Redistributed as a Service of the National Library for the Environment*
The Arctic National Wildlife Refuge
M. Lynne Corn and Lawrence C.
Updated September 5, 1996
The Arctic National Wildlife Refuge (ANWR) is an area rich in fauna, flora, and oil potential, where development has been debated for over 36 years. Current law forbids oil and gas leasing. Development proponents argue that any ANWR oil would help insulate energy markets from recur-ring crises in the Middle East, could be developed safely, improve the balance of payments, boost North Slope oil production and the economic viability of the Trans-Alaska Pipeline System (TAPS), and create numerous jobs in Alaska and elsewhere. Opponents argue that ANWR's intact ecosystem is more valuable than its oil, should be legally designated as wilderness; and that any oil found would not provide lasting energy security and could be replaced by a variety of cost-effective alternatives.
Some early efforts to allow development of the coastal plain of the ANWR in northeastern Alaska effectively ended with the Exxon Valdez oil spill in 1989. The 1990-91 crisis in the Persian Gulf aided development arguments temporarily.
In January 1991, the Department of the Interior gave its estimate of "the marginal probability of economic success (i.e., the potential for oil recovery)" as 46% (a very high figure by industry standards). At the time some Members charged that both this and earlier studies were politically motivated.
The Administration prepared a study in June 1995 that reduces estimates of ANWR potential, and in August prepared a preliminary update of the impacts of development on the 1002 area, concluding that these impacts are likely to be substantial. These studies too have been criticized as politically motivated.
The three main legislative options include: (1) allowing development to proceed; (2) designating the area as wilderness, thereby ending the potential for development (unless the designation is repealed or amended); and (3) taking no action. This third choice also prevents development, since current law requires congressional action for oil development to occur.
Congress has not passed separate legislation to open ANWR, but direction to do so was included in the conference agreement on the reconciliation bill (H.R. 2491). The bill was vetoed, as expected, and the inclusion of the ANWR measure was cited among the list of reasons for the veto. As further debate stretches into the election cycle, prospects of any legislation appear to be diminishing.
Budgetary considerations and the depressed price of Alaskan oil as a result of an export ban play a key part in the ANWR debate. On November 15, a conference committee reached an agreement on a reconciliation package (H.R. 2491) including a chapter opening the Refuge to development. The President vetoed the measure on December 6, citing the ANWR provisions as one of the reasons. On November 28, the President signed S. 395 (P.L. 104-68), which will allow the export of North Slope oil. Neither recent appropriations acts nor the Administration's proposed budget for FY1997 include ANWR development provisions. There are few signals at this time that the ANWR debate will be as active in the FY1997 budget cycle as it was in FY1996. Action, if any, still seems likely to be in the context of the new budget cycle.
The coastal plain of the Arctic National Wildlife Refuge (ANWR) in the northeast corner of Alaska is currently the most promising U.S. onshore oil and gas prospect. This federal land (administered by the Fish and Wildlife Service in the Department of the Interior) could hold as much oil as the giant field at Prudhoe Bay, which is on state land west of ANWR. Proponents of development cite, in particular, the benefits to the Alaskan and national economies and to the balance of trade.
At the same time, the Refuge is home to a spectacular variety of plants and animals. The presence of caribou, polar bears, grizzly bears, wolves, migratory birds, and many other species in a nearly undisturbed state has led some to call the area "America's Serengeti." The Refuge and two neighboring parks in Canada have been proposed for an international park, and several species found in the area (including polar bears, caribou, migratory birds, and whales) are protected by international treaties or agreements.
The conflict between high oil potential and pristine nature creates a dilemma: should Congress open the area for oil and gas development or should the area's ecosystem be given permanent protection? What factors should determine whether to open the area? If the area is opened, how can damages be avoided, minimized, or mitigated? To what extent should Congress involve itself in the management of the area (if it is developed) and to what extent should federal agencies be allowed to manage the area under existing law?
The Clinton Administration opposes development of the Refuge. Political stability in the Middle East and comparatively low world oil prices reduce the need and make the economics less favorable for development. However, both Chairman Murkowski (AK) of the Senate Committee on Energy and Natural Resources and Chairman Don Young (AK) of the House Committee on Resources have stated that opening the Refuge to energy development is a top priority. They cite increasing oil imports and declining U.S. and North Slope output among their major reasons for wishing to open the Refuge.
