U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

66-955 PDF 2012

H.R. 2150, ‘‘NATIONAL PETROLEUM 

RESERVE ALASKA ACCESS ACT’’ 

LEGISLATIVE HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY AND 

MINERAL RESOURCES 

OF THE

COMMITTEE ON NATURAL RESOURCES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

Thursday, June 16, 2011 

Serial No. 112-42 

Printed for the use of the Committee on Natural Resources 

( 

Available via the World Wide Web: http://www.fdsys.gov 

or 

Committee address: http://naturalresources.house.gov 

(II) 

COMMITTEE ON NATURAL RESOURCES 

DOC HASTINGS, WA, Chairman 

EDWARD J. MARKEY, MA, Ranking Democrat Member 

Don Young, AK 

John J. Duncan, Jr., TN 

Louie Gohmert, TX 

Rob Bishop, UT 

Doug Lamborn, CO 

Robert J. Wittman, VA 

Paul C. Broun, GA 

John Fleming, LA 

Mike Coffman, CO 

Tom McClintock, CA 

Glenn Thompson, PA 

Jeff Denham, CA 

Dan Benishek, MI 

David Rivera, FL 

Jeff Duncan, SC 

Scott R. Tipton, CO 

Paul A. Gosar, AZ 

Rau ́l R. Labrador, ID 

Kristi L. Noem, SD 

Steve Southerland II, FL 

Bill Flores, TX 

Andy Harris, MD 

Jeffrey M. Landry, LA 

Charles J. ‘‘Chuck’’ Fleischmann, TN 

Jon Runyan, NJ 

Bill Johnson, OH 

Dale E. Kildee, MI 

Peter A. DeFazio, OR 

Eni F.H. Faleomavaega, AS 

Frank Pallone, Jr., NJ 

Grace F. Napolitano, CA 

Rush D. Holt, NJ 

Rau ́l M. Grijalva, AZ 

Madeleine Z. Bordallo, GU 

Jim Costa, CA 

Dan Boren, OK 

Gregorio Kilili Camacho Sablan, CNMI 

Martin Heinrich, NM 

Ben Ray Luja ́n, NM 

John P. Sarbanes, MD 

Betty Sutton, OH 

Niki Tsongas, MA 

Pedro R. Pierluisi, PR 

John Garamendi, CA 

Colleen W. Hanabusa, HI 

Vacancy 

Todd Young, Chief of Staff 

Lisa Pittman, Chief Counsel 

Jeffrey Duncan, Democrat Staff Director 

David Watkins, Democrat Chief Counsel 

SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES 

DOUG LAMBORN, CO, Chairman 

RUSH D. HOLT, NJ, Ranking Democrat Member 

Louie Gohmert, TX 

Paul C. Broun, GA 

John Fleming, LA 

Mike Coffman, CO 

Glenn Thompson, PA 

Dan Benishek, MI 

David Rivera, FL 

Jeff Duncan, SC 

Paul A. Gosar, AZ 

Bill Flores, TX 

Jeffrey M. Landry, LA 

Charles J. ‘‘Chuck’’ Fleischmann, TN 

Bill Johnson, OH 

Doc Hastings, WA, ex officio 

Peter A. DeFazio, OR 

Madeleine Z. Bordallo, GU 

Jim Costa, CA 

Dan Boren, OK 

Gregorio Kilili Camacho Sablan, CNMI 

Martin Heinrich, NM 

John P. Sarbanes, MD 

Betty Sutton, OH 

Niki Tsongas, MA 

Vacancy 

Edward J. Markey, MA, ex officio 

(III) 

CONTENTS 

Page 

Hearing held on Thursday, June 16, 2011 ............................................................ 1 

Statement of Members: 

Hastings, Hon. Doc, a Representative in Congress from the State of 

Washington .................................................................................................... 6 

Holt, Hon. Rush D., a Representative in Congress from the State of 

New Jersey .................................................................................................... 3 

Prepared statement of ............................................................................... 5 

Lamborn, Hon. Doug, a Representative in Congress from the State of 

Colorado ......................................................................................................... 1 

Prepared statement of ............................................................................... 2 

Markey, Hon. Edward J., a Representative in Congress from the State 

of Massachusetts ........................................................................................... 7 

Statement of Witnesses: 

Balash, Hon. Joe, Deputy Commissioner of the Alaska Department of 

Natural Resources, Alaska Department of Natural Resources ................. 12 

Prepared statement of ............................................................................... 13 

Drevna, Charles T., President, National Petrochemical & Refiners 

Association ..................................................................................................... 19 

Prepared statement of ............................................................................... 21 

Murkowski, Hon. Lisa, U.S. Senator, State of Alaska .................................. 8 

Prepared statement of ............................................................................... 10 

Myers, Eric F., Policy Director, Audubon Alaska .......................................... 30 

Prepared statement of ............................................................................... 32 

Pool, Hon. Mike, Deputy Director, Bureau of Land Management, U.S. 

Department of the Interior ........................................................................... 49 

Prepared statement of ............................................................................... 51 

Sharp, Tim, Business Manager/Secretary Treasurer, Alaska District 

Council of Laborers ....................................................................................... 27 

Prepared statement of ............................................................................... 29 

(1) 

LEGISLATIVE HEARING ON H.R. 2150, THE 

‘‘NATIONAL PETROLEUM RESERVE ALASKA 

ACCESS ACT.’’ 

Thursday, June 16, 2011 

U.S. House of Representatives 

Subcommittee on Energy and Mineral Resources 

Committee on Natural Resources 

Washington, D.C. 

The Subcommittee met, pursuant to call, at 10:04 a.m. in Room 

1324, Longworth House Office Building, Hon. Doug Lamborn 

[Chairman of the Subcommittee] presiding. 

Present: Representatives Lamborn, Gohmert, Fleming, Rivera, 

Duncan of South Carolina, Gosar, Flores, Landry, Hastings (ex 

officio), Holt, DeFazio, Costa, and Markey (ex officio). 

STATEMENT OF HON. DOUG LAMBORN, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF COLORADO 

Mr. LAMBORN. The Subcommittee will come to order. The Chairman notes the presence of a quorum, which under Committee Rule 

3[e] is two Members. I am told the Ranking Member will be here 

any second. 

The Subcommittee on Energy and Mineral Resources is meeting 

today for a legislative hearing to hear testimony on H.R. 2150, the 

National Petroleum Reserve Alaska Access Act. 

Under Committee Rule 4[f], opening statements are limited to 

the Chairman and Ranking Member of the Subcommittee. However, I intend to recognize full Committee Chairman Hastings and 

Ranking Member Markey for opening statements later in the proceedings if they wish to make one. 

In addition, I ask unanimous consent to include any other Members’ opening statements in the hearing record if submitted to the 

clerk by close of business today. Hearing no objection, so ordered. 

I recognize myself now for five minutes for an opening statement. 

Today’s hearing is on H.R. 2150, the National Petroleum Reserve Alaska Access Act; but the real subject of today’s hearing is 

jobs and energy security. 

Two weeks ago, this Subcommittee examined the tremendous 

promise that Alaska holds in resources, infrastructure, and people. 

But that is just the start. Onshore there are potentially an additional 14 billion barrels just waiting for development. Currently, in 

Alaska alone, the oil and natural gas industry supports over 43,000 

American jobs, and comprises 16 percent of the State’s wealth. 

Today we will hear directly from a representative of thousands 

of those workers, who will join with us in the call for more development in the National Petroleum Reserve, Alaska: NPRA. 

We will also hear from representatives of the State of Alaska 

talking about the importance of development in NPRA for the State 

and the security of the Trans-Alaska Pipeline. In addition, we will 

2 

hear from a representative from the Refinery Association, discussing the important role Alaskan oil plays in allowing Pacific 

Coast refiners to produce and provide essential fuel that American 

consumers rely on every day. 

We will also hear from the Administration. However, we will 

likely not hear about how development in the NPRA has been 

stymied by the inability of the Department of the Interior, the 

Army Corps of Engineers, and the EPA to process permits for the 

pipelines and roads necessary to transport the petroleum out of the 

Petroleum Reserve. 

There is no doubt that the development of NPRA has been 

stopped because of problems within this Administration, and these 

are problems that the President could fix. 

We won’t hear the Administration admit that in 2010 it issued 

the fewest leases for oil and gas development since 1984. In issuing 

only 1308 leases last year, one-fifth of those leases, which were 

issued in Nevada, this Administration has shown that leasing for 

oil and gas is clearly not a priority. 

In fact, the second year of the Obama Administration resulted in 

only one-quarter the number of new leases in 1994, the second year 

of the Clinton Administration, where they issued 4,159 leases, and 

is about half the number of leases issued during the second year 

of the Bush Administration in 2002, which issued 2,384. 

This lack of leasing includes not issuing a single lease in the 

State of Alaska in 2010. Last month, in his Saturday Presidential 

Address, President Obama announced his intention to hold annual 

lease sales in NPRA. I am glad that he has appeared to reverse 

that policy of his Administration, and I anxiously await his Administration following through with these plans. The bill before us 

today will require the Department to ensure annual lease sale 

offerings. 

It has often been said in front of this Subcommittee that our nation does not have a lack of resources to curb our foreign dependence, we have a lack of clear policy. This Administration has shown 

that through their actions, they do indeed have a clear policy; it is 

a policy of limiting oil and natural gas development, halting job 

creation, and weakening our national security. 

It can and should be the policy of this government to develop the 

resources in our National Petroleum Reserve quickly, efficiently, 

cleanly, and responsibly in order to reduce our foreign dependence, 

create jobs, and keep our revenue here at home. The legislation before this Committee today will accomplish all these goals. 

I would now like to recognize the Ranking Member for five 

minutes for an opening statement. Mr. Holt. 

[The prepared statement of Mr. Lamborn follows:] 

Statement of The Honorable Doug Lamborn, Chairman, 

Subcommittee on Energy and Mineral Resources 

Today’s hearing is on H.R. 2150, the ‘‘National Petroleum Reserve Alaska Access 

Act’’ but the real subject of today’s hearing is jobs and energy security. Two weeks 

ago the Subcommittee examined the tremendous promise that Alaska holds in resources, infrastructure and people. 

But that is just the start, onshore there are potentially an additional 14 billion 

barrels just waiting for development. Currently in Alaska alone, the oil and natural 

gas industry supports over 43,000 American jobs and comprises 16% of the State’s 

3 

wealth. Today we will hear directly from a representative of thousands of those 

workers who will join with us in the call for more development in NPR–A. 

We will also hear from representatives of the State of Alaska talking about the 

importance of development in NPR–A for the State and the security of the TransAlaska Pipeline. In addition, we will hear from a representative from the refinery 

association discussing the important role Alaskan oil plays in allowing Pacific Coast 

refiners to produce and provide essential fuel that American consumers rely on 

every day. 

We will also hear from the Administration. However, we will likely not hear about 

how development in the NPR–A has been stymied by the inability of the Department of the Interior, the Army Corps of Engineers and the EPA to process permits 

for the pipelines and roads necessary to transport the petroleum out of the petroleum reserve. The is no doubt that the development of NPR–A has been stopped because of problems within this Administration, and problems that the President 

could fix. 

We won’t hear the Administration admit that in 2010 it issued the fewest leases 

for oil and natural gas development since 1984. In issuing only 1,308 leases last 

year, one-fifth of those leases were issued in Nevada, this administration has shown 

that leasing for oil and gas is clearly not their priority. 

In fact, the second year of the Obama Administration resulted in only one-quarter 

the number of new leases as 1994—the second year of the Clinton Administration 

where they issued 4,159 leases, and about half the number of leases of the Bush 

Administration in 2002 who issued 2,384 leases. 

This lack of leasing includes NOT ISSUING A SINGLE LEASE IN THE STATE 

OF ALASKA IN 2010. Last month in his Saturday Presidential Address, President 

Obama announced his intention to hold annual lease sales in NPR–A. I am glad 

that he has reversed that policy of his Administration and I anxiously await his Administration following through with these plans. The bill before us today will require the Department to ensure annual lease sale offerings. 

It has often been said before this subcommittee that our nation doesn’t have a 

lack of resources to curb our foreign dependence, we have a lack of clear policy. This 

Administration has shown that through their actions they do have a clear policy. 

It is a policy of limiting oil and natural gas development, halting job creation, and 

weakening our national security. 

It can and should be the policy of this government to develop the resources in our 

National Petroleum Reserve, quickly, efficiently, and responsibly in order to reduce 

our foreign dependence, create jobs and keep our revenue here at home. The legislation before this Committee today will accomplish all those goals. 

I want to thank all the witnesses for being here today and look forward to hearing 

your testimony. 

STATEMENT OF HON. RUSH HOLT, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. HOLT. I thank my friend, the Chairman. Today this Subcommittee is considering legislation dealing with oil drilling in the 

National Petroleum Reserve, Alaska, NPRA, as you have heard. 

And the Majority claims that we need this legislation because the 

Administration is blocking, in their words—stymied, actually, the 

Chairman used—oil and gas drilling in the Reserve, and slowwalking permits in the NPRA. The facts simply don’t support that 

claim. 

As with previous drilling legislation that the Majority has been 

moving through this Committee, to set artificial and unnecessary 

deadlines on the Interior Department and to limit environmental 

review of oil and gas drilling, H.R. 2150 would unnecessarily truncate review of permits by the BLM. 

To quote the Chairman, what we are seeking to do here is to behave responsibly. H.R. 2150 would direct the Secretary of the Interior to ensure that any Federal permitting agency shall issue permits for pipelines and roads within 60 days of enactment of leases 

4 

that have an approved permit to drill, and within six months of the 

submission of an application for a permit to drill for other leases. 

This directive would appear to require the Interior Department 

to compel other cabinet-level agencies to act, something that is far 

beyond the scope of the Secretary of the Interior’s authority. 

Furthermore, this directive is unnecessary because there are no 

pending applications with the BLM to construct pipelines or roads 

in the NPRA. This provision would also, it appears, prohibit proper 

NEPA review of future oil and gas pipelines in the Reserve. 

H.R. 2150 would require the BLM to develop a plan to ‘‘ensure 

that all leaseable tracts in the Reserve are within 25 miles of an 

approved road and pipeline right-of-way.’’ 

Of course, requiring the BLM to invest time and money in mapping out a spiderweb of roads and pipelines before we even know 

where future oil and gas production may take place is wasteful. 

Underscoring the difficulty of predicting where future production 

may occur, and thus the infrastructure needed to support it, oil 

companies have been relinquishing numerous leases in the NPRA. 

In the last three years of the Bush Administration, oil and gas 

companies relinquished more than 100 leases in the Reserve. 

In Fiscal Year 2010, 64 leases were relinquished, and already 

this year, 2011, companies have relinquished 60 leases. 

H.R. 2150 would further require the Secretary to develop regulations to require action on drilling permits within 60 days. However, 

existing regulations that are already in place impose a timeframe 

on the Department of 90 days to consider applications to drill in 

the NPRA. 

Moreover, there are no pending applications at the BLM for permits to drill in the NPRA. H.R. 2150 would require the Geological 

Survey to complete an assessment of the technically recoverable oil 

and gas in the Reserve. 

The USGS just released a new assessment of the undiscovered 

oil and gas reserves in the NPRA about eight months ago. That assessment revised previous estimates downward by more than 90 

percent. 

The USGS also completed a study of the economically recoverable oil and gas in the Reserve earlier this year. And according to 

the USGS, the average cost of an oil and gas assessment is $2.75 

million. 

We shouldn’t be wasting nearly $3 million to require the USGS 

to redo an assessment completed less than a year ago. 

President Obama and the House Democrats have taken steps to 

encourage drilling in the NPRA. The Chairman said we will not 

hear today how the Administration has stymied oil production in 

Alaska. No, we won’t hear about it, unless you are making it up, 

because that is not happening. 

President Obama announced May 14, as the Chairman said, that 

he would direct the Department of the Interior to conduct annual 

lease sales. And I am pleased that it is not the President who has 

reversed himself here; I am pleased that the Majority has included 

similar language in this bill, and that the Majority has reversed 

their position from three years ago, when all but 15 Republican 

Members, so the large majority of Republican Members, voted 

5 

against a similar provision contained in the comprehensive energy 

legislation passed by Democrats on the House Floor. 

So we should encourage oil and gas drilling in the NPRA in a responsible manner, as President Obama and House Democrats have 

done. I look forward to the testimony. I yield back. 

[The prepared statement of Mr. Holt follows:] 

Statement of The Honorable Rush D. Holt, Ranking Member, 

Subcommittee on Energy and Mineral Resources 

Thank you Mr. Chairman. 

Today, this subcommittee is considering legislation dealing with oil drilling in the 

National Petroleum Reserve Alaska or NPR–A. The majority claims that we need 

this legislation because the Administration is somehow blocking oil and gas drilling 

in the Reserve and slow-walking permits in the NPR–A. However, the facts do not 

support the majority’s claims. 

As with previous drilling bills the majority has moved through this Committee to 

set artificial and unnecessary deadlines on the Interior Department and limit the 

environmental review of oil and gas drilling, H.R. 2150 would unnecessarily truncate review of permits by the BLM. H.R. 2150 would direct the Secretary of the Interior to ‘‘ensure that any Federal permitting agency shall issue permits’’ for pipelines and roads within 60 days of enactment for leases that have an approved permit to drill and within 6 months of the submission of an application for a permit 

to drill for other leases. This directive would appear to require the Interior Department to compel other Cabinet-level agencies to act, something far beyond the scope 

of the Secretary’s authority. Furthermore, this directive is unnecessary because 

there are no pending applications with the BLM to construct pipelines or roads in 

the NPR–A. This provision also could prohibit proper NEPA review of future major 

oil and gas pipelines in the reserve. 

H.R. 2150 would require the BLM to develop a plan to ‘‘ensure that all leasable 

tracts in the Reserve are within 25 miles of an approved road and pipeline rightof-way.’’ Of course, requiring the BLM to invest time and money in mapping out a 

spider-web of roads and pipelines, before we even know where future oil and gas 

production may take place is wasteful and counterproductive. 

Underscoring the difficulty of predicting where future production may occur and 

thus the infrastructure needed to support it, oil companies have been relinquishing 

numerous leases in the NPR–A. In the last three years of the Bush Administration, 

oil and gas companies relinquished more than 100 leases in the Reserve. In Fiscal 

Year 2010, 64 leases were relinquished, and already this year, companies have relinquished 60 leases. 

H.R. 2150 would further require the Secretary to develop regulations to require 

action on drilling permits within 60 days. However, existing regulations already 

place a timeframe on the Department of 90 days to consider applications to drill in 

the NPR–A. Moreover, there are currently no pending applications at the Bureau 

of Land Management for permits to drill in the NPR–A. 

And H.R. 2150 would require the U.S. Geological Survey to complete an assessment of the technically recoverable oil and gas in the Reserve. Well, the USGS just 

released a new assessment of the undiscovered oil and gas reserves in the NPR– 

A in October of 2010. That assessment revised previous estimates downward by 

more than 90 percent. The USGS also completed a study of the economically recoverable oil and gas in the Reserve earlier this year. According to the USGS, the aver- age cost of an oil and gas assessment is $2.75 million. We shouldn’t be wasting 

nearly $3 million to require the USGS to redo an assessment completed less than 

1 year ago. 

President Obama and House Democrats have taken steps to encourage drilling in 

the NPR–A. House Democrats introduced the Increase American Energy Production 

Now Act of 2011 on May 12, which would require at least one lease sale per year 

in the NPR–A. Building on that idea, President Obama announced on May 14th in 

his weekly radio address that he would direct the Department of the Interior to conduct annual lease sales in the NPR–A. I am pleased that the Majority has included 

similar language in this bill and that they have reversed their position from 2008, 

when all but 15 Republican Members voted against a similar provision contained 

in comprehensive energy legislation passed by Democrats on the House floor. 

We should encourage oil and gas drilling in the NPR–A as President Obama and 

House Democrats have done. But we should make sure that we are drilling in challenging environments like the Arctic responsibly, not truncating proper review as 

the majority proposes in this bill. 

6 

Mr. LAMBORN. OK, thank you, Representative Holt. I now recognize the full Committee Chairman for five minutes for his opening 

statement. 

STATEMENT OF HON. DOC HASTINGS, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF WASHINGTON 

Mr. HASTINGS. Thank you very much, Mr. Chairman, for holding 

this hearing on this bill, the National Petroleum Reserve Alaska 

Access Act. 

Just last week I had the privilege of traveling to Alaska with our 

colleagues, Don Young and Alaska Governor Sean Parnell, up to 

the North Slope, and it was an extraordinary trip from my point 

of view. 

As we have heard in testimony at prior hearings, Alaskans depend on a robust oil and natural gas industry to fuel their economy 

and create jobs, and America depends on Alaska to provide safe 

and reliable energy to sustain and create jobs across the entire 

country. 

Alaska is, without a doubt, a tremendous energy asset to our 

nation. 

The NPRA was specifically designated in 1923 as a petroleum reserve. Its purpose was to help supply our country with American 

energy. These oil and natural gas resources should be developed to 

create jobs here, and make us less dependent on Middle Eastern 

oil. 

Development of the NPRA has enjoyed bipartisan support, including from President Obama and House Democrat leaders, so I 

am very hopeful that this will continue with this legislation. 

