Arctic National Wildlife Refuge: Background and Issues
Released: 2003-05-15T00:00:00

Executive Summary

From Alaska's Prudhoe Bay eastward 200 miles to the Canadian border is an area of uniquenatural wealth. An area teeming with wildlife, it has been called the "Serengeti of the Arctic." Theeastern part of the region also contains one of America's best remaining onshore oil prospects,beneath the coastal plain of the Arctic National Wildlife Refuge (ANWR). (See Figure 1.)

This remote and largely untouched area is an example of an arctic ecosystem that, by virtue of being essentially intact, is increasingly rare. It is an important habitat for musk oxen, migratorywaterfowl, vast numbers of caribou, and predators such as grizzly bears, polar bears, wolves, andgolden eagles.

Moreover, the coastal plain is immensely promising for oil and natural gas, possibly on the scale of Prudhoe Bay's resources. Its development could help reduce America's energy dependenceto some degree and keep the Alaska pipeline in use for decades -- benefitting the national economy,the oil industry, and people in Alaska.

The Purpose of the Report

When Congress expanded the boundary of ANWR in the Alaska National Interest Lands Conservation Act (ANILCA) in 1980, it designated about 8 million acres within the earlierboundaries of the refuge as wilderness -- off-limits to any form of development. However, in twosections of ANILCA, Congress postponed a decision on wilderness designation of 1.5 million acresof the coastal plain (called the 1002 area ) -- a portion of ANWR thought to be rich in oil and gasresources -- and required the Department of the Interior (DOI, or Interior) to prepare a detailedstudy of the area and to recommend how it should be managed.

Interior finished its detailed analysis of oil potential, wildlife resources, impacts, and mitigation measures in April 1987. In its report to Congress, DOI estimated then that the chance of recoveringeconomic quantities of oil at 19%, a figure that is very high by industry standards. The reportrecommended that the entire area be made available for leasing. The report and its recommendationgenerated controversy, as have virtually all subsequent reports on this topic. In intervening years,estimates of oil potential have varied, but enthusiasm for ANWR oil development remains strong,particularly in Alaska. Likewise, opposition to energy development continues to be strong, basedon concern for the area's wilderness values and wildlife.

Figure 1. Shaded Relief Map of Northeastern Alaska.

Source: U.S. Dept. of the Interior, Fish and Wildlife Service http://www.r7.fws.gov/nwr/arctic/shademap.html , Nov. 9, 2001. Minor modifications made to enhance clarity in monochrome.

This report goes beyond reporting the opposing views of development versus protection. Rather, it provides background and basic material for analyzing possibilities and implications ofemerging options.

The Tradeoffs and Possible Alternatives

Much is at stake in the ANWR decision, for U.S. energy interests, for proponents of unspoiled wilderness, and for the State of Alaska. On the one side, if oil were found and developed, theadditional domestic supply would be seen as enhancing national security (although some opponentsof opening ANWR argue that the vulnerability of the TAPS pipeline to sabotage diminishes thenational security argument). Further, oil development would create several thousand short-term jobsin Alaska and elsewhere, and a substantial number of long-term jobs as well. The state wouldbenefit from additional royalty income, and many of Alaska's Native groups would benefit as well(though some would face threats to important subsistence resources).

On the other side, many believe developing oil would irrevocably compromise the area's wilderness values -- defined as an area "untrammeled by man." Some counter that the area hasalready been affected by man: there are a few remains of DEWLINE construction and a capped oilwell in the 1002 area. Some argue, too, that the coastal plain itself is not of a wilderness qualitymost would expect. The area is bounded on the south by the spectacular Brooks Range, but is itselfmostly flat or rolling -- a treeless tundra laced with shallow streams, most of which flow onlyduring the brief arctic summer.

However, the apparently hostile nature of the area belies its national and international significance as an ecological reserve. It protects a virtually undisturbed, nearly complete spectrumof arctic ecosystems, and is one of the last places north of the Brooks Range that remains legallyclosed to development. Those who favor preservation argue that when the United States is servingas an international leader in the protection of vanishing ecosystems, development of the 1002 areawould not set a good international example. Thus, if oil development occurred, the issue wouldbecome how to ensure that development would be compatible, as far as possible, with the purposesof the wildlife refuge.

Developing oil in the harsh, fragile arctic environment is expensive and risky. Since oil was discovered at Prudhoe Bay in 1968, oil companies and government agencies have done much toreduce environmental impacts, e.g. , through reducing the size of drill pads, numbers of roads, andsize and location of support facilities; and through improving waste management. Depending onstatutory and regulatory requirements, and with proper investment, monitoring, and enforcement,energy companies could develop the 1002 area in ways that continue to reduce effects on plants andanimals.

The Choices Before Congress

In the context of these tradeoffs, the spectrum of alternatives before Congress includes:

No action, which would maintain the status quo, which prohibits drilling for oil and gas throughout the refuge.

Authorize leasing in the coastal plain of ANWR to proceed under the current regulatory requirements and capabilities of DOI.

Allow leasing in the coastal plain of ANWR to proceed, but with special statutory and regulatory conditions, (which could be greater or less than currently required). Amonga variety of possibilities or proposals, these conditions might include one or more of thefollowing:

1. Limiting surface occupancy in the 1002 areato reduce environmental impacts (recognizing evolvingtechnology).

2. Requiring environmental controls, phasing,special area protection, or enforcement mechanisms.

3. Requiring various measures for site restorationor removal of infrastructure upon completion of oil operations and/or establishing bondingmechanisms to ensure accomplishing these goals.

4. Reducing requirements for environmentalreview under the National Environmental Policy Act or limiting judicial review of executiveactions.

5. Allowing different standards for environmentalprotection or reclamation to prevail on Native lands than on the remainder of the coastalplain.

Designate the coastal plain as wilderness, thereby foregoing any energy development and associated economic benefits, but maintaining existing natural values andemployment and subsistence opportunities.

Exploring and Developing the Oil Resource

Exploration does not necessarily mean that the coastal plain immediately would be spread with drilling pads, service facilities, and pipelines. Companies may not discover economic quantities ofoil -- or any oil at all. If they do find economic quantities and development occurs, oil facilitieslikely would occupy only a small, though dispersed, portion of the total area; and it is unlikely thatoil would be produced until 7 to 12 years after any congressional approval of exploration. Drillingproponents argue that this long lead time is a reason for making a decision now.

Assessing the Potential. Parts of Alaska's North Slope coastal plain have proved abundant in oil reserves, and its geology holds further promise. (1) Theoil-bearing strata extend eastward from the National Petroleum Reserve-Alaska (NPR-A), past theprolific Prudhoe Bay field and a few smaller fields, and may continue into and through ANWR's1002 area. Clearly, a key step in making a decision on ANWR is estimating how much oil mightbe there. Drilling (both exploration and confirmation), now prohibited, is the only method by whichthe 1002 area's petroleum potential can be ascertained with reasonable assuredness in the contextof the uncertainties of oil discovery.

On its part, the Department of the Interior, without drilling, has issued assessments in 1987, 1991, 1995, and 1998 of the amount of oil and gas that might be present in ANWR. Those preparedafter 1987 have been based upon progressively newer geological data from outside ANWR and uponreinterpretation of previous information using improving techniques, and have changed estimatesof ANWR's oil potential.

Two considerations might be noted at this point. One is that the projected price of oil is a key factor in estimating the amount of oil that might be economically recoverable. The second is thatthe larger the area open to leasing and resultant oil company participation, the more likely thatcompany bidding will give the government (the people of the United States) a larger return formaking resources accessible to private entities.

ANWR Oil, U.S. Oil Consumption, and ANWR Gas. Based upon the results of the 1998 Interior Department assessment, the 1002area contains some of the most promising undrilled onshore geologic structures with petroleumpotential known in the United States. The U.S. Geological Survey (USGS) estimated that, at$24/barrel (in 1996 dollars), there is a 95% chance that 2.0 billion barrels or more could berecovered, and a 5% chance of 9.4 billion barrels or more. In comparison, the Prudhoe Bay fieldoriginally was estimated at 11-13 billion barrels of economically recoverable oil.

Many argue that this large potential should be explored and developed to offset the decline in domestic oil production. Domestic production without ANWR is projected by the U.S. EnergyInformation Administration (EIA) in its base case to be down to 5.6 million barrels per day (bbl/d)by 2020 (from 5.8 million bbl/d in 2000), while consumption is projected to rise from 19.7 millionbbl/d to 26.7 million bbl/d. Other things being equal, domestic output without ANWR would supplyonly about one-fifth of U.S. consumption, with the rest coming from imports. Assuming a higherprice of $30 per barrel, it appears that potential peak output from USGS's "low" and "high" ANWRvolumes of economically recoverable oil at 300,000 and 1,575,000 bbl/d, respectively. These wouldrepresent a 5% and a 28% rise in U.S. output, respectively, at peak production.

Possibly of greater importance are the gathering and transportation economics of both existing and prospective fields, which include the cost of shipment through the TAPS pipeline. Combinedproduction at Prudhoe Bay and other North Slope fields is now at only about half of its peak and isprojected to rise only slightly between 2000 and 2020. Development of and production from ANWRwould improve the commercial viability of currently producing North Slope fields by spreading theper barrel cost (maintenance and capital charges) of operating the pipeline over a larger number ofbarrels.

The possibility of large amounts of natural gas in ANWR together with huge amounts of proven gas reserves in the Prudhoe Bay area (not being produced presently) may increase the appeal of oiland gas development of ANWR to energy companies. For economic reasons, natural gas generallyhas not been emphasized, but becomes more attractive as demand grows and prices rise. Construction of a pipeline to transport natural gas to North American markets and/or a warm waterport for shipping liquefied natural gas would be a necessary element.

Controlling Impacts

If Congress decided to authorize development, then the issue would become whether and how to minimize effects on wildlife and the coastal arctic ecosystem, and -- through them -- on Nativecultures. Changes in the ecosystem could result from several facets of oil development. Majorintrusions would include large requirements for water and gravel; and the displacement anddisturbance of land, animals, and plants by pipelines, roads, airstrips, and other infrastructure. Thereis particular concern for caribou migration routes; calving and insect relief areas; migratory birdnesting and staging; effects of air and water pollutants; and direct and indirect effects of humanpresence. In addition, because of mixed ownership in the area, problems arise in how to establishand enforce controls on development.

Infrastructure. The trend in North Slope energy development is toward compactness, reduction in numbers and mileage of roads, centralization orreduction of support facilities, reduction of hazardous wastes, and concentration of exploration andearly development activities in winter (when the frozen tundra makes cross-tundra travel possible,and when roads can be built from ice). Industry representatives now argue that the entire ANWRarea can be developed with only a 2,000 acre "footprint." Opponents argue that the 2,000 acreswould be spread across the entire 1002 area, is achievable only if one fails to count some majorfacilities, and is misleading in any case, since effects of the area covered by gravel may extend wellbeyond even a broadly defined footprint. Limitation of the footprint has begun to be a major pointof congressional debate.

Physical Environment. Much of the controversy over development of the 1002 area has focused on potential impacts on biological resources in thearea. However, if development occurs, there also would be impacts on the physical environment andresources of the area -- land, air, and water -- as a result of construction, operations, and humanhabitation. Currently, because the area is uninhabited (except for Kaktovik), the condition of thephysical environment has been characterized as pristine and nearly unaffected by human activity.

Exploration and development activities would alter the existing physical environment. For example, oil field operations would result in air pollution emissions. There would be need for largeamounts of water for drilling and ancillary activities, including construction of roads, drill pads, andairstrips. There likely would be impacts from both the mining and use of gravel as part of some ofthese activities. Exploration and development also would result in the generation of several typesof waste streams, both from industrial operations and domestic wastes, requiring disposal. At issueare the individual and cumulative effects of such alterations and the ability of the naturalenvironment to recover and be reclaimed when oil-related activities have ceased.

Industry points out that companies use improved technology in the arctic today (compared with that used in the past for development of existing sites in the arctic region) which greatly reduces the"footprint" of operations and relies on practices that minimize and provide for better disposal ofwastes. The result is less direct and indirect impact in terms of habitat loss and environmentalcontamination. Moreover, numerous environmental protection requirements administered by federaland state authorities are intended to govern and regulate activities that might take place. Critics,however, are concerned about environmental effects of routine operations in the fragile 1002environment, as well as the possibility of leaks and spills of various contaminating substances, andwhether adequate safeguards would be adopted and enforced by regulators. Moreover, critics arguethat even careful development would lead to lasting changes in the fragile arctic environment.

Alaska Native Ownership. Over 100,000 acres in ANWR are owned by Alaska Natives. The surface of more than 90,000 acres is owned by theKaktovik Inupiat Corporation (KIC) and the subsurface of these acres is owned by the Arctic SlopeRegional Corporation (ASRC). The remaining 10,000 plus acres are owned by individual Natives. Some of the 100,000 acres are within the legal description of the 1002 area; some also lie along thecoast but are legally described as outside the 1002 area, and all 100,000 acres are within the Refugeas a whole. Regulation of development on these lands is problematic and is often not consideredexplicitly in legislative proposals. (See CRS Report RL31115 , Legal Issues Related to ProposedDrilling for Oil and Gas in the Arctic National Wildlife Refuge .)

Special Areas. Wildlife experts are particularly interested in threats of development to several sensitive or special areas. For example, on thesouthern edge of the coastal plain, Sadlerochit Spring is of great biological importance because itnever freezes. Other areas include the southeast portion of the coastal plain, where caribou calvingis particularly likely to occur; certain staging areas for snow geese; riparian areas important to muskoxen; deep rivers and lakes important to overwintering fish; and denning or nesting sites of bears andraptors, to name a few.

Secondary Development. Also of concern are the effects of possible spin-off development both in Kaktovik, an Alaska Native settlement andDistant Early Warning Line (DEWLINE) station on Barter Island just off the coast, and on otherNative lands within the Refuge. Kaktovik could be a staging area for oil operations. Suchdevelopment could compromise wildlife and other environmental values. Currently, Deadhorse (atPrudhoe Bay, the oldest support center), the Kuparuk Industrial Center (west of Prudhoe Bay), andto some extent Alpine (a very modern oil development west of the Kuparuk oil field, with much ofits support activities reduced or taking place elsewhere) offer alternate examples of how servicesupport areas might be handled. Deadhorse was left mostly to private decisions, and its sprawl andcontamination problems led to the more compact, controlled approach at the Kuparuk Facility. Stilllater, the Alpine field essentially eliminated the need for some kinds of additional support facilities,reduced the physical size of some of the remaining facilities, and shifted still other operations toother sites by flying material in and out or carrying other equipment in on winter ice roads. In the1002 area, facility reduction might continue, and some needs might be shifted to Native lands withinand near the 1002 area.

Future Recovery

Whether strict statutory and regulatory controls and strong government enforcement could protect wildlife values to the satisfaction of those opposing development is open to question. (Wilderness values, by definition, would be compromised if full development occurred.) But for thelong term, an equally important question is whether, after oil production ceased, the area could beand should be restored as nearly as possible to pre-development conditions.

If major oil reserves were found, energy companies might operate on the coastal plain for decades. If natural gas were also found, it too might be developed. (There is currently no means tosend natural gas to market, either from the 1002 area or from Prudhoe Bay.) Offshore oil fieldsmight also be found, and might be developed with onshore support in ANWR. Any of theseoutcomes could lead to significant human activity in the area for a century or more.

Assuming eventual dissipation of industrial presence, would the area eventually revert to something of its former condition? New data exist to show that such an intensive presence couldlast many decades after activity ceases. Complete removal of all infrastructure seems unlikely, andresulting water flow patterns might not even make it desirable. The short growing season and lowprecipitation make complete revegetation of disturbed areas uncertain. Recovery of animalpopulations and species diversity would depend on viable populations close enough to restock thearea or site, and possibly explicit controls limiting future presence so that the site or area can recover. If Congress decides to open ANWR, it may include rehabilitation requirements.

Introduction

The debate over whether to open the coastal plain of the Arctic National Wildlife Refuge(ANWR) to energy leasing has raged for decades, with the main periods of controversy occurringin the late 1950s before the refuge was established; the period 1977-1980 at the passage of theAlaska National Interest Lands Conservation Act; 1987 when the Final Legislative EnvironmentalImpact Statement (FLEIS) was released; the early 1990s during the Persian Gulf War; and the currentdebate, which began months before the attacks on New York and Washington, but was certainlyheated by those events.

The purpose of this report is to collect the background information and new developments that have arisen since the 1987 FLEIS, and to discuss the possibilities and implications of emergingapproaches to development. The report does not focus on any particular legislation. (2) Rather, itprovides background and basic material for analyzing proposals and ideas about developing or notdeveloping the 1002 area.

The Decision Before Congress

The portion of Alaska's North Slope between Prudhoe Bay and the Canadian border represents this country's largest, most diverse remaining example of a largely untouched arctic ecosystem. (3) Allmajor arctic species are relatively abundant in the area. The coastal plain and adjacent areas areimportant habitat for caribou, migratory waterfowl, and such predators as wolves, polar bears, andgrizzly bears. However, the coastal area is also very likely one of the nation's best remaining oilprospects, possibly containing quantities nearly as great as the fields at Prudhoe Bay. (4)

Congress recognized this conflict in values in 1980 when it expanded the existing Arctic National Wildlife Range, and renamed it the Arctic National Wildlife Refuge in the Alaska NationalInterest Lands Conservation Act (ANILCA, P.L. 98-487 ). The major portion of the pre-existingRange was designated as wilderness, and the remainder, which constituted most of the Range'scoastal plain, was hotly contested because of its high biological value and potential oil resources. The compromise reached in ï¿½1002 of ANILCA required that DOI intensively evaluate the oilpotential, environmental impacts, and alternative policies for future disposition of 1.5 million acresof the coastal plain of ANWR. This "1002 area" is approximately 100 miles wide, and is 10 to 25miles from north to south, roughly to the margin of the Brooks Range. (See Figure 2 .) DOI wastoprovide the report with its findings and recommendations to Congress, so that decisions relating todevelopment could be made with more information and with the full participation of Congress. Inthe meantime, ï¿½1003 of ANILCA explicitly forbids energy development throughout the Refuge untilCongress acts.

The issue has been debated several times since 1980. Congressional interest has been stimulated by fluctuating energy prices and by a favorable environment in Congress and a stronglysupportive President. The fluctuating oil prices, close margins in control of the Senate, and concernover terrorism have all complicated the outlook in recent months.

Congressional options can be divided into categories. A decision could be postponed, thereby continuing the development prohibitions of ï¿½1003; the area could be made permanent wilderness;development could be permitted under current laws applicable to other federal lands; or developmentcould be allowed subject to specified restrictions.

Figure 2. Petroleum Accumulations in Northern Alaska and Nearby Parts of Canada(1998)

Notes: "Locations of known petroleum accumulations and the TransAlaska Pipeline System (TAPS) are shown, as well as summaries of known petroleumvolumes in northern Alaska and the Mackenzie delta of Canada. Bbo = billion barrels of oil, included cumulativeproduction plus recoverable reserves;tcfg = trillion cubic feet of gas recoverable resources." Source: Figure AO1, USGS, Oiland Gas Potential ofANWR .

Scope of the Report

It is unclear whether Congress will present the President with ANWR legislation in the 108th Congress. The House passed an energy bill with an ANWR developmenttitle in the first session of the 108th Congress. The Senate is taking up energylegislation in the first session, but Chairman Domenici (Committee on Energy andNatural Resources) has pledged to exclude ANWR development from acomprehensive energy bill in light of an earlier failure to include ANWRdevelopment provisions in a reconciliation bill. (For details of current legislation,see CRS Issue Brief IB10111, Arctic National Wildlife Refuge (ANWR):Controversies for the 108th Congress .) In light of the continuing debate, this seemsan appropriate time to review the history of the debate and what has been learnedabout the complex issues surrounding this decision.

This report provides the background for such analysis. It summarizes and integrates relevant information and points of view on the economic, legal,environmental, management, and national energy concerns surrounding any decisionon ANWR. The report does not attempt to focus on specific legislative issues, bills,or provisions, but rather attempts to provide a baseline for analyzing such proposals.

Congress faces several difficult questions in deciding whether to open the area to energy development, and if so, under what conditions to do so. These include:

How much oil might be recovered, and how quickly might it begin to supply the country?

What would be the economic benefits and costs of development to the nation? To Alaska specifically?

What role do Native lands on the coastal plain play in the development of any energy resources and what environmental restrictions mightapply to those lands specifically in the event of development?

What environmental impacts are likely to occur if the area is opened and how might these impacts be avoided, reduced, ormitigated?

Is it possible for industry to limit the "footprint" of development, and if so how widely scattered must the footprint be, in order to permitfull development?

After completion of several decades of energy production, could the coastal plain ever be restored to an approximation of its currentcondition?

How should revenues be shared between the federal and theAlaska state governments?

The following chapters provide background and analysis on the questions raised above. Besides extensive information in the 1987 two volume FLEIS, otherinformation is now available in scientific reports, economic analyses, position papers, and testimony. Many of these tend to be focused at one extreme or the other, but notall. Wherever possible, additional materials or references are noted which treat theissues in more depth than is possible in this report.

The report begins with background on the geography or setting of the refuge, and continues with its history. The next portion is on the history of related energydevelopment issues. To set the scene, the likely development sequence if Congressopens ANWR is presented next, followed by an extensive review of the resources ofthe 1002 area, including the current status, regulations, and potential effects ofdevelopment of those resources. Finally, the report ends with a presentation of thelegislative issues which have arisen most frequently in recent years. A glossary isincluded to define the key terms and acronyms.

Although the chapters of this report are not entirely independent, readers may find it useful to consult them selectively as background, in order to follow theevolving debate about the possible opening of the 1002 area to development.

The Setting: the Geography of Alaska's North Slope

Physically, what is called the North Slope of Alaska consists of those landsnorth of the Brooks Range where waters drain into the Beaufort and Chukchi Seas. Its area exceeds 100,000 square miles (64,000,000 acres), and includes the northernside of the mountains, foothills, and a relatively flat coast plain. The western part ofthe North Slope is very broad, with the crest of the Brooks Range being as much as250 miles from the coast. The eastern part of the North Slope, which includes partof the Refuge, is relatively narrow, with the crest of the range lying as little as 30miles from the coast. (See Figures 1 and 2.)

The foothills of the Brooks Range merge gradually into the coastal plain of the North Slope. The western portion of the plain is extremely flat, and much of it iscovered in small lakes. In the narrower eastern coastal plain, the topography issufficiently rolling that lakes are much less common in the Refuge.

Lying north of the Arctic Circle, darkness and extreme cold prevail much of the year. The area is underlain by permafrost -- a permanently frozen layer 1,000 to2,000 feet thick. During the brief summer, about 3 feet of soil thaws, supportinglichens, mosses, grasses, forbs, and other low shrubby plants that make up the tundra . Although precipitation is low, flat areas become wetlands in summer. Most streamsand rivers are frozen in winter, flood in spring breakup, and meander in braidedchannels of gravel until freeze-up. Because the 1002 area has more topographicrelief, its drainage is better established, and its vegetation is more woody than thewetland grasses that dominate Prudhoe Bay and other developed areas. Foothills andthe hilly portions constitute 45% and 22%, respectively, of the ANWR coastal plain. The foothills reach 1,250 ft, while the hills are mostly less than 100 ft above theirsurroundings (FLEIS, p. 18-19).

However, conditions on the North Slope have changed somewhat since the FLEIS was prepared in 1987. In recent decades, the climate of the North Slope, likethat of most of the area north of the Arctic Circle, has been warming, particularlyduring winter. (5) The warming has generally resultedin earlier greening of vegetationin the spring and later die-back in the fall. (In 2000 and 2001, spring snowmeltbucked this longer trend and was unusually late.) Arctic Natives, basing their claimson traditional knowledge, have reported decreasing predictability of weather patterns,more dangerous snow and ocean ice conditions, the appearance of insects and birdsnew to the area, and similar phenomena. (6)

History of the Refuge

A chronology of the Refuge's history might begin in 1956, with the visit tonortheastern Alaska by naturalists Olaus and Margaret Murie, who reported the vastmigrating herd of caribou that winter in the United States and Canada around thePorcupine River. Upon their return, the Muries worked with other scientists to setaside the area to protect the caribou herd and the whole relatively intact arcticecosystem of which they were a central part. However, the first group actually topropose that the area become a national wildlife range, in recognition of the manygame species found in the area, was the Tanana Valley (Alaska) Sportsmen'sAssociation. (7) The following is a description, inchronological order, of major eventsconcerning the Refuge, and related energy development in northern Alaska since the1950s.

Land Orders

All lands in the North Slope were withdrawn January 22, 1943 by Public Land Order (PLO) 82 (8 Fed. Reg. 1,599 (February 4, 1943). In November, 1957, anapplication for the withdrawal of lands to create an Arctic Wildlife Range was filed. Under the regulations in effect at the time, this application "segregated" the lands inquestion, removing them from disposal. This fact was important because on July 7,1958, the Alaska Statehood Act was signed and on January 3, 1959, Alaska wasformally admitted to the Union. On December 6, 1960, after statehood, the Secretaryof the Interior issued PLO 2214 reserving the area as the Arctic National WildlifeRange. (In Figure 1, the outer boundaries of the "1002 area", plus the wildernessboundaries, were the boundaries of the Range.) The Supreme Court has held that theinitial segregation of lands was sufficient to prevent the passage of ownership ofcertain submerged lands within the Refuge to the State of Alaska at statehood. (8)

Alaska National Interest Lands Conservation Act

In 1980, Congress enacted the Alaska National Interest Lands Conservation Act (ANILCA, P.L. 96-487 , 94 Stat. 2371), which included several sections aboutANWR. The Arctic Range was renamed the Arctic National Wildlife Refuge, andwas expanded, mostly southward and westward, to include an additional 9.2 millionacres. Section 702(3) of ANILCA designated much of the original Refuge as awilderness area, but not the coastal plain. (9) Instead,Congress postponed decisions onthe development or further protection of the coastal plain. ANILCA defined the"coastal plain" as the lands on a specified map. (10) A later legal description of theboundaries excludes most Alaska Native lands, even though these lands are geographically part of the coastal plain. Three key sections of ANILCA are discussedbelow.

Section 1002 Study. Section 1002 of ANILCA directed a study of the "coastal plain" (which therefore is often referredto as the "1002 area") and its resources be completed within 5 years and 9 months ofenactment. The executive branch was to conduct a comprehensive baseline study ofthe fish and wildlife resources of the coastal plain of the Refuge; to developguidelines for, initiate, and monitor an oil and gas exploration program; to preparea report to the Congress on the biological resources, the extent of hydrocarbonresources, the impacts of development, transportation of oil and gas, and the need forthem; and to make a recommendation on whether exploration, development, andproduction should proceed. The resulting "1002 report" or Final LegislativeEnvironmental Impact Statement (FLEIS) (11) wasissued in April 1987.

