Young urges national energy, Arctic plans

Alaska’s congressman will continue to push ANWR drilling, icebreaker funding, development in National Petroleum Reserve-Alaska

Steve Quinn

For Petroleum News

U.S. House Rep. Don Young says he’s ready for Congress to take significant steps in advancing the nation’s ability to develop its own resources. On Election Day, the Republicans fortified their majority in the House while taking over in the Senate for the upcoming Congress in January.

Young says he believes it’s time for the country to draft an energy policy led by oil and gas development but also to include other power generation such as wind and hydro.

He also says he believes ANWR will have the support of Congress and he would like for any legislation to be a standalone effort.

Young discussed his recently his short- and long-term vision for resource development with Petroleum News.

Petroleum News: Let’s start with makeup of the Congress. The House Republicans picked up a few seats and the Republicans wrested control from the Democrats in the Senate. How do you think this makeup will or won’t help advance some of oil and gas issues that stalled?

Young: I think it’s going to be helpful. We’ve done a pretty good job in the House. The Senate just didn’t do anything. I expect to pass ANWR out of the House relatively fast. I’m going to try to keep it as a separate bill so it does draw attention. I’m going to try to get the majority of the House and the Senate to set down an energy policy. Because even people over the years, we still have not had an energy policy that made sense as far as where we are going to be 20 years, 30 years, 100 years from now.

Oil and gas, of course, is still going to play a major role until we run out. I was told when I was 5 years old that we were going to run out. We’ve got more oil now that we’ve had ever before, well not more oil but more discoveries. That’s the reason why we are producing so much now off of private land.

ANWR will be passed and we expect Keystone will pass. Having said all of that, we will set this policy before the public and explain to them why this is important for the future. Then if the president wants to veto it, let him veto it. It does set the stage for the ’16 election. We will keep control and I think this is one of the major issues the public is interested in.

Petroleum News: So how can the public appreciate something like Keystone when many would see it as something for Canada, not so much the United States?

Young: We are a North American continent. Keystone can be one of these security links that we can have and not be so dependent on Venezuela, which is a rotten country to its core, or Brazil to a point where they are one of the players; both otherwise less settled countries as far as politics, so Canada will be our partner. I look at that as a way we can safeguard our supply of oil in times of what I call global stress, so I do believe that scenario would be beneficial to immediate jobs, but more than that, dependability of oil availability to American public.

Petroleum News: Alaskans sometimes expect the delegation to advance the state’s interest first, so why does this matter here?

Young: We believe that would relieve some of the efforts in case we have another embargo, political unrest, war in the Middle East, revolution in Venezuela, all these things we shouldn’t be depending upon when we could be more dependent upon Canada and Canada is our good neighbor.

Petroleum News: OK, let’s go back to your thought of an energy policy. Why do you believe this country has not been able to craft a meaningful energy policy?

Young: The main thing is it’s because it’s a political ping-pong ball. You have those who say fossil fuels, including this president, are terrible. You can’t use fossil fuels. It’s ruining this climate. The public is being destroyed. Then you have those who say you can’t use nuclear power. It’s dangerous and you shouldn’t use it. Look what happened in Japan. Then you have those who say we will solve all of those problems by conservation. They forget you can’t conserve your way to prosperity. Then you have those who say we can use exotic fuels such as wind mills, which are subsidized and solar panels, which are still subsidized and still can’t move a truck, a plane, an automobile or a train.

No one has sat down and said what are the necessary Btus we have to have for an advanced society in the period of 100 years? I say put it all in the soup pot and make sure it works together. That’s what we have not done. That’s why we have always been at the mercy of fossil fuels from foreign countries. Fossil fuels is still the most immediate, still the cheapest way to move an object and we have to utilize to the best of our advantages but including others to the development of them so we have a whole package of cheap energy so we can keep growing as the population increases.

Petroleum News: Your colleague Lisa Murkowski likes using the phrase all of the above when it comes to energy policy. Is that how you’re seeing it, too?

Young: A little bit of each. The truth of the matter is we are going to utilize those Btus, that carbon source, at some time. We’ve got to be planning how much coal we’ll be burning and how will we burn it and include how much oil will be available and where will we use it, then how can we use it in the most efficient way.

