Maureen Lorenzetti
Washington Editor
WASHINGTON, DC, Mar. 28 -- The public policy spotlight will be on petroleum-rich federal lands in Alaska this spring as Congress decides whether the time is right to open the Arctic National Wildlife Refuge coastal plain to leasing.
Sen. Jeff Bingaman (D-NM), Senate Energy Committee chairman, Mar. 27 asked Interior Secretary Gale Norton to release preliminary results of a US Geological Survey assessment of estimated oil and gas resources in the National Petroleum Reserve-Alaska (NPR-A). USGS latest estimate is due to be released in mid-May and is expected to be higher than earlier calculations.
NPRA, unlike ANWR, is already available to industry for drilling, although its remote location and poor exploration history discouraged some companies from investing there until recently.
But Interior officials say recent successes by Phillips Petroleum Co. and other industry data may encourage future drilling there. When the Bureau of Land Management conducted a lease sale on a portion of the NPR-A in May 1999, industry showed interest, and more lease sales are expected.
"While I understand that USGS policy is not to release data in preliminary form, I also understand that much of this work, including the estimates of technically-recoverable oil and gas resources in the NPR-A, is substantially completed," said Bingaman.
Earlier estimates by USGS showed the northeast portion of the 23-million acre area likely holds 1.8-4.7 billion bbl of recoverable oil.
"This information would be extremely useful to the Senate as we debate the future of the environmentally sensitive coastal plain of the Arctic National Wildlife Refuge," Bingaman noted to Norton in a letter. "Knowing the extent of alternative supplies of oil and gas is of assistance in the debate on whether drilling should be allowed in the Arctic refuge."
New ANWR-related data
Using USGS data, the nonpartisan Congressional Research Service Mar. 12 summarized the probability of the presence and recoverability of oil in the federal 1002 area of ANWR, adjacent state waters, and native lands. At a market price of $24/bbl, USGS said the mean estimate of oil in ANWR, including state and native lands was 7.60 billion bbl. Of that total, 5.24 billion bbl would come from the 1002 coastal plain area, under a 1999 USGS assessment. Another 2.36 billion bbl may also be recovered under adjacent state waters and native lands assuming the same market conditions under a new preliminary estimate released by USGS this month.
Bingaman maintains that policy-makers need the newest information possible on NPR-A and other sources of oil and gas to get a clearer picture of what is already available to industry before opening a portion of ANWR that is ecologically unique.
Senate Democratic leaders who opposed ANWR drilling for environmental reasons say they have enough votes to shut down debate on the issue this spring. A Republican-sponsored House bill passed last August includes an ANWR leasing provision.
A big question remaining for industry and lawmakers from oil-producing states is whether the White House will accept a final energy bill that does not include ANWR. Bush administration officials have offered mixed signals on what President George W. Bush would do under those circumstances. However, some lobbyists predict the president may never see a final bill because the House and Senate may not be able to resolve their differences.
Gas pipeline
One issue that has more support in Congress is a proposal to build a new natural gas line from the North Slope to the Lower 48.
"Clearly, North Slope natural gas can be an important source of energy for our nation, assuming an appropriate transportation system is constructed," Bingaman said in his letter to Norton.
Pending energy legislation before the Senate includes provisions to encourage a massive new pipeline. However, some producers are skeptical it can be built, given that the current bill mandates a more expensive, southern route through Alaska that would be designed to maximize the control the state would have over gas shipments.
The new arctic gas line would be one of the largest construction project ever undertaken and would parallel the oil pipeline to Fairbanks and then the Alaska Highway to British Columbia.
Canadians and North Slope producers favor a shorter, northern route from Prudhoe Bay field east across the Beaufort Sea to the Mackenzie Delta and then south along the Mackenzie Valley.
Other federal prospects
Along with NPR-A and a new gas line, industry still has opportunities in the Lower 48 that could be pursued without having to open ANWR, Bingaman suggested to Interior.
"Similarly, there are 32 million acres of the Outer Continental Shelf off the coasts of Texas, Louisiana, and Mississippi that have been already leased by the government to oil companies for exploration and production that could serve as an important source of energy for our country."
