Oil Development in Arctic National Wildlife Range Term Paper

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Abstract

This paper describes the issues based on the development policy of the Arctic National Wildlife Refuge and the efforts made by the government to conserve the ANWR. This paper also includes several aspects of the policy like future assumptions for ANWR with taking, the protection and conservation measures of ANWR, into account.

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Introduction

“The Arctic National Wildlife Range was established in 1960. This designation was a promise to the American people to preserve the area’s ‘unique wildlife, wilderness, and recreational values.’(Lieland, 2006, p. 3)”

Before starting the analysis of development policy, let me explain briefly about the ANWR (Arctic National Wildlife Refuge). The ANWR is spread over nineteen million acres of northeast Alaska and the authority of administration of ANWR is in the hand of the Fish and Wildlife Services. The coastal area of ANWR is currently seen as one of the favorite on-shore oil and gas prospects of the United States. In conformity with the United States Geological Survey, the field on this land could have as much economically valuable oil as the large field at Prudhoe Bay, which is situated at the western direction of ANWR, but at the same time, the land at ANWR, especially the coastal area, is home to a various bread of species and plants. The ANWR and two parks of Canada have been proposed for an international park, and several animals, reside in the area (including caribou, polar bears, whales, and migratory birds,) are under the protection of international agreements or treaties. The analysis under covers, first, the geological and economic factors that have induced new interest in development, followed by the environmental, biological, and philosophical quality factors that have moved opposite to it.

The battle between nearly pure nature and high oil potential makes a controversial situation that, should the ANWR be given permanent protection from development or should it be opened for oil and gas development by the Congress? If the field of ANWR is opened, how can the damage be avoided, mitigated, or minimized?

Analysis of development policy of ANWR

The capital energy associated issue in the one hundred & seventh Congress is whether to pass energy development in the ANWR in north-eastern Alaska, and if so, under what prohibitions, or whether to proceed to prohibit energy development to protect the ANWR’s ecological resource and natural values.

In the last few years, Congress tried to countenance the opening of ANWR in the fiscal year 1996 reconciliation bill, but the decision was contradicted. The President quoted the Arctic National Wildlife Refuge division as one of his causes for opposing the decision. While bills were acquainted, the Arctic National Wildlife Refuge issue was not considered in the hundred & fifth Congress. In the hundred & sixth Congress, bills to denominate a certain area of the ANWR as wasteland and others to open the ANWR to energy development were presented. Assumptions for Arctic National Wildlife Refuge revenues were added in the fiscal year’01 budget analysis, as described by the Senate Budget Committee on 31st March 2000.

Merely three recorded votes associating directly to the Arctic National Wildlife Refuge development happened from the hundred & first to the hundred & sixth Congress. They all were in the Senate. In the hundred & fourth Congress, on 24th May 1995, there was a gesture to put on a correction that would have undressed the Arctic National Wildlife Refuge development titles. The motion went across in the same Congress, on 27th October 1995 there was one more motion to put on a similar correction to H.R.-2491. This motion also went through in the hundred & sixth Congress, the vote to put on a correction to undress Arctic National Wildlife Refuge revenue assumptions from the budget analysis was passed.

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The Energy Resource Divisions of North Slope of Alaska coastal plain has proved copious in gas and oil reserves, and its ecology considers assurance for the Arctic National Wildlife Refuge. The oil-bearing strata broaden east-ward from coordinates in the National Petroleum Reserve of Alaska past the Prudhoe Bay area and may go on into and through ANWR’s certain area.

Calculations of Arctic National Wildlife Refuge oil prospective, both previous and present, rely upon small-scale data and many beliefs about economics and geology. The latest government analysis of natural gas and oil prospects in Arctic National Wildlife Refuge, finished in 1998 by the United States Geological Survey, discovered that there is a splendid chance (ninety-five percent) that a minimum of 11.5 billion barrels of oil is present on northern lands in the area one thousand and two. There also is a little chance (five percent) that 31.4 billion barrels or more than this are present. The United States Geological Survey evaluates there is an excellent chance (ninety-five percent) that 4.4 billion barrels or more are technically redeemable, and there is a little chance (five percent) that 11.7 billion barrels or more are technically redeemable, but the fraction that would be economically redeemable relies upon the cost of oil.

“The United States Geological Survey evaluated that, at $24/ barrel, there is a ninety-five percent chance that 2 billion barrels or more could be economically redeemed and a five percent chance of 9.3 billion barrels or more. Approximately one-third more oil may be under the next state waters and native lands. Yet, these areas would be hard to develop without reach through national land.” (Moeller, 2002, p. 96).

