Just because the federal government leases tracts for oil and gas development doesn’t mean the leaseholders can actually use their leases, because agencies can always change their minds.
The day after Christmas, the Department of the Interior quietly notified Hilcorp that the Biden Administration will not extend the offshore oil and gas leases for the Liberty Unit in the Beaufort Sea. The agency waited until the last possible day to deny the lease extension.
“After years of working in good faith to move the Liberty project forward, Hilcorp is extremely disappointed with this decision. We will continue to pursue this opportunity and are currently evaluating all available options. Hilcorp remains committed to ensuring the safe and responsible development of Alaska’s natural resources,” said Matthew Shuckerow, spokesman for Hilcorp.
Hilcorp estimates that the Liberty Unit contains approximately 150 million barrels of recoverable, high-quality crude oil, in leases that go back to 1998, when they were owned by BP.
Located 5.5 miles offshore in shallow water of about 20 feet, the lease are inside the Beaufort Sea’s barrier islands about 20 miles east of the Endicott oil field, which is also operated by Hilcorp. It would require a manmade island for operations and a 5.5-mile pipeline to shore.
Hilcorp acquired primary ownership in 2014 and has been working with the federal government for several years to get all the requirements met that would allow the leases to be extended. The approval by the Trump Administration was put on hold by a court decision in 2020, which sent the project back for further environmental work.
These purchased leases will now expire, meaning that the untold millions of dollars worth of effort by Hillcorp has been lost.
The rejection of the lease extension came at the same time the Biden Administration locked down most of the Outer Continental Shelf for any further oil and gas development. The Department of Interior has not yet announced its action, nor has the Bureau of Ocean Energy Management, but the letter is at this link.
Alaska’s two senators, Dan Sullivan and Lisa Murkowski, sent a letter to the Department of Interior, encouraging favorable action and reminding the department that the Liberty Unit was submitted as a plan to BOEM in 2014.
“Hilcorp worked diligently with the State of Alaska, federal government, University of Alaska, and Alaska Native community to develop plans for the potential development of the Liberty Unit, and obtained an SOP for the Liberty Unit in 2021,” they said.
“Over the course of this process, however, Hilcorp encountered permitting delays, processed new information, and, consequently, made adjustments to the previously proposed plan. They determined that in order to mitigate any environmental impacts and avoid further permitting delays, the best course of direction for the development of the Liberty Unit was to pursue the use of an extended reach drilling (ERD) development project instead of a gravel island development project,” Sullivan and Murkowski wrote.
Hilcorp submitted a request for the extension of the suspension of operations and production plan on Aug. 12, 2024 and on Nov. 20, 2024, submitted an amended development and production for the Liberty Unit to BOEM, which describes Hilcorp’s proposal to develop the reservoir utilizing extended reach drilling from Endicott Satellite Drilling Island.
“In light of the proposed transition to ERD, this extension request is justified to carry out the requirements of the National Environmental Policy Act, particularly due to the inordinate delays Hilcorp has encountered in obtaining required permits because of third party challenges to agency actions. With the SOP expiring on December 26, 2024, there is simply not enough time for BOEM to review the changes within the revised DDP before the SOP expires in a few weeks,” the senators said.
“The extension of the SOP is critical, and we reiterate that its issuance will result in a more efficient, productive, and responsible development of the Liberty Unit. It is our request that this submission is given due consideration, as the proper development of Liberty will produce vast benefits for the State of Alaska and our nation at-large. We thank you for the consideration of our correspondence and respectfully ask that you keep our offices notified of the eventual outcome,” Sullivan and Murkowski wrote.
Environmental groups lauded the decision, saying drilling in the Arctic is too risky.
Continuing to support the WEF agenda at all costs.
The elites (read that as parasites) need you to just freeze to death in the dark. It is the only way they can live a life of luxury at your expense.
Don’t you ever have CBMTTek work to do? You seem to spend all day every day commenting on MRAK stories.
This administration starting to get a little ridiculous. But we need to do is say that all of his executive orders are void because he doesn’t have cognizant memory or the ability to make a simple decision.
Biden is making Venezuela look like a stable oil-producing nation. This ghoul is doing everything he can to pound stakes into the heart of the Alaska – and indeed the US – oil industry. Still less that two weeks until Biden is replaced. That’s a lot of time to do a lot more damage.
The evil puppet regime continues their attempts of pillage and plunder. Truly they are all invaders, not just those illegally crossing our borders. The shadow government propping up puppet Biden are also enemy invaders set on destroying our republic.
