Sen. Lisa Murkowski (R-AK) knows how D.C. works.
For nearly a decade, the now-senior senator from Alaska has been introducing bills to open the Arctic National Wildlife Refuge up to the oil and gas industry. Now, as the powerful head of the Senate Energy and Natural Resources Committee, she has found her opportunity.
“Our instruction is to find $1 billion,” Murkowski announced Thursday at a hearing to consider opening a region of the refuge known as the 1002 area. “We have that opportunity to find that in the 1002 area.”
The instruction to the Energy Committee to find $1 billion to reconcile the 2018 budget bill comes, of course, from the Republican-led Senate itself. Coincidentally — or not — $1 billion is roughly what Murkowski and other supporters of opening the 1002 area calculate it could bring in.
Testifying at the hearing were Murkowski’s fellow Alaskan senator Republican Dan Sullivan, the governor and lieutenant governor of the state, several representatives from native corporation commissions, a couple Trump officials, one environmentalist, one scientist, and one representative from the indigenous Gwitchin tribe, which lives in the region targeted for oil and gas development.
No bill has been prepared, ranking member Sen. Maria Cantwell (D-WA), noted at the hearing. Cantwell has been fighting to preserve the refuge for just as long as Murkowski has been to open it, but despite her strong opposition — saying Thursday “we are never stopping” — it does indeed look like, legally at least, the 1002 area will be opened for drilling in the very near future.
Murkowski, who never got much traction on her previous bills, has finagled the 1002 area into budget reconciliation, meaning that she only needs a simple majority to pass the bill, which is expected to be marked up by the committee next week. Several Democratic senators complained Thursday during the hearing that they would not have a chance to hear any expert testimony on the specifics of the bill itself.
“I don’t see how you can say this looks fine unless you know how many wells, how many miles of pipeline, where they will be located… we are being asked to make an assessment here about economic value versus environmental risk,” Sen. Angus King (I-ME) told one of the witnesses, Fish and Wildlife Services principal deputy director Greg Sheehan. According to King’s “back of the envelope” calculations, some 10,000 wells would need to be drilled in the area to achieve the $1 billion revenue goal over the next 10 years.
The 1002 area of the Arctic National Wildlife Refuge is one of the last remaining pristine parts of the Arctic. According to a study in Oil and Gas Journal in 2003, “biological diversity in the 1002 Area and adjacent waters is considered very high, ecologically intact to a large degree, and valuable as a scientific resource. Much opportunity remains to advance understanding of caribou, polar bear, and muskoxen, for example.”
In addition, the site is a caribou calving area that provides “a crucial source of nutrition and culture for the Gwitch’in native peoples, who inhabit villages along the southern part of ANWR and in adjacent Canadian territory,” the study says.
Samuel Alexander, representing the Gwichyaa Zhee Gwich’in Tribal Government, told senators his people “adamantly oppose” opening the refuge. “At the heart of the issue is freedom, the freedom for us to continue to exist as indigenous people” Alexander said in his opening statement. “To exist as Gwitch’in.”
“We as Gwitchin see the desire to open up the refuge as an attack on us and on the porcupine caribou herd on which we depend,” he said. The refuge is the porcupine caribou herd’s sole habitat, and the herd is a staple source of food security for the tribe.
“Tell me how replacing caribou with highly processed foods is better for us,” Alexander said. “Eating Spam? Is that progress? I don’t think so,” he said during questioning later in the hearing.
Alexander, though, was one of the lone Alaskan voices calling for the ban on drilling to stay intact. Several representatives of tribal corporations — for-profit organizations that oversee native interests in Alaska — supported drilling in the area.
“The Alaska native corporations are not tribes,” Alexander said. “They are not tribes. They do not have a language. Their purpose is profit. Our purpose as Gwitch’in is to protect our way of life.”
Cantwell, too, expressed her concern that more native voices weren’t represented at the hearing, but Republicans and local officials consistently emphasized Alaska’s dire economic situation. They also claimed that Alaska is able to develop oil and natural gas resources safely, with little to no threat to the caribou herd or the environment.
“The state has demonstrated that wildlife and environmental protection can be achieved through 50 years of development and progress on the North Slope,” said Lt. Gov. Byron Mallott (D), a member of the Tlingit tribe and the former executive director of Alaska’s largest native corporation.