H.R. 2150 expands energy production by requiring that annual 

lease sales be held in the NPRA. This is a proposal recently supported by President Obama. 

However, lease sales alone are not enough. Producing oil and 

natural gas in the NPRA is pointless if there is no way to get it 

out of the NPRA. The real problem is the Federal Government’s 

blocking and delaying the permits for necessary roads, bridges, and 

pipelines needed to transport the energy out of this area. 

While in Alaska, we visited the site where ConocoPhillips has 

been waiting for three years to receive a permit to construct a 

bridge and pipeline over the Colville River. They have discovered 

oil that is ready to be produced—ConocoPhillips—and delivered to 

the American people. It is unacceptable that the Federal Government is the obstacle in harnessing this energy, American energy. 

To address this problem, the bill sets firm guidelines for infrastructure permits to be approved. This will ensure that bureaucratic delays will not prevent oil and natural gas resources from 

being transported out of the NPRA. 

Further, the development of the NPRA is imperative to keep the 

Trans-Alaskan Pipeline System operating. TAPS is a conduit for 

transporting oil from the far North across Alaska, for shipments to 

Washington State—my state—and California, and for refining and 

use in the Lower 48. 

TAPS at one time conveyed over two million barrels of oil per 

day, but reduced production has left the pipeline at less than half 

that capacity, threatening a shutdown that would impact 

7 

thousands of good-paying jobs. This bill will help ensure that TAPS 

stays full and operational. 

TAPS is arguably the single most important piece of energy infrastructure in our nation. Let me pause at this observation. If it 

was targeted for destruction by a foreign threat, our nation would 

aggressively defend and protect that pipeline. Yet the Federal 

Government policies and inaction are threatening to starve TAPS 

into destruction. We must not let that happen. 

NPRA oil and natural gas is vital to the future of American 

energy production. As gasoline prices hover at highs near $4 per 

gallon, it is imperative that Congress take action to increase energy 

production, production that would lower prices, create jobs, and 

lessen our dependence on unstable foreign energy. 

So with that, I yield back my time. I thank the gentleman for 

having this hearing. 

Mr. LAMBORN. Thank you, Mr. Chairman. And we have one more 

piece of official business to conduct before we hear from the distinguished witness, who will consist of our first panel. 

I now recognize the Ranking Member of the full Committee, Representative Markey, for his opening statement. 

STATEMENT OF HON. EDWARD MARKEY, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF MASSACHUSETTS 

Mr. MARKEY. Thank you, Mr. Chairman. Mr. Chairman, I have 

a unanimous-consent request that as we discuss Alaska, as we discuss the National Petroleum Reserve Alaska today, I ask that we 

accept a motion that we measure the oil in Alaska not in how 

many barrels of oil could be filled with that oil, but rather how 

many Stanley Cups of oil would be filled. Because in Boston, in 

Boston we are very happy today. 

[Laughter.] 

Mr. MARKEY. And we know it is not a good day in Canada and 

in the northland, all those rooting for—— 

Mr. HASTINGS. Reserving the right to object. 

[Laughter.] 

Mr. MARKEY. I am so sorry, Mr. Chairman, this is our day for 

gloating. 

Mr. LAMBORN. If it doesn’t lead to any rioting. 

Mr. MARKEY. In Vancouver it does; in Boston, they are doing 

cartwheels. 

The bill we are considering today—and welcome, Senator—the 

bill we are considering today would require at least one sale annually in the NPRA. 

Well, if this provision sounds familiar to some of my colleagues, 

it should. In 2008, House Democrats passed comprehensive drilling 

legislation on the Floor of the House, which required at least one 

lease sale per year in the NPRA. All but 15 of my Republican colleagues voted against that bill on the House Floor. 

And it might also sound familiar, from legislation which I introduced with other House Democrats earlier this year, the Increase 

American Energy Production Now Act of 2011, introduced on 

May 12, that includes a provision requiring at least one lease sale 

annually in the NPRA. 

8 

But it might also sound familiar, from what President Obama 

has already announced in his weekly radio address. On May 14, 

President Obama announced, ‘‘I am directing the Department of 

the Interior to conduct annual lease sales in Alaska’s National Petroleum Reserve, while respecting sensitive areas.’’ 

So President Obama and the Interior Department are already 

speeding up leasing in the NPRA, exactly as this legislation would 

require. 

In 2008, NPRA apparently stood for something that at that point 

we could receive very little support, in terms of increasing and celebrating the leasing in the Reserve. But perhaps we should think 

about another meaning for NPRA. And that is that we now have 

a consensus that is building around this issue. I hope that everyone 

understands, however, that the bill includes more than an unnecessary provision. The bill would waive as well the requirements of 

the National Environmental Policy Act, or NEPA, for the construction of roads and pipelines in the NPRA. It would impose artificial 

and arbitrary deadlines on the Department to approve permits for 

the construction of infrastructure, even though there are no such 

applications pending from oil and gas companies. 

And as we are coming up on the debt ceiling, and the Majority 

is attempting to cut key programs, such as Medicare, this bill 

would require the U.S. Geological Survey to waste as much as $3 

million to conduct an assessment of the oil and gas reserves in the 

NPRA, when the ink is barely dry on the last USGS assessment. 

This bill is more of the same drill, baby, drill, speed-over-safety 

refrain that we have seen from the Majority during this entire Congress. The bill would waive bedrock environmental laws, and limit 

review of drilling permits. The bill is not only unnecessary, it is imprudent. The President and the Democrats support drilling in the 

NPRA. That is why we passed the legislation in 2008. That is why 

the President supports it. 

What we do not support, though, is waiving the National Environmental Policy Act in order to accomplish that goal. I yield back 

the balance of my time. 

Mr. LAMBORN. OK, thank you. We will now hear from our first 

panel of witnesses. We have before us the Hon. Lisa Murkowski, 

the senior Senator from the State of Alaska. 

Madame Senator, we are honored to have you here today. Your 

written testimony will appear in full in the hearing record, so I ask 

that you keep your oral statement to five minutes, as outlined in 

our invitation letter to you, and under Committee Rules. 

Our microphones are not automatic, so you have to press the button to get started. And I realize that you are on a hard deadline 

and have to leave at 10:30. 

Thank you so much for being here, and you may begin. 

STATEMENT OF HON. LISA MURKOWSKI, A U.S. SENATOR 

FROM THE STATE OF ALASKA 

Senator MURKOWSKI. Thank you, Mr. Chairman. I appreciate the 

invitation to join with you and Ranking Member Holt, thank you. 

Congressman Hastings, thank you for introducing the legislation 

that you have in front of us. 

And to my Congressman, it is good to see you here, as well. 

9 

[Pause.] 

Senator MURKOWSKI. I noticed, I am taking account of that. But 

I am glad that you are here, and I thank you for the opportunity 

to walk across from the Senate side to discuss the National Petroleum Reserve Alaska. This is an important issue. 

And as Representative Markey has indicated, this is an area 

where we ought to be able to find agreement; that if we can’t be 

producing in the National Petroleum Reserve Alaska, where can we 

produce? So I thank you for the opportunity to discuss this today. 

Because as we talk about what we have in terms of potential, this 

is not only about enhanced opportunities for oil, but this is about 

jobs. This is about energy security. This is about reducing the Federal deficit. 

The NPRA is, by name and by law, a petroleum reserve. It is not 

a wildlife refuge, it is not a national park, it is not a monument 

or a wilderness area. Its primary statutory purpose is to supply 

conventional energy resources to our nation. 

The authorizing statute calls for the expeditious development of 

these resources, so it is somewhat amazing that we are even having this conversation. If we agreed that this is where we should be 

doing it, why do we have to have legislation to advance it? 

Congressman Hastings referenced the ConocoPhillips CD-5 application up in the Colville River Delta. It was February 5 of last year 

that the Corps denied Conoco’s Section 404 permit for construction 

of a bridge across the Colville River. 

The bridge is necessary to move personnel, equipment, and of 

course a pipeline, across the delta to the leases that the company 

has bought. This is not just for CD-5, but hopefully for CD-6 and 

CD-7. The process of determining where and when and how to construct this bridge really began back in 2004, and was negotiated intensely in both an interagency process with Federal and state entities, as well as with very, very strong local participation, including 

the nearby village of Nuiqsut. 

This would have been a great story of industry success working 

with government and local residents, and it would be the first oil 

produced from the NPRA. But all of this public process, all of this 

support, didn’t matter to the EPA. With no public process, or even 

notice, the Agency designated the Colville River as an aquatic resource of national importance, and signaled a clear intention to elevate the project to a veto, under Section 404 of the Clean Water 

Act. 

We are still, we are still working through this process with the 

Administration to advance this permit over the Colville. 

So the question needs to be asked: How did we get to this point? 

We have to ask again. If we can’t be producing from the National 

Petroleum Reserve, where in the world can we get it from? 

I would suggest to you that we have a permitting problem; we 

don’t have a leasing problem. The leases are out there. We can 

lease every acre there is. But without some assurance of basic use 

and enjoyment of the property, purchasing a lease would be a very 

risky business. And I am cautiously optimistic that we will see a 

better result for CD-5 specifically, but I think that there is a bigger 

problem here. 

10 

If every time a leaseholder wants to produce from the NPRA, 

they have to come to Congress and essentially have a Congressional hearing, we are not going to be in a much better position 

next go-around. I think we recognize that we have a vastly understated resource estimate within the NPRA, and you take this with 

the highly speculative reassessment of previous studies; these 

delays are going to shrink private investment in bidding on NPRA. 

This will cost taxpayers billions in the future, if the bids are low 

or nonexistent, let alone the lost benefits of the royalties, the 

energy security, and of course, most importantly, the jobs that are 

at stake. 

I want to close with a very brief history lesson. This was back 

in 1980, over 30 years ago. Congressman Young was here. I wasn’t 

around yet. But the President at the time, President Carter, when 

he signed ANILCA into law, he stated 100 percent of Alaska’s offshore areas, and 95 percent of the potentially productive onshore 

oil and mineral areas, will be available for exploration or for drilling. That was a statement, that was a commitment that our President made 30 years ago. 

Mr. Chairman, this is among the biggest and the worst broken 

promises between the Federal Government and any state. And it 

is shameful, it is unacceptable, and we must change this. 

I appreciate your attention to this matter. I would ask that my 

full statement be accepted for the record. Again, thank you for your 

leadership on this issue. 

[The prepared statement of Ms. Murkowski follows:] 

Statement of The Honorable Lisa Murkowski, U.S. Senator, State of Alaska 

Chairman Lamborn, Ranking Member Holt, thank you for inviting me to speak 

at this important hearing and thank you for considering legislation to expedite the 

development of the National Petroleum Reserve–Alaska, or the NPRA. As Alaska’s 

Senior U.S. Senator and the Ranking Member of both the Energy and Natural Resources Committee as well as the Appropriations Subcommittee on Interior and the 

Environment, I have a distinct interest in this subject. But it is first and foremost 

as an Alaskan that I come to you in hopes of advancing this discussion and our 

shared goals—those being jobs, energy security, and reducing the federal deficit. 

The NPRA is, by name and law, a petroleum reserve. It is not a wildlife refuge, 

a national park, a monument, or a wilderness area. Its primary statutory purpose 

is to supply conventional energy resources to our Nation. The authorizing statute 

calls for the expeditious development of these resources so it amazes me that we 

are having this conversation today, 

On February 5th of last year, the Corps of Engineers denied Conoco-Phillips’ Section 404 application for the construction of a simple bridge across the Colville River 

Delta. A bridge was necessary for the safe transport of personnel, equipment, and 

of course a pipeline across the delta to leases the company had bought and explored 

in the area known as CD–5, with the hopes of more production from CD–6 and CD– 

7. The process of determining where, when, and how to construct this bridge really 

began in 2004 and was negotiated intensely in both an interagency process, with 

federal and state entities, as well as strong local participation, including the nearby 

Native village of Nuiqsut. This would have been a great success story of industry 

working with government and local residents, and it would be the first oil production ever from the NPRA. 

But all of this public process, all of this support, didn’t matter to the EPA. With 

no public process or even notice, the agency designated the Colville River Delta an 

‘‘aquatic resource of national importance’’—an ARNI—and thereby signaled a clear 

intention to elevate the project to a veto under the Clean Water Act Section 404. 

Several months later the Corps decision came back rejecting the application. Conoco-Phillips appealed this and we have been working extremely hard with the Administration to work through the issues raised in the denial. 

Members of the Subcommittee, how did we get to this point? We in Congress have 

to ask ourselves, if we can’t get petroleum from the National Petroleum Reserve, 

11 

where in the world can we get it? So I commend Chairmen Hastings and Lamborn, 

together with Congressman Young, for putting forth this bill to bring this issue to 

the forefront. And I appreciate the recognition that we have a permitting problem, 

not just a leasing problem. We can lease every acre there is, but without some assurance of basic use and enjoyment of this property, purchasing a lease would be 

a very risky venture. I am cautiously optimistic that we will see a better result for 

CD–5 specifically, but there is a major problem here. If every time a leaseholder 

wants to produce from the NPRA, it requires Congressional hearings and years of 

involvement from this many elected officials, we will not be in much better position 

next time. 

The danger is that, combined with what we in Alaska know to be a vastly understated federal resource estimate of the NPRA, based on highly speculative reassessments of previous studies, these delays will shrink private interest in bidding on 

the NPRA. This stands to cost taxpayers billions into the future if bids are low or 

nonexistent, let alone the lost benefits of royalties, energy security, and most importantly jobs. 

I want to close with a very brief history lesson. Over 30 years ago in 1980, while 

Congressman Young was already here but well before I was, President Carter, right 

when he signed Alaska National Interest Lands Conservation Act—or ANILCA— 

into law and after his re-election was lost, stated that ‘‘100 percent of [Alaska’s] offshore areas and 95 percent of the potentially productive [onshore] oil and mineral 

areas will be available for exploration or for drilling.’’ Mr. Chairman, this is among 

the biggest and worst broken promises between the federal government and any 

state, and it is shameful and unacceptable. As the Interior Department reported last 

spring when it published its report on so-called ‘‘non-producing’’ lands, less than one 

percent of federal lands in Alaska, and none of our federal offshore lands, are producing any oil or natural gas. This is shameful and unacceptable because it represents not only a failure of the federal government to allow U.S. taxpayers to benefit from their federal resources, but also because it is an outright broken promise 

to the people of the State of Alaska. I doubt very much the statehood agreement, 

let alone ANILCA, would ever have been agreed to if the signatories had any idea 

that this would be the outcome. 

For these reasons, I am glad to see the NPRA getting this attention and I hope 

my colleagues will understand why so many members are becoming reluctant to 

agree to any further land withdrawals anywhere. The witnesses, particularly from 

the State of Alaska, are in good position to speak to the merits of this bill and the 

need for the NPRA’s resources in preserving the viability of the Trans-Alaska Pipeline. I am supportive of this bill and you may look to very similar efforts from the 

Senate. 

Mr. LAMBORN. You are certainly welcome. Thank you for being 

here today. Your full statement will appear in the record. We appreciate your attendance. Thank you so much. 

We will now have our second panel of witnesses. And I would 

like to invite to come forward the Hon. Joe Balash, Deputy Commissioner of the Alaska Department of Natural Resources, within 

the Alaska Department of Natural Resources. Charles T. Drevna, 

President of the National Petrochemical and Refiners Association; 

Tim Sharp, Secretary-Treasurer of Laborers Local No. 942; and 

Eric Myers, Policy Director, Audubon Alaska. 

Like all witnesses, your written testimony will appear in full in 

the hearing record, so I ask that you keep your oral statement to 

five minutes, as outlined in our invitation letter to you, and under 

Committee Rules. 

Our microphones are not automatic, so you have to turn them on 

when you are ready to begin. And when you have one minute left, 

the yellow light will come on. 

We do have to expedite things this morning. We have a long series of votes that are going to begin about 11:30, and we have to 

have not only your statements, but questions and answers afterwards. And we have one more panel following. 

12 

So we will try to keep our questions as expedited as possible, as 

well. 

Mr. Balash, you may begin. 

STATEMENT OF HON. JOE BALASH, DEPUTY COMMISSIONER, 

ALASKA DEPARTMENT OF NATURAL RESOURCES 

Mr. BALASH. Thank you. Good morning, Chairman Lamborn, 

Ranking Member Holt, and members of the House Subcommittee 

on Energy and Mineral Resources. 

On behalf of Governor Sean Parnell, the State of Alaska welcomes this opportunity to testify to you about our support for the 

objectives of this legislation. I also wish to express our eagerness 

to work with the U.S. Congress and the Administration to see that 

Alaska can meet its potential to deliver to the Nation billions of 

barrels of domestically produced oil, and trillions of cubic feet of 

natural gas, for the U.S. economy. 

The National Petroleum Reserve Alaska Access Act is a good first 

step toward realizing the potential that Federal lands in Alaska 

have to provide domestic energy supplies. The provisions of the Act 

are not unprecedented. Construction of TAPS required an Act of 

Congress, and that was at a time when the U.S. economy was in 

the doldrums, actions by OPEC were forcing prices into the stratosphere, and Americans were left wondering whether we still had 

what it takes to maintain our presence as a world power. 

We hope this legislation is but one piece of a larger body of work 

by the Congress that will once again make clear that energy production from America’s most prolific hydrocarbon province is a 

national priority. 

Before commenting on the legislation specifically, I would like to 

bring the Committee’s attention to the massive energy potential in 

Alaska. As a threshold matter, Alaska’s North Slope has huge reserves, and is still relatively underexplored. According to the U.S. 

Geological Survey, America’s Arctic ranks as number one for undiscovered oil potential, and number three for natural gas potential, 

in the world’s conventional petroleum resources north of the Arctic 

Circle. This represents 43 percent of the nation’s total oil potential, 

and 25 percent of its gas potential. 

Thus, the issue of whether Alaska can continue to provide a significant share of domestic production does not center on whether 

we have enough hydrocarbons to entice investment. With $100-abarrel oil, the viability of Alaska production is clearly not solely 

economic. Its realization will primarily be determined by Federal 

politics and policies relative to Federal lands in Alaska. 

If we had a Federal Government that welcomed exploration and 

development, and permitted operations in a timely and predictable 

manner, the economics of filling TAPS would take care of itself. 

Ironically, one place in Federal jurisdiction where there should 

be less resistance to oil and gas development is the NPRA. The objectives of the NPRA Access Act address many of the challenges to 

development on Federal lands in Alaska. 

Exploration and development in Alaska is a very long-term proposition. A predictable leasing program is key to allowing companies 

to make the investment of time, capital, and limited human reVerDate Nov 24 2008 10:45 Feb 23, 2012 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6602 L:\DOCS\66955.TXT Hresour1 PsN: KATHY
13 

sources necessary to realize tremendous gains from this relatively 

untapped resource. 

The NPRA Access Act recognizes the critical linkage between resource and transportation infrastructure, including roads and pipelines. Without the means to reach reserves and move them to market, these resources are effectively stranded. 

Predictability in regulatory timelines is critical. In Alaska, we 

pride ourselves on doing things right. One way we achieve that is 

by restricting certain activities to very specific windows of time 

throughout the year. Due to these limited windows of opportunity 

to conduct exploration and development activities, delays of critical 

permits for these Alaska projects, even if only by 30 days, can push 

back projects by an entire year. 

This is particularly true for exploration conducted in the NPRA, 

since there is little to no permanent year-round surface transportation infrastructure, beyond the Spine Road at Kuparuk, which is 

well east of the NPRA boundary. 

Perhaps the most ambitious element of the proposed legislation, 

the call for a plan for approved rights-of-way, complements plans 

put into place by the state. In 2009, Governor Parnell directed his 

Department of Transportation to advance the permitting for a road 

and pipeline corridor from Umiat in the southeast corner of NPRA 

to the Dalton Highway and TAPS. More than 90 miles west of the 

Dalton, Umiat is known to contain a discovery of oil at relatively 

shallow depths, just inside the NPRA. The road and pipeline would 

provide benefits not only for access and transportation of oil, but 

also for future exploration and development of gas in the foothills. 

Additionally, the road would benefit the U.S. Army Corps of Engineers as it continues cleanup of the former military site at 

Umiat. Whether this road is constructed depends on the completion 

of an EIS by the Corps, and issuance of permits by Federal agencies. 

The State of Alaska welcomes Congress’s involvement in ensuring that access to Federal lands for responsible resource development occurs in a timely and predictable manner. Thank you. 

[The prepared statement of Mr. Balash follows:] 

Statement of Joe Balash, Deputy Commissioner, 

Department of Natural Resources, State of Alaska 

Chairman Lamborn, Ranking Member Holt, and members of the House Subcommittee on Energy and Mineral Resources, on behalf of Governor Sean Parnell, 

the State of Alaska welcomes this opportunity to testify to you about our support 

for the objectives of this legislation. I also wish to express our eagerness to work 

with the U.S. Congress and the Administration to see that Alaska can meet its potential to deliver to the nation billions of barrels of domestically produced oil and 

trillions of cubic feet of gas for the U.S. economy. 

