The Last Refuge

Arctic National Wildlife Refuge

Caribou Migration, Drilling Plan Symbolic of Battle Between Oil and Environment 

ZACHARY COILE San Francisco Chronicle 28aug2005

[Two other parts of this 3-part series below]

Arctic National Wildlife Refuge, — Thousands of caribou arrived again this summer at their calving grounds on the coastal plain of the Arctic National Wildlife Refuge, a trip they have made for generations.

But will they keep coming when the oil rigs arrive?

Alaska — Across the rushing water of the glacier-fed Kongakut River, still partly coated in ice, the caribou lift their heads and take a momentary break from feeding on a hillside of golden sedges.

They are all bulls, 16 tan and cream-colored males with large antlers still covered in chocolate-tinted velvet. They start to move, but slowly. They are following tracks in the tundra carved weeks earlier by caribou cows that began arriving by the hundreds in late May when the snow was still knee-deep in places.

Twenty miles north, the river flows out onto the Arctic National Wildlife Refuge's coastal plain, a flat and boggy landscape of permafrost and river deltas on the northern tip of Alaska that has become the most controversial terrain in American politics.

After a quarter-century battle between environmentalists and oil interests, the Republican-led Congress is poised to approve a budget bill as soon as next month that would open 2,300 square miles of the refuge's coastal plain to oil drilling. U.S. geologists believe the area contains one of the America's largest untapped oil fields, which supporters of drilling say could lessen reliance on foreign oil.

With oil prices soaring and worldwide demand growing, the urge to drill in the refuge has accelerated, but other forces are just as intense, particularly the cash-strapped state of Alaska's need for the money that would flow along with the oil.

On the ground, however, it becomes clear why the refuge has been a top priority for environmentalists for so long, why the battle in Washington has been fought so hard. Here above the Arctic Circle, in an untouched vastness the size of South Carolina, lies one of the last truly wild places in North America. It is a land so large and open that the caribou, 123,000 strong, migrate up to 3,000 miles each year undisturbed except by natural predators and Native American hunters.

The amount of oil that could be gained, environmentalists say, isn't worth the loss of wilderness.

"This is one of the last places on earth where you can see large mammal migrations like this," said Michael Engelhard, an author and wilderness guide, who had just watched a group of nearly 1,000 caribou splash across the Kongakut while he rafted down the river.

"It looked like what the herds of bison must have looked like 200 years ago."

In the long debate over drilling, the caribou, known as the Porcupine herd, have become the symbol for the potential environmental loss. The coastal plain, one of the last areas of Alaska's coastline on the Arctic Ocean still off-limits to drilling, is the traditional calving ground of the herd.

Advocates of drilling, including President Bush, say the plain can be developed without harming the herd. Wilderness enthusiasts and many biologists say the construction of oil wells and pipelines on the plain threatens one of the most epic migrations of animals anywhere in the world.

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From pilot Kirk Sweetsir's Cessna, 500 feet above the Aichilik River, the caribou look like armies of ants, marching in tidy rows along icy river banks toward the Beaufort Sea. It's late June, and the first large groups of the Porcupine herd are fanning out across the thawing tundra and wetlands of the coastal plain. The refuge is so remote that only about 1,000 visitors come to camp and raft each year. As a result, it has remained wild, which was gruesomely demonstrated last month when a grizzly bear attacked and killed a couple from Anchorage at their campsite along the Hulahula River.

President Dwight Eisenhower created the refuge in 1960, and President Jimmy Carter signed a law in 1980 doubling its size to 19 million acres and designating most of it as wilderness. But lawmakers, who were heavily lobbied by oil companies and worried about a repeat of the 1973 oil embargo, left the 1.5 million-acre coastal plain as a study area — a legal gray area that would allow it to be drilled or set aside as wilderness in the future.

The coastal plain covers less than 10 percent of the refuge, but biologically it's the richest part because the remaining 90 percent is largely covered by the steeply sloped snowcapped mountains of the Brooks Range.

In winter, the coastal plain is a desolate place blanketed in thick sheets of snow and ice, with gusty winds and temperatures that can drop to 80 degrees below zero. The sun does not rise for 56 straight days. Even the refuge's most hardy residents — polar bears — spend most of the winter inside their dens.

But come spring, the snow begins to melt and reveals an emerald green landscape of river deltas and lake-size pools that draw millions of migratory birds from around the world, including Arctic terns from Antarctica, buff- breasted sandpipers from Argentina, dunlins from the coast of China, and tundra swans from the Chesapeake Bay.