Hilcorp spent very little effort on Liberty, MRAK has no basis for writing untold $millions spent. What is true is that Jeff Hildebrand’s wealth has increased by over $10 Billion since Hilcorp bought out BP and Alaska’s annual revenue loss is at least $100 milliuon annually because Hilcorp is an S Corporation.
You don’t know what you are talking about with regards to Hilcorp expenses relative to the Liberty drill site. The Liberty project was an asset included in the 5.6 billion dollar deal with BP and Hilcorp has spent hundreds of thousands in legal time and permitting requirements due to the continual litigation brought against everything oil in Alaska by the Earth Justice terrorist “non profit” assholes. Hilcorp exposure for this lease hold is extensive and the decision by Biden should NOT have expired the lease, due to suspension of the project by BOEM. This suspension stopped the clock toward expiration of the leasehold. I am confident the new administration will be able to enable Hilcorp to continue with this project. As for the revenue loss, the politicians in Juneau have continually thrown the money away so the tradeoff for jobs is worth it, in my opinion.
Frank,
Shoddy reporting.Quick google search “BP’s Liberty Project” will bring up good factual based reporting from 4/10/2023.Looks to me like Hillcorp was basically trying to keep the project on deep freeze.Optionable without actually tying up construction capital.
And what do you think they paid for those leases steve.?.? Ind I suppose hanging onto that project didn’t cost them anything. F the Biden administration.
Look, folks, Liberty has been being worked on as a potential development for 30 years. Don’t ask me how I know, but I have firsthand knowledge. It’s never made the cut and has been put on many back burners over time. BP wouldn’t do it, and neither will Hilcorp. So this is a tempest in a teapot. And of course, leases always expire, and they can be retracted as well under certain circumstances.
We can’t afford any more days of this failed administration! Just like the first days of Biden’s administration was disastrous to Alaska, so are his last days! Gulp!
Trump will undo it all. What needs to happen is something in writing to prevent this from happening to Alaska ever again. Ridiculous the working people get basically abused every 4 years with a new POTUS agenda. The CLOWN leaving will be known as THE worst president in history. In my opinion, that is every Democrat. Do not ever vote them into office again!
Just look around, find a Democrat, personally thank them for the results // consequences of voting and supporting the Lisa & the Democrat ticket. Now(!), we all get to reap the benefits!
“Environmental groups lauded the decision, saying drilling in the Arctic is too risky.”
As if they’d know. They don’t seem to realize how much their ideas are messing up the very environment they claim to want to save.
Manda Gershon, everything is “risky” in life, including drilling for oil in the Arctic. However, in the last 50 years it has been proven that the risks are quite minimal as it relates to the environment, that is in measurable terms. The Caribou are doing well, Polar Bear Populations are nearing nosebleed levels and the Inupiaq people living near the Oil fields are happy with the current state of affairs.
That’s just because once they run Alaska into the ground, they’ll pack it in and move back to Portland or Seattle. I predicted this 15 years ago. Very disappointing. And this is just the start unless somebody can successfully turn back the clock.
Has this administration done anything except try to undermine and eliminate anything Trump wants to do?
.
Seriously, the entire administration can be summed up in one sentence. “If Trump wants it, we will oppose it.”
They’ve proven since 1968 that oil is safely produced on the Slope . One of cleanest oil producing environments on the planet . Can’t argue with the facts .
Give it a couple months and the new president will unwind all these crazy executive orders that Biden’s puppeteers have put into place.
Maybe the next time the President approves building permanent gravel roads into NPRA it will get done . Ice roads are temporary and only used to keep the competition out . Very expensive to build and maintain and only gravel roads should be built . Conoco Phillips elected not to build hard year around surface roads when they were given the green light by the past administration . It’s really set back the Willow project . However $75-80 barrel oil has kept them very profitable .
It should not take ten years once the oil is found to get it producing . Should only take three years or so . Capital is not that patient unless your a NorthSlope producer .
Sufficient gravel sources have been elusive and challenging for the Willow Project. Totally agree, there should be permanent gravel roads interconnecting … Red Dog Port – Point Lay – Kivalina – Point Hope – Point Lay – Wainwright – Barrow – Atqasuk – Teshekput Lake – Alpine – Nuiqsut – Umiat – Deadhorse – Point Thomson – Kaktovik, providing access to a multitude of ‘now’ stranded resources.
Just remember, this anti-fossil fuel stance is embraced by the democrat party as a part of their global warming (oops, climate change) hysteria. So why do republican legislators jump ship, lose their majority status only to let democrats run the show in the legislature? Why do Alaskans vote for these people who continue to do this?
Lisa … Needs to held accountable and replaced!