In the meantime let’s build some hydro sites and nuclear sites and wind power, so we have an abundance for what we call use for stationary energy, otherwise can be used for a houses for heat or an office for heat. Then use those mobile sources of energy for movement of commerce.

That’s what I call an energy package and I believe we ought to be looking at that. We’ve done a terrible job of it. It’s all run on a political basis instead of sitting down and saying how much do we need and what will work.

If we have a package put together, they all should accept it. Will they accept it willingly? No. The fact is I think the general public will, not the interest groups. We need that product (fossil fuels) to move our commerce otherwise we can’t do it. I’m sitting there thinking I want wind power. It’s subsidized. It’s not efficient yet. But by having it, we are eventually going to develop batteries or some form of storage. See that’s the problem. We have wind one day, and not the next. We have wind for 12 hours and not the other 12 hours. It can produce energy. That’s no secret. Same thing for water power. This built the United States. The first steel mills were run on water power.

So if we put out a plan and say this is what we need and this is how much we are going to be able to produce the next 100 years, we will have a plan. It’s not going to be an easy sell.

Petroleum News: Let’s go to ANWR. You mentioned that earlier. With oil more accessible in the Lower 48, critics say we don’t need ANWR. Why do you believe it’s still important?

Young: The first time I passed that bill, we can’t do it fast enough. It won’t do any good. It won’t lower the price of oil. It won’t make oil available. That was 35 years ago. ANWR is not a quick solution. If we were to pass an ANWR bill, it would take 15 years to get oil into the pipeline. In 15 years a lot of different things can occur. This goes back to my argument that an abundance off of private land is not going to last forever. We all know that. We have an abundance of that now. If we start running out, we have to have availability of oil that comes from domestic fields.

Look at Keystone - that will still be providing. But that’s only 500,000 barrels per day. We are not going to decrease consumption We are going to increase consumption. We should look at ANWR as a beginning, as a potential to provide for instead of saying wait until we need it. We’ve played that game. I say let’s have it available in 15 years when we will probably need it.

Petroleum News: What about the prospects of getting a gas line built? Are you pleased with the progress state lawmakers and (outgoing Gov.) Sean Parnell have made with the producers?

Young: I’m hoping it’s a beginning. I’ve been in the state 65 years and I’ve heard about the gas line all 65 years. That’s the big elephant in the room, the gas line for the future of the state of Alaska. ANWR isn’t really ours. It’s federal oil. The gas line is big time. I’m hoping it will be built. Like I say, it’s the sky is falling story. I’ve heard it for so long I just question when it’s going to happen. I think the Legislature did as good a job as it’s going to do and the governor did, too. I don’t know what the new governor is going to do. I don’t think he has to undo what’s been done to reach this far. I think that would be kind of silly, but that’s going to be up to him.

Petroleum News: So do you have any concerns that a new administration could derail what’s been done?

Young: I don’t believe so, but who knows. He’s been very supportive of a gas line. We are dealing with the owners of the gas and they’ve got some pretty strong opinions themselves about where it should go, how it should go and what should be built. Seeing how they are financing most of it, they probably have a little bit to say about it.

Petroleum News: The state and the feds held a lease sale at NPR-A and I know there’s been some criticism over what tracts are available or once they are grabbed, access – road and bridges – isn’t provided.

Young: These leases are a joke, frankly, for the reasons you just stated: Accessibility delayed by fish and wildlife; inability to build a road. They will put every roadblock in the way. These leases are not good leases. Regardless of the administration, but this one is worse. They very rarely ask the oil companies where do they want these leases to be.

I’ve always said if you want to drill for oil, if you want to lease something, then find out what the buyer wants to have. That’s what they didn’t do. My old saying is you don’t hunt for rabbits at a pool table just because it’s green. That’s an old saying; I’ve said that for years. People have these leases then they say there was no interest in the bid. Well there’s a reason. What little seismic knowledge they have, there’s no oil there so why would you.

Petroleum News: What about the Arctic, specifically the outer continental shelf?

