Major Oil Companies Wary Of Drilling in ANWR

by Katherine Stapp

(IPS) NEW YORK -- After a Senate vote, the Bush administration is treating the issue of oil drilling in a pristine Alaskan wildlife refuge as a fait accompli.

But some oil companies seem to be taking a cautious attitude about investing in the 607,000-hectare Arctic National Wildlife Refuge.

A delegation of U.S. lawmakers earlier this month hiked around the tundra of Alaska's coastal plain, shivered through sub-freezing temperatures, and sat down with the leaders of an Inupiat Eskimo village near the wilderness refuge that has become the center a bitter struggle to define U.S. energy policy.

But the group of five Republican senators, two Cabinet members and a White House official who traveled Mar. 5 to Alaska's North Slope to observe the oil industry's seasonal operations there did not visit the Gwich'in community of Arctic Village.

The local residents adamantly oppose opening the refuge for drilling because they fear it will displace the Porcupine caribou (Rangifer tarandus) herd that native people have hunted for generations.

"We invited Senator (Pete) Domenici to bring the delegation to the Gwich'in community, but we never heard back," said Luci Beach, executive director of the Gwich'in Steering Committee. "It hurt my heart because I felt they had already made up their minds."

The U.S. House of Representatives has repeatedly passed measures to allow drilling in the 607,000-hectare Arctic National Wildlife Refuge (ANWR), only to see the legislation blocked in the Senate.

The congressional majority Republicans won with a vote March 16, 51-49, with a new tactic to permit exploration: they inserted revenues from ANWR leases in a budget resolution. It required only a simple majority of 51 votes to pass and be immune to a Democratic block.

"The president asked for it, and we're trying to do what the president asked for," Judd Gregg, chairman of the House Budget Committee, said last week, adding that it was reasonable to assume ANWR would be part of the budget measure.

Oil drilling in ANWR has been a central part of President Bush's energy plan, which critics say ignores conservation and renewable sources to focus almost exclusively on fossil fuels.

The United States holds just three percent of the world's oil reserves, yet it consumes 25 percent of the world's oil production.

According to the U.S. Geological Survey, ANWR has a 95 percent chance of containing 5.7 billion barrels of oil, and a five percent chance of containing as much as 16 billion barrels.

But the coastal plain is also home to caribou, musk ox, polar bears, and other Arctic wildlife.

"The caribou is a gift that has been given to us, one that we don't take lightly. This is a fragile herd. It is not something you want to experiment with," Beach told Tierramerica. "No one has the right to take away another person's subsistence."

Although not in her own village, Beach and other activists did meet with some members of the delegation for about an hour in the city of Anchorage before the officials returned to Washington.

"They gave political responses to our concerns, but I don't think they really care about the human rights of the Gwich'in people," said the Native activist. "I'm trying to stay hopeful that common sense and wisdom are going to prevail because this is something that will effect future generations."

Michael Musante, spokesman for Arctic Power, the leading pro-Arctic drilling lobbying group and a member of the delegation told Tierramerica that the Inupiat with whom he met hunt in the same area as the Gwich'in and they feel that oil exploitation in the refuge is absolutely necessary for improving their lives.

He also said that the drilling infrastructure would occupy just 2.4 to 3.2 hectares of the 607,000 hectares that comprise the ANWR.

But several prominent oil companies, including BP, ConocoPhilips and ChevronTexaco, have dropped out of Arctic Power, and an anonymous Bush administration source recently told The New York Times that the oil companies would not pursue drilling in ANWR even "if the government gave them the leases for free."

Two years ago, Alaska offered leases in the three-mile-wide strip of water just offshore of ANWR -- with no takers.

However, Ed Porter, a research manager at the American Petroleum Institute, says there are sufficient incentives for investing in the refuge.

"ANWR is still the largest single prospect in North America. I would be very surprized if most companies didn't participate in the bidding process. Oil prices are over 50 dollars a barrel, and I somehow doubt that would dampen interest," he said.

Advances in extraction technology over the last 30 years, such as horizontal drilling that allows multiple wells to be tapped from the same primary drill site, would significantly reduce the project's "ecological footprint," Porter added.

Musante recognized that ExxonMobil is the only transnational still in Arctic Power, but noted that the oil companies cannot take any decisions until Congress acts, which could be soon.

Russ Roberts, a spokesman for ExxonMobil, conceded in a conversation with Tierramerica that "critical data, such as seismic, is virtually non-existent, making a meaningful interpretation and forecast of resources difficult."

But the company believes that "ANWR can be developed with little threat to the ecology of the Coastal Plain," partly by using three-dimensional imaging techniques that allow engineers to pinpoint oil reservoirs even where the geology is very complex.

The recently approved Bush administration's 2006 budget assumes $2.4 billion in fees from development of the refuge's oil and natural gas resources.

But Lydia Weiss, a government relations expert at the environmental group Defenders of Wildlife, says the numbers don't add up.

"The lease sales are wildly speculative," she said. "To make 2.4 billion dollars, the leases in the Arctic Refuge would have to sell for between $4,000 and $6,000 per acre. The fact is that the average price per leased acre on the North Slope over the past 20 years is $50 per acre."

"We're hoping the chairmen of the (budget) committees will not engage in trickery on something as controversial as drilling in ANWR, which a majority of Americans oppose," Weiss said.

But should the measure pass, "the environmental community will fight every step of the way," she warned.