Each spring the caribou of the Porcupine herd leave their wintering grounds south of the Brooks Range and in Canada's Yukon Territory and begin the long journey north. A portion of the herd stops at the Ivvavik National Park, a section of coastal plain set aside as a calving area by the Canadian government. The rest of the herd heads west toward the Arctic refuge's coastal plain. Caribou can cover 10 to 30 miles in a single day and over the course of a year can travel up to 3,000 miles — the longest migration by any terrestrial mammal.

The instinct of the caribou to reach the coastal plain to calve is so strong that they will trudge through deep snow on mountain passes and cross icy rivers, with the buoyant hollow hairs of their winter coats keeping them afloat and broad hooves allowing the animals to swim as fast as 6 miles an hour. They paw through snow to find hidden vegetation and sometimes climb wind- swept mountains to find food with less snow cover.

The herd is driven toward the coastal plain in part to escape harassment by mosquitoes and oestrid flies, which lay their larvae inside the animals' nostrils. As temperatures heat up in July and early August, the caribou move closer to the coast, where gusty winds and cooler weather provide some relief from insects.

Proponents of drilling insist the caribou's migration wouldn't be affected by oil operations. The proposed legislation would restrict oil exploration to the winter months, when the caribou have left for their winter range, and limit the surface area for oil wells and drill pads.

But government studies and interviews with caribou biologists suggest that advocates of drilling may be underestimating the potential effects on the Porcupine herd.

After a series of tough winters and poor reproductive cycles, the herd's population dropped from a high of about 178,000 in 1989 to 123,000 in the most recent census in 2001.

"The population of this herd is essentially flat," said Ray Cameron, a wildlife biologist at the University of Alaska at Fairbanks, who spent two decades studying caribou for the Alaska Department of Fish and Game. "Consequently, it would take less of an impact to put the Porcupine caribou herd into decline — and that has potential impacts on users of caribou."

The Inupiat Eskimo of the north coast, who generally support drilling in the refuge, and the Gwich'in Indians of interior Alaska and northwest Canada, who oppose drilling, rely on the Porcupine herd as a major food source and view their subsistence hunting as essential to preserving their native culture.

Clancy Crawford, a wind-burned guide who has led trips into the refuge since the 1970s, has been watching the caribou's migration this summer from his camp along the Kongakut River. Crawford said the caribou have been drawn by the cotton grass and the lime-green shoots of willow trees.

"They seem really enthusiastic about the new growth on the willows," Crawford said. "The new growth is the most concentrated energy a plant puts out every year."

This nutrient-rich vegetation is what attracts the caribou to the coastal plain. Lactating caribou cows need twice their usual energy intake, and the herd's survival depends on their ability to produce enough milk for calves, which must grow quickly to make the long migration south in the fall.

New research by scientists at the University of Alaska at Fairbanks suggests that caribou are so attuned to their nutritional needs that each year females in the herd calve within 6 miles of the most ideal spot, based on forage quality, of the entire 110-mile long coastal plain.

"If you move these animals, you put them into different places on earth where the amount of food available to them and the risk of predation changes," said Brad Griffith, a caribou expert with the U.S. Geological Survey's Alaska Cooperative Fish and Wildlife Research Unit.

By migrating to the coastal plain to give birth, caribou lower the odds of exposing calves to predators such as wolves and grizzly bears, which tend to hunt closer to their dens in the foothills of the Brooks Range. The herd also deters some predators by their sheer numbers, a phenomenon called predator swamping.

Along the Kongakut, in an area called "Caribou Pass," 600 caribou rested and grazed close together on a steep slope covered in cotton grass, demonstrating this safety-in-numbers strategy. The newborn calves, which are particularly vulnerable to airborne attacks from golden eagles, rarely strayed from beneath the gangly legs of their mothers.

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A central argument by supporters of oil development in the refuge is that drilling has had little impact on the Central Arctic herd near Prudhoe Bay to the west of the refuge. Oil workers describe watching hundreds of caribou cross beneath elevated pipelines. Advocates of drilling show photos of caribou standing near pipelines or on gravel roads that may offer some relief from the swarms of mosquitoes and other insects. In 1991, President George H.W. Bush said of the trans-Alaska oil pipeline, "The caribou love it. They rub against it and they have babies. There are more caribou in Alaska than you can shake a stick at."

The Central Arctic herd has been exposed to oil activity and the herd has grown in size — from about 5,000 to more than 30,000 animals since major oil development began in the late 1970s — which some cite as proof that oil development has little or no impact on caribou.