More specifically, we want to demonstrate to this committee and the rest of your 

colleagues in the Congress the vital role Alaska can play in enhancing America’s 

long-term energy security, expanding American employment, growing the economy, 

providing significant revenue to federal, state, and local governments, and delivering billions of barrels of domestically produced hydrocarbons to the U.S. marketplace. At a time when the Congress faces difficult choices between raising taxes and 

cutting spending development of our nation’s natural resources offers a means to 

put Americans to work, increase federal revenue, and reduce the balance of trades 

deficit. 

Before getting into substantive matters, I would like to briefly mention my professional background as it pertains to this testimony. I have been serving as deputy 

commissioner of the Alaska Department of Natural Resources (DNR), a state agency 

14 

of over 1,100 personnel, since December 2010. Under the Alaska Constitution, the 

primary responsibility of the DNR is to maximize the development of the state’s resources in a manner that furthers the public interest. DNR manages one of the largest portfolios of oil, gas, minerals, land, and water resources in the world, including 

approximately 100 million acres of uplands, 60 million acres of tidelands, shore 

lands, and submerged lands, and 44,500 miles of coastline. I am responsible for the 

management of the Divisions of Oil and Gas (DOG), Geologic Geophysical Survey 

(DGGS), and Coastal and Ocean Management (DCOM), and the Offices of the State 

Pipeline Coordinator (SPCO), the Alaska Gasline Inducement Act Coordinator 

(ACO), and the Mental Health Land Trust (TLO). 

General 

This subcommittee has properly recognized that some of our country’s biggest 

challenges center on energy security, national security, employment, and the national deficit. Pursuing smart policies that promote responsible energy development 

in America can help the country meet and overcome these challenges. 

The National Petroleum Reserve Alaska Access Act is a good first step towards 

realizing the potential federal lands in Alaska have to provide domestic energy supplies. The provisions of the act are not unprecedented. Construction of TAPS required an Act of Congress—at a time when the U.S. economy was in the doldrums, 

actions by OPEC was forcing prices into the stratosphere, and Americans were left 

wondering whether we still had what it takes to maintain our presence as a superpower. We hope this legislation is but one piece of a larger body of work by the Congress that will once again make clear that energy production from America’s most 

prolific hydrocarbon province is a priority. 

Before commenting on the legislation specifically, I’d like to bring the Committee’s 

attention to the massive energy potential in Alaska. Alaska is a leader in promoting 

all types of energy, including our massive renewable energy base of hydro power, 

geothermal, wind, and biomass. We are also a national leader in promoting energy 

efficiency throughout the state. We cannot, however, talk about strategies to ensure 

our country’s energy security without discussing our critical need to increase domestic production of oil and gas. 

Alaska’s Role in America’s Energy Picture 

Alaska is one of the nation’s most critical and prolific oil-producing states. For 

more than 30 years Alaska has supplied domestic energy supplies to markets in the 

United States. When unscheduled disruptions to this supply occur, such as in August 2006 and in January of this year, prices move upward and refineries on the 

West Coast are forced to seek supplies from foreign sources. While production is less 

than 2/3 of its peak production, Alaska still supplies more than 600,000 barrels of 

oil every day. 

The artery which gets that domestic energy to market is the Trans Alaska Pipeline. Eight hundred miles of 48’’ pipe, eleven pump stations, several hundred miles 

of feeder pipelines, and the Valdez Marine Terminal constitute the Trans-Alaska 

Pipeline System (TAPS). It is one of the longest pipelines in the world; it crosses 

more than 500 rivers and streams and three mountain ranges as it carries Alaska’s 

oil from Prudhoe Bay to Valdez. 

Spurred by global concern over the 1973 oil crisis (OPEC embargo) and spiking 

energy prices that resulted in a severe U.S. and global recession, the U.S. Congress 

was instrumental in the approval and rapid development of TAPS. Congress approved construction of the pipeline with the Trans Alaska Pipeline Authorization 

Act of 1973. The principle focus of this Act is as relevant today as it was in 1973: 

‘‘the early development and delivery of oil and gas from Alaska’s North Slope to domestic markets is in the national interest because of growing domestic shortages 

and increasing dependence upon insecure foreign sources.’’ 

Underscoring the urgency of the country’s precarious energy security position, the 

Trans Alaska Pipeline Authorization Act also halted all legal challenges to delay 

construction of the pipeline and ensured that additional government studies would 

not be used to delay construction. Under its Congressional declaration of purpose 

the Act states: ‘‘The purpose of this chapter is to insure that, because of the extensive governmental studies already made of this project and the national interest in 

early delivery of North Slope oil to domestic markets, the trans-Alaska oil pipeline 

be constructed promptly without further administrative or judicial delay or impediment. To accomplish this purpose it is the intent of the Congress to exercise its constitutional powers to the fullest extent in the authorizations and directions herein 

made and in limiting judicial review of the actions taken pursuant thereto.’’ 

15 

Alaska’s Energy Potential 

Alaska’s North Slope, both on and offshore, remains a world-class hydrocarbon 

basin with extraordinary potential. According to the U.S. Geological Survey, America’s Arctic ranks as number one for undiscovered oil potential and number three 

for gas potential for the world’s conventional petroleum resources north of the Arctic 

Circle. Nearly 50 billion barrels of conventional undiscovered, technically recoverable oil resources and 223 trillion feet of conventional undiscovered, technically recoverable gas resources may be found in the North Slope and the Arctic OCS off 

Alaska’s northern coast. This represents 43 percent of the nation’s total oil potential 

and 25 percent of its gas potential. 

The development of these resources means jobs, domestic energy supplies, and 

revenues for the federal treasury. A recent study conducted by Northern Economics 

and the Institute for Social and Economic Research at the University of Alaska Anchorage examined the national benefits associated with commercialization of oil and 

gas resources in the Arctic OCS. Their findings demonstrate that there are significant, material gains available to the nation through development of domestic natural resources. 

Based on a reasonable set of price estimates for oil and gas ($65/bbl and $6.40/ 

mmBtu respectively), researchers estimated that $193 billion in revenues would accrue to federal, state, and local governments over a 50-year period. If you assume 

a price for oil closer to what the market is trading at today, that revenue estimate 

climbs to nearly $263 billion. From a jobs perspective, this economic activity would 

generate an annual average of 54,700 jobs nationwide, with an estimated cumulative payroll amounting to $145 billion over the same time period. 

These extraordinary benefits are those that can be derived from a single element 

of federal lands in the Arctic. In addition, the Arctic National Wildlife Refuge 

(ANWR) and the National Petroleum Reserve-Alaska contain large resource potential with further economic benefits available to the nation. While these benefits are 

impressive, they are based solely on conventional oil and gas resources. 

Unconventional Resources 

In addition to conventional oil and gas resources, Alaska’s North Slope contains 

massive quantities of unconventional resources: shale oil and gas, coalbed methane, 

deep-basin gas, heavy and viscous oil, and gas hydrates (USGS mean estimate is 

85 trillion cubic feet). The U.S. Department of Energy has estimated that there is 

36 billion barrels of heavy oil on the North Slope. (No current estimates exist of 

Alaska’s shale oil and gas reserves.) Most of these unconventional resources are located onshore near existing infrastructure. Energy companies are beginning to investigate developing some of these resources in Alaska, particularly shale oil. 

The oil fields at Prudhoe Bay and Kuparuk are the two largest discovered in 

North America. The oil and gas contained in those fields was captured by geologic 

structures as the hydrocarbons migrated up from the source rocks that produced 

them. Those source rocks are well-known by geologists—and they are huge. While 

their potential is unknown, key indicators (thermal maturity, organic chemistry, 

petrophysics, and geomechanics) appear to be analogous to the Eagle Ford play in 

southern Texas. 

Three different source rocks are present, representing distinct opportunities for 

development if a commercial means can be found to produce them. Key to that commercial determination is the cost of production and transportation. Their location 

runs from the base of the Brooks Range just outside of ANWR and proceeds west 

in a wide swath through the NPR–A all the way to the Chukchi coast. 

The Future of Arctic Energy Production 

The importance of federal land to the future of oil and gas development in 

Alaska’s Arctic must not be underestimated. Many of the most promising oil and 

gas resources in Alaska are in federal lands. Development of these lands, in particular from the OCS, Arctic National Wildlife Refuge, and National Petroleum Reserve—Alaska (NPR–A), could result in production of over a million barrels of oil 

a day. Unfortunately, the federal government has consistently denied access to these 

lands, made decisions that have added significant delays to promising projects, and 

pursued policies that have chilled the investment climate. 

What concerns Alaskans and what should concern all Americans is the continued 

viability of TAPS to operate under its current configuration. Under the same law 

Congress enacted to ensure its construction, once TAPS is no longer operating it 

must be dismantled and removed. Without a pipeline to transport crude oil to the 

northernmost ice-free port in the U.S., very little of the potential identified above 

can ever be realized. The viability of TAPS as a continuing critical component of 

16 

our nation’s energy security infrastructure is an issue for all Americans. It is on this 

issue that the federal government can play a critical role. 

The reduced flow of oil through TAPS has reached a point where the pipeline is 

now approximately two-thirds empty. Continued throughput decline raises a host of 

technical challenges due to the slower velocity of oil in the pipeline, longer transit 

times, and the resulting dramatic lowering of the temperature of oil during the winter months. These challenges include wax buildup, frost heaves, and ice crystals and 

ice plugs. The likelihood of these problems occurring increases with lower throughput, and they can cause additional TAPS shutdowns and oil leaks that could harm 

the environment. This past January, TAPS was shut down for five days as the result of a leak at Pump Station 1 that was contained in a building. 

The State of Alaska is working with industry to ensure that we are prepared to 

address these additional challenges in the near term as TAPS throughput decline 

continues. But clearly, the most effective way to address these technical challenges 

and the environmental risks that they may entail is to increase TAPS throughput. 

The January 2011 shutdown of TAPS, during the heart of a cold Alaskan winter, 

not only focused attention on the significant technical challenges of decreased TAPS 

throughput, but also raised the specter of a broader premature shutdown of TAPS. 

Such a shutdown would significantly undermine U.S. national security and energy 

security interests and would devastate the Alaskan economy. 

A premature shutdown of TAPS would result in the stranding of billions of barrels 

of domestic oil in America’s largest hydrocarbon basin. Oil prices would continue to 

soar. Thousands of jobs would be lost. U.S. refineries would likely have to turn to 

foreign sources of oil, as they did when TAPS shutdown in January, thereby increasing the U.S. trade deficit and undermining American national and energy security. 

A premature TAPS shutdown would also have a crushing impact on Alaskans. It 

has been estimated that one-third of the Alaska economy is connected to the oil industry. The loss of North Slope oil production would deprive state and local governments of billions of dollars in annual revenue. Government services including education, public safety, and health care would be slashed and infrastructure projects 

would be significantly curtailed. Rural communities, particularly those that have 

significantly benefitted from oil development such as the North Slope Borough, 

would face a significant decrease in their standard of living. 

But continued TAPS throughput decline does not need to be Alaska’s or the country’s destiny. The massive North Slope hydrocarbon resource base remains available 

for development. What is needed to ensure a reversal of this decline are state and 

federal policies that promote increased investment, responsible resource development, and increased job creation on the North Slope. 

The Need for Investment 

Despite the extraordinary production and massive hydrocarbon potential, Alaska 

remains relatively underexplored compared to any other prolific oil and gas region 

in North America. Only 500 exploration wells have been drilled within a 150,000- 

square-mile area on the North Slope—an area that maintains the highest undiscovered conventional oil and gas potential in Alaska. That calculates to three wells 

per 1,000 square miles. As a comparison, 75,000 square miles within the state of 

Wyoming, endowed with high oil and gas potential, has more than 19,000 exploration wells, or about 250 wells per 1,000 square miles. 

With this remarkable potential, Alaska can play a pivotal role in helping our 

country meet its significant energy and security challenges; reduce our reliance on 

foreign oil; provide thousands of high paying jobs; reduce the nation’s trade deficit; 

and provide significant revenue to local, state, and federal governments. 

The Need for Affirmative Federal Support 

Although both economics and federal policies are in play, the viability of TAPS 

is more of a political issue than an economic one. As a threshold matter, Alaska’s 

North Slope has huge reserves and it is still relatively underexplored. Thus, the 

issue of TAPS’ viability does not center on whether we have enough hydrocarbons 

to entice investment. With $100/barrel oil, predictions that oil prices will remain 

over $80-$90 for much of the decade, and Alaska’s existing infrastructure to transport hydrocarbons, the viability of TAPS is clearly not solely economic. 

The State of Alaska is also doing as much as we can to make oil production on 

state lands as globally competitive as possible. The Governor’s major tax reform legislation will do much to get us to such a position. While it is true that 98 percent 

of all of the oil production to date has come from state lands, the lion’s share of 

the resource potential belongs to the federal government. In the estimates given 

above, fully 88 percent of the undiscovered technically recoverable oil and 79 percent 

of the gas will be explored for on land under federal jurisdiction. 

17 

For these reasons, the long-term viability of TAPS will primarily be determined 

by federal politics and policies. Unfortunately, the federal government has consistently denied access to these lands, made decisions that have added significant 

delays to promising projects, and pursued policies that have chilled the investment 

climate, discouraging companies from exploring and producing in Alaska. When 

Shell cannot drill one exploratory well in the OCS after five years of spending billions of dollars for leases and permits, and ConocoPhillips cannot get a permit, 

again after five years, to build a bridge across the Colville River to access CD–5 in 

the NPR–A, it is the federal government that is denying access to abundant hydrocarbon resources and, ultimately, jeopardizing the long-term viability of TAPS. 

These are just a few examples of many where federal policies have focused on discouraging—not encouraging—the billions of dollars of investment needed to increase 

North Slope oil production. If we had a federal government that welcomed exploration and development and permitted operations in a timely and predictable manner, the economics of filling TAPS would take care of itself. 

Protecting Alaska’s Environment 

Among the reasons for these actions is concern for the environment. This concern, 

however, is misguided. Failure to advance development of Alaska’s domestic energy 

supplies does not advance global environmental protection. To the contrary, it does 

the opposite. When oil and energy development in Alaska is shut down by our own 

government, development for such resources is driven overseas to places like Brazil, 

Russia, Iraq, Azerbaijan, and Saudi Arabia. Environmental standards in these 

places are not nearly as strong or strictly enforced as in Alaska, where stringent 

regulations are the hallmark of hydrocarbon production on the North Slope. 

Alaska has some of the most stringent environmental policies and regulations in 

the world and we are a leader in research for sound natural resource development. 

We love our state, not only for its economic opportunities, but also for its natural 

beauty, and we are very focused on protecting our environment. 

The State of Alaska strongly believes that responsible resource development and 

protecting the environment go hand in hand and we have a strong record of upholding the Alaska Constitution’s mandate that the state pursue responsible resource 

development in a manner that safeguards the environment. 

To ensure responsible resource development occurs in Alaska, the state has devised a comprehensive system that imposes rigorous environmental protections that 

meet or exceed federal standards. Wherever possible, we have assumed—or are in 

the process of assuming—primacy for the issuance of permits. 

Our efforts at protecting the environment and wildlife have been successful. For 

example, when debating the development of TAPS, many predicted that oil and gas 

development would decimate caribou herds. These predictions have not come true. 

In fact, caribou numbers have increased dramatically over the past thirty years. The 

Central Arctic caribou herd, which occupies summer ranges surrounding Prudhoe 

Bay, has grown from 5,000 in 1975 to over 66,000 today. 

Even with a robust regulatory regime, the state continues to look for ways to improve its regulatory oversight. Later this month, the state will release a comprehensive gap analysis conducted to: better understand the spectrum of state agency oversight; better understand the effectiveness of authorities and enforcement over oil 

and gas operations; and to identify gaps or redundancies in state oversight and determine if they need to be filled or eliminated as appropriate. 

Because of the efforts taken by federal, state, and local governments and the energy industry, oil and gas development in Alaska is conducted in a safe and responsible manner with standards that exceed most other jurisdictions in the world. 

NPR–A: a Logical First Step 

Ironically, one place in federal jurisdiction where there should be less resistance 

to oil and gas development is the National Petroleum Reserve-Alaska (NPR–A). 

Early in the last century this land was specifically set aside by Congress for oil and 

gas exploration and production. As well, the State of Alaska has itself invested 

heavily in this area—and may be the largest single investor in recent exploration 

there. In just the last decade, the state of Alaska has awarded more than $180 million in cash exploration incentive tax credits to several oil companies to conduct 

seismic surveys and drill exploration wells in the NPRA on land that it does not 

own. The objectives of the National Petroleum Reserve-Alaska Access Act address 

many of the challenges facing exploration and development on federal lands in 

Alaska. 

Leasing 

Access to Lands through predictable leasing programs allows those companies interested in exploring, finding, and producing to assess the opportunities and plan 

18 

for participation. Exploration and development of oil and gas in Alaska is a long 

term proposition. A predictable leasing program is key to allowing companies to 

make the long-term investment of time, capital, and limited human resources necessary to realize tremendous gains from this relatively untapped resource. 

Transportation Infrastructure 

The NPR–A Access Act recognizes the critical linkage between resource and transportation infrastructure—including roads and pipelines. The first production from 

CD–5—the expansion of the Colville River Unit operated by ConocoPhillips—was expected to start in 2012. Unfortunately, in February 2010, the U.S. Army Corps of 

Engineers (COE) reversed course and denied ConocoPhillips its permits to construct 

a pipeline and vehicle bridge across the Nigliq Channel in the Colville River Delta. 

Without the means to move it to market, this reserve of oil is effectively stranded. 

Many Alaskans viewed this decision as a shutdown of NPR–A development. 

After five years of delays, the status of CD–5 remains uncertain, thereby chilling 

the investment climate over the entire NPR–A. Alaskans remain hopeful and we believe that the COE will recognize the efficacy of a bridge over the Nigliq Channel 

and approve ConocoPhillips’ permit. 

Deadlines for Permits 

Predictability in regulatory timelines is critical. In Alaska, we pride ourselves on 

doing things right. One way we achieve that is by restricting certain activities to 

very specific windows of time throughout the year. If a critical permit is delayed 

by 30 days, the consequences to the execution of the project could be enormous. 

Tundra travel in the Arctic is restricted to those months when the ground is frozen solid to a depth that ensures the surface will not be scarred by exploration activities. Operators need sufficient time to mobilize equipment to the site of the exploration activity, to conduct the relevant activity, and to demobilize the equipment 

and return it to permanent infrastructure. 

Due to these limited windows of opportunity to conduct exploration and development activities, when critical permits are delayed for Alaska projects the consequence can be delay of the project for an entire year. This is particularly true for 

exploration conducted in the NPR–A since there is little to no permanent, yearround surface transportation infrastructure beyond the spine road at Kuparuk. 

Planned ROW 

Perhaps the most ambitious element of the proposed legislation, the call for a plan 

for approved rights-of-way for pipeline, road, and other surface infrastructure to ensure all leases are within 25 miles of an approved right-of-way complements plans 

by the State of Alaska. In 2009, Governor Parnell directed the State of Alaska to 

advance the permitting for a road and pipeline corridor from Umiat to the Dalton 

Highway and TAPS. 

More than 90 miles west of the Dalton, Umiat is known to contain a discovery 

of oil at relatively shallow depths just inside the NPR–A. The company holding the 

leases at Umiat estimates the size of the field to be 250 million barrels, with peak 

production capable of reaching 50,000 barrels per day. 

The road and pipeline would provide benefits not only for access and transportation of oil, but also for future exploration and development of gas in the Foothills. 

The road would also benefit to the U.S. Army Corps of Engineers as it continues 

cleanup of the former military site at Umiat. A total of $24 million in state funds 

have been appropriated by the Alaska Legislature to complete the necessary EIS. 

Accountability 

Requiring a notification for applicants with specific information regarding delays 

in the issuance of permits is a novel approach that will inform operators of the likelihood they will succeed in obtaining the necessary permits and authorizations required to proceed with responsible development. Such notifications will allow operators to make reasoned decisions regarding the timing and efficacy of their exploration plans. 

Resource Assessment 

Activities currently underway by the USGS should make this relatively easy to 

achieve. SOA had concerns with the last revision made to assessments of the oil resources of the NPR–A. We remain bullish on the prospects of conventional oil discoveries yet to be found, and are certain that significant unconventional resources 

are in place throughout the region. 

19 

Conclusion 

The State of Alaska welcomes Congress’s involvement in ensuring that access to 

federal lands for responsible resource development occurs in a timely, predictable 

manner. We believe the NPR–A Access Act supports Alaska’s goal of one million 

barrels a day through TAPS within a decade. By working together to champion such 

a goal, as well as the President’s goal of reducing oil imports by one-third, we can 

demonstrate how state and federal governments can come together to curb our dependence on foreign oil and create a brighter, more secure future for Americans. 

The benefits of increased access to and production from federal lands in the Arctic 

promote numerous interests of America and Alaska: 

• Economic and job security 

• Trade deficit—promoting resource development in Alaska ensures that we import less oil from overseas 

• Federal budget deficit—by providing Americans access to their own lands to 

produce oil, the federal government is opening the opportunity to earn billions 

in direct revenues, rather than forcing Americans to help fill the treasuries 

of countries such as Venezuela, Russia, and, Saudi Arabia. 

• Energy security—promoting development of Alaska’s massive sources of domestic energy reinforces U.S. energy security. 

