July 16, 1995 in Business

Oil Drilling Plan Gains Momentum But Critics Still Trying To Derail Arctic Exploration

Gregg Jones Dallas Morning News
 

Alaska environmentalists aren’t fond of Debbie Reinwand. But oil companies some day may want to build a monument to the Anchorage woman.

For the past two years, the feisty lobbyist has been leading a long-shot campaign to drill exploratory oil wells in northern Alaska’s Arctic National Wildlife Refuge. It didn’t seem possible only a few months ago, but she soon may get her wish.

The debate over whether to search for crude in the refuge has been the hot-button issue for U.S. oil companies and environmentalists for the past decade.

The Sierra Club and other environmental groups have made preserving the area a major fund-raising cause. Oil executives, on the other hand, have cited Congress’ failure to allow drilling as an example of how overzealous environmental concerns have forced energy companies to spend their exploration dollars overseas.

Now, a Republican-controlled Congress with Alaskans guiding the natural resources committees of both houses is poised to approve Arctic refuge drilling. The House and Senate have passed budget plans that include proposals to lease the ANWR coastal plain for exploratory drilling, saying it would generate $1.4 billion in revenues for the federal government.

The final budget vote is expected in September or October.

“It doesn’t look good,” says Melinda Pierce, a Sierra Club lobbyist on Capitol Hill.

Reinwand and drilling proponents are delighted by the Arctic unexpected turn of events. Since late last year, the debate has shifted from a Democratic move to permanently ban oil companies from the refuge to the recent Republican effort to start selling ANWR drilling leases.

“There are huge hurdles ahead,” says Reinwand. “But we’re being heard now.”

Even if Congress does approve ANWR (pronounced AN-war) leasing, President Clinton could sidetrack the proposal by vetoing the Republican budget. It could take another three to five years to sort out legal challenges and conduct environmental impact studies, supporters say.

But big oil companies such as Exxon Corp., Atlantic Richfield Co., British Petroleum and Chevron Corp. are already jockeying for position, said a key drilling supporter.

What intrigues oil companies is the lure of what might be the last huge onshore oil discovery in the United States. Geologists believe that billions of barrels of oil could lie beneath the flat tundra of the refuge’s coastal plain, which is just a few miles east of the 10 billion barrel Prudhoe Bay oil field.

Ten years ago, Chevron and British Petroleum were allowed to drill an exploratory well on a piece of the coastal plain. Rumor has it that the hole, known as KIC-1, indicated a big discovery. For competitive reasons, the companies have never disclosed the results.

While the quest for Arctic refuge oil would be an economic boon for Alaska, other states - especially Texas - also stand to benefit, says Reinwand. ANWR exploration could enable Texas companies doing business in Alaska’s North Slope oil fields to save or create 60,000 jobs, she says. Nationwide ANWR oil development would create 250,000 jobs, supporters contend.


Thoughts and opinions on this story? Click here to comment >>

Get stories like this in a free daily email