But many wildlife biologists say the argument has been oversimplified. Although the same animals, the two herds are very different. The Porcupine herd migrates over a much larger range, an arduous journey that takes its toll on the herd. Scientists also believe the Central Artic herd, a much smaller herd, has access to several acceptable calving grounds. The Porcupine herd has fewer alternatives and the herd has suffered declines in years when deep snow cover made it difficult to reach its preferred calving grounds on Alaska's coastal plain.

Some biologists suggest a major reason why the Central Arctic herd has flourished is because as much as three-quarters of the area where it calves has virtually no oil activity.

"Yes, the herd has grown, but only 25 percent has been affected," said Griffith, an associate research professor at the University of Alaska at Fairbanks. "The fact that it has grown does not mean there is no effect. It means that the effect wasn't sufficient to keep it from growing at all."

Ground observations of the Central Arctic herd in the nearby Kuparuk oil fields have found that over time the caribou increasingly avoid areas of intense activity - especially during the sensitive calving period — and shift into areas with fewer roads and pipelines.

A survey of radio-collared females between 1980 and 1993 showed that the caribou reduced their use of the more heavily developed Prudhoe Bay oil fields by 78 percent, and their east-west movements declined by 90 percent — a sign oil activity can impact a herd's movements.

"As surface development continues, the caribou are effectively crowded out of these areas," said Cameron, the University of Alaska professor, who has studied the effects of roads and pipelines on the Central Arctic herd. "They've decided it's not the place to be."

Some scientific research has suggested less of an effect. An aerial survey of caribou in the Milne Point oil field west of Prudhoe Bay from 1991 to 2001, taken during the calving period, found the animals were no less dense in an area within 1 mile of a major road than they had been before the road was developed.

Matt Cronin, a research associate professor at the University of Alaska at Fairbanks, whose research was financed by oil firms, said his study showed that caribou may be more flexible in coping with roads and pipelines. He believes better-designed equipment — such as pipelines raised a minimum of 5 feet to allow caribou to pass beneath — has helped the animals adjust.

"Generally, if they want to cross a barrier, they will cross it," Cronin said. "It's a consideration, but I don't think they see it as a brick wall."

Cameron, who analyzed the impact of oil development on caribou for a 2003 National Research Council study, said it's difficult to determine precisely how much drilling could affect the Porcupine herd. Much of the information about the location of oil deposits based on seismic testing and test wells has not been publicly released, so scientists don't know how much of the calving grounds could be drilled.

"We just know from Prudhoe Bay that there is a measurable impact on caribou," he said.

Drilling proponents in Congress have proposed limiting the surface area for oil wells and drill pads to only 2,000 acres, about twice the size of Golden Gate Park in San Francisco.

"We can now reach all of (the refuge's) oil by drilling on just 2,000 acres," President Bush said in a speech in March. "By applying the most innovative environmental practices, we can carry out the project with almost no impact on land or local wildlife."

But wildlife biologists point out that the actual footprint would look more like a spider web, with miles of pipeline connecting each drilling well to the trans-Alaska pipeline in Prudhoe Bay to ship the oil to market.

"You hear arguments to the effect of, well, exploration will be conducted in the winter, when they aren't there. Exploration isn't the issue - it's production. And production facilities will be there 12 months out of the year, " said Griffith, the lead author of a 2002 U.S. Geological Survey study on oil drilling and the Porcupine herd.

A model he developed with other biologists predicted that the caribou would avoid heavily developed parts of the coastal plain — called the "1002 area" — and shift their calving grounds to the east, closer to the Canadian border. According to the model, shifting the herd's current calving grounds by an average of 17 miles would be enough to halt the growth of the herd.

"If it winds up looking like Kuparuk (west of Prudhoe Bay) and if the entire 1002 area is ultimately developed ... then we would ultimately expect there to be shifts to the east — with costs in calf survival," Griffith said. "But that's going to take a long time."

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Flying low across the coastal plain, the landscape of the refuge looks like a geometric puzzle of thermokarst lakes and brown and green polygons, formed by the seasonal freeze-thaw cycles. It's a typical summer day on the plain: A light rain is falling, the wind is gusting and the fog is so dense it covers the jagged peaks of the Romanzof Mountains to the south. Much of the coastal plain is too flooded to safely land so Sweetsir circles his Cessna and finds a narrow opening on a barrier island 50 feet from the coast, steering to avoid piles of driftwood from the Mackenzie River.

Sweetsir, who once led scientific expeditions in Greenland, points out tracks in the sand of an arctic fox and watches for polar bears, which have been seen in the area recently. The refuge is the only conservation area for polar bears in the country, and the coastal plain is the most heavily used land-denning area by polar bears in Alaska.

A female caribou with a small calf between her legs sits at the edge of the refuge's coastal plain and the Beaufort Sea. The cow stares for a minute and then sprints away. Even a slight disturbance has spooked her.

