US Govt to Cancel Alaska Oil Drilling Rights
Satyesh Bhandari
Joe Biden made campaign promises to shut down oil and gas production on federal lands and ANWR, which meant destroying high paying jobs Americans and Alaskan families and communities would benefit from.
The US government led by President Biden is taking steps to stop oil development in Alaska by cancelling leases to drill in the Arctic National Wildlife Refuge.? The moves came in the wake of the government’s decision to approve ConocoPhillips’s 600 MMbbl Willow oil project in Alaska.
The government has decided to cancel leases awarded during the period of President Trump in a January 2021 auction. President Biden had earlier suspended all these leases while government reviewed the sale. However, this initiative will not affect production from existing fields, but the effort is likely to fuel tensions within oil industry leaders. The Alaska Industrial Development and Export Authority (AIDEA) announced?to go to court to protect its rights.
Although, it would take years to develop and produce any oil and gas from the area, it is in contrast to Biden’s earlier statement that U.S. oil companies need to boost output to keep the global oil benchmark under $90 a barrel. Incidentally, the crude prices are again nearing $90 a barrel.
Alaska's petroleum history began with Commercial production in 1902, long before statehood in 1959. Production began from an oilfield in a region known for natural oil seeps.
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Alaska’s North Slope has produced more than 18 billion barrels of oil since the discovery of the Prudhoe Bay oil field. Oil production in Alaska has contributed about $180 billion in total revenue till now. The daily oil production from North Slope, Alaska is little less than 500,000 barrels. Alaska's total proved oil reserves is about 3 billion barrels, sufficient to produce for another twenty years at the current rate of production. Many new fields are waiting for development. The state's oil output peaked at 2 million barrels per day in 1988.
?It's not that Alaska is running out of oil; far from it. Instead, the state's energy industry has been battered by The oil production from Alaska declined due to dtiff competition from shale producers, federal policies, ESG-related concerns and the Biden administration's ban on new leases.
Alaska has vast energy resources. Major oil and gas reserves are found in the Alaska North Slope (ANS) and Cook Inlet basins. According to the Energy Information Administration,?Alaska ranks fourth in the nation in crude oil production.
Defeat in the Crimean War further reduced Russian interest in this region. Russia offered to sell Alaska to the United States in 1859,?believing the United States would off-set the designs of Russia's greatest rival in the Pacific, Great Britain.
ConocoPhillips?has major ownership interests in Alaska’s two largest legacy conventional oil fields.