The FLEIS recommended full development of the 1002 area. It described the 1002 area as "the most outstanding petroleum exploration target in the onshoreUnited States" (FLEIS, p. vii), and estimated a 19% chance of finding economicallyrecoverable oil. Its mean estimate of economically recoverable oil was 3.2 billionbarrels, and the report predicted the area could supply about 4% of total U.S. demandin 2005, and reduce imports by nearly 9%. (See Oil Potential , below, for updates ofthese figures.) It estimated total national economic benefits of $79.4 billion andfederal revenues of $38.0 billion. It assumed that oil would be selling at $33/barrelin 1984 dollars by 2000. (In actuality, West Texas Intermediate, a benchmark crudeoil, sold from about $25.50 per barrel to about $34.50 per barrel in 2000, which wasabout $20.30 to $27.50 in 1984 dollars.)

The FLEIS also said the "1002 area is the most biologically productive part of the Arctic Refuge for wildlife and is the center of wildlife activity.... The areapresents many opportunities for scientific study of a relatively undisturbedecosystem." It analyzed the effects of the various development alternatives on theplants and animals, and especially on the calving grounds of the Porcupine CaribouHerd (PCH). It stated that "major effects on the PCH could result if the entire 1002area were leased and all prospects contained economically recoverable oil" (p. 123). It concluded that full leasing would lead to reductions in bird nesting habitat, loss ofover-wintering fish habitat, and loss of polar bear denning habitat. It also predictedmoderate effects on polar and grizzly (brown) bears due to direct mortality relatedto human encounters; and recommended buffer zones of at least 0.5 miles aroundknown polar bear dens. It also noted the special sensitivity of snow geese to aircraftdisturbance.

Legal Definition of the 1002 Area. Section 1002 of ANILCA defines the coastal plain as the area shown on a map datedAugust, 1980. However, the Bureau of Land Management informs us that no suchofficial map or maps with that date depicting the coastal plain exist. The official1980 maps of the Refuge as a whole, less the area of designated wilderness might besaid to indicate the coastal plain. These maps show the Native lands in the Refugewith boundaries crossed out -- presumably to indicate they are included within theRefuge. However, the legal description of the boundaries of the coastal plain thatwere published pursuant to ï¿½103 of ANILCA (48 Fed. Reg. 16838, 16869 (April 19,1983)) exclude the Native lands as of that date from inclusion in the 1002 coastalplain.

Section 1003 Prohibition. In ANILCA, Congress also included ï¿½1003, which prevents further development ofenergy resources, until Congress acts:

Production of oil and gas from the Arctic National Wildlife Refuge is prohibited and no leasing or other developmentleading to production of oil and gas from the range shall be undertaken untilauthorized by an Act of Congress.

Development opponents are well satisfied with the status quo under ï¿½1003. While many development bills have been introduced since 1987, very few have beenreported out of a committee, despite considerable interest by various Members. Inthe Senate, for example, a willingness to filibuster against development bills hasmade it difficult for such bills to come to the floor; through the 106th Congress, thesole exception (see ANWR Consideration in the 101th - 106th Congresses ,below) wasin a reconciliation bill which was later vetoed. Development continues to beprohibited.

ANILCA and Native Claims. ANILCA also contained provisions in ï¿½1431 that followed up on the previouslyenacted Alaska Native Claims Settlement Act (ANCSA, P.L. 92-203), and gave theNative village corporation of Kaktovik rights to make certain selections and to enterinto certain land exchanges. The result is that Kaktovik has surface rights to somelands inside and some lands outside the 1002 area. However, all of the Kaktoviklands are within the Refuge and are subject to the current restrictions on oil and gasdevelopment of ï¿½1003 of ANILCA and to ï¿½22(g) of ANCSA, which made Nativelands conveyed in a refuge subject to the regulations of the refuge. If Congress wereto lift the restriction of ï¿½1003 on oil and gas development in the Refuge,development of Native lands would be allowed to occur. (See discussion of ANCSAprovisions in Use of Resources by Alaska Natives, below.)

ANWR Consideration in the 101st to 107th Congresses

After the FLEIS of 1987, and the Exxon Valdez oil spill of 1989 (see below), congressional interest in the energy potential of the 1002 area has waxed and waned.Bills to open the 1002 area to development or to designate it as wilderness have beenintroduced repeatedly in both House and Senate. In the House, these bills werereferred to the Merchant Marine and Fisheries Committee or (beginning with the104th Congress) to the Committee on Resources. In the Senate they have beenreferred to the Committee on Environment and Natural Resources or the Committeeon Environment and Public Works. Whether they were development bills orwilderness bills, they have rarely been reported from committees, much less receivedfloor consideration. From 1989 to 1994 (101st to 104th Congresses), no ANWR billreceived floor consideration.

In 1995, Congress passed the FY1996 budget reconciliation bill ( H.R. 2491 ) in which ï¿½ï¿½5312-5344 authorized the opening of ANWR,but the measure was vetoed. President Clinton cited the ANWR sections as one ofhis reasons for vetoing the measure. (12) Key Senatevotes occurred on May 24 andOctober 27, 1995, on motions to table amendments that would have stripped ANWRdevelopment provisions from the Senate version of the bill (Roll Call #190 and #525,respectively). Both motions succeeded.

While bills were introduced, the ANWR issue was not debated in the 105th Congress. In the 106th Congress, bills to designate the key northern portion of theRefuge as wilderness, and others to open the 1002 area to energy development, wereintroduced. The FY2001 budget resolution ( S.Con.Res. 101 ) reportedby the Senate Budget Committee on March 31, 2000 included assumptions aboutfederal revenues that would be obtained if ANWR leasing were approved. Anamendment to remove the language was tabled (51-49) on April 6, 2000 (Roll Call#58); however, conferees rejected the language. The conference report on budgetreconciliation did not contain this assumption, and the report was passedby both Houses on April 13. (13) These three rollcall votes in two Congresses were allin the Senate, and were the only recorded votes on Refuge development from the101st through the 106th Congress.

Six bills were introduced in the 107th Congress that would have directly affected the future of ANWR. Four of these ( H.R. 4 , H.R. 39 , H.R. 2436 , and S. 388 ) would have opened the Refugeto development; they shared many overlapping provisions. Two ( H.R. 770 and S. 411 ) would have designated the coast of ANWR aswilderness. The following actions were taken on these bills.

On July 25, 2001, the House Resources Committee reported H.R. 2436 . Title V would have opened ANWR to exploration and development. Theseprovisions were incorporated into H.R. 4 , an omnibus energy bill. Afloor amendment was passed to limit some types of surface development to a totalof 2,000 acres; another amendment to strike Title V was defeated. H.R. 4 passed the House on August 2, 2001. The Senate Energy Committee held hearingson S. 388 . H.R. 39 , H.R. 770 , and S. 411 had no hearings.

A comprehensive energy bill, but one that lacked Refuge development provisions, was offered in the second session by Senator Daschle as an amendment(S.Amdt. 2917) to S. 517 , the bill which served as the vehiclefor Senate floor consideration of omnibus energy legislation. An amendmentpackage to open the Refuge by Senators Murkowski and Stevens was filibustered; cloture motions on the amendments lost, and the amendments were withdrawn. Thetext of S. 517 (amended) was passed in lieu of the House version of H.R. 4 . Conferees met, but were unable to reconcile the two versionsof H.R. 4 , in many areas, including Refuge development. Thelegislation lapsed at the end of the 107th Congress. (For more on past actions, seeCRS Report RL31725, Arctic National Wildlife Refuge: Legislative Issues Throughthe 107th Congress .)

History of Related Energy Development

In 1967, oil was discovered on the North Slope of Alaska at Prudhoe Bay, about60 miles west of ANWR. (See Figure 2 .) Since that time, developments followingfrom that discovery have affected the economics, potential support facilities, andunderstanding of proposed development of the Refuge. This section provides a shorthistory of related energy development on the North Slope and describes how thatdevelopment has influenced the ANWR debate.

As the years have passed, new fields in the area have been discovered, developed, and produced. As production at the original giant field rose to a peak andthen fell again, additional fields have been brought on-line, though this has notreversed a long term decline in North Slope production. (See Figure 3 .)

Source: Alaska Department of Revenue, Tax Division. Revenue Sources Book. Forecastand HistoricalData. Spring 2002. Table H. (Amounts in millions of barrels/day.)

TransAlaska Pipeline System (TAPS) Authorization

The Prudhoe Bay discovery was a great distance from markets and/or a warm water port from which to transport oil to markets. Development of the resource wasthwarted for several years by lack of agreement on how and by which route the crudeoil would be transported out of the area.

Alternative Routes Considered. Transporting the oil directly from the area by tanker was considered briefly, but anexperiment failed. Pipeline routes were seen as the only viable option. Initially, threegeneral pipeline routes were conceptualized. Two never reached the stage of seriousstudy: one was an easterly route into Canada, to the McKenzie River Delta, thensouth to a Chicago-area destination, and the other was a southeasterly route along theAlaskan Highway into Canada and then south into the United States. The third wasoverland, south to the port of Valdez.

Proponents of the first two routes argued that the oil was needed most in the Midwest, because it has no indigenous source of crude oil. Midwestern interestsfavored it because of the prospective economic gain. Opponents contended that suchroutes were very long, and therefore would cost more and take longer to build. Oilprices had not reached levels sufficient to justify further investigation.

The third route was ultimately chosen: oil is shipped via TAPS south to the seaport of Valdez on Prince William Sound, then loaded on tankers destined for otherports. Proponents cited its shorter length, and therefore lower total cost and shorterconstruction period. Some opponents were concerned that the proximity of Valdezto Pacific Rim countries such as Japan and Korea presented too great a temptationto export the oil; others were concerned about possible oil spills along the WestCoast.

Export Restrictions in Original TAPS Law. Much of the pipeline's route between the North Slope andValdez is on federal lands, for which rights-of-way were needed. The MineralLeasing Act of 1920 prohibits export of oil transported through pipelines grantedrights-of-way over federal lands (30 U.S.C. 185(u)). There was considerableopposition to the export of North Slope oil and many saw a growing domestic needfor the oil in late 1973 as a result of the Arab oil embargo (imposed during theArab-Israeli War of October 1973), and of the gasoline shortages (resulting frompetroleum allocation regulations). The increased concern over U.S. dependency onforeign oil brought urgency to the pipeline debate. A compromise was soon reachedover whether to exempt North Slope oil from this prohibition.

The compromise was the Trans-Alaska Pipeline Authorization Act ( P.L. 93-153 , 87 Stat. 584, 43 U.S.C. 1651 et seq .), signed November 16, 1973. It specified amongits many provisions that oil shipped through the pipeline could be exported onlyunder certain restrictions. (14) Subsequent legislationstrengthened the exportrestrictions further. (15) The restrictions proved tobe, in effect, a complete ban onexports of North Slope oil. However, the restriction was not to last, as market forcescreated pressure to change the law. (See Export Restrictions Loosened , below.)

Exxon Valdez Oil Spill

The grounding of the Exxon Valdez on March 24, 1989, near the southern terminal of the TAPS in Prince William Sound played a major role in placing thedevelopment debate on hold. Environmental damage at the time included anestimated 300,000 to 645,000 dead seabirds; 4,000 to 6,000 dead marine mammals;and $100 million in other losses, including commercial fishing impacts. Somecleanup methods were criticized as doing more harm than good. Lawsuits wereabundant.

Today, there is still disagreement over the impact of the spill. Some scientists note the lack of toxicity of the water, and a visitor in the area would still see ruggedbeauty on most beaches. But other observers stress the accumulation of oil in somespecies, such as mussels (which filter sea water), and the effects on species thatconsume contaminated organisms. For example, a 2001 study of seabirds in the areashowed that of the 17 groups (containing a total of 33 species) "most [groups] forwhich injury was previously demonstrated are not recovering and others continue toshow potential population effects nine years after the spill." (16) The affected birdsincluded species of sea ducks, grebes, terns, murres, and gulls. Exxon Mobilresponded that bird populations may not be recovering due to a variety of otherenvironmental changes in the area, e.g., higher water temperatures. (17)

Export Restrictions Loosened

The Trans-Alaska Pipeline System was completed in 1977, and oil was being shipped through by the end of the year. Continued oilfield development on the NorthSlope resulted in a 10-year increase in production to a peak of 2.0 million barrels perday (bbl/d) in 1988.

With exports effectively banned, much of North Slope oil went to West Coast destinations. The rest was shipped to the Gulf Coast via the Panama Canal oroverland across the Panamanian isthmus. Such Gulf Coast shipments reduce averageeffective wellhead prices on the North Slope, which must absorb at least the cost oftransportation through the pipeline and by tanker, and therefore always are a few toseveral dollars below Lower-48 wellhead prices.

In the early and mid-1990s, California -- the nation's third largest oil producing state -- was producing about 800,000 bbl/d on average. Another 150,000 bbl/d werebeing produced in federal waters off the West Coast, and about 100,000 bbl/d ofcrude oil were being imported. At the same time, total consumption of petroleum inCalifornia was falling -- 8% between 1989 and 1995. The combination ofCalifornian and federal offshore production, North Slope oil, (18) and imports, resultedin such large quantities relative to demand that prices of crude oil in California fellbelow those elsewhere in the United States. Prices obtained by producers -- fromCalifornia and North Slope -- naturally suffered as well, and elicited concern andcomplaints from those producers.

Attempts to obtain help were unsuccessful until 1995 despite arguments that the gains of exporting would outweigh the losses. For example, a June 1994 Departmentof Energy (DOE) study found that exporting Alaskan crude oil would increase pricesfor both Californian and Alaskan producers and result in up to 100,000 bbl/d moreproduction in California and Alaska (combined) than would be the case withcontinued export restrictions. (19) As a result ofavoiding the trip through Panama,Alaskan oil would gain higher prices (net of transportation costs) if sold in Japan. DOE predicted that higher resulting prices on the West Coast would spur additionalproduction. In addition, the study found, exporting North Slope oil would stimulateimports of crude oil better suited to California's petroleum product demand mix. However, the study acknowledged, exporting Alaskan oil would divert cargoes awayfrom the U.S. domestic merchant marine fleet and workforce. (20)

These expected benefits and costs, less concern about petroleum in 1995 (after three or four years of low world oil prices), relative calm in the Mideast, andcontinued pleadings from West Coast producers (after two years of wellhead pricesaveraging below $12 per barrel) helped open the way to repeal of the exportrestrictions. The Clinton Administration was supportive, and bills in the House andSenate (H.R. 70 and S. 395) passed by large margins. On November 28, 1995, thePresident signed P.L. 104-58 (109 Stat. 557), Title II of which amended the MineralLeasing Act to provide that any oil transported through the Trans-Alaska Pipelinemay be exported unless the President finds, after considering stated criteria, that it isnot in the national interest (30 U.S.C. 185(s)). The President may impose terms andconditions; and authority to export oil may be modified or revoked. Beginning with36,000 bbl/d in 1996, ANS exports rose to a peak of 74,000 bbl/d in 1999. The latterrepresented 7% of North Slope production. Exports of ANS oil ceased voluntarilyin May 2000.

NPR-A Developments

Almost concurrent with the push to allow export of North Slope oil, production of North Slope oil began to fall, reducing if not eliminating the California oil surplus,but also spurring discovery and development of other North Slope fields. Thesuccessful exploration, although not sufficient to stop the production decline,increased geological information and strengthened belief that there are commercialquantities of oil in the National Petroleum Reserve - Alaska (NPR-A). (See Figure2.)

Established in 1923 by President Harding as Naval Petroleum Reserve Number 4, the 33 million acre Reserve, together with other government petroleum reserves,was intended to help assure availability of fuels for the Navy. Rationale for theReserves faded over time, however, as the likelihood of a sustained interruption inoil supply declined, and markets showed a capacity to allocate and price petroleumwhen supply was uncertain. In 1981, stewardship of the Reserve passed from theNavy to the Department of the Interior (DOI), and its designation was changed toNational Petroleum Reserve - Alaska. Public Law 96-514 authorizes the Secretaryof the Interior to conduct oil and gas leasing and development in the NPR-A. Fourlease sales were held between 1981 and 1984. An exploratory well drilled in 1985was dry; but none of these leases was developed and all have expired. The areaactually has been explored (including drilling) and/or mapped by various federalgovernment agencies or on their behalf on and off from 1901 through 1998.

By 1996, total Alaskan oil output had fallen below 1.4 million barrels per day. Many Alaskans supported exploration of NPR-A, hoping that output from therewould help offset the drop in royalty payments from reduced Prudhoe Bayproduction. Some argued that NPR-A might assure sufficient throughput to keep theTrans-Alaskan Pipeline running. In addition, lease sales provide bonus bid revenueto the U.S. Treasury; and the government collects royalties if there is production.

Leasing. In early 1997, the Department of the Interior (DOI) initiated a study of potential drilling areas in a 4.6million acre portion of the northeast part of the Reserve, and of the steps that wouldbe needed to protect wildlife. The discovery of the commercially successful AlpineField (discussed later in this report) adjacent to the eastern boundary of NPR-A wasimportant in spurring development of a leasing proposal for NPR-A. On August 6,1998, DOI released its Final Integrated Activity Plan and Environmental ImpactStatement (EIS), making 4 million acres available for leasing, with surface pipelinesbanned on 20% of that area. The EIS was prepared to meet National EnvironmentalPolicy Act requirements and to serve as the basis for managing the area; its preferredoption provided for a number of restrictions intended to strike a balance betweenpermitting exploration and protecting the environment. (21) DOI officials estimated thatthe quadrant under review for leasing could hold 500 million to 2.2 billion barrels onan assumption of a crude oil price of $18-30/barrel. (22)

A lease sale held in May 1999 drew 174 bids from six companies on 3.9 million acres. More than 130 bids were accepted, totaling $105 million. ARCO initiallypicked up the leases and then sold these holdings to Phillips Alaska Inc. as requiredby the Federal Trade Commission for the takeover of ARCO by British Petroleum(BP). In the spring of 2001, Phillips Alaska and minority partner AnadarkoPetroleum Corporation reported findings of oil and gas, and indicated the find mightbe commercial. (23) Phillips resumed explorationin the winter of 2001-2002. Additional NPR-A lease sales are anticipated in late 2002.

New Assessment of Resources. Increasing interest in Alaska's petroleum potential spurred the USGS to initiate in1998 a re-assessment of undiscovered oil and gas resources in the NPR-A. Theresults, published in May 2002 suggest that there is appreciably more crude oil andnatural gas than indicated by previous assessments. (24) The new estimates are basedupon field studies, well and geophysical data analysis, and reinterpretation ofprevious exploration performed over the last four years, plus analysis of the recentdiscoveries of oil just east of the NPR-A.

According to the new assessment, there is a 95% chance that 5.9 billion barrels or more of crude oil are technically recoverable, a 5% chance that 13.2 billion barrelsare technically recoverable, with a mean estimate of 9.3 billion barrels. At an oilprice of $24 per barrel (1996 prices), 3.1 billion barrels would be economicallyrecoverable. (25) USGS's 1980 assessment indicatedtechnically recoverable amountsof from 0.3 billion barrels (95% chance) to 5.4 billion barrels (5% chance). (26)

Possible Development Sequence

There are five phases of oil development on federal lands: the leasing process,exploration, development, production, and reclamation. If economic quantities of oilare not found, only three phases -- leasing, exploration and reclamation -- wouldoccur. In a large area with numerous tracts, all of these phases could be occurringsimultaneously: exploration in some fields, development in others and production instill other fields. Exploration specialists might move from prospect to prospect forseveral years, followed by construction and other workers carrying out developmentwhere discoveries occurred, and so on. The following section describes these fivephases. (27)

Where newer technologies are used, they may reduce not only environmental damage or risk, but also costs. Cost-effective technologies would likely be usedwhether specified in legislation or not. Where savings are less likely, legislationcould be required to ensure use of advanced technologies or to ensure environmentalstandards (with the latter perhaps driving development of still newer technologies). However, any federal requirements to use advanced or environmentally friendlytechnology may not necessarily apply to Native lands unless Congress explicitlyapplies them. (See CRS Report RL31115 , Legal Issues Related to Proposed Drillingfor Oil and Gas in the Arctic National Wildlife Refuge .)

Leasing Phase

Through ï¿½1003 of ANILCA, Congress has clearly reserved to itself the decision on whether to lease the coastal plain. If it passes development legislation, it maychoose to deviate from the typical pattern of leasing on other federal lands or othernational wildlife refuges. This section highlights how the leasing process wouldnormally work, and some of the leasing issues that might be considered by Congressin legislation to open ANWR.

In the leasing phase as it is carried out under the Mineral Leasing Act of 1920, (28) BLM gathers information about an area of federal land, based on data from federalagencies and industry submissions. The leasing phase involves a series of decisionsand actions by the federal government and by oil corporations, with each decision oraction influencing the next. Then BLM determines how much, and what specificlands would be offered. Generally, BLM offers federal leases on a competitive basis,though non-competitive leases may be offered in some circumstances. BLM solicitsbids on the tracts, selecting the winning companies based on these bids. Competitiveleases would probably be the norm in the 1002 area. The entire process, from initialpublic notice, to sales, and to any production, with public input along the way,generally requires several years. Broadly speaking, Congress may choose to passlegislation which entirely replaces the normal processes for leasing on other federallands, or may selectively override, or substitute for, some of those processes. Thefollowing is an abbreviated outline of the steps in a competitive oil or gas lease sale.It indicates as well the areas in past bills where there were proposed changes fromcurrent practices.

Leasing must be in accordance with relevant land management plans, such as those for National Forests or for BLM lands, but an analogous plan does not exist forANWR, though the 1987 FLEIS carried out some of the same functions. These plansare developed with public input and information, as did the FLEIS. Even if thefederal lands in question are not subject to general land management planning, theNEPA processes or special statutory provisions may provide opportunity for publicparticipation. If ANWR were opened to leasing, Congress might choose to specifythat some of these planning steps, or measures for public participation, be includedin the ANWR leasing process. Alternatively, given past reviews such as the FLEIS,it might override some or all of the NEPA process. (See Compliance with NEPA ,below.)

The Director of BLM may elect to accept formal or informal nominations of lands to be leased. If nominations are to be accepted, a company would normallynominate more land than those areas it felt most promising, in order to conceal itsintentions and avoid excessive attention by future competitors on what it believes arethe best prospects. In the case of ANWR, it seems highly likely that formalnominations would be part of any leasing process, and measures to provide forformal nominations have been included in bills in previous Congresses. In decidingwhich (if any) nominations to make, companies would already be considering factorssuch as likely operating costs, future oil prices, and alternative or perhaps moreattractive prospects in the United States or elsewhere. In Alaska, the North Slope'sgenerally high operating costs would tend to be an especially important considerationas companies decided which tracts to nominate. Those companies with pastexperience elsewhere on the North Slope might be more interested in participatingthan those lacking such experience.

BLM would use the nominations and other information to determine how much land to offer (if this is not set in legislation) and in what tract sizes. (29) For example,the geology of the area is markedly different on either side of the Marsh Creekanticline (see Figure 5 ), and the agency might wish to recognize that in some wayin its selection of tracts. In previous Congresses, bills have often directed a particularschedule, usually setting a fairly fast pace for the initial and subsequent leaseofferings. BLM would not normally choose to offer millions of acres for bidding atonce, but instead offer portions over a number of years, using previous discoveriesand geologic information to determine future offerings.

At the time of any offering, BLM would also specify terms or conditions that may apply to particular tracts. These conditions might include, in the case ofANWR, limits on surface occupancy, size of footprint, seasonal availability toexploration, wildlife protection measures, reclamation standards, and the like. Congress could also specify particular terms or conditions in legislation to open the1002 area to development, and these terms and conditions could be a major vehiclefor environmental protection measures in the 1002 area. (Though these terms andconditions might not necessarily apply to Native lands; see Alaska Native Lands andRights , below.) It would be essential for industry to have a firm idea of the terms andconditions of a lease, since these provisions would likely affect the cost of operatingthe lease, and therefore the amount a company might be willing to bid for the tract. Leases under the Mineral Leasing Act are for 10 years and continue as longafterwards as oil and gas is being produced commercially; Congress could chooseany length for the leases.

Under current law, on the date of a competitive sale, oral bidding takes place at a specified location. Competition among companies is based on the size of theirup-front offer, called the bonus bid . A bonus bid is required to be at least $2 peracre, but bonus bids can total many millions of dollars for some tracts, while othersmay receive no bid at all. Payment of the bonus bid will occur at a point when thewinning bidder cannot yet be certain that oil will be present. As a result, even anANWR utterly devoid of commercial oil deposits might still earn millions of dollarsfor the federal government, whether oil is ever produced or not. According to BLM,leases on other federal lands are granted "on the condition that the lessee will haveto obtain BLM approval before conducting any surface-disturbing activities." (30) Congress may choose to specify certain conditions or modifications on therequirement for this final step after a lease is sold and before construction of roadsor drilling platforms.

In a typical lease under the MLA, a successful bidder must pay $1.50/acre in rent for its tract(s) in the first 5 years, and $2.00/acre thereafter. The first year'srental payment, plus the minimum bonus bid and a $75 administrative fee is due onthe date of the sale. The remainder of the bonus bid must be received within 10 workdays. Subsequent rental payments are due on the anniversary date of the lease. Inaddition, once production starts, companies pay a standard 12.5% royalty on the saleof the oil they produce. Leases expire after 10 years unless production or specifiedsteps toward production are occurring. Lessees may also voluntarily surrender thelease, subject to requirements concerning abandonment of wells, clean up, and anyfinal payments that may be owed. Generally speaking, few bills in previousCongresses have treated an ANWR leasing program in this level of detail (save fora willingness to specify a 12.5% royalty rate). Instead, development bills usuallydirect the Interior Secretary to promulgate rules and regulations to carry out theleasing program in order to carry out the provisions of the legislation.

Frontier Variations. In a typical frontier area, where energy leases have been rare to non-existent, and geologicalknowledge is sparse, BLM might allow companies to conduct seismic exploration inthe general area before specific tracts are designated. (ANWR is not typical,however, because ANILCA had specific exploration provisions for the 1002 area.) Once the sale tracts have been named, further exploration might take place. Congressmight specify whether additional exploration could occur before nominations wererequired. However, due to the seasonality of North Slope exploration, this choicecould lengthen the time required to make a first lease offering. In the NPR-A (whichhas its own distinct regulations), this exploration occurred for the first lease sale;exploration took place during the arctic winter, and companies focused on dataanalysis once melted tundra made the area inaccessible. Far more exploration thentook place on leased tracts, in order to help the companies select specific drill sites.

