The Arctic National Wildlife Refuge (ANWR) in Alaska is the
subject of heated debate as some Members of Congress, led by
Senators Frank Murkowski (R-AK) and Ted Stevens (R-AK) and
Representative Don Young (R-AK), attempt to open a small fraction
of the area to oil exploration and production. A provision included
in the budget reconciliation would open the Coastal Plain area of
ANWR. This effort is a sensible approach that could dramatically
expand much-needed domestic oil production with negligible impact
on the environment.
ANWR is an enormous area of land located in the Northeast corner
of Alaska within the Arctic Circle. Contrary to the image evoked by
opponents of oil production, that ANWR is the last small pristine
area left in Alaska, the state has an abundance of hardy
ecosystems. In addition to the healthy ecosystems existing on
millions of acres of private and state land, the Alaska National
Interest Lands Conservation Act (ANILCA) of 1980 set aside 100
million acres of land as parks, refuges, and preserves, including
57 million acres of wilderness. ANWR itself covers 19.8 million
acres. While eight million acres of ANWR were set aside as
wilderness, 1.5 million acres were designated for review by the
Department of Interior (DOI) to recommend future management of high
potential oil resources. In 1987, DOI recommended that this 1.5
million acres, known as the Coastal Plain, be leased for oil and
gas exploration and production in an environmentally sensitive
manner.
The provision in the budget reconciliation bill would implement
DOI's recommendation. But only a tiny fraction -- far less than one
percent -- of the Coastal Plain area would be affected. Advancing
technology over the last 20 years has reduced the necessary size or
"footprint" of drilling operations to less than one-fifth of what
was required, say, at Prudhoe Bay. So exploration and production
would affect only about 2,000 acres. To put this in perspective,
that is an area about one-sixth the size of Dulles Airport near
Washington, D.C., and about 0.01 percent of the total area of ANWR.
Even in this very limited area, modern sophisticated operations
adopt many environmentally sensitive methods which further limit
any ecological impact.
Expanded oil production is badly needed. The United States
currently imports more than half its oil consumption, and reliance
on foreign oil is growing. That raises national security concerns
and is an unwelcome factor in foreign policy considerations. This
reliance caused a $51 billion oil trade deficit last year --
roughly equivalent to the U.S. trade deficit with Japan. Foreign
energy dependence would be eased considerably if the Coastal Plain
produced oil. The area potentially could produce 1.5 million
barrels of oil per day for at least a quarter of a century, thereby
increasing domestic production by almost 25 percent. Allowing
limited drilling in ANWR also would reduce the trade deficit by
about $14 billion per year. Further, the Congressional Budget
Office estimates that federal revenues from lease sales would be
$1.3 billion over the next seven years, helping to trim the budget
deficit.
Alaska's residents would be big beneficiaries of lease sales.
Alaska has agreed to split the estimated $2.6 billion revenue from
lease sales evenly with the federal government (rather than take
the 90 percent to which the state otherwise would be entitled), so
the state still will receive $1.3 billion. This partially explains
why three-quarters of Alaskans support the plan.
Not only will Alaskans and the federal treasury benefit from
increased oil production, but an estimated 222,000-732,000 jobs
will be created throughout the country. There will be new hires in
the oil industry and manufacturers, suppliers, and transporters of
oil-related equipment will increase hiring dramatically, with fully
98 percent of these jobs in the lower 48 states. Based on a
mid-range estimate of job creation, this one action would drop the
unemployment rate by 0.36 percentage points.1
The only potentially legitimate objection to opening the Coastal
Plain of ANWR to oil drilling would be on environmental grounds.
But these concerns are without merit because of the very limited
impact of modern drilling and production techniques. Even the
"pro-environment" native Inupiat Eskimos, who live in or near the
Coastal Plain and opposed oil drilling in Prudhoe Bay 60 miles
away, support onshore oil development in the area. As Inupiat Mayor
George Ahmagak of the North Slope Borough wrote last June, "Our
whalers and hunters make maximum use of our few resources, always
taking care not to harm the land so their grandchildren may in turn
carry on their culture.... As Mayor, I can state unequivocally that
the people of the North Slope Borough enthusiastically support the
presence of the oil industry in our land.... The wisdom of our
Elders teaches us the value of hunting where game is most
plentiful. Likewise, it makes sense for our nation to seek oil in
an area that even [DOI] has identified as the country's best
prospect for new petroleum deposits."2
Exploration is opposed by the Gwich'in Indians, who live 120
miles south and have strong ties to the environmental lobby. They
are concerned about protecting their hunt of 300-350 animals from
the 152,000 porcupine caribou. While the herd size has fallen from
its high of 180,000 a few years ago, oil drilling is unlikely to
have any negative impact. One reason for this confidence is that
the Central Arctic caribou herd living in the Prudhoe Bay area
already has increased its population over sevenfold since oil
production began 20 years ago, despite dire warnings at the time
that the herd would decline sharply if oil drilling was permitted.
In fact, the second-largest oil field in the U.S. is the favorite
place for caribou to give birth.
The facts are clear. Permitting oil production in ANWR would
spur economic growth, cut the trade deficit, and ease national
security concerns. Moreover, it poses virtually no threat to the
environment. It is time for Congress to give the green light to
limited exploration and production.
Endnotes:
1. Calculated by author using Bureau of
Labor Statistics employment figures for September 1995; a 1992
DRI/McGraw Hill study for the Department of Energy, "National and
Regional Implications of S. 1220 (The National Security Act of
1991) without the ANWR title," for low end estimates; and a Wharton
Econometrics 1990 study, "The Economic Impact of ANWR Development,"
for high-end job distribution estimates. Job estimates are based on
peak year of 2005. Employment calculation assumes static employment
rate otherwise.
2. The Arctic National Wildlife
Refuge: Its People, Wildlife Resources, and Oil and Gas
Potential (Office of the Governor, Juneau, Alaska; North Slope
Borough, Office of the Mayor, Barrow, Alaska; Arctic Slope Regional
Corporation, Anchorage, Alaska, June 1995), p. iii.