But Cronin, who has advised oil firms on ways to protect wildlife, said much can be done to allow the caribou and the oil rigs to share the same space.

"One could minimize — and I didn't say eliminate — impacts with proper regulations and mitigations," Cronin said.

"The calving period is only about three weeks at the end of May and early June. Most of the disturbance is because of activity associated with roads — traffic, people running around," he said. "What if we eliminated activity during the three-week period around calving, including vehicle traffic, air traffic, large-scale construction projects? ... In other words, you simply remove the source of disturbance."

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Politics and nature in the Arctic 

Here are some key dates in the political life of the Arctic National Wildlife Refuge:

1960
One year after Alaska statehood, the Eisenhower administration creates the Arctic National Wildlife Range when Congress is unable to agree on a plan. The area covers almost 9 million acres of coastal plain and mountains adjacent to Canada.

1978-79
Congress designates the range a federal wilderness area but also requires evaluation of its oil and gas potential.

1980
After a lengthy battle over whether more land should be preserved or opened to development, President Jimmy Carter signs a law renaming the area the Arctic National Wildlife Refuge and more than doubling its size. The new law also directs the Interior Department to assess oil potential in 1.5 million acres of the coastal plain area.

1987
A federal environmental review says oil drilling in the coastal plain would affect the habitat of caribou, musk oxen and other species. The Reagan administration recommends proceeding with an oil and gas leasing program designed to protect the environment.

1989
The Exxon Valdez tanker spill halts congressional efforts to consider whether to allow drilling.

1991
The Senate Energy Committee votes to allow oil and gas leasing, but the plan is dropped after a filibuster by Senate Democrats.

1995
President Bill Clinton vetoes a federal budget bill that includes language to open the refuge for oil and gas drilling.

1998
The U.S. Geological Survey estimates that the refuge's coastal plain contains 6 billion to 16 billion barrels of recoverable oil.

2001
President Bush unveils an energy plan calling for drilling in the refuge. House approves an energy bill that authorizes drilling.

2002
A Senate energy bill dies after a coalition of moderate Republicans and Democrats filibuster a drilling proposal.

March 2003
Senate Republicans insert a provision into the budget resolution that would allow drilling, but the full Senate kills it, 52-48.

September 2003
The Government Accountability Office, the investigative arm of Congress, reports that the Fish and Wildlife Service lacks trained staff and resources to properly monitor the three dozen wildlife refuges that already allow oil and gas drilling.

November 2004
Senate Republicans say election gains mean they may have the votes in the next Congress to approve oil drilling in the refuge.

March 10, 2005
The Senate Budget Committee includes refuge drilling in the 2006 fiscal year budget resolution.

March 14, 2005
The Congressional Budget Office estimates that oil and gas drilling leases will generate $5 billion in government revenue over a decade, with proceeds split between the federal government and Alaska. The office estimates 6 billion barrels of oil are economically recoverable with prices at or above $35 a barrel.

March 16, 2005
The Senate votes 51-49 to keep the drilling provision in a must-pass federal budget resolution. Republican leaders inserted the provision in the resolution because budget bills cannot be filibustered under Senate rules and require only a simple majority for passage.

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Drilling in the refuge After years of debate, Congress is poised next month to approve oil drilling in the Arctic National Wildlife Refuge. To get beyond the political rhetoric, The Chronicle sent staff writer Zachary Coile to America's most contentious piece of pristine land.

Today

On the ground with the caribou.

Monday

Alaska's dependence on oil.

Tuesday

How much oil will the refuge produce?

source: http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/08/28/MNGR4EDJGT1.DTL&type=printable 30aug2005

Arctic Oil:
Oil is the Lifeblood of Alaska

. . .with residents ready to drill Inhabitants of the Last Frontier see economic opportunity
— and with Bush and the Republicans in power, timing is right 

ZACHARY COILE / San Francisco Chronicle 29aug2005

Fairbanks, Alaska — When Alaska Gov. Frank Murkowski took office in 2003 facing a $1 billion budget deficit, he made clear how he would pull this resource-rich state out of its fiscal crisis.

"What is our plan for increasing revenue?" Murkowski said in his first address to the state Legislature. "In a single word — oil."

The newly elected Republican governor said Alaska needed to drill in the Arctic National Wildlife Refuge and elsewhere to make up for declining revenues from Prudhoe Bay, with oil flowing at only half-capacity through the trans-Alaska pipeline.

This fall, Murkowski and other Alaskan officials are expected to get their wish: Congress appears likely to approve a budget bill that would allow drilling on the 1.5 million-acre coastal plain of the refuge.

