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Lawmakers discuss Arctic drilling in $1.8B federal proposal

By Beixi Xu, Medill News
Former President Barack Obama issued a moratorium on oil and gas drilling in certain areas of the Arctic until at least 2022. File Photo by Lou Dematteis/Spectral Q/HO/UPI
1 of 2 | Former President Barack Obama issued a moratorium on oil and gas drilling in certain areas of the Arctic until at least 2022. File Photo by Lou Dematteis/Spectral Q/HO/UPI | License Photo

Two U.S. senators this week addressed the prospect of drilling for oil and natural gas in the Arctic National Wildlife Refuge -- which is part of a federal proposal by the Trump administration.

"Our access is limited by certain policies," Sen. Lisa Murkowski, R-Ak., co-chair of Senate Arctic Caucus, said Wednesday at a conference of the Center for Strategic and International Studies. "We need to make sure we are working corporately as Arctic nations, and prevent oil spilling."

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Murkowski said Arctic drilling is a good way to improve long-term energy cooperation with countries like Russia, Canada and China, which are also interested in drilling there.

The Arctic region is estimated to contain about 90 billion barrels of crude oil and 1.7 trillion cubic feet of natural gas. According to an Energy Department analysis, the total volume of recoverable crude in the so-called coastal plain of the ANWR is about 10.4 billion barrels.

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The U.S. Bureau of Ocean Energy Management has approved a bid by an Italian oil company, Eni SPA, to drill exploratory wells from an existing artificial island in the Beaufort Sea, about 15 miles northwest of Prudhoe Bay.

The company said it would only drill during the winter months in order to avoid harm to Arctic wildlife, but critics warned that a large well blowout could result in a major spill. Eni acknowledged that such a spill could leak more than 21 million gallons -- twice the amount the Exxon Valdez spilled in Alaska's Prudhoe Bay in 1989.

The National Wildlife Arctic Refuge is best known for its resident polar bears, and the landscape is also one of the few places on Earth where polar, brown grizzly and black bears can co-exist.

Many Democrats and environmental groups strongly oppose Arctic drilling, saying the harsh conditions of the region make it especially dangerous -- and that oil and gas extraction would be destructive to the climate.

Former President Barack Obama set strict requirements for companies hoping to drill in the Arctic and nixed all new leases there through at least 2022.

Drilling in the Arctic National Wildlife Refuge would raise about $1.8 billion, according to the Trump administration's 2018 budget proposal. A budget blueprint also asks Congress to pass legislation to reduce the government's deficit by $5 billion over 10 years.

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Sen. Angus King of Maine, co-chair of the Senate Arctic Caucus, said at the conference that more examination of science and data should be done before any drilling is approved.

"We need to continue support for science. This is an area that we don't know much about, and we are learning," King said. "The more data we get, [the] more policy we can have. I hope the administration will continue to support research that will help us."

Regardless of whether development is criticized by environmentalists, the economics of Arctic drilling have been an impediment. Major international oil and gas companies gave up on $2.5 billion in drilling rights there last year because of a drop in oil prices, which made extensive development unfeasible.

"The fact is, oil at $50 a barrel makes Arctic oil uncompetitive," said Stephen M. Carmel, senior vice president of Maritime Services at Maersk Line Ltd. "In terms of what's going to happen down the road, I saw a World Bank report placed the oil in nominal dollars at $80 a barrel in 2030. That's still way below break the price for Arctic oil."

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