The state lease renewal is a major step in securing a future for the Trans Alaska Pipeline System, which delivers nearly a fifth of domestically produced oil and has shipped over 13.5 billion barrels of crude since it began operations in 1977.
Next month the Interior Department will formally renew the right-of-way agreement that allows the pipeline to operate on federal lands. That agreement, also scheduled to expire in 2004, will be extended for another 30 years. The Bush administration has identified speedy right-of-way renewal as a top energy priority. State and federal officials say there is no reason to deny the pipeline's owners another 30 years of access to those public lands.
Renewal of the leases and right-of-way agreements will clear the way for the pipeline to ship at least another 8.9 billion barrels over the next three decades, not counting any possible production from the Arctic National Wildlife Refuge, the U.S. Bureau of Land Management estimates.
Alyeska Pipeline Service Co., operator of the pipeline, says it has spent over $30 million in its applications for lease and right-of-way renewals. The two-year process began after Sylvia Baca, then director of the BLM, decided that renewal would necessitate a full environmental study of the system's past and future impacts. Alyeska is owned by six oil companies with interests on the North Slope. BP, ConocoPhillips and Exxon Mobil are the major owners; while Unocal, Williams Cos. Inc. and Amerada Hess own minority interests.
Also renewed on Tuesday were state leases for five major North Slope feeder lines. Those pipelines, the Endicott, Kuparuk, Kuparuk Extension, Milne Point and Oliktok lines, deliver 60 percent of the oil that is transported down the Trans Alaska Pipeline System. Their leases were extended for 30 years.
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