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Alaska offers $50 million, hoping to join feds in probing ANWR's oil prospects

Alex DeMarban
The coastal plain of the Arctic National Wildlife Refuge USFWS

Angered by a federal government they say is ignoring its commitment to study oil resources in the Arctic National Wildlife Refuge, Gov. Sean Parnell offered up $50 million on Monday to jumpstart the effort, starting with seismic activity they say won't hurt the tundra and eventually including exploratory drilling.

How far the measure will go is uncertain. For more than two decades, Congress has nearly always refused to allow exploratory drilling in a coastal swath of ANWR, the so-called 1002 area that Congress in 1980 set aside for hydrocarbon evaluation. The coastal area represents about 9 percent of the 19.2-million-acre refuge, and is thought to contain about 10 billion barrels of oil.  

Parnell and Natural Resources Commissioner Dan Sullivan announced the idea -- and a 187-page plan and resource evaluation to carry it out -- early Monday in Washington, D.C.

Parnell said the Interior Department has previously indicated it won't study 1002's oil and gas potential as part of a conservation-planning document being developed for the refuge. But the state hopes to change that.

“The federal government has the responsibility to do this under federal law, but is clearly reluctant to do so," Parnell said. "Therefore, we are stepping forward with our expertise and financing to provide a detailed resource evaluation-and-exploration proposal."

Conservation groups bashed the idea. The Alaska Wilderness League released a statement calling the proposal "silly" and a "dead-end."

"Gov. Parnell's proposal ignores the fact that exploration of the Coastal Plain would be illegal," said Lydia Weiss, Arctic Refuge Campaign Director. "In 1980 Congress had authorized a one-time Coastal Plain exploration effort, and that effort occurred in the 1980s." 

In the mid-1980s, oil companies BP and Chevron drilled the only well ever permitted in the refuge. Called the KIC well because it was drilled on land owned by Kaktovik Inupiat Corporation, the nearest regional Native corporation, what was found has never been made public. 

7-year program would cost $150 million

Having a better idea what's beneath the ground could inform the debate over where drilling should occur, Parnell said.

Exploration would take place only in winter to protect the fragile tundra. The first part of the seven-year program, described in a letter sent to Interior Secretary Sally Jewell, calls for spending $150 million on minimally invasive 3-D seismic testing that would provide more reliable data, supplementing two-dimensional testing done 30 years ago.  

The state will offer $50 million if the federal government partners with it. The hope is that the federal government will pitch in $50 million, and industry will pick up the remainder of the tab, Sullivan said.

The seismic testing would avoid damaging the tundra and thousands of caribou that sometimes migrate along the coast, North Slope leaders said.

After seismic testing, exploratory drilling will require ice roads, ice pads and airstrips, as well as four drill rigs that can drill up to 16 wells on 14 prospects. "Drilling will occur in January through April from seasonal ice pads, with the dates for drilling shutdown and rig demobilization determined as a function of actual annual weather conditions," the proposal says. Ice-based facilities will be used through April each year. No summer activities are planned for phase three."

The Interior Department is taking a "head in the tundra" approach toward assessing ANWR's resource potential, Sullivan said.  

"They don't want to know any more," he said. "We think that's completely illogical. If you're trying to best manage this land, why would you not want to know?"

Sullivan said the 1980 federal law that expanded the refuge calls for the government to access its resources on a "fairly regular basis, but it hasn't been done in a long, long time."

Going nowhere

The refuge is considered critically important to hydrocarbon-dependent Alaska, and may be home to one of the nation's biggest caches of oil. Parnell and Sullivan announced the idea at a conference hosted by the U.S. Chamber of Commerce in Washington, D.C. North Slope leaders also attended.

Alaska has long tried to tap ANWR oil, but has been repeatedly beaten back by a powerful environmental lobby and, usually, by a stubborn Senate. In 1995, Congress agreed to open the 1002 area, but President Bill Clinton vetoed the measure that would have allowed it. Sen. Lisa Murkowski, R-Alaska, has proposed allowing horizontal drilling that would access the coastal area beneath the ground, without ever disturbing anything on the surface.    

Two years ago, the state offered leases in the Beaufort Sea in state-owned waters near the ANWR coast in hopes that some of the refuge's hydrocarbon potential could be drained that way. No oil has come from that tactic either.

A proposal to open ANWR failed spectacularly in the Senate in 2012, earning just 41 of 60 needed votes. Either way, President Obama has said he'd veto any measure to open the refuge. Meanwhile, the amount of oil sent down the 800-mile trans-Alaska pipeline has fallen to about one-fourth of its capacity as North Slope production has dwindled. In April, only about 550,000 barrels per day of oil in April was moved south.

Support from Native leaders

Charlotte Brower, the Inupiaq mayor of the North Slope Borough who spoke at the announcement, said the borough supports onshore development in ANWR over the more dangerous offshore efforts of Shell to explore the Arctic Ocean's federally owned outer-continental shelf.

She applauded the proposal.

"This represents the essential first step to assisting the federal government in making informed management decisions in this region," she said. "The North Slope Borough has advocated for responsible development of Alaska's onshore oil and gas resources, over the inherently more risky and speculative nature of offshore outer-continental development."

Rex Rock, president of Arctic Slope Regional Corp., the Native corporation representing 11,000 Inupiaq shareholders on the North Slope, said the only community in the refuge, Kaktovik, supports exploration. He also noted that 3-D seismic will not leave an imprint on the tundra.

Nicole-Whittington Evans, Alaska regional director for the Wilderness Society, said that's not true. Seismic testing involves large vehicles criss-crossing the tundra, and they can damage fragile plant life. 

"There isn't always a very thick snow cover, and there are documented cases of damage from seismic exploration using ice roads," she said.  

The refuge was established for conservation purposes, to protect the wildlife, fish and flora that depend on it, and it should stay that way, she said.  

"Seismic exploration and oil and gas drilling would result in extensive adverse impacts to a world-class wilderness area," she said.  

Contact Alex DeMarban at alex(at)alaskadispatch.com