While environmentalists have pledged to fight it, budget bills can't be filibustered and an enlarged Republican majority in the U.S. Senate has given proponents confidence it will pass this year.

In Congress, the issue has been cast by supporters as an effort to lessen the United States' reliance on foreign oil. The debate pits the nation's energy needs against protection of one of America's last truly wild places.

But in Alaska, what's driving the campaign to drill in the refuge is the state's dependence on oil for its economic survival, and its fears of what will happen as the state's largest oil field at Prudhoe Bay taps out.

"Oil is the thing that keeps us going in Alaska," explained Jeffrey John, 49, a Gwich'in tribal member from Fort Yukon, who has spent years working pipeline repair jobs on the North Slope.

"We need oil to keep everything running — to keep the planes running, to keep businesses running in the state of Alaska," he said. "If we don't do that, our economy will go down, and we'll have a hard time getting jobs."

Since the first major discovery of oil in Prudhoe Bay in 1968, the extent of the state's reliance on oil has become evident:

• Taxes and royalties from oil production now account for 87 percent of revenues to the state's general fund, paying for everything from schools to roads.
• Oil production brings in more revenue for Alaska than all of its other major industries — fishing, mining, timber, tourism and air cargo — combined.
• Oil revenues allow Alaskans to pay no state income tax, and every man, woman and child who lives there collects an annual Permanent Fund dividend check based on oil royalties, which last year totaled $919.84.
• Oil companies are the state's largest corporate donors to charities, funding everything from college scholarships, Boys and Girls Clubs, United Way programs, and performances of the Nutcracker ballet in Anchorage.

Around the nation, a slight majority of Americans opposes drilling, according to opinion polls. A Gallup survey in March, for example, found that 53 percent of people surveyed opposed drilling in the Arctic National Wildlife Refuge, while 42 percent supported it.

But in Alaska, where residents have reaped the economic benefits of drilling, polls over the last two decades have shown more than 70 percent favor drilling in the coastal plain of the 19 million-acre refuge, which covers the northeast corner of the state.

"There is this overwhelming perception that if the oil runs out and if we don't find other sources of oil up here that basically the Alaskan economy is toast," said Ivan Moore, a veteran Anchorage-based pollster.

"The whole economy is based on oil, and if the oil stopped ... there would be a massive decline in jobs, and people would be fighting their way to get on airplanes to get out."

The only thing Alaska relies more on than oil is federal spending. The state gets back $2 for every dollar it sends to Washington. Heavy spending on military, land management and services for Alaska natives means that one out of every three jobs is dependent on federal largesse.

For more than a decade, Alaskan officials have faced a worrisome trend. Oil production from Prudhoe Bay peaked in 1988 — at just more than 2 million barrels a day — and has since declined by almost 50 percent.

The state's Department of Revenue predicts that revenues from oil production will fall from $2.3 billion in 2004 to $1.3 billion in 2015, but state expenditures will continue to rise. Without new oil supplies, Alaska officials have warned they will have to raise taxes or slash government spending in the future.

"The state is not broke, but sooner or later we are going to have a real cash flow problem," said Matt Berman, an economics professor at the Institute of Social and Economic Research at the University of Alaska Anchorage.

"Alaskans eventually are going to have to start paying taxes," he said. "We would already be facing a fiscal problem if it hadn't been for high oil prices. It's put off the inevitable day of reckoning."

State officials also are nervous that the aging 800-mile trans-Alaska pipeline — which sparked the state's oil boom when it was built in the late 1970s — will become too costly to operate if Alaska can't find new sources of oil.

"The pipeline is running about half as much oil through now as it did when it first opened," said Steve Thompson, the mayor of Fairbanks, Alaska's northernmost city and a pipeline construction hub. By drilling in the refuge, "I see the life of the oil line being extended for a lot more years."

If Congress decides to open the refuge this fall, the Interior Department could put oil leases out to bid as soon as next year. Alaska would get half of the revenue of the leases — an estimated $2.5 billion for the state over five years, according to the Congressional Budget Office. Drilling would begin within a decade.

Alaskan officials — led by the state's powerful and senior congressional delegation — have been lobbying to open the refuge since before 1980, when President Jimmy Carter doubled its size and set most of its desolate landscape aside as wilderness.

At the time, oil firms exploring further west along Alaska's North Slope were convinced there were major oil deposits in the refuge. Lawmakers were persuaded to allow the 1.5 million-acre coastal plain — the refuge's most vibrant area and part of that North Slope to the Arctic Ocean — to be studied for its oil potential and its wilderness values.