Offsetting receipts from leasing in the Refuge are included in the assumptions in H.Con.Res. 67, the congressional budget resolution. This assumption effectively sent a recommendation to the authorizing committees either to lease in ANWR or to produce equivalent savings or revenues from other sources.
ANWR in Reconciliation: Conference Agreement. The vetoed conference agreement for the reconciliation bill (H.R. 2491) comprised Sections 5312-5344 authorizing leasing in the Refuge. Key provisions included these features.
Much of what is now ANWR was set aside in December 1960 by Public Land Order 2214. Section 1003 of the Alaska National Interest Lands Conservation Act of 1980 (ANILCA, P.L. 96-487) prohibits oil and gas development in the 19-million-acre Refuge unless authorized by Congress. Under Section 1002 of ANILCA, Congress required the Department of the Interior (DOI) to report on the plant and animal resources and the oil and gas potential in 1.5 million acres of the coastal plain portion of ANWR (8% of the Refuge), now generally called the "1002 area." This information was presented in the Final Legislative Environmental Impact Statement (FLEIS or 1002 report), and submitted to Congress in April 1987. DOI described leasing alternatives and recommended that the area be fully leased.
The grounding of the Exxon Valdez on March 24, 1989, near the southern terminal of the TransAlaska Pipeline System (TAPS) in Prince William Sound played a major role in placing the development debate on hold. Damage at the time included an estimated 300,000 to 645,000 dead seabirds; 4,000 to 6,000 dead marine mammals; and $100 million in other losses. In retrospect, some cleanup methods have been criticized as doing more harm than good. Lawsuits were abundant. One result of the lawsuits was that much of the information and research has remained secret in order to protect the interests of various parties. Today, there is still disagreement over the legacy of the spill. Some scientists note the lack of toxicity of the water, and a visitor in the area would still see rugged beauty on most beaches. But other observers stress the accumulation of oil in some species, such as mussels (which filter sea water), and the effects on species that consume contaminated organisms.
Since 1987, many hearings on development proposals and on wilderness designation of the 1002 area have been held, and many bills have been introduced. Issues covered included the FLEIS, the environmental effects of oil development in ANWR or at Prudhoe Bay, assessments of the need for additional sources of oil, the biological resources of the coastal plain, and a proposed exchange of lands with Native corporations. (For a description of the issues and bills considered since 1987, see CRS Reports 88-380 ENR, 89-266 ENR, and 91-325 ENR.)
Congress has three basic choices for ANWR legislation. One option is passing legislation permitting oil and gas leasing in the 1002 area. If the development option is chosen, Congress could also decide the pace and conditions for any oil or gas development. The current vehicle for this choice is the reconciliation process (H.R. 2491, see above).
A second option is designating the area as wilderness, thereby not allowing energy development (unless Congress later reversed the decision). This choice, like the failure to find oil, could stimulate development of alternative energy supplies and strategies.
The third option, and the one chosen since the 99th Congress, is taking no action. Because current law prohibits development unless Congress acts, this option prevents onshore energy development. Those supporting delay often argue that not enough is known about either the probability of discoveries or about the environmental impact if development is permitted. Others argue that oil deposits should be saved for an unspecified "right time." Those arguing for preservation say the Refuge is a unique national treasure. Those supporting development argue that declining oil production suggests that that time should be sooner rather than later.
ANWR's Geology and Potential Petroleum Resources. Alaska's North Slope (ANS) coastal plain has proved abundant in oil resources, and its geology holds further promise. The oil-bearing strata extend eastward from the 2-billion-barrel Kuparuk River field, past the Prudhoe Bay field (originally 11 billion barrels (bbls), now down to about 4 billion bbls), and a few smaller fields, and may continue through ANWR's 1002 area. The smaller accumulations include some fields that have produced intermittently and others that are currently noncommercial due mainly to lack of existing infrastructure. ANWR contains the largest undrilled onshore geologic structures with petroleum potential known in the United States.
In 1991, the Bureau of Land Management (BLM) of the Department of the Interior reviewed its 1987 estimate of ANWR's recoverable petroleum resource. The review was based on updated geophysical information and four wells drilled near ANWR, as well as applicable technology recently used in the development of the Endicott and Milne Point fields on the ANS frontier.