In addition, in frontier areas such as NPR-A and elsewhere, the NEPA impact assessment process is occurring both before and during preparation for the sales. Afull EIS can add substantially to the time required to carry out a sale, even if it occursconcurrently. Congress has, in several ANWR development bills, shown awillingness to modify or eliminate NEPA requirements, on the basis that the 1987FLEIS fulfilled that function.

Thus, a leasing phase may overlap substantially with an exploration phase. In the 1002 area, while both of these phases might be shortened by reducingrequirements for environmental review, for example, there is a limit to how much theprocess might be truncated. Furthermore, in the arctic, current technology limitsexploration to the winter season only. Since BLM would wish to consider the viewsof industry in selecting the tracts to be offered -- views that will take time andfurther exploration to develop -- this too could lengthen the leasing process.

Leasing on National Wildlife Refuges. A factor which Congress might consider, should it decideto open ANWR, would be the special circumstances that apply to leasing part of aNational Wildlife Refuge, since leasing would normally have to be determined to be"compatible" with the major purposes of the National Wildlife Refuge System andwith the purposes of the particular unit of that System. (See Compatibility withRefuge Purposes , below.) While energy leasing does occur in the National WildlifeRefuge System, it occurs in less than 10% of refuges, and in virtually no instance hasleasing occurred after a compatibility determination. (See Box for examples.) IfCongress wished ANWR development to occur as expeditiously as possible, it couldoverride the compatibility test. In previous Congresses, bills have expresslyaddressed the potential conflict by stating that Congress has determined energyleasing to be compatible with the purposes for which ANWR was designated.

Exploration Phase

As the previous section makes clear, the leasing and exploration phases overlap. The exploration phase is the time at which industry and the federal governmentaccumulate data about the area that will be, or has already been leased. Explorationactivity is most intense after leases have been purchased. Preliminary seismicexploration, using two dimensional (2-D) imaging technology, continues to be usedin early exploration in new areas. It is carried out directly across frozen tundra(without special ice roads) in widely spaced grid lines. Seismic exploration usestrains of rolligons (large vehicles with enormous soft tires that spread their weightevenly across the surface) for vibrating the surface and recording the result, plusvehicles for carrying fuel, mechanical repair facilities, and a crew of 80 to 120people. Damage in the area around Prudhoe is prevented by waiting until the tundrais well-frozen, though tractors with heavy rubber treads are required to pull some ofthe heavier equipment. For the much less expensive, but less precise 2-D surveys,lines may be several miles apart, but for the high accuracy of 3-D seismic, lines areabout 1100 feet apart. More exploration using 3-D seismic technology becomeseconomic in defining more precisely the boundaries of potential structures, thoughdrilling may occur based on 2-D alone. Under the more advanced 3-D technology,finer grid lines are also run directly across the tundra. The better data resulting from3-D increase the chance that a given well will be successful from 1 in 10 to perhaps3 or 4 in 10.

Modern arctic exploration on the state-owned lands of the North Slope is carried out in winter; while early phases involve travel across frozen open tundra, subsequentexploration drilling uses a combination of ice roads, and ice pads. Each mile of iceroad uses an estimated one million gallons of liquid water, and road builders typicallytransport liquid water no more than 10 miles, since it may freeze before it is used. Technical solutions to water shortages could involve greater use of chipped icescraped from lakes to supplement liquid water, and/or development of newtechnologies using a desalination plant and a heated elevated pipeline. (31) Though suchtechnologies could prove feasible and some are already in use on the North Slope,they could also change the economics of exploration and later development.

If data indicate economic quantities of oil may be present, a hole is drilled entirely in winter, on thick insulated pads of frozen water. These pads melt insummer, leaving the tundra in relatively good condition. (32) If no commercial quantityof oil is found, the pipe is plugged and temporarily or even permanently abandoned,covered by a small cube-shaped building. Use of these methods, in comparison tothe technology available in 1987, can substantially reduce impacts of exploration onthe landscape. (33)

Development Phase

In the development phase, companies construct the infrastructure needed to go from a find to actual production; employment peaks in this phase. If economicquantities of oil are found, a gravel drill pad is built and multiple wells are drilledfrom the pad. The newest arctic development technology is demonstrated in theAlpine field, at the extreme western edge of current oilfield development, on statelands near the NPR-A. (See Figure 4, showing the Alpine field.) Two gravel pads,linked by a 3-mile long combined road and runway, support 112 wells. Heavyequipment to be used in the field was delivered to the nearest staging area in summervia gravel road. Once winter ice roads were built, the equipment was transported tothe field. In summer, access to Alpine is by aircraft only. While no gravel roads linkAlpine with other North Slope development, pipelines connect the Alpine field tocollection lines from several fields and these in turn connect to TAPS to carry the oilsouth.

Since the 1987 FLEIS, considerable advances have been made in the technologies surrounding the development phase. These advances contribute toefficiency and often to reduced environmental impacts, and some would likely beused, required or not, due to cost savings. Others might be used if required by thefederal government or the state; such requirements could change the economics ofdevelopment. One clear improvement since 1987, as a result of improved dataanalysis at the exploration phase, is that development can be more efficient, sincefewer "dry holes" are likely to be drilled. Other improvements are as follows.

Advanced Drilling. Drilling technology has evolved from a single hole straight down into a prospect, todirectional, extended reach, horizontal, multilateral, and designer wells. All of thesedesigns permit more efficient production of hydrocarbon reserves, and allow easierconnection to production facilities, with fewer pipelines. They also reduce thenumber of wellheads. Drill bit technology has improved, allowing wells to be drilledfaster. Drilling muds are less toxic; cuttings generated during drilling can be storedin temporary reserve pits and then used in construction, or reinjected into specialwells for waste disposal. (34) Efforts are made toavoid any surface discharge of wastes. Savings make it likely that these technologies would be used if ANWR were opened;legislative provisions might push further requirements.

Drill Pads. With this advanced drilling technology, more of the oil-bearing structure can be tapped from a well head,and drill pads can be located, under very favorable conditions, up to 7 miles inhorizontal distance from a target. These technologies reduce development'sfootprint, as well as allow greater protection of surface features. Since each drill padcan develop a greater area, fewer drill pads are needed than in the past. Technologiesdeveloped largely in the 1990s also permit closer spacing of wells, and morewellheads can be placed on a smaller drill pad. Drill pads in the 1970s were about44 acres. In contrast, Alpine's 2 drill pads are 36 acres and 10 acres. (35) The largerpad is the main production pad, and includes a central processing facility, housing,and storage area, along with wellheads. The secondary pad contains only drillingfacilities and wellheads; workers there commute from the main pad. If the PrudhoeBay oilfield and surrounding fields had been developed using this technology, only4,000 acres, instead of the present 12,000 acres, would be needed. (36) Productionfacilities (like those at Alpine) would be scattered in a network over producing fields,due to the 7-mile maximum reach of horizontal drilling, and multiple pads could beneeded for producing fields. (Pipelines would carry oil from the pads to a collectionline; see Production Phase .)

Roads. If a development phase followed the model at Alpine, heavy equipment would be carried to a staging area asnear as possible to the drill site and accessible to the gravel road network thatservices the currently developed areas. As soon as ice roads could be built, theequipment would be moved to the drill site, where a gravel pad would have beenconstructed previously. All heavy equipment would be transported to the site duringthe winter; equipment needed in the summer would be flown in along with personnelto an adjacent airstrip. As at Alpine, gravel roads might be constructed to link padswithin the same field.

If this model were followed, the mileage of roads constructed in the 1002 area would be far smaller than was expected in the 1987 FLEIS (for a given size andlocation of discovery). Heavy reliance on ice roads could mean high demands forwater if the staging area were just to the west of the 1002 area and discoveries werein the eastern portion of the 1002 area -- a distance of roughly 100 miles. Alternatively, staging areas could be located farther east, perhaps by off-loadingbarged equipment at Kaktovik. Water demands might be further reduced, perhapsby developing new technologies, or by placing gravel roads to transport heavyequipment on Native lands. The feasibility of these options would also depend onthe extent to which Congress regulated development on Native lands (as opposed tofederally-owned land).

Figure 4. Alpine Oil Field.

Source: ARCO Alaska, Incorporated. Permit Application to U.S. Army DistrictEngineer, Alaska, Permit No. 2-960874, Colville River 18. Jan. 22 and 24, 1998. Map somewhat simplified for clarity in monochrome.

The Meaning of Footprints. The footprint of development infrastructure is the area within the outline of any structureson the surface of the land as these features might be shown on an ordinary twodimensional map. In the case of arctic energy development, most observers appearto include gravel drill pads, runways, and roads in the total footprint of development. However, in the case of elevated pipelines, some might choose to count only the baseof the support arms holding aloft the pipelines (footprint in the narrow sense), ratherthan the entire length and width of the pipeline (footprint in the broad sense). (37) Somewould also count the surface covered by gravel mines, ports, water impoundments,water treatment facilities and the like (footprint in the broadest sense).

Arctic Power (a consortium of development proponents that includes industry) has estimated that the 1.5 million acre 1002 area could be developed with amaximum footprint of 2,000 acres. (38) Some haveassumed that the footprint wouldbe a single compact unit of 2,000 acres (equivalent to 3.125 square miles -- about0.13% of the 1002 area). However, full development would be impossible if thefootprint were a single compact unit. With advanced drilling technology (extendedreach drilling), under favorable circumstances, lateral drilling can reach 5 to 7 milesfrom a drill site. Thus, if development were confined to a compact box of 3.125 mi 2 (equivalent to a square 1.77 miles by 1.77 miles) and optimum conditions obtained,up to 10.5% of the 1002 area could be developed. In contrast, full development ofthe 1002 area would require the strategic placement of pads, connector roads (thetype of road at Alpine), and pipeline supports to be scattered about the 1002 area ina network.

Most development advocates do not oppose a surface occupancy, or footprint, limitation to 2,000 acres, apparently feeling that such a limit based on a definitioncovering pads, airstrips and pipe supports would not hinder full development. Evenif the term footprint were expanded to include connector roads like that at Alpine(where the road represents about 15% of the gravel surfaces), they do not appear toconsider a 2000-acre limit to be overly confining. If, however, gravel mines, watercatch basins, water treatment plants, ports, causeways, and other possible features(FLEIS, p. 99), were to be built and included in a 2,000-acre limit on footprint (thebroadest definition of the term), and if geology of the fields required more numerousor widespread wells, there appear to be three possible responses to the problem: (1)facilities might be modified (perhaps through improved technology) in order to staywithin a 2,000-acre limit; (2) some otherwise economic prospects might be missed;or (3) the footprint limitation might be modified in some way. Finally, if legislationdid not apply limitations to Native lands, some additional prospects on federal leasesmight be developed from pads within these Native lands by using advanced drillingtechnologies. Support facilities also could be located on the Native lands within theRefuge and as a result avoid an acreage limitation, if legislation did not specificallyinclude such lands in the limitation.

Production Phase

In a production phase, drilling equipment would be removed, and small buildings (housing oil pumps) would be installed and connected to pipelines and, forthe 1002 area, ultimately to TAPS. Fewer employees are necessary during theproduction phase. Production facilities to extract hydrocarbons consist of drillingequipment and rigs, central processing facilities (which include oil and gas separationunits, power plants, flowlines, and crew offices and living quarters), access roads,gravel mines, airstrips, and possibly ports and desalination facilities. Shouldcommercial quantities of oil be discovered in ANWR, it is likely that the mostadvanced production facilities would be used in order to contain costs and minimizephysical size and effect on the environment.

With current technologies, permanent drill sites would be constructed of gravel or recycled cuttings from the exploration wells. Compact factory-manufacturedproduction facilities would be transported to the site instead of built on site. Depending upon conditions, slim-hole or coiled tubing drilling would be used. (39) Multilateral wells (wells with additional boreholes branching from a common hole)might be used in restricted spaces and/or to share the same surface facility. Whenwells not accessible to conventional rigs became old, the life of the reservoir may beextended by using through-tubing rotary drilled wells, which go through existingproduction tubing. Unmanned production facilities might be installed to exploitaccumulations in remote sites, precluding the need for crew facilities at thoselocations. Together, these techniques reduce the amount of support facilities neededand the amount of waste.

The Alpine development, at the far western edge of North Slope development, uses these technologies, the most advanced currently available. The total Alpinedevelopment, according to the U.S. Army Corps of Engineers, is permitted at 98.4acres of gravel fill. The permit provides for 1 large drill pad (36.3 acres), 1 satellitepad (10.1 acres), 1 airstrip (35.7 acres), 1 connector road of 3 miles (14.6 acres), andother features (culverts, etc., 1.7 acres). (40)

Reclamation Phase

In the reclamation phase, lessees would remove the traces of their activities to whatever standard was specified. Any authorization to develop the 1002 area couldinclude reclamation provisions. (41) If oil productionwere to occur, industrial activitywould probably last decades, especially if natural gas resources could also bedeveloped, so reclamation would be decades in the future. Removal of gravel pads,roads, and runways; pipelines; support centers; water treatment plants; etc., wouldcome as production (and therefore revenue) was declining. To ensure financialresources to support this final industrial phase, some have suggested that companiesbe required to post bonds. Even with consistent use of the best availabletechnologies, decades of disturbance could require more decades for thedisappearance of human intrusion in the slow-growing environment. (42) It is unclearwhether local residents or Refuge managers would even wish to have roads or otherfacilities removed once energy production ceases.

However, as noted above, new developments in production field facility construction and maintenance and in drilling and production have reduced the sizeof oil and gas field operations. And, since modern technology attempts to avoid anysurface discharge, the technical aspects of reclamation could be somewhat lessdemanding than for older fields.

Resources: Status, Current Regulation, and Potential Effects of Development

While much is still unknown regarding both the biological and geologicalresources of the 1002 area, much has also been learned during 40 years of debateover the Refuge. Among the areas with improved information are estimates of theoil and gas potential of the area and the ecology of several of the species that frequentthe area. Some of the specific resources are discussed below. (43) This report will firstgive background information, and then discuss potential effects of development onAlaska Natives, the economy, and the Refuge.

Energy: Status and Effects

Potential energy resources are the attraction that drives the ANWR question. From a long term and basic perspective, U.S. oil production has been declining forthree decades, petroleum consumption has been increasing, and oil imports fill thegrowing gap. During 2001, the nation's attention was drawn to energy issues bysuccessive jumps in the pump price of gasoline and by California's serious electricpower problems. (44) The potential for oil in the1002 area has been a focus of thatattention.

Oil Potential. Parts of Alaska's North Slope (ANS) coastal plain have proved abundant in oil reserves, and itsgeology holds further promise. The oil-bearing strata extend eastward fromstructures in the National Petroleum Reserve-Alaska (NPR-A), to the 2 billion barrelKuparuk River field, past the Prudhoe Bay field (originally 11-13 billion barrels, nowdown to about 4 billion barrels), and a few smaller fields, and may continue into andthrough ANWR's 1002 area. Further east in Canada's Mackenzie River delta, oncepromising structures have not produced significant amounts of oil. These smalleraccumulations include some fields that have produced intermittently and others thatcurrently are noncommercial due mainly to lack of transportation infrastructure. The1002 area contains some of the most promising undrilled onshore geologic structureswith petroleum potential known in the United States.

Geology and Potential Petroleum Resources. Estimates of ANWR oil potential, both old andnew, depend on limited data and numerous assumptions about geology andeconomics. New geological data from outside ANWR and reinterpretation (usingnew techniques) of the limited old FLEIS information have changed estimates ofANWR's oil potential. Another factor affecting resource and recovery estimates isthe projected price of oil, which the Bureau of Land Management (BLM) in 1987assumed would increase steadily (excluding inflation) over coming decades. Inactuality, except for short intervals of spiking, the price of oil has not risen to theextent assumed by BLM until recently. A third factor is falling production costs. Astechnology improves, once unprofitable structures may become profitable; this hasoccurred repeatedly on the North Slope. (See Box, What the Numbers Mean , fordiscussion of terms used below.) Three major studies are reviewed below; due tochanges in methods, assumptions, and goals of the studies, comparisons among themmust be done with caution.

1991 and 1995 Studies. In 1991, BLM reviewed its 1987 estimate of ANWR's recoverable petroleum resource, based on reprocessedgeophysical data, newly-acquired information on four wells drilled near ANWR,additional seismic data from offshore areas near the coastal plain, and thecharacteristics of new applicable technology (used in the development of the Endicottand Milne Point fields on the ANS frontier). This review gave BLM a greater levelof confidence that ANWR is part of the North Slope oil province, and increased itsestimates of the probability of economic success. BLM reduced its estimate of thesmallest field that could be developed economically from 440 million to 400 millionbarrels, (45) thereby increasing the marginalprobability of economic success from 19%to 46%; if such a field is found, the mean estimate of economically recoverable oilwould be 3.57 billion barrels -- 0.37 billion bbl more than in 1987.

In June 1995, the U.S. Geological Survey (USGS) revisited the Bureau of Land Management's 1991 estimates, relying upon several new geologic studies and datafrom a new well, the Tenneco Aurora, a federal offshore lease north of the 1002 area. The USGS reduced its estimates of technically recoverable oil reserves in the 1002area to between 148 million and 5.15 billion barrels. (The draft study, which wasnever finalized, did not give a mean estimate. (46) See Box What the Numbers Mean ,for the difference between "technically recoverable" and "economicallyrecoverable.")

1998 Study. The most recent government study of oil and natural gas prospects in ANWR, also by the USGS, was completed in 1998. (47) USGSscientists gathered new data from nearby fields both onshore and offshore andexamined the reprocessed seismic data collected in the Refuge in 1984-1985. (SeeTable 1 and Figure 5; more detailed maps of results are given in the report.) Theresults of this new study are based upon the assumption that at least onecommercial-size field is discovered.

Table 1. Probability of the Presence of Given Quantities of Oil and the Recoverability of the Oil in the 1002Area (billions of barrels)

Note: All calculations to estimate economically recoverable resources and the pricesused are in 1996 dollars.

Source: U.S. Dept. of the Interior, Geological Survey. The Oil and Gas Potential of the Arctic National Wildlife Refuge 1002 Area, Alaska. U.S.G.S. Open File Report98-34 (Washington, DC: 1999) Summary, and Table EA4. (Report available on2-disk CD-ROM.)

According to USGS, there is an excellent chance (95%) that at least 11.6 billion barrels are present on federal lands in the 1002 area. There also is a small chance(5%) that 31.52 billion barrels or more are present. If cost were no object, USGSestimates there is an excellent chance (95%) that 4.25 billion barrels or more aretechnically recoverable. And there is a small chance (5%) that 11.80 billion barrelsor more are technically recoverable. (48) (If stateoffshore lands and Native corporationlands are included, these numbers become 5.7 and 16.0 billion barrels, respectively.) It appears that natural gas is likely to be present as well. USGS estimates that thereis a 95% chance that 2.28 trillion cubic feet (tcf) associated with crude oil aretechnically recoverable, and a 5% chance that 5.16 tcf are technically recoverable.

Technically or Economically Recoverable? However, cost inevitably comes into play, whether in the extreme conditions of the North Slope orelsewhere. Thus, the primary question is how much oil can be extracted profitably ? Each company has its own internal criteria for this. The higher the price of crude oil,the greater the proportion that would be economically recoverable. High prices alsocould provide incentives to improve extraction technology thereby reducingextraction costs. The USGS estimated that, at $24/barrel (in 1996 dollars), there isa 95% chance that 2.03 billion barrels or more could be recovered, and a 5% chanceof 9.37 billion barrels or more. For comparison, the spot price of West Texas crudeoil ranged from an average of $11.35 per barrel in December 1998, to $34.34 perbarrel in November 2000, according to the Energy Information Administration (EIA). It was estimated at $20 in November 2001. (In 1996 dollars, these were $10.95,$32.00, and $18.10, respectively.)

The projected price of oil is only one of many factors entering into the decision on bidding for a lease. Efforts to reduce exploration and production costs throughnew technologies play a key role, for example. Each prospective bidder would do itsown analysis of the economic and physical factors of the areas offered for lease, andcompany analyses historically have differed from one another and from governmentanalyses. With geological evidence pointing to the presence of recoverable oil andgas, developers may be interested in bidding on ANWR leases.

Possible Production Levels. It is difficult to estimate the development rates or production levels over time that wouldbe associated with given volumes of economically recoverable oil resources. Someof the various factors considered by prospective bidders also would come into playin determining the rate of development and levels of production. Oil prices (currentand projected), geologic characteristics such as permeability and porosity, cash flow,and any transportation constraints would be among the most important.

The EIA estimated production "schedules" that would be associated with several different volumes of technically recoverable resources at two development rates. (49) (See Table 2.) At the faster development rate, a production peak would occur 15 to20 years after the start of development, with maximum daily production rates ofroughly 0.00015 (0.015%) of the resource. Slower development rates would peakabout 25 years after the start of development at a daily production rate of roughly0.000105 (0.0105%) of the resource. (Peak production associated with a resource of5.0 billion barrels at the faster development rate would be 750,000 bbl/d.)

Figure 5. Petroleum Discoveries and Exploratory Wells of 1002 Area and Adjacent Areas.

Notes: This map shows "petroleum discoveries and status of exploratory wells relative to the 1987 USGS[FLEIS] assessment. ...[D]ashed line marksapproximate boundary between undeformed area, where rocks are generally horizontal, and deformed area, whererocks are folded and faulted." Source:Figure AO2 of USGS, Oil and Gas Potential of ANWR . Oil was found at Flaxman Island,Hammerhead, Kuvlum, Badami, and Sourdough. Gas wasfound at Kavik and Kemik, and Point Thomson showed gas condensate and oil. It is not known if the developmentrates and production schedules developed byEIA would apply to discoveries of economically recoverable oil in ANWR. If theydid, the peak production level in a scenario with the world price of oil at $24 perbarrel could range from 200,000 to 1,400,000 barrels per day depending upon the sizeof the discovery (Table 2). For simplicity, it is assumed that oil prices do notfluctuate during the lives of the fields being produced.

Table 2. Approximate ANWR Peak Production Levels Under Selected Discovery and Development Scenarios

Note: Production levels (and implicit development rates) are based upon theassumption that crude oil prices (current and projected) would be high enough tojustify continued development and production. For simplicity, it is assumed that oilprices do not fluctuate during the lives of the fields being produced.

a These volumes correspond to those shown in Table 1 as economically recoverable oil at market prices of $18, $24, and $30 per barrel at different degrees of uncertainty.

b Production volumes associated with a slower and a faster rate of development; thus at $24/bbl, the mean expectation of economically recoverable oil is 5.24 billion bbl. This would result in a production rate of 550,000 to 775,000 bbl/day in the slowerand faster production rates, respectively.

Sources: Energy Information Administration. Potential Oil Production from the Coastal Plain of the Arctic National Wildlife Refuge: Updated Assessment . May2000. Table 1 and CRS estimates.

Natural Gas Potential. Not only crude oil but also large amounts of natural gas are believed to exist in the 1002 area. This expectation together with huge amounts of proven gas reserves in the PrudhoeBay area may increase the appeal of oil and gas development of ANWR to energyproducers. (50) For economic reasons, natural gaswas not emphasized in the 1980s, buthas become more important in recent years as demand has grown.

Estimates of Prudhoe Bay Complex. The Alaska Department of Natural Resources estimated the original recoverable gasreserves of Prudhoe Bay at 30.5 trillion cubic feet (tcf), and estimates current overallNorth Slope reserves at 30.9 tcf (including amounts in oil fields subsequentlydiscovered). (51) On an energy equivalent basis, 30tcf of natural gas is equivalent toabout 5.3 billion barrels of crude oil. (52) TheEnergy Information Administrationoriginally counted all of the ANS gas volumes noted above as proved reserves. Since1988, however, the EIA has omitted about 80% of those volumes on the basis that,without a pipeline or near-term prospects of a pipeline, the gas has no market andtherefore is not commercially recoverable. EIA counts the remaining portion of thegas reserves because they are used to power oilfield and transport operations. EIAestimates that proved natural gas reserves in the entire state of Alaska totaled 9.7 tcfat the beginning of 2000. (53)

Most of the gas produced so far on the North Slope has been reinjected into the ground by oil field operators to maintain pressure in the reservoir zones. Currently,80-90% of the 8 to 9 billion cubic feet of natural gas produced per day arereinjected. (54) The remainder is used for leaseoperations, electric power generation,and for powering oil flow through pipelines.

Estimates of 1002 Area. Natural gas is also estimated to be in the 1002 area, although seemingly not as much as so fardiscovered in the rest of the North Slope. The USGS 1998 assessment of ANWR gasresources estimated a 5% chance that there are 10.02 tcf or more of technicallyrecoverable gas not associated with oil in the 1002 area, with a mean "expected"amount of 3.48 tcf. The mean "expected" amount of technically recoverabledissolved natural gas ( i.e. , associated with oil) was 3.56 tcf (Table 3). Non-associated gas probably would not be targeted until after oil field infrastructurewas in place.

Table 3. Mean Estimates of the Amounts of Undiscovered Natural Gas and Natural Gas Liquids in the 1002Area

Notes: Crude oil equivalents are based upon inherent heat content. The mean is the arithmetic average of all the estimated amounts, and is sometimes called the"expected" value, or amount.

bbl -- barrel; N.A. -- not applicable; tcf -- trillion cubic feet.

Source: U.S. Dept. of the Interior, Geological Survey. The Oil and Gas Potential of Arctic National Refuge: 1002 Area, Alaska. U.S.G.S. Open File Report 98-34.(Washington, DC: 1999). Tables EA4 and RS14.

In addition, the USGS estimated natural gas liquids extractable from the technically recoverable gas in mean amounts of 143 million barrels from oil fieldsand 112 million barrels from gas fields. With an energy content of about 3.8 millionbtu per barrel, the former figure is roughly equivalent to 95 million barrels of crudeoil and the latter to about 75 million barrels. The mean amounts of natural gasliquids economically recoverable at $18, $24, and $30 per barrel of oil would be 10million, 70 million, and 100 million barrels, respectively.

Because, without a pipeline, there presently is no way of transporting natural gas to markets and generating revenue streams with which to compare costs, it is notpossible to derive estimates of economically recoverable natural gas in the 1002 area.

