Climate change vs. responsible development at Senate ANWR hearing

  • The Senate Energy and Natural Resources Committee held a marathon hearing on Nov. 2 on the pros and cons of opening the coastal plain of the Arctic National Wildlife Refuge to oil development. From left to right at a press conference following the hearing are Matthew Rexford, a member of the Voice of the Arctic Iñupiat, committee chair Sen. Lisa Murkowski, Alaska Gov. Bill Walker and Lt. Gov. Byron Mallott. (Image via screencap)

The U.S. Senate committee hearing held Thursday on the merits of opening part of the Arctic National Wildlife Refuge to the oil industry mostly featured rehashed arguments on both sides of the debate but also highlighted the some of the dichotomies and contradictions underlying the debate.

Sen. Lisa Murkowski, who chairs the Energy and Natural Resources Committee and called the meeting in her committee, said to open the hearing that the majority of Alaskans would not support opening the ANWR coastal plain to oil activity if they did not feel it could be done in a responsible manner.

“What I know is no one cares more about Alaska than those of us who live and work and raise our families there,” Murkowski said. “We love our state; we respect the land; we would never risk its future for the sake of development.”

Sen. Dan Sullivan, who testified as a witness, was more direct in echoing her sentiment.

“With all due respect to my colleagues here today there are three people in Congress who care more about Alaska’s environment than anyone else in the entire body: Sen. Murkowski, Congressman (Don) Young and myself,” Sullivan said.

Young also testified and did so in his usual attention-grabbing fashion. In attempting to illustrate the size of the ANWR coastal plain, or 1002 area, Young did not put a pen to paper, but rather to the tip of his nose.

“I represent Alaska,” he said before putting the ink on his face. “This little dot on my nose — I weigh 225 pounds — this little dot is what we’re talking about, the 1002 area.”

The ANWR coastal plain, which got its moniker as the 1002 area via the section it is defined in the 1980 Alaska National Interest Lands Conservation Act that established the refuge, is approximately 1.5 million acres of the 19 million-acre refuge. Alaska is about 375 million acres.

Young also said the refuge probably holds 20 billion barrels of oil, a figure he cited in early October when the House passed the fiscal year 2018 budget resolution Republicans are attempting to use as a vehicle in conjunction with President Donald Trump’s tax reform proposal to open the area through reconciliation, which requires only 51 votes to pass.

The most recent U.S. Geological Survey assessment of the oil and gas underneath the coastal plain, done in 1998, put the mean oil estimate at 10.3 billion barrels for the 1002 area and very nearby state territory. The USGS additionally estimated there is a 5 percent probability the area holds nearly 16 billion barrels of technically recoverable oil.

Young’s spokesman Matt Shuckerow said in a prior interview that the congressman was speaking in general terms and using round numbers when referencing the area’s oil potential.

House Republicans inserted a provision into the resolution directing the House Natural Resources Committee to come up with ways to generate at least $5 billion in new revenue over the next 10 years. Similarly, the Senate budget orders the Energy and Natural Resources Committee, chaired by Sen. Lisa Murkowski, to add $1 billion to the Treasury in the coming decade.

Revenue from oil and gas lease sales for the ANWR coastal plain is seen as a way to meet those instructions, and using prospective ANWR revenue to in theory help reduce the budget deficit allows the controversial action to be taken with a simple majority vote — all that is needed for budget matters in Congress.

The aforementioned members of Alaska’s congressional delegation, along with Gov. Bill Walker and Lt. Gov. Byron Mallott, who also testified, emphasized the need for the economic opportunities and revenues industry activity in the coastal plain could provide their state.

Walker said Alaska’s budget deficits that have averaged about $3 billion in recent years due in part to low oil prices and North Slope production that is about one-quarter of its peak have forced him “to do things I hope no future governor ever has to do,” such as cut budgets for public safety.

He also stressed the need for Alaska to be able to access and develop the resources inside its borders, the revenue from which was seen as the primary means for the state to pay for itself when Alaska joined the Union.

“All I’m asking for is that we get the deal we made in 1959 under the statehood compact. The great compromise that was made under ANILCA was that the 1002 was set aside for further development. That’s what the deal was,” Walker said to the Senate committee. “All we’re asking for is the benefits of the deal that was made long ago.”

Alaska’s economic situation is a concern, said Sen. Maria Cantwell, the ranking Democrat on the committee, but the state would be better served focusing on why a gasline project has not been built rather than trying to get ANWR opened.

Sullivan contended that opponents to opening the coastal plain who cite the need to protect the fragile Arctic ecosystem need to look at it in a broader context.

“When you disallow investment in Alaska, a place with the highest environmental standards in the world, you don’t end up protecting the global environment. What you do is you end up driving capital and investment to jurisdictions with much less environmental standards, or in some cases, no environmental standards,” Sullivan argued.

He added that some of those countries are also geopolitical adversaries of the U.S., namely Russia and Venezuela.

And while Democrats on the committee, such as Cantwell and Minnesota Sen. Al Franken characterize the ANWR debate as rehashing an old issue, Sullivan said the debate actually hasn’t kept up with technological advancements in the industry.

