Alaska dreaming

Oct. 12, 2001
The US Congress is in an Alaska state of mind when it comes to energy policy.

The US Congress is in an Alaska state of mind when it comes to energy policy.

America continues to struggle with its long-term energy intentions. And Alaska, with large petroleum deposits, could offer homegrown solutions. The US could better leverage gas supplies if a new pipeline is built; opening a portion of the coastal plain of the Arctic National Wildlife Refuge could ease dependence on oil imports.

Most Americans don't buy into the radical environmental argument that resurging Middle East conflicts mean America should immediately wean itself from oil this generation. A new industry poll says 61% of the respondents believe the positives of exploration and production in ANWR outweigh the negatives, up from 39% in July.

But beyond the next generation, there are signs American's energy future could be much different. Royal Dutch/Shell Group Chairman Phillip Watts recently told investors that oil companies should prepare for the end of the hydrocarbon age as alternative energies win over consumers in coming decades (OGJ Online, Oct. 4, 2001). Shell plans to spend up to $1 billion in the next 5 years to develop new energy businesses.

Strong homeland energy

Neither politicians nor the public want to think that far ahead.

Both the pipeline project and ANWR are on the table now, and time will tell whether policymakers embrace both or trade one for the other in some political deal.

Congress does want to be seen as strengthening US energy business today.

But the public relations battle is still on. Mainstream environmentalists support the pipeline, because most of the gas shipped would come from already established fields. Producers, particularly large independents that prefer to stay home rather than venture overseas to build reserves, want ANWR opened.

The White House would be happy with both a pipeline and ANWR leasing but knows it's unlikely, although not impossible, both could happen at the same time. Given a choice, ANWR leasing appears to be its favorite for now. Energy Sec. Spencer Abraham and Interior Sec. Gale Norton even ventured into the Teamsters Union headquarters for a press event to hammer home the point that ANWR development translates to more jobs and less reliance on foreign oil.

Shaky arguments

Saying ANWR can create jobs is laudable but may not be a strong enough argument in a Democratic-controlled Senate, even with the backing of some organized labor. That's because the proposed Alaska Highway "southern" gas pipeline route endorsed by the state of Alaska also ostensibly creates jobs. ANWR proponents argue that drilling would lead to more jobs over a longer period of time, but a recent report by the nonpartisan Congressional Research Service strongly suggested that it is very unclear how many direct jobs will be created. An interesting next step might be for a lawmaker to ask a neutral party such as CRS to compare jobs created from building and maintaining a gas line versus opening ANWR.