Native Lands and Adjacent State Waters. Significant amounts of oil also are believed to be underNative lands and lands beneath state waters adjacent to ANWR -- perhaps one thirdas much as in the federal 1002 area. In a March 2002 "preliminary" report, theUSGS presented estimates that there is a 95% chance that there are at least 1.5 billionbarrels (bbls) and a 5% chance there are at least 4.2 billion bbls of technically recoverable oil in lands under state waters adjacent to the Federal 1002 area and inNative lands, with a mean estimate of 2.7 billion bbls. (55) The USGS estimated that,if the price of crude oil is $24 per barrel (1996 dollars), there is a 95% chance of atleast 0.9 billion bbls and a 5% chance of at least 3.7 billion bbls of economicallyrecoverable oil in the non-federal 1002 portion of the study area, with a meanestimate of 2.4 billion bbls.

While significant accumulations may exist under state waters and in Native lands, they will be difficult to develop without access to Federal land. AlaskaNatives have various property interests and differing opinions related to the issue ofoil drilling in ANWR that may present complex legal issues for refuge managementif the coastal plain is opened to oil and gas exploration and development. Regulationof development on these lands could be difficult, as discussed in Alaska Native Landsand Rights , below. (56)

Natural Gas Pipeline from North Slope. Construction of a pipeline to transport natural gas to NorthAmerican markets and/or a warm-water port for shipping liquefied natural gas (LNG)could enhance Prudhoe Bay economics -- oil as well as gas. The prospect ofproducing both oil and gas would also enhance the commercial promise of the 1002area. Until recently, estimated costs of transporting the gas precluded seriousconsideration of pipeline construction. However, recent steep increases in the priceof natural gas and some projections of continued high prices relative to the averageof the past 15 years have suggested some improvement in the relationship betweenmarket price and the cost of known gas resources in the North Slope. Economicgrowth, environmental regulations, and gains in gas-fired electric power generationhave increased current and projected demand for natural gas. In addition, thetechnology of converting gas into a liquid has advanced. As a result, seriousconsideration is being given to building the means of transporting "proven" gas andthe prospective gas of the North Slope to markets.

There appear to be several route options. (See Figure 6.) One is a pipeline that would parallel the existing TAPS from the North Slope to Fairbanks, then veereastward along the Alaska Highway through the Yukon Territory, northern BritishColumbia, and into Alberta. This, the Alaska Natural Gas Transportation System(ANGTS), was approved by the U.S. government in the 1970s and by the Canadiangovernment shortly after. Phase I of the ANGTS pipeline was completed in the early1980s and is in operation. Its two legs, extending from a central collecting point inAlberta in the direction of northern California and to the Chicago area, respectively,deliver one-third of Canada's total annual gas exports to the United States. The thirdleg, connecting Phase I to the North Slope, has never been started. The legalframework and permits are still in force. Another proposed gas pipeline, theTransAlaska Gas System (TAGS), would move the gas via a buried route parallelingTAPS all the way to slightly west of the TAPS terminal at Valdez. The gas wouldbe liquefied there for shipment to Asian markets. Various environmental and otherapprovals have been obtained.

A northern pipeline route (Northern Gas Pipeline Project) would run eastward from Prudhoe Bay buried under the Beaufort Sea and come ashore in the MackenzieDelta. It would then link with a pipeline running through the Mackenzie Valley intonorthern Alberta, or with a pipeline running through the Yukon Territory, whichwould then link with the ANGTS. It appears that the options have narrowed to thenorthern route and the unbuilt leg of the ANGTS route.

Various factors would come into play in determining a route or routes. (57) Astudy prepared for the INGAA Foundation (58) estimated that an overland pipeline routewould cost $100,000 per diameter-inch-mile, and an offshore pipeline route wouldcost $150,000 per diameter-inch-mile in up front capital. (59) According to thisestimate, a 30-inch, 500-mile overland pipeline would cost $1.5 billion. Theproposed northern pipeline route would be shorter, but the underwater nature maysubject it to technical and environmental risks, and whalers from Alaska Nativevillages object. Environmental impact statements prepared 25 years ago may not beaccepted now.

In mid-2003, the economic viability of a natural gas pipeline appears uncertain. But some recent industry engineering studies of prospective pipeline costs suggestinsufficient profit potential vis a vis the risks. (60)

Figure 6. Proposed Routes to Transport Alaskan and Canadian Natural Gas to Markets.

Source:

http://www.eia.doe.gov/emeu/perfpro/chapter4.html

Advances in the technology of converting natural gas into a liquid could provide another transportation option. A gas-to-liquids process (now being developed)chemically converts natural gas into a diesel-like liquid that can be mixed with crudeoil for transportation and then refined in the lower 48 states. (61) Converting the gasinto a liquid at or near the oil and/or gas fields would eliminate the need for aseparate gas pipeline and potentially extend the economic life of the existing oilpipeline. Oil produced from existing North Slope fields is projected to decrease andfall below the minimum economic flow of the TAPS within a decade or two.

Alaskan Position on Northern Route. Alaska has enacted legislation that bans construction of a gas pipeline in northernstate waters. The Alaska state legislature strongly supports proposals for a pipelineto the south. While the royalties to the state (for those natural gas resources actuallyowned by the state) would be higher under the shorter, less costly northern route,thereby making the wellhead prices higher, (62) stateofficials see a greater gain throughthe income multiplier effect of construction within the state and greater access byAlaskan communities to the new gas supplies. Also at issue is the fact that aCanadian route would likely serve new Canadian gas fields, which would thencompete with Alaska in U.S. markets. This, together with the factors cited above,suggests a potential conflict between maximizing energy company profits andbenefits to the state.

Canadian Position on Natural Gas Pipeline. Canada supports a natural gas pipeline that wouldtravel from Alaska through Canada. The Canadian government has not taken a standon which of the two possible Canadian routes it might prefer; affected provincialgovernments all support routes through their jurisdictions. The over the top routecould make some natural gas deposits in the Yukon and Northwest Territorieseconomically viable. In either case, Prime Minister ChrÃ©tien has expressed Canada'sinterest in selling more oil and natural gas to meet U.S. energy needs. (Some haveargued that this interest has intensified Canadian opposition to ANWR development.)

However, the Canadian government has expressed deep concern that price supports to encourage development of the pipeline could damage or even endCanadian natural gas sales to the United States. The Premier of the NorthwestTerritories, Stephen Kakfwi, fears that price supports might even flood westernCanada with sufficient cheap natural gas to shut down the area's own natural gasproduction. (63) In addition, some Canadian criticsreportedly claimed that pricesupports could interfere with free trade and therefore violate NAFTA. (U.S.domestic producers in the Lower 48 have also expressed reservations about potentialdistortions in the natural gas market.)

Economic Effects of Development. The U.S. economy as a whole would be affected bydevelopment and production of oil in the Arctic National Wildlife Refuge throughthe direct effects of the economic activity constituted by the development andproduction itself. The economy would also be indirectly affected by any change inoil prices resulting from ANWR production and any effects on the amount spent onimported oil. A major unknown and driving factor is the amount of economicallyrecoverable oil discovered and eventually produced. (64)

Development Stimulus. Oil and gas development in ANWR would generate primarily mining, construction,manufacturing, and transportation activity, but also many types of other supply andsupport services such as food, fuel, power, and management services. Such demandfor goods and services equipment would be felt in the lower 48 states as well as inAlaska.

Major determinants of the cost of developing ANWR, and its direct stimulus, would be the size of any overall discovery of economically recoverable oil resourcesand the sizes of the individual fields containing such resources. There are highdegrees of uncertainty in both areas. (See Table 2.)

The USGS estimates also have very wide ranges with respect to oil field sizes. Among the larger sizes, which oil companies probably would consider first, theestimates show a 95% chance of three or more fields and a 5% chance of six or morefields with 256-512 million bbl of technically recoverable oil; a 95% chance of oneor more fields and a 5% chance of four or more fields with 512-1,024 million bbl;and a 95% chance of a field of three-tenths of a field or more and a 5% chance of oneand a half fields or more with 1,024-2,048 million bbl. (65) Each company would havedata on 1002 area prospects from its preliminary exploration and comparisons withexisting information; it would then select the most attractive prospects based uponits own interpretation of geologic data, its own resource assessment, and its ownfinancial criteria. Smaller fields probably would become attractive if and when largerfields were developed and infrastructure was in place.

Thus, if commercial oil fields were discovered, they most likely would be of different sizes and the collective overall quantity of economically recoverable oilcould be in a very wide range. And, given that the size of a possible overalldiscovery is unknown, estimations of the overall cost of developing ANWR arehypothetical.

Advances in arctic oil and gas development technology, equipment, and facility configuration reduce both the extensiveness of facilities and the development cost perbarrel of discovery. (66) These advances have madesuch development more capitalintensive onsite and moved more labor offsite, to locations where data analysis isperformed. A very crude benchmark to use as a basis for estimating the outlays thatwould be entailed is the roughly $1 billion cost of developing the Alpine field, whichhas about 430 million bbl of reserves. (67) Alpineis a recently developed field on theNorth Slope of Alaska that employs advanced arctic technologies. However, Alpineis appropriate as a cost benchmark only to the extent that the geological conditions,pristineness, and accessibility of the hypothetically discovered fields at ANWR weresimilar to those at Alpine. (68)

Two illustrative hypothetical cases might be as follows: (1) A discovery of 2.40 billion bbl of economically recoverable oil in four 100-million bbl fields, three200-million-bbl fields, two 400-million-bbl fields, and one 800-million-bbl field. (2)5.24 billion bbl of economically recoverable oil in six 200-million-bbl fields, four400-million-bbl fields, two 800-million-bbl fields, and one 1,200-million-bbl field. (69)

In the first case if, hypothetically, the fields associated with an overall 2.40-billion-bbl discovery of economically recoverable oil are of the same nature anddegree of difficulty to develop as Alpine, and if, as is unlikely , development costs forANWR are proportional to field size (using Alpine as the benchmark), totaldevelopment cost of an ANWR discovery of that size would approximate $6.5billion. With identical caveats for a 5.24-billion-bbl overall discovery, totaldevelopment cost of that overall discovery would approximate $14.0 billion. (70) Atroughly $2.70 per barrel discovered ($14 billion ï¿½ 5.24 billion bbl), thesehypothetical estimate totals, which may well exclude exploration costs, appear low. In recent years, major oil companies have experienced onshore finding costs of about$5.25 per barrel (with exploration costs accounting for about one-third), based uponEnergy Information Administration (EIA) surveys, (71) but such costs have beendeclining over time.

Oil Market Response. Other things being equal, an increase in production, or supply, would be expected to result in aprice decline (or a lower price than would occur otherwise). The size of the declinewould depend to some extent on how close world oil output would be in relation toworld oil production capacity and upon the reaction of other suppliers to the market.

As noted above, peak production from any economically recoverable volumes of 2.03 billion and 9.37 billion bbl at $24 per barrel (72) probably would be reached inabout 2020, and would range from roughly 300,000 to 1,400,000 bbl per day. EIAprojects world oil production to total 106.6 million bbl per day in 2015. (73) Thus,ANWR production (from the respective discovery volumes) at their peaks around theyears 2013-2015 would range from about 0.3% to 0.9% of world output.

Opponents of ANWR have suggested that potential ANWR resources are equivalent to U.S. daily demand for oil for a matter of just months. (74) This does notconsider the role which any incremental source of petroleum plays in markets, whichare dynamic. Consequently, the impact of ANWR production on world oil prices islikely to be variable depending upon market and political factors prevailing in themoment. For proponents of development, the oil shocks to the market in 1973-74,1979-80, 1991, and 2000-2001 tend to loom large.

However, a review of the nearly thirty years since the time of the Arab oil embargo and first oil price shock in 1973 suggests that it is more accurate to see thisnearly thirty-year period as one of general price and supply stability that isperiodically broken with shorter episodes when price became volatile and suppliesof fuel less certain. During any of these episodes, even an additional 100,000 bbl/dayof refined product in certain regional markets might have eased prices. (75) In times ofuncertainty -- and even at the low range of estimates of potential ANWR production -- these volumes might help contain a short-term spike in prices. In these moments,it matters little whether the incremental supply comes from a field holding sixmonths' national demand, or sixty years' potential supply, because the price ofproduct at the pump will not discriminate between the two.

Some argue that ANWR production could result in lower world oil prices if supply in the world market were relatively tight in 2015 and the market wasreasonably competitive. In a period of general stability and balance in supply anddemand, production from ANWR at the lower range of the estimates would probablyhave a small effect on prices. There is also the prospect that, depending upon marketfactors and their internal economies, OPEC and other producers could cut theiroutput to offset the supply effect of ANWR, as has occurred before. This woulddepend upon the commitment of OPEC nations to try to support or defend a priceband for crude oil by cutting production, as they did three times in 2001. At the sametime, internal revenue needs have sometimes prompted producing nations to selloutput above their quotas. Additional oil supply from non-OPEC producers alsomakes it more difficult for OPEC to affect prices. (76)

Macroeconomic Effects. In general, if energy prices fall, the drop would tend to increase the amount of inputs affordedby businesses, boosting the overall supply of goods and services. Higher aggregateincome and lower prices would enable households to buy more goods and services. Economic growth would speed up; and, if the economy is not at full employment,more labor and capital would be employed. Once the adjustment to lower prices iscompleted, growth would return to its prior rate, but at a higher output level.

However, in analyzing the impact of changes in energy costs on the economy as a whole or on individual sectors, one needs to be aware that the relative price ofoil has decreased since the oil price spikes of the 1970s and early 1980s, and energyuse per unit of output has fallen as well. The proportions of production costsaccounted for by energy have dropped across the economy; and energy costs as ashare of Gross Domestic Product (GDP) have declined. Consequently, the relativeimpacts of energy price changes on the economy in general and on particular sectorscan be expected to be smaller than they were 20-25 years ago.

It appears also that any price effect would have to be considerable and sustained for the macroeconomic effects to be reasonably noticeable. For example, theOrganization for Economic Cooperation and Development estimated that an increasein oil prices of $10 per barrel above its baseline scenario would result in U.S. GDPbeing 0.2% lower one year and two years after the shock. (77) In contrast, as notedabove, the price effect of a 0.3% -- 0.9% addition to world oil supply resulting fromANWR production probably would be small, although econometric research findingssuggest that the beneficial macroeconomic result of a price drop would notnecessarily be proportional.

Oil and gas producers that do not participate in ANWR development, their suppliers, and their local economies in the contiguous 48 States would be harmed should oil prices decline. Producers' revenues would decline indirectly as well asdirectly through reductions in output -- both effects leading to cutbacks inemployment and in purchases of other goods and services.

With respect to ANWR development, hypothetical outlays of $6.5 billion and $14.0 billion with an income multiplier of two (78) applying to both would come toroughly 0.12% and 0.26% of projected GDP for the year 2002 (on the unlikelyassumption that all the outlays occur in one year). (79) If the outlays are spread overmore than one year, the impact in each year would be less, but the total effect wouldbe about the same. The percentages would be much lower in 2020, when theeconomy is projected to be about 45% larger. (80) If there is some spare capacity in theoil and gas industry, producers and their suppliers would benefit. However, if theeconomy is at full employment, the multiplier effect would be transitory.

Employment Effects. Oil and gas development in ANWR would generate additional jobs in the national economy tothe extent that development resulted directly and indirectly in a net economicstimulus. A key factor would be whether the economy is at full employment or lessthan full employment. The direct effects are clearer than the indirect, given theuncertainty of the effects of ANWR oil on world oil prices and any consequentbeneficial effects of lower energy prices on the economy as a whole.

Rough estimates can be made for jobs generated by the hypothetical development outlays by using the national averages of 3.89 jobs directly andindirectly generated per $1 million of sales by oil and gas producers and 16.53 jobsper $1 million of sales by oil and gas field service companies, as estimated by theBureau of Labor Statistics (BLS). (81) Adjusting forprice increases since 1992 andassuming that half of the outlays are attributable to each group, $6.5 billion in outlayswould lead to about 60,000 jobs, and $14.0 billion would lead to about 130,000jobs. (82)

If the economy were at full employment, however, investment in ANWR may crowd out other spending in the economy; moreover, ANWR development may drawoil industry resources (capital and labor) from oil prospects elsewhere in the country. In the long run, the unemployment rate is determined by the structure of the labormarket, and, at full employment, any jobs generated by ANWR development wouldcome at the expense of an equal number of jobs lost in the rest of the economy.

Because the impact of ANWR oil on world oil prices would be uncertain, and any decrease would have to be considerable and sustained for the macroeconomiceffects to be reasonably noticeable, the effects on employment would be highlyuncertain. Any gain in employment from beneficial macroeconomic effects of a dropin oil prices, however, may be offset by the harm to oil producers elsewhere in theUnited States, who may reduce their operations and workforce.

Other Job Impact Estimates. Some proponents of ANWR development assert that such development would result in a gain of more than700,000 jobs in the economy. This is based upon a 1990 report by The WEFAGroup (83) that estimated that the economic impactof oil development in ANWR wouldresult, through direct and indirect effects, in a net gain in employment of 735,000 inthe peak year of job creation. The major portion of WEFA's employment gainresults from large estimated beneficial macroeconomic effects of lower world oilprices caused by an increase in world oil supply attributable to ANWR oil. WEFAbased that increase upon an oil discovery near the high end of the 1987 FLEISestimates.

The study's estimates of effects on GNP (84) and employment appear large in thecontext of WEFA's essentially full employment base case. They are large alsocompared with actual economic consequences of oil price changes, and in view ofdecreased importance of energy inputs in the economy compared with the 1970s(noted above). It may have been reasonable for WEFA to posit that the world oilsupply situation in 2005 would be much tighter than in 1990, and that an injectionof an additional 1.7 million barrels per day would tend to lower prices somewhat; andthe model used by WEFA allowed for some response by OPEC. The estimated priceeffect is large nevertheless. In general, the report tended to select the more or mostoptimistic of underlying scenarios when there was a choice to be made in thesequential analysis required in estimating efforts of this type. (85)

A recent report by Dean Baker of the Center for Economic and Policy Research (CEPR) examined The WEFA Group study and re-estimated the employment effects. It followed WEFA's paradigm but applied different assumptions about some basicdata, the degree of response by the market and by OPEC to ANWR oil, and thedegree to which the economy responds to an oil price decline. CEPR estimated thatoil production in ANWR would result in the creation of 46,300 jobs. (86) The CEPRreport, however, does not purport to be a full-fledged estimate of job effects undercurrent oil market, oil industry, and economic conditions.

Import Reduction. As any ANWR oil would be the marginal source of petroleum for the United States, net imports (totalimports minus exports) probably would be reduced by virtually one barrel for everybarrel of ANWR output. This is true regardless of the amount of exports of NorthSlope oil (now nil), which would affect gross imports. The economy would benefittemporarily through a reduction in the income transferred overseas to pay for the oil. Using the EIA's projection of refiners' acquisition cost of foreign crude oil of about$21.50 per barrel in 2015, (87) the oil import billwould be cut by $2.4 billion to $11.0billion in that year, improving the U.S. merchandise trade balance in the short run.

The relative reduction in dollars flowing abroad, however, could cause the dollar to appreciate. This would tend to reduce other exports and expand other imports tosome extent, reversing the initial improvement. A possibly greater increase indemand for imports of other goods and services could result from the higher level ofeconomic activity caused by lower oil prices. Basically, the trade deficit reflects thedesire of Americans to borrow abroad versus the desire of foreigners to invest orborrow in the United States. Assuming that oil development of ANWR did notinfluence this dynamic, it would likely have no permanent effect on the trade balance.

Effects on the Alaskan Economy. The Alaskan economy could be affected substantially by development and production ofoil in ANWR through the direct effects of the exploration, development, andproduction, and indirectly through the ripple effects of the money spent in Alaska bythe producing companies and their workers. A major unknown is the amount of oilthat might eventually be produced.

Oil and gas production already is a major industry in Alaska, directly accounting for about 4,500 jobs and $425 million in annual payroll, (88) and about 20% of stategross product on average. (89) ANWR developmentwould affect primarily the oil andgas industry, but also construction, telecommunications, manufacturing,transportation, and other mining, as well as employment in these industries. Manytypes of other supply and support services such as food, fuel, power, andmanagement services would also benefit. A study of the current economic impactof the oil and gas industry on Alaska indicates substantial effects of the industry onindividual regions in the state. And it found indirect and "induced" employmentimpacts equal to six times employment in the industry itself. (90)

The direct stimulus of the outlays for exploration, development, and production would be felt more in Alaska than elsewhere in the United States -- the amount ofeconomically recoverable oil discovered and eventually produced being a key factor. However, much of the equipment and other goods required would be manufacturedin the lower 48 states as well as in Alaska. Working with the hypothetical outlays of$6.5 billion and $14.0 billion for wells, pipeline extension, and other facilities, andmaking the simplifying assumption that half of these outlays would be spent forgoods and services (including labor) in Alaska, they would come to $3.25 billion and$7.0 billion. Again adjusting for price increases since 1992 and assuming that oilproducing companies and oil field service companies each accounted for half of theoutlays, it would lead to about half of the hypothetical jobs estimated for the UnitedStates as a whole -- 30,000 and 65,000, respectively.

The ratios used, however, are national averages, and oil and gas industry wages in Alaska are higher than average. While the latter is beneficial in one respect, it maytranslate into a smaller number of jobs per billion dollars of outlays. Also, advancesin oil and gas development technology and facilities since 1990, reducing the size offacilities, may also reduce the number of jobs generated by such development.

Furthermore, if there were some slack in the Alaskan economy if or when ANWR energy development occurs, jobs created by ANWR could result in areduction in Alaskan unemployment. If the Alaskan economy were at fullemployment, the job gain could be transitory. Moreover, as noted earlier, any jobsgenerated by ANWR development could come at the expense of an equal number ofjobs lost in the rest of the economy. This could include drawing oil industryresources (capital and labor) from oil prospects elsewhere in the country to someextent.

The Alaskan state government, and ultimately Alaskan citizens, could benefit substantially from ANWR development via its share of potentially billions of dollarsof revenues from bonuses, rents, and royalties. Alaskan citizens receive annualdistributions from the state's Permanent Fund, which is endowed by revenues frommineral lease rentals, royalties, and bonuses, and the states's share of federalmineral-derived revenues. The distribution in 2000 was $1,963.86 per resident.

Regarding only royalties, a discovery sufficient to produce the modest amount of 750,000 barrels per day with a wellhead price of $20 per barrel and a royalty rateof 12.5% could yield about $700 million per year for Alaska's 627,000 residents. Asdiscussed subsequently in this report, however, it is uncertain at this point whatAlaska's share of the various revenue streams might be.

Relationship to Recent U.S. Energy Difficulties. The current interest in oil exploration and developmentin ANWR was at least partly prompted by the increase in the retail prices for refinedpetroleum products that began with gasoline in early 1999, and California's electricpower problems. Any energy and/or economic benefits that would accrue from oiland gas development of ANWR essentially would not address the power difficultiesexperienced in California -- which were related to insufficient generation capacity,natural gas price spikes, and the electric power market deregulation plan adopted bythe state.

Similarly, some of the increase in the prices for gasoline, diesel and home heating oil were a function of insufficiently available refining capacity, and a brittlepetroleum supply infrastructure. Much of this effect has now been mitigated. Underthese circumstances, the effect upon price of incremental crude production fromANWR might have been partly muted, or at least more selective and regional.

Biological Resources: Status and Effects

At a House hearing on July 1, 1959, testimony was provided by Ross L. Leffler, Assistant Secretary of the Interior for Fish and Wildlife, on H.R. 7045 to authorizethe establishment of the Arctic National Wildlife Range. Speaking of the entire areaof the proposed refuge, he said:

The great diversity of vegetation and topography . . . in this compact area, together with its relatively undisturbedcondition, led to its selection as the most suitable opportunity for protecting a portionof the remaining wildlife and its frontiers. The area included within the proposedrange is a major habitat, particularly in summer, for the great herds of Arctic caribou,and the countless lakes, ponds, and marshes found in this area are nesting groundsfor large numbers of migratory waterfowl that spend about half of each year in therest of United States; thus, the production here is of importance to a great manysportsmen.... The proposed range is restricted to the area which contains all of therequisites for year-round use. The coastal area is the only place in the United Stateswhere polar bear dens are found. (91)

Twenty-eight years later, the FLEIS echoed these remarks with the following: "The Arctic Refuge is the only conservation system unit that protects, in anundisturbed condition, a complete spectrum of the arctic ecosystems in NorthAmerica" (p. 46). It also said "The 1002 area is the most biologically productive partof the Arctic Refuge for wildlife and is the center of wildlife activity" (p. 46). Thebiological value of the 1002 area rests on the very intense productivity in the shortarctic summer; many species arrive or awake from dormancy to take advantage ofthis richness, and leave or become dormant during the remainder of the year. Caribouhave long been the center of the debate over the biological impacts of Refugedevelopment, but other species have also been at issue. Among the other speciesmost frequently mentioned are polar bears, musk oxen, and the 135 species ofmigratory birds that breed or feed there. To some extent, the effects of developmenton animals in the Refuge can be estimated by examining past effects on the samespecies as they exist in developed areas on the coastal plain. (92) However, thesecomparisons must be made with some caution for several reasons:

The coastal plain in the 1002 area is much narrower (as little as 15 miles) than around Prudhoe (roughly 100 miles) or the NPR-A (as much as130 miles).

The form development takes in the 1002 area would likely bequite different from earlier development, with fewer roads and more overflights, forexample.

Conditions have changed since Prudhoe Bay developmentbegan nearly 30 years ago: winters tend to be milder; tundra thaws earlier and freezeslater; and vegetation patterns have already begun to change in response to thesechanges. (93) Animal life would be expected torespond to these changes, sooner orlater.

This section presents background information on various species as it might relate to energy development in the Refuge and the potential effects of developmenton these species.

Caribou. In 1987, the Porcupine caribou herd (PCH) was estimated at 180,000 animals, and is now estimated at129,000 animals. (94) The herd winters south of theBrooks Range in central Alaskaand northwestern Canada. Its winter range is centered on the Porcupine River inCanada and Alaska. In the spring, the males and yearlings migrate north first,followed by the cows, who move north with the retreating snow line; the entire herdcalves in only a few days. In most years, the cows reach the 1002 area and give birththere, concentrating their activity in areas that are greening most rapidly and thatoffer the high protein content required by growing calves and lactating cows. (95) Ifsnowfall has been heavy, or if a cool spring delays snowmelt, the cows are delayed,and drop their calves short of the 1002 area. (Maps of the distribution ofradio-collared caribou throughout their annual cycle can be found at http://www.taiga.net/caribou/pch/pc_cycle.html and annual calving maps at http://www.r7.fws.gov/nwr/arctic/pchmaps.html .)

