FEATURE - Alaska oil search proceeds outside ANWR spotlight
Date: 09-Apr-02
Country: USA
Author: Yereth Rosen
Significant pools of untapped oil have already been discovered by drilling teams and oil companies are poised for more exploration. The petroleum potential is so great that the federal government is planning new oil and gas leasing.
This windfall can be found not in northeast Alaska's Arctic National Wildlife Refuge (ANWR), which has been the subject of a bitter battle between environmentalists and drilling supporters, but in the National Petroleum Reserve-Alaska (NPR-A), a sprawling 23 million-acre piece of federal land that lies far west of the Arctic Refuge and, apparently, well out of the national spotlight.
The largely undeveloped petroleum reserve has long been in ANWR's shadow, partly due to its remote location, past failed exploration attempts and earlier government decisions to not bother with oil leasing there, according to one federal manager.
"It's way up here all by itself, and nothing happened with it because nobody could get into it," said Fran Cherry, Alaska district manager of the Bureau of Land Management, the federal agency that oversees the reserve.
New information, including recent exploration successes by Phillips Petroleum, is likely to boost estimates of potential oil resources in the reserve, Cherry said.
In fact, the U.S. Geological Survey said the reserve's northeast quadrant probably holds 1.8 billion to 4.7 billion recoverable barrels. The USGS is scheduled to release a new estimate this spring, Cherry said.
Past estimates are likely to be too conservative, he said. "Who knows the potential in NPR-A? I think it's huge," he said. "NPR-A has the potential to be a lot bigger than we had originally estimated."
Despite the petroleum reserve's relative obscurity, development there poses its own ecological risks, one environmental leader said.
"It's a beautiful and still a very wild place, and it does have tremendous wildlife resources," said Stan Senner, head of the Audubon Society's Alaska office.
Migratory birds from around the world flock in summer to the reserve's lakes and ponds and the area has the world's most dense concentration of nesting birds of prey, he said.
The reserve is home to two caribou herds. And the banks of its Colville River hold the world's northernmost deposits of dinosaur bones, teeth and ossified tendons, a priceless resource to paleontologists.
But environmentalists know that the petroleum reserve is no wildlife refuge, Senner said. Unlike the situation in the Arctic refuge, development there can be mitigated but not entirely blocked, he said. "It's a different ball game, politically and legally."
Back in 1917, government surveyors found oil seeps in the area. The petroleum reserve was created in 1923 to provide energy for military security. But despite sporadic exploration that started in the 1940s, there has been no commercial oil production there. For decades, the industry ignored the area.
That changed after 1995, when Arco Alaska Inc. announced the discovery of its 430 million barrel Alpine field on state land near the petroleum reserve's eastern border. Phillips, which acquired Arco's Alaska assets in 2000, is now producing 90,000 barrels a day at Alpine, currently the westernmost oil field on the North Slope.
The BLM in 1999 offered the first NPR-A leases in 15 years, opening about 4 million acres in the reserve's northeast corner to development. Oil companies bid $104.6 million for the rights to explore 133 tracts there.
The BLM plans another lease sale in June and officials from Phillips and Anadarko Petroleum, Phillips' partner at Alpine, have said their companies will participate in the lease sale.
The Alpine field - about 60 miles west of the trans-Alaska pipeline's intake station at Prudhoe Bay - is what makes even modest amounts of oil from the reserve attractive to the industry, said Chuck Logsdon, chief petroleum economist for the state's Department of Revenue.
"If you found something in NPR-A, it wouldn't have