Murkowski: Suggesting Alaska Should Pay for Overdue Federal Obligations is Outrageous

WASHINGTON, D.C. – U.S. Sen. Lisa Murkowski, R-Alaska, today criticized the Department of the Interior (DOI) for attempting to stick Alaska with the bill for federal responsibilities that have been neglected for decades.

Under the president’s 2014 budget proposal for DOI, Alaska’s 50-percent share of revenue from oil and natural gas activity in the National Petroleum Reserve-Alaska (NPR-A) would be diverted from the state to pay for the cleanup of legacy wells that were drilled by the federal government.

“The idea that this administration would rob the state to clean up this mess is unbelievable,” Murkowski said. “These are federal wells that were drilled on federal lands and every day since then have remained a federal obligation. At no point should our state’s revenues be swiped to pay for them.”

The administration’s proposal seeks to “temporarily halt” Alaska’s share to pay for cleaning up more than 100 abandoned oil wells drilled decades ago by the federal government and for completing land conveyances owed to the state and Alaska Natives since as far back as statehood in 1959.

“This is another slap to the state by the federal management agencies. Not only does the federal government not live up to its promises, but now the administration wants to stick us with the bill,” Murkowski said.  “It’s disturbing enough that we are blocked from producing oil on the vast majority of federal lands within Alaska, and that long overdue land conveyances still have not been completed. To now declare that the federal government is entitled to the meager revenues that may trickle in over the next few years is a breach of trust – and it shows a complete lack of awareness on the part of this administration.”  

Murkowski, as the ranking Republican on the Senate Energy and Natural Resources Committee and the Interior Appropriations Subcommittee, holds both authorizing power and budgetary oversight of the Department of the Interior.

Legacy Wells

From 1944 to 1981, the federal government drilled 136 wells in what’s now the National Petroleum Reserve-Alaska. The Bureau of Land Management (BLM) within the Department of the Interior is federal custodian of these wells. Only 16 of the wells have been properly plugged, and seven of those were taken care of by the North Slope Borough, not by BLM. The remaining 120 wells are in various conditions of non-compliance with state law.

BLM’s Alaska office receives about $1 million a year to clean up the abandoned wells. The last three wells they remediated cost $2 million each. At its current pace, it will take the BLM 100 years to clean up the remaining wells. The state cannot impose fines on the federal government for violating state regulations. If it could, the fines would exceed $8 billion dollars. If the statute of limitations were waived, the fines would exceed $40 billion dollars.

Alaska Land Conveyance Program

The federal government’s conveyance program of land owed to Alaska and Alaska Natives is mandated under the over 42-year-old Alaska Native Settlement Claims Act (ANCSA).

The Bureau of Land Management is once again proposing a deep cut in funding for Alaska land conveyances required by the 2004 Alaska Land Conveyance Acceleration Act. The 2014 funding proposal includes just $17 million – a nearly 50 percent cut from 2012 funding levels. At this annual funding level, BLM estimates it will take as much as 80 years to finish patenting the land conveyances.