Based on this study, BLM raised the probability distribution of field size in the 1002 area. BLM estimated a 46% chance of finding at least one economic field. If an economic field is found, the median estimate of recoverable oil is 3.57 billion barrels, with a 5% probability of finding a total of 10 billion bbl or more in the ANWR region.
In June 1995, the U.S. Geological Survey (USGS) revisited BLM's 1991 estimates, relying upon several geologic studies and data from one new well, the Tenneco Aurora, at a federal offshore location north of the 1002 Area. USGS reduced its estimates of recoverable oil reserves to between 148 and 5,150 million barrels.
The BLM estimates, both old and new, depend on limited data and numerous assumptions about geology and economics. New data, such as the Tenneco Aurora well, and how the limited information is interpreted, can dramatically change estimates of ANWR's oil potential. Another important factor is the projected price of oil, which BLM assumed would increase steadily, exclusive of inflation, over coming decades. Except briefly during the 1990 Persian Gulf crisis and some market-related events currently causing a runup during the first quarter of 1996, oil prices have been low and stable since 1986 and proved world reserves of oil have increased. Some critics argue that the price increases projected by BLM unrealistically increase the probability of finding an economic field in ANWR.
The projected price of oil, however, is only one of many factors entering into the decision on whether and how high to bid for a lease. Each prospective bidder will do its own highly sophisticated analysis of the economic and physical factors of lease offers, and industry analyses historically have led to different results than the Government's analysis. With geological evidence pointing to the presence of physically recoverable oil and gas, prospective developers are expected to be eager to bid on ANWR leases.
Economics of Alaskan Oil Production. While crude oil prices affect the economics of ANWR production, transport costs and regional market conditions -- which are unique to North Slope production -- bear on an oil prospect's commercial viability. Until recently, ANS crude could not be exported under the law. (See Oil Export Legislation, below.) Until 1996--when exports begin to flow under a lifting of the ban--the export ban had contributed for years to a glut of oil on the West Coast, reducing the price received by North Slope producers. This market effect, combined with high pipeline and shipping costs, resulted in producer revenues often below $10.00/bbl, according to a Department of Energy study. (For further details on ANS and the West Coast crude pricing and export issue see CRS Report 95-214 ENR, West Coast Oil Exports, January 27, 1995.)
Over the years, low wellhead prices contributed to the natural decline in North Slope reservoirs' production by diminishing the incentive to drill more wells and otherwise enhance output from existing reservoirs. Low prices have reduced investment in currently producing reservoirs and caused the abandonment of exploration and development work outside the Prudhoe Bay and Kuparuk fields. Capital intensive expansion of the infrastructure would be required to access attractive geologic sites not adjacent to current production. Lacking new investment in existing fields, development of known structures and exploration, the falling output of the Prudhoe and Kuparuk fields will not be offset.
Lower production means lower TAPS throughput. Pipeline costs are largely fixed; a smaller flow of crude means higher unit pipeline rates. The effect of declining ANS oil output on transportation economics in turn aggravates the negative effect on production.
There is little chance that this self-reinforcing cycle can be altered by reducing transportation and production costs. Much of ANS transport and production infrastructure is geared to high output. Substantial fixed investment is involved, and it is not amenable to downsizing as production falls. The cycle of lower output and rising unit costs could lead to a situation in which ANS production economics are continuously eroded, clouding the outlook for existing oil fields.
Oil Export Legislation. Diminished concerns about the security of oil supply, coupled with new leadership in the 104th Congress, led to renewed interest in oil export legislation. In the Senate, an export bill (S. 395) was introduced by Senator Murkowski. On November 8, 1995, the House agreed to the conference report (H.Rept. 104-312), and the Senate approved it on November 14. The measure was signed by the President on November 28 (P.L. 104-58).
The export of the West Coast crude surplus, which was expected to raise Alaskan crude to world market levels (a $2 or $3 increment) is just beginning. At the same time, the world oil market is in the midst of an upward price fluctuation, with current prices exceeding $20/bbl, a $4 increase from late 1995. And this time the world market has taken Alaskan prices along for the ride.