Prices of oil, geologic features such as permeable ness and porousness, cash circulation, and any carriage constraints, would be amongst the most valuable factors impacting the production levels and development rates that would be linked with given amounts of oil resources. The Energy Information Administration evaluated that at a higher development rate, generation would peak 15 to 20 years after the beginning of development, with maximum periodic generation rates of approximately 0.00015 of the resource. Generation connected with the sluggish rate would peak about twenty-five years after the beginning of development at a periodic rate rival to about 0.000105 of the resource. Peak generation connected with a technically redeemable resource of 5 billion barrels at the higher development rate would be 750,000 billion barrels per day. United States petroleum consumption is approximately 19 million billion barrels per day.

A considerable amount of natural gas is evaluated to be in area no. one thousand & two as well. Being able to trade this gas likely would raise the mercenary prospects of the area no. one thousand & two and of the rest of Alaska’s North Slope oil as well as gas. Nevertheless, as with the copious natural gas found at Prudhoe Bay, at present, there is no way to deport the gas to market. Until nowadays, the mixture of relatively low natural gas prices and pipeline construction costs prevented serious concerns of pipeline construction. A higher gas price in the last 2 years has enhanced interest in the makeup of a pipeline to carry natural gas to markets of North America.

Better Technologies- As development has occurred after the uncovering of Prudhoe Bay, Alaska’s North Slope oil arena operators have developed fewer environmentally interfering ways to develop the ANWR oil, priory through innovations in technology. The field research has benefited from fresh seismic technology. Better analytical methods produce high constancy images of ecologic structures and recognize hydrocarbon accumulations, and new ice-based transportation serves distant areas during research drilling on freshly ripped insulated ice pads.

Leading Legislative Issues

The capital energy-related issue in the hundred & seventh Congress is whether to pass energy development in the ANWR in north-eastern Alaska, and if so, under what prohibitions, or whether to sustain to restrict energy development to save the ANWR’s biological resource and wasteland values.

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The issues based on environment- the Congress could decide to pass on environmental issues to administrative authorities under present laws. Instead, Congress could enforce a superior standard of environmental conservation because the field is in a national wildlife refuge or because of the delicacy of the environment of the arctic, or it could ordain an inferior standard to alleviate development. The level of delicacy passed on to the administering authority could also make an impact on the lack of money for environmental conservation. An example is here, Congress could add provisions needing the use of ‘the best acquirable technology’ or ‘the best technology available commercially’ or analogs common standards; instead, it could restrict judicial examination of environmental norms.

A particular issue would be the use of water and gravel resources necessary for oil development and exploration. Some other legislative issues add a restriction on miles of roads or other surface possession; the applicability of present pollution standards; treatment and prevention of cut downs; the applicability of present environmental needs; and aircraft overflights, among other belongings.

The development policy needs the secretary to manage the leasing contract to ‘result in no remarkable bad effect on fish and wildlife, their natural habitat, living resources like food, and the environment, including the application of the best business-based available technology’(Moeller, 2002, p. 95) development policy also needs that this program to be done ‘in a manner that assures the acknowledge of fair market measure by the public for the mineral assets to be hired.’ (Moeller, 2002, p. 95).

It is not clear that how the two goals of fair market measure and environmental conservation relate to each other. Development policy requires leaseholders to be responsible for the reformation of lands within the coastal plain to support uses before leasing or to an utmost use passed by the secretary. There are needs for abatement, development of rules, and other measures to conserve the environment. These include restrictions on the public reach to service roads and other carriage restrictions. Other purveys may also leave an impact on environmental conservation.

Development policy provides for a confederation of leasing programs; among different things, confederation would tend to cut down environmental effects of development. Development policy would further require, ‘accordant with the purveys of section- six five zero three (which add assuring receipt of fair market measure), that the secretary

manages the leasing operation to assure that the highest quantity of surface land area enveloped by support and production amenities, including landing strips and any areas enveloped by annoying beams for the base of pipelines, does not go past two thousand acres on the coastal area’.(Rutledge, 2006, p. 73) A ground correction to development policy with this land area prohibition was released on 1st August 2001. The expression used has not been specified in the bill, and hence the whole set of coordinates coming under the

prohibition is debatable (for example whether gravel mines, roads, and structures on native lands would be considered under this purvey). The ground argument focused on the amount to which the amenities included in the correction would be broadly stretched around the ANWR. In this illumine, it is remarkable that a single compact amenity of two thousand acres would not allow the whole development of the area 1002, since present technology under the finest conditions allows directional drilling at a maximum of seven miles from the well-head. The outcome would be that at most around eleven percent of the coastal plain could be developed. Alternatively, complete development of area 1002 would need that amenities (though restricted to two thousand acres whole) be more broadly detached around the coastal plain, also, the land area restriction appears not to concern to inhabitant lands.