Mr. LAMBORN. All right. Thank you for your testimony. Mr. 

Drevna. 

STATEMENT OF CHARLES T. DREVNA, PRESIDENT, 

NATIONAL PETROCHEMICAL AND REFINERS ASSOCIATION 

Mr. DREVNA. Good morning, Subcommittee Chairman Lamborn, 

Ranking Member Holt, Chairman Hastings, and members of the 

Subcommittee. I am Charlie Drevna, and I serve as President of 

NPRA, the National Petrochemical and Refiners Association. And 

again, thank you for giving me the opportunity to testify in support 

of the National Petroleum Reserve Alaska Access Act. 

My association and the NPRA Reserve Alaska share the same acronym, but we are a little different. National Petrochemical and 

Refiners Association is a trade association. We represent high-tech 

American manufacturers of virtually the entire supply of U.S. gasoline, diesel, jet fuel, other fuels, home heating oil, and the petrochemicals used as the building blocks for virtually thousands of 

products. 

My NPRA is headquartered in an office building in Washington 

that sits atop a parking garage. The U.S. Geological Survey estimates that the National Petroleum Reserve Alaska sits on top of 

more than 2.7 billion barrels of oil, and more than 114.3 trillion 

cubic feet of natural gas. And as Senator Murkowski pointed out, 

these are probably very low estimates. 

These are tremendous energy resources. Our nation needs to use 

them to bring the tremendous benefits to the American people. 

For more than 30 years elected officials have been saying we 

need to reduce our reliance on foreign oil. For far longer, they have 

been telling us America needs to create more jobs. So we can talk 

about this for another 30 years, or 40 years, or 50 years, or we can 

take action. And producing more oil and natural gas in Alaska and 

elsewhere in the United States is the most effective action I believe 

we can take. 

Lurching from crisis to crisis, and wishing and hoping for miraculous new energy sources to magically solve all of our problems, 

isn’t the foundation of U.S. energy policy. Instead, we need a reality-based policy that looks years down the road, and understands 

20 

the need to develop easily accessible, abundant, efficient, reliable, 

and proven sources of domestic energy. This will be the foundation 

for a more secure future for our children and grandchildren. 

My association supports the National Petroleum Reserve Alaska 

Act because it is realistic, practical, and benefits America and the 

American people. 

A report from 2008 said that oil and natural gas development in 

Alaska would have the following impacts, and I quote now: ‘‘Reducing world oil prices, reducing the U.S. dependence on imported foreign oil, improving the U.S. balance of trade, extending the life of 

the Trans-Alaska Pipeline System for oil, and increasing U.S. jobs.’’ 

Now, some may assume this report was produced by the oil industry; but in fact, it was produced by the United States Energy 

Information Administration. Now, this is a non-partisan and independent government organization that is respected for its objective 

analyses. 

The National Petroleum Reserve Alaska Act deserves to be enacted into law on two levels. First, it will, because it will provide 

a sure and steady supply of domestic oil to enable fuel and petrochemical manufacturers to meet the needs of millions of Americans 

throughout the country—living in Alaska, Washington, Oregon, 

California, Nevada, Arizona, and Hawaii. 

And second, because this important legislation, and I believe it 

is just the first step of many actions that we urge Congress and 

the Administration to take, to make more use of America’s valuable 

fossil-fuel resources available to serve all Americans across the entire nation. 

Let me dispel a myth that has been repeated so often that millions of Americans understandably believe it is true. Despite what 

you may have heard, America is not energy-poor. We are energyrich. We have more oil, natural gas, and other energy resources 

under our feet and off our shores than just about any country on 

earth, and we are finding new and environmentally safe ways to 

bring these energy sources to the American people all the time. 

Keeping our energy resources locked up and out of reach makes 

about as much sense as a millionaire keeping all his cash stuffed 

in a mattress. We need to take advantage of our energy wealth. 

The members of NPRA want to ensure a continuing supply of 

American oil to our refineries and petrochemical manufacturing 

plants, because we want to preserve America’s economic and national security. Instead of shipping billions of more dollars abroad 

to buy foreign crude, we want to keep more of our nation’s wealth 

right here, in our own nation, supporting American families and 

communities. 

Instead of creating millions of jobs abroad, we want to produce 

more oil and natural gas, and more fuels and petrochemicals, right 

here. 

We urge the approval of the National Petroleum Reserve Alaska 

Access Act. It is the first in a series of critical measures to lay the 

foundation for a U.S. energy policy that benefits our nation, economy, and all Americans. 

Thank you very much. 

[The prepared statement of Mr. Drevna follows:] 

21 

Statement of Charles T. Drevna, President, 

National Petrochemical & Refiners Association 

I. Introduction 

Good morning Subcommittee Chairman Lamborn and Ranking Member Holt, 

Chairman Hastings, Ranking Member Markey and members of the Subcommittee. 

I’m Charlie Drevna, and I serve as president of NPRA, the National Petrochemical 

& Refiners Association. Thank you for giving me this opportunity to testify before 

the Subcommittee on Energy and Mineral Resources of the House Natural Resources Committee in support of The National Petroleum Reserve Alaska Access 

Act. 

My association and the National Petroleum Reserve-Alaska share the same acronym, but are in very different locations. The National Petrochemical & Refiners Association is headquartered in an office building here in Washington that sits on top 

of a parking garage. The U.S. Geological Survey estimates that the National Petroleum Reserve-Alaska sits on top of more than 2.7 billion barrels of oil and more 

than 114.3 trillion cubic feet of natural gas. These are tremendous energy resources, 

and our nation needs to use them to bring tremendous benefits to the American 

people. 

The National Petrochemical & Refiners Association is a trade association representing high-tech American manufacturers of virtually the entire U.S. supply of 

gasoline, diesel, jet fuel, other fuels and home heating oil, as well as the petrochemicals used as building blocks for thousands of vital products. NPRA members make 

modern life possible, meet the needs of our nation and local communities, strengthen economic and national security, and provide jobs directly and indirectly for more 

than 2 million Americans. 

I know that in the public mind, the oil industry is a collection of giant companies 

that do everything—explore and drill for oil, manufacture fuels and petrochemicals, 

and own gasoline stations where you fill up your car or truck. But that’s a myth, 

not reality. In fact, the concept of ‘‘Big Oil’’ is a pejorative that inaccurately seeks 

to homogenize, vilify and discount the tens of thousands of companies and millions 

of American working men and women affiliated with our nation’s domestic oil 

industry. 

NPRA member companies engage in what we call ‘‘downstream’’ manufacturing 

activities—we don’t primarily focus on the ‘‘upstream’’ work of getting oil out of the 

ground or offshore, but rather on turning oil into useful products. Or to paraphrase 

an old advertising slogan: We don’t produce the oil, we make the oil better. The oil 

that comes directly out of the wellhead is useless until it’s refined through sophisticated manufacturing processes into a transportation fuel or turned into a petrochemical—and that is the important work carried out by our members. 

The National Petroleum Reserve Alaska Access Act deserves to be enacted into 

law on two levels. First, because it will provide a sure and steady supply of domestic 

oil to enable refineries and petrochemical manufacturing plants to make the fuel 

and other vital products needed to serve the millions of Americans living in Alaska, 

Washington, Oregon, California, Nevada, Arizona and Hawaii. And second, because 

this important legislation it is just the first of many actions we urge Congress and 

the administration to take to make more of America’s valuable fossil fuels resources 

available to serve the American people. 

II. America is Energy Rich 

Before I get into the specifics of the merits of this bill, let me dispel a myth that’s 

been repeated so often that millions of Americans understandably believe it’s true. 

America is not energy poor—we’re energy rich. We have more oil, natural gas and 

other energy resources under our feet and off our shores than just about any country on Earth. And we’re finding new—and environmentally safe—ways to bring 

these energy sources to us all the time. Examples include technology for extracting 

oil from shale and from oil sands, and technology for bringing vast amounts of natural gas to the surface by using hydraulic fracturing. The problem isn’t that we lack 

energy resources. The problem is that our government is making it extremely 

hard—if not impossible in some instances—to use them, even with extensive environmental safeguards. 

From the Atlantic, to the Gulf of Mexico, to our nation’s Pacific Coast...from the 

Marcellus Shale in Pennsylvania and neighboring states to the Eagle Ford Shale in 

Texas...from untapped oil and natural gas fields in the Lower 48 states to 

Alaska...our nation is blessed with immense and untold energy riches. 

Keeping our energy riches locked up and out of reach makes about as much sense 

as a millionaire keeping all his cash stuffed in a mattress—and then begging for 

22 

money because he won’t give himself access to his own fortune. We need to take 

advantage of our energy wealth. 

III. Utilize NPR–A 

Let me focus now on the need for Alaskan crude oil and The National Petroleum 

Reserve Alaska Access Act. In testimony May 13 this year before the Subcommittee 

on Energy and Power of the House Committee on Energy and Commerce (a copy 

of which is being submitted with this testimony), Lynne D. Westfall, executive vice 

president of Turner Mason & Company, pointed out: 

• The region comprised of Alaska, Washington, Oregon, California, Nevada, Arizona and Hawaii was a major exporter of crude oil to the rest of the country 

in the 1980s. But this region has gradually seen oil production drop. Oil has 

not been shipped out of the region since 2001. 

• These seven states are not connected by pipelines to other parts of the United 

States and now rely on oil imported from other nations for about 50 percent 

of their demand. 

• ‘‘Without continued production in Alaska, the West Coast will grow more dependent on imports from OPEC.’’ 

• Declining oil production in Alaska ‘‘will fall below the minimum operating 

rate for the Trans Alaska pipeline in the early 2030s. The economics of production, however, may cause the cessation of supplies well before that time.’’ 

In fact, we have already seen times in the past few years where the low volume 

of oil being transported by the 800-mile long Trans Alaska pipeline has threatened 

to halt pipeline operations, endangering the oil supply to American refiners in the 

process. The low volume of oil in the pipeline has already slowed the speed at which 

oil travels through the vital artery, allowing the oil temperature to cool and threatening pipeline malfunctions. 

The loss of the Trans Alaska pipeline would cause many problems. Had there 

been no crude coming from Alaska to the Western states in 2010 they would have 

imported more than 73 percent of their crude oil, and 71 percent of these imports 

would have come from OPEC nations. 

Mr. Westfall presents many additional compelling statistics in his testimony to 

clearly establish that people of the West need more oil from Alaska. Those who 

decry America’s reliance on imported oil and at the same time oppose efforts to 

bring us more oil from our northernmost state are being logically inconsistent. 

Looking in detail at the provisions of the National Petroleum Reserve Alaska Access Act, my association believes this legislation has a number of beneficial provisions that would avoid bureaucratic delays that hold up the process for producing, 

transporting and delivering American oil to American refiners. 

The legislation provides for a streamlined and expedited permitting process to accelerate the leasing, exploration and production activities in the National Petroleum 

Reserve-Alaska. This permitting process would also speed the building of critical infrastructure needed to transport Alaskan oil to the West Coast market. In addition, 

the bill calls on the Department of the Interior to develop a plan for coordinating 

future leases and production activities with access to necessary infrastructure. 

Our nation needs to ensure that there are minimal constraints to critical energy 

arteries—roads, bridges and pipelines—that move reliable and secure American energy sources to manufacturers that produce useful American products. Unfortunately, too often multiple government agencies create years of bureaucratic delays 

in approving a permit for a road, a bridge or other needed infrastructure. 

For example, ConocoPhillips, a member of the National Petrochemical & Refiners 

Association, has a ‘‘shovel-ready’’ project called CD5 in the National Petroleum Reserve-Alaska area that could generate new jobs and investment immediately. CD5 

alone represents 400 new jobs per year during at least two years of construction, 

plus hundreds more support jobs. This project would also generate income for 

Alaska and the U.S. economy. However, the project has faced permitting delays 

since 2005. 

IV: Use Domestic Energy 

Some may be wondering: if we just buy oil, why do the refiners and petrochemical 

manufacturers that NPRA represents care so much about where the oil comes from? 

The Gulf of Mexico, the Gulf of Alaska, the Arabian Gulf or wherever—what’s the 

difference? There are a number of critically important reasons why we want—and 

why our nation needs—robust domestic oil and natural gas production. 

Above all, we want to ensure a continuing supply of domestic oil to refineries and 

petrochemical manufacturing plants because we want to preserve America’s economic and national security. We share the concern of Democrats, Republicans and 

independents that our nation has become too reliant on oil from unstable areas of 

23 

the world that are too often hostile to American interests. We share the concern of 

all Americans about our high national unemployment rate and the terrible suffering 

it is causing families around our country. We share the concern of the American 

people that our nation’s debt and deficit are too high. Producing more energy right 

here at home can have a big effect on reducing all these problems. 

We also—believe it or not—don’t necessarily benefit from high oil prices. Our 

members are the first customers for crude oil, and can’t manufacture fuels and petrochemicals without oil. In fact, about 70 percent of the cost of gasoline is determined by oil prices set on world commodities markets. Just as a baker doesn’t welcome a rise in flour prices, or a coffee brewer doesn’t welcome increases in the price 

of coffee beans, we don’t necessarily welcome increases in oil prices. I never try to 

predict what will happen with fuel prices. But I’ve never heard anyone say that 

shortages of domestic supply ever put downward pressure on the price of any 

product. 

We’ve seen President Obama and other administration officials meet with officials 

from Brazil and OPEC nations to encourage oil production abroad and to encourage 

sales of the foreign oil to the United States. But why not produce more oil and natural gas right here at home to create millions more American jobs beyond the 9.2 

million already supported by both the ‘‘upstream’’ and ‘‘downstream’’ petroleum sectors? 

Why not keep billions more American dollars right here in our own country, supporting American families and communities, instead of shipping this wealth abroad 

to buy foreign crude? Why not hold down costs of crude oil by producing more in 

our own country and relying less on oil shipped from foreign nations thousands of 

miles away? 

Using our own energy resources to a much greater extent would be an enormous 

economic stimulus to our country, at no cost to American taxpayers. Besides reducing unemployment, it would flood the U.S. Treasury with billions more dollars in 

taxes and royalty payments from oil companies and the workers they employ. What 

is the alternative? Growing energy imports that weaken our economy, wipe out 

American jobs, increase our trade deficit and make us less secure in a dangerous 

world. 

V. Conclusion 

The National Petrochemical & Refiners Association is not opposed to non-fossil 

fuels forms of energy. We want all forms of energy to compete on a level playing 

field in a free market, and we want to let the best forms of energy win. We understand that no single energy source will meet all of our nation’s needs, and that we 

need an ‘‘all of the above’’ solution to energy challenges. 

NPRA is the association that says ‘‘yes’’ to a brighter energy future. We say ‘‘yes’’ 

to the spirit of innovation and free market competitiveness that led to countless inventions in the past 200 years, transforming America from a frontier nation to the 

leading nation on our planet. We say ‘‘yes’’ to problem-solving instead of throwing 

up our hands in surrender. We say ‘‘yes’’ to building prosperity instead of managing 

scarcity. 

The death of the hydrocarbon molecule has been forecast for a very long time, but 

it will continue providing the American people with reliable, secure, abundant and 

efficient energy for many decades to come. The members of NPRA and the hardworking men and women we employ are proud to be able to harness this amazing 

molecule to serve the American people every hour of every day. 

The companies that are members of NPRA are often criticized and demonized. 

But in fact, we’re not part of America’s energy problems—we’re part of the solution 

to those problems. We believe the path to overcoming the energy challenges America 

faces begins with a national commitment to using our own God-given resources to 

serve the interests of our own citizens. Americans haven’t achieved success by waiting passively for things to happen to us. We’ve achieved success by taking control 

of our destiny. Our parents and grandparents and earlier generations did this, and 

we and our children and grandchildren can do this as well. 

I’m obviously here representing the best interests of the American fuel and petrochemical manufacturers that are members of NPRA. We want to stay in business, 

serving the American people, employing American workers, paying American taxes, 

strengthening American communities, being good American citizens. We don’t want 

to see American fuel and petrochemical manufacturing plants and their workers be 

replaced by foreign competitors—as happened with much of the American textile, 

appliance, auto and electronics manufacturing industries in the lifetimes of many 

of us here today. 

But if we get to the point where more and more of the oil we rely on comes from 

abroad, there’s no reason why more and more of the gasoline, diesel, jet fuel, petroVerDate Nov 24 2008 10:45 Feb 23, 2012 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6621 L:\DOCS\66955.TXT Hresour1 PsN: KATHY
24 

chemicals and other products we manufacture couldn’t be made abroad as well. Bad 

news for NPRA members? Absolutely. But more importantly, bad news for American 

consumers, American workers, and the American economy. 

We urge approval of The National Petroleum Reserve Alaska Access Act as the 

first of a series of measures to help bring an end to the bad economic news that’s 

hit our country in the last few years, to give Americans faster and greater access 

to our nation’s valuable natural resources, to generate more revenue for government 

at all levels, and to begin building a better and brighter future for our nation and 

the American people. 


66955.001.eps 66955.002.eps
25 


66955.003.eps 66955.004.eps
26 


66955.005.eps 66955.006.eps
27 

Mr. LAMBORN. OK, thank you. Mr. Sharp. 

STATEMENT OF TIM SHARP, BUSINESS MANAGER/ 

SECRETARY TREASURER, LABORERS LOCAL 942 

Mr. SHARP. Good morning. My name is Tim Sharp, and I am the 

Business Manager of the Alaska District Council of Laborers, an 

organization representing approximately 5,000 union construction 

workers. We are mainly construction, maintenance, and manufacturing workers employed throughout the State of Alaska. We work 

in the oilfields, on roads and bridges, within the building and construction trades industry, as well as maintain both public and private infrastructure facilities all over the State. 


66955.007.eps 66955.008.eps
28 

I am here today and very excited to strongly support H.R. 2150, 

or the National Petroleum Reserve Alaska Access Act, introduced 

by Congressmen Young, Hastings, and Lamborn. We are in strong 

support for a number of different reasons, but they boil down to 

two main issues that most impact my membership. Most simply 

put, those are jobs and affordable fuel and energy. 

There was never a question of if the NPRA should be opened, 

only when. We would suggest that with the dwindling amount of 

oil presently being pumped through the Trans-Alaska Pipeline, the 

cost of gas and heating oil for the average American increasing to 

business and commerce-stifling rates, the huge number of unemployed construction workers, the extra cost burden presently being 

exacted on our rural Alaskans in the form of $6- to $10-dollar-pergallon fuel, that there is no better time than right now. 

There will of course be the inevitable wailing and gnashing of 

teeth from those who have never met a road, bridge, dam, or pipeline that they liked, especially from certain organizations outside 

our state run by people that have never even been there, that wish 

to lock up our state out of a misguided perception of what they 

think it should be. 

From the perspective of the people I represent and most Alaskans that I know, we need jobs, and we need affordable energy and 

fuel. We see no wisdom in not taking action to begin to address the 

obvious immediately. We feel that this legislation is a straightforward approach toward doing so for the nation. 

Also to at least show that we are responsible stewards of our own 

state, I would also support any development being tied to the most 

stringent, ecologically friendly engineering possible. It means more 

jobs, it protects the environment, and results in cheaper and more 

abundant energy. 

The other reason for moving this legislation now is that the oilfields are not built or developed overnight. I think that five years 

would be a very conservative guess toward a minimum timeline in 

going from permitting to blueprints to further exploration, to roads 

and pad construction, to pipelines, and finally to market. However, 

the upside would be that five years of good employment leading up 

to a time of bringing a downward pressure to the price per gallon 

of gasoline or heating fuel. We see no downside for Americans. 

It has also been my observation, after 20 years in the Alaskan 

oilfields, that the amount of spinoff jobs created in support of this 

type of development are huge. There may also be large amounts of 

natural gas to be discovered, tapped, and developed as a result of 

newly concentrated commercial activity in the NPRA. 

Finally, and most important, is that Alaska has always had the 

potential to be a huge breadbasket of natural resources for America. Shy of permitting and politics, the only thing that keeps this 

from becoming a reality is the extraordinarily high cost of energy 

that it takes to develop them. 

This legislation moves us toward changing that, and helping to 

control our own destiny as a state and as a nation. The only thing 

we can know for sure is that which is not working already; and 

that any further inaction, for lack of political will, will only put us 

farther behind the eight-ball of increased dependence on foreign oil, 

jobs, and energy. 

29 

Please support this timely and much-needed legislation for our 

country, and thank you for taking the time to listen. 

[The prepared statement of Mr. Sharp follows:] 

Statement of Tim Sharp, Business Manager/Secretary Treasurer, 

Alaska District Council of Laborers, Anchorage, Alaska 

Good Morning, 

I appreciate the invitation from Chairman Lamborn to testify and the sub committee for taking the time to listen. My oral testimony will be the same as my written remarks. 

My name is Tim Sharp and I am the Business Manager of the Alaska District 

Council of Laborers, an organization representing approximately five thousand 

union workers. We are mainly construction, maintenance and manufacturing workers employed throughout the State of Alaska. We work in the oilfields, on roads and 

bridges, within the building and construction trades industry, as well as, maintain 

both public and private infrastructure facilities all over the state. 

