior vice president for global operations at ConocoPhillips, speaks at the annual membership luncheon held in Anchorage on June 12 by the Resource Development Council for Alaska. Johnson described ConocoPhillips’ plans for continued investment in Alaska oil production for many years to come. (Photo by Yereth Rosen/Alaska Beacon)

These groups are anarchists… and nuts. They are more interested in destroying Alaska and America than protecting the environment. Their only hope is that the judge is as crazy as they are. They want to tear down the Trans Alaska Pipeline, but are so disillusioned they can’t see the glaring logical fallacies in their own argument,” he said in a post Wednesday.

Rather than decrease, state experts are forecasting that North Slope oil production will increase in coming years as big fields like ConocoPhillips’ Willow project and Santos’ Pikka project come online. The Alaska Department of Revenue’s latest forecast, issued in March, projects North Slope production will rise from its current average of 467,600 barrels per day to over 640,000 barrels per day in 2033.

In a speech at the annual membership luncheon of the Resource Development Council for Alaska, a senior ConocoPhillips official described his company as bullish about new North Slope oil production.

“ConocoPhillips would say that Alaska is a fantastic place to be,” Kirk Johnson, senior vice president for global operations, told the audience at the Wednesday event.

The company is backing that optimism with investment dollars, Johnson said.

It has spent $10 billion in Alaska over the last 10 years, and such investments will continue, he said.

“Our forward-looking expectation is that we’re going to spend another $10 billion, and that’s outside of Willow,” he said. That money will go to old but huge fields like Prudhoe Bay and Kuparuk, as well as to the various smaller and newer fields like the Greater Mooses Tooth Unit, Narwhal and Coyote, he said.

“We continue to find new opportunities and new plays within our existing assets, and we’re leveraging, again, this infrastructure that we’ve built out over the last 40 years,” he said.

As for Willow, which is expected to start shipping oil in 2029 and produce up to 180,000 barrels per day, ConocoPhillips expects its investment to be $7 billion to $7.5 billion, he said.

While there is an energy transition underway, with momentum toward renewables, the energy industry has been in transition for two centuries, and fossil fuels are not losing their position, Johnson said.

“Oil and gas is going to have staying power within that transition,” he said. “And Alaska is uniquely positioned to be a player within the global energy landscape going forward.”