President Could Get ANWR Nod Soon

Abstract:A Republican Congress might finally afford the Bush administration and the petroleum industry the chance to test the potential of the Arctic National Wildlife Refuge with the drill bit.

Analysis:In the coming weeks, the 108th U.S. Congress could give the Bush administration its best shot so far at opening up a fragment of the Arctic National Wildlife Refuge (ANWR) to exploration drilling.

It may take a seldom-used—but legal—procedural quirk to do it, but the new Republican majority in the Senate could include an ANWR drilling provision in the upcoming federal budget reconciliation bill, which has to be dealt with very soon. In that case, only a simple majority of 51 votes would be needed for approval. That's important, because if the proposal were to be part of a formal Senate energy bill, it would need 60 votes to cancel the threat of a filibuster by opponents—not all of them Democrats—who most assuredly would do so, creating a hot political showdown.

At their end of the building, House members most likely would approve an energy bill with an ANWR drilling initiative, particularly since they approved one during the last session of Congress, only to see a companion bill defeated, thanks to the then-Democratic majority in the Senate.

Opening up ANWR was a keystone in President Bush's initial comprehensive energy plan, introduced in 2000, along with other provisions, including giving producers more access to federal lands in the inter-mountain West to develop conventional natural gas and coalbed methane. Since that time, a number of other points of the plan have been adopted, including much-increased federal support of major research and development efforts by industry into both renewable and alternative energy sources, including fuel cells. But from the get-go, most Democrats and the entire environmental lobby have vehemently opposed drilling in ANWR.

Now, however, it looks as though the Senate could carry the idea over the top—if they really want to. And Senate majority leaders appear to want to.

Everyone knows that ANWR is a political lick log to which the two dominant political philosophies in this country are always raring to go.

The pro-ANWR drilling folks—and there are a lot of them—believe any increase in domestic oil and gas production is preferable to standing by as the U.S. gives in to sharp increases in imports from countries whose political affairs are, at best, dicey. Of course, increased petroleum imports is a given in this country, since energy demand long ago outdistanced available domestic supply and continues to pull away. But the pro-ANWR folks see new oil from the 49th state as a way to dull such import spikes a bit while paths to new, less-wobbly overseas oil areas like Russia and West Africa continue to be opened up and the alternative energy source development gains momentum. To them, ANWR development is the lead dog in a pack of stopgap measures.

From their perspective—while they're far fewer in number but a whole lot louder—it appears that the anti-ANWR folks believe the U.S. should draw the line now on any new oil and gas supply, domestic or imported. Apparently, they favor abandoning the Petroleum Age as soon as possible in favor of all-out development of alternative energy sources. Their pitch seems to be that the U.S—in the form of the federal government, of course—should order wholesale energy conservation, allowing domestic oil and gas use to phase out (but in the interim, depending on the rest of the world to fill the gap while all this new stuff is adopted). Meanwhile, say they, the nation's total intellectual and industrial resources should be concentrated on powering the country with non-fossil-related energy sources like the wind and the sun, biofuels, and, eventually, fuel cells. This is truly a "bite the bullet" concept.

The Bush administration bases its pro-ANWR development stance on the proposition that the U.S. already is up to its sideburns in a full-blown energy crisis, with our fossil-fueled economy constantly hampered by the questionable imports-from-shaky-countries issue. Imported oil already makes up 55 percent of domestic supply, and if the current trend continues, say the experts, they would constitute 65 percent or higher in the next four to eight years. The trouble, of course, is that the brunt of those imports comes from Venezuela and Saudi Arabia. Neither could be considered totally reliable, politically, for all the usual reasons. And their oil producing neighbors—both in South America and the Middle East—aren't what we could call bosom buddies, either. But contrary to what anti-petroleum interests would have Americans believe, the U.S. has not run out of oil and gas totally. To name a few home-based sources, we have our largest state, Alaska, which is embarrassingly rich i! n natural resources—oil and gas being the richest of all. We also have the vast federal lands in the gas-prone badlands of the Rocky Mountain region. And there are the huge potential oil and gas reserves that lie off both the east and west coasts (but that's off the table, at least for the near future). Billions of barrels remain in the Mid-Continent area, but redevelopment costs make them uneconomic, at least at historically low average domestic oil prices.

But take a look at ANWR. Tremendous oil reserves already have been developed beneath Alaska's nearby North Slope. There are vast reserves of natural gas, as well, that could be pipelined south to further fuel U.S. growth. And both industry and government know that the proved North Slope reserves undoubtedly trend eastward beneath the huge untapped area of ANWR, a 19-million-acre block in the northeast corner of the state whose western boundary reaches almost to the existing Prudhoe Bay development area.

According to the Bush proposal, only 1.5 million acres, or about eight percent, of the refuge would be developed, with the extra 17.5 million acres remaining closed permanently to any kind of development. This smaller coastal segment borders the Beaufort Sea on the north and Canada's Arctic Slope area on the east. At its widest points, the plain is about 100 miles across and about 30 miles deep, covering a spot only a bit bigger than the state of Delaware.

Beneath that coastal segment, however, there is thought to exist estimated in-place reserves ranging from 4.8 billion to 29.4 billion barrels of oil, with recoverable reserves ranging from 600 million barrels on the low side to some 9.2 billion barrels. That's according to a conservative estimate the U.S. Department of the Interior (DOI) made in 1987 after two years of geological, aeromagnetic, and seismic surveys. In fact, the DOI identified 26 separate oil and gas prospects in the plain area that might each contain "super giant" fields (500 million barrels or more).

According to Arctic Power (, an Anchorage-based lobbyist group formed in 1992 to expedite approval of ANWR development, oil and gas exploration and production activity there would enhance federal revenues by billions of dollars from bonus bids, lease rentals, royalties, and taxes. A 1995 estimate of bonus bids alone was $2.6 billion. The 10,000-member group also estimates ANWR development could create between 250,000 and 735,000 U.S. jobs.

As for environmental impact, the group points out that the Central Arctic Caribou Herd at Prudhoe Bay has grown from 3,000 to as high as 23,400 during the last 20 years, all while oil and gas development was taking place on their tundra. What's more, advanced technology has reduced the arctic oil development footprint significantly, Arctic Power observes. If Prudhoe Bay were to be built today, they point out, the entire footprint would total only about 1,526 acres, reducing its size by 64 percent. Apparently, the development footprint on the ANWR coastal plain would be rather insignificant when compared with Prudhoe Bay's actual one.

Proponents of ANWR development can trot out other plus points, and have reasonable answers to charges leveled by foes, particularly enviro groups. Their arguments fall on deaf ears throughout the Democratic Party, however, which kisses ANWR development off as just another way for the Republicans to reward big business at the expense of the American people.

But now the Republicans have the hammer, so to speak. During the next few weeks, it will be interesting to see if the Bush administration and the Republican Congress will stand behind ANWR development, and can give good, solid reasons for doing so. There's no doubt that a number of clear and present dangers to U.S. national security exist today. We may be at war in the Middle East before February ends, and everyone hopes that diplomacy will settle the problem with North Korea. Meanwhile, who knows if or when Venezuelan oil imports will be resumed, or whether war in Iraq will affect oil flow from the Middle East?

Let's hope that at some future time, it won't be necessary for anyone to have to ask: "Why didn't we develop ANWR when we had the chance?"


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