Alaska's North Slope:

Requirements for Restoring Lands After Oil Production Ceases

GAO-02-357: Published: Jun 5, 2002. Publicly Released: Jul 9, 2002.

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This report discusses the nature and extent of dismantlement, removal, and restoration requirements for oil industry activities that are occurring on both federal and state lands located on the North Slope of the state of Alaska. The state of Alaska, which owns the lands where most of the North Slope's current oil production occurs, has adopted general dismantlement, removal, and restoration requirements that contain no specific stipulations on what infrastructure must be removed or to what condition the lands used for oil industry activities must be restored once production ceases. Alaska's requirements are similar to those of some states but less explicit than those of other states, which create a fixed obligation to fully restore the land according to specific requirements. Until the state of Alaska defines the condition in which it would like its lands returned, there is no way to accurately estimate the cost of dismantling and removing the infrastructure and restoring the disturbed land on Alaska's North Slope. Existing financial assurances, such as bonding requirements, ensure the availability of only a small portion of the funds that are likely to be needed to dismantle and remove the infrastructure used for oil industry activities and to restore state-owned lands. Current dismantlement, removal, and restoration requirements and financial assurances for federal lands on the North Slope vary by agency, but are generally insufficient to ensure that any federal lands disturbed by oil industry activities will be restored.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Matters for Congressional Consideration

    Matter: Any future decision to open additional federal lands to oil and gas activities, including those on Alaska's North Slope, is a public policy decision that rests with Congress. In making such a decision, one factor that would be important to consider is the restoration of the land after oil and gas activities are completed. If Congress wants to provide guidance on the condition to which these lands should be returned following the completion of such activities, it may wish to consider providing in the authorizing statute a restoration that will allow the federal agency or agencies responsible for developing dismantlement, removal, and restoration requirements to have a clear understanding of what Congress wants achieved.

    Status: Closed - Not Implemented

    Comments: While the House and Senate had passed an energy bill entitled "Energy Policy Act of 2005," the resulting conference report did not include the provision for authorizing oil and gas activities in the Arctic National Wildlife Refuge. On March 16, 2006, the Senate passed the FY07 budget resolution, which, among other things, directed the Committee on Energy and Natural Resources to reduce budget authority by an amount equal to predicted revenues from ANWR development. The House budget resolution, as passed, did not have any ANWR language or direction for the House Resources Committee. By late June 2006, no conference agreement had been reached on the FY2007 budget resolution.

    Matter: If Congress wants to provide guidance on the condition to which these lands should be returned following the completion of such activities, it may wish to consider providing in the authorizing statute specific assurances that the federal agency or agencies responsible for developing dismantlement, removal land restoration requirements will obtain adequate financial assurances that funds will be available to meet the goal of returning the land to a condition that Congress has specified.

    Status: Closed - Not Implemented

    Comments: While the House and Senate had passed an energy bill entitled "Energy Policy Act of 2005," the resulting conference report did not include the provision for authorizing oil and gas activities in the Arctic National Wildlife Refuge. On March 16, 2006, the Senate passed the FY07 budget resolution, which, among other things, directed the Committee on Energy and Natural Resources to reduce budget authority by an amount equal to predicted revenues from ANWR development. The House budget resolution, as passed, did not have any ANWR language or direction for the House Resources Committee. By late June 2006, no conference agreement had been reached on the FY2007 budget resolution.

    Recommendations for Executive Action

    Recommendation: BLM should review its existing financial assurances for oil and gas activities in the National Petroleum Reserve-Alaska to determine whether they are adequate to ensure the availability of funds to achieve its overall restoration goal.

    Agency Affected: Department of the Interior: Bureau of Land Management

    Status: Closed - Implemented

    Comments: The Department of the Interior agreed with GAO's recommendation. According to a December 11, 2002 letter from the Department's Assistant Secretary for Policy, Management, and Budget, the BLM Alaska has reviewed the financial assurances for the activities to date within the NPR-A as recommended. Specifically, the BLM has determined that the current bonds are sufficient for overall reclamation goals for these activities. In reaching this decision, the BLM considered factors including the business stability of the company, its financial strength, reliability in meeting its obligations, and cost of dismantlement, removal, and restoration work. To date there are no production activities within the NPR-A and all requirements for dismantlement, removal, and restoration have been completed for exploration activities.

    Recommendation: In order to ensure that the lands of the National Petroleum Reserve-Alaska are properly restored after oil and gas activities cease, the Secretary of the Interior should instruct the Director of the Bureau of Land Management (BLM) to issue specific dismantlement, removal, and restoration requirements that will allow BLM to meet its overall goal of returning the land to a condition that will sustain its previous uses including fish and wildlife habitat and subsistence uses.

    Agency Affected: Department of the Interior

    Status: Closed - Not Implemented

    Comments: Specific requirements for dismantlement, removal, and restoration (DR&R) activities will be part of the planning for the Full Field Development and will be included in the permitting process for those activities. Currently, in the National Petroleum Reserve-Alaska, BLM has not yet approved a permit for Full Field Development and, therefore, has not yet developed specific dismantlement, removal, and restoration (DR&R) requirements.

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