American Oil and Gas Reporter - May 2018 - 35

fornia by the states of California and
New Mexico, attempting to reinstate the
royalty valuation rule finalized in June
2016 by the Office of Natural Resources
Revenue under President Obama and subsequently repealed in August 2017 by
ONRR under President Trump.
The Obama-era Consolidated Federal
Oil & Gas and Federal & Indian Coal
Valuation Reform Rule allowed ONRR

to substitute a "default valuation" for oil
and gas sold under an arm's-length contract
if the agency believed the royalty calculated by industry was too low (AOGR,
August 2016, pg. 111).
The states' lawsuit contends the pre2016 royalty valuation regulations, which
are again in effect, "date back decades
and fail to take into account dramatic
changes that have occurred in the industry

and marketplace for these resources, including a coal industry practice of depressing commodity values by selling
coal to affiliated companies at artificially
low prices."
The lawsuit argues that ONRR "failed
to provide a reasoned analysis or explanation for repealing the (Obama-era) valuation rule" and asks the court to force
ONRR to reinstate it.
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BLM Begins Plans For ANWR Leasing
WASHINGTON-The Bureau of Land
Management is moving to open the Arctic
National Wildlife Refuge for oil and gas
drilling, saying it has begun the scoping
process for an environmental review to
study the environmental impacts of leasing
drilling rights in the 1.6 million acre site.
According to the April 20 Federal
Register notice, BLM intends to prepare
a leasing environmental impact statement
for the area within ANWR defined as the
"Coastal Plain." It says the leasing EIS
will guide the agency as it prepares to
hold at least two lease sales, and also
may be used in implementing post-lease
activities, including seismic and drilling
exploration, and developing and transporting oil and natural gas in and from
the Coastal Plain.
"Specifically, the leasing EIS will consider and analyze the potential environmental impacts of various leasing alternatives, including the areas to offer for
sale, and the terms and conditions (i.e.,
lease stipulations and best management
practices) to be applied to leases and associated oil and gas activities to properly
balance oil and gas development with
existing uses and conservation of surface
resources, and to limit the footprint of
production and support facilities on federal
lands to no more than 2,000 surface
acres," the notice states.
BLM says the scoping process seeks
to determine which issues need to be addressed, and to identify the significant
issues related to implementing a Coastal
Plain leasing program. It adds the information received will influence the proposal
and alternatives, and guide the environmental analysis.
The agency's action follows White
House approval of the Tax Cuts and Jobs
Act of 2017. One of its provisions, inserted
by Senator Lisa Murkowski, R-Ak., was
instructions to develop policies to generate
at least $1 billion during the next decade,
including opening ANWR to drilling

(AOGR, November 2017, pg. 26).
Joseph Balash the assistant secretary
for land and mineral management in the
Department of the Interior, was quoted
as saying the first lease sale could be as
early as 2019. Before that happens, the
department must complete draft environmental and final reviews, and satisfy all
federal leasing requirements before beginning to accept applications to drill,
media reports note.
As part of the scoping process, BLM
says it will take comments on the environmental review until June 19, and hold
public scoping meetings in the Alaska
towns of Anchorage, Arctic Village, Fairbanks, Kaktovik and Utiag'vik. The bureau
adds it will add more scoping meetings
if needed to meet community demands.
Alaska Governor Bill Walker hails the
move, saying opening ANWR to oil leasing is a historic opportunity. According
to the state, its four-week average for
daily crude production has dropped 5
percent from year-ago levels, to 500,000
barrels a day. The U.S. Geological Survey
estimates ANWR may hold as much as
10.4 billion barrels of commercially available oil at $30 a barrel.
"This is an important priority for my
administration given the potential for significant new revenues from lease sales
and production," Walker says. "The state
of Alaska will work with DOI to support
its efforts to prepare for these lease sales
and ensure that local input is taken into
consideration. Alaska has a long history
of safe development on the North Slope,
and new technology is making the footprint
of development even smaller."
Leasing EIS
BLM says in addition to adhering to
the Tax Cuts and Jobs Act and the National
Environmental Policy Act, its ANWR
scoping process will follow requirements
similar to the administration of lease
sales under the Naval Petroleum Reserves

Production Act of 1976.
The Federal Register notice says the
bureau will collaborate with interested
parties to identify the management decisions best suited to local, regional and
national needs and concerns, as well as
to develop a proposed action and alternatives consistent with key criteria:
* The EIS will consider all federal
lands and waters within the area defined
by Congress as the Coastal Plain.
* Under the Tax Cut and Jobs Act,
not fewer than two lease sales, each to
include no fewer than 400,000 acres in
areas with the highest potential for hydrocarbons, must occur by December
2024.
* BLM will consider subsistence resources and users, as well as potential
actions to minimize adverse impacts to
subsistence in accordance with Section
810 of the Alaska National Interest Lands
Conservation Act.
* The EIS will appropriately consider
the Coastal Plain's surface management.
Future on-ground actions requiring subsequent BLM approval, including proposed
seismic and exploration plans or development proposals, will require NEPA
analysis based on location and extent of
the activity.
Comments on the scoping plan may
be submitted until June 19 to BLM by email at blm_ak_coastalplain_EIS@blm.gov,
or by mail at BLM, Alaska State Office,
Attention-Coastal Plain, 222 West 7th
Ave., No. 13, Anchorage, AK 99513-7599.
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Coming In June
Permian Basin Activity
Artiﬁcal Lift Technology
Offshore & Subsea
Update
MAY 2018 35
American Oil and Gas Reporter - May 2018

Table of Contents for the Digital Edition of American Oil and Gas Reporter - May 2018
