Bush backs oil exploration in Alaska wildlife refuge
Copyright 2000, Houston Chronicle
Wednesday, July 5, 2000
By David Ivanovich, Houston Chronicle
Presidential candidate George Bush, the one-time Midland oilman, wants the U.S. government to allow petroleum companies to hunt for oil and natural gas in the Arctic National Wildlife Refuge in northeast Alaska.
With motorists howling about the high price of gasoline, Texas Gov. George W. Bush has adopted one of the oil industry's old favorites.
The one-time Midland oilman wants the U.S. government to allow petroleum companies to hunt for oil and natural gas in the Arctic National Wildlife Refuge in northeast Alaska.
Even if supporters of the plan can overcome environmentalists' vehement opposition to drilling in a region where caribou come to calve, it won't be a quick fix.
The federal government's energy analysts predict that it could take a decade or more after any approval to drill before the oil could reach the market. And crude prices would have to remain strong for the effort to be profitable.
Bush's response contrasts with that of his Democratic rival, Vice President Al Gore, who saw a political opportunity when gasoline prices soared past $2 a gallon in Chicago and other Midwestern cities. Gore quickly blamed "Big Oil."
"I believe we have to have exploration of ANWR," Bush said last month. "I think we can do so in a way that doesn't damage the environment."
Before the Texas governor got into politics, he was head of Arbusto Energy (arbusto is Spanish for "bush" or shrub"), which was later renamed Bush Exploration Co.
His call for tapping the Alaskan refuge is surely hitting a chord with the oil industry. For years it has clamored for the right to drill in the pristine area believed to hold the largest untapped deposit of onshore oil and gas left in the United States.
The federal government created the South Carolina-sized Arctic National Wildlife Refuge in 1980, in the midst of the second oil price shock, which followed the Shah of Iran's downfall.
With memories of mile-long gas lines still fresh, lawmakers designated a 1.5-million-acre expanse between the Brooks Mountain range and the coast of the Beaufort Sea for possible oil and gas development. But they never made a decision on development.
Advocates argue that drilling in the refuge would help the United States lower its growing dependence on foreign crude. Opponents decry the notion of pumping in what they call "America's Serengeti."
All sides agree that the oil and gas potential of the region is immense.
"This is the largest potentially productive onshore basin in the United States," the U.S. Energy Information Administration said in a report issued in May.
Together with state and tribal lands, where exploration is already permitted, the region could yield 5.7 billion to 16 billion barrels of recoverable oil, according to a 1998 U.S. Geological Survey study.
That would dramatically increase the nation's total reserve base of 21 billion barrels of oil, the Energy Information Administration said.
Production would likely range from 250 million to 800 million barrels a day, the government analysts said, with peak production between 650,000 and 1.9 million barrels a day.
The refuge is 60 miles from prolific Prudhoe Bay, so it is within easy reach of the 800-mile-long Trans-Alaska Pipeline, which runs from Prudhoe south to the port city of Valdez.
Government analysts note, however, that after getting the green light to explore in the refuge, producers might need seven to 12 years to obtain leases, receive the proper permits and conduct required environmental reviews.
"Initial ANWR production could occur around 2010 if leasing approval occurred within the next few years," the Energy Information Administration said.
Sen. Frank Murkowski, R-Alaska, chairman of the Senate Energy and Natural Resources Committee and a longtime advocate of exploration in the refuge, is more optimistic.
"I'm guessing we could have some production flowing between two and three years if we really want to," said Murkowski, who has advised Bush on energy matters.
Murkowski argues that opening the refuge to exploration would send a message to the Organization of the Petroleum Exporting Countries. "It would send a strong signal that we're not going to be held hostage," he said.
The Geological Survey estimates that 80 percent of any reserves in the refuge would be commercially recoverable if oil prices stayed above $25 a barrel.
While prices have remained north of $25 for several months, they have not stayed at such levels long enough to allow industry planners to assume that they're going to be that high over the long haul. A year and a half ago, crude prices were wallowing at $10a barrel.
Jay Saunders, an energy analyst with Deutsche Banc Alex. Brown in Baltimore, noted that despite the run-up in crude prices, oil companies have been reluctant to invest in new exploration projects.
Economic considerations aside, drilling in the wildlife refuge faces opposition from a wide spectrum of interests, from environmental groups such as Greenpeace to powerful Republicans such as Senate Finance Committee Chairman William Roth of Delaware. The Canadian government has likewise voiced its opposition.
The coastal plain where drilling would occur is where the 129,000-head Porcupine Caribou Herd calves in summer.
That means oil companies would not be permitted to drill during summer.
The coastal plain also is home to polar bears, grizzlies and black bears, as well as dall sheep, wolves and moose. Hundreds of thousands of snow geese gather there in August and September, and 150 pairs of tundra swans nest near the coast.
"It's an incredibly unique and amazing place," noted Iain MacGill, an energy analyst with Greenpeace in Washington. "What's it worth to protect places like ANWR? What do we really value? Are we really so addicted to oil that we will strip-mine this country?"
Opinions among the native peoples of the region are mixed.
In the Inupiat Eskimo village of Kaktovik, a town of 210 that is the only permanent settlement in the refuge, residents support drilling, survey results show.
But the Gwich'in, who migrate in and out of the refuge following the caribou — the tribe's name means "People of the Caribou" — fear that oil and gas drilling could affect their food supply.In 1995, the Republican-controlled Congress approved a provision to permit exploration in the refuge, but President Clinton vetoed the legislation.
Murkowski plans to hold hearings this summer on drilling in the area. He does not anticipate a vote this year on whether to drill "unless there continues to be a crisis, where this Congress has to act."