Young: I think the Chukchi is going to go next year; Beaufort - maybe not. The challenge we have there is access route. If it’s across Native lands and they want it, I say put it across Native lands and not let it be delayed by the EPA or Fish and Wildlife or all of these other agencies. The oil has no value to this nation or the state if the oil is shipped elsewhere by tankers. So a successful pipeline is crucial to the state. The main reason we need it is that it keeps the pipeline active. That goes for ANWR and offshore. Under the law, if it does shut down, it has to be torn down, and that takes all of our smaller fields on state property. That’s been my goal to keep the smaller fields - they aren’t elephants, but baby elephants - but if you don’t have the pipeline available they aren’t economical. We are down to 540,000 barrels per day and that’s down from 2 million.

Petroleum News: OK, back to the outer continental shelf, federal agencies and the courts may have put up some road blocks, but Shell tripped up a few times, too.

Young: Now, I don’t know whether they tripped up or not. Everybody says they tripped. Where did they trip up?

Petroleum News: With moving the Kulluk.

Young: That had nothing to do with drilling. That was a drill rig being towed. Everybody blew this out of the water saying Shell this and Shell that. If there was fault at all it was the captain of the rig and Shell, but it had nothing to do with drilling, nothing to do with drilling. So the road blocks have been put up by the federal government. And lawsuits.

Petroleum News: So do you think this can work itself out the next year and a half?

Young: Oh, I think we are going to get it worked out. The big job that we are going to have is there is an awful lot of oil up there and getting that oil is important for the federal treasury and the pipeline. We’ll see what happens.

Petroleum News: Also in the Arctic, the United States takes over as chair in the Arctic Council. What would you like to see accomplished during that two-year stint?

Young: What I would like to see done is for the American public is to recognize that we are an Arctic nation. We are still putting more money in the Antarctic than the Arctic. More research, etc, yet this is where the action is going to be, the Arctic not the Antarctic.

Thanks to Alaska, we are an Arctic nation. The Coast Guard is very supportive, but we haven’t funded them. The military is getting interested, which to me is very encouraging. But if you think, Japan, China - China especially - and Russia is going to sit idly by as the Arctic opens up and we sit here sucking our thumb. It’s another dumb example of not leading. The general public, well it affects them too. I just hope they wake up and say this is a pretty important region.

Petroleum News: Would you like to see Alaska become a hub these next two years for discussions on Arctic policy?

Young: I’d like to see Alaska become the central hub for the Arctic Council. It shouldn’t be in Palo Alto or Woods Hole.

Petroleum News: How can Alaskans benefit these next two years?

Young: We need icebreakers. We are going to try to get another ice breaker built in Congress. I doubt it will get built because of the high cost but we have to do something. Navigational aids, not only for our own ships, but we should set the channel. If they come through our 200-mile limit, they should go through a specific route. This is for safety purposes for any potential collision. The other countries are going to listen to us. They can go outside the 200-mile limit and do anything they want to.

Petroleum News: Some of the priorities shared include ice breakers but also various ports and other infrastructure. So do you see it as a package?

Young: Well, you have to have a port. I’m pushing Port Clarence. Unless it’s an offshore port, there is no place on the Chukchi and Beaufort to build because it’s 150 feet deep at the max. Closer to shore you could hardly run a fishing boat. So it’s a very large alluvial plane so we are going to have to find a harbor. You’ve got Port Clarence. Nome is not really suitable. You’ve got Blossom near Kotzebue which might work. We think we are going to be able to do it privately with public input. We need to get those navigational aids and systems in place. I do think that will come about as we get more aggressive. We better do it because other countries are going to do it without us.

Petroleum News: So are we behind or are we ...

Young: We are behind and it’s hard to catch up. I wish very frankly the media would do a better job of selling the Arctic as a potential challenge and as a necessity for the Lower 48 instead of saying we’ve got to protect it because it’s not going to be protected by the other countries. If we don’t put the navigational system in and we don’t put the port in, hey, we are in deep trouble.

Petroleum News: I know many state lawmakers say we need the infrastructure in place, not just for ourselves, but in case incidents in other waters affect our own waters.

Young: That’s absolutely right. There’s tidal action that would affect this. Which way do they go? What time of the year is it? Will it be under the ice or on top of the ice? It won’t be from a drill rig. It will be from another ship or ships that are either outside that 200-mile limit or within that 200-mile limit but without the appropriate safeguards.