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The Bureau of Ocean Energy Management has approved Hilcorp Alaska’s drilling project for the Liberty prospect in the Beaufort Sea, and this is the first approval for a drilling project in federal waters, the Department of Interior said in a press release.
The release noted the BOEM had studied the project’s potential impact on the environment in detail to make sure it would be safe, but this is unlikely to convince environmentalists it is good for anyone but the oil industry.
Congress voted to open the Arctic National Wildlife Refuge for drilling last December, after forty years of often heated discussions of the issue. Earlier this year, the Department of the Interior said it had allocated US$4 million for construction work ahead of the start of oil and gas drilling in the Arctic National Wildlife Refuge.
Alaska, which generates a substantial portion of its budget income from the oil and gas industry, is eager for the drilling to start. One oil company and two Alaska Native firms in May became the first to apply for a seismic survey permit in the wilderness but, the Washington Post reported at the time, the Department of the Interior’s Fish and Wildlife Services rejected the application, finding it “inadequate”.
Hilcorp Alaska will have to make sure it fulfils several conditions that BOEM stipulated in its approval: it will have to only drill in the “hydrocarbon-bearing zone” and it may only drill “during times of solid ice conditions”. Also, drilling will only be allowed in certain periods during the year to avoid disturbing “Cross Island subsistence whaling activities.”
Data from the Alaska Oil and Gas Association says the waters around the northernmost state are estimated to contain over 30 percent of the U.S. known recoverable oil and gas resources offshore. Developing these would go a long way towards supporting the state’s economy, which is heavily dependent on the oil industry and will likely contribute to the advancement of the energy dominance agenda of the Trump administration if meaningful discoveries are made.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.