Higher price of whatever origin enhance incentives for greater exploration and development on the North Slope and increase interest in, as well as the revenues which might flow from, leasing ANWR. However, it's not clear that these higher prices will be sustained. (For additional background, see CRS Report 95-214 ENR, West Coast Oil Exports, January 27, 1995.)
World Oil Supply and Price. In addition to uncertainty about future oil prices, and the complexities confronting ANS development and production, U.S. dependence on imported oil is another important factor in the ANWR debate. The world's total stock of proven crude oil reserves increased more than 50% in the 1980s, from 659 billion bbls in 1980 to 997 billion bbls in 1993. Global demand, measured by worldwide production, dipped to a low of 53 million barrels per day (mbd) in response to large price rises after the Iranian political upheaval, but rose to 60 mbd in 1989 and has remained essentially unchanged since.
With supply increasing nearly everywhere in the world -- except in the United States -- it is not surprising that crude prices peaked in 1981 and declined steadily until late 1985, at which point they plunged from about $26/bbl to about $14/bbl. World prices since then, except for the brief dramatics of the 1990 Persian Gulf War and a few other market driven price spikes, have hovered in the $15-$20 range.
In the context of a 22-billion-barrel-per-year market of internationally traded oil, ANWR's likely contribution would be small, even if its full potential were realized. But small contributions can have important price effects, as witnessed by the role played by declining U.S. imports in the 1980s.
ANWR, the U.S. Oil Market, and Energy Policy. Lower-48 crude production has declined consistently since its 1973 peak of 9.0 mbd. Domestic output received a boost in 1977 when TAPS was completed and ANS crude production began. In 1978, the first full year of TAPS operation, pipeline throughput averaged 1.2 mbd. ANS production peaked in 1988 at a 2.0 mbd annualized, subsequently declining to a current 1.5 mbd.
Domestic crude production now stands at 6.5 mbd, 28% below its 1973 high. The drop features a 44% decline in lower-48 production, much of which comes from very old fields, depleted by decades of production. ANS output, mostly from the Prudhoe Bay and Kuparuk fields, has declined more than 25% from its highest levels in just 6 years.
Declining domestic production has been replaced by imports, which have returned to an historic high, exceeding 8 mbd. Nearly half of the Nation's oil now comes from abroad.
Were ANWR to be leased for oil exploration and development and -- through a large discovery in the Refuge or between it and Prudhoe Bay -- a significant ANS production increase to result, how would the Nation's energy supply and security situations be affected?
Extra domestic crude production of the greatest imaginable amount would still leave the Nation dependent on imports for at least 40% of its petroleum needs. From an energy security perspective, the basic situation would be unchanged -- the Nation would still depend heavily on imports. However, at present prices, each 0.1 mbd of foreign oil replaced with domestic supply (or produced here and sold abroad) reduces the trade deficit by $700 million annually.
Exploration and Leasing Options. The main federal law governing leasing and production of petroleum on federal land is the 1920 Mineral Leasing Act. Conventional federal leases permit exploration and, after discovery, usually extend until production ceases entirely. Congress has debated whether this law, federal environmental laws, and applicable Alaskan laws are adequate for 1002 development. In past hearings, many Members were willing to consider leasing mechanisms which differed substantially from historic practices. (See also Revenue Allocation. below.)
To reduce uncertainty about the presence of oil, Congress could authorize exploration, without proceeding automatically to development. Such a strategy is widely opposed by both industry and environmental groups because all sides have something to lose. If oil were found, environmentalists fear that development would be virtually impossible to stop, and if it is not, that the Refuge would still be marred. Oil companies fear that if oil is found at the sites of a handful of test wells, competition could push bids to higher levels than they feel are warranted. Moreover, it is unlikely that oil companies would support or fund exploration without the right to develop any commercial quantities of oil that might be found. However, faced with the choice of participating or not, their position might change. Oil companies also fear that a few negative findings might prevent any opening of the area, even though the industry might see opportunities in other parts of the huge 1002 area, away from the test wells. The Treasury would benefit if successful exploration forced subsequent bids higher, but if oil were not found at the test wells, bids for the entire area would likely be pushed down, and the Treasury would receive less revenue.
