Murkowski working Alaska energy issues

State’s senior senator pushing development in federal areas from OCS to NPR-A and ANWR with President Obama, Secretary Salazar

Steve Quinn

For Petroleum News

It took less than 24 hours after the U.S. House and Senate agreed to a debt ceiling compromise and Alaska’s Sen. Lisa Murkowski was back to addressing energy issues.

She was quickly backing a finding that calls for testing directional drilling techniques that could tap into the 10.5 billion barrels of oil in the non-wilderness section of the Arctic National Wildlife Refuge.

Murkowski is completing her 10th year in the Senate and beginning her second elected term.

Since claiming a landmark write-in victory over Tea Party-backed Joe Miller, Murkowski has been on the front lines of major energy issues.

Now in a third year as ranking member of the Senate Energy and Natural Resources Committee, topics such as ANWR, offshore development and increased domestic production remain paramount.

Spanning 10 time zones, her work has taken her to Anchorage for meetings with Shell officials, to Greenland and Girdwood to discuss Arctic issues and even the White House for a one-on-one meeting with President Obama.

She spoke with Petroleum News about this hectic pace that began almost immediately in January.

Petroleum News: What did you learn from that meeting with Shell and what made you have that meeting?

Murkowski: My takeaway was I was encouraged by what I saw with regards to their thoroughness of a plan.

They had a plan prior to Macondo. I had been briefed on it. I had been briefed subsequent to it. But after the Deepwater Horizon incident, I said to Shell and others said to Shell and the folks within Shell said we are going to have to go back and revisit our plan in light of this.

They did that. I was encouraged by what I saw in terms of their attempt to really anticipate all that they would need in the event of any kind of a spill, any kind of an incident. What particularly impressed me was their recognition that if something goes wrong it’s not as if you have a flotilla of fishing boats that are standing by who can help you go out and lay boom like they did in the Gulf of Mexico or even as we did with the Exxon Valdez. You don’t have that in the Beaufort and the Chukchi.

I think their effort to anticipate everything is what particularly impressed me with the presentation that they gave me.

Petroleum News: There are still concerns about no proven way for cleaning up for the Arctic in the event of a spill. How do you address that?

Murkowski: Keep in mind: this is not Shell’s first foray into northern waters, into the Arctic. They do have a level of experience that other operators don’t.

You have phrased it no proven way. I think it is fair to say here in this country, our laws prohibit us from doing an actual test, basically creating a spill so we can clean it up to demonstrate our capabilities. We can’t do that in the actual waters. It’s all under contained situations or controlled situations that are not in the environment. But there are other nations who have done that testing. Norway has led that. The extent to which there has been a study of this is important to recognize.

One of the things I think is still outstanding is that I understand Alaska may be the only state or be one of a few where there is not preauthorization for dispersant use. This is an issue the Coast Guard has presented to me and I’ve talked about it with Shell. I think we saw with Macondo that the whole issue of heavy doses of the application at the seabed surface, what was this going to mean? They clearly had an understanding of the effect of dispersants, but not necessarily at this concentration. There were a lot of questions. Those questions caused concerns at the time. I would like to have a little more certainty when it comes to the applications of dispersants Arctic waters.

Petroleum News: The amendment to get a greater share of revenue for oil produced close to our coasts didn’t advance. Do you think it still can?

Murkowski: We had high hopes that we might be able to advance an amendment to the OCS reform bill a couple of weeks ago that would provide for revenue sharing to coastal states. This is an effort that Sen. (Mary) Landrieu and I have been working for quite a period of time. We made some headway. There was bipartisan support. It has been expanded or broadened to include not only the oil and gas energy production, but the effort is to make this energy neutral. In other words if there is energy production that comes from wind energy offshore, those coastal states would be able to share in those benefits as well. It’s an effort that is ongoing. We did not move that to a vote when we had the OCS reform bill before the (energy and natural resources) committee. That is still on hold. I anticipate that perhaps after we get back from the August recess we will have an opportunity to revisit again.

Petroleum News: How productive did you find your meetings with the president? Do you believe there is genuine movement toward treating increased domestic production as a priority rather than as some put it as hindrance?

Murkowski: Anytime you have the opportunity to sit one-on-one with the president — I don’t care if it’s a president from my party or the opposition party — anytime you have that one-on-one I think is good, it’s a positive. The president gave me a good amount of time. We visited for about 45 minutes. I was able to walk him through not only the issue with Shell, but with NPR-A and ANWR and show him the disposition of Alaska’s lands, brought in a map that shows the wilderness areas, the parks areas, the BLM lands. It was important for him to know and understand this and it was important for him to know and understand where my priorities were. I do think the president and his immediate staff understand the importance of increased domestic production to the economy, to the national security. But I do think you have some within the administration who are fundamentally, ideologically opposed to how we might further that domestic production. So when the president says that he thinks it’s important that we increase our domestic production, he supports the development, I think he acknowledges the significance of that to our economic base and to the national security component of that. It’s one thing to say you’re supportive of it, but it’s another thing to encourage action, to really facilitate action. This is where we are hung up within this administration. Sometimes it feels like it’s just a continuous game of whack-a-mole. We make a little progress in one area, then another issue crops up, another agency comes up with an objection that furthers slows or stalls things. As much as the president might be encouraging, there is resistance. I’ve had similarly positive and encouraging meetings with Secretary (Ken) Salazar. He and I served together in the Senate. I call him my friend. Coming from the West, he understands resource development. We’ve had many, many long conversations about how we might do more to facilitate our energy production in Alaska, being sensitive to the environment, but let’s make it happen. I think it’s fair to say that the secretary himself has been frustrated with what he sees coming out of other agencies or what he sees coming out of his own department when we can’t get things moved off center. Good intentions, but it has got to translate into action.