I am here today and excited to strongly support H.R. 2150 or the National Petroleum Reserve Alaska Access Act introduced by Congressmen Young, Hastings and 

Lamborn. We are in strong support for a number of different reasons, but they boil 

down to two main issues that most impact my membership. Most simply put, those 

are jobs, and affordable fuel and energy. 

There was never a question of ‘‘f’’the NPRA should be opened, only ‘‘hen’’ We 

would suggest that with the dwindling amount of oil presently being pumped 

through the Trans Alaska Pipeline, the cost of gas and heating oil for the average 

American increasing to business and commerce stifling rates, the huge numbers of 

unemployed construction workers, the extra cost burden presently being exacted on 

our rural Alaskans in the form of six to ten dollar per gallon fuel, that there is no 

better time than now. 

There will of course be the inevitable wailing and gnashing of teeth from those 

who never met a road, bridge, dam or pipeline that they liked; especially from certain organizations outside our state run by people that have never been there, that 

wish to lock our state up out of their own misguided perception of what they think 

it should be. From the perspective of the people I represent and most Alaskans I 

know, we need jobs and we need affordable energy and fuel. We see no wisdom in 

not taking action to begin to address the obvious immediately and feel this legislation is a straightforward approach towards doing so for the nation. 

Also, to at least show that we are responsible stewards of our own state I would 

also support any development being tied to the most stringent ecologically friendly 

engineering possible. It means more jobs, protects the environment and will result 

in cheaper and more abundant energy. 

The other reason for moving this legislation now is that oilfields are not built or 

developed overnight. I would think that five years would be a very conservative 

guess toward a minimum time line in going from permitting to blueprints, to further 

exploration, to roads and pad construction, to pipelines, and finally to market. However, the upside would be five years of good employment leading up to a time of 

bringing a downward pressure to the price per gallon of gasoline or heating fuel. 

We see no downside for Americans. 

It also has been my observation, after twenty years in the Alaskan oilfields, that 

the amount of spin off jobs created in support of this type of development are huge. 

There may also be large amounts of natural gas to be discovered, tapped and developed as a result of newly concentrated commercial activity in the NPRA. 

Finally, and possibly most important, is that Alaska has always had the potential 

to be a huge breadbasket of natural resources for America. Shy of permitting and 

politics, the only thing that keeps this from becoming a reality is the extraordinarily 

high cost of energy here that it takes to develop them. This legislation moves us 

towards changing that and helping to control our own destiny as a state and a 

nation. 

The only thing we can know for sure is; that which is not working already and 

that any further inaction for lack of political will, will only put us further behind 

the eight ball of increased dependence on foreign oil. 

Jobs and energy... Please support this timely and much needed legislation for our 

country. 

Thank you again for taking the time to listen. 

30 

Mr. LAMBORN. Thank you, Mr. Sharp, for your testimony on behalf of working families. 

Now I would like to hear from Mr. Myers. 

STATEMENT OF ERIC MYERS, POLICY DIRECTOR, 

AUDUBON ALASKA 

Mr. MYERS. Mr. Chairman, members of the Subcommittee, thank 

you for the opportunity to provide this testimony on the topic of 

today’s hearing. My name is Eric Myers, and I serve as the Policy 

Director for Audubon Alaska. Today I am representing the 

National Audubon Society. 

Both as a longtime resident of Alaska, as well as a citizen of the 

United States, I believe this is a very important topic. With more 

than 450 chapters across the country and more than a million 

members, volunteers, and supporters, Audubon has a long history 

of involvement with the National Petroleum Reserve Alaska, and 

advocates for a responsible and balanced approach to resource 

development in Alaska, which includes the only Arctic ecosystem in 

the United States. 

Audubon is not opposed to oil and gas development, and recognizes that we are all consumers of energy. At the same time, Audubon supports a careful and measured approach to resource development in America’s Arctic that should include a continuing commitment to the conservation and protection of special areas with exceptional biological values. 

Alaska has benefitted greatly from oil development and the associated revenues, but these fiscal benefits have not come without 

cost. Since the discovery of oil at Prudhoe Bay in 1968, North Slope 

development has grown from a single operational oilfield to a 

sprawling industrial complex, extending across 100 miles of America’s Central Arctic. More than 30 major oilfields have been developed, with more than 5,500 exploration and production wells, and 

more than 390 gravel pads, connected by more than 500 miles of 

road and 600 miles of pipeline, and supported by some 20 airstrips, 

various production plants, production facilities, refineries. This infrastructure has used more than 50 million cubic yards of gravel 

mined from North Slope rivers and tundra. 

Impacts include oil spills, both large and small, too numerous to 

count; displacement of wildlife; air pollution, water pollution; elimination of wilderness values; and the loss of significant subsistence 

harvest opportunities in the Central Arctic across the Coastal 

Plain, between the Canning River to the east and the Colville River 

to the west. This industrial development has permanently transformed Alaska’s North Slope, and is projected to continue far into 

the future. 

Incremental industrialization is now moving west, with the proposal to develop permanent new infrastructure on the Federal public lands inside the NPRA. 

Audubon believes that the current law enacted by Congress appropriately recognizes that there is room for both future oil production, as well as protection, within the NPRA. The NPRA is the 

largest single land-management unit in the United States. Congress enacted the Naval Petroleum Reserves Production Act in 

31 

1976, and explicitly recognized that the NPRA contains far more 

than just potential hydrocarbon resources. 

Current law recognizes the need for balanced management of our 

public lands and the NPRA, specifically calling for the protection 

of special areas with important surface values and exceptional biological resources. At more than 22 million acres, the NPRA spans 

a large portion of the entire North Slope. It is larger than 12 

states. Were it a state, it would fall somewhere between South 

Carolina and Maine in size. 

Audubon believes that within such a vast landscape, it is both 

reasonable and appropriate that there be a balance in development 

and conservation. This is the position that Congress itself has endorsed in the statutes that govern the NPRA when it enacted the 

Naval Petroleum Reserves Production Act in 1976, and transferred 

management from the Navy to the Department of the Interior, expressly requiring protection of exceptional surface values. 

Congress itself recognized two areas in particular, Teshekpuk 

Lake and the Utukok River Uplands, and deserving maximum protection because of the exceptional biological values found in these 

areas. 

In keeping with the American land ethic of balanced land management, Congress has recognized in the NPRA the value of the 

nation’s public lands includes far more than just the wealth and 

economic gain that can be extracted. 

Teshekpuk Lake has been a particular focus of Audubon’s work 

in the past 10 years. The Teshekpuk Lake special area includes the 

most important goose-molting habitat in the Arctic, and provides 

vital habitat for tens of thousands of geese that gather annually in 

the area, including Brant, greater wet-fronted geese, snow gees, 

and Canada geese. These waterfowl rely on the wetlands in the 

area, and migrate back south to their wintering grounds across the 

Lower 48. 

It is important to recognize that both Democratic and Republican 

administrations have recognized the importance of this area, and 

Presidents with disparate philosophies, such as Jimmy Carter and 

George W. Bush, have both taken actions to see this area protected. 

Consistent with the Congressional requirement to conduct an expeditious program of competitive leasing, the BLM has conducted 

numerous oil and gas leases, leasing more than 6.8 million acres 

to date. Half of those lease sales were in the past decade, and the 

vast majority of the 13.4 million acres have been leased in the 

Northwest and Northeast planning areas multiple times. There 

have been four lease sales in the Northeast planning area alone, 

in 1999, 2004, 2008, and 2010. Most recently within the last year. 

And there will be another lease sale held within the calendar year. 

My point, sir, is simply to say that there is, there has been leasing by the BLM, and the current law is important to maintain. And 

that the proposals that are reflected in this legislation would abandon the protections that have previously been recognized by Congress. I will stop there. Thank you. 

[The prepared statement of Mr. Myers follows:] 

32 

1 42 USC § 6504 

2 42 USC § 6506a 

3 1998 NE NPRA Final IAP/EIS, Vol 1: Introduction—Purpose and Need, p. I–1 

Statement of Eric F. Myers, Policy Director, 

Audubon Alaska, Anchorage, Alaska 

Thank you for the opportunity to provide testimony to the Subcommittee on Energy and Mineral Resources on the topic of today’s hearing. 

My name is Eric Myers and I serve as the Policy Director for Audubon Alaska. 

Today I am representing the National Audubon Society. With more than 450 chapters across the country and more than one million members, volunteers and supporters, Audubon has a long history of involvement with the National Petroleum Reserve Alaska (NPRA) and advocates for responsible and balanced approach to resource development in Alaska, which includes the only Arctic ecosystem in the 

United States. 

Audubon is not categorically opposed to oil and gas development and recognizes 

that we are all consumers of energy. At the same time, Audubon supports a careful 

and measured approach to resource development in America’s Arctic that should include a commitment to the conservation and protection of special areas and exceptional biological values. 

Today’s hearing is focused on the NPRA, the largest single land management unit 

in the United States. Established by President Harding in 1923, the NPRA was 

originally intended to help meet the Navy’s needs as it converted from coal to oil. 

In 1976, Congress enacted the Naval Petroleum Reserves Production Act (NPRPA) 

and removed management of the NPRA from the Navy and transferred it to the Department of the Interior (DOI) while expressly requiring the protection of exceptional surface values. 

At more than 22 million acres, the NPRA spans a large portion of the entire 

North Slope. The NPRA is larger than 12 states; were it a state, it would fall somewhere between South Carolina and Maine in size. Audubon believes that within 

such a vast landscape it is both reasonable and appropriate that there be a balance 

of development and conservation. 

This is the position that Congress itself has endorsed in the statutes that govern 

the NPRA. The mandate for balance has also enjoyed bi-partisan support as reflected in the NPRA management actions taken by both Democratic and Republican 

administrations. 

The NPRPA requires the Secretary of the Interior to determine whether and/or 

where to lease lands in the NPRA for oil and gas development while also requiring 

‘‘maximum protection’’ of areas identified as having ‘‘significant subsistence, recreational, fish and wildlife, or historical or scenic value.’’ In the 1976 legislation 

Congress itself identified two areas in particular—the Teshekpuk Lake and the 

Utukok River Uplands—as deserving of ‘‘maximum protection’’ because of the exceptional biological values in these areas.1

Congress appropriately provided a mandate for balanced resource management of 

the NPRA directing that the Secretary ‘‘shall include or provide for such conditions, 

restrictions, and prohibitions as the Secretary deems necessary or appropriate to 

mitigate reasonably foreseeable and significantly adverse effects on the surface resources of the National Petroleum Reserve in Alaska.’’ 2 As recognized in the first 

Integrated Activity Plan (IAP) prepared for the Northeast Planning Area, the 

NPRPA ‘‘encourages oil and gas development in NPRA while requiring protection 

of important surface values.’’ 3

Congress has thus expressly provided that while energy development is an important reason for the initial establishment of the NPRA it is not a mandate to the 

exclusion and detriment of other important values and public interest priorities such 

as protection of the natural ecosystems that support subsistence. 

In keeping with the American ethic of balanced land management Congress has 

recognized that in the NPRA the value of the Nation’s public lands includes more 

than the just the wealth and economic gain that can be extracted. 

Special Areas and Exceptional Biological Resources in the NPRA 

The NPRA has a remarkable diversity of ecosystems that remain intact at the 

landscape scale that are also essential to supporting a wide range of subsistence 

harvest activities for more than 40 communities spread across northern and western 

Alaska. 

The NPRA and the immediately adjoining Arctic waters sustain exceptional natural resources and values. These include: fish resources, marine mammals (seals, 

whales, walrus, polar bears), migratory birds, large mammals (caribou, moose, wolVerDate Nov 24 2008 10:45 Feb 23, 2012 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6621 L:\DOCS\66955.TXT Hresour1 PsN: KATHY
33 

4 42 USC § 6506a 

5 An Integrated Management Plan for the South Planning Area was initiated by BLM but subsequently suspended. Resource assessment indicated that the South NPR–A planning area contains very limited oil reserves or approximately 2 percent of the undiscovered oil in NPR–A. See: 

http://www.blm.gov/ak/st/en/prog/planning/npra_general/south_npra.html 

verine, wolf, grizzly bear and other furbearers); threatened and endangered species; 

rare Arctic ecosystem types (e.g., sand dunes); designated Important Bird Areas; archeological, anthropological, and paleontological resources; and wilderness/wild river 

values. 

The NPRA includes four existing designated Special Areas recognized by the BLM 

as having extraordinary biological values. These include: Teshekpuk Lake, the 

Utukok River Uplands, Kasegaluk Lagoon and the Colville River. As noted, Congress specifically recognized the Teshekpuk Lake and Utukok Uplands areas as 

warranting ‘‘maximum protection’’ when it enacted the NPRPA in 1976 and past 

presidential administrations as philosophically disparate as those of former President Jimmy Carter and former President George W. Bush have embraced the need 

for protection of these areas. 

Exceptional biological values in existing Special Areas include the concentrated 

calving grounds of two of Alaska’s largest caribou herds (i.e., the Western Arctic 

Caribou Herd and the Teshekpuk Lake Caribou Herd); vitally important nesting, 

molting and staging habitat for migratory waterfowl, seabirds and shorebirds; essential habitat for various marine mammal species including polar bear, walrus, 

spotted seal, and beluga whale; internationally recognized raptor nesting concentrations; and exceptional predator populations including grizzly bears, wolves and wolverine. 

A particular focus of Audubon’s work in the past ten years has been to assure 

the protection of the unique assemblage of biological resources found in the vicinity 

of Teshekpuk Lake, the largest freshwater lake on the North Slope and the third 

largest lake in Alaska. The Teshekpuk Lake Special Area includes the most important goose molting habitat in the Arctic and provides vital habitat for tens of thousands of geese that gather annual in the area, including Brant, Greater white-fronted geese, Snow geese, and Canada geese. In the fall, the waterfowl that rely on the 

wetlands in this area migrate back south to their wintering grounds across the 

Lower 48 states. Teshekpuk Lake has been recognized and designated as an Important Bird Area of Global Significance for the many breeding and migrating birds 

that rely upon the area. 

The area around Teshekpuk Lake also includes the concentrated calving and insect relief areas for the Teshekpuk Lake Caribou Herd which provides a critical subsistence harvest resource for North Slope communities. The Western Arctic Caribou 

Herd Working Group, an organization comprised of subsistence users from small 

communities across northern and western Alaska, has identified and recommended 

that the lands surrounding Teshekpuk Lake should not be leased or developed for 

oil and gas. 

Over time, the unique values of the Teshekpuk Lake area have been acknowledged and set aside for protection by both Democratic and Republican administrations. 

Oil and Gas Leasing & Exploration in the NPRA 

Consistent with the Congressional requirement to ‘‘conduct an expeditious program of competitive leasing of oil and gas in the Reserve’’ 4 the BLM has conducted 

numerous oil and gas lease sales within the NPRA. Management plans for the 

Northeast Planning Area (4.6 million acres) and Northwest Planning Area (8.8 million acres) have been completed that govern approximately 13.4 million acres, including the lands within the NPRA regarded as having the greatest oil potential.5

• There have been ten lease offerings in the NPRA since 1982 in which nearly 

6.8 million acres have been leased. 

• Half of those lease sales were in the past decade and the vast majority of the 

13.4 million acres within the Northeast and Northwest Planning areas have 

been offered for lease multiple times. 

• There have been four lease sales in the Northeast Planning Area alone (1999, 

2004, 2008, and 2010). 

• The most recent NPRA lease sale offering was conducted by the Obama Administration less than a year ago in August 2010. 

The Obama Administration has announced it will conduct annual lease sales in 

the NPRA, with another sale anticipated before the end of this calendar year. 

Recent activities in the NPRA include extensive 3–D seismic survey work and the 

completion of 30 exploration wells on federal and Native land. 

34 

6 United States Geological Survey, ‘‘Economic Analysis of the 2010 U.S. Geological Survey Assessment of Undiscovered Oil and Gas in the National Petroleum Reserve in Alaska’’ (May 2010) 7 Because of limited oil potential and high costs, the USGS has concluded that future oil development in the NPRA will be a by-product of gas exploration and exploration for gas will drive 

the discoveries of oil. The USGS analysis concluded that at a market price in the conterminous 

United States of $8 per thousand cubic feet (MCF) and with the assumption of a 10-year pipeline delay, the economic non-associated gas resources at the 95th-fractile, mean, and 5th-fractile 

estimates are predicted to be 4.5 TCF, 17.5 TCF, and 39.4 TCF, respectively. In the case of a 

20-year pipeline delay, the economic gas resources at the 95th-fractile, mean, and 5th-fractile 

estimates are predicted to be 0.9 TCF, 7.3 TCF, and 24.5 TCF, respectively. With a superabundance of relatively inexpensive natural gas in the Lower 48, however, prospects for construction 

of a natural gas pipeline from the North Slope are poor as reflected by the recent cancellation 

of BP and Conoco-Phillips efforts to build the Denali Pipeline project. See: http://www.adn.com/ 

2011/05/17/v-printer/1867232/bp-conoco-drop-bid-for-alaska.html 8 Annual Energy Outlook 2011, Energy Information Administration http://www.eia.gov/forecasts/aeo/excel/fig93.data.xls See: Figure 93 (figure data) 9 USGS mean estimate assuming only a 10-year delay in gas pipeline access. United States 

Geological Survey, ‘‘Economic Analysis of the 2010 U.S. Geological Survey Assessment of Undiscovered Oil and Gas in the National Petroleum Reserve in Alaska’’ (May 2010). 

Hydrocarbon Potential in the NPRA 

In October 2010, the United States Geological Survey (USGS) updated its 2002 

analysis of the hydrocarbon potential of the NPRA and substantially revised downward the estimate of technically recoverable oil in the NPRA. The USGS analysis 

of drilling and seismic data found an unanticipated and abrupt transition from oil 

to gas approximately 15–20 miles west of the Alpine oil field along with poor reservoir quality in key formations. 

U.S. Geological Survey (USGS) geologists have interpreted results of exploratory drilling to show that formations thought to be oil prone are actually 

gas prone. The new data have also indicated that actual reservoir quality 

is inferior to the reservoir quality inferred in the 2002 assessment 

(Houseknecht and others, 2010). The change in paradigm results in a decline in the estimated mean value of undiscovered oil from 10.6 billion barrels of oil (BBO) to 895 million barrels of oil (MMBO).6

The updated USGS estimate of 895 MMBO of technically recoverable oil (mean 

estimate) in the NPRA is less than ten percent of the prior 2002 estimated quantity 

of oil. The USGS also estimated undiscovered technically recoverable natural gas resources of 52.8 TCF (mean estimate). This estimate also resulted in a downward revision but remains at roughly ninety percent of the natural gas estimated in the 

prior 2002 assessment. 

In May 2010, USGS published its estimate of undiscovered hydrocarbon resources 

in the NPRA that can be economically recovered (i.e., commercially developed at a 

range of market prices). This analysis further reduced the prospect of significant oil 

development in the NPRA. 

At a price of $90 per barrel ($10 per MCF gas price) and an estimated 895 MMBO 

of technically recoverable oil, USGS projects economically recoverable reserves of 

502 MMBO (mean estimate) under a scenario with a 10-year delay for gas pipeline 

capacity and 358 MMBO with a 20-year-delay assumption. (The USGS anticipates 

a 10-year to 20-year delay between expenditures for discovery of gas accumulations 

and production that would rely upon construction of a new gas pipeline.)7

NPRA Hydrocarbon Potential in the Context of National Energy Demand 

Considerable attention has been given of late to the rising price of gasoline. It has 

been argued in some quarters that more aggressive development of NPRA will help 

‘‘lower energy costs’’ but this claim cannot be supported objectively. 

The ‘‘Drill Baby Drill’’ rhetoric most famously associated with Alaska’s former 

Governor will not bring down the price of gasoline at the pump. Any such representations do a great disservice to the American public, misleading consumers and providing a false hope that will not be realized. 

The price of oil is driven by international market considerations that are well beyond the ability of NPRA development to influence. Even assuming the most robust 

USGS estimate of oil reserves as informed by the most current data, there is simply 

not enough oil volume to move prices downward to any significant degree. 

Putting the oil potential of the NPRA into the larger national context, the United 

States consumes 19.58 MMBO per day or approximately 587 MMBO per month.8

The total economically recoverable oil in the NPRA identified by the USGS is insignificant: the entire projected economically recoverable reserves of 502 MMBO 9

(mean estimate) accounts for less than one month of consumption for the United 

States. 

35 

10K. Hall, ‘‘Chief regulator says speculators swamping oil, grain markets’’, Anchorage Daily 

News (June 10, 2011) http://www.mcclatchydc.com/2011/06/09/115551/key-regulator-speculatorsswamping.html 11The impact of speculation on oil prices has also been noted by the government of Saudi Arabia. Diplomatic cables between the Saudis and the former Administration show speculation has 

been raised in meetings between U.S. and Saudi officials, in one-on-one meetings with American 

diplomats and at least once with former President George W. Bush himself. Saudi officials have 

conjectured that speculation represented approximately $40 of the overall oil price when oil was 

at its height. http://www.mcclatchydc.com/2011/05/25/114759/wikileaks-saudis-often-warned.html 

See also: http://www.mcclatchydc.com/2011/05/13/114190/speculation-explains-more-about.html 12Ted Murphy, BLM Alaska State Office (personal communication) 

To address the issue of excessively high oil prices attention should be directed to 

curtailing rampant speculation in oil markets. As reported recently by the head of 

the Commodity Futures Trading Commission, nearly 9 of 10 traders in oil are financial speculators and not actual end users of oil.10

If reducing the price of gasoline at the pump is the goal, attention should be concentrated on the Wall Street banks and hedge funds that are driving up oil prices 

through excessive speculation which may account for a significant fraction of the 

price.11

Declining Industry Interest in the NPRA 

The oil industry’s ‘‘on-the-ground’’ actions reinforce the conclusion that the NPRA 

has only limited oil potential. As a result of the many past lease sales, nearly 6.8 

million acres have been leased across large portions of the NPRA, extensive 3–D 

surveys have been conducted, and exploration wells have been drilled. 

