National Petroleum Reserve-Alaska activity: small discoveries and infrastructure expansion.

• Author: Bradner, Mike
• Position: OIL & GAS

It has been ninety-one years since President Warren Harding created what is now the National Petroleum Reserve-Alaska (NPR-A), a 23-million-acre federal enclave on the western North Slope that is the size of many US states. Originally it was Naval Petroleum Reserve No. 4.

Harding created the reserve as a potential source of fuel for the US Navy at the recommendation of US government geologists, who had investigated oil seeps and believed the region had the potential for larger discoveries. There were no confirmed oil resources at the time, however.

The US Geological Survey estimated in 2011 that the reserve could hold 500 million barrels of undiscovered oil that could be produced at an oil price of $90 per barrel and 18 trillion cubic feet of natural gas that could be produced at prices of $8 per thousand cubic feet.

While those resources might be in NPR-A, finding them has proven elusive.

Exploration History

Between 1944 and 1981, the federal government drilled and then abandoned a number of wells in the reserve. In the early years the exploration was led by the US Navy and its contractors, and forty-five shallow core tests and thirty-six exploration wells were drilled between 1945 and 1952 under management of the Navy.

Despite these efforts, there were no commercial discoveries of oil and gas during the Navy's years as landowner. The Navy has been able to get ample fuel from other sources, however, and in 1976 Congress transferred the reserve from the Navy to the US Department of the Interior and changed its name to the National Petroleum Reserve-Alaska.

With the Interior Department as the new owner and the US Bureau of Land Management (BLM) as land manager, a second exploration program began, directed by US Geological Survey and with Husky Oil hired as a contractor. Six deep tests were drilled by Husky, but again there were no discoveries.

President Ronald Reagan dropped the government-led exploration of NPR-A in the 1980s, developing a conventional federal oil and gas leasing program so that exploration would be led by private companies. Leasing has been underway since. The most active area of interest by industry has been in the northeast part of NPR-A where the geology is considered more attractive for oil.

BLM now conducts an annual lease sale, typically in November, with the sale typically coordinated with the state of Alaska's annual "area-wide" lease sale in the state-owned central North Slope region, east of the federal reserve. In recent years the sales have been held on the same day so that companies could bid on acreage along the boundary between the reserve and state lands where prospects might straddle the border.

The regularity of BLM's annual leasing is praised, but the federal government...