Much has been made of the failure of caribou cows to calve in the 1002 area in some years, notably 1986, 1987, 2000, and 2001. In these years, heavy snowfall orcool spring temperatures slowed the northern migration, so that when calvingoccurred, most cows had not yet crossed large flooding rivers or passed the BrooksRange. Many newborn calves died in river crossings or fell prey to the golden eagle,wolf, and grizzly populations in the Brooks Range. For radio collared cows in 2000,the June calf survival rate and the July calf to cow ratio were the lowest everrecorded. (96)

Even if migration is delayed, the cows continue on to the 1002 area, where they continue to forage. As June days lengthen and become warmer, mosquitos, bot flies,and warble flies can reach tremendous numbers on the coastal plain. While theblood-sucking habits of mosquitos are well-known, the flies present major healthproblems as well. These flies deposit their eggs in the nasal passages of the caribouor in wounds; larvae feed and migrate through the skin, making holes in the skinwhen ready to emerge. Severely infested animals, or those in weakened condition( e.g. , injured or older animals, young calves, lactating cows) have restricted breathingor are otherwise weakened. They may die or fall to predators. When these flies arenumerous, herds may appear panicked, seeking relief in areas where flies are lessnumerous.

Mosquitos become active earlier in the summer and are deterred by cool, windy, humid conditions. When they are numerous, caribou congregate near the coast,where breezes are typically stronger, temperatures lower, and mosquitosconsequently rarer. The larger bot and warble flies tolerate somewhat higher winds,but not shade; they too prefer warmer temperatures, and become active later in thesummer. (97) Consequently, after calving is overand the herd has reached the 1002area, the herd generally moves to the coast to escape mosquitos; as mosquitopopulations decline and fly populations increase, the herd may return to inland areaswhere patches of snow, gravel bars, or hills offer less favorable conditions for theincreasing numbers of bot and warble flies. At this time of year, cows are at theirlowest energy levels, and according to the FLEIS, "[a]ccess to insect-relief habitatand forage during this period may be critical to herd productivity" (p. 25).

The effects of exploration, production, and development in the 1002 area on caribou cannot be known with certainty unless such events actually occur, and eventhen will undoubtedly be debated. When the 1987 FLEIS was released, debatecentered on the potential for displacement of the herd from (a) its preferred calvingarea and (b) the coastal areas needed for relief from clouds of biting insects. Theseremain the primary concerns. A major point of debate has been the comparison ofeffects of development on the Central Arctic Herd (CAH), whose range is partly inthe developed areas west of the Refuge, and the potential effects of development onthe PCH, whose summer range is primarily in the 1002 area. Comparisons of the twoherds must be made cautiously, since the PCH is about 5 times larger than the CAH,calves in about 1/5 the area of the CAH, and annually migrates to overwinter southof the Brooks Range, while the CAH generally remains year-round in the muchbroader coastal plain in and south of the existing oil fields.

Would Caribou Be Displaced from Calving in the 1002 Area? This question can be divided into two parts: would thePCH likely be displaced from the 1002 area at calving time ? And more importantly,if it were displaced, would displacement have harmful effects on calving success ? For the first question, the answer for the herd as a whole, based on the Prudhoe Bayexperience, appears initially to be a qualified "no." Individual animals, especiallyadult males, habituate to the disturbance, and sometimes seek out gravel pads androads, where insect attacks may be less severe. The CAH has grown sincedevelopment began, from 5,000 to about 27,000. However, warning signs exist. Forinstance, Brad Griffiths and Ray Cameron and their students at the University ofAlaska (Fairbanks) have shown that for the western portion of the CAH, cows haveshifted their calving southward, out of the development area, and return to this richforaging area only after their calves are older. These studies also show that "thegreatest incremental impacts are attributable to initial construction of roads andrelated facilities" and that "the extent of avoidance greatly exceeds the physical'footprint' of an oilfield complex." (98) Thus, it ispossible that habituation could occur,especially with males and yearlings, but some displacement of cows with youngcalves also seems likely.

The second question is the most crucial, since displacement to another area is inconsequential only if calving success is equally good in the alternative area(s). More precisely, if the herd is significantly less productive in the alternative area(s),the difference serves not to show the availability of alternatives but rather to highlightthe importance of the preferred area. For clues, scientists have examined thereproductive success both of displaced cows in the CAH, and of the PCH in yearswhen natural events prevented it from calving in the 1002 area. Griffiths andCameron have shown a correlation of calf survival in the CAH with the amount ofhigh-protein food in the calving area. In the much narrower coastal plain of the 1002area, any cows displaced southward would calve in or nearer the Brooks Range,where golden eagles, grizzly bears, and wolves (all calf predators) are more abundantthan on the plain. Cows displaced to the east and calving in Canada tend to eatmosses and evergreens there, rather than the more digestible cottongrass and otherplants available in the 1002 area. (99) As notedabove, in 2000, when snows delayedmigrating cows, effects on calf survival were severe. (100)

In sum, calving can -- and in some years does -- occur in areas other than the preferred 1002 area. However, evidence exists to suggest that calving success willbe reduced when this occurs. At present, displacement from areas of the mostnutritious forage is a rare event; if it were to become common, reduced fecunditycould be expected. Smaller drill pads and fewer roads could combine to reducedisplacement, and with directional drilling, pads might be sited to avoid areas of highquality forage. Even then, the naturally cyclic nature of caribou populations mightconceal all but large effects for a considerable time.

Attempting to address this question of calf survival, USGS scientists used existing field data on caribou displacement elsewhere and combined it with fivepossible development scenarios (described in previously published literature) rangingfrom development only at the periphery of the northern and western portion of the1002 up to one scenario that included most of the 1002 area and two fulldevelopment scenarios. Then they examined the hypothetical outcomes that wouldhave occurred had those areas been developed at that level with the actual data on thedistribution of cows from 1980 to 1995. In effect, they asked where would PCHcows have gone in each of those 16 years of data, if that level of development hadbeen in place and if PCH cows responded as other caribou cows do to various kindsof disturbance. With this empirical model, they then predicted PCH calf survival inthe areas to which the cows would have been displaced. "The simulations indicatedthat a substantial reduction in calf survival during June would be expected under fulldevelopment of the 1002 area." (101)

Would Caribou Be Displaced from Insect Relief Areas? Relief from massive mosquito populations and thenfly populations can be critical to the herd. Given the particular aversion of cows withyoung calves to developed areas, the potential for conflict with development seemslikely to be more important early in the calving season. Immediately along the coast,breezes deter mosquitos. Any shore facilities or activities that block access to thecoast could be most significant in this potential conflict. Later, when bot and warblefly populations are peaking and calves are older, cows with calves are likely to leavethe coast and move inland. In the CAH, they may join the rest of the herd when itrests on drill pads or under pipelines or other structures, where shade discourages flypopulations. Studies by Pollard et al . have shown that temperatures were lower andwind speeds higher on gravel pads, and mosquitos and flies were less common ongravel pads than on tundra. (102) Thus, graveldrill pads could join other features inproviding fly relief to the PCH, once caribou become accustomed to the facilities. However any such benefit is likely to be marginal for the PCH, since the herd tendsto leave the 1002 area before the bot and warble fly populations have reached theirpeaks. (103)

Polar Bears. Polar bears ( Ursus maritimus ) probably rank right after caribou in generating attention in the ANWRdebate. The Beaufort Sea population is estimated at about 2000-2500 bears andranges along the Alaskan and northwestern Canadian coasts. Bears spend most oftheir adult lives at sea on the ice, feeding primarily on seals. Female bears give birthabout once every three years (or less, if previous cubs died young) as they hibernate. While some females den on the ice pack, other adult females come ashore. In eithercase, they give birth to one to three cubs. In the spring, the females and cubs leavethe dens; those with onshore dens return to join the rest of the population on the icepack. As a result of this pattern, only a small part of the population is on shore at anyone time. The Refuge has the highest density of onshore dens of any area along theAlaskan coast. Researchers have shown that female polar bears are very sensitive todisturbance and will abandon their dens and young cubs if sufficiently disturbed(FLEIS, p. 129-130).

The shift to winter for virtually all exploration and certain other activities during development and production benefits many species. However, for polar bears thisactivity would occur at the times when female bears would be denning. To the west,industry has worked to avoid known den sites, but fewer dens are present in that areathan in the 1002 area. Paradoxically, one new technology may present moredifficulties. Use of 2-D seismic exploration can be accomplished with crewsworking at considerable intervals between survey lines. But for finer analysis ofgeological data, industry may find 3-D seismic exploration to be a cost-effective andpreferable supplement. However, 3-D crews must work at much closer spacing than2-D, thereby increasing the potential for conflict with denning bears. However, morerecent studies suggest that denning polar bears may not be as seriously disturbed byhuman activities as previously thought: certain dens exposed to high levels of activitydid not suffer a detectable reduction in productivity. (104)

Other possible conflicts include inhibition of bears coming ashore for denning, and the habituation of polar bears to human presence, and the subsequent risk tohuman life. Protected under the Marine Mammal Protection Act, and an internationalagreement (though not under the Endangered Species Act), polar bears are huntedrelatively infrequently in Alaska (for subsistence), and some may lose their fear ofhumans. If human presence increases in the 1002 area as a result of development,conflicts with scavenging bears might become more common in the 1002 area. Polarbears are attracted now to the Kaktovik area (especially on occasions when whalecarcasses have been landed). Generally, when such conflicts have occurred on theNorth Slope, habituated nuisance bears are relocated or destroyed.

The FLEIS suggested buffer zones of at least 0.5 miles around known dens in order to prevent abandonment. It also recommended orienting facilities to permitinland access for pregnant polar bears, relocating problem bears, and as a last resort,humane killing to protect human welfare. These actions continue to be the primaryforms of mitigation.

Musk Oxen. Musk oxen were hunted to extinction in the area in the late 1800s, but 64 animals were re-introducedinto the 1002 area in 1969-1970, and the population peaked at about 400 animals in1986. (105) About twice that many are presentduring spring calving. They survivebrutal winters protected by their thick fur, and conserve energy by moving little fromtheir preferred riparian habitats. River corridors are used both for feeding and fortravel all through the year, particularly in western portions of the 1002 area. Limitedhunting of bulls is permitted by the Alaska Department of Fish and Game.

The high demand for water could create conflicts with the needs of musk oxen. The preferred habitat for musk oxen is riparian areas; if riparian areas are heavilymined for gravel, or altered for capture of spring runoff, this species could beaffected. In addition, the extreme metabolic slowdown that this species undergoesto survive the harsh winter could be threatened if herds are forced to flee frequentdisturbances. The latter seems more easily mitigated than habitat alteration, sinceknowledge of the specific whereabouts of herds through radio collars could permitworkers to avoid them.

Migratory Birds. A variety of bird species nest or forage in the 1002 area, taking advantage of the explosion of insectlife and rapid plant growth that occurs in the short summer. Compared to birdsbreeding in temperate areas, these species cycle from spring arrival, to nesting, tosouthern migration at a furious pace. A large variety of birds, both familiar and rarein the lower 48 states, breed or fatten for migration in the Refuge. (See FWS website: http://www.r7.fws.gov/nwr/arctic/wildlife.html .) Among these are manypopular game species: snow geese, Canada geese, white-fronted geese, brant, pintails,widgeons, and others. A wealth of shorebirds (plovers, dunlin, sandpipers,turnstones, phalaropes, and others) also frequent the area. Population data on mostANS bird species come from studies done in or near developed areas around PrudhoeBay. The populations of many species oscillate, as is common in the arctic. Amongshorebirds, only dunlin have shown long term declines, though this trend is shownin other arctic areas, and may be due to losses in their wintering habitat in eastAsia. (106) Only 6 bird species are regularly foundin the 1002 area in winter: snowyowls, gyrfalcons, rock and willow ptarmigans, common ravens, and Americandippers. (107)

The spectacled eider, a large sea duck, is a rare to uncommon breeder along the coast of ANWR. It is listed as threatened under the Endangered Species Act (ESA). (See FWS fact sheet, including distribution map, at http://alaska.fws.gov/es/spei.pdf.) Reasons for the decline are unclear and may vary in different parts of the bird'srange, but increased lead poisoning from ingested lead shot, hunting, and increasedpredation due to augmented predator populations near human development andgarbage dumps are thought to play a role.

Steller's eider is a casual visitor along the coast of the Refuge. It too is listed as threatened under ESA. (See FWS fact sheet, including distribution map, athttp://www.r7.fws.gov/es/steller/stei.pdf.) Reasons for the decline of this species arealso unclear, but may be similar to those for the spectacled eider.

In comparing likely environmental effects of potential energy development on the birds of the 1002 area under a modern scenario and under that envisioned in1987, only one feature seems to have changed markedly: much greater reliance onaircraft. Many more airstrips are now likely to be built, and many more flights made,especially in summer when more birds are present, than seemed likely in 1987. Thespecies most likely to be affected by these flights is the snow goose, since their hugefeeding flocks are highly sensitive to overflights, and are easily startled away fromforaging sites. Mitigation measures suggested in the FLEIS were "careful facilitiessiting and controls on surface activities, air transportation, and hunting" (p. 133). These remain important, and it seems likely that a reduced number of facilities couldmake siting easier, but controls on air traffic seem more likely to be difficult than wasassumed then. Protection of eiders, which were not listed under ESA at that time,could also be an issue in the western part of the Refuge where these rare birds aremore likely to occur. Measures to protect both species of eiders could includerestrictions on certain activities such as vehicular traffic, noise, construction withinabout 200 meters (660 feet) of active nests, and habitat alteration.

Other Species. Arctic fox populations and brown (grizzly) bear populations on the coastal plain have increasedfrom development due to increased scavenging. The FLEIS noted that the increasedpopulation of foxes had damaging effects on their normal prey species, such as youngbirds, on which they continue to feed. Scavenging arctic grizzlies can becomehabituated to humans, as they do elsewhere, and become dangerous to human life. As noted in the FLEIS, careful control of trash can mitigate both problems.

Special Areas. If Congress opened ANWR, it could choose to afford special protections to special areas. Fourareas within the coastal plain are commonly considered to have exceptionalecological value and were identified as such in the FLEIS.

By far the most frequently mentioned is Sadlerochit Spring in the southernmost part of the 1002 area. The spring maintains a flow of water at50-58F year-round, and keeps the river open for nearly 5 miles, even in winter. Itrepresents the extreme northern range of some plants and birds, and provideswintering habitat for fish; muskoxen frequent the area. During the research leadingup to the Section 1002 study, 4,000 acres around the spring were closed toexploration. There are individual Native allotments in the Sadlerochit area, whichcould complicate attempts to set it aside.

The Kongakut River lies between the 1002 area and theCanadian border, and flows into the Beaufort Lagoon. Because of the unusual anddiverse offshore ecosystem, and the presence of some of the North Slope's very raretrees in the upper part of the watershed, the area is considered ecologically valuable. About 25,000 acres of this system are included in the extreme northeastern part of the1002 area.

The Angun Plains are in the eastern part of the 1002 area,where evidence of Pleistocene glaciation is considered special. It comprises 36square miles (23,040 acres).

Parts of the Jago River drainage were identified in the FLEISas nominees for "a system of 'Ecological Reserves.'" The river flows from theBrooks Range, into the 1002 area, and to the sea east of Kaktovik. The report notesthat the drainage "contains a complete array of tundra and flood-plain vegetationtypes and provides habitat for a cross-section of all Arctic Slope wildlife species" (p.20). The particular areas suitable for such ecological reserves were not named byproponents of the idea, and the FLEIS gave no acreage figure forit.

Physical Environment: Status and Effects

Much of the attention and controversy over exploration and development of the 1002 area have focused on potential impacts on biological resources in the area. However, if development occurs, there also will be impacts on the physicalenvironment and resources of the area -- land, air, and water -- as a result ofconstruction, operations, and human habitation. Currently, because the area is largelyuninhabited, the condition of the physical environment is almost pristine (althoughrugged and challenging for man's use) and essentially unaffected by human activity. Especially in terms of land and water, the dominant physical characteristic ispermafrost, the permanently frozen layer which starts between 1 and 2 feet below thesurface and has been found at a depth of 2,000 feet, that impedes drainage and createssaturated soil conditions in most areas of the entire North Slope. Permafrost and thesurface layer on top of it are fragile, and special construction techniques (such as iceroads and structures built on pilings) have been devised to protect them.

It is undisputed that exploration and development activities will alter the existing physical environment. Oil field operations will result in air pollutionemissions. There will be a need for large amounts of water for drilling and ancillaryactivities, including construction of roads, drill pads, and airstrips. Some amount ofgravel will be mined as part of some of these activities, and there likely will beimpacts from both the mining and use of gravel. Exploration and developmentactivities will result in the generation of several types of waste streams, both wastesfrom industrial operations and domestic wastes, requiring disposal technologies. Atissue are the individual and cumulative effects of such alterations and the ability ofthe natural environment to recover and be reclaimed when oil-related activities haveceased.

The industry strongly believes that the 1002 area can be explored and developed in an environmentally sensitive manner. Industry points out that companies useimproved technology (compared with that used in the past for development ofexisting sites in the arctic region) which greatly reduces the "footprint" of operationsand relies on practices that minimize and provide for better disposal of wastes. Theresult is less direct and indirect impact in terms of habitat loss and environmentalcontamination. Moreover, there are numerous environmental protectionrequirements administered by federal and state authorities that are intended to governand regulate activities that might take place. Critics, however, are concerned abouteffects of routine operations in the fragile 1002 environment, as well as thepossibility of leaks and spills of various contaminating substances, and whetheradequate safeguards will be included in legislative proposals, and adopted andenforced by regulators.

Air Quality. Air quality on the North Slope of Alaska, including that in ANWR, currently meets all NationalAmbient Air Quality Standards (NAAQS) and would likely continue to do so evenwith ANWR development. Areas such as ANWR (i.e., those that meet the NAAQS)are regulated under the Prevention of Significant Deterioration (PSD) requirementsof the Clean Air Act. The PSD program requires pre-construction review andpermitting of major new sources of pollution to determine the impact of projectedemissions, and the imposition of Best Available Control Technology on emissionsources.

Emissions and Expected Air Quality. Oil field operations -- and the natural-gas-fired turbines and heaters associated withthem in Alaska -- generate significant amounts of air pollution. The power facilitiesneeded to support operations on the North Slope are quite large: according toBPAlaska, the Central Compression Plant at Prudhoe Bay has turbines capable ofgenerating the equivalent of 429 megawatts of electric power -- enough power fora city of 150,000 people. (108) Even though itburns relatively clean fuel (natural gas),the North Slope complex emits an estimated 63,786 tons of air pollution per year. (109) Nitrogen oxide emissions, which account for more than two-thirds of the total, are"2-3 times the amount emitted by Washington, DC." (110)

Despite these emissions, as noted, air quality on the North Slope of Alaska, including that in ANWR, currently meets all National Ambient Air QualityStandards. Annual concentrations of nitrogen dioxide, measured at three monitoringstations in the Prudhoe Bay field, were, in fact, 70% to 90% below the NAAQS ineach of the years 1996-2000. Emissions of other criteria pollutants were also withinlimits. (111)

Potential emissions from ANWR sources were discussed in the Final Legislative Environmental Impact Statement (completed in 1987, and not subsequently updated). The FLEIS concluded that the likely effect on air quality of the full leasing anddevelopment alternative would be minor. (112) It also noted that while "it is difficult topredict the impacts on air quality in the 1002 area without knowing the scope, timing,and location of oil development," which is impossible to predict without furtherexploratory activity, "The maximum annual emissions from the 1002 area wouldprobably be analogous with present North Slope operations." (113)

PSD Regulatory Structure. Facilities in the 1002 area would be subject to the Clean Air Act's Prevention of SignificantDeterioration rules. The PSD program is designed to protect air quality whereambient concentrations of pollutants are better than required by National AmbientAir Quality Standards. Pollutants subject to PSD requirements are particulate matter,sulfur oxides, and nitrogen oxides. Of these, only the nitrogen oxide increment (114) isexpected to pose any challenge to the development of the 1002 area.

Under the PSD program, the type of area affected by a proposed facility's emissions determines the amount of air quality degradation to be allowed. Allinternational parks, national parks larger than 6,000 acres, and most wilderness areaslarger than 5,000 acres are mandatory Class I areas -- those for which the leastincrement of pollution is allowed. Facilities affecting Class I areas may increaseannual ambient concentrations of NOx by only 2.5 g/m 3 -- 2.5% of the NAAQS.

ANWR, and specifically the 1002 area, are not Class I areas, however: the 1002 area has not been designated wilderness, and the remainder of ANWR, while it isofficially wilderness, was not designated so until after the statute establishing thePSD program was enacted. Thus, like most other areas of the United States, ANWRis a Class II area. In such areas, new facilities may increase concentrations of NOxby 25 g/m 3 , 25% of the NAAQS -- 10 times the amount allowed if the area weredesignated Class I.

Even this allowed increment could pose constraints for full ANWR development. In establishing the PSD increments for nitrogen oxides in 1988, theEnvironmental Protection Agency (EPA) made specific note of their potential impacton the North Slope, stating that "certain Class II areas such as Prudhoe Bay, Alaska,have ambient concentrations as much as 40 g/m 3 higher than in 1980," (115) whichexceeds the 25 g/m 3 increment adopted. If the FLEIS is accurate in projecting NOxemissions from full development of ANWR as analogous to levels observed atPrudhoe Bay, emissions might exceed allowed levels unless additional pollutioncontrol measures are adopted.

Major new sources of air pollution in PSD areas must undergo preconstruction review and must install Best Available Control Technology (BACT). Statepermitting agencies (in this case, the Alaska Department of EnvironmentalConservation) determine BACT on a case-by-case basis, taking into account energy,environmental, and economic impacts. More stringent controls can be required ifmodeling indicates that BACT is insufficient to avoid violating an allowable PSDincrement or the NAAQS itself. Thus, the permitting process should ensure thatambient concentrations of NOx increase no more than 25% of the NAAQS level.

Arctic Haze. Another air quality concern that was much discussed when ANWR development was first considered inthe 1980s is a phenomenon known as arctic haze. Beginning in the 1950s, arcticobservers have noted the presence in late winter and early spring of persistent bandsof haze that reduce visibility and change the color of clear skies from deep blue to apale blue or hazy gray. The haze consists of suspended particles, primarily sulfates,that originate in Europe and the former Soviet Union. (116) The arctic's cold, dry air,with little precipitation and weak sunlight, produces remarkably stable air masses inwinter and early spring, allowing the particles to remain airborne for weeks at a timeand to spread thousands of miles from their point of origin.

Arctic haze appears to be less of a concern at present than it was in the 1980s. With the breakup of the former Soviet Union and the closure of many of the mostheavily emitting industrial facilities in Eastern Europe and Russia, the haze hasdeclined by as much as 50% since the mid-1980s. (117) Emissions from Alaska's NorthSlope appear to contribute relatively little to the problem.

Water Resources and Wetlands. Issues of concern for potential oil exploration and development in the 1002 area arethe availability of water supplies and the impacts of production activities on the waterand wetland resources of the area. Large amounts of water are needed for drillingand ancillary activities, such as ice roads and airstrip construction, as well asdomestic use.

Description of the Resource. According to the 1987 FLEIS, free water is limited in the 1002 area and is confinedto the surface and the shallow zone of soil located above the impermeable permafrostlayer. The refuge receives an average of 6 inches of precipitation annually. A studydone in 1989 found 255 lakes, ponds, and puddles within the 1002 area. Most lakesare shallow and freeze solid in winter. Less than 25% were deeper than 7 feet, andonly 8 contained enough unfrozen water to build a mile or more of ice road. (118) Anumber of rivers and streams exist in the 1002 area, most draining to the coast andthe Beaufort Sea; these too are also usually shallow.

According to the FLEIS, 99% of the 1002 area is classified as wetlands, which are transitional lands found between terrestrial and aquatic systems where the watertable usually is at or near the surface, or the land is covered by shallow water. Arcticwetlands are different from those in the Lower 48 states, however. In warmer areasoutside of Alaska, wetlands play a significant role in floodwater storage, lateral watermovement, groundwater recharge, and sediment and erosion control. But in thearctic area, the permafrost layer impedes drainage and prevents many of the processesnormally attributed to wetlands from occurring, because most arctic wetlands are nothydrologically linked to underground aquifers. However, this thin surface layer ofsoil and rock, located above the permanently frozen layer, is the area where theprocesses that sustain life in the arctic occur, including the cycle of freezing in winterand thawing in the brief summer and where biological activity of micro-organismsand growth of plant roots take place. (119) Plantsthat grow in the perpetually saturatedsoils of the area include sedges, grasses in flat areas, and tiny shrubs and dwarf treesin the foothills and uplands.

Water availability is cyclical during the year. In the spring, rapid snowmelt occurs throughout the area, and melting snow flows to rivers because it does notpenetrate the permafrost. Rivers run full, riverbanks are severely eroded by ice andsnow, and there is extensive spring flooding. Turbidity from suspended sedimentsis high, which impairs water quality. In summer and fall, rain follows, which canalso lead to flooding. But at the time of freezeup in the fall, low water supplyconditions prevail. Most rivers go dry or freeze to the bottom, and streamflow ceasesduring winter except below a few warm springs.

Currently, water quality conditions in the 1002 area are not affected by human activity. While the state does not have extensive information about water quality inthe vast majority of Alaska's watersheds, because they are not actively monitored,most are presumed to be in relatively pristine condition -- including the 1002 area-- due to the state's size, sparse population, and general remoteness. As of 1987,no data were available on water quality below the permafrost in the 1002 area, butthe water beneath it is probably brackish, according to the FLEIS.

Effects of Oil Exploration and Development. The 1987 FLEIS identified the use of limitedfresh water sources for industrial purposes as having the potential for major adverseeffects, if exploration and development of the 1002 area occur. It estimated that oneexploratory well could require 15 million gallons of water: 7 to 8 million gallons forconstruction and maintenance of an airstrip; 1.2 to 1.5 million gallons per mile forroad construction and maintenance; and 1.7 to 2 million gallons for drillingoperations and domestic use. Despite technological improvements and a smaller"footprint" for oil and gas operations in the arctic today (discussed below), estimatesof water requirements are generally the same as presented in the FLEIS.