However, in the past several years, the industry has been abandoning leases in 

the NPRA at a record pace, reinforcing the conclusion that the NPRA is fundamentally a gas province; that key formations hold more gas than oil; and there is poorer 

reservoir quality than originally anticipated. Of the nearly 6.8 million acres previously leased, approximately three-quarters of the tracts have been given up by the 

industry. 

Limited oil potential in the NPRA, combined with the glut of natural gas in Lower 

48 markets and the superabundance of natural gas already available from developed 

fields on the North Slope, has rendered the NPRA an area of limited appeal. 

No exploration wells were drilled in the NPRA during the winter of 2010–2011 

and there are no pending applications to drill additional exploration wells.12 In the 

most recent NPRA lease sale (August 2010), 1.8 million acres were offered. Only a 

few individual tracts were leased within the vicinity of already unitized areas. 

Notably, industry lease relinquishments have included tracts both on federal 

lands within the NPRA as well as leased areas in State of Alaska coastal waters 

immediately adjacent to the NPRA. Leases were most recently relinquished in 

Smith Bay and Harrison Bay, state waters along the north coast of the NPRA. 

Future Development Within the NPRA and the Proposed CD–5 Road/Bridge 

Project 

While the NPRA has limited prospects as a major oil province, there is interest 

on the part of Conoco-Phillips Alaska Inc. (Conoco) in developing some ‘‘satellite’’ oil 

resources associated with the existing Alpine oil field that is located within the 

Colville River Delta immediately to the east of the NPRA. 

This includes the so-called ‘‘CD–5 project’’, a proposal by Conoco to build a permanent all-weather surface road from the Colville River Delta with a bridge and suspended pipe over the Nigliq Channel to access the CD–5 production drilling pad inside the NPRA. (The Nigliq is a large channel in the Colville River Delta defining 

the westernmost edge of the Delta and the eastern boundary of the NPRA.) 

There is no question that oil and gas development on Alaska’s North Slope will 

continue far into the future and Audubon fully anticipates development of the 

Cononco satellite prospects on the eastern edge of the NPRA. The essential issue 

in the case of this development is not whether oil and gas development will take 

place in the NPRA, but rather where and how it will occur. 

The proposed road and bridge project would be the first permanent oil production 

road and infrastructure within the NPRA and the manner in which this project proceeds has important implications for future development of the NPRA. The CD–5 

project proposal is not only relevant in terms of ‘‘opening’’ NPRA, the project design 

has very significant implications for the Colville River Delta, an area with unique 

biological qualities found nowhere else on the North Slope. 

The all-weather road and bridge proposal has a long history of controversy because it is at odds with prominent representations made by the oil industry regarding development of Alpine as a roadless project in order to prevent damage to the 

36 

13http://alaska.conocophillips.com/EN/about/operations/Pages/index.aspx (emphasis added) 14http://www.conocophillips.com/EN/about/worldwide_ops/country/north_america/pages/alaska.aspx (emphasis added) 15Letter from M. Combes, Environmental Protection Agency to Col. K. Wilson, United States 

Army Corps of Engineers, dated June 9, 2009. 16http://online.wsj.com/article/SB10001424052702304563104576357800795837470.html ‘‘Bureaucratic Rift Stalls Alaska Well’’, Wall Street Journal (June 2, 2011) 

exceptional ecological values of the Colville River Delta. To this day, Conoco-Phillips 

touts roadless Alpine oil field development on its website: 

Alpine - The company continues to develop environmentally-sensitive and 

technologically advanced approaches to oil extraction, including the Alpine 

field on the Western North Slope. The $1.3 billion initial construction cost 

resulted in a roadless development that operates more like an offshore development. In winter, an ice road is constructed from Kuparuk to the main 

Alpine facility to transport supplies for the rest of the operating year.13

Directional drilling, zero-waste discharge, roadless development and other 

innovations minimize the Alpine development’s environmental footprint on 

the Arctic.14

The importance of maintaining the biological integrity of the Colville River Delta 

was a key consideration during the original Alpine oil field development process. 

This included a specific provision that future development in the Delta adhere to 

a roadless design unless either a more environmentally preferred alternative was 

developed or roadless development was determined to be infeasible (Special Condition 10).15

The project, as proposed by Conoco, with a permanent all-weather road, bridge 

and suspended pipeline over the Nigliq channel stands in sharp contrast to the commitment to roadless development at Alpine. The high-quality habitats in the Colville 

River Delta have long been recognized for their unique value. The Colville River 

drains nearly one-third of the North Slope and the United States Fish and Wildlife 

Service (USFWS) has identified the Delta as the largest and most productive river 

delta in northern Alaska. The EPA has identified the Colville delta as an Aquatic 

Resource of National Importance. 

After careful review, the Alaska District of the Army Corps of Engineers (Corps) 

concluded that the Conoco project proposal was not the ‘‘least environmentally damaging alternative’’ (or LEDPA) as required by the Clean Water Act. The Corps found 

that there are other, less damaging project design alternatives that would accomplish the purpose of accessing the CD–5 site to produce oil. These alternatives include a roadless alternative with a pipeline under the Nigliq channel using horizontal directional drilling (HDD) which the Corps has identified as feasible and 

practicable. 

The administrative record before the Corps reflects a long history of opposition 

to Conoco’s proposed project design by both the EPA and the U.S. Fish and Wildlife 

Service (USFWS). 

It should also be noted, as recently reported by the Wall Street Journal, that the 

CD–5 permit denial was ‘‘a rare step by the Alaska district engineer, who has denied just two of nearly 3,000 permit applications, including the Conoco proposal, 

since he took command in June 2009.’’ 16

The Colville River Delta provides habitat for nearly 80 species of birds and is 

within the range of three species listed as threatened under the Endangered Species 

Act (Spectacled eider, Steller’s eider, and polar bear), is an area used by another 

Endangered Species Act candidate species (Yellow-billed loon), and the Delta provides important habitat for hundreds of thousands of migratory shorebirds. In addition, the Colville River Delta has been designated an Important Bird Area (IBA) of 

Continental Significance and the area contains approximately 70 percent of the fish 

overwintering habitat on the North Slope. Spotted seal and beluga whale are known 

to seasonally occur in the Nigliq channel 

Of particular note are concerns about the impact a permanent road would have 

on the Colville River Delta surface flow hydrology that is essential to the long-term 

health and productivity of the Colville River Delta. Construction of a road would disrupt this surface flow which is vital to the long-term maintenance and health of the 

Delta’s habitat. 

The proposed bridge and suspended pipeline also present the risk of a catastrophic spill. The Nigliq channel can carry significant discharge volumes (most of 

the flow) when an ice jam occurs in the main channel during breakup. If even a 

relatively minor leak in the pipeline should occur concomitant with a seasonal flood 

event the potential for a major spill exists. While an HDD alternative is not without 

37 

17 ‘‘U.S. Army Corps of Engineers denies permit application for CD–5 drill pad’’, U.S. Army 

Corps of Engineers, Alaska District Public Affairs Office, Press Release No. 10–02 (February 5, 

2010) 18Letter from M. Combes, Environmental Protection Agency to Col. K. Wilson, United States 

Army Corps of Engineers, dated June 9, 2009. 19 Alpine Satellite Development Plan Final EIS http://www.blm.gov/eis/AK/alpine/eisdoc/final/ 

07sec02.pdf Section 2.6.8 (September 2004) 20Kuukpik Corp., Native Village of Nuiqsut and City of Nuiqsut to U.S. Army Corps of Engineers, letter dated July 21, 2009. 21 Ibid. 

risk, proper design, maintenance and monitoring can limit the risk of leaks. An 

under-channel pipe would not be vulnerable to a complete catastrophic failure. 

Another concern about the Conoco proposal is that the road would allow the 

Colville River Delta to become the main staging area for future development in the 

NPRA. Industrialization of the Delta is a long-anticipated concern of itself—further 

wetlands fill, additional laydown pad, facility construction, loss of habitat, disruptive 

operations, traffic, etc.—and the fundamental reason for inclusion of the roadless development stipulation. As the CD–5 project is proposed, Conoco would create an operations center for future development of the eastern NPRA in the center of the 

most hydrologically active and resource rich river delta in Alaska’s arctic. 

Consistent with the Clean Water Act, the Corps determined that there are other 

practicable alternatives that meet the need of the project—to transport hydrocarbons from CD–5 back to the Alpine for processing—that would have less adverse 

impact on the aquatic ecosystem.17

When the Alpine project was first developed there were many representations, as 

reflected to this day on Conoco-Philips’ website, about roadless development. The 

CD–5 proposal now being advanced contradicts that commitment. As articulated in 

comments by the EPA in correspondence to the Corps dated June 9, 2009 regarding 

the Conoco’s proposal: 

As you are aware, EPA is not opposed to continued exploration and development of oil and gas resources in the NPR–A. EPA is firm in our understanding that this can occur in a reasonable manner through the construction of alternatives that are the least environmentally damaging. During 

EPA’s evaluation of the applicant’s previous proposal EPA found a road-less 

alternative to be the least environmentally damaging practicable alternative (LEDPA).. . .EPA believes there are practicable alternatives that do 

not involve a bridge and road crossing of the Nigliq Channel and CRD 

[Colville River Delta] that have less adverse effect on the aquatic environment.. . .[A]n alternative that includes use of the existing airstrip in 

Nuiqsut, development of a ‘‘Nuiqsut hub’’ for logistical operations with road 

access to CD–5 drill site via the proposed Kuukpik spur road, and HDD of 

the pipeline under the Nigliq Channel warrants a detailed analysis.18

Many of the foreseeable impacts that would follow from approval of a permanent 

road, bridge and elevated pipeline would be avoided with an alternative road configuration using and developing infrastructure at and around Nuiqsut. A more complete analysis of the Nuiqsut Operations Center (NOC) alternative is needed. This 

alternative has never been given detailed analysis by the BLM. In the 2004 Alpine 

FEIS process, the NOC alternative was regarded as not ‘‘economically viable’’ and 

eliminated from detailed consideration.19

Since the time the Alpine Final EIS was completed, the price of oil has more than 

doubled and oil company profits have soared. Substantive consideration of the NOC 

alternative is especially relevant because of the Memorandum of Agreement between Conoco and Kuukpik Corporation that calls for the construction of a new road 

that will connect Nuiqsut and the CD–5 platform. 

Written comments jointly prepared by the Kuukpik Corporation, the Native Village of Nuiqsut and the City of Nuiqsut express clear support for expansion of oil 

field support services in the Nuiqsut area so that the community can develop ‘‘as 

the main hub supporting future oil and gas activities in NPR–A’’ 20 providing a competitive advantage to Nuiqsut-based businesses and generating local employment 

opportunities. These comments note that expanded use of the existing Nuiqsut airport and ‘‘[s]hifting air traffic out of the far more sensitive wildlife habitat of the 

Delta to the already developed area around Nuiqsut would be very beneficial.’’ 21

The history of oil development on the North Slope has been one of incremental 

industrial sprawl. The Clean Water Act appropriately requires that the least environmentally damaging practicable alternative be identified. 

The ultimate decision on how the CD–5 project proceeds will provide an important 

measure of whether the promise for responsible development is kept. 

‘‘The National Petroleum Reserve Alaska Access Act’’ 

38 

There are several elements to the draft legislative proposal under review by the 

Subcommittee (H.R. ___ ‘‘The National Petroleum Reserve Alaska Access Act’’). 

These include provisions that would: • enact a fundamental change to existing policy and law in the NPRPA that 

would undermine the requirement for balance that Congress has appropriately established in law for management of the NPRA, the nation’s single 

largest land management unit; • compel oil and gas leasing in areas irrespective of their exceptional biological 

value or sensitivity; • establish arbitrary fixed timelines for permit decisions and other authorizations regardless of their complexity; • require the Department of the Interior to engage in extensive and wasteful 

planning about speculative rights of way in the NPRA; and • require the Department of the Interior to undertake a redundant study of hydrocarbon resources within the NPRA after having just recently completed 

such an analysis. 

For all of the reasons discussed above, Audubon does not believe the provisions 

of this draft legislative proposal are either necessary or beneficial and would urge 

the Subcommittee to defer further action on the proposal. 

Conclusion 

1. Balance: Under current law, the Congress has appropriately recognized that 

the NPRA contains more than just potential hydrocarbons, including extraordinary surface values of national significance. Congress has properly required that oil and gas development in the NPRA should proceed in a manner that balances energy development with other public interests in the protection and conservation of the NPRA’s special areas and exceptional biological resources. 

2. Leasing & Oil Potential: The BLM has diligently undertaken a leasing and 

exploration program, as directed by Congress, having held numerous oil and 

gas sales, leased more than 6.8 million acres (an area the size of Massachusetts) and overseen seismic survey work and exploration as intended by Congress. The NPRA will undoubtedly make a future contribution to the Nation’s oil supply but only in modest quantity. Seismic and drilling results 

have shown that the NPRA is largely a gas province with relatively little oil 

development potential. 

3. Protection of Special Areas: With enactment of the NPRPA, Congress explicitly called for the protection of special areas in the NPRA, specifically 

identified the Teshekpuk Lake and the Utukok River Upland areas as well 

as recognized that other areas with important surface values should also be 

identified and protected. Over time, recognition of the need to conserve the 

exceptional biological areas in the NPRA has been embraced by both Democratic and Republican administrations. 

Finally, it should again be noted that Audubon recognizes that there will be future oil development in the NPRA. As future development proceeds there are important issues of national interest regarding where and how that development is undertaken. 

In the NPRA, the nation’s largest land management unit, Audubon believes there 

is both room as well as need to balance future development with strong protection 

of special areas and extraordinary biological values. 

Mr. LAMBORN. OK, thank you. And I want to thank all of you for 

your testimony. You have come great distances to be here, and we 

appreciate that. 

I would like to ask my first question to Mr. Sharp. In your testimony you mentioned that you observed a large amount of spinoff 

jobs that are created by expanding energy development. Can you 

elaborate on what exactly these kinds of spinoff jobs are? That is 

the first part of my question. 

And second, will expanding energy development indirectly help 

the rest of the country, as well? Mr. Sharp. 

Mr. SHARP. Thank you. I guess it would be the same answer of 

both. In other words, those jobs that would be created would impact immediately the Lower 48, in terms of supply, in terms of 

39 

foundries, the potential for steel, manufacturing of all oilfield supplies. It would be, it would be huge in the Lower 48, much like we 

have seen in the past. If you look at these suppliers for Prudhoe 

Bay right now, they are, more often than not, American-made products, and you would just be seeing more and more of those things— 

whether from Texas, whether from the foundries of Ohio, or 

throughout the United States. 

Mr. LAMBORN. Thank you. Mr. Balash—I hope I have pronounced 

that correctly—like other oil-producing regions, in some Alaskan 

communities, the oil and gas industry is the lifeblood. These jobs 

are high-paying, and according to the American Petroleum Institute, there are over 43,000 jobs in Alaska supported by the oil and 

gas industry. 

Can you tell me about the different opportunities for people between having a robust oil and gas industry, or the other kinds of 

employment opportunities that are available apart from the energy 

sector? 

Mr. BALASH. Thank you, Mr. Chairman. As you noted, the number of jobs supported by the energy industry in Alaska are particularly high-paying. They are able to support very solid elements and 

pillars within the community, both in terms of gainful employment, 

but also in terms of social contributions by those employees that 

can afford to participate in the larger community activities. 

Aside from energy, we have primarily seasonal and service-based 

opportunities. The commercial fishing processing type of employment is periodic and intermittent. Construction also varies with the 

seasons, and the types of other employment opportunities in Alaska 

are few and far between. Mining is one bright spot in addition to 

energy. 

And so these opportunities for projects to occur are incredibly important to the State as a whole, but especially, and in particular, 

to the communities in question on the North Slope, as you move 

farther west and east, and become closer to proximity of the local 

villages. 

Mr. LAMBORN. All right, thank you, Commissioner. Mr. Myers, 

there are two wildlife refuges in the Lower 48, the Rainey Wildlife 

Refuge in Louisiana and the Bakers Sanctuary in Michigan. These 

are not petroleum reserves; these are wildlife refuges that are 

owned by your organization. And they allow oil and gas development, or have in the past. 

If oil and gas development is good enough for these two areas, 

why isn’t it good enough in Alaska, which is what we are talking 

about—a petroleum reserve? 

Mr. MYERS. Mr. Chairman, as I said earlier, Audubon is not opposed to oil and gas development; it is a question of where, and 

under what circumstances. And in the case of the, I am not familiar with the second property you mentioned, but in the case of 

Rainey Sanctuary, there was divided, the state interest, and Audubon inherited a surface state interest. And there was some production; there is no production now. And I don’t believe there is any 

further intention of production on that property. 

But the question fundamentally is not whether there should be 

oil and gas development; it is a question of where and how. In the 

case of the National Petroleum Reserve, the NPRA, under the FedVerDate Nov 24 2008 10:45 Feb 23, 2012 Jkt 000000 PO 00000 Frm 00043 Fmt 6633 Sfmt 6602 L:\DOCS\66955.TXT Hresour1 PsN: KATHY
40 

eral law that was enacted in 1976, Congress itself took great care 

to acknowledge that the NPRA included far more than just petroleum resources. 

And so the position that I have tried to identify today is not that 

there is categorical opposition to oil and gas development, but it is 

a question of how you go about it. And if there is enough room in 

such a large landscape to ensure that there is protection, as well 

as production. 

Mr. LAMBORN. OK, thank you. Now I will recognize Ranking 

Member Holt. 

Mr. HOLT. Thank you, Mr. Chairman. A question for Mr. Balash 

and Mr. Drevna. What is the pronunciation of your name? I am 

sorry, Balash? 

Mr. BALASH. Balash, thank you. 

Mr. HOLT. Balash, I beg your pardon. About three quarters of the 

leased acres in NPRA have been either relinquished or allowed to 

expire over the last few decades. And in fact, they are being relinquished at a greater and greater rate, so that this year 60 leases 

have been relinquished. Why do you think that is? I would like to 

ask each of you for a short answer, please. 

Mr. BALASH. Ranking Member Holt, I am aware of one company 

in particular who is going through the process of plugging and 

abandoning a known discovery. That is FEX Alaska. They have a 

known discovery in the western part of NPRA, the closest discovery 

to Barrow that has been found to date. 

As their company has changed leadership, they have redirected 

their corporate approach. They put that property up for sale prior 

to engaging in these P and A activities, and found no buyers. The 

distance and the regulatory gauntlet that has to be run to transport that discovered oil resource from the western central part of 

NPRA to the east, and tying into the existing infrastructure at 

Prudhoe Bay, is daunting. 

Mr. HOLT. Given the amount of oil they would expect to get 

there. Is that right, Mr. Drevna? 

Mr. DREVNA. Sorry, I can’t comment on the exact amount of oil. 

What I can comment on is, it is very difficult to have a short answer to a very complex question. 

The process of obtaining a lease—getting the permits, developing 

the lease, and trying to really determine if there are economically 

recoverable quantities of oil and natural gas—is not an overnight 

proposition. It is not like leasing an apartment. 

So there are leases that are gained and returned all the time. 

The point we are trying to make is that, if we don’t get a process 

that has—— 

Mr. HOLT. But Mr. Drevna, 76 percent of the leases have been 

relinquished or abandoned. Companies make hard-headed decisions 

and we in policy circles shouldn’t live in a world of wishful thinking 

any more than a hard-headed business does. 

The fact is that the recoverable oil there hasn’t become real, and 

companies are deciding that it is just not worth it. That seems 

pretty apparent. 

Mr. DREVNA. Would you like me to respond to that, sir? 

Mr. HOLT. Well, in just a moment. We have here the gas pipeline 

project. Mr. Sharp, I am always looking forward to good jobs for 

41 

hard-working people. This would have been the largest private construction project in history. But it is abandoned for hard-headed 

decisions, when you look at what will be available. 

So you know, no companies are asking the BLM for permits to 

build pipelines or roads. There are none pending with the Department. So let me ask Mr. Myers, isn’t this really just about economics? 

Mr. MYERS. The industry’s on-the-ground action certainly reinforces the conclusions that are reflected in the USGS analysis, that 

the NPRA is not likely to provide the bonanza of oil that it once 

was thought to. 

In the past several years, the industry has relinquished or allowed to expire about three quarters of the tract. I think an important point is that the BLM has engaged in an aggressive leasing 

program consistent with its mandates under the Naval Petroleum 

Reserves Production Act. There has been exploration wells drilled, 

but that basically what they have found is that it is a gas province, 

rather than oil province, and there is no market for gas. 

