Paul Driessen
Way back in 1980, Congress passed the Alaska National
Interest Lands Conservation Act, establishing the Arctic National Wildlife Refuge and
making numerous other land use decisions for our 49th state. Section 1002 of
the act postponed a decision on managing ANWR’s 1.5-million-acre coastal plain,
which has enormous oil and gas potential and is important summertime wildlife
habitat.
For four decades, environmentalists blocked legislation
that would have opened the coastal plain to leasing and drilling. In 1995
President Clinton vetoed a pro-drilling bill that had passed both houses.
At long last, the tax-cut legislation just passed by
Congress allows America to benefit from the petroleum resources that experts
predict will be found in a small section of the plain, along Alaska’s northern
coast. The legislation directs the Interior Department to hold at least two
lease sales over the next 10 years, for a maximum of 2,000 acres opened to
drilling. Analysts say the sales could fetch as much as $2.2 billion.
The area contains an estimated 10.4 billion barrels of
oil, says Alaska Senator Lisa Murkowski, chair of the Senate
Energy and Natural Resources Committee. Others put the petroleum potential even
higher.
The U.S. Geological Survey and Congressional Research Service say
it’s 95% likely that there are 15.6 billion barrels of oil beneath ANWR. With
today’s exploration, drilling, fracking and other technology, up to 60% of that
may ultimately be recoverable.
At $50 a barrel, that represents $460 billion that the
USA would not have to send overseas; tens of billions in Alaskan and United
States royalty and tax revenues; and thousands of jobs in oilfield,
manufacturing and many other sectors.
After the IRS, oil company oil and gas royalty payments
represent the single largest contribution to the U.S. treasury. Companies that
produce from federal onshore and offshore leases pay royalties of up to 18% of
wellhead prices, and then pay corporate taxes on profits and sales taxes at the
pump. Workers pay income taxes, instead of receiving unemployment and welfare
checks.
Every step in the leasing, drilling, production and
pipeline process will require extensive environmental reviews. Unfortunately,
each step will likely generate lawsuits and delays.
As they have since long before 1980, activists continue
to claim that any drilling would destroy the entire ANWR area’s wilderness
character and threaten its caribou, polar bears, birds and other wildlife. In
all too typical hyperbole, League of Conservation Voters president Gene Karpinski
claimed the tax law provision will “turn one of our last remaining wild places
into an industrial oilfield.” That’s absurd.
Alaska alone has 57 million acres (more than all of Utah)
set aside as wilderness, plus tens of millions more wild acres off limits
to drilling in national park, wildlife refuge and similar designations.
Nationwide, land several times the size of California is protected in these and
other land use categories.
ANWR is the size of South Carolina: 19 million acres. Of
this, far fewer than 2,000 coastal plain acres would actually be disturbed by
drilling, roads and other development work. That’s 0.01% of ANWR; one-twentieth
of Washington, DC; 20 of the buildings in which Boeing manufactured its 747
jetliners.
To claim this minimal impact will despoil the entire
refuge is like saying a few farms and airports scattered along South Carolina’s
northern border would kill wildlife and ruin scenery throughout the state.
The potentially oil-rich coastal plain is actually flat,
treeless tundra, 3,500 miles from Washington, DC – and 50 miles from the
beautiful Brooks Range mountains that feature so prominently and deceptively in
Sierra Club and other anti-drilling campaigns.
Even more telling, the same environmentalists never
object to forests of 400-foot-tall wind turbines installed in or next to
forests, grasslands, wildlife sanctuaries, migratory bird flyways and other
sensitive areas – where they slice and dice eagles, falcons, geese, bats and
other magnificent flying creatures day after day, year after year.
During some eight months of winter, when drilling will
take place, virtually no wildlife are present in the coastal plain. Food is
buried under snow and ice, and temperatures plummet as low as minus 40 F. The
tundra turns rock solid. Spit, and your saliva freezes before it hits the
ground.
But the nasty conditions mean exploratory drilling can be
done using roads, “drill pads” and even airstrips that are all constructed with
ice and snow. Come spring, all of this will melt, leaving only puddles, little
holes and a few permanent facilities. The caribou will return – just as they
have for years at the nearby Prudhoe Bay and Alpine oilfields – and do what
they always have: eat, hang out and make babies.
In fact, the Prudhoe Bay oilfield’s Central Arctic caribou
herd is over 20,000 today, compared to 5,000 in 1975. Arctic fox, geese, shore
birds and other wildlife also return each spring, along with the Alaska state
bird: giant mosquitoes.
If oil is discovered, modern Arctic drilling technologies
from small gravel pads will ensure minimal land impacts, as other North Slope
operations have demonstrated. Each drill pad will support multiple wells, and
modern “directional” and “extended reach” drilling
technologies will allow companies to punch multiple holes a mile deep and five
miles long in any direction, steering drill bits to penetrate multiple oil
zones and hit distant targets far below the surface, without disturbing the
tundra high above.
Coupled with the ability to fracture rock formations and
stimulate them to produce far more oil and natural gas liquids than previously
possible, this accuracy means a series of small sites totaling less than 2,000
acres could produce up to 15 billion gallons of petroleum annually.
That’s far better than producing 15 billion gallons of
ethanol annually from corn grown on an area larger than Iowa: 36 million acres
– via a process that also requires massive amounts of water, pesticides, fertilizers
and fossil fuels, to create fuel that gets one-third less mileage per gallon
than gasoline.
Inuit Eskimos who live in or near ANWR have supported drilling by an 8:1
margin. They no longer want to live in poverty – especially after having given
up their traditional land claims for oil rights that Congress, greens,
presidents and courts have repeatedly denied them.
Gwich’in Indians have opposed ANWR drilling, and some
were paid by environmentalist groups to appear in anti-drilling commercials.
However, they actually live hundreds of miles away on the other side of the
Brooks Range. And they leased many of their own tribal lands to generate
revenue. Their leased areas were close to a major caribou migratory route,
where caribou often birth their calves before arriving in ANWR. Unfortunately
for the Gwich’ins, no oil was found.
Drilling in ANWR will also ensure sufficient production
to keep the Trans-Alaska Pipeline in operation. Right now, declining North
Slope production threatens to reduce oil in the pipeline to a point where it
cannot stay sufficiently warm to flow under months-long winter conditions.
The
pipeline needs between 250,000 and 350,000 barrels of oil per day to stay open. If there are
inadequate supplies, because ANWR or other deposits are not developed, the
pipeline will be shut down – leaving millions of barrels and billions of
dollars behind. That makes ANWR oil doubly important.
Adding to the complexities, $50-per-barrel oil prices,
shale development in the Lower 48, and decades-old seismic data mean relatively
few oil companies may be interested in leasing acreage in the remote, frozen
area. But America’s long-term strategic interests require a thorough look at
ANWR’s potential.
Spending U.S. or Alaskan funds to pay an independent
company to conduct high-tech modern seismic and other surveys of the coastal
plain would ensure that energy companies and American citizens have the best
possible information on which to base decisions on leasing and exploring those
2,000 scattered acres.
ANWR’s energy belongs to all Americans. It can and should
be produced safely, to generate tremendous oil, gas, job, revenue and other
bounties – in yet another huge benefit from this tax reform legislation.
Paul Driessen is senior
policy advisor for the Committee For A Constructive Tomorrow and Congress of
Racial Equality, and author of many books and reports on energy and
environmental issues.
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