For decades, Alaskan politicians have sought a highly coveted prize: permission from Congress to open up sections of the pristine Arctic National Wildlife Refuge in Alaska to oil and natural gas drilling. To them, the refuge is a chance to make the state more economically resilient and refill Alaska’s Permanent Fund, which has been paying shrinking dividends from oil and gas revenue to Alaskans in recent years.
But time after time, Alaskan leaders have been stymied — as environmentalists have made blocking drilling in ANWR a rallying cry and Congress has offered tepid support at best and outright hostility at worst.
Now, it appears the Alaska delegation, led by Republican Sen. Lisa Murkowski, may have its best shot yet at the ANWR prize.
Republicans hold 52 votes in the Senate and need at least 50 to get their already troubledtax reform package through. Murkowski, who torpedoed Obamacare repeal multiple times, might be interested in a package that also opens up ANWR drilling. And, crucially, ANWR would add revenue to the tax reform package, which slashes taxes for corporations and the wealthy. With Sen. Bob Corker (R-TN) signaling he won’t vote for anything that would blow a hole in the deficit, ANWR could be the crucial way to make up the difference.
To wit: The Senate Budget Committee directed the Senate Energy and Natural Resources Committee, which Murkowski chairs, to come with $1 billion in revenue to help close the budget deficit. Were ANWR to be to leased oil and gas drillers, the Congressional Budget Office estimates it would generate $5 billion over 10 years for the federal government.
But here’s the catch: Low oil and gas prices mean that drillers aren’t hurting for new wells. And not all Alaskans are on board with opening up ANWR, while environmental groups are gearing up to fight it every step of the way. Let’s walk through the return of this familiar battle, and why it’s different this time around.
ANWR has been a central fight of environmental politics for years
Long before environmentalists and the fossil fuel industry were fighting over the Keystone XL pipeline and hydraulic fracturing, ANWR was the definitive issue dividing them.
The case for establishing the refuge was first laid out in the journal of the Sierra Club in 1953, and groups ranging from the Natural Resources Defense Council to the Audubon Society have all campaigned and litigated against Alaska’s attempts to allow drilling in ANWR for decades.
The push for drilling has also spanned generations of Alaskan politicians. Murkowski’s father, Frank Murkowski, added pro-drilling language into a Senate budget in 1995 that was vetoed by then-President Bill Clinton.
The 19 million-acre refuge, managed by the US Fish and Wildlife Service, was created in 1960 and remains the largest wildlife refuge in the United States. It’s home to polar bears, musk oxen, and migratory birds from six continents, and is the calving ground for the porcupine caribou. There are no roads and fewer than 500 people living in or near the refuge.
In 1980, President Jimmy Carter signed the Alaska National Interest Lands Conservation Act, expanding ANWR and opening the door to drilling in a 1.5 million-acre region of the refuge. However, there was a snag: Drilling would require an environmental impact study and approval from Congress.
Leaving the fate of oil drilling in ANWR to lawmakers has let this issue drag out for decades as support and opposition to drilling waxed and waned. Environmentalists have managed to successfully persuade Democrats (and some Republicans) to defend it.
But without definitive legislation supporting drilling, and without any rulings declaring ANWR completely off limits, the proposal has remained in limbo.
Why Alaska wants to open up ANWR so badly
Every October, each Alaskan who has been in the state longer than one year gets a check for around $2,200, a dividend from the state’s $61 billion Permanent Fund. The fund is larger than any trust, endowment, or pension in the United States.
The money for the Permanent Fund comes from oil and gas production in the state. Alaska residents are paid a dividend from earnings on the fund, not the principal. That means the dividend check can go up or down, even to zero, depending on the fortunes of the state’s energy industry.
In addition, the Trans-Alaska oil pipeline provides the state with 85 percent of its budget. Alaska does not have a state income tax or a sales tax, so the bulk of the revenue has to come from energy.
