A Citizen’s Guide

The state is gearing up for its annual lease sale, but the big question is whether anyone will show up.

At the lease sale earlier this year, the state got only one bid for land in the Alaska Peninsula and no bids for land in the North Slope Foothills.

Geologists believe both of these areas have large oil and/or gas deposits. The North Slope foothills, especially, are considered “gas prone,” a term usually reserved for hungry people attacking large meals, but in this case referring to the trillions of cubic feet of natural gas believed to be hiding underground.

The North Slope foothills is a large plot of land bordered by Arctic National Wildlife Refuge to the east, the National Petroleum Reserve-Alaska to the west and the Brooks Range to the south. Many people see the foothills as key to a successful gas project.

During the past legislative session, some testimony questioned whether the existing and proven North Slope gas reserves are enough to make a gas pipeline profitable. But if the foothills contain as much gas as everyone expects, the state believes it would definitely make the pipeline profitable.

Several companies currently holding leases and exploring in the foothills are expected to start drilling as soon as a pipeline is ready to take that gas to market. Because the lease sale comes a full three months after the deadline for AGIA, it stands to reckon that the outcome of the gas pipeline applications will play at least a small role in the success of the lease sale.

This past February, the state blamed the lack of interest in the foothills on on-going land disputes in the area. The 1,347 tracts in the upcoming lease sale are a mix of state, federal and Native land. Because the state still hasn’t gotten all of the federal land promised in the Alaska Statehood Act, and in turn many of the Native corporations haven’t gotten all of the federal land promised under ANCSA, you end up in a situation with a lot of overlapping ownership.

In 2004, President Bush signed the Alaska Land Transfer Acceleration Act, designed to get all of this worked out by the 50th anniversary of statehood in 2009.