Alaska Republican Senator Lisa Murkowski said the Obama administration’s restrictions on oil production in her state threatens to dry up supplies that could flow through the trans-Alaska pipeline, Bloomberg reported Feb. 24.
President Barack Obama has proposed declaring 12 million acres of the Arctic National Wildlife Refuge as wilderness, limiting offshore leasing in Alaska’s Beaufort and Chukchi Seas and block drilling in some portions of the National Petroleum Reserve. Those steps, announced Jan. 25, put much of the state off limits to new oil production, Murkowski said Feb. 24.
“The actions of this administration seem destined to shut down our trans-Alaska pipeline, weaken our economy, forcing our state to make steep budget cuts and really violating the promises that were made to us at statehood and since then,” Murkowski told Interior Secretary Sally Jewell at a hearing on the department’s budget. “As an energy producing state, this is what we do.”
Without more crude that can be shipped by the Trans-Alaska Pipeline System—which has seen declining volumes in the past decade—freezing temperatures could force the pipeline to be closed in coming years. That would make it impossible to sell the oil produced in Alaska.
The Arctic region represents one of the nation’s largest known petroleum reserves, though harsh conditions and environmental concerns have hampered exploration and development.
Jewell said that much of the offshore waters remain open to production, and the administration has agreed to a plan from ConocoPhillips (NYSE: COP) to produce in an area of the Alaskan National Petroleum Reserve.
Alaska oil production has declined from a peak of 2.1 million barrels a day (MMbbl/d) in 1988 to an average of 514,399 bbl/d so far this month, state data show. Jewell said much of that change reflects the natural decline in long-producing oil fields.
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