These water supply needs result from the fact that ice is the construction material of choice for the winter exploration season to make temporary roads, winterairstrips, and drill pads, in preference to mining of gravel (discussed below). Thisis done by spreading 6 inches of chipped ice from rivers and lakes, then spraying thearea with fresh water to make temporary roads and pads that melt in the spring. When they melt, they leave no significant damage to the tundra. Road constructiontechniques have evolved since early days of oil activity in the arctic. Temporary iceroads now allow construction of oil field pipelines during the winter months, thuslargely eliminating the need for permanent gravel roads adjacent to pipelines. (120)

A source of water for ice roads, airstrips, and drill pads would need to be located, but there is little evidence on whether North Slope rivers and lakes cansupport the amount of water used by oil fields. One FWS hydrologist suggests thatdrawing too heavily from deep lakes would diminish the aquatic species that are foodfor migratory waterfowl; heavy withdrawals from the Canning River, which flowsfreely in winter for many miles below warm springs, could harm overwinteringfish. (121) The deepest river basins are near themouths of the Canning and Jago Rivers;if the brackish water from these basins were used for ice roads, the result could beharm to tundra vegetation when the ice melts in the spring.

Because the Refuge has few deep lakes or lakes that do not freeze solid in winter, it is believed that there is only enough water in the 1002 area for less than 50miles of ice roads. (122) To meet water needs,alternatives that might be consideredinclude creating water reservoirs by excavating deep pools in conjunction with gravelremoval. Overflow during spring runoff would fill the basins, and the accumulatedwater could be used for construction. With sufficiently deep basins, habitat could becreated for overwintering fish. If economic quantities of oil were not found, basinsmight be left in place, or it would be necessary to find clean gravel to fill in thebasins. Riparian habitat is heavily used by musk oxen in winter, and siting offacilities in riparian areas (with or without oil discovery) would likely to be an issue.

Companies might also melt lake and river ice and snow, or desalinate marine water. Oil companies also might consider transporting water by truck from existingdeveloped areas, such as Prudhoe Bay, although the economics of doing so for longdistances could be impractical. Another possibility is that oil companies might revertto building gravel roads for exploration and production, as in the past elsewhere onthe North Slope.

On the North Slope today, most wastes associated with drilling, as well as sewage and garbage, are injected in dedicated disposal wells, rather than in wastepits, which greatly reduces surface impacts and water pollution incidents. The oilindustry has improved both technology and practices to prevent and clean upaccidental releases that could harm the surface layer and water. However, critics areconcerned about the possibility of spills of various substances, including waste oil,acid, ethylene glycol, and drilling fluids, especially given the relatively few lakes andstreams in the 1002 area. Even small spills, if not cleaned up, can affect lakes andstreams, for example if a spill on an ice pad melts in the spring. The primary impactof contaminated water is its potential to reduce oxygen availability in receivingwaters, plus possible toxicity of the waste. (123) Critics also are concerned that leaksand spills of oil, fuel, chemicals, or brine could contaminate soils, thus killingvegetation and resulting in scattered small habitat loss. In addition, they areconcerned about the environmental standards which would have to be met fordevelopment on these federal lands.

Regulatory Setting. If oil exploration and development were to occur in the 1002 area under current law, a regulatoryregime that is carried out both by federal and state agencies would apply to waterquality protection. Federal laws applicable to activities taking place in the 1002 areainclude the Clean Water Act, Safe Drinking Water Act, Rivers and Harbors Act,Coastal Zone Management Act, and the Ocean Dumping Act. In Alaska, permitsrequired by federal laws are issued by federal agencies, especially the EnvironmentalProtection Agency (EPA) and the U.S. Army Corps of Engineers (Corps).

The state of Alaska has limited separate regulatory authorities and requirements. One important role that the state plays is in establishing water quality standards toprotect waters within its jurisdiction, as required by the federal Clean Water Act(CWA). Alaska's statewide standards apply to surface waters and to groundwater,at the state's discretion, and include specification of designated uses (such as use forwater supply or recreational purposes), numeric and narrative criteria, and generalpolicies to ensure protection of the designated uses. State standards do currentlyapply to waters throughout the state, including the 1002 area. Any permits writtenby federal or state agencies must provide that state water quality standards will notbe violated. In addition, the state requires development of oil discharge preventionand contingency plans for exploration or production facilities and proof of financialresponsibility to ensure that owners and operators maintain adequate financialresources to respond to any spill and mitigate environmental damages. The state'sDepartment of Fish and Game also would conduct a review of any proposed projectfor possible impacts on anadromous fish.

There is little public information available concerning oil industry compliance with state water quality standards, permits, and other environmental requirements.The industry believes that as a result of improved technology and operating practices -- especially in recent years -- its environmental performance in the arctic is good. Critics, however, point out that data compiled by the Alaska Department ofEnvironmental Conservation demonstrate that on average several hundred spills ofhazardous substances, refined oil products, and crude oil occur each year at existingNorth Slope operations, and some argue that the oil industry should not be allowedinto the 1002 area until it fixes chronic problems with leaky and poorly maintainedphysical structures. (124)

The Clean Water Act requires that facilities must obtain permits which authorize discharge of processed wastewater. These permits, issued in Alaska by EPA,establish specific limitations on pollutants in industrial waste or sewage that may bedischarged from any facility to waters of the United States, as well as generalrequirements such as monitoring and reporting. CWA permits for oil and gasoperations in the arctic typically require Best Management Practices (BMP) planswhich focus on pollution prevention rather than end-of-pipe discharge limits throughspecification of structural and operational controls, maintenance, and inspections. Outside of the 1002 area, EPA has issued a general permit for onshore and offshoreoil and gas extraction in Alaska that covers rest of the North Slope Borough. Itprovides general authorization to different facilities having similar discharges forsuch activities as discharges from ice roads constructed of gravel pit water,discharges of sanitary and/or domestic wastewater from covered facilities, andconstruction dewatering. The general permit application process is streamlined,because individual sources covered by a general permit do not need to apply to EPAfor a source-specific permit; if they file a Notice of Intent and meet certain otherqualifications, they can be covered by the general permit. The current general permitwas issued in 1997 and extends to April 10, 2002. It is possible that EPA would alsochoose to issue a general permit for any activities in the 1002 area.

EPA also issues CWA permits for stormwater discharges of uncontaminated rainwater and snowmelt. Arctic drilling and production pads do not haveconventional storm drains, as in other parts of the country, so stormwater dischargesare in the form of surface runoff during the spring thaw season. Stormwater permitsfocus on plans to prevent releases of contaminated runoff to waters of the UnitedStates.

The Safe Drinking Water Act (SDWA) authorizes a program to protect underground sources of drinking water (USDWs) from contamination by injectionthrough wells. In Alaska, primary responsibility for regulation of injection wellsthrough this program is split between EPA and the Alaska Oil and Gas ConservationCommission (AOGCC). EPA issues permits authorizing subsurface injection ofnon-hazardous industrial wastes associated with oil exploration and development,while the AOGCC issues permits for wells used for injection of fluids brought to thesurface from oil and gas production operations or liquid hydrocarbons which arestored underground. Injection of fluid wastes which cannot be recycled is preferredto the discharge to surface disposal pits or ponds. Underground injection is to beconducted so as to protect USDWs. However, in existing oil production areas on theNorth Slope, EPA has determined that there are most likely not any aquifers beneaththe permafrost which are fresh enough to qualify for protection as USDWs. Thus,the agency has granted several waiver requests from oil companies authorizingunderground injection with less stringent requirements than normal. This could bea precedent for ANWR, as well.

Separate from the CWA discharge permit program administered by EPA, ï¿½404 of the CWA also contains a permit program administered by the U.S. Army Corpsof Engineers under which advance approval must be obtained for discharges fromany project that involves dredging or filling of the nation's waters, including adjacentwetlands. Because of the extent of wetlands in the 1002 area, these requirements arelikely to apply to nearly all oil exploration and development activities that mightoccur onshore. In addition, the Rivers and Harbors Act of 1899 requires permitsfrom the Corps for construction of any dam or dike in a navigable waterway or anystructure in or over any navigable waterway, if the structure affects the course,location, or condition of the waterbody. (125) Ifdocks or offshore navigationalcomponents of facilities to transport people and materials to and from the 1002 areawere constructed, permits under this authority as well as the CWA would likely berequired.

Another permit provision that could arise is contained in the Marine Protection Research and Sanctuaries Act (Title I known as the Ocean Dumping Act), whichrequires a permit from the Corps for the disposal of dredged material in the territorialseas, for example, for disposal of material dredged in the construction of channels inopen seas needed to get to shore facilities. In carrying out its regulatoryresponsibilities, the Corps evaluates projects through a public interest balancingprocess, considering the public benefits and detriments of all relevant factorsincluding conservation, economics, aesthetics, wetlands, cultural values, fish andwildlife values, and navigation. Further, the Corps shares jurisdiction with otheragencies. For example, the Corps uses environmental guidelines issued by EPA toevaluate impacts of a proposed discharge and consults with other federal and stateagencies before issuing permits.

The Coastal Zone Management Act (CZMA) requires certification by states that projects to be located in a state's coastal zone are consistent with the state's coastalzone management program. The CWA requires a similar state certificationconcerning compliance with state water quality standards. Both would presumablyapply to oil exploration and development activities. According to EPA officials,however, in part because of resource limitations, the state of Alaska frequentlywaives CZMA and CWA certification, rather than using that authority to imposeenvironmental conditions on projects. (126)

Waste Disposal. Oil exploration and drilling result in the generation of several waste streams. There are also smallquantities of solid and hazardous wastes associated with daily living activities andwith running an industrial complex. The Resource Conservation and Recovery Act(RCRA) governs the generation, storage, transportation and disposal of hazardouswastes, and in Alaska the program is carried out by the U.S. EPA. Nonhazardous andRCRA-exempt solid wastes are regulated by the Alaska Department ofEnvironmental Conservation (ADEC).

The hazardous wastes come from maintenance shops, laboratories, and other support activities. The largest categories are paint wastes, solvents, miscellaneouschemicals (particularly from laboratories), crushed light bulbs and bases, and rags,sorbents, and filters. There are no commercial facilities in the state for disposal ofhazardous wastes, and they must be stored in secure areas before shipment toRCRA-permitted facilities in the lower 48 states.

RCRA-Exempt Wastes. EPA has determined that oil and natural gas exploration and production wastes constitute ahigh-volume, low-toxicity waste stream that would be better managed outside theRCRA hazardous waste regime. The ADEC regulates these drilling fluids, producedwaters, and other wastes.

In the past, drilling wastes were placed in surface impoundments called "reserve pits," but they have several disadvantages: they take up a great deal of space, makingthe well pad's footprint larger; they require continuous fluid management,maintenance, and monitoring to prevent releases of metals, salts, and othercontaminants into the environment; and, when closed down, may require years ofenvironmental monitoring. Today these wastes are ground up and injected intodedicated disposal wells 5,000 - 8,000 feet deep. (127) The ADEC regulatesunderground injection wells, as discussed above in Water Resources and Wetlands . The wells are only allowed in areas where there is no underground source of drinkingwater, or where aquifers are too deep or briny for development. Grind and injecttechnology has ended the use of reserve pits for permanent disposal.

Minimization and Recycling. The companies on the North Slope employ waste minimization and recycling programsto reduce the volume of solid waste. (128) Oneof the waste streams is drilling muds --mixtures of natural clays and weighting materials with small amounts of specializedadditives that serve to lubricate the drill bit, remove cuttings from the well bore, andcontrol the pressure in the well. As the mud circulates back to the surface, cuttingsand other solids are removed, and the muds are reused; this recycling can reduce mudrequirements by 50 % or more. During drilling operations, each well can generateup to 8,000 barrels of muds and cuttings. Cuttings from the upper strata are washedand used as gravel for construction of roads and pads. The remaining cuttings areground fine and injected in a slurry in a permitted disposal well along with otherproduction wastes.

Surface discharges of sanitary and domestic wastewater (black and gray water) have been eliminated at some facilities by injecting them in disposal wells or usingthem for enhanced oil recovery (EOR). Other nonhazardous and RCRA-exemptliquids that might otherwise be discarded may also be used for EOR. Used oil fromvehicles and equipment is collected at several North Slope facilities. It is blendedinto the crude oil and sent to refineries.

In conjunction with the Federal Trade Commission's approval of the sale of ARCO Alaska to the Phillips Petroleum Company in 2000, an agreement betweenthe State of Alaska and the companies operating on the North Slope was reached. Called the "Charter for the Development of the Alaskan North Slope," it contained,among other things, several environmental provisions committing British Petroleumand Phillips Petroleum to clean up selected existing and abandoned sites, retrieve anddispose of abandoned empty barrels, and close inactive reserve pits. (129)

These cleanup activities are testament to the uneven environmental record of the past. And as recently as the year 2000 British Petroleum (BP) paid $7 million in civiland criminal penalties and agreed to spend $15 million to carry out a nationwideenvironmental management system as a result of a contractor's illegally disposinghazardous waste for at least 3 years, and of BP's failing to report it immediately ondiscovery. (130) Technical advances andheightened sensitivity on the part of theoperators to the need for careful operation in the arctic environment offer anoptimistic outlook, but the possibility of an accident or deliberate violation of a wastedisposal permit or regulation always exists.

Land and Gravel Use. Gravel is a necessary component of exploration and development activities on the North Slope,and gravel suitable for these activities is a relatively valuable resource there. (131) However, with the higher velocities of rivers in the narrow coastal plain of the 1002area, gravel is more abundant than in the broader, developed portion of the coastplain to the west. Gravel roads and pads are constructed by piling gravel on top oftundra to provide a base for aboveground structures and to insulate the permafrostthat lies just below the surface. The mining of gravel from streambeds andfloodplains for such purposes can alter natural river drainage and cause increasederosion and sedimentation. Vegetation covered with layers of gravel dies, subtractingits resources from the food web of the ecosystem. In addition, dust blown from thegravel structure may affect freezing and thawing of nearby vegetation, as may anymaterial washed from the gravel surface. The blown dust might convey someunexpected benefits: dust kicked up from gravel structures may cause earlier snowmelt. Early melting stimulates plant growth, and could provide earlier foraging areasfor waterfowl. Possible contamination of the dust with wastes might counterbenefits, however.

The need for gravel for activities in the 1002 area, if development occurs, is likely to be much less than that for earlier years of oil development in existing areasfor several reasons. First, gravel previously was used as the base for nearly all roadand pad construction, but today it is likely to be used only for permanent roads andpads because ice is the preferred construction material for temporary roads and pads(although the availability of adequate supplies of water is an issue for developmentof the 1002 area; see Water Resources and Wetlands , above). Second, gravelpreviously was mined to create reserve pits that held drilling muds and otherproduced wastes. Today, however, nearly all wastes are recycled, reused or disposedby underground injection, thus greatly reducing the need for reserve pits. Third, evenwhere used for drilling pads, the amount of gravel needed will be less because of thesmaller overall footprint of sites.

If development in the 1002 area followed the pattern at Alpine, it would be, if not entirely roadless, then road-reduced, compared to older developments. Alpineis not connected by road to older facilities, but the development includes a 3-mileroad (14.6 acres) and a 36.3-acre airstrip. (See Figure 4.) The latter forms part of theroad connecting the 2 pads. (132) The road andairstrip constitute about 52% of the totalpermitted acreage. If anything like this pattern holds in a modern scenario, it wouldrepresent a very substantial reduction in the miles of roads relative to earlierdevelopment.

However, it is not clear whether roadless development along the Alpine model would be economic in ANWR. According to a recent report, current leaseholders atthe Badami oil field (25 miles further east than the current easternmost permanentroad on the North Slope, and about 25 miles west of the 1002 area) are seeking apermanent road to field. (133) The leaseholdersargue that the leases are not economicwithout a year-round road. They seek state funding for the creation of this road. Ifsuch a road were built, the Badami area would represent the nearest staging area tothe 1002 area. Thus depending on whether the Badami road is built, development inthe 1002 area would require either construction of an additional 25 or 50 miles ofgravel road up to the refuge boundary, plus ice roads into the 1002 exploration sites. Proponents of state construction of the Badami road estimate that it would cost$50-60 million. Similarly, the three most extensive of 5 development scenarios inone recent model assume the presence of a road, parallel to a pipeline, as well as aconnector road to Kaktovik, in the 1002 area. (134) The absence of a gravel road linkedto currently developed areas would add to the cost of development of ANWR,potentially making some prospects uneconomic or adding to pressure to build gravelroads outside or inside the 1002 area. (On the other hand, a variety of factors,including higher oil prices, could mean that such costs would not be prohibitive.)

Caribou cows in existing oil fields with calves younger than a few weeks old (roughly, during June in most years) are known to avoid roads, pads, and other areasaround human activity; avoidance during this early period extends well beyond thefootprint of facilities, especially in early years of oil development. (135) (See also Caribou , above.) If road mileage were reduced, impacts on calves at this sensitivetime could be lowered. In ANWR, as calving ends in early June, and as thePorcupine Caribou Herd (PCH) tends to move to the coast and the western portionof the 1002 area for insect relief, roads or runways oriented across the path of travelcould be expected to disrupt the cows' movement more than those oriented roughlyparallel to it. If calving were displaced to the foothills, greater predation wouldapparently result; if foraging is displaced from prime areas, weight loss in cows couldresult in reduced survival rates in calves. (136) On the other hand even in June, someanimals (primarily males and yearlings) use pads, roads, and runways for insectrelief, and so may congregate in these areas. Later in the summer, when calves areolder, some cow-calf pairs may join them.

Consequently, interpretations of impacts based on the CAH must be made cautiously, due to the differing concentrations of the herds and the differingavailability of similar calving areas. (137) If roadmileage were limited, impacts wouldprobably be lowered. Conversely, if roads were not limited, or if economic necessitylater resulted in a change in this restriction, impacts on the PCH or other species,such as tundra swans (which tend to avoid nesting within 200 meters (about 650 feet)of roads), could be greater. (See also Biological Resources: Status and Effects ,above.)

Changing Footprint Estimate: 1987 vs. 2001. There has been considerable focus in recent years onthe reduced footprint that seems likely in any 1002 development, given advances inexploration, development, and production technologies, as well as the possibility ofadded congressional restrictions on environmental impacts. It may be useful tocompare those features considered in the footprint as described in the 1987 FLEIS,and how that might differ from a scenario predicated on modern technologies. In1987, the FLEIS described the assumptions built into its full development scenario:

For the sake of maintaining data confidentiality, [the full development scenario] shows a highly generalized placementof production and transportation facilities based on typical North Slope prospectcharacteristics for three localities within the 1002 area. This assumes successfulexploration in all three localities. Actual placement of oil production facilities andmarine facilities on the 1002 area, or location of the trunk pipeline from producingfields to TAPS Pump Station 1, depends upon site-specific geotechnical, engineering,environmental, and economic data that can be determined only after a specificprospect has been drilled, and a discovery made andconfirmed. (138)

The features considered in the FLEIS (on p. 99) are shown in Table 4, along with the estimate given at that time for the space or miles that would be occupied bythe feature in a full development as hypothesized by the FLEIS. The third columnshows, in qualitative terms, how modern technology would probably change theestimate provided in 1987, assuming the same full development scenario. Thehighlights of the comparison are as follows.

Some features would very likely or probably be reduced in total acreage or mileage; a few might even be eliminated. These are:

spur roads with collecting lines, connecting (fewer) pads in agiven oil field,

large permanent airfields (supporting an entire area, as atDeadhorse or Kuparuk),

permanent drill pads,

pits for gravel mines (borrow pits),

major river or stream crossings (given fewerroads),

main road paralleling main pipeline (possibly no such road),and

large central processing facility, as at Deadhorse or Kuparuk(possibly no such facility).

In other instances, new technology might actually increase the demand for acreage devoted to some features:

marine and saltwater treatment facilities, due to greater moderndemand for water (but possibly substituted with smaller plants for fields near coast),and

small permanent airfields, enough for each cluster of pads notsupplied by a permanent road.

Assuming the same full development scenario as the FLEIS, some features would probably remain the same:

main oil pipeline within the 1002 area,and

collecting lines from drill pads to main oilpipeline.

Finally, in some instances, it is simply unclear whether some features would be built:

marine port facilities, to off-load barges and other heavyequipment,

main road from marine facility.

In 1987, the FLEIS, in its hypothetical full development scenario, estimated that the total acreage covered would be 5,330 to 5,980 acres. A comparison with ascenario using modern technology suggests that the footprint (as defined by theFLEIS in its table) would be smaller, but perhaps not markedly so. If, as suggestedby Arctic Power (a pro-development group cited earlier), full development of the1002 area could be accomplished by building no more than 2,000 acres of facilities(scattered appropriately around developed oil fields, and assuming the same oil fieldsas the FLEIS), then either its definition of "footprint" is different from that used inthe FLEIS, or additional technological improvements may be required. It is the pads,airstrips, pad supports, and connector roads that are typically considered whendevelopment proponents have recently referred to limiting surface impacts to 2,000acres; other features, such as pipelines, gravel mines and the like typically are not. (139)

While the technologies used would be affected by economics, direction by Congress could specify higher or lower standards than those assumed in the table. Moreover, development on Native lands is not considered in the table, since differentstandards could apply. (For legal issues related to Native lands, see Alaska NativeLands and Rights, below.)

Table 4. Comparison of the Estimated Number and Area of In-place Oil-related Facilities: 1987 FLEIS and ModernTechnologies

Notes: Columns 1 and 2 are reproduced from the FLEIS with the modificationsnoted. Column 3 assumes the same hypothetical oil fields as the FLEIS, and the useof modern, Alpine-like technologies or better. The FLEIS table gave one figure forall main roads; this number is broken into two parts here, since an Alpine-likescenario is assumed not to have a main road for a pipeline, but such technology maynot necessarily preclude a marine facility or roads associated with it.

a Facilities which at least some observers would likely count in current proposals to restrict development to 2,000 acres (see text); unclear in some of the marked caseswhether any such structure would actually be built. Some argue that economics (costof long-distance transportation of heavy equipment or cost of repeated constructionof ice roads) could force eventual construction of a main road, especially if world oilprices do not increase.

b Facilities which most observers would likely count in proposals to restrict development to 2,000 acres (see text); unclear in some of the marked cases whetherany such structure would actually be built.

c In association with the Alpine development, the Corps of Engineers issued a permit to Nuiqsut Contractors for a 150-acre gravel pit, though some portion of the gravelmet needs in the village of Nuiqsut, and the size of the permitted pit may have beendesigned to allow expansion of the Alpine development to 2 additional satellite padsand associated connector roads. It is unclear precisely what size of gravel minewould have been required to construct only the current facilities at Alpine.Consolidation of gravel pits might occur, by digging fewer, deeper pits, but noinformation was found on this possibility.

Sources: U.S. Dept. of the Interior, Fish and Wildlife Service, Geological Survey, and Bureau of Land Management. Arctic National Wildlife Refuge, Alaska, CoastalPlain Resource Assessment. Report and Recommendation to the Congress of theUnited States and Final Legislative Environmental Impact Statement. Washington,DC, 1987. p. 99.

U.S. Army Corps of Engineers, Alaska District, Permit Evaluation and DecisionDocument, Alpine Development Project, Colville River 18 (2-960874). February 13,1998. p. 2.

U.S. Army Corps of Engineers, Alaska District, Colville River 17 (2-960869). Alpine Gravel Pit, Nuiqsut Contractors. June 23, 1997.

Effects on Tundra Surfaces. The 1002 area has a higher proportion of rolling terrain than the flat, pond-rich Prudhoe Bayarea. Vegetation may be exposed by the wind and damaged as it is run over,especially where more hilly terrain could make rolligon use difficult. In a moretemperate environment, vegetation might recover fairly quickly, but the intense coldand the freezing and thawing cycles of the arctic environment can make recoveryrates much slower. However, there is no research to show whether this type ofvegetational damage would affect foraging animals. (140)

The vegetation under ice roads and ice pads may be damaged, partly by compaction, but also by being delayed in its spurt of growth in the brief summer. Where all debris is removed and no spills have occurred, little effect has beenobserved. (141) Where insulation is used tomaintain an ice pad over a single summer,damage appeared to be confined to areas around the edges of the pad, where somethawing had occurred but no sunlight had reached the plants; evidence ofrecolonization began to appear in two growing seasons. (142)

Port and Offshore Activity. The FLEIS assumed that 2 ports would be built to support development in the 1002 area. It is unclear whether that assumption is still likely. If water for ice roads is at apremium, port development could reduce the need for long ice roads from the west. If port facilities were carefully sited and built offshore, and connected to shore viacauseways, and in turn to ice roads, they may prove attractive for the staging andmovement of heavy equipment. Offshore facilities may also be considered forplacement of heavy equipment such as water treatment plants, since such placementcould put them outside any 2,000 acre limit on surface occupancy (if Congress wereto impose such a limit). The reduction in surface impacts would be traded forpotential offshore impacts; in the FLEIS, the focus of impacts from causeways wason fish migration. If ports were to be located on Native lands, their regulation isunclear.

Aircraft Use. At Alpine, 6 to 8 aircraft, including large cargo planes, arrive daily. (143) Reliance on aircraft for summertransport is essential if connecting roads are to be eliminated. Effects on birdpopulations vary. Tundra swans appear to be affected only minimally by aircraft. (144) According to the FLEIS (p. 132), snow geese are "highly sensitive to aircraftdisturbance" from flights at 100 ft to 10,000 ft, and at 0.5 to 9 miles away. The geeseappeared to habituate after several passes by helicopters or fixed wing aircraft. Thereport also noted evidence that snow geese are disturbed by traffic, noise, or otherhuman activities and respond by taking flight en masse . Regardless of source,sufficient disturbance would reduce available feeding time, weight gain, and resultingvigor for the fall migration. The FLEIS cited control of aircraft traffic as potentialmitigation, but the development design examined in the FLEIS did not contemplatethe heavy reliance on aircraft (and assumed that only 2 large permanent airfieldswould be built under full development) that would be essential if road mileage weresubstantially reduced.

Use of Resources by Non-Natives: Status and Effects (145)

The village of Kaktovik on Barter Island (see Figures 1 and 4) is the only currently occupied human settlement in the coastal plain of ANWR. Aside fromBarter Island, topographic maps of the area (146) show that it also contains 5 cabins, 2ruins, 2 landing strips, 2 towers, 1 grave site, and 6 tractor trails. Of these 18features, all are within 5 miles of the coast, except for one trail. Some of these sitesare the remains of facilities run by the Defense Department as part of the DistantEarly Warning Line (DEWLine; see below). In addition, as discussed below, theremains of the drill pad and a protruding pipe mark the site of a closed exploratorywell on lands of the Kaktovik Inupiat Corporation (KIC well; see Alaska NativeLands and Rights , below).

