Alaska Outer Continental Shelf

The USGS completed an assessment of the entire circum-arctic area in May of 2008.  They estimate that 90 billion barrels of oil, 1,669 trillion cubic feet of natural gas, and 44 billion barrels of natural gas liquids remain to be found in all areas of the Arctic.

About 27 billion barrels of oil and 132 trillion cubic feet of natural gas are estimated to be in the OCS areas around northern Alaska.  The Chukchi Sea area is believed to contain at least 15 billion barrels of oil and could contain as much as 40 billion barrels.  The Beaufort Sea area is estimated to contain at least 8 billion barrels of oil and may contain up to 23 billion barrels.  No other areas in the OCS surrounding Alaska are expected to contain large, commercially significant quantities of oil.

Lease sales have occurred in Cook Inlet, the Gulf of Alaska, Norton Sound, and in the Bering, Beaufort and Chukchi Seas, but the only currently active leases are in Cook Inlet and the Beaufort Sea.

Four lease sales were held between 1989 and 1991 for parts of the Chukchi Sea area and five exploration wells were drilled, none of which resulted in commercial-size discoveries.  A lease sale was held in February 2008 for the Chukchi area and bids were received for 488 tracts that totaled over 2.6 billion dollars.

Several lease sales have occurred for the Beaufort sea.  The most recent was in April of 2007 and it resulted in bids for 92 tracts totaling over 42 million dollars.  Lawsuits were filed that delayed any activity on the new leases until a January 2008 court decision dismissed the action.  Only the Northstar Project has made it through the arduous regulatory, legal, and exploration process and has actually begun production.  The Liberty Project has completed a development and production plan.  The Shell projects have completed some of the various permitting processes.

In 1988, offshore leases in the North Aleutian basin were sold but never explored due to a moratorium issued by Congress in 1989 after the Exxon Valdez disaster.  The leases were bought back by the government in 1995 and leases in this area were unavailable until recently.  The language forbidding any expenditure on activities in the North Aleutian basin was dropped by Congress in 2004.  A separate Presidential Withdrawal enacted in 1998 was lifted in January of 2007, opening up the area for leasing once again.  North Aleutian lease sales are planned for 2011 although oil deposits in this area are expected to be less than 1 billion barrels, the main focus will be developing expected gas deposits of about 8 trillion cubic feet.

Very limited exploration has occurred in the Alaska OCS areas to date and no very large deposits of oil have been reported to be discovered.  More geological and geophysical permits to conduct seismic surveys have been issued in the past 2 years than in the previous 8 years and the high prices paid for some of the Chukchi leases suggests that the surveys identified some very promising finds.  With oil prices well above $100 per barrel and production costs in the Alaska OCS areas estimated to be between $30 and $50 per barrel, significant exploration is expected and any commercial-size deposits existing in the leased areas will be developed as rapidly as possible.

The Northstar project took nearly 20 years from initial lease to production.  While much of that delay was due to low oil prices, the difficult conditions in the area, and lack of infrastructure, a significant part was due to bureaucratic red tape, regulatory delays, and legal challenges.  Without some type of legislative action by Congress it could take several years before any of the newer leases even begin exploratory drilling, much less begin production.

Additional Alaska OCS Resources

Determinations of Well Producibility

Additional Lease Sales Planned

Alaska OCS planning areas

Liberty Project

Liberty Project Summary

Beaufort Sea 2006 Assessment

Resource Assessment

USGS Energy Resources