Under ANILCA, one of the purposes of ANWR is to "conserve fish and wildlife populations and habitats in their natural diversity...." The other three purposes cite fish and wildlife treaty obligations, subsistence use, and maintenance of water quality and quantity. Under current law, additional activities are allowed on refuges to the extent that they are compatible with the purposes for which the refuge was designated. Thus, energy development in the 1002 area would have to be compatible with these four purposes, or the purposes would have to be modified or over-ridden. (The latter method was chosen in H.R. 2491 in the version vetoed by the President.) In addition, environmentalists argue that the pristine quality of the refuge and the 1002 area provide an argument beyond the requirements specified in ANILCA.
On August 25, 1995, DOI released a Preliminary Review of the Arctic National Wildlife Refuge, Alaska, Coastal Plain Resource Assessment. Examining especially biological impacts, the report concluded "there would be major environmental impacts from oil and gas development on the coastal plain." (The report noted that it joined the earlier 1987 FLEIS in that conclusion. However, the 1987 report found relatively few major impacts and held that most of these could be mitigated and that the energy and security benefits outweighed the negative impacts.) The primary new information reported was the greater dependence of the Porcupine Caribou Herd (PCH) on the 1002 area for calving (due to greater calf survival in years when calving occurs there) and for insect relief after calving. It further noted that if development displaced the herd, calving was likely to shift to areas of higher predation. Muskoxen were reported vulnerable to winter disturbance, when their low, energy-conserving metabolism would make movement difficult. Polar bears, according to both the 1987 and 1995 reports, are vulnerable to disturbance in their maternity dens. The new report considers revegetation to be a difficult and unproven technique, and notes that a "showcase" effort to revegetate an exploratory well site near Kaktovik still bore a visible scar 8 years later. The report (like earlier reports by previous Administrations) was criticized as politically motivated.
Refuge Purposes: Plants and Animals. Development advocates note that 92% of the Refuge would remain closed to development. Environmentalists counter that the 1002 report said the area at issue "is the most biologically productive part of the Arctic Refuge for wildlife and is the center of wildlife activity." If development were authorized, Congress would have to weigh how the various activities that would necessarily accompany development would affect the Refuge's resources. The importance of these resources (such as caribou, polar bears, grizzly bears, wolves, snow geese, wildflowers, water quality and quantity, etc.) in the debate derives from their value for subsistence take, sport hunting and fishing, their ecological roles, and/or aesthetic enjoyment, depending on the observer's point of view. Management of particular species, siting of facilities, and timing of development could all be issues.
Fewer Listed Species than in 1987. At the time of the 1002 report, 3 species were listed under the Endangered Species Act (ESA): the endangered bowhead and gray whales, and the threatened arctic peregrine falcon. The bowhead is still listed as endangered; according to the report, the activities most likely to affect this species would be summer-time noise and disturbance, though these effects were not deemed to be serious. This species, one of the largest marine mammals, is an important cultural and subsistence resource for Native people, and they have expressed concern that development activities take careful account of the needs of this species. The gray whale population for this area was de-listed on June 15, 1994, although ESA still requires that the species be monitored until 1999. The Arctic peregrine was de-listed on October 5, 1994, and must likewise be monitored for 5 years.
Caribou and Other Species. Opponents of development argue that the entire, balanced complex of caribou, polar and grizzly bears, wolves, falcons, wildflowers, and so on, is worth preserving intact, especially since it represents the least disturbed Arctic coastal area under U.S. ownership, and one of the "wildest" habitats of any type left in the United States. Scientists and sport hunters both stress the importance of the summer habitats on the plain for migratory game birds taken in both Canada and the United States. Game birds, especially snow geese, use the area for feeding before starting their journey south, and some hunters fear that summer development, especially overflights, could interfere with feeding enough to prevent the geese from gaining adequate weight for migration. The 1002 report notes some studies supporting that view and says that this and other possible consequences to birds could be minimized by controlling transportation and siting of facilities.