Alaska lawmakers nearly succeeded in opening the refuge in the 1980s until the oil tanker, Exxon Valdez, struck Bligh Reef in 1989, fouling Prince William Sound. The images of oil-slicked birds and sea otters raised concerns about the environmental toll of the state's oil industry.

Congress last passed a bill approving drilling in the refuge in 1995, but, under pressure from environmental groups, President Bill Clinton vetoed the measure.

Native Inupiat leaders have played a key role in pushing to open the refuge. The native-owned Arctic Slope Regional Corp. has 92,000 acres of the land in the coastal plain.

The corporation has already drilled an exploratory test well on its land — in partnership with ChevronTexaco and BP — and could reap a windfall if the refuge is opened. Oil revenues from Prudhoe Bay have helped the Inupiat build homes, schools and health clinics.

"Our lives have changed," Oliver Leavitt, vice president of Arctic Slope Regional Corporation, said during a lobbying trip to Washington in March before a key Senate vote on the refuge. "We lived in Third World conditions until Prudhoe Bay was discovered, and now we live a lot better."

While oil firms have been lobbying to access the refuge for years, the two largest oil producers in Alaska, ConocoPhillips and BP, recently dropped out of Arctic Power, the group that has led the campaign to open the refuge. Both companies were under pressure from shareholders and environmental groups and feared being seen as spearheading efforts to drill in the refuge.

"Our position is that it's a decision for the people of the United States, " said Darren Beaudo, BP's director of public affairs in Alaska. "And until and if it's opened, we're just focusing on business opportunities that are available to us — and that is not available to us."

However, state and federal officials insist the oil companies have expressed interest in bidding on oil and gas leases in the refuge. Shell recently bid $44 million for nearby offshore leases in the Beaufort Sea and many expect the offshore oil could eventually be shipped through pipelines built along the refuge's coastal plain.

Support for drilling in the refuge is so strong among Alaskans that politicians of both parties generally back it. In the hard-fought 2004 U.S. Senate race, former Gov. Tony Knowles, a Democrat, jockeyed with Republican Sen. Lisa Murkowski — the governor's daughter — over who was more pro- drilling.

"It's the kiss of death up here to be a major political figure and to be anti-(drilling)," said the pollster Moore. "It's not possible to win."

As oil prices rise around the world and fears of Mideast terrorism increase, Alaska's boosters have found the political climate in Washington has finally tilted their way. A Republican president — who came from the Texas oil industry — championing new domestic oil production and a bigger margin for Republicans in Congress have provided their best shot at opening the refuge.

Proponents of drilling also enlisted the political muscle of labor unions. The International Brotherhood of Teamsters was the first major union to break from the mostly Democratic labor movement and lobby vigorously for drilling, saying its members would benefit from the jobs created by oil development.

An analysis by the Anchorage-based McDowell Group, sponsored by business groups supporting drilling, estimated that developing the refuge could create 10,000 jobs in Alaska in the first five years of construction, and 17,000 to 38,000 jobs at peak production. The report also found the state could reap at least $540 million a year in royalties from oil production.

At the Laborers International hall in Fairbanks on a Monday this past June, about 40 union workers in paint-speckled jeans and sweatshirts paced the floor during the 9:30 a.m. work call, hoping to land a coveted seasonal job out on the North Slope. In this blue-collar crowd, it was tough to find anyone who didn't strongly support drilling in the refuge.

"For me, personally it'd be an opportunity to get my hours and retire," said Raudel Limon, 50, a Santa Barbara native, who said workers on the North Slope can make $5,000 to $10,000 a month.

"Most of these jobs on these pipelines you're working 12 hours a day, seven days a week," he said. "That adds up."

Kevin Meenaghan, a 26-year-old Fairbanks native who pours concrete at construction jobs, said he believes opening the refuge could spark a new oil boom for the state. His father left New York in 1978 to work on the oil pipeline, and recently retired from his job as a pump station operator.

"It would be big for Fairbanks," Meenaghan said. "People would be moving in and out. All the stores would be busy. It would trickle down through the economy."

Not all Fairbanks residents, however, agree that drilling in the wildlife refuge — home to caribou, polar bears, musk ox, golden eagles and other species — is a wise idea for Alaska's future. Environmentalists note that 95 percent of the North Slope now is available for current or future development.

"It's a beautiful spot — it would be a shame to destroy it," said Steve Zaber, a cabinetmaker in Fairbanks, who visited the refuge on a recent fishing and hiking trip. "It's ridiculous to try to get the last drop of oil out of the ground."

