HOUSE APPROVED ANWR LEASING, NOT DRILLING

The US House of Representatives did not - as has so widely been reported - approve drilling of the Arctic National Wildlife Refuge coastal plain this week.

Aug 6th, 2001

The US House of Representatives did not - as has so widely been reported - approve drilling of the Arctic National Wildlife Refuge coastal plain this week.

It approved oil and gas leasing.

There's a difference, about which the oil and gas industry needs to pay heed.

"House Approves Arctic Drilling," said an Aug. 1 headline on the Washington Post web site over an Associated Press article that reported, "The House voted late Wednesday to allow oil and gas drilling in the Arctic National Wildlife Refuge in Alaska..."

"House OKs bill to drill Arctic reserve," reported CNN's web site.

The Aug. 2 New York Times reported that the House voted "to allow drilling in an Alaskan refuge..."

And so it went-all, technically, wrong.

It is understandable that the general media conflate the terms "leasing" and "drilling."

Leasing is indeed supposed to lead to drilling.

So when a legislative body approves leasing of an area, does it not also, by extension, approve drilling?

Not necessarily.

Producers with federal leases in the US West have learned the hard way that leases do not always convey the right to drill.

In the 1970s, operators acquired leases of federal acreage off the East Coast and were never allowed to drill. The government eventually bought back the leases.

For onshore federal land in the West, leases sometimes contain so many restrictions-including "no surface occupancy" stipulations-that drilling is impossible. And labyrinth of permitting requirements has developed. More drilling plans die within it than ever become rigs making hole.

Onshore and offshore, of course, some leases never lead to drilling because the leaseholders determine that indicates that the effort would be fruitless.

The bill that the House passed this week does nothing to shorten the administrative distance between leasing and drilling in ANWR.

It calls on the secretary of the Interior, for example, "to administer the provisions of this title [involving ANWR leasing] through regulations, lease terms, conditions, restrictions, prohibitions, stipulations, and other provisions that ensure the oil and gas exploration, development, and production activities on the coastal plain will result in no significant adverse effect on fish and wildlife, their habitat, subsistence resources, and the environment..."

Some of that verbiage is leasing boiler-plate. Some of it is political persuasion. All of it is raw meat for environmental lawyers.

Another legal sticking point is the environmental impact statement (EIS) that the Interior secretary must prepare before the first lease sale. The legislation specifies that an April 1987 EIS on the coastal plain fulfills National Environmental Protection Act requirements as they apply to regulations governing a leasing program.

The new EIS would cover everything else. Its sufficiency would become bait for environmental litigation.

Concerning ANWR leasing approval, of course, there's a question much larger than semantic differences between "leasing" and "drilling": Can the provision survive a Senate controlled by Democrats?

The odds are still against it.

House approval nevertheless raises hope. So it's not too soon for the industry to address issues with potential to keep ANWR's coastal plain, even if it is leased, ever from being drilled.

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