At its peak in the 1980s, the pipeline transported more than 2 million barrels of oil per day. But oil production is now a quarter of that, so the state is facing increasing pressure to raise cash.
The state’s budget deficit is now at $3.7 billion. And this year’s dividend payment from the Permanent Fund will be $1,100 — about half of what Alaskans have received in previous years, drawing the ire of many in the state.
That’s why Alaskan lawmakers have renewed their push for ANWR drilling.
“This is not so much about the oil industry; it’s really about Alaska,” said Athan Manuel, director of the lands protection program at the Sierra Club. “The state of Alaska has been salivating for this kind of stuff.”
But it’s not clear how much oil is really there. And oil companies aren’t that interested in it.
Though Alaskan politicians have long painted ANWR as a rich oil field just waiting to be exploited, it’s difficult to say just how much oil really is there.
There’s only been one exploratory well drilled in the territory, back in 1986, and the drillers haven’t disclosed what they found, which some analysts have taken to mean that there’s less oil there than hoped.
USGS estimated in 1998 that there is between 4.3 billion and 11.8 billion barrels of oil in the 1002 area, a rather vast margin of error.
The federal government has also banned seismic testing in ANWR to measure oil deposits. The process involves setting off explosives or rattling the earth with 40,000-pound thumper trucks and measuring the vibrations to detect underground reservoirs. The Trump administration is now taking steps to allow this technique in the refuge.
However, other parts of northern Alaska have yielded major oil finds, and the state has extracted oil there for more than 50 years, currently producing about 500,000 barrels of crude every day, according to Kara Moriarty, president and CEO of the Alaska Oil and Gas Association.
“It’s a very mature basin, but the future is incredibly bright,” she said, adding that oil finds in Alaska “could be producing for at least another 40 years plus.”
Moriarty also noted that the oil industry isn’t planning to develop the entire swath of 1002 lands, keeping most of its activities in a stark, treeless 2,000-acre region on the coastal plain that is far away from the majestic vistas that often illustrate ANWR discussions.
“It’s a very sensitive environment; we’re very mindful of that,” she said. “But it’s not the mountain and lake pictures that are often used. That area is permanently set aside and can never be developed.”
But environmental groups don’t think it’s possible to develop energy in the Arctic without damaging it, even on a remote and limited stretch of land. “Even if they don’t spill a drop, they are industrializing a wilderness area,” said the Sierra Club’s Manuel.
At the same time, the energy landscape has changed radically since drilling in ANWR became a possibility more than 30 years ago, with US crude oil production reaching record highs and prices holding below $50 a barrel, driven largely by the shale oil and gas boom.
Now with a glut of fossil fuels in the US and around the world, oil and gas companies are offering muted support for new drilling in the Arctic.
“If the 1002 area was authorized for leasing, we would consider it against other opportunities in our portfolio, just as we do with exploration opportunities worldwide,” said Daren Beaudo, a spokesperson for ConocoPhillips, in an email. “That being said, we see tremendous potential in National Petroleum Reserve-Alaska and remain focused on our projects and exploration plans in the Reserve.”
Frank Wolak, an economics professor and director of the program on sustainable energy at Stanford University, said current market conditions mean that drilling in the arctic, which tends to be more expensive and difficult than drilling in the lower 48, doesn’t make much sense when energy prices are poised to stay low.
Environmental groups have also been preparing for decades to fight Arctic drilling if Congress ever gives it a green light.
“It’s going to be litigation like you’ve never seen from the environmental community,” Wolak said. “Why take that on when oil prices are at their current levels?”
Alaskans who are close to ANWR are divided on it
Bernadette Demientieff, a member of the Gwich’in tribe and executive director of the Gwich’in Steering Committee, said her tribe considers the coastal plain of the refuge to be sacred and that it should be protected from drilling.
The tribe historically followed caribou herds in the region, which spend part of the year on the coastal plain, but have faced increasing pressure as average temperatures in the region have risen.