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DRILLING IN THE REFUGE After years of debate, Congress is poised next month to approve oil drilling in the Arctic National Wildlife Refuge. To get beyond the political rhetoric, The Chronicle sent staff writer Zachary Coile to America's most contentious piece of pristine land. See SFGate.com for Sunday's story.

SUNDAY: On the ground with the caribou.

TODAY: Alaska's dependence on oil.

TUESDAY: How much oil will the refuge produce?

source: http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/08/29/MNGLGEEKSF1.DTL&type=printable 30aug2005

Arctic Oil:
How Much Oil is Anybody's Guess

Depending on who's doing the talking, estimates differ widely on possible yield at Arctic refuge 

ZACHARY COILE / San Francisco Chronicle 30 aug2005

Deadhorse, Alaska — Last in a series.

No one knows how much oil sits beneath the Arctic National Wildlife Refuge.

In the political fight in Washington, with Congress expected to vote next month to allow drilling in the refuge, advocates on both sides cite the same source for their arguments: an assessment of oil in the refuge by the U.S. Geological Survey, first published in 1987 and updated in 1998.

Proponents of drilling cite estimates as high as 16 billion barrels of oil, even though geologists say the number is unrealistic. Opponents say the refuge could contain less than 3 billion barrels of oil, though studies suggest that may be a vast understatement.

"Obviously, partisans — people who are trying to convince you of something — will tend to choose the number that is most effective for their cause," said Jonathan Koomey, a staff scientist at Lawrence Berkeley National Laboratory and a visiting engineering professor at Stanford University, who wrote a report about the various estimates of oil reserves in the refuge.

The truth is that geologists have only a rough idea of how much oil and natural gas may be trapped in pockets beneath the surface of the refuge based on seismic tests and a small amount of exploratory drilling conducted years ago, Koomey said.

"They haven't done the really detailed exploratory drilling that would allow you to really understand the geology and get it down to a fine art," he said. "These estimates are based on some relatively modest experimental drilling done decades ago. ... There is still a lot of uncertainty about what is there."

Regardless of the ultimate amount, all sides in the debate concede one fact: Drilling in the refuge would not end America's long-standing dependence on foreign oil.

According to the latest Energy Information Administration forecast, oil supplies flowing from the refuge — at peak production in 2025 — would lower America's dependence on foreign oil from 70 percent to 66 percent.

Environmentalists say that it's not worth the potential damage to a wildlife refuge that is home to caribou, polars bears and millions of migratory birds.

In Alaska, where oil money fuels the economy and last year produced an annual dividend check of $919.84 for each resident, few have doubts about the amount of oil under the refuge — or the reason to drill for it.

"People say, 'There's no oil up there,' " said Ken Ludy, a land surveyor who was buying supplies at the general store in Deadhorse for a job on Alaska's oil-rich North Slope. "Oil companies spend millions of dollars on research before they invest in a new oil field. Do you think they would drill if they thought there was no oil?"

Advocates argue that even a moderate amount of oil would be worthwhile as world demand jumps and fears intensify that rising demand may outstrip oil supplies.

If the oil were flowing from the refuge at that peak level today, it would account for more than 9 percent of the 9.1 million barrels used every day by Americans to fuel their cars, trucks and SUVs.

However, even if Congress approves drilling this fall, oil would not begin to flow for seven to 10 years, and the oil field would not reach peak production for two decades.

Opponents of drilling are urging the Congress to instead raise fuel- economy standards. The Union of Concerned Scientists estimated that increasing the average fuel economy of cars and light trucks to 36 miles per gallon over the next decade would save at least three times as much oil as would flow from the refuge by 2020.

"This is just based on using technologies that automakers have already developed," said David Friedman, research director for the group's Clean Vehicles program. "It doesn't even tap into hybrids. This is technology that is on the road today."

The last significant exploration on the coastal plain was a test well drilled in 1986 on private land owned by Arctic Slope Regional Corp., a native Inupiat Eskimo company. The corporation and its private sector partners, BP and ChevronTexaco, have not made the results public, saying the information is proprietary.

Federal geologists are basing their estimates mostly on seismic testing of the 1.5 million-acre coastal plain, which is at the northernmost tip of the 19 million-acre refuge.

Their 1998 report offers only broad ranges of how much oil is technically recoverable — accessible using current technology — and how much is economically recoverable — or cost-effective to drill, given the high costs of producing and shipping oil from the North Slope.

Most politicians who favor drilling cite the report's findings about how much oil is technically recoverable: an estimated 5.7 to 16 billion barrels, or a mean figure of 10.4 billion barrels.