In fact, earlier this week Alaska ordered a review of all oil wells on the North Slope, an area adjacent to the refuge where drilling is allowed, after it was discovered that some wells were improperly insulated and were melting the permafrost that holds them in place. A BP well had reportedly been leaking for days.
In a separate incident, BP had a major gas leak near Prudhoe Bay in September, prompting a “deep inquiry” and a “safety reset,” according to leaked emails acquired by BuzzFeed News. Much of Alaska’s oil and gas extraction takes place in the North Slope’s Prudhoe Bay oil field, the largest in the United States.
Yet despite Murkowski’s claims that the central Arctic caribou herd, which lives near Prudhoe Bay, has increased four-fold since “development began in earnest” several decades ago, the National Research Council concluded in 2003 that there has been a litany of environmental impacts from drilling in the North Slope, including disruptions to caribou populations, reduction of traditional culture, and causing local communities to be perpetually dependent on oil and gas revenue.
“I think it’s important to remember that what we are seeking to do in the 1002 is not something that hasn’t been done in the North Slope,” Murkowski said — although she meant to indicate that everything would be fine.
Instead, that dependency is now in full effect, with Alaska’s major oil pipeline only running at one-quarter capacity and the state budget in dire straits. (Alaska, unlike most U.S. states, has traditionally had a 90-10 split with the federal government on oil and gas revenues, making its budget even more reliant on fossil fuel price and production.)
“This would stimulate my state at a time when it is sorely needed,” Mallott said, adding that “it will allow us to invest in climate change adaptation and modification and promote an energy transition for the Alaskan people.”
But while more drilling would help Alaska’s bottom line, there are several reasons to be skeptical that opening the 1002 area would be the panacea Mallott, Murkowski, and others expect. For starters, there is already a massive amount of land available to oil and gas drilling in Alaska — and much of it has gone unleased.
“Simply put, there is no shortage of federal oil and gas leases in Alaska. It’s not even close. I don’t know why it is necessary to open a pristine natural area like the refuge,” Sen. Al Franken (D-MN) noted at Thursday’s hearing, pointing out that only 17,000 of the available million acres are being developed right now and that the Trump administration recently announced plans to open even more of the North Slope for leasing — as well as reported plans for opening the Atlantic Coast.
“If my colleagues across the aisle think drilling is such a good idea, we should have hearings, not do this on the quick and cheap because of a tax plan,” Franken said.
“There really is no energetic or economic argument to [open area 1002] right now,” David Murphy, assistant professor of environmental studies at St. Lawrence University, told reporters on a call Wednesday. He pointed out that the 10,000 acres expected to be up for grabs would have to be leased at $1,300 per acre — assuming 100 percent leasing — to reach the total $2 billion revenue number. (The bill is expected to offer a more common 50-50 state/federal split on revenues). Over the past two decades, Murphy said, the average lease rate in the North Slope was $34.
“These numbers are completely out of line with the history of bidding in the North Slope,” he said. Given that the point of the reconciliation bill is to raise $1 billion of unaccounted for spending and tax cuts, the plan is likely to backfire, he said. “Any of that shortfall is going to add to the deficit.”
Another expert on the call, Christopher Lewis, a former petroleum geologist for BP who was involved in the Prudhoe Bay discovery, said that the U.S. Geological Survey’s estimates of oil in area 1002 were questionable, at best.
“The main reservoirs are at Prudhoe Bay and at Kuparuk River,” he said. “As you go eastwards, they wedge out, and the only reservoirs going into the refuge are tertiary. They are not good reservoir rocks.”
“I can’t understand this business of saying 1002 is ‘oil rich,'” Lewis added.
Nonetheless, Murkowski is likely to get her way on this one. This area — unlikely to hit its expected revenues, a pristine environment, and the sole habitat for a native group and a unique herd of caribou — will almost certainly be put up for grabs to oil and gas drillers during the coming budget votes.
Environmentalists are clinging to the idea that it may be so unprofitable to develop the 1002 area that drillers don’t even bother to lease it, but that just brings up the prospect that “wildcatters” — rogue oil exploration companies — will step in.
“If you do have a few companies that want to take risks… even if they do just drill a few wells up there,” Murphy said, “the impact will be huge and it will take forever for the ecosystem to recover.”