“Many of our people now have to travel hundreds and hundreds of miles just to hunt the caribou we have depended on,” Demientieff said.
Now the tribe is concerned that caribou herds will decline further with the advent of drilling, just as herd numbers have fallen in other areas of Alaska’s north slope where mineral extraction is permitted.
The prospect of losing a valuable food source and cultural element would be devastating to a people that are already facing immense environmental pressures.
“Not only our we dealing with climate change, it’s also food security, it’s also our identity,” Demientieff said.
But other indigenous groups have thrown their weight behind drilling proposals.
Last month, the Voice of the Arctic Iñupiat, a group representing indigenous people in the region, came out in favor of energy development in ANWR.
“Collectively, we are concerned about the future of our communities and, as of today, we stand together, with our members from Kaktovik, in support of ANWR development as part of the economic solution for the Arctic Slope region,” John Hopson Jr., mayor of Wainwright, Alaska, and vice chair of Voice of the Arctic Iñupiat, in a press release.
He cited the need for economic development in the remote region and the potential for improving schools, sanitation systems, and clinics with revenue from drilling.
Murkowski will have to walk a fine line here. She owes her political life to tribal groups in Alaska who mounted a write-in campaign for her after she lost her primary to Tea Party candidate Joe Miller in 2010.
This is going to be a long fight
The divide among Alaskans over the fate of ANWR has an analog on Capitol Hill.
Washington Sen. Maria Cantwell scuttled the last major effort to open ANWR to drilling back in 2005, when she blocked Alaska Sen. Ted Stevens, then the longest-serving Republican in the Senate, from tacking on drilling to a military spending bill with a filibuster.
“Destroying a national wildlife refuge is not the answer to our nation’s energy problems,” she said at the time.
Cantwell is now the ranking member of the Senate Energy and Natural Resources Committee, where she sits right next to Lisa Murkowski.
The two senators have worked together on energy legislation, but on ANWR, they couldn’t be further apart.
After the budget resolution was announced last week, the senators issued dueling statements within minutes of each other.
“This provides an excellent opportunity for our committee to raise $1 billion in federal revenues while creating jobs and strengthening our nation’s long-term energy security,” Murkowski wrote, tiptoeing around ANWR.
Cantwell was more blunt: “With another Republican Congress comes another attempt to turn over this iconic national wildlife refuge to the oil and gas industry,” she said, adding that she’s “going to fight tooth and nail until this attempt fails too.”
Murkowski now has limited political capital within her own party since she was part of the downfall of the Republican health care bill, hurting her standing with the White House and some conservatives are saying putting ANWR on the table “reinforces bad behavior.”
And some Republicans, including Arizona Sen. John McCain, have previously opposed efforts to open ANWR to drilling, so the coalition needed to advance ANWR energy development is fragile, and the push depends on an already fraught budget process with other contentious issues baked in.
If the measure fails, the status quo around ANWR remains, meaning that drilling remains a possibility if Congress approves it in another form. Congress could also designate the 1002 region a wilderness areas, effectively ending the prospects for drilling.
Outside of the Senate, advocates and opponents are gearing up for a long legal fight if the budget bill does go through with the ANWR drilling rider still attached.
It would start with the federal leasing process, which requires a public comment period at almost every stage of development, from awarding leases to siting to drilling, creating openings for lawsuits.
“We’re expecting litigation at each and every step,” said Moriarty. “If the budget resolution passes, I’m not sure you’d see production by the end of [Trump’s second term].”
And even if drillers clear those administrative hurdles, actually finding suitable drilling sites can be a difficult process, since oil companies can only explore for oil in the winter when the Alaskan ground is hard enough to support ice roads.
That means it would take upward of a decade before any oil from ANWR starts coursing through the Trans-Alaska pipeline.
“This is something that would be a very long-term play,” Moriarty said.
Source: http://bit.ly/2fXleAQ