Murkowski: Again, you have to ask the question is the statement being made because the president and secretary are saying OK, these are important and we will show how committed we are by offering up these lease sales; we are not the bad guys. Then you can’t get the permits through the administration’s agencies to allow the process to move ahead. It does appear there is some inconsistency, perhaps a lot of inconsistency, and NPR-A is a perfect example. Folks have been saying for years, if you can’t drill in ANWR move over to the National Petroleum Reserve-Alaska. Just look at the name. Then when Conoco attempts to make that effort, they are held up by the issuance of a permit for a bridge. Then Shell sitting here four to five years later, billions of dollars later waiting for a permit. It’s one thing to offer up leases, but it’s another thing to encourage action through the regulatory process. That’s where we seem to get hung up at every turn.

Petroleum News: You noted ANWR. Why do you keep pushing this? Is it really worth the fight?

Murkowski: It is because of the great opportunity that we have in ANWR. Look at the estimates. You’re sitting on 10.5 billion barrels of oil potentially that this country needs, that our oil pipeline needs, sitting at less than half full right now. Just because it’s hard, just because the politics are against us, doesn’t mean we shouldn’t continue to raise the opportunity that ANWR presents as an option for us as a nation. I do think we are seeing our efforts shift in the popular opinion on this, particularly when they look at the prices at the pump. They look at that and say, ‘what else can we be doing?’ Then you have folks stand up and say we do have opportunities to do more in this country. ANWR is a significant reminder of what we can do. I’m not giving up on this just because it’s a tough initiative. I think we have an opportunity in the House. I know we have the votes over there. It’s a tougher lift here in the Senate. It’s an effort that needs to be made. I’m not going to back off of it. I know where the president is on this. He needs to know where I am as an Alaskan and as an American interested in increasing domestic production.

Petroleum News: You’ve been addressing Arctic issues, whether in Greenland or Girdwood. Would you please talk about your position on Arctic development?

Murkowski: We’ve always been aware of the opportunities up there. It’s nice to know that the rest of the country is becoming more aware, hopefully beginning to appreciate that we are an Arctic nation. You mentioned Greenland. The fact that Secretary (of State Hillary) Clinton went to head the U.S. delegation along with Secretary Salazar and myself was incredible significant for us as a nation. Never before had a secretary of State, or a cabinet member or a senator attended an Arctic council meeting. It probably generated more interest among the Arctic nations that were there than it did here at home. Other Arctic nations have been waiting for the day that the United States was finally going to wake up and say there are some opportunities up there and say we are an Arctic nation. It means the federal government is finally stepping up to be part of the discussion there.

The Arctic Imperative, I was really impressed with what (Alaska Dispatch Publisher) Alice Rogoff and her team put together in Girdwood. We joked that these were the best and the brightest in the country on the issue of the Arctic. The only problem is we need more people that are focused on it and consider themselves to be Arctic experts.

We’ve got to be able to reduce the regulatory uncertainty we are facing, not only in the Arctic but within the country, that could inhibit some of the investment.

There was a lot of discussion about what we need to be doing here in the Senate toward the ratification of the Law of the Sea. I continue to work that as an initiative.

Most people realize the air has been sucked out of the room with the debt debate, so we haven’t tended to too much other Senate business of late.

We need to become a signatory to that convention. We are the only Arctic nation that hasn’t signed on. I think we put ourselves at a disadvantage if we have not ceded to it.

Petroleum News: Why is Law of the Sea that important?

Murkowski: It adds certainty, most definitely, to the maritime boundaries. I believe it’s imperative for us to be a participant in what is happening not only within the Arctic because Law of the Sea is more than just Arctic, but failing to be a participant then we lose a seat at the table when we are talking about our extended continental shelf. We lose some of our sovereignty. We’ve got to figure out how we get at the table and the way we get at the table is through ratification.

Petroleum News: There is pushback on the Keystone pipeline coming into the U.S. and bringing oil from Canada. Some believe whether it’s approved or not could speak broadly to the administration’s energy policies. What are your thoughts on the line?

Murkowski: There is a recognition that we’ve got an opportunity to gain a resource from our northern neighbor, a country that we have good strong relationships with. There are some who suggest that we don’t want the Keystone line because it will be bringing a product out of Canada that comes from the tar sands and it’s more dirty than other energy products. There are some who will suggest to you who will say it’s better to bring in or import oil from a country like Venezuela than it is from a country like Canada if Canada is sending us what they term dirty oil. I view our national security vulnerability because of our reliance on foreign sources oil. I’d much rather have a situation where we have a neighbor like Canada who is also concerned about ensuring a clean environment than to suggest we don’t want to have this Canadian oil coming down this Canadian pipeline. It’s not as if Canada is going to shut it down because we won’t buy it.

Petroleum News: Do you get a sense that some folks in D.C. don’t understand the value of TAPS?

Murkowski: I do. I think there are those who have taken Alaska oil for granted. We’ve been quietly supplying the country for 30 years now. At one point, we were supplying 20 percent of the nation’s domestic supply. Obviously that is down dramatically. It’s been kind of chugging along there. People don’t think that much about it. This is a challenge to us. It’s a challenge to make sure people in the Lower 48 understand what it is we have been providing, that we have a continued opportunity to provide more, but we’ve got to get this pipeline filled up. It’s capable of 2 million barrels a day. It’s down to 640,000 barrels a day. We know what happens if throughput shrinks much further, that we could be looking at a situation where TAPS is inoperable. I don’t want the Lower 48 to wake up and say what do you mean you’re shutting it down?