NRC report finds pros, cons to Alaska oil development

April 28, 2003
Industry has made enormous technical improvements to reduce the environmental impact of oil exploration in Alaska's North Slope, the National Academies' National Research Council said last month in a congressionally mandated report.

Industry has made enormous technical improvements to reduce the environmental impact of oil exploration in Alaska's North Slope, the National Academies' National Research Council said last month in a congressionally mandated report. But the cumulative effect of 3 decades of production means some environmental effects will persist, according to the study.

"Efforts by the oil industry and regulatory agencies have reduced many environmental effects but have not eliminated them," the report said.

The committee that wrote the report said that the social and economic effects of oil production on the North Slope have been large and both positive and negative.

"As policymakers and the public discuss the future of the oil industry in Alaska, it is important for them to do so in the context of the cumulative environmental, social, and economic effects—both positive and negative—triggered by oil exploration and production," said Committee Chairman Gordon Orians, professor emeritus of zoology, University of Washington, Seattle. "Although many studies have looked at the effects of specific activities, we examined how these effects add up over time, which has not been studied much until now."

Industry's improving record

NRC said the roads, rigs, and pipelines necessary to find, pump, and transport oil have been affecting the North Slope environment ever since large amounts of oil were discovered there.

The report, however, did acknowledge industry's improving record. It noted that advances in locating and targeting oil have reduced the number of exploration wells, and the use of remote sensing to find oil has reduced offroad travel. "Oil-drilling platforms also are smaller, leaving smaller physical imprints on the tundra, and some roads and drilling sites are now being constructed with ice instead of gravel," the report said.

But NRC found that when North Slope production ends, equipment, buildings, roads, pads, and other installations are likely to remain in place because of the high costs of dismantling, removal, and restoration. Last July, the General Accounting Office in another congressionally mandated report urged US regulators to ensure producers are financially prepared to clean up any drilling and production-related damage done to public lands before new exploration is allowed to begin (OGJ Online, July 11, 2002). Responding to the GAO study, Alaska officials said they felt GAO's call to issue specific restoration requirements for the National Petroleum Reserve-Alaska prior to further exploration was premature. Alaska officials said it would be better to address the issue when oil production ends and the obligation actually comes due. For NPR-A alone, GAO noted the potential price tag for cleaning up the area could be $2.7-6 billion, based on preliminary industry estimates.

In this latest study, NRC stressed that in some areas of concern, there has been no negative environmental impact. They noted that oil spills on the tundra so far have been small and have had only local impacts, and the damaged areas have recovered.

The committee stopped short of issuing a recommendation on whether industry should be allowed to drill further in the region. They said it was beyond the scope of the 18-month, $1.5 million study to say whether exploration benefits outweigh accompanying undesirable environmental consequences.

"Society as a whole must debate and decide that issue," NRC said.

Reactions

Responding to the study, the American Petroleum Institute defended industry's record on Alaska's North Slope.

"While we have not an opportunity to read the full report, we understand it confirms that new technologies have given enormous opportunities to provide much-needed energy for the US economy and in environmentally safe and responsible manner," an API spokesman said.

API noted that the report says there have been substantial improvements in technologies and especially of exploration and the operators have been taking increasing care. API also pointed to the new major Alpine oil discovery on Alaska state lands. "It was developed without construction of permanent roads and has had a tiny impact on the surrounding land. It represents the best of the new available technologies and demonstrates that the industry can explore for oil and gas without damaging the Alaskan tundra," API said. "Our industry remains committed to protecting environment while providing opportunities for economic growth and securing domestic energy supplies."

Environmental groups said the report confirms that even with new technology the environmental problems associated with North Slope oil exploration outweigh any economic benefits to consumers or the native population.

"Despite the enormous ongoing impacts of drilling on the North Slope, drilling proponents regularly defend 'new technologies'—particularly ice roads and directional drilling—for drilling in the Arctic. Those promises are empty: today's report and any comprehensive look at the industry's record helps reinforce the point that that there is no way to drill in the Arctic National Wildlife Refuge without fundamentally spoiling its wilderness character," the Wilderness Society said. "These technologies are simply not what they are cracked up to be: they are not new, they are expensive and rarely used, and they do not solve the fundamental problems inherent in drilling on the North Slope.

"As Congress prepares to consider whether to open the biological heart of (ANWR) to oil drilling, it must carefully consider the damage that has already been done in this region."