Inhabitant Lands

The ANCSA (Alaska Native Claims Settlement Act) of 1971 determined indigenous claims in opposition to the U. S. by (along with other kinds of stuff) making village corporations that could choose lands to which they undertake the surface land, and regional corporations that could choose subsurface and surface privileges as well. The surface estates (approximately 3 townships), chosen by KIC (Kaktovik Inupiat Village) are alongside the coastal area of the Arctic National Wildlife Refuge (but were governmentally disqualified from being measured as within the ‘coastal plain 1002’). These areas and a fourth community that is inside the distinct coastal plain (adding up approximately ninety-two thousand acres) are all inside the ANWR and focus on regulations of the ANWR. The ASRC (Arctic Slope Regional Corporation) obtained subsurface privileges underneath the Kaktovik Inupiat Village lands in conformance to lands replace agreement 1983. Additionally, there are presently more than ten thousand acres of individually owned and conveyed native distributions in the area of the ANWR that is not focused on the ANWR rules.

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The development policy would cancel the Alaska National Interest Lands Conservation Act prohibition on oil and gas development. Just once oil and gas development is sanctioned for the lands in the ANWR, development can take place on the 100000 acres of inhabitant lands, debatably without any land area restriction subjecting to development on the refuge lands. The level to which the native lands could be synchronized to shelter the environment is doubtful, given the grade of allotments and a little of the language in the Agreement of 1983 with the Arctic Slope Regional Corporation. After the adjournment vote on. S. Amdt -3132 on 18th April 2002, senator Stevens publicly acknowledged his objective to offer a modification to open native lands in this division of the ANWR to energy development but consequently determined not to do so.

Temperament of Revenue

One more issue that has risen during arguments over leasing in the Arctic National Wildlife Refuge is that of the temperament of probable revenues- whether congress may genuinely provide for a temperament of revenues method other than the 90 by 10 % split stated in Alaska Statehood Act. A court in Alaska v. U. S. appears to have pointed to that the language in the Alaska State-hood Act intends that Alaska is to be handled like all other states under the MLA (Mineral Leasing Act), which holds a 90 by 10 split. Yet, Congress can set up a non-MLA leasing treatment – e.g., the separate leasing operations that rule the NPR-Alaska (National Petroleum Reserve) – where the returns sharing method is fifty-fifty.

The development policy should be like that, it would present that fifty percent of attuned revenues be paid to Alaska. Then fifty percent of revenues from extra payments go into a renewable energy technology investment fund, and fifty percent from royalties and rents go into a royalties conservation fund. It is not understandable whether the root for the shared returns is to be net or gross receipts. More basically, the secretary is to set up and implement a leasing operation under the MLA, yet, development policy directs a revenue distribution program dissimilar from that in the Mineral Leasing Act. Setting up a leasing operation under the Mineral Leasing Act, however, providing for an unlike revenue temperament may again lift validity queries. If the optional temperament were hit down and the revenue purveys were found to be dissociable, it is doable that Alaska could get ninety percent of the revenues from the Arctic National Wildlife Refuge.

A chronic issue in federally-funded and federal projects is whether project contractors or holders efficiently should be needed, by ‘agreement’, to use union employees. The PLA (Project labor agreements) are agreements among the main contractor or project owner and the union signifying the craft employees for an exacting project that set up the terms and conditions of the job that will pertain to the particular task. The agreement might also specify a source (like a union renting hall) to provide the craft employees for the project. Naturally, the contract is binding on all subcontractors and contractors functioning on the project, and identifies pay rates and reimbursements, discusses processes for determining jurisdictional and labor arguments, and contains a no-strike section.

Promoters argue that the Project labor agreements ensure an efficient, reliable labor resource and help keep expenditures down. The Challengers argue that Project labor agreements inflate plan rates and reduce competition. There is small autonomous data and information to reform these contradictory declarations and show whether the Project labor agreements add to higher or lower project expenses. Structure and other unions and their followers powerfully favor Project labor agreements because they think that the Project labor agreements help assure admission for union members to federally funded and federal projects. Non-union firms and their followers think that Project labor agreements unfairly prohibit their entrance to those projects.

The development policy expresses the secretary to necessitate lessees to consult to get a project labor contract. The secretary would do so ‘distinguishing the Government’s ownership interest in labor constancy and the capability of construction management and labor to meet the exacting requirements and situations of projects to be developed’ (Congress, 1989, p. 52). In one of the senate’s passed versions, the senate ‘advises’ the subsidizers of whatsoever natural-gas pipeline project ‘to consult a project labor contract to speed up the creation of the pipeline’(Congress, 1989, p. 53).