The species which has drawn the most attention in this debate is the caribou. The PCH calves in or near the 1002 area, and winters south of the Brooks Range in Alaska or Canada; in 1994, the herd numbered 152,000. In both areas it is an important food source to Native people and others -- especially since other meat is either expensive or unavailable. Some observers fear that development and production could cause cows to calve in less desirable locations or prevent the herd's access to sites where they can escape from the voracious insects common in early summer. Oil companies counter with a comparison to the Central Arctic Herd (CAH) that summers near Prudhoe, whose population has grown significantly since oil was discovered, and in 1994 numbered about 26,000. Environmentalists and some Natives counter that the CAH has a much larger area in which to calve, that caribou cows with young calves tend to avoid developed areas, and that predators have been controlled in that herd's area. The effect of oil development on the PCH is likely to remain one of the hotly contested issues in a new round of debate over the Refuge.
Pristine and Untrammelled? To follow the Refuge debate, it is important to understand that those who wish to prevent development are not basing their arguments primarily on economic tests nor pollution risks, though they may view those issues as favoring their side of the debate. Rather, they argue that "pristine" is a relative term and that the word has lost all meaning if it does not include a place like the Arctic Refuge. In terms that emphasize deeply held values, supporters of wilderness designation argue that few places as untrammelled as the 1002 area remain on the planet, and fewer still on the same magnificent scale. Any but the most transitory intrusions (e.g., visits for recreation, hunting, fishing, subsistence use, research, etc.) would, in their view, damage the "child-like sense of wonder" they see the area as instilling. The mere knowledge that a pristine place exists, whether one ever visits it, can be important to those who view the debate in this light.
Thus, even if a number of measures of biodiversity were to remain stable in the face of development, from their perspective, the peace of the area as a place where a larger truth may be sought would be seriously corrupted. Similarly, when told that the total "footprint" of development (the area actually occupied by drill pads, roads, etc.) would be smaller than Dulles International Airport, they note that the infrastructure would actually be scattered like a fine net thrown over the entire area, disrupting the terrain, the ecosystem, and the sense of lonely grandeur.
Development advocates counter this argument by noting the presence of the Native village of Kaktovik, the nearby DEWline station, and the remnants of other DEWline installations, and argue that the area is not pristine. Moreover, many Natives of Kaktovik respond that an argument about the value of pristine nature relegates their village to the margins of the debate.
The 1002 debate sometimes takes on a feud-like aspect due to the clash of two deeply held values: a belief in wilderness as teacher and guide in the quest for important values and sustenance of the planet over the long term, versus the value of work and of supporting a family. The re-injection of drilling wastes and similar issues would not raise the temperature of the debate higher than these issues.
Areas of Special Environmental Significance. The wildlife debate has focused mainly on the migratory Porcupine Caribou Herd. However, some believe other species, such as polar bears, grizzly bears, wolves, or migratory birds, may be at greater risk. Congress could consider special protection (e.g., wilderness designation, delayed exploration, or a special regulatory regime) of the most important habitats. The areas most often mentioned for some special status include the major calving area of the PCH, the area around Sadlerochit Spring (a warm spring that flows all year), and the overlapping areas near the coast where substantial bird populations occur in the summer and where pregnant female polar bears make their winter dens. From 1981-1991, 90 dens of female polar bears were found in the latter area, making up about 43% of the dens of this population.
Control of Access. One access issue could be the logistical conflict between the area's management as an industrial site versus its current management as a refuge devoted not only to wildlife conservation but also to recreation (including sport fishing and hunting) and subsistence uses, among other functions. This conflict would become more intense as human populations and road networks increased with development. In contrast to the current open but difficult access at ANWR, access to the state-owned Prudhoe Bay complex is strictly (if not always effectively) controlled. Visitors' and workers' belongings are searched for firearms, alcohol, and drugs, which are prohibited. (None of these requirements now applies to the 1002 area.) Moreover, hunting, even for subsistence, is forbidden at Prudhoe and limited in other developed areas. Similar restrictions are not found in the 1002 area and may conflict with the Refuge's purposes as currently interpreted.
The grounding of the Exxon Valdez increased concern among environmentalists and others over oil spills and other potential sources of pollution, whether in Prince William Sound, along the length of TAPS, or at the North Slope. These environmental quality management issues can be divided into three categories: resource management, pollution, and waste disposal. Congress could choose to leave these matters to administrative agencies under authorities of existing laws. Alternatively, Congress could opt to impose a higher standard of environmental protection because the area is in a national wildlife refuge or because of the fragility of the Arctic environment. At issue would be the use of gravel and water resources essential for oil exploration and development; and setting fees for and allocating any revenues from exploiting these resources.