Republicans are asking to permanently develop just a 2,000-acre footprint in the 1.5 million-acre 1002 area in the latest legislation as horizontal drilling and rigs with a longer reach combined with better 3D seismic data allowing for more targeted exploration have drastically shrunk the area needed to extract oil.

Cantwell, who has been a cross-aisle ally of Murkowski’s on other energy matters, noted the hearing was about prospective legislation that wasn’t yet before the committee, despite the fact a bill markup hearing is scheduled for next week.

“We’re here today because someone has come up with the ludicrous idea that we can pass a tax reform bill that raises the deficit, that increases our taxes and that will take a sliver out of a wildlife refuge to do it,” Cantwell sniped. “I almost want to call this ‘caribou for millionaires’ because it’s the most ridiculous idea I’ve heard as it relates to meeting the tax reform agenda.”

Walker and Mallott said the state’s share of ANWR revenue would not only ease general budget burdens but also could be used to help relocate Western Alaska villages and offset other climate change impacts.

The Alaska Statehood Act allocates 90 percent of royalty revenue from production to the state government, but that could change in the legislation to open it to drilling, if it is to pass. The state production tax would also apply.

“We cannot (fight the affects of climate change) without the financial resources to do it,” Walker said. “I don’t see it coming from Washington (D.C.) to relocate 12 villages. We need to look at how we can bring in the revenue. The only way we can do it is with our resources. Alaska is unique because the beauty above the ground is unparalleled. The beauty below the ground is unparalleled as well. The beauty below the ground is our resources that we need to develop responsibly.”

Franken, of Minnesota, questioned Mallott as to whether or not he sees any irony in justifying more oil production to combat the challenges of climate change.

The lieutenant governor said he doesn’t see it as ironic because it is simply recognizing Alaska’s current situation.

“It will take decades for us to withdraw from reliance on a petroleum-based economy and for us in the meantime to rely on sources other than our own raises national security issues, economic issues; it raises issues that impact us in Alaska very directly,” Mallott responded.

Samuel Alexander, a member of the Gwich’in Nation pointed out what he sees as an irony in the broader resource development debate.

Gwich’in tribes inhabit the upper Yukon River basin in Northeastern Alaska and the Northern Yukon Territory of Canada. They have largely opposed drilling in the coastal plain because it is the calving grounds for the Porcupine caribou herd that is still one of their primary food sources.

Alexander said proponents of drilling in the refuge see it as a way to support economic development, which would allow some to eat better food and lead healthier lives. However, doing so would destroy that very situation for the Gwich’in Tribes that already have food security via the Porcupine caribou, he asserted.

“What is all this drilling for? So we can have money to do what?” Alexander questioned. “To live like Gwich’in? We already live like Gwich’in. We’re not trying to change anything in that regard.”

He also stressed the Alaska Native corporations in support of opening the coastal plain to industry activity do not speak for the state’s Tribes.

“Alaska Native corporations are not Tribes. Their purpose is profit. Our purpose as Gwich’in is to protect our traditional way of life and to live that traditional way of life in an honorable way,” Alexander testified.

Aaron Schutt, CEO of Doyon Ltd., the Native regional corporation which covers the upper Yukon area, testified in support of drilling as did, Matthew Rexford, president of Kaktovik Inupiat Corp., the Native village corporation for Kaktovik, the only community in the 1002 area.

The only exploration well drilled in ANWR was drilled on KIC in-holdings in the refuge by Chevron and BP during the winter of 1985-86. The findings from that well remain confidential.

Rexford said property taxes paid by the oil industry have helped develop the basic public infrastructure in the North Slope Borough that much of the country takes for granted. Drilling in ANWR would continue to support the North Slope communities that have benefited from development on state lands, according to Rexford.

Mallott and others said bowing to the unproven fears that oil activity would ruin the refuge ignores what has happened on state lands not far to west for more than 40 years.

Former University of Alaska Professor and wildlife biologist Matthew Cronin said caribou continue to use Slope oilfields as habitat and development techniques such as elevating pipelines to allow the animals to pass underneath has limited the industry’s impact on migratory patterns.

“I think oil and gas development can be done using proven mitigation measures. I believe it can be done with minimal impacts to caribou as long as mitigation measures are implemented,” Cronin said. “You simply limit activities during the calving period.”

Principal Deputy Director of the U.S. Fish and Wildlife Service Greg Sheehan, the agency that manages the refuge, noted that if Congress opens ANWR to industry the country’s environmental review laws would still apply even to establish a leasing plan that would well proceed actual drilling.

“We would expect that probably lease sales, perhaps two, would occur, with drilling being as potentially far out as seven to 10 years,” Sheehan estimated.

Murkowski said the long lead-time means action should be taken now.

“It’s like the old saying, we say it a lot around here: the best time to plant a tree was 20 years ago. The second-best time is now and we need to take that first step today so that we can realize the benefits going forward,” she said.

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.

Updated: 
11/08/2017 - 9:36am

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