A pronouncement to build a pipeline to carry natural gas to North American markets from Alaska, leads to risk as well as a choice on the route. The Senate version of policy endeavors to tackle the previous by supplying federal promises of credits taken out for building a natural gas carriage system. Assurances may not go beyond eighty percent of a loan, and the whole finance principle to which assurances concern may not surpass ten billion dollars. The Senate invoice also offers a tax credit for the manufacture of North Slope gas that efficiently sets up a price ground of 3.25 dollars/thousand cubic feet. Together the Senate and the House versions deal with the route issue by restricting the authorizing of a route that goes into Canada north of sixty-eight degrees. The Energy industry of Canada interests entities to the prevention of the northern way in the course of Canada (a southern way would by-pass gas stores in far north-west Canada) & they say that the duty credit would provide Alaskan gas manufacturers a cost-benefit over producers of Canada.

Export of the Alaskan north slope oil in common, and any of the Arctic National Wildlife Refuge oil in exacting, has been a problem, starting minimum with the approval of the Trans-Alaska Pipeline and ongoing into the current Arctic National Wildlife Refuge discuss. A lot of the pipeline’s way is on federal areas and the MLA’1920 bars export of oil carried through pipelines funded rights of way over federal areas. The T.A.P.A.A. (Trans-Alaska Pipeline Authorization Act) signed on 16th November 1973, prĂ©cised that oil carried through it could be sent abroad only under very limiting circumstances. Following legislation reinforced the export limitations further. Exports of the oil of the North Slope became efficiently barred. Oil started to be carried through the pipeline in rising quantities as the development of the oil field of North Slope grew. Through exports efficiently barred, a lot of North-Slope oil departed to the West-Coast targets; the remaining was carried to the Gulf-Coast through the Panama Canal or overland across the cape. At the beginning and mid-nineties, the grouping of federal offshore manufacture and Californian, oil of North Slope, and imports out came in such large amounts relative to the requirement that crude oil values in California knocked down below those somewhere else in the United States, drawing out complaints from the North Slope and Californian producers. Through 1995, 3 or 4 years of low world oil values and relative tranquility in the mid-east had decreased worry regarding petroleum.

Yet, market powers ultimately built pressure to amend the law. On 28th November 1995, a law was passed, Title-II of which modified the MLA (Mineral Leasing Act) to provide that oil carried through the pipeline may be sent abroad except the President finds, after judging stated criteria, which is not in the nationwide interest. The President may oblige terms & conditions, and export permission may be revoked or modified. ‘Starting with 36000 billion barrels per day in 1996, the Alaskan North Slope exports climbed to a peak of 74000 billion barrels per day in 1999, representing seven percent of North-Slope production. Alaskan North Slope oil exports stopped willingly in the May of 2000’(Krugman, 2003, p. 23). The NEPA (National Environmental Policy Act) needs the homework of an EIS (environmental impact statement) to inspect the outcomes of key federal acts on the environment. The final full environmental impact statement inspecting the results of leasing development in the Arctic National Wildlife Refuge was finished in 1987 and some spectators state that a new environmental impact statement is required to help development now. Both the bills concentrate on the issue.

Conclusion

Under the 2 Senate modifications to the development policy, the leasing necessities would have taken impact upon certification and determination by the President, that development of the coastal plain is in the national security and economic interests of the U. S. This certification and determination were to be in the only judgment of the President and are not assessable. This alternative has not been lifted in further bills because present law bans development except Congress acts, this option also stops energy development. Those behind delay often dispute that not sufficient is known about either the environmental impact or about the probability of discoveries if development is allowed. Others fight that depositions of oil should be held on for an indefinite right time.

References

Krugman, Paul R. (2003). The Great Unraveling: Losing Our Way in the New Century, W. W. Norton, pp. 22-26.

Lieland, Barbara T. (2006). Arctic National Wildlife Refuge, Nova Publishers, pp. 2-7.

McBeath, Gerald A., Thomas A. Morehouse (2001). Alaska Politics & Government, U of Nebraska Press, pp. 17,18,19.

Moeller, Steven T. (2002). Energy Efficiency: Issues and Trends, Nova Publishers, pp. 95, 96, 98.

Rutledge, Ian(2006). Addicted to Oil: America’s Relentless Drive for Energy Security, I. B. Tauris, pp. 71-74.

U.S., Senate, Congress (1989). Arctic Coastal Plain Competitive Oil and Gas Leasing Act, pp. 53-55.

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