U.S. oil and gas companies should support the current effort to open leasing of the Arctic National Wildlife Refuge coastal plain. They should do so even if they lack interest in leases in the area. They should do so even if they think that ANWR leasing is a hopeless cause. They should do so because important principles of public policy are at stake.
Although ANWR, as everyone knows, is the most prospective onshore exploratory frontier in the U.S., many companies have little enthusiasm for exploration there. For small companies, arctic exploration is too expensive. Some companies, having given up hope for ANWR leasing after a Senate filibuster killed debate on the issue in 1989, have committed their budgets and people to other frontiers. And some companies may not think that ANWR prospects are everything they've been touted to be. Furthermore, companies that do want to test the coastal plain resource can rest assured that leases, if they're ever sold, will contain tough, maybe unreasonable, stipulations for environmental protection.
THE ANWR LEGACY
Such is the legacy of past ANWR fights. It means that Republican lawmakers, heady in their first year in control of Congress, may be more eager than industry is to approve ANWR leasing. And there's no assurance that enough lawmakers feel that way to pass a leasing bill, let alone override the presidential veto certain to follow.
Congress has so far prohibited coastal plain leasing solely because environmentalist groups wanted it to. Some of those groups once dismissed the coastal plain as lacking special environmental value. Now they act as though activity on the coastal plain, less than 8%, of ANWR's total area, would spoil the whole refuge.
In fact, drilling and production would occupy very little of the coastal plain, which is mainly an arctic swamp. Activities would not disturb wildlife; indeed, most animals leave the area in winter, when drilling would occur. And the risk of lasting environmental consequence is low. Industry testimony before the Senate Energy Committee this month showed once again how modern technologies are reducing the environmental effects of arctic drilling and production.
The environmental case against leasing of the ANWR coastal plain simply isn't compelling. The economic case for leasing is.
The petroleum resource at ANWR, like all natural resources, represents potential wealth. Left unexplored and undeveloped, it has no value. Unleased, unexplored, and undeveloped, the ANWR petroleum resource creates no jobs, generates no profits, and provides the government no revenues from lease bonuses, royalties, or taxes. In its present state, the ANWR petroleum resource is taxable economic activity explicitly prohibited by Congress.
OBSTRUCTIONIST AGENDA
This is private and national economic interest subordinated to environmental politics, not environmental values. Environmental groups years ago made ANWR leasing the keystone of an obstructionist political agenda, and Congress went along. Environmental reasons have had little to do with the debate because, in fact, there are no good environmental reasons not to lease the coastal plain.
Congress should approve leasing for many reasons. The best and most immediate reason is to repudiate, once and for all, the ability of environmentalist politics to obstruct economic activity at will. Even companies with no plans to explore the ANWR coastal plain should support the principle. Groups able to keep ANWR in irons this long for such meager reasons are groups that threaten everyone.
Copyright 1995 Oil & Gas Journal. All Rights Reserved.
