Plan Would Tap Alaska Oil Reserve>>>
Wednesday, August 5, 1998; 2:45 p.m. EDT
WASHINGTON (AP) -- Untapped since its creation 75 years ago, part of the largest government oil reserve would be opened to drilling beneath Alaska's vast tundra under a plan the Clinton administration will announce Thursday.
The drilling proposal, to be unveiled by Interior Secretary Bruce Babbitt, is expected to fall short of what the oil industry wants because of restrictions aimed at protecting wildlife habitat. But environmentalists are still questioning the move, especially at a time that ''the world is awash in oil.''
''We expect it will please neither side,'' said Interior spokesman Michael Gauldin, who declined to elaborate further on the plan except to call it ''a reasonable, balanced proposal.''
Conservationists have argued that none of the reserve should be developed when there's plenty of oil worldwide and prices are cheap. Drilling in the reserve will harm the habitat of millions of migratory birds, waterfowl, caribou and polar bears, especially if allowed in the reserve's ecologically sensitive northern coastal plain.
The oil companies, meanwhile, insist the oil -- an estimated 400 million to 1 billion barrels -- can be recovered without endangering wildlife or the arctic ecosystem by using the latest technology.
''Oil and gas can be extracted ... without harm to local fish and wildlife populations and without interruption of the traditional uses of the land,'' said Mike Joyce, a biologist for ARCO-Alaska, one of the companies eyeing the new fields.
''We understand the stresses on caribou and birds in a much better way than we used to. We can mitigate those disturbances,'' he said in a telephone interview.
While both environmentalists and oil executives anticipated some lease sales, both sides are waiting to learn what kind of protective restrictions will be imposed.
''The world is awash in oil,'' said Bill Reffalt, director of Alaska programs at the Wilderness Society. ''We've got it selling at $14 a barrel. Why are we in such a big hurry to start developing oil and gas (there now) at a fairly substantial cost to the environment?''
But industry representatives argue that even if leases are offered now, the oil won't flow for years. By then, U.S. oil production likely will be less than what it is now, the lowest since the 1940s.
''We're not talking today, we're talking about a decade from now,'' said Ronnie Chappell, a spokesman for ARCO-Alaska.
Alaska Gov. Tony Knowles, a Democrat who is up for re-election this year, has vigorously lobbied President Clinton to open the reserve, arguing that the White House already has denied oil companies access to the Arctic National Wildlife Refuge farther to the east even as Prudhoe Bay reserves are declining. The state, which relies heavily on oil royalties, would get half of any royalties from the federal reserve.
Located just west of the Prudhoe Bay oil fields on the North Slope of Alaska, the federal National Petroleum Reserve was created for the Navy in 1923 to have access to oil in case of a national emergency.
Except for some unimpressive exploratory drilling in the 1940s and again in the 1980s, the reserve has been largely ignored. Industry has been occupied by the adjacent and much larger 12 billion-barrel Prudhoe Bay fields and also in trying to gain access to the arctic refuge to the east.
But in recent years, new technology has cut the cost of arctic oil exploration and development, causing the Navy reserve to become increasingly enticing -- especially since efforts to open the arctic refuge are at a stalemate.
ARCO-Alaska, an affiliate of Atlantic Richfield Co., already is developing a new field 3 miles from the reserve's eastern boundary. Other companies expected to bid for leases include British Petroleum.
The government reserve covers 23 million acres -- about the size of Indiana -- and extends 100 miles along the arctic coastal plain. Only 4.6 million acres in the northeastern corner is being considered for lease sales, but geologists believe that area contains substantial oil and gas reserves.
Environmentalists say a 20-mile strip along the coastal plain in that area should be put off limits. It is there, in that strip of wetlands, lagoons and marsh created by hundreds of years of freezing and thawing, that millions of migratory birds including snow geese, ducks, tundra swans and loons come each summer to feed on the rich grasses and organic soils, they say.
''It's an enormously significant and extraordinary wildlife area,'' said Reffalt, contending that even if the reserve is opened, the coastal wetlands should be spared to a point south of Teshekpuk Lake.
But the coastal strip, part of the Barrow Reach, also holds the greatest opportunity for finding oil, geologists say. East of the reserve, oil was found in 20 of 30 wells drilled on the coastal plains. Farther south there's been only one discovery in 42 tries.
Eliminating the coastal plain from leases would ''sharply diminish the likelihood of significant oil and gas production,'' ARCO said in public hearing testimony on opening the reserve.
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