But those figures are widely used without a crucial scientific caveat about probabilities. According to the report, there is a 95 percent probability of finding 5.7 billion barrels of technically recoverable oil, but only a 5 percent probability — a 1 in 20 chance — of finding 16 billion barrels. There's a 50 percent chance of finding 10.4 billion barrels.

The figures are also somewhat misleading, Koomey said, because they include not only federal lands of the coastal plain but also adjacent native- owned lands and state lands that could be drilled as part of the project.

Because the geology of the area is still little explored, scientists suggest that a more cautious assessment of oil supplies is appropriate. Under this more cautious approach, the refuge would yield, at prices of $15 to $25 in 1996 dollars, an estimated range of zero to 5.6 billion barrels of economically recoverable oil, Koomey said.

Ken Bird, a USGS geologist in Menlo Park who oversaw the agency's assessment, said the best way for the public and policymakers to understand the estimates would be to look at how much oil would be produced in a cost- effective way at various prices for oil. As oil prices rise, producers can recover more oil by using more expensive methods and still make a profit.

For example, scientists concluded that at a price of $15 a barrel in 1996 (about $18.60 today), a relatively small amount of oil — a mean estimated 1. 1 billion barrels — could be removed cost-effectively from the entire area.

At a price of $20 a barrel in 1996 dollars, the mean estimate rose to 4.9 billion barrels, and at $25 a barrel it jumped to 8 billion barrels. At $40 a barrel in 1996 dollars — or about $50 today — oil firms could produce an estimated 9.3 billion barrels of oil.

The 1998 USGS study did not estimate how much crude oil could be tapped at today's prices, which have soared to more than $60 a barrel. Bird said the report suggested that at higher prices, more oil could be produced, but not necessarily a lot more.

"Once you get above $25 a barrel ... with additional increases in price, you're getting relatively smaller amounts of technically recoverable oil," Bird said.

On its Web site, Arctic Power, the group lobbying to drill in the refuge, points out that Alaska's Prudhoe Bay was once estimated to have similar-size reserves: "Experts said it would produce 8 billion barrels of oil. So far, Prudhoe Bay has produced 14 billion barrels."

But geologists say the key difference is that the refuge has much smaller oil fields, which yield less oil and are more costly areas for oil companies to drill.

"We are estimating that these are going to be modest fields in size. There is nothing like Prudhoe Bay," Bird said. "We think that a half-billion- barrel field or maybe a billion-barrel field is going to be pretty close to the maximum."

The Energy Information Administration, the research arm of the Energy Department, has estimated the refuge, if opened to drilling, could reach peak production of about 876,000 barrels a day by 2025, while worldwide demand for oil now has climbed to 84 million barrels a day.

Others, including Interior Secretary Gale Norton, have more bullishly suggested that peak production could exceed 1.3 million barrels a day.

Bird said the energy administration's estimate was possible, although it might be somewhat optimistic given how long it takes to lease, permit, explore and develop new oil fields.

"You are going to have to find several fields that have to be brought online fairly soon, one after the other, so that their combined production totals up to this 800 million figure," he said.

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Drilling in the refuge After years of debate, Congress is poised next month to approve oil drilling in the Arctic National Wildlife Refuge. To get beyond the political rhetoric, The Chronicle sent staff writer Zachary Coile to America’s most contentious piece of pristine land. See SFGate.com for the other parts.

Sunday

On the ground with the caribou.

Monday

Alaska’s dependence on oil.

Today

How much oil will the refuge produce?

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Comparing estimated peak ANWR production with other sources
    
    U.S. oil production, daily average for 2003* 
    Compared with 2003 production from U.S. oil fields, the Arctic National 
Wildlife Refuge's estimated peak  production would rank fourth in barrels per 
day.
    
    Barrels per day
    
    Gulf of Mexico      1,600,000
    Texas onshore       1,100,000
    Alaskan North Slope   949,000
    Arctic Refuge         876,000
    California            683,000
    Louisiana onshore     244,000
    Oklahoma              178,000
    Wyoming               143,000
    
    U.S. crude oil imports, daily average for 2002*
    The estimated daily peak production from ANWR would rank fifth when 
compared with the average amount imported by the United States from other oil-
producing countries in 2002.
    
    Saudi Arabia        1,520,000
    Canada              1,420,000
    Mexico              1,280,000
    Venezuela           1,200,000
    Arctic Refuge         876,000
    Nigeria               570,000
    Iraq                  440,000
    United Kingdom        410,000
    Norway                340,000
    Angola                320,000
    
    * In each case, the latest year for which figures are available.
    Source: Energy Information Administration, U.S. Department of Energy

source: http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/08/30/MNGR6E17QG73.DTL&type=printable 30aug2005