In addition, air and water pollution (whether chronic or acute) primarily raise questions of subtle, long-term ecological effects. Potential legislative issues include the adequacy of existing standards, research needs, monitoring, prevention and treatment of spills, the adequacy of current waste disposal requirements, the development of alternatives to landfills, and liability concerns that can make consolidation of disposal facilities unattractive to oil companies.
Management of Support Services. Activities of the independent support service industry in the Prudhoe Bay area, particularly at Deadhorse, have been widely criticized. (Firms in this industry are generally employed by, rather than part of, major oil companies.) At Deadhorse, the state leases land for these independent services (repair, cleaning, laundry, aircraft supply, etc.). Management and control of support facilities, while a complex subject, could be one of the areas where oil companies and environmentalists might reach common ground, if development were authorized by Congress.
Section 1003 of ANILCA does not cover the role the 1002 area might play as a land base for state or federal offshore activity. Both the United States and Alaska are proceeding with offshore leasing near the 1002 area. But despite occasional small flurries of interest, no well has been commercially developed offshore from the Refuge.
Long-Term Cleanup. If Congress authorized development, but no commercial quantity of oil were found, the ecosystem is likely to recover substantially from exploratory activities in only a few years. If major quantities of oil and gas were found, development would probably last for decades or perhaps even a century, if natural gas production becomes commercially feasible. Substantial recovery from the much higher level of disturbance might then take further centuries in the harsh Arctic environment and could be a herculean task. Thus, Congress might be debating rehabilitation that would not begin until 2060 or 2090. Furthermore, some types of cleanup might not even be desirable or practical: deep gravel roads and drilling pads, for example, might be impossible to remove without creating further damage, and thus might necessarily become a permanent feature of the landscape. No existing federal laws are known to cover such long terms in planning for a cleanup whose cause may never occur, and the exact nature of which is unknown.
Congress may consider various proposals on assuring the long-term environmental quality of the area. Central to any decision on these proposals is determining what the ultimate rehabilitation goal(s) should be. Environmentalists would want strong standards, but would simultaneously argue that complete recovery is nearly impossible. Development advocates would argue that existing and future practices are adequate.
The village of Kaktovik (over 200 people) and the lands of the Kaktovik Inupiat Corporation (KIC) lie along the coast within the Refuge and mostly adjacent to the 1002 area. Natives of Kaktovik are the major users of the resources in the coastal plain, although they focus significantly on marine resources. Kaktovik Natives support leasing generally but oppose both leasing in the primary caribou calving area in the east-central 1002 area and restrictions on discharging firearms. There is also a U.S. military Distant Early Warning (DEW) station near Kaktovik, with about a dozen employees. The DEW network has several unoccupied sites of former or uncompleted developments scattered in or near the 1002 area. Together with Kaktovik, the DEW site operates a garbage dump and a runway.
Subsistence hunters in the interior of Alaska and Canada (including especially the Gwich'in people who hunt the herd in its winter range) and the Canadian government oppose leasing in the calving area of the herd and support wilderness designation. If the area is opened to leasing, Congress may be asked to consider whether the current access or hunting rights of Native users should be restricted to protect pipeline safety; whether subsistence users should have a special voice in new regulations as 1002 exploration or development evolve and what provision might be made to minimize any harmful impacts of development on Native culture among both north slope and interior Alaska groups.
If oil is present, ANWR development revenues from bonuses, rents, and royalties, as well as from sales of gravel and water, could generate billions of dollars for the landowners. Peak annual royalties alone might range from $200 million to $2.5 billion, followed by declining revenues for 30-50 years. If Alaska owns submerged lands in the Refuge, it could receive substantial revenues directly. (See Legal Issues, below.) Whatever the federal income, Congress would need to decide:
The United States and Alaska dispute the ownership of submerged lands beneath waters within and offshore of ANWR. Depending on how the legal issues are decided, Alaska may own significant subsurface inholdings within ANWR. If these inholdings were opened to leasing, not only would management of the remaining Refuge lands be complicated, but substantial revenues from any oil on those inholdings would accrue to Alaska, rather than the United States. P.L. 100-395 addressed these issues in part, but significant issues remain. (For further information, see CRS Report 87-673 A.)