Mr. HOLT. Well, my time has expired. But of course, what this 

bill does, then, is ask the BLM, or the USGS rather, to do another 

survey because they didn’t like the answer of the last one, which 

is just not there in the numbers that some might wish it would be. 

Thank you. 

Mr. LAMBORN. Thank you, Mr. Holt. Thank you. I would like to 

now recognize the Chairman, Representative Hastings. 

Mr. HASTINGS. Mr. Lamborn. Mr. Drevna, you attempted to respond to an observation that was just made. Would you go ahead 

and respond? 

Mr. DREVNA. Thank you, sir, Mr. Chairman. Again, the leasing 

process is one that is very complicated. If you look at the history 

of leasing throughout, whether it is oil, coal, gas, it is a process of 

prospecting. You have to make those hard-headed decisions you 

mentioned, Ranking Member Holt, about where to go, where to 

drill, how to drill. 

And then when you throw on top of that the delays, the interminable delays that companies see in getting the necessary permits. 

It reminds me of the old Yogi Berraism: No one goes to that restaurant anymore; it is too crowded. It is just that it is not worth 

the time and effort for these companies. 

Our members have told us that until we get a process up there 

that really streamlines things and allows us to go in and develop 

and process, these leases are not going to be forthcoming. That is 

the bottom line. 

Mr. HASTINGS. Let me follow up on that, because in my opening 

statement I made reference to the pipeline, and made reference to 

the fact that it is at about half its capacity. The intent of this legislation is to have some certainty in connecting to that pipeline, and 

I think that is a very, very important part of how you are going 

to develop these resources up here. 

So I would like to ask Mr. Balash, Mr. Drevna, and Mr. Sharp, 

an open-ended question. If we don’t start producing up there, 

whether we are talking about the Reserve or whether we are talking about Beaufort or Chukchi, or even ANWR, to the west, and 

that pipeline does not have the capacity to continue on, what are 

42 

the consequences, with the economy and jobs in Alaska? And Mr. 

Balash, I will start with you. 

Mr. BALASH. Well, from a state perspective, being a little bit parochial, Alaska quite simply would be devastated economically. Oil 

provides 85 percent of the revenue that funds our state government. We are a top-heavy state; most of the revenue is collected at 

the state level, and redistributed to our communities for education, 

K-12, university, and health programs. 

Without TAPS, without oil revenue coming into our state Treasuries, it would be a total collapse. 

Mr. HASTINGS. Mr. Drevna. 

Mr. DREVNA. Expanding, going farther south, and starting in 

Washington and going down the coast all the way to Arizona, they 

are very, very dependent on the Alaska reserves. What we have 

seen over the past years now is we have seen, I think, as you mentioned, Mr. Chairman, at a peak, about 2.1 million barrels a day 

heading south to fuel the refineries along the West Coast. Now it 

is about 655,000 barrels a day. 

From what the engineers tell us, that is unsustainable. What we 

are seeing now—besides the potential devastation to the pipeline, 

which is a very, very dire situation, as was just mentioned—we are 

getting colder oil now, and in order to process that oil, we have to 

heat it because it is not being heated because the pipeline is not 

being used to capacity. 

Now, if you will allow me to go on a little farther. 

Mr. HASTINGS. Well, real quickly, because I want Mr. Sharp to 

respond to that. 

Mr. DREVNA. OK. That is the impact on the pipeline. The impact 

on the domestic refineries and jobs is going to be, if we are not 

going to get it from Alaska—and we are not going to—and 

California is not going to allow Canadian oil sands soon, where are 

we going to get it from? 

We are either going to get it continually from foreign nations, 

Russia and other OPEC countries, or we are going to ship Canadian crude to China and the Pacific Rim, have it refined there, and 

sent back to the United States. 

Mr. HASTINGS. Right. Mr. Sharp. 

Mr. SHARP. Yes. It is not a matter of what would, it is happening 

right now. 

In Fairbanks, the energy prices are so cost-prohibitive, people are 

literally leaving the state, leaving Fairbanks in particular. It is interesting to me, Mr. Holt’s talk of all this gas. We are coming out 

of the ground with a training and apprenticeship school right now. 

I can’t get gas to heat and fuel my training school. I live in Alaska; 

it doesn’t make any sense. 

But yes, it would be devastating to the economy. It would, it 

would change the face of Alaska as we know it, and not in a good 

way. 

Mr. HASTINGS. I just want to make an observation before my 

time runs out. It appears to me, after my trip up there and listening to a number of people testify on this issue, I quite frankly see 

a back-door effort to starve the pipeline. Once you starve the pipeline, you take away all that potential up there. 

43 

I just think the focus needs to be, and I think all of you up there, 

especially that are impacted, need to focus on how important it is 

to keep that pipeline full. Because without that pipeline, all of 

what we are talking about in the future, even from a national security standpoint, which you alluded to, Mr. Drevna, is at risk. 

So thank you very much, Mr. Chairman. 

Mr. LAMBORN. All right, thank you. Mr. Fleming. 

Mr. FLEMING. Thank you, Mr. Chairman. Gentlemen, I am from 

Louisiana. And you know, of course, it is legendary now, the problems we have had with the oil spill and so forth. And as you know, 

we started out with a moratorium; then we had a de facto moratorium, then a permitorium, and now we have a slowatorium. 

It is obvious that the Administration is doing everything it can 

to throw a monkey wrench into the gears, to slow things down, do 

whatever it can to be sure that we reduce our energy production 

in this country. 

Now, why, I don’t quite understand, but that is obvious. I am 

hearing the same sort of testimony here today that this is going on 

in Alaska as well. 

Now, to address a point here before I get to a question. The 

statement is made by the other side time and time again that there 

are less oil reserves in the United States, and that production is 

going up. That is exactly opposite to the truth. 

For instance, offshore drilling in the United States, production 

has dropped from 1.7 million barrels a day to 1.59 million barrels 

a day, and going down. Their permit process is way off of what it 

has traditionally been. So we don’t know where the bottom is going 

to be in this fall-off of production. 

Having said that, the USGS says that the United States now has 

more oil reserves than any country in the world: 1.3 trillion barrels 

equivalent, when you get to coal, natural gas, and oil; and, of 

course, in my district alone, there is the Hainesville Shale, which 

has the largest natural gas deposit in North America, the fourth 

largest in the world. We didn’t know it existed five years ago. 

So the elephant in the room here, gentlemen and members of the 

Committee, is that the Administration flatly wants to reduce oil 

production, to the benefit of so-called alternative forms of energy, 

which do not make sense in the marketplace. They still are not 

technologically where they need to be, and this creates a conundrum that we are talking about today. 

So I will quickly get to my question. Mr. Drevna, in your testimony you discussed the importance that Alaskan crude plays for 

West Coast refiners. You also point out that these refineries import 

about 50 percent of their crude product from overseas. 

However, if the Trans-Alaska Pipeline were to shut down in 

2010, they would have imported over 73 percent of their crude 

product, over 70 percent of this from OPEC nations. 

Do you have an estimate of how many Americans are employed 

at these refineries? 

Mr. DREVNA. Yes, sir. I believe that currently we have about 16 

to 17,000 direct, on-the-payroll employees in refineries up and 

down the Coast. But when you take into consideration the jobs that 

those jobs generate, as Tim had mentioned earlier, you are talking 

44 

anywhere up to the 200- to 240,000 jobs. Which I would suggest is 

significant. Good high-paying jobs. 

Mr. FLEMING. Yes, that was going to be my followup point. The 

petroleum sector jobs are wonderful; I mean, even the entry-level 

jobs are much better than the average job out there. So we are 

talking about excellent jobs, and benefits that would go with them. 

Can you explain to the Committee what the result would be if 

Alaskan crude supply continues to diminish? 

Mr. DREVNA. Well, as I mentioned before to the Chairman, if it 

continues to diminish and as the pipeline goes away, then what are 

we going to feed those West Coast refineries with? 

In California right now you have a low-carbon fuel standard that 

says you can’t use the Canadian crudes. Well, those Canadian 

crudes are going to be used. If they are not used in the United 

States, they are going to be used elsewhere. The rest of it is going 

to have to come from foreign sources. 

And that is if the situation were to continue where we would get 

the crude from the foreign sources, but after a while the logical, or 

illogical conclusion, as one might suggest, would be that it would 

be much more efficient and less expensive to actually refine the 

product overseas, and bring it to the United States. Thus putting 

those 240,000 jobs at severe risk. 

Mr. FLEMING. So what we are looking at is continued loss of jobs 

in a terrible job market today we have in this country, higher and 

higher energy prices, more and more dependency on foreign sources 

of oil. At our peak, we were at 60 percent self-dependent, now we 

are 30 percent self-dependent, or 60 percent dependent on other 

sources; and it looks like it is going to continue to go down. 

Yet we have more conventional forms of energy than any country 

in the world. It makes absolutely no sense to me, Mr. Chairman. 

I thank you, and I yield back. 

Mr. LAMBORN. All right, thank you. Mr. Duncan. Excuse me, Mr. 

Young. I am sorry. 

Mr. YOUNG. Thank you. This is an interesting hearing. I have reviewed this bill, and I highly support it. But I hope, Mr. Chairman, 

we add to it. 

You heard the Senator say something about permits. I am just 

curious about, they talk about having lease sales in Pet 4. We had 

two of them in 2010. There have been 100 of them in inactive 

leases that have been relinquished, and there have been 11 of them 

expired. That is because of the 10-year rule. 

Now, Mr. Holt keeps saying well, there is no oil there. They have 

done no 3-D work, is that correct? Does anybody know, Mr. Balash? 

Did they do any 3-D work? 

Mr. BALASH. Mr. Congressman, limited 3-D seismic work has 

been done. 

Mr. YOUNG. But was the State involved in this? 

Mr. BALASH. We have been supporting exploration through credits on the production taxes. 

Mr. YOUNG. My point is, the DOI report went from 10 billion to 

2 billion. 

Mr. BALASH. Mr. Congressman, I believe that is a self-fulfilling 

prophecy that has occurred; that the most prospective areas of 

NPRA were deferred from leasing and drilling activities. 

45 

Mr. YOUNG. That is what I—— 

Mr. BALASH. The 2010 assessment was based on the wells that 

had been drilled in the last decade, which were in the least prospective areas of NPRA for oil. 

Mr. YOUNG. That is what I asked the question for. Because this 

has not been explored. The leases that were given were relinquished because they couldn’t drill, and it is expensive oil. It is a 

long way away from the pipeline. Until we have a big pool, you 

can’t afford to put the infrastructure in to do it. That is our biggest 

challenge. 

We can go all to the pipeline, I think the gentleman, Mr. Hastings, mentioned the fact, Mr. Audubon Society and Sierra Club 

and Defenders of the Earth, you are all trying to take and strangle 

the pipeline. What the members of this Committee don’t realize, if 

the pipeline shuts down, it has to be pulled up. That is what they 

are trying to do. They are trying to starve the pipeline, and there 

is no doubt about that in my mind. 

This is to be drilled. I hope this Committee will take and pass 

out ANWR; if you don’t want to drill in PET-4, we will drill in 

ANWR. This isn’t the last pristine area in Alaska; we have those 

priorities set aside, and now to say this is the habitat—and, by the 

way, I was up there last week. There were many, many, many 

geese right around the wells. Landing. Laying their eggs. The goslings were going to be out in about six weeks or less. So don’t tell 

me it affects the birds; in fact, the birds are in better shape than 

they were before. They are not, in fact, being endangered and 

threatened. Those that don’t believe me, go down to the golf 

courses around here. 

VOICE. Mr. Young—— 

Mr. YOUNG. I didn’t ask you a question. 

VOICE. Could I—— 

Mr. YOUNG. I did not ask you a question. OK. Second, this area, 

you know, we have this idea of the bridge being set aside by the 

EPA, primarily. The EPA is what is the real snot on the handkerchief. This is really what it is. 

Because they stopped the building of that bridge, and it is on Native land, Mr. Chairman. This is not Federal land. And if I get my 

way, I will make sure the EPA can’t do anything to Native lands. 

We gave those lands to the Natives for their economic and social 

well-being. They have drilled wells on their land. And yet they 

can’t build a bridge across Colville to expand their finds and their 

drilling. The cost of the state, too. 

Mr. Sharp, you have a training school. How many people are you 

training for pipeline work? 

Mr. SHARP. Congressman, we are training as many as the market allows us to put to work. Right now, that is not as many as 

we would like to see. We have 100 active apprentices in Local 942, 

probably the same in Local 341 in Anchorage. But it is very sporadic in terms of the ability to get them into the oilfield under the 

pipeline. 

Mr. YOUNG. Is most of that work being done on maintenance? Or 

is it, are you training them to build pipelines, too? 

Mr. SHARP. We are training both, Congressman. 

46 

Mr. YOUNG. Both of them. This has been one of the knocks on 

the industry, because there has been an awful lot of outside oil 

workers coming from, all due respect, Louisiana and other areas to 

Alaska, and then return. 

How many jobs do you think the pipeline, and if we get PET-4 

open, would be created? 

Mr. SHARP. Congressman, I would not want to take a guess, except to say that right now just the legacy jobs alone in Prudhoe, 

the regular maintenance jobs are between 9 and 12,000. 

When I worked on the Trans-Alaska Pipeline, my local union 

alone had 11,000 people, and that is from one of the four pipeline 

unions that are involved—not to mention all the building trades 

unions or the spinoff work. And the other work then would have 

to still be done, the regular construction projects. Congressman, it 

would be huge. I would like to, I would like to stay away from that 

question, because I know whatever answer I give it will be wrong. 

But it will be thousands and thousands and thousands of jobs. 

Mr. YOUNG. I thank you. And I am running out of time, Mr. 

Chairman. Thank you. 

Mr. LAMBORN. All right, thank you. And I hope we have kept everything in the correct order, those who were here at the opening 

gavel, in the order of seniority, and then everyone in order as they 

arrived afterwards. So Mr. Duncan. 

Mr. DUNCAN OF SC. Thank you, Mr. Chairman. And I want to 

thank you for holding this hearing; it has been very informative. 

I appreciate the Chairman of the Committee issuing this piece of 

legislation. 

I just wanted to say that the testimony today just proved what 

we already have heard over and over in this Committee, and that 

is that Alaskans want this. That Alaskans want more oil and natural gas leasing and sales in their state. 

In fact, when I sat down with the former Speaker of the House 

from Alaska, she told me that a vote in the Alaska House of Representatives was 51 to one in favor of allowing leasing permits and 

drilling within the State of Alaska. I think Senator Murkowski confirmed that this morning. I have never heard it been used, the snot 

on the handkerchief, Mr. Young, but I like that. I am going to borrow that from you at some point in time. 

But not only does Alaska want this, and Alaskans want this, but 

America needs this. We know this is the, the National Petroleum 

Reserve. I think the question isn’t there whether the area has oil 

and natural gas. 

And it is a time for this Administration to quit talking about 

meeting America’s energy security needs, and actually start doing 

something about it. 

And we are learning this morning about this area. But it strikes 

me as odd that no one from the other side of the aisle is taking 

the opportunity to listen to you guys, and understand what is going 

on in Alaska, and understanding that we do have the reserves 

there. We can tap those, we can access those with bridges and pipelines that are necessary. 

And so again, I will say that it is time for the Administration to 

quit talking, and to start walking the walk, lessening our dependVerDate Nov 24 2008 10:45 Feb 23, 2012 Jkt 000000 PO 00000 Frm 00050 Fmt 6633 Sfmt 6602 L:\DOCS\66955.TXT Hresour1 PsN: KATHY
47 

ence on Middle Eastern sources of energy controlled by a cartel, 

and start tapping American resources to meet our energy needs. 

I don’t have a question for you guys, because I have listened to 

the testimony today, and you are answering all the questions that 

I had. So I want to thank you for being here, and I want to commend you for pursuing this very vital time in American history for 

tapping American resources. So Mr. Chairman, I will yield back my 

time, because I know there are others that want questions. 

Mr. LAMBORN. All right, thank you. And we are trying to finish 

before votes being called very, very soon. Mr. Landry. 

Mr. LANDRY. Thank you, Mr. Chairman. I just want to thank Mr. 

Duncan, as well as you all, for expressing that. That is exactly, 

what he said is exactly the same point that I will have. And I won’t 

try to repeat it, and I will try to be brief. 

But I think what others on the other side of the aisle don’t understand is that we don’t know what is under the ground there 

until we have an opportunity to do proper 3-D seismograph, then 

do exploration wells. 

I mean, look, they thought we were running out of natural gas. 

Well, it has gone, I mean, we have so much natural gas now, we 

are starting to export it. You know? 

I wanted to tell you something, Mr. Sharp. I am with you. I want 

you and your people to go to work, and the only way we can go to 

work, the only way that we can feed this economy is through affordable energy. 

The reason they are not over here is because they are embarrassed; because they know that you-all guys are right. 

And Mr. Myers, I respect the Audubon Society, but you all are 

wrong. OK. I hunt on property next to the Audubon Society’s pieces 

of property. That oil and gas production doesn’t affect those birds 

one lick. 

In fact, I am getting ready to have to leave here and go to a 

meeting with the head of an oil and gas company, who showed me 

pictures of his oil and gas rig that President Obama is going to require him to remove off the floor of the Gulf of Mexico, where he 

is going to be in violation of multiple laws for destroying some of 

the most exotic endangered coral in the world. OK? 

Not only that, it is one of my favorite fishing spots. That is the 

kinds of things that you all have to realize you all are doing. Oil 

and gas exploration and conservation, and the protection of animals, go hand in hand. 

Last weekend in the Gulf of Mexico I fished a tournament where 

they broke a record for the number of blue marlin caught, and they 

shattered the big-eye tuna Mississippi State record, and you all are 

going to tell me that the BP oil spill has destroyed the Gulf of Mexico. Please, please, please understand that we cannot move this 

economy and this country unless we provide Americans with affordable energy, and it starts with drilling out there in Alaska. Help 

these guys help you and your organization. 

Thank you. Mr. Chairman, I yield back. 

Mr. LAMBORN. All right, thank you. Mr. Flores. 

Mr. FLORES. Thank you, Mr. Chairman. I was struck by the testimony of Mr. Balash. I wasn’t here to hear it, but I did read it, and 

it is deja vu all over again. In 1973, what were we faced with? As 

48 

you said, it was high oil prices. We were faced with a moribund 

economy. 

But we did something different back then. We approved the 

Trans-Alaska Pipeline. And here we are, in 2011, and we are facing 

the same situation. High oil prices, high gasoline prices, and a moribund economy. And we have people that would rather get our oil 

from the Middle East, and rather get our oil from Brazil, than grow 

the American economy with American oil, and create American jobs 

for Mr. Sharp. 

I don’t get it. We are going in the wrong direction in this country; 

but with this Act, we hopefully will turn this silliness around. 

I do have a question for you, Mr. Balash. And then Mr. Sharp, 

I am going to try to get to you in just a second, if we can be brief. 

Mr. Balash, could you tell me a little bit—and if this is a repeat 

question, I apologize for it, because I wasn’t here before. What 

could we do in addition to this bill to better facilitate a more efficient and transparent permit processing structure with the Corps? 

Is there anything we need to do there? 

Mr. BALASH. Thank you, Mr. Congressman. I think that the 

Corps is one of a handful of agencies involved in these permitting 

decisions. The legislation specifically calls out the Department of 

the Interior for action, but as we have come to understand the regulatory process in Alaska, there is an alphabet soup of agencies out 

there that we have to deal with. With different—— 

Mr. FLORES. Could I interrupt you? I mean, what would you recommend we do for this Act in order to help you with that alphabet 

soup? That is basically shutting down the entire U.S. economy 

every day. 

Mr. BALASH. I would be happy to provide the Committee with a 

written summary of the specific agencies involved in most of these 

decisions. The Corps is a leading actor because of the wetlands 

issues, and the Fish and Wildlife Service as well. Those would be 

the two primary agencies to deal with. 

Mr. FLORES. If you would send that to us as quickly as possible, 

I would appreciate it. 

Mr. Sharp, I think you were passed over on a question a minute 

ago that Mr. Holt asked, and I think you might have an answer 

for this. Can you tell us how the pace of permitting is impacting 

jobs and your constituents? 

Mr. SHARP. Yes, sir. It is, it is impossible for oil companies, it is 

a closed-for-business message. Because the oil companies not only 

have to get over the initial permitting—the lease, then the permitting. At the end of the day, Shell Oil right now is held up on a 

project that they invested in years ago. Millions of dollars a month 

are being spent, and they are held up on the permits. 

It generates downstream very quickly to nobody going to work. 

We have a membership of about 13- to 1400 in Fairbanks; I have 

500 people working. Everybody needs their job. So it is, I understand why the oil companies aren’t going after the leases, because 

of all the hurdles that they have to do to get it from lease to market, in a reasonable time on their investment. 

Mr. FLORES. Thank you. Mr. Myers, I just want to let you know 

I have been to the North Slope. I have driven the Haul Road, and 

49 

the allegations that are being made about these types of activities 

by your organizations and your affiliates are absolutely incorrect. 

Mr. Chairman, thank you. I yield back. 

Mr. HASTINGS. Could I respond to that? 

Mr. FLORES. I will yield to Mr. Hastings. 

