Providing coverage of Alaska and northern Canada's oil and gas industry
November 2017

Vol. 22, No. 46 Week of November 12, 2017

Senate committee holds ANWR hearing

Gathers comments in conjunction with move to open refuge to oil, gas development to raise federal revenue, part of budget proposal

Alan Bailey

On Nov. 2, as part of a new move to open part of the Arctic National Wildlife Refuge to oil and gas exploration, the U.S. Senate Committee on Energy and Natural Resources held a hearing, gathering testimony on the pros and cons of opening the refuge. The issue under debate involves the opening of the ANWR coastal plain, referred to as the 1002 area, for oil and gas leasing.

The Alaska National Interest Lands Conservation Act, the statute that established ANWR in its current form, recognized the possibility of opening the 1002 area for development, especially given the area’s high oil and gas potential. But under the terms of ANILCA the area can only be opened if the U.S. Congress passes an authorizing act. Thus far, despite multiple attempts, an act with the appropriate authorization has not passed into law.

Budget reconciliation bill

This latest initiative involves building an ANWR opening provision into a budget reconciliation bill, a form of bill that is immune from a filibuster in the Senate. By avoiding a filibuster, which can only be overcome through a supermajority of 60 votes, proponents of the ANWR opening see the possibility of passing an ANWR provision with a simple majority of 51 votes, a vote requirement that increases the odds of the bill’s passage.

Both the House and the Senate have passed a budget resolution bill that does not make any mention of ANWR but requires the Committee on Energy and Natural Resource to propose a means of raising $1 billion in federal revenue in a budget reconciliation bill planned for later this year. Clearly, the idea is to propose oil and gas leasing in ANWR as the prime means of raising the necessary revenue. If language to that effect is put into the budget reconciliation bill, and if the bill passes with that language included, Congress would, in effect, have passed a statute opening ANWR to oil and gas activity.

Murkowski: small impact

In her opening statement in the Nov. 2 hearing, Sen. Lisa Murkowski, R-Alaska, commented that the 1002 area has not been designated as protected wilderness and only consists of 1.5 million acres out of ANWR’s total area of 19 million acres. Moreover, Alaskans are only asking to develop a surface area of 2,000 acres, about on ten-thousandth of the whole of ANWR, Murkowski said, presumably referencing bills introduced in the House and the Senate in January by the Alaska congressional delegation, limiting any surface impacts of development to a maximum of 2,000 acres. And the Congressional Research Service has estimated that the federal treasury could gain $48.3 billion to $296.8 billion over 30 years from an ANWR opening, Murkowski said.

The benefits of opening ANWR would extend over several decades, with revenues directly reducing government debt while bringing new wealth and prosperity. Modern directional drilling techniques allow access to large areas of the subsurface with minimal surface impacts. And techniques such as the use of ice roads have minimized the environmental impact of oil development. In the Prudhoe Bay area the Central Arctic caribou herd has increased in size from 3,000 to 22,000 animals since oil development in the area began, Murkowski said.

Sen. Dan Sullivan, R-Alaska, told the committee that prohibiting development in Arctic Alaska, a region characterized by Sullivan as having the highest environmental standards in the world, would drive development to nations that have few if any environmental controls. Moreover, with a number of these countries being geopolitical foes of the United States, the encouragement of U.S. energy development would improve the nation’s security, Sullivan argued.

Native community views

Native communities in rural Alaska presented diverse views on the question of opening ANWR.

The Gwich’in people from the Yukon Flats region of the Interior and the nearby region of western Canada have remained adamantly opposed to the opening because of worries about the potential impacts of oil development on the Porcupine caribou herd that the Gwich’in depend on for their subsistence lifestyle. The herd calves on the ANWR coastal plain.

Sam Alexander, representing the Gwich’in, told the committee hearing that his people have relied on the Porcupine herd since time immemorial and that the place where the caribou calve is the sacred place where life begins. A study by the National Research Council outlined the manner in which drilling on the North Slope has disrupted caribou migration and behavior, Alexander said.

On the other hand, Matthew Rexford, tribal administrator for the Native village if Kaktovik, on the Beaufort Sea coast of ANWR, told the hearing that the Native village, the Kaktovik Inupiat Corp. and the Voice of the Arctic Inupiat all support the opening of the ANWR 1002 area for oil and gas development. Rexford said that the Inupiat have decades of experience of working with the oil industry to protect the lands of the region while, at the same time, the industry supports the local communities through jobs, business opportunities and infrastructure investments, including schools and hospitals.

And Richard Glenn, executive vice president for lands and natural resources for Arctic Slope Regional Corp., the Native regional corporation for the North Slope, said that to not allow safe and responsible development of the ANWR coastal plain would be to deny Kaktovik residents and Native landowners in ANWR the right to economic self-determination on their own lands. This support for development comes against a backdrop in which the Native people consider all of their lands to be sacred and in which the people of Kaktovik, like the Gwich’in, depend on the caribou for survival, Glenn said.

Environmental organizations opposed

Environmental organizations remain vehemently opposed to any oil and gas development on the ANWR coastal plain, saying that development poses too high a risk of damage to the region’s fragile environment. Oil exploration and production activities, even with the use of directional drilling, would substantially undermine ANWR’s purpose to protect the wilderness, wildlife and subsistence lifestyle of the region, Lois Epstein, Arctic program director for the Wilderness Society, told the committee hearing. The ANWR coastal plain forms the biological heart of the refuge and is one of the wildest and among the most beautiful landscapes in the country, Epstein said.

Epstein said that, as oil development expanded from Prudhoe Bay, caribou from the Central Alaska herd moved their calving grounds to the south, and that there is evidence of a decline in nourishment for caribou using land immediately east of the developments.

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