A court held that DOI should have prepared a Supplemental Environmental Impact Statement (SEIS) encompassing new information about the 1002 area in connection with the Department's recommendation that Congress legislate to permit development. The last EIS was prepared in 1987 and it seems clear that, under current law, either an SEIS or a new EIS would have to precede development, unless Congress eliminates this requirement, as would have occurred under Section 5335 of the conference agreement on H.R. 2491. The Section stated that the 1987 EIS was adequate for development of the regulations, for conducting the first and subsequent lease sales, and for granting rights-of-way.
The bill also called for a 50/50 split of revenues from the development of ANWR. Alaska has indicated that the state will dispute any distribution of revenues from ANWR leases that deviates from the 90/10 share to which Alaska is entitled under a 1976 Act and, allegedly, under the Alaska Statehood Act. It can be argued, however, that that split was intended to reflect the usual share of western states under the 1920 Mineral Leasing Act, which allows a 50/50 direct split and an additional 40% returned to the states indirectly through the Reclamation Fund; and that Congress has at times prescribed other disposition of revenues, e.g., with respect to the Naval Petroleum Reserves.
P.L. 104-58, S. 395
H.R. 70 (Thomas)
H.R. 1000 (Vento)
H.R. 2491 (Kasich)
S. 428 (Roth)
ARCO Alaska, Inc. Oil in the Arctic: The Environmental Record of Oil Development on Alaska's North Slope -- Comments and Critique. Natural Resources Defense Council, National Wildlife Federation, and Trustees for Alaska. 1988. 24 p.
Speer, Lisa, and Sue Libenson. Oil in the Arctic: The Environmental Record of Oil Development on Alaska's North Slope. Natural Resources Defense Council, Inc., 1988. 78 p.
Speer, Lisa. Tracking Arctic Oil: The Environmental Price of Drilling in the Arctic National Wildlife Refuge. Natural Resources Defense Council, National Wildlife Federation, and Trustees for Alaska. New York. 1991. 36 p.
U.S. Department of the Interior. Bureau of Land Management. Overview of the 1991 Arctic National Wildlife Refuge Recoverable Petroleum Resource Update. Washington, April 8, 1991. 8 p., 2 maps.
U.S. Department of the Interior. Fish and Wildlife Service. Arctic Refuge website. http://bluegoose.arw.R9.fws.gov/NWRSFiles/RefugeSystemLeaflets/R7/Arctic/ArcticIndex.html Hypertext links to numerous other relevant information, and maps and photographs from a variety of sources and viewpoints. Revised frequently.
U.S. Department of the Interior. Fish and Wildlife Service, Geological Survey, and Bureau of Land Management. Arctic National Wildlife Refuge, Alaska, Coastal Plain Resource Assessment. Report and Recommendation to the Congress of the United States and Final Legislative Environmental Impact Statement. Washington, 1987. 208 p.
U.S. General Accounting Office. Arctic National Wildlife Refuge: An Assessment of Interior's Estimate of an Economically Viable Oil Field. Washington, D.C. July, 1993. 31 p. GAO/RCED-93-130
U.S. Library of Congress. Congressional Research Service. West Coast Oil Exports. Lawrence C. Kumins. Washington] 1995. 7 p. CRS Report 95-214 ENR
---- ANWR Development: Analyzing its Economic Impact. Bernard
A. Gelb. [Washington] 1992. 6 p.
---- Arctic Oil, Arctic Refuge. Videotape by Lynne Corn, Bob Nickel, et al. 53 minutes. [Washington] 1991. (Available to congressional requestors only.)
---- The Arctic National Wildlife Refuge: Major Oil Development or Wilderness? ed. by John E. Blodgett and John L. Moore. Washington] 1988. 162 p. CRS Report 88-161 ENR
---- Legal Issues Related to the Ownership of the Submerged Lands within and off the Coast of the Arctic National Wildlife Refuge, by Pamela Baldwin. [Washington] 1987. 36 p. CRS Report 87-673 A
---- Whether Congress Unilaterally May Amend a Mineral Lease Revenue Distribution Formula that Appeared in the Alaska Statehood Act, by Thomas J. Nicola. [Washington] 1987. 12 p. CRS Report 87-63 A
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