American Geological Institute

Government Affairs Program

Contradictions Reign Over Alaska's National Petroleum Reserve (10/98)

The following column by GAP Senior Advisor John Dragonetti is reprinted from the October 1998 issue of The Professional Geologist, a publication of the American Institute of Professional Geologists. It is reprinted with permission.

The opening of the National Petroleum Reserve-Alaska (NPR-A) has become a hot topic in Washington. Not only of interest to the oil industry and environmental groups, it is a live issue on the federal agenda. Recognizing the decline in production from existing Alaskan oil fields, the petroleum industry has been joined by Alaska's congressional delegation and governor in petitioning President Clinton to open NPR-A for leasing and development. In particular, decreasing production from Prudhoe Bay has raised concerns over maintaining flow rates in the Trans Alaska Pipeline in the coming decades.

Those appeals paid off in early August when Interior Secretary Bruce Babbitt disclosed his intention to open 87 percent of the 4.6 million acres in the northeast quadrant of NPR-A for oil and gas exploration and development. The announcement coincided with the release of the Bureau of Land Management's (BLM) final report on its recommendations for oil and gas development in the reserve. The Minerals Management Service has estimated that the northeast corner of NPR-A contains over 3 billion barrels of technically recoverable oil and nearly 10 trillion cubic feet of technically recoverable natural gas. The Secretary's declaration renewed the impassioned differences among the players and observers generating commentary from members of Congress, the environmental community, the oil industry, Alaskan natives, and governors of the oil producing states.

The 23 million acre NPR-A lies between the Brooks Range and the Arctic Ocean. The petroleum reserve was originally established in 1923 by President Harding to maintain an emergency oil supply for the U.S. Navy. Initially termed the Naval Petroleum Reserve No. 4, it acquired its present title in 1976 with passage of the Naval Petroleum Reserves Production Act which also transferred its management to the Department of the Interior(DOI). The Fiscal Year 1981 Appropriations Act for DOI provided for competitive oil and gas leasing within NPR-A. Four lease sales were held between 1982 and 1984, but all of the issued leases have expired without development.

Reaction to Secretarial Decision
Opponents to development, especially environmental groups, criticized Secretary Babbitt's judgment for allowing oil development in highly sensitive areas that shelter astounding varieties of wildlife at a time when oil supplies are inexpensive and abundant. Their response, however, has been somewhat muted due to a much deeper apprehension over possible leasing of the nearby Arctic National Wildlife Refuge (ANWR). Opening NPR-A for drilling may take some of the pressure away from opening ANWR. The native population has expressed concerned over subsistence issues and over potential damage to the land and resident wildlife, thereby impeding their capacity to survive by means of subsistence hunting and fishing.

Senate Energy and Natural Resources Committee Chairman Frank Murkowski (R-AK) applauded the decision but expressed disappointment that some of the high oil-potential lands were withdrawn from leasing. The American Association of Petroleum Geologists, the Independent Petroleum Association of America, and industry officials strongly supported the move to allow access to the NPR-A for exploration and development, but they would have preferred opening of the entire area with requirements for securing necessary environmental and societal protections by means of lease and permit stipulations. Industry executives referred to an excellent record of effectively operating in environmentally sensitive areas, indicating that new technology makes it possible to produce oil from isolated pads without jeopardizing the regional ecosystem. They also emphasized that actual development cannot occur for a decade or more, dismissing arguments that the current oil glut made further exploration unnecessary. The Interstate Oil and Gas Compact Commission, which represents the governors of the 29 oil-producing states, supported the Secretary's verdict, declaring it a victory for states' rights.

Bureau of Land Management Study
Babbitt's decision was based on a BLM report, entitled the Final Integrated Activity Plan/Environmental Impact Statement, that presents the results from an 18-month study, begun in February 1997, by an interagency team led by the BLM, and consisting of the Minerals Management Service, the U.S. Geological Survey, the Fish and Wildlife Service, the State of Alaska, and the North Slope Borough. The preferred alternative of the report recommends opening of the northeast quadrant of NPR-A for development, while restricting leasing around environmentally sensitive areas. Specifically, the report recommends opening 4 million acres of the quadrant for leasing, but 20 percent of that area can only be accessed through directional drilling, expressly forbidding surface operations. Oil and gas facilities are banned around Teshekpuk Lake and along the Colville River as well as in riparian areas important to the Inupiat, the native people in this part of the North Slope, for sustenance. The study provides for a Subsistence Advisory Panel to address conflicts between oil and gas development and subsistence. The Teshekpuk Lake region potentially contains significant oil and gas deposits, but is also the home of the Teshekpuk Lake caribou herd, and a breeding and nesting ground for several species of waterfowl, some of which are on the threatened and endangered species list. The caribou provide much of the meat essential to sustain nearby North Slope villagers. The Colville River valley provides an important habitat for the Arctic peregrine falcon and other raptors, migratory birds, moose, and fish. The region reportedly also contains world-class paleontological materials.

In view of the widespread interest in the BLM report, a public comment period, which closed on September 8, 1998, was established to receive suggestions about any element of the study. Volume 1 of the report, which includes the five alternatives considered, is available on the BLM website.

It appears likely that the NPR-A will ultimately be developed. The major question seems to be how hydrocarbon development, environmental protection, and subsistence can prosper simultaneously.

The Government Affairs Column is a bimonthly feature written by John Dragonetti. John Dragonetti is the Senior Advisor the American Geological Institute's Government Affairs Program.

This article is reprinted with permission from The Professional Geologist, published by the American Institute of Professional Geologists. AGI gratefully acknowledges that permission.

Please send any comments or requests for information to the AGI Government Affairs Program.

Contributed by John Dragonetti, AGI Government Affairs.

Posted November 30, 1998

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