Mr. HASTINGS. I appreciate your yielding, and I am going to 

make an announcement. The Department of the Interior just put 

out a news release that is embargoed until 11:30; I am about three 

minutes early on this. I hope the Department of the Interior will 

forgive me for that. 

But I just want to mention that they have announced that they 

are going to expedite lease sales in the National Petroleum Reserve 

Alaska. Now, I want to make two observations in that regard. 

Perhaps these hearings and exposing what is going on is accelerating the Administration to move. In that case, I am very pleased 

with that. 

But second, what I think it probably does more than anything 

else is it talks about the importance of moving this piece of legislation. Because if you are going to accelerate leases, you are going 

to have to have infrastructure if, in fact, there are product there 

to move. So those two things I just want to make, and I hope the 

Department forgives me for being two or three minutes early on 

this. 

So I thank the gentleman for yielding. I yield back. 

Mr. LAMBORN. All right, thank you all. That concludes the questions for this panel of witnesses. Thank you all for being here. 

Like all witnesses, your written testimony will appear in full in 

the hearing record. I would ask that if anyone has any further 

questions to you, that they submit to you in writing, that you 

would respond to those. And they will need to get those questions 

to you by the end of business today? Is that correct? Within 10 

days. 

So thank you for the thousands and thousands of miles you have 

traveled to be here, and for your testimony. 

We will now have our next panel come up. I would like to invite 

forward the Hon. Mike Pool, Deputy Director of the Bureau of 

Land Management within the U.S. Department of the Interior. 

Like all of our witnesses, your written testimony will appear in 

full in the hearing record, so I ask that you keep your oral comments to five minutes, as outlined in our invitation letter and 

under Committee Rules. 

Our microphones are not automatic, so you have to press the button to be able to talk and be heard. And at four minutes a yellow 

light will come on, and a red light will come on at five minutes. 

Thank you for being here, and we appreciate your testimony. 

STATEMENT OF HON. MIKE POOL, DEPUTY DIRECTOR, 

BUREAU OF LAND MANAGEMENT, U.S. DEPARTMENT OF THE 

INTERIOR 

Mr. POOL. Thank you, Mr. Chairman. And thank you for the opportunity to discuss H.R. 2150, the National Petroleum Reserve 

Alaska Access Act. The bill directs the Department of the Interior 

to continue a program of competitive oil and gas leasing in the 

NPRA, and to update the NPRA Fossil Fuel Resource Assessment. 

50 

With me today is Douglas Duncan. He is the Associate Coordinator for the Energy Resources Program at U.S. Geological Survey. 

Mr. Duncan is available to respond to any questions on the resource assessment portion of the bill. 

On May 14, 2011, as part of an effort to increase safe and responsible domestic oil production, President Obama directed the 

Secretary of the Interior to conduct annual oil and gas lease sales 

in the NPRA, and Secretary Salazar has affirmed this commitment. 

The Department supports the goal of facilitating the development 

of oil and gas resources in the NPRA in an environmentally responsible manner. 

In 1923, President Harding signed an Executive Order establishing the Naval Petroleum Reserve on the North Slope of Alaska. 

The U.S. Navy conducted the first modern oil exploration program 

of the area from 1944 to 1953. The Naval Petroleum Reserve’s Production Act of 1976 transferred responsibility to the Department of 

the Interior. 

In 1980 Congress directed the Department to conduct an expeditious program of competitive oil and gas leasing in the Reserve. 

Since 1999, BLM has offered six lease sales in NPRA, and over 1.6 

million acres are currently under lease in the area. BLM plans to 

conduct a lease sale in December of 2011, and in 2012, and each 

year thereafter. 

The BLM is required to balance the exploration and development 

of oil and gas resources with other values, including the protection 

of wildlife habitat and the subsistence values of rural residents and 

Alaska natives. 

We accomplish this on the nearly 23-million-acre NPRA through 

a careful planning process, which includes public input. 

The U.S. Geological Survey has also studied the area. USGS resources assessment report was updated in October 2010; and in 

2011, the USGS released its assessment of the economic 

recoverability of undiscovered conventional oil and gas resources 

within the NPRA. 

Facilitating responsible development in the NPRA poses unique 

challenges. The potential environmental and public health impacts 

of production, exploration, and development can be more difficult to 

ascertain, given the often harsh conditions of the area. As a result, 

planning and exploration activities can take longer than other 

areas of the United States. 

The Administration remains firmly committed, however, to facilitate development in the region. 

The Department has concerns with the leasing and authorization 

provisions of H.R. 2150. The bill’s provisions requiring leasing in 

areas of NPRA most likely to produce commercial quantities of oil 

and gas may conflict with decisions reached through the BLM’s 

carefully conducted public land planning process. 

The Department has additional concerns, including the requirement that the Secretary consult with the Department of Transportation on all surface disturbance, rather than only major roads and 

pipelines; the requirement that the Secretary must ensure that 

other Federal permitting agencies comply with the deadlines set 

forth in the bill; and the implication that all requested permits 

51 

must be issued—regardless of the availability of alternatives or the 

actions of potential impacts. 

In addition, the Department is concerned that the timelines required by the bill may not be compatible with the public involvement comments and review requirements of other laws, including 

the Environmental Policy Act. Also of concern is the suggestion 

that the Department must preapprove rights-of-way on millions of 

acres of lands that industry may never seek to develop. If enacted, 

these requirements would likely divert BLM resources, and result 

in delay of further development of NPRA resources in an environmentally responsible manner. 

Finally, the BLM’s existing regulations already establish 

timelines for appropriate authorizations and require prompt notification of any delays. 

The BLM’s leasing program in the NPRA ensures that safe and 

responsible exploration and development of domestic oil and natural gas resources can be done in a manner that protects wildlife 

and habitat, and honors the subsistence values of rural residents 

and Alaska natives. 

We welcome the opportunity to work with the Committee, the oil 

and gas industry, the Alaska Native community, and the public to 

continue to develop NPRA in an environmentally responsible manner. 

Thank you for the opportunity to present the views of the Department on H.R. 2150. I would be glad to answer any questions. 

[The prepared statement of Mr. Pool follows:] 

Statement of Mike Pool, Deputy Director, Bureau of Land Management, 

U.S. Department of the Interior 

Thank you for the opportunity to discuss H.R. 2150, the National Petroleum Reserve Alaska Access Act. The bill directs the Department of the Interior to continue 

a program of competitive oil and gas leasing in the National Petroleum Reserve in 

Alaska (NPR–A). The Department supports the goal of facilitating the development 

of oil and gas resources in the NPR–A in an environmentally responsible manner. 

On May 14, 2011, as part of an effort to increase safe and responsible domestic oil 

production, President Obama directed the Secretary of the Interior to conduct annual oil and gas lease sales in the NPR–A, and Secretary Salazar has affirmed this 

commitment. 

Many of the activities called for in H.R. 2150 are within the scope of existing Department authorities and consistent with our priorities and activities already underway. Under these authorities, 191 tracts are currently leased by the Bureau of Land 

Management (BLM) in the NPR–A with a leased acreage of over 1.6 million acres. 

We would like to work with the Committee to move toward our shared goal of improving the efficiency of the oil and gas leasing and development process while 

maintaining safety and environmental standards in the NPR–A. 

Background 

In 1923, President Harding signed an executive order establishing the Naval Petroleum Reserve Number 4, on the North Slope of Alaska. The Order reserved to 

the Navy all oil and gas resources within the Reserve, and prohibited private production from all areas not then covered by a valid entry, lease or application. The 

U.S. Navy conducted the first modern oil exploration program of the area from 1944 

to 1953. The Naval Petroleum Reserves Production Act of 1976 renamed the area 

the National Petroleum Reserve in Alaska, and transferred authority and administrative responsibility to the Department of the Interior. The Act directed the Department to commence further exploration of the Reserve, but prohibited petroleum 

production, and all developments leading to production of petroleum, from the Reserve. In 1980, an appropriations enactment superseded the prohibition on the production, and directed the Department to conduct an expeditious program of competitive oil and gas leasing in the Reserve. Under subsequent amendments to the Naval 

Petroleum Reserves Production Act of 1976, and implementing regulations, the BLM 

52 

is required to balance the exploration and development of oil and gas resources 

with, among other values, the protection of wildlife, habitat, and the subsistence 

values of rural residents and Alaska Natives. 

The BLM manages nearly 23 million acres in the NPR–A. In 2004, the BLM completed planning for 8.8 million acres in the Northwest NPR–A Integrated Activity 

Plan/Environmental Impact Statement (IAP/EIS). The BLM completed the 4.6 million acre Northeast NPR–A Supplemental IAP/EIS in 2008 with the assistance of 

the North Slope Borough as a cooperating agency. In 2010, the BLM moved to establish consistent management direction for the entire NPR–A, including the unplanned southern portion of the Reserve, through an Integrated Activity Plan/Environmental Impact Statement. A Draft IAP/EIS is planned for May of 2012. 

Through a careful planning process which includes public input, the BLM has in 

place an active leasing program in the NPR–A, under which lease sales have been 

offered in 1999, 2002, 2004, 2006, 2008, and 2010. Over 1.6 million acres are currently under lease in the NPR–A. In December, 2011, the BLM plans to conduct a 

lease sale of tracts. The BLM also plans to hold a lease sale in 2012 and each year 

thereafter. 

The U.S. Geological Survey (USGS) also has studied the area. A USGS report 

from October 2010 entitled ‘‘Petroleum Resource Assessment of the National Petroleum Reserve in Alaska,’’ found an estimated 896 million barrels of conventional, 

technically recoverable oil and 53 trillion cubic feet of conventional, undiscovered 

gas within NPR–A and adjacent state waters. In 2011, the USGS released its assessment of the economic recoverability of undiscovered, conventional oil and gas resources within the NPR–A and adjacent state waters. This new analysis estimates 

that approximately 350 to 500 million barrels of undiscovered oil are economically 

recoverable at $90 per barrel. Additional studies are ongoing. 

It should be noted that facilitating responsible development in Alaska, including 

in the NPR–A, poses unique challenges. The potential environmental and public 

health impacts of production, and exploration and development can be more difficult 

to ascertain given the often-harsh conditions of the area. As a result, planning and 

exploration activities can take longer than in other areas of the U.S. The Administration remains firmly committed, however, to facilitating environmentally responsible development in this region. 

H.R. 2150/Leasing & Authorizations 

H.R. 2150 directs the Department (BLM) to continue a program of competitive oil 

and gas leasing in the NPR–A, and to facilitate permitting of drilling and surface 

development activities in an environmentally responsible manner. The bill specifically requires the Department to conduct at least one lease sale annually from 2011 

through 2021 in those areas of the reserve most likely to produce commercial quantities of oil and natural gas (Sec. 3). As noted above, the Administration supports 

annual lease sales in the NPR–A and has committed to holding them, while respecting environmentally sensitive areas. Efforts to begin this annual lease sale are already underway with existing authorities. 

The bill requires the Secretary of the Interior to consult with the Department of 

Transportation (DOT) for all surface development activities; to ensure that other 

federal agencies meet specific timelines for issuing appropriate authorizations; and 

to submit a plan for approval of potential rights-of-way on an area covering nearly 

23 million acres (Sec. 4). Also, the bill requires the Secretary to promulgate regulations which establish deadlines and sets forth specific actions the Department must 

take if deadlines are not met (Sec. 5). 

The Department has concerns with the leasing and authorization provisions in 

H.R. 2150. For example, the bill’s provisions requiring leasing in areas of NPR–A 

most likely to produce commercial quantities of oil and natural gas may conflict 

with decisions reached through the BLM’s careful public land-use planning process. 

These decisions balance protection of wildlife, habitat, and subsistence values with 

oil and gas exploration and development. 

The Department has additional concerns with the bill, including: 

• the requirement that the Secretary consult with the DOT on all surface disturbance, rather than only on major roads and pipelines [Sec. 4(a)]; 

• the requirement that the Secretary must ensure that other federal permitting 

agencies comply with the deadlines set forth in the bill [Sec. 4(b)]; 

• the implication that all requested permits must be issued, regardless of a proposed action’s potential impacts or the availability of alternatives [Sec. 4(b)]; 

• the timelines required by the bill that may not be compatible with the public 

involvement, comment, and review requirements of other laws, including the 

National Environmental Policy Act [Sec. 4(b)].; 

53 

• the suggestion that the Department must pre-approve rights-of-way on millions of acres of lands that industry may never seek to develop [Sec. 4(c)]. 

If enacted, these requirements would likely divert BLM resources and result in 

delay of further development of NPR–A resources in an environmentally responsible 

manner. Further, the BLM’s existing regulations already establish deadlines for appropriate authorizations and require prompt notification of any delays. 

H.R. 2150/Resource Assessment 

The bill requires the Department (U.S. Geological Survey) to complete an updated 

comprehensive assessment of technically recoverable conventional and unconventional fossil fuel resources in the NPR–A (Sec. 6). As noted, the USGS recently completed an updated assessment of the conventional oil and gas resources of NPR–A. 

The Department has concerns with this requirement. Because the USGS used all 

available information in its 2010 assessment and no new data or information has 

become available since that time, the USGS believes there is no need to reassess 

these resources now. 

The USGS has started evaluating the unconventional petroleum resources in 

NPR–A, with the plan to assess these resources in the future. A coalbed methane 

assessment for the North Slope including NPR–A was completed in 2006; the mean 

estimate of undiscovered, technically recoverable resources indicated a potential for 

about 18 trillion cubic feet (TCF) of coalbed gas. The results for other unconventional resources on the North Slope, including shale gas and tight gas, are expected 

to be available in 2–3 years. 

It is not clear from the language in the bill whether a coal assessment would be 

required. The North Slope of Alaska contains coal resources [which are the source 

of the coalbed methane], but the cost of mining and transporting the coal would be 

substantial. Earlier this year, the USGS, in cooperation with the Department of Energy, National Energy Technology Laboratory, published a database compilation of 

published and nonconfidential unpublished coal data from the Cook Inlet and North 

Slope areas of Alaska. Despite the database, there are relatively few data with 

which to conduct a robust coal assessment. 

Conclusion 

The BLM’s leasing program in the NPR–A ensures that safe and responsible exploration and development of domestic oil and natural gas resources can be done 

in a manner that also protects wildlife and habitat, and honors the subsistence values of rural residents and Alaska Natives. We welcome the opportunity to work 

with the Committee, the oil and gas industry, the Alaska Native community, and 

the public to continue to develop the NPR–A in an environmentally responsible 

manner. Thank you for the opportunity to present the views of the Department on 

H.R. 2150. I will be glad to answer any questions. 

Mr. LAMBORN. All right, thank you. They have just called votes. 

It is down to 13 minutes of the first 15-minute vote. 

Thank you very much for being here. I will ask that in our round 

of questions, everyone try to keep it to two minutes, and that way 

we can be out of here with about eight or so minutes to go. 

So I will ask just one question, and then the Ranking Member 

will have a question or two. 

Director Pool, in 2010 this Administration issued the fewest 

leases for oil and gas development since 1984, in issuing only 1308 

leases last year. This is the second year of the Obama Administration, and only one-quarter of the number of leases in 1994, which 

was the second year of the Clinton Administration, which was at 

the time 4,159 leases, and about half the number of the second 

year of the Bush Administration in 2002, where they issued 2,384 

leases. 

Now, as you know, oil and gas development takes time. It is like 

a pig in a python. The increases that we have seen in domestic production today are the result of much of the leasing that took place 

at the end of the Clinton Administration and the beginning of the 

Bush Administration five to 10 years ago. 

54 

Can we expect that the slowdown in leases that we have seen 

last year and previously by this Administration, to result in declining production in the future? 

Mr. POOL. Thank you, Mr. Chairman. I can respond to what we 

have been doing with the NPRA, and this is since 1999. And that 

was since 1999, we were offering the lease sales every two years. 

And since that time, we have offered 250 tracts of about two and 

a half million acres, all of which have been relinquished by industry. 

In 2010 we offered 190 tracts for leasing in the NPRA, and we 

only received five lease offers by industry, which is about 30,000 

acres. So systematically over time, we have been responsive to conduct and make available and facilitate oil and gas leasing in the 

NPRA. 

We have no pending backlog of applications for permit to drill. 

We have no pending backlog of rights-of-way to facilitate pipelines 

and roads. We have issued four APDs, and they have not been pursued by industry as of yet. So there is no delay in permitting or 

processing as it relates to the Bureau of Land Management responsibilities in the NPRA. 

Mr. LAMBORN. Representative Holt. 

Mr. HOLT. Thank you. Just to move along briefly, I thank you 

for coming. I would like to ask for some short answers, then, if you 

could. 

The assessment by the USGS was completed less than a year 

ago, is that correct? 

Mr. POOL. That is correct. 

Mr. HOLT. Do you see any reason why that would be a, methodologically, a poor assessment? Or any reason why it would be out 

of date? 

Mr. POOL. I think I will allow my colleague to answer that question. 

Mr. HOLT. Identify yourself, please. 

Mr. DUNCAN (USGS). I am Douglas Duncan; I am the Associate 

Coordinator of the Energy Resources Program for the U.S. Geological Survey. 

Mr. HOLT. And I would like to give you a lot of time to reply, 

but unfortunately there isn’t a lot. 

Mr. DUNCAN (USGS). I will be very brief. Our assessment is very 

current. And without additional information from additional drilling or seismic profiling, including 3-D seismic, there would be no 

reason for us to reassess or update that assessment. 

Mr. HOLT. And this assessment was based on wells that had 

been drilled. 

Mr. DUNCAN (USGS). That is correct. 

Mr. HOLT. Which presumably were not the least promising. I 

mean, the witness earlier said well, the assessment was done on 

the basis of the least promising wells. I presume the wells that had 

been drilled were what the knowledgeable people thought were the 

most promising. 

Mr. DUNCAN (USGS). That is correct. 

Mr. HOLT. OK, thank you. And Mr. Pool, the bill would require 

that all leaseable tracts be within 25 miles of an improved road or 

55 

pipeline. Do you agree with that? Would you like to see that done? 

Does the BLM agree with that requirement? 

Mr. POOL. Congressman, I think that from our perspective, that 

it depends on which leases have been issued and industry’s pursuit 

to develop those particular leases, their proximity to existing roads, 

and the need for new roads or pipelines, through BLM’s authorization process. 

Mr. HOLT. OK. Could the required consultation with the Department of Transportation improve matters? Would that speed things 

up, or slow things down? 

Mr. POOL. In my view, it is unnecessary. I think we clearly have, 

with our own regulations, we are very accustomed to processing 

permits, the application for permit to drill, including those rightof-way authorizations for pipelines and roads. We already have the 

infrastructure in place to do that. 

Mr. HOLT. And the announcement today from Interior suggests 

that things are moving along at the rate that the requests for permits would warrant. Is that a correct interpretation? 

Mr. POOL. Yes. What we are planning, and we hoped to announce 

this early next week, it will go through the Federation Notice, is 

an open solicitation for expressions of interest. And this affords the 

industry to express the BLM for certain parcels or tracts that we 

would like to see offered for the lease sale come December. 

And just to complement that, it doesn’t preclude the Bureau of 

Land Management, which oftentimes we do, we will look at our 

planning system. And by Bureau motion, we will also offer these 

various tracts up for lease sale. 

Mr. HOLT. So putting aside some of the provisions of the bill that 

might actually be damaging, such as waiving environmental reviews and so forth, is there a need for this legislation? 

Mr. POOL. I think we have everything in place. And we have 

demonstrated that over time. This Administration is clearly committed to facilitating oil and gas development. I think that we currently have all the regulations and authorities we need to continue 

to advance oil and gas development in NPRA. 

Mr. HOLT. OK. I wish there was more time for discussion. I 

thank the Chairman, I thank the witnesses, and I yield back. 

Mr. LAMBORN. Thank you. I am going to take the final two minutes of my time. 

Mr. Pool, if everything is in place, why is no oil being produced 

in the NPRA? 

Mr. POOL. Mr. Chairman, we have been, I think, very proactive 

for a number of years in terms of lease administration. I pointed 

out earlier the statistics associated with the number of 

relinquishments. We have only issued four applications for permits 

to drill. 

We have currently no wells in production. The fact is that we 

have, on a biannual basis—and now we are going to move to an 

annual basis—making parcels available for lease. We are fully prepared, if they want to pursue those leases, develop those leases, to 

provide the needed ancillary authorizations for both rights-of-way 

to accommodate pipelines and roads. 

To the extent that market conditions, oil and gas prices, other 

outside influences impact or—— 

56 

Mr. LAMBORN. Or other agencies. EPA, Corps of Engineers. 

Mr. POOL. Well, I will let them speak for themselves. But I can 

just let you know within the NPRA, that is our jurisdiction, and 

we have been very responsive—not only on lease sales, but we are 

fully prepared to process whatever permits may come our way. 

Mr. LAMBORN. But there is no production today. 

Mr. POOL. Not today. 

Mr. LAMBORN. Thank you. That will conclude this hearing. 

Thank you for your testimony. I would ask you to respond to any 

questions that are submitted to you in writing by members of the 

Committee within the next 10 days. 

Thank you for being here. And if there is no further business, 

this Subcommittee is adjourned. 

[Whereupon, at 11:43 a.m., the Subcommittee was adjourned.] 

Æ