DEWLine and Kaktovik. Startingin the 1950s, the Defense Department constructed a system along the arctic coasts ofAlaska and Canada to provide early warning of a Soviet attack. (147) Barrow served asa base for construction. Kaktovik was designated as the site of a major installation,resulting in three relocations of the village to accommodate the military facility, andconcentration of the previously more scattered Inupiat seeking job opportunities. Intermediate stations along the coast in what is now the ANWR 1002 area wereconstructed (from west to east) at Brownlow Point on the Staines River; CamdenBay, about 30 miles west-southwest of Kaktovik; and Beaufort Lagoon, about 30miles southeast of Kaktovik. (148) Only thestation at Kaktovik remained open in 1986.USGS maps (cited above) indicate one tower, one landing strip, and both a landingstrip and tower at these three sites respectively. According to a 1986 report,"[a]bandoned materials include numerous rusting steel fuel drums located primarilyat Camden Bay and Beaufort Lagoon, but also scattered along the coast and inlandwithin the boundaries of ANWR." (149)

Recreation Visits. There have never been large numbers of recreational visits to this very remote Refuge. The peakwas 886 visiting the entire Refuge in 1990, when development of the 1002 area wasmost recently broadly debated; visitor numbers for 2001 are also high. (150) Trips,starting from Fairbanks, usually cost $2,000-$3,000, and may last 1 or 2 weeks. Usually, small groups of visitors are ferried in light planes to a river bank where theyare dropped off, traveling with or without professional guides. Either way, they walkalong or raft one of the many rivers flowing northward to the coast where anotherplane picks them up, often followed by a stop in Kaktovik before returning south toFairbanks. In the right season, the migrating caribou are part of the attraction and,in all seasons, so is the solitude. One outfitter stated, "Where else can you spend 10days floating a river, and not see anyone at all?" (151) In 2001, with the increase incontroversy over the Refuge's coastal plain, the number of visitors has increased, butstatistics are not yet available. Under current conditions, given the remoteness of theRefuge's coastal plain, the solitude seems likely to remain one of the principalattractions for visitors, while migrating caribou and other species will attract others.

Migratory Birds: Hunting and Birdwatching. As noted below, birds are used by Inupiatsubsistence hunters. Beyond the immediate ANWR area, use falls into 2 additionalcategories: direct taking by hunters in many states of a number of species, and "use"by birdwatchers in other states. It is difficult to assess the economic impact of suchuses and tie them to populations breeding or staging for migration in the 1002 areaspecifically, since these species breed and stage in other places as well. Thetremendous number of snow geese breeding elsewhere, but staging in the 1002 area,make the Refuge especially important to hunters of this species. (A map showingannual migration routes of some birds nesting in ANWR is at http://www.r7.fws.gov/nwr/arctic/birdpost.html .)

Use of Resources by Alaska Natives

Alaska Natives are both participants in and subjects of the debate over ANWR. Alaska Natives include Eskimos (Inuit and Yupik), Aleuts, and American Indians,and make up over 15% of Alaska's population. Alaska Natives participate in thedebate through many different groups and organizations. They are members of thestate's 229 federally-recognized Indian (152) tribes,which are political entities; they arealso citizens of the state and of their boroughs and municipalities (where organized);and they are shareholders in Native village and regional corporations, which in somevillages and regions may include both non-profit and for-profit corporations. (Seebox: Corporations and Boroughs , for a discussion of their origins.)

Among and within these groups and organizations, there is disagreement over whether to open ANWR and the 1002 area to oil and gas exploration anddevelopment.

One set of Alaska Native groups and organizations favors oil and gas development in the 1002 area. This set is centered around North Slope Inupiat, whoare Alaskan Inuit. In northern Alaska, this pro-development set includes (1)Kaktovik, the only Native village in ANWR, and its municipal government; (2)Kaktovik Inupiat Corporation (KIC), the Native village corporation; (3) Arctic SlopeRegional Corporation (ASRC), the Native regional for-profit corporation for NorthSlope Inupiat; and (4) the North Slope Borough government, the organized boroughwithin which Kaktovik is located.

Another set of Alaska Native groups and organizations opposes oil and gas development in the 1002 area. This set is centered around a group of Gwich'inIndian villages. The Gwich'in (also known as Kutchin) are Athabaskan Indians andare situated in east-central Alaska and neighboring areas of northwestern Canada. The anti-development set includes (1) two Gwich'in villages, Venetie and ArcticVillage, which are located in the Doyon region (an Athabaskan Indian Native region,which overlaps the southern portion of ANWR), and the two villages' tribalgovernment, called the Native Village of Venetie Tribal Government; (2) theGwich'in Steering Committee, composed of Venetie, Arctic Village, and 13 otherGwich'in villages of Alaska and Canada; and (3) the Native regional non -profitcorporation for the Doyon region, the Tanana Chiefs Conference, Inc. However, theNative regional for -profit corporation, Doyon, Ltd., favors oil and gas developmentof the 1002 area. (153) Unlike Kaktovik, theGwich'in villages are not within anorganized borough.

The pro- and anti-development sets of Alaska Natives are of course not monolithic. Not all Inupiat or North Slope Borough residents support oil and gasdevelopment in ANWR or the 1002 area, and not all Gwich'in or Athabaskansoppose it. Other local, regional, statewide, and national Native and Indian groupsand organizations support the position of one set or the other. The Alaska Federationof Natives (AFN), the major statewide Alaska Native organization, favors oil and gasdevelopment in ANWR and the 1002 area. Some Native critics of the AFN positionclaim that the organization tends to represent the position of the for-profit Nativecorporations, who are generally more supportive of 1002 development. The NationalCongress of American Indians (NCAI), a major nationwide organization representingIndian tribes, opposes oil and gas development in ANWR, but many Alaska Nativeentities are not NCAI members.

The disagreement between the two sets of Alaska Natives often centers on the effects of energy development on subsistence resources, especially the Porcupinecaribou herd. Both Kaktovik and the two Gwich'in villages make significant use ofthe PCH. (See also Biological Resources: Status and Effects: Caribou , above.) Inboth Inupiat and Gwich'in cultures, the millennia of dependence on subsistenceanimals have created a complex set of practices and beliefs linking well-being andidentity to subsistence in general and to certain animals in particular. Threats to theseanimals may thus be seen as threats to the very basis of Inupiat and Gwich'incultures.

The disagreement is also greatly affected by ANILCA, which had several provisions that ultimately allowed KIC to acquire surface lands -- and ASRC toacquire subsurface rights under these KIC lands -- in the 1002 area and elsewhereon the coastal plain within ANWR. (For fuller discussions, see Alaska NationalInterest Lands Conservation Act , above, and Alaska Native Lands and Rights ,below.) An oil or gas discovery under KIC/ASRC land would enormously increaseASRC revenues and hence the material benefits to Inupiats.

Inupiat Use of ANWR and the 1002 Area. Kaktovik, the only Native village in ANWR, depends greatlyfor subsistence resources directly on the 1002 area, the coastal plain in general, andother parts of ANWR, as well as on marine resources off the coast of ANWR. Residents of the Inupiat village of Nuiqsut, about 175 miles west of ANWR, alsomake some subsistence use of the 1002 area. Nonetheless, Kaktovik is the onlyAlaska Native village whose residents depend so much on subsistence resourcestaken on the 1002 area. The FLEIS, citing studies from the late 1970s and early1980s, found that most Kaktovik households depended on hunting, fishing, andgathering in ANWR for food, and that caribou, Dall sheep, and bowhead whales(taken off the coast of ANWR) were their chief sources of meat, although they alsohunted numerous other types of mammals, birds, and fish. Whaling has such greatcultural and subsistence importance among Inupiat -- especially Kaktovik, which,under special rules for subsistence, is allowed to take one to three endangeredbowhead whales a year -- that they oppose offshore oil and gas exploration becausethey fear it may endanger their whaling. Kaktovik's take of caribou was estimatedin the FLEIS to be about 100 caribou a year, 50-80% from the PCH and the rest fromthe Central Arctic Herd (CAH) to the west. Most Kaktovik caribou harvesting occursin summer, during the PCH postcalving time, and much of the harvest is in the 1002area.

Some recent observers have suggested that Kaktovik has become somewhat less dependent on subsistence hunting, even though the activity is still significant. Theysuggest that paid employment has become so important that it restricts time forsubsistence hunting. (154) Statistics from the 1990census show that 72% of Kaktovik'sadults were in the labor force. (155) Like otherArctic Slope villages, Kaktovik hasbenefitted from the North Slope Borough's programs, which has funded a modernhigh school, housing, street lighting, a community hall, a power plant, and othercapital improvements. (156) Kaktovik alsobenefits from state government activitiesfunded by North Slope oil development.

Many Kaktovik residents worry that a reduction in oil and gas development and production will reduce their present standard of living, and most of them favor oilexploration and development in the 1002 area. (157) Moreover, because they areshareholders in KIC and ASRC, because they would be the closest Native village tooil development in the 1002 area, and because exploration of the 1002 area may evenreveal oil in lands where ASRC owns the subsurface rights, Kaktovik residents mightbe expected to benefit more than any other Alaska Natives from 1002 oil and gasdevelopment. Moreover, through the actions by which ASRC acquired subsurfacerights to KIC lands in ANWR (see Alaska Native Lands and Rights , below), ASRCwas found by arbitration to be exempted from ANCSA's requirement to sharesubsurface revenues with other regional corporations, so dividends to ASRCshareholders, including Kaktovik, might be even greater.

Kaktovik residents and other Inupiat supporting oil and gas development in the 1002 area argue that they are as concerned about the dangers to subsistence as theopponents, but that they are experienced in caring for wildlife and the environmentand believe that development can be carried out without endangering subsistenceanimals, including especially the PCH. Alaskan Inupiat who support ANWR leasinghave in their turn opposed or remained cool to offshore leasing on the grounds thatit might harm or drive off the bowhead whales on which they depend for cultural andsubsistence reasons. (158) That is, both sets ofNatives have opposed leasing in areascommonly used by the resources on which they depend.

Gwich'in Use of ANWR and the 1002 Area. The Gwich'in do not hunt within the 1002 area. They takecaribou from the Porcupine herd in areas south of the Brooks Range, inside andoutside ANWR, during the fall, winter, and spring. According to the FLEIS, ArcticVillage in Alaska and Old Crow in Canada are the two Gwich'in villages mostinvolved in caribou harvesting (recent information suggests Fort McPherson inCanada may now have a larger harvest than Old Crow (159) ). Other Alaska Gwich'invillages hunting PCH caribou are Venetie, Fort Yukon, and Chalkyitsik; some ofthese also trade for much of their caribou meat. These Gwich'in villages harvestmore caribou than does Kaktovik. Caribou is the main food source for ArcticVillage, Venetie, and other Gwich'in villages. Arctic Village, according to theFLEIS, harvested 200-1,000 caribou per year in the 1970s, as did Old Crow, whilethe other Alaskan Gwich'in villages together took 300-400 a year and the otherCanadian villages 100-2,100 a year. The Gwich'in also harvest other animals as wellas fish and birds. For the Gwich'in, caribou are by far the most culturally importantsubsistence animal. They speak of themselves as "people of the deer," andtraditionally the Gwich'in believed that people and caribou each had a bit of theother's heart in theirs. (160)

Arctic Village and Venetie have benefitted from Alaska's oil and gas development, but to a much lesser extent than Kaktovik. Arctic Village and Venetieelected, under ANCSA, to forego regional corporation shareholdings and take privatefee title to their 1.8-million-acre reservation. After 1971, the reservation was firstheld in joint ownership by the two villages' village corporations, but in 1979 thecorporations transferred title to the villages' tribal government, the Native Village ofVenetie Tribal Government (the land was not, however, restored thereby to the statusof an Indian reservation). Hence, because they had no shareholdings in Doyon, Ltd.,the regional for-profit corporation, Arctic Village and Venetie residents have notshared in any dividends flowing to Doyon shareholders. Moreover, the AlaskanGwich'in villages are not in an organized borough, so their benefits from North Slopedevelopment have come chiefly through state government activities. Theircommunity facilities are less prosperous and extensive than those of North SlopeBorough villages. (161) Paid employment inArctic Village and Venetie is not aswidespread as it is in Kaktovik. Census statistics for 1990 show that 54% of ArcticVillage's adults and 48% of Venetie's adults were in the labor force. (162)

The Gwich'in argue that oil and gas development in the 1002 area will endanger the PCH by threatening the herd's calving areas, and that because of their dependenceon the PCH they will suffer subsistence loss and harm to their culture. When criticsfrom the pro-development set of Alaska Natives argue that Arctic Village andVenetie in the 1980s sold oil development leases (ultimately unsuccessful) on theirlands, and that the villages seemed unconcerned about endangering the PCH then, theGwich'in respond that the lease areas were not calving or postcalving areas and thuswere not as sensitive for the herd's survival.

Alaska Native Lands and Rights. Alaska Natives have various property interests related to the issue of oil drilling inANWR that may present complex legal issues for refuge management if the coastalplain is opened to oil development. (163) In 1971,Congress enacted ANCSA to resolveall Native aboriginal land claims against the United States. ANCSA provided formonetary payments and also created village corporations that received the surfaceestate to approximately 22 million acres of lands. Village selection rights includedthe right to choose the surface estate in a certain amount of lands within the NationalWildlife Refuge System, in which case, under ï¿½22(g) of ANCSA, the lands were toremain subject to the laws and regulations governing use and development of theRefuge. (164) KIC received rights to threetownships (165) along the coast of ANWR.

ANCSA also created regional corporations which could select subsurface rights to some lands and full title to others. Subsurface rights in National Wildlife Refugeswere not available, but in-lieu selections to substitute for such lands were provided.

Section 1431 of ANILCA (1980) followed up on the previously enacted ANCSA and gave KIC rights to make certain selections and to enter into certainexchanges. ANILCA (ï¿½1002(b)) also defined the 1002 area by reference to a mapdated August 1980, which has been interpreted as excluding the KIC lands. As aresult, Kaktovik has its previous surface rights to three townships along the coast thatare outside the 1002 area and one township inside that area. Geographically , the KIClands are all on the coastal plain and are indistinguishable from surrounding lands intheir importance to wildlife. However, all of the Kaktovik lands are within theRefuge as a whole and hence are subject to the restrictions on oil and gasdevelopment of ï¿½1003 of ANILCA and, under ï¿½22(g) of ANCSA and ï¿½1431(g) ofANILCA, they are subject to the laws and regulations governing the Refuge.

Section 1431(o) of ANILCA also authorized the Arctic Slope Regional Corporation (ASRC), whose shareholders are Inupiat, to obtain rights in the Refugethrough exchanges, if lands in the National Petroleum Reserve-Alaska (NPR-A) orANWR within a certain proximity to village lands were ever opened for commercialoil and gas development within 40 years of the date of ANILCA. However, undera different ANILCA exchange authority (ï¿½1302(h)), an exchange was executed onAugust 9, 1983, between then Secretary of the Interior James Watt and ASRC. Under this "Chandler Lake Agreement" the United States received certain ASRClands in the Gates of the Arctic National Park and ASRC received the subsurfacerights to the KIC lands -- which, it will be recalled, are three townships within theRefuge on the coastal plain but outside the 1002 area, and one township within the1002 area. Congress appears to have ratified the Agreement in later legislation ( P.L.98-366 , ï¿½5; 98 Stat. 468, 470-471).

Also as part of the Chandler Lake Agreement, ASRC was given the contractual right to drill up to three exploratory wells on the KIC lands that are outside the 1002area within a certain window of time. One test well was drilled, but the results ofthat well have been kept confidential.

In addition to the KIC and ASRC Native lands, there are also some individual Native "allotments" within the coastal plain. These typically are surface rightsbelonging to a particular individual. The conveyance of some lands has beencompleted; other lands have been applied for, but final rulings have not been made. BLM currently is compiling the exact locations and acreage of these allotments, butpreliminary data indicate that these allotments and applications appear to be clusteredalong the coast and near Sadlerochit Spring, both of which are important wildlifeareas. (See Special Areas , below.) Allotments already conveyed total over 10,000acres. Use of allotments appears not to be subject to ï¿½22(g) ANCSA controls, norto other restrictions or regulations unless Congress enacts same.

The 1983 Agreement and its appendices address oil exploration and development on the KIC/ASRC lands and their terms will govern the developmentand oil production on those lands unless they are superseded by statutory provisions. Appendix 2, part 9 of the 1983 Agreement states that development and productionactivities undertaken on ASRC lands "shall be in accordance with the substantivestatutory and regulatory requirements governing oil and gas exploration, includingexploratory drilling, and development and production that are designed to protect thewildlife, its habitat, and the environment of the coastal plain, or the ASRC Lands, orboth." Other provisions in the Agreement purport to survive subsequent legislation(which is to say they likely would unless Congress acts to expressly negate them),and would affect the applicability of any environmental controls Congress mightotherwise enact. If Congress repeals the current prohibition against oil developmentin the Refuge, development could occur on the more than 100,000 acres of Nativelands that are comprised of KIC/ASRC lands and individual Native allotments.

Canadian Interests in Traditional Native Rights. The Canadian government has consistently opposeddevelopment in the 1002 area, citing risks to the PCH and consequently to theGwich'in people found on both sides of the international border. (166) It also points toa 1987 U.S.-Canada "Agreement on the Conservation of the Porcupine CaribouHerd" under which each nation agreed to protect the PCH and its habitat. If onecountry plans to carry out an activity that may result in significant long term adverseimpacts on the PCH, the other is to be notified, and given the opportunity to consultbefore any final decision. Canada cites evidence of its commitment to the herd in itscreation of Ivvavik and Vuntuk National Parks on the Canadian side, which preventdevelopment in important calving and migration areas on its side of the border. Theembassy website notes: "... the 1002 Area of ANWR contains the core of thecritically important calving area for the Porcupine Caribou Herd, and Canada isconvinced that only permanent protection of the plain will assure the herd'slong-term sustainability." (167)

Development proponents often claim that the Canadian position borders on hypocrisy, since a significant portion of the PCH range in Canada was leased for oiland gas development in decades past. But commercial quantities of hydrocarbonswere not found, and leases have been allowed to lapse. Thus, this argument goes,Canadian opposition arose only after it became clear that commercial quantities ofoil were not found in the PCH range in Canada. In response, Canadians (andGwich'in on both sides of the border) argue that the portion of the calving area on theU.S. side is the most frequently used, and that at the time the Canadian leases wereoffered, the importance of the proposed leasing areas to caribou was unclear. Indeed,some Canadian industry officials now complain of government hostility todevelopment in the northern areas of the country, based on what they perceive asoverzealous environmental concerns.

Reclamation Issues After Development

If the 1002 area were opened to exploration, and if energy development did occur, then even under the most stringent requirements for environmental protection,a major question would remain: what should be done after the oil and/or natural gasare depleted? The FLEIS seemed to be of two minds. It speaks of "rehabilitation" (168) and says that effects on wildlife could be "very long-term [but] would not beconsidered irreversible once the life of the producing fields in the 1002 area wasover." (169) Yet it also speaks of "the long-termcommitment of this area to industrialuse based on oil and gas development" (170) andof "long-term changes in the wildernessenvironment, wildlife habitats, and native community activities currently existing,resulting instead in an area governed by industrial activities." (171) And it notes that"complete restoration [of disturbed sites] may not be possible, inasmuch asconstruction activities dramatically alter surface features which determine plantspecies composition in the natural habitat." (172) These comments raise the question asto whether the 1002 area, upon initiation of development, remains an integral part ofa wildlife refuge with a temporary (albeit long) interlude of industrial activity, or anarea whose fundamental purpose has changed, but continues to lie within theboundaries of a national wildlife refuge.

Whatever development might be permitted, should it be seen as essentially temporary -- serving immediate energy needs and then being removed, followed byrestoring the 1002 area habitat to a condition as near as possible to itspre-development state? The answers to questions about rehabilitation of the 1002area, and the confidence in the response, will crucially affect not only anydevelopment of the area, but also will likely affect views on whether the 1002 areashould be opened to exploration and production in the first place.

Conditions for Rehabilitation. Total rehabilitation after development could be defined as restoration to a state whicha trained ecologist could not distinguish from the original ecosystem. So defined,total rehabilitation of the 1002 area might require centuries and could be impossible,since it might be confounded by other long-term changes: global warming, changesin sea level, expansion or contraction of the polar ice cap, changes in the northernpolar hole in the ozone layer or in CO 2 levels, etc. On the other hand, if "substantial"rehabilitation were defined as restoration of the area to a state approximating theoriginal, with a full complement of pre-development species (if not all atpre-development population levels), so that at least untrained observers could noteasily or frequently detect human influences, then such a level might be anachievable but very difficult goal. Such a goal would probably require not merely theremoval of structures and equipment and stringent pollution control, including thesafe disposal of hazardous and other wastes, but also the return to pre-developmenthuman population levels, the removal of gravel roads, and the restoration of nativevegetation.

As yet no major operating oil fields anywhere are known to have been shut down permanently, and many have kept producing long beyond initial expectations,due to enhanced recovery techniques. Thus there is little relevant experience to guidea total closure of potential 1002 area development. Interestingly, in 1988 ARCOAlaska said with respect to Prudhoe Bay that "Large scale rehabilitation/restorationis neither currently practical nor required by Federal or State regulations." (173) Thus,rehabilitation and restoration could be an important feature in congressional debateconcerning the 1002 area.

Human Population Levels. In an oil field, human population levels reach a peak during the construction phase, once aproducible field has been confirmed. In 1987, the FLEIS estimated 1,500 workersat the peak of construction. (174) After majorconstruction projects are completed,personnel levels drop to those needed for operations -- perhaps a few hundredworkers -- or for smaller construction projects such as the addition of new drill pads.

Once energy production ceases, it is hard to imagine what incentives would hold workers in the 1002 area, since few other industries seem likely to seek the high costof North Slope operations. An important exception would be Alaska Natives,presumably those in Kaktovik especially. With an increasing reliance on a monetaryeconomy, both for personal and local government income, there may be pressure tomaintain development to support (possibly subsidized) alternative local industries,including tourism. The North Slope Borough has stated that its support for 1002development stems partly from a concern over declining Prudhoe Bay revenues,which are used for schools, fire stations, and other facilities. Over the years, littledebate has focused on the post-development status of permanent human populations -- a reflection, in part, of a lack of debate on the long-term fate of the 1002 area ingeneral.

Removal of Roads and Gravel Structures. There is a striking distinction between the accesspolicies around development areas in the North Slope versus those in the 1002 areaas it is currently managed. In the former, a road network provides relatively easytransportation, but its use is largely restricted to authorized persons. In the latter, thelack of roads requires aircraft for most travel, but the journey is relativelyunrestricted. If Congress decides to authorize 1002 area development, the fate ofroads could have far-reaching environmental effects. (175)

Under the scenario for development based on current technologies, fewer roads would be built than with older technology. However, if oil prices fall, or operatingcosts rise, the cost of reliance on expensive aircraft might make construction of haulroads seem attractive, especially for movement of heavy equipment. In addition, itis unclear whether any restrictions on road construction would apply to Native lands,and still less whether requirements for road removal would apply on Native lands. In any event, under all current scenarios, it is likely that at least some roads would bebuilt. If these are in unconnected small segments, as at Alpine, their effects onhuman access would probably be quite small. Experience in national parks, nationalforests, and national wildlife refuges has shown that reducing human access canbenefit sensitive species, in such matters as preventing illegal hunting, or reducingdisturbance of nesting sites, calving areas, or spawning streams.

Removing millions of tons of gravel from roads (and pads) -- some of it contaminated with oil or other toxins -- would be expensive, but so would continuedgravel maintenance to preserve culverts and other flow control measures. Costswould likely prevent either the total removal of roads once production ceased, or theindefinite maintenance of the full network. Unless otherwise specified or required,rehabilitation of gravel structures would likely include removal of culverts andbridges to ensure natural drainage, grading and scoring of the road or pad surfaces,and seeding of grasses and forbs. Care would be required to minimize erosion,sedimentation, and ponding. Probably, only if there were a need for gravel elsewherewould some portion of the gravel be removed from abandoned roadbeds.

Thus, if leasing is allowed and production is achieved, there appear to be several options, depending on the gravel structure and congressional policy. First, some maywish to see certain useful structures retained even if all production ceases. Examplesof such structures are water treatment plants and some airfields. Others, such as drillpads, seem unlikely to be useful in a post-production setting, and would likely bepriority candidates for removal. Finally, for roads, there appear to be two basicoptions: maintain some roads while rehabilitating rights of way for the rest; orabandon all of the roads and rehabilitate the rights of way in an effort to return topre-development conditions. If development were to result in increased tourism ( e.g. ,visitor centers or visitor cabins), there might be considerable pressure to keep at leastsome roads open, especially if tourism were seen as a continuing source of incomefor Natives after development ceased. Continuing access could be expected toprolong habitat disturbance and delay rehabilitation.

Restoration of Native Vegetation. Once production ceased, restoration of the correct species and adequate numbers ofnative plants would be a key factor in restoration of animal populations. There is akey distinction between the 1002 area and the developed areas to the west: the rollinghills of much of the 1002 area support more shrubby, woody vegetation, while thewetlands of the developed areas are dominated by herbaceous vegetation. Thus,restoration experience around Prudhoe Bay and environs may provide usefultechniques for only part of the 1002 area. Moreover, recent research has shown that"none but the smallest and wettest patches on level ground ... recovered unassistedto something approaching their original state in the medium term (20-75 years)." (176) In larger, drier, or more sloping sites, revegetation (where it occurred) often resultedin a species composition that differed from the original state. "A wide range of smalldisturbances resulted in alternative vegetation states with reduced speciesdiversity." (177) If roads and other gravelstructures were not removed, revegetation onthese structures would be particularly difficult, due to drying, loss of seeds, anderosion. On the other hand, revegetation at the edges of the pads would be lessdifficult, due to wetter conditions and protection from wind.

Site Phase-Out. The requirement to remove all facilities and to rehabilitate the site is generally a term or condition ofa lease sale. Thus far, there is relatively limited experience in the arctic from whichto judge the effectiveness of this requirement. North Slope fields that have beendeveloped are still active and only a relatively small number of drilling sites havebeen abandoned. These abandoned sites include a few artificial drilling islands in theBeaufort Sea and a number of onshore sites, several of which are in the NPR-A. Atthe abandoned island sites, facilities and slope protection have been removed and theartificial islands were left to erode away. The NPR-A example is particularlyrelevant to ANWR development.

Site Cleanup in the NPR-A. Before the recent return to NPR-A prospects, there were two rounds of drilling in theNPR-A. The most recent was between 1974 and 1981, when 28 wells were drilledin a federal program under the supervision of USGS. In that round, each exploratorysite included a drill pad, airstrip, and source of water supply. Buildings andequipment were located on the drilling pad, often on pilings to prevent thawing of thepermafrost. The pad design included a fuel storage pit, a reserve pit for drilling fluidsand cuttings, and a flare pit.

Cleanup included removing miscellaneous debris, cutting off pilings below ground level, and filling the pits by grading off and contouring the gravel pads. Thenrevegetation of the sites was attempted using grass seed mixtures and fertilizer. Theprogram for revegetating the pads met with mixed success. Generally, the leastsuccess was found at some coastal sites where pads were constructed of relativelybrine-rich clay silts excavated from the reserve pits. Considering the somewhatexperimental nature of the revegetation program and the variability of individualsites, revegetation was thought to progress at reasonable to excellent rates by 1986. (178) In the interim, pad construction techniques elsewhere on the North Slope haveevolved, and exploration pads such as those in the USGS program at NPR-A wouldbe built of ice.

However, as with roads, the return of vegetation is not identical to recovery of the tundra to its previous condition. Even if organic matter is left intact after adisturbance, "significant and essentially permanent change [in] both vegetation andsoils" may still occur. (179) Nonetheless, amanager may be satisfied if a site simplyreturns to a plant-covered, stable surface. (180)

Site Development and Facility Removal. Facility removal really begins as soon as drillinga well is finished. At that point, the drill rig is removed, leaving only pipe valves andgages for each well and any operational facilities on the pad. When a field isdepleted or a well is abandoned, the well is plugged with cement plugs at variouspoints and at the surface. Surface facilities are removed, and the pad would begraded and revegetated. The FLEIS full development scenario estimated that 5,650acres scattered around the 1.5 million acre 1002 area would be physically coveredwith gravel (less than 0.4%). As noted previously (see Land and Gravel Use , above),somewhat less would probably be covered with the use of modern technologies,though these features would still be scattered in various spots around the 1002 area. Until the affected areas were restored and revegetated, the impacts would remainvisible (at least as long as they were not concealed by snow and darkness). Asdifferent requirements for rehabilitation might apply to Native lands, their inholdingsmight retain various structures or pads might remain for a considerably longer period.

Retention of Facilities: the Other Option. The alternative to removing all drilling pads, roads,buildings, airstrips, and other facilities would be a judgment that some of thedevelopment may be of longer term and/or broader benefit than the oil and gasdevelopment in the immediate area. In remote regions of a hostile environment,emergency shelters can be life-savers. A building or other recognizable structure,such as a road or airstrip, in a featureless region can serve as a visual aid tonavigation, which can also save lives. In addition, if it were necessary to re-developa location, it would likely be less disruptive to the environment to reopen a closedfacility than to construct a new one. In any event, carrying out the actual restorationrequirements in ANWR would probably not arise for many years; thus a tensionmight exist between those preferring that a goal of restoration be made a conditionof development and those preferring that the decisions on some facilities beconsidered on a case-by-case basis later. In the later case, it could be difficult toenforce a cleanup measure that was not originally specified as regulation, or a termor condition of the lease.

Legislative Issues

The ANWR debate has continued for such a long time that most issues have along history of debate. Some of the issues that have been raised most frequently aredescribed briefly below. (For specific legislative provisions of current bills, see CRS Issue Brief IB10111.)

Alternatives to Developing 1002 Area

Opponents of energy development in ANWR argue that a variety of other options could provide the energy equivalent of most projections of ANWR oilproduction, especially if one assumes the high energy prices necessary to reach themost generous assumptions regarding Refuge resources. More succinctly, the highenergy prices that would make Refuge oil economic would make a variety of otherenergy options attractive as well. Recognizing the great importance of oil in thetransportation market, opponents most frequently mention increases in fuel economyfor cars and light trucks, and production of ethanol from cellulose. (181) Increases inefficiency in other sectors (heating and cooling especially) are also mentioned. Others have argued that developing ANWR oil, thereby continuing a nationalreliance on TAPS, is harmful to U.S. energy security, especially with respect toterrorist attacks. One author called TAPS "among the gravest threats to U.S. energysecurity," due to the vulnerability of the pipeline, lack of alternatives if it wereseriously damaged, and the difficulty of repairing the aging pipeline. (182)

Addition ofany ANWR oil would continue that risk, in this line of reasoning.

Consequently, for not only environmental, but also economic and security reasons, opponents of ANWR oil development believe that other options (especiallyin the transportation sector) are preferable to development of the Refuge. Proponentsdownplay the economic rationale and practicality of the alternatives, but have onlyrecently begun to focus on continued reliance on TAPS as a security argument.

Exploration Only

Some have argued that the 1002 area should be opened to exploration first, before a decision is made on whether to proceed to leasing. Those with this viewhold that with greater certainty about the presence or absence of energy resources, abetter decision could be made about whether to open the coastal plain for full leasing. This idea has had relatively little support over the years. For those opposed to energydevelopment, the reasons are fairly clear: if there were economic discoveries, supportfor further development might be unstoppable. And even if exploration resulted inno or insufficient economic discoveries, any damage from exploration ( e.g ., soilcompaction, erosion, or altered drainage patterns) would remain.

Those who support leasing see unacceptable risks in such a proposal. First, who would be charged with carrying out exploration, who would pay for it, and to whomwould the results be available? Second, if no economic discoveries were made,would that be because the "best" places (in the eyes of whatever observer) were notexamined? Third, might any small discoveries become economic in the future? Fourth, if discoveries did occur, could industry still be foreclosed from developingthe area, or might sparse but promising data elevate bidding competition tounreasonable levels? Fifth, if exploration were authorized, what provisions shouldpertain to Alaska Native lands? In short, various advocates see insufficient gain fromsuch a proposal. In the 108th Congress, no bill supporting exploration only has beenintroduced.

Compatibility with Refuge Purposes

As a general rule, activities may be allowed in federal wildlife refuges if they are compatible with the major purposes of the National Wildlife Refuge System andwith the purposes of any particular unit of that System. (183) Long-term uses of a refugemay be allowed if compatible with all of the purposes of the particular refuge and theSystem. (184) The mineral leasing laws apply tolands within the System to the sameextent they applied prior to October 15, 1966 (the date of the first general refugemanagement statute), unless lands are subsequently withdrawn. (185)

A new compatibility policy and new regulations were published on October 18, 2000, effective November 17, 2000. (186) "Compatible use" is defined as "a proposedor existing wildlife-dependent recreational use or any other use of a national wildliferefuge that, based on sound professional judgment, will not materially interfere withor detract from the fulfillment of the National Wildlife Refuge System mission or thepurpose(s) of the national wildlife refuge." Lands within Alaska refuges are subjectto the regulations on compatibility.

More specifically as to mineral leasing, Public Land Order 2214, which withdrew lands to create the original Range, withdrew the lands from operation ofthe mining laws, but not the mineral leasing laws. Congress, of course, in ï¿½1003 ofANILCA reserved to itself the decision of whether to lease the coastal plain area. Any legislation that ultimately permitted oil and gas leasing in that area wouldanswer the question of compatibility by authorizing leasing, and probably wouldexpressly address the compatibility of that leasing, and might set limits on suchactivities.

Compliance with NEPA

Some question whether the existing FLEIS, prepared in 1987 in compliance with the National Environmental Policy Act (NEPA), is adequate to supportdevelopment, or whether an updated or new EIS needs to be prepared. A court in adeclaratory judgment action in 1991 (187) heldthat the Department of the Interior shouldhave prepared a Supplemental Environmental Impact Statement (SEIS) at that timeto encompass new information about the 1002 area in connection with theDepartment's recommendation that Congress legislate to permit development. Therefore, it is likely that either an SEIS or a new EIS would have to be preparedbefore development, unless Congress changed or waived this requirement.

Environmental Direction

Congress could choose to leave environmental matters to administrative agencies under existing laws. Alternatively, Congress could impose a higherstandard of environmental protection because the area is in a national wildlife refugeor because of the fragility of the arctic environment, or it could legislate a lowerstandard to facilitate development. One issue would be the use of gravel and waterresources essential for oil exploration and development. Other potential legislativeissues include extent and regulation of gravel structures, gravel mines, or otherdevelopment; limitations on miles of roads or other surface occupancy; the adequacyof existing air and water pollution standards; research needs; monitoring; preventionand treatment of spills; the adequacy of current waste disposal requirements;prohibitions on landfills; aircraft overflights; reclamation; and concerns over sharedliability that can make consolidation of facilities unattractive to oil companies.

Of the various bills introduced over the years, few had provisions that mandated specific technologies. Rather, the focus was on requirements to use "best available"or "best practicable" technologies or similar phrases. In recent debates on the issue,limitations on surface occupancy have been also considered. These limitations aregenerally focused on those features covered by gravel structures ( e.g. , drill pads,runways, and connector roads). Debates over surface occupancy have tended to omitfeatures that require no laying of gravel or could be built offshore, e.g. , gravel mines,pipelines (as opposed to pipeline pier supports), culverts, altered drainage patterns,water treatment plants, ports, causeways, and the like.

Special Areas

Congress could decide to set aside certain special areas for their ecological or cultural values. This could be done either by designating the areas specifically, inlegislation, or by authorizing the Interior Secretary to set aside areas to be selectedafter enactment. A few bills have named specific areas (especially SadlerochitSpring) within the 1002 area for set-asides. A number of bills in the past havechosen the latter course, with a cap of around 45,000 acres in which surfaceoccupancy (a term not usually defined) could be limited. Depending on the meaningof "surface occupancy," such areas might be open to seismic exploration (whichrequires no roads of any type) or to (temporary) ice roads. Such areas could also stillbe accessible for leasing, if developed from drill pads outside these areas. The fourspecial areas named in the FLEIS together total more than 52,000 acres, so somechoices would be necessary if the set-aside acreage available to the Secretary weretoo low to accommodate the identified areas.

Expedited Judicial Review

Leasing proponents urge that any ANWR leasing program be put in place promptly; expediting judicial review may be one means to that goal. Judicial reviewcan be expedited through procedural changes such as time limits within which suitsmust be filed, or by avoiding some level of review. The scope of the review alsocould be curtailed, or the burden imposed on a challenger could be increased. Billsbefore Congress have combined all of these elements.

Project Labor Agreements

A continuing issue in federal and federally-funded projects is whether project owners or contractors effectively should be required, by "agreement," to use unionworkers. In the past 10 years, President George Bush, President Bill Clinton, andPresident George W. Bush have issued executive orders pertaining to the question,with President Clinton favoring their use and Presidents Bush opposing their use. Members of Congress have become involved when they objected to a presidentialaction. In the 108th Congress, the issue has come up in the context of proposed oiland gas development of ANWR.

Project labor agreements (PLAs) are agreements between a project owner or main contractor and the union(s) representing the craft workers for a particularproject. PLAs establish the terms and conditions of work that will apply for theparticular project. The agreement may also specify a source (such as a union hiringhall) to supply the craft workers for the project. Typically, the agreement is bindingon all contractors and subcontractors working on the project, and specifies wage ratesand benefits, discusses procedures for resolving labor and jurisdictional disputes, andincludes a no-strike clause.

Proponents of PLAs argue that they ensure a reliable, efficient labor source and help keep costs down. Opponents contend that PLAs inflate project costs anddecrease competition. There is little independent information and data to sort out these conflicting assertions and demonstrate whether PLAs contribute to lower orhigher project costs. Construction and other unions and their supporters stronglyfavor PLAs because they believe that PLAs help ensure access for union membersto federal and federally funded projects. Nonunion firms and their supporters believethat PLAs unfairly restrict their access to federal and federally-funded projects. (188)

Revenue Disposition

A recurring issue in the ANWR debate is that of disposition of possible revenues, not only from oil but also from sale of gravel or water resources. There aretwo parts to the disposition question: (a) how would revenues be split between thefederal government and the state; and (b) how would the federal portion be used?

Federal/State Split. The Mineral Leasing Act (MLA) (189) governs the leasing ofoil and gas and certain other mineralsfrom federal public lands. Under ï¿½35 of the MLA, certain western states receivedirectly 50% of revenues received. An additional 40% goes to those states indirectlythrough the construction and maintenance of irrigation projects under theReclamation Act of 1902. (190) Before 1976,these percentages were 37ï¿½% and 52ï¿½%respectively. Because the territory of Alaska did not benefit from the ReclamationAct, it received only a 37ï¿½% share of federal leasing revenues. Before enactment ofthe Alaska Statehood Act, Congress amended the MLA to provide that the territorywould receive an additional 52ï¿½% share, thereby putting Alaska on the same footingas the other states. (191) Section 28(b) of theAlaska Statehood Act again amended theMLA to change the references from territory to State of Alaska. (192) Section 317 of theFederal Land Policy Management Act of 1976 amended the revenues section of MLAto direct payment of 90% to Alaska, rather than the separate percentages previouslystated. (193) The committee report accompanyingthe 1976 change states that the actionwas intended to clarify that Alaska was to continue to receive 90% of the mineralrevenues taken in from federal lands in Alaska. (194)

Alaska has asserted that the 90% total referenced in the Statehood Act cannot be changed and must always be paid to the state because the Statehood Act is acompact between the prospective state and the federal government. Others assert thatthe Statehood Act provision was a technical one, meant to recognize that Alaskashould receive a share comparable to that of other states under the MLA , but does notpreclude the Congress from changing the MLA or at times making special provisionfor leasing certain areas under a different regimen.

Alaska sued in the U.S. Court of Federal Claims, asserting that because the United States had an obligation under the Statehood Act both to maximize mineralleasing in Alaska and to always pay a 90% share of gross receipts to Alaska, theUnited States had either breached the contract established by the Statehood Act, or"taken" property of Alaska by withdrawing some lands in Alaska from leasing(notably ANWR) and by deducting administrative costs prior to the disbursement ofthe 90% revenues to the State. The court found that the Statehood Act and theprevious statute providing the territory of Alaska with the same shares as the otherstates "simply plugged [Alaska] into the MLA, along with the other States." (195) Therefore, Congress could amend the MLA, e.g ., to provide a different way ofcalculating receipts, and the changes would lawfully pertain to Alaska. Furthermore,the court concluded that the United States did not promise in the Statehood Act tomake federal mineral lands produce royalty revenues for the State, and that theUnited States therefore retained discretion over leasing decisions. (196) Because of thesefindings, the court also granted the government's motion for summary judgment onthe takings claim, dismissing Alaska's claim.

If the Statehood Act simply means that Alaska will be treated like other states under the MLA, the question may be asked whether Congress may legislate speciallyas to ANWR and prescribe different revenue-sharing provisions. Congress has doneso in the past, e.g. , with respect to the National Petroleum Reserves, in whichsituation all of the revenues go into the federal Treasury, (197) except for the NationalPetroleum Reserve in Alaska, in which instance the revenue sharing is 50/50. (198) Therefore, arguably Congress has flexibility in legislating regarding oil and gasleasing in the Refuge, including providing for the disposition of revenues from anysuch leasing.

Uses for Federal Share of Revenues. Proponents of opening ANWR for oil production pointout that the federal share of any revenues could be made available for variousconservation purposes, including ameliorating impacts, providing funds for researchon renewable energy sources, or assisting other refuges and conservation areas. While additional funding for these purposes would undoubtedly cheer manyenvironmental groups, it is difficult to name any such group whose views on ANWRdevelopment have been swayed by such proposals.

Wilderness Designation

In each Congress since 1980, bills have been introduced in both House and Senate statutorily to designate the coastal plain of the Refuge as wilderness. Energydevelopment is not permitted in wilderness areas, unless there are pre-existing rightsor unless Congress specifically allows it or later reverses the designation. Development of the surface and subsurface holdings of Native corporations wouldbe precluded inside wilderness boundaries (although compensation might be owed). This choice would preserve existing recreational opportunities and jobs, as well asthe existing level of protection of subsistence resources, including the PorcupineCaribou Herd, while of course foregoing any energy resources that might beavailable.

No Action Alternative

Because current law prohibits development unless Congress acts, this option also prevents energy development. Those supporting delay often argue that notenough is known about either the probability of discoveries or about theenvironmental impact if development is permitted. Others argue that oil depositsshould be saved for an unspecified "right time."

Glossary

Key Features, Terms, Acronyms, and Abbreviations

1002 area --

A portion of the coastal plain of ANWR north of the Brooks Range alongthe Beaufort Sea. Section 1002 of ANILCA defined the area with respectto a "map dated August 1980" but the area was later defined by a publisheddescription.

1002 report --

See FLEIS .

ADEC --

Alaska Department of Environmental Conservation; regulatesnonhazardous and RCRA-exempt solid wastes and underground injectionwells.

ADF&G --

Alaska Department of Fish and Game.

ADNR --

Alaska Department of Natural Resources.

AFN --

Alaska Federation of Natives; the major statewide Alaska Nativeorganization.

Alaska Natives --

Eskimos (Inuit and Yupik), Aleuts, and American Indians in Alaska, whotogether make up over 15% of Alaska's population. Included by the federalgovernment in the terms Indians and Indian tribe .

Alpine Corporation Oil Field --

A 40,000 acre oil field originally owned by ARCO Alaska, Inc., and nowowned by Phillips Petroleum Co. Originally permitted at 98 acres fordevelopment, its current footprint is slightly smaller. It is situated west ofthe Kuparuk Oil Field, and is accessible only by aircraft or winter ice road. Oil development facilities here are considered state-of-the-art arctic(energy) technology.

ANCSA --

Alaska Native Claims Settlement Act of 1971 (P.L. 92-203). Provides forselection and conveyance of property title and monetary award to AlaskaNatives in settlement of their aboriginal claims; authorizes establishmentof native regional and village corporations; also contains variousprovisions regarding federal land management in Alaska.

ANGTS --

Alaska Natural Gas Transportation System (surface pipeline).

Angun Plains --

One of several "special areas" in ANWR defined in the FLEIS, whereevidence of Pleistocene glaciation is considered special. It comprisesabout 36 square miles.

ANILCA --

Alaska National Interest Lands Conservation Act of 1980 ( P.L. 96-487 ):Among other things, it expanded the boundaries of ANWR, designated the1002 area, prohibited energy development in the Refuge unless authorizedby Congress, and established numerous federal conservation system units(National Parks, Wildlife Refuges, etc.) on federal lands in Alaska;amended several provisions of ANCSA and included various provisionsregarding federal land and resource management in Alaska.

ANWR --

Arctic National Wildlife Refuge; also called "the Refuge."

AOGCC --

Alaska Oil and Gas Conservation Commission. The state agency regulatesextraction of oil and gas on non-federal lands. It also has primaryresponsibility for regulation of subsurface injection of fluids brought to thesurface from oil and gas production operations or liquid hydrocarbonswhich are stored underground through a permit program under the SafeDrinking Water Act (SDWA). AOGCC's responsibilities under theSDWA are split with EPA. (See SDWA.)

ARCO Alaska --

Formerly a subsidiary of Atlantic Richfield Company; operated the easternhalf of the Prudhoe Bay field until April 2000, when the company's Alaskabusinesses were bought by Phillips Petroleum Co. ARCO Alaska was theoriginal developer of the Alpine field near the border of the NPR-A; likeother ARCO Alaska holdings, Alpine is now owned by Phillips Petroleum.

Arctic Power --

A consortium of proponents of energy development in ANWR, whosemembers include, among others, petroleum industry representatives, theState of Alaska, and various Native corporations.

ASRC --

Arctic Slope Regional Corporation. Established under ANCSA, a Nativeregional corporation for essentially all of the Alaskan North Slope. ASRCowns the subsurface rights beneath the lands within the coastal plain ofANWR owned by the Kaktovik Inupiat Corporation.

BACT --

Best Available Control Technology, required to be imposed on majorsources of specified pollutants in areas subject to the Prevention ofSignificant Deterioration Program of the Clean Air Act. BACTrequirements would apply to ANWR.

Barter Island --

A coastal island within ANWR; the site of the Native Village of Kaktovikand a DEWLine station. Currently, only occupied human habitation on thecoastal plain of the Refuge.

bbl --

Barrel; barrels (of oil); 42 gallons.

BEA --

Bureau of Economic Analysis; part of the U.S. Department of Labor.

Beaufort Lagoon --

A small lagoon on the eastern edge of the 1002 area.

Beaufort Sea --

Portion of the Arctic Ocean adjacent to central and eastern Alaska(including ANWR), as well as northwestern Canada.

BLS --

Bureau of Labor Statistics; part of the U.S. Department of Labor.

BLM --

Bureau of Land Management in DOI. Among other responsibilities, BLMadministers the federal mineral estate, including oil leases, on federallands.

BMP --

Best Management Practices. In petroleum energy development, thosedevelopment plans which focus on pollution prevention rather thanend-of-pipe discharge limits through specification of structural andoperational controls, maintenance, and inspections.

Bonus bids --

The up-front payment made by a successful bidder to the federalgovernment for tract of federal land on which to explore, and if any energyreserves are found, to produce it. The size of this payment is the vehicleby which companies compete to obtain a federal energy lease.

BPAlaska --

Formerly a division of British Petroleum Company, it became a majorNorth Slope operator in 1968. BPAlaska was sold to Standard Oil Co.(Ohio) in 1978. In 1987, British Petroleum Company acquired completecontrol of Standard Oil Co., its U.S. associate. British PetroleumCompany became BP Amoco p.l.c. after 1998, and then became BP p.l.c.in May 2001, and it currently operates in the western half of the PrudhoeBay field, as well as other parts of the North Slope, and it is vested in theTrans-Alaska Pipeline.

Brooks Range --

An east-west trending mountain range in northern Alaska, running fromthe Chukchi Sea eastward into northwestern Canada; north of this Range,water drains to the Arctic Ocean; southward, to the Yukon River in CentralAlaska.

btu --

British Thermal Unit. The amount of heat required to raise thetemperature of a pound of water one degree Fahrenheit.

CAH --

Central Arctic Herd; caribou whose range is partly in the developed areas,including Prudhoe Bay, west of the Refuge; they occupy an area aboutone-fifth the size of the Porcupine Caribou Herd (PCH).

CEPR --

Center for Economic and Policy Research. An economic and socialwelfare policy research organization, aimed at promoting debate oneconomic and social issues through conducting research and presenting thefindings of its own and others' studies. (In September 2001, CEPRreanalyzed the 1990 WEFA study of the economic impact of the possibledevelopment of ANWR.)

Chandler Lake Agreement --

The 1983 land exchange agreement between DOI and ASRC, under whichthe U.S. received lands in Gates of the Arctic National Park and ASRCreceived subsurface rights to KIC lands in ANWR in return.

Coastal Plain --

When used in lower case, the relatively flat area between the foothills ofthe Brooks Range and the north coast of Alaska; much of it is wetland,especially around Prudhoe Bay. When used with upper case ("CoastalPlain"), the term is used as defined pursuant to ï¿½1002 of ANILCA andexcludes Native lands in the coastal area.

COE --

U.S. Army Corps of Engineers. Approves permits affecting wetlands,subject to EPA guidelines.

Compatible Use --

Defined as "A proposed or existing wildlife-dependent recreational use orany other use of a National Wildlife Refuge that, based on soundprofessional judgment, will not materially interfere with or detract from thefulfillment of the National Wildlife Refuge System mission or thepurpose(s) of the National Wildlife Refuge." (50 C.F.R. ï¿½25.12). Landswithin Alaska refuges are subject to the regulations on compatibility in 50C.F.R. ï¿½ï¿½25 and 26.

Corps --

See COE.

CWA --

Clean Water Act; among other things, the CWA requires permits for oiland gas operations in the arctic that typically require the use of bestmanagement practices to protect water resources. The CWA also requiresa state certification that energy development activities requiring federalpermits or licenses will comply with state water quality standards.

CZMA --

Coastal Zone Management Act. Among other things, requires certificationby states that projects to be located in a state's coastal zone are consistentwith the state's coastal zone management program. For ANWR, thiswould apply to oil exploration and development activities on the coastalplain (ANILCA ï¿½1002).

Deadhorse --

The oldest support center for oil exploration in the Prudhoe Bay field;includes offices, depots, repair and service facilities, and housing foremployees.

Denning --

The act of a wild, usually predatory animal taking to its lair or takingshelter. Often associated with bears and other animals which hibernateduring the winter, and with females of the species when they are givingbirth.

DEWLine --

Distant Early Warning Line. Series of stations used by U.S. and Canadianmilitary for detection of possible national security threats from the formerSoviet Union; usually a surveillance post and telecommunications relay ateach station. In the case of ANWR, one is situated on Barter Island just offthe north coast of Alaska, adjacent to the village of Kaktovik.

DOI --

U.S. Department of the Interior.

Doyon, Ltd. --

Regional for-profit Native corporation for central Alaska Natives (chieflyAthabascan Indian), established under ANCSA.

Economically Recoverable Oil --

Estimated amount of oil that could be feasibly extracted under theassumption of a particular level of crude oil prices. If Congress were toallow for energy development in ANWR, the price of oil would come intoplay in the decision to explore for and develop resources in the extremeconditions of the North Slope. (See technically recoverable oil and oil inplace .)

EIA --

The Energy Information Administration in DOE. Responsible forinventorying and forecasting U.S. Energy Resources.

Endicott --

Small oil field located offshore from Prudhoe Bay; contains 375,000barrels of recoverable oil. Formerly operated by Standard AlaskaProduction Company; acquired as part of Standard Oil Co. (Ohio) holdingsby British Petroleum Company in 1987; now belongs to BP p.l.c..

EOR --

Enhanced Oil Recovery. A technique used to increase petroleum recoveryfrom known deposits, e.g., permeability of rocks may be increased bydeliberate fracturing, using explosives or water under very high pressure;carbon dioxide gas under pressure can be used to force out more oil; andhot water or steam may be pumped underground to warm thick, viscousoils so that they flow more easily and be extracted more completely.

EPA --

Environmental Protection Agency. Independent U.S. agency whichconducts environmental research, promulgates national environmentalcriteria and standards, regulates a wide variety of activities which mayaffect the environment, assists states in administering environmentalprograms and funding municipal water infrastructure projects, remediatesand cleans up hazardous waste and enforces most environmental protectionlaws. EPA has commented on DOI's proposed leasing of ANWR and theadequacy of mitigation measures.

ESA --

Endangered Species Act; 16 U.S.C. 1531ff.

Exxon-Mobil --

A major oil company with substantial North Slope holdings, including oilfields in Prudhoe Bay. Exxon Corporation and Mobil Corporation mergedin 1998.

FLEIS --

Final Legislative Environmental Impact Statement; in the ANWR context,the final report published under ï¿½1002 of ANILCA on April 1987 byFWS/DOI on alternatives for preserving, managing, and/or developing the1002 area. Also called 1002 report .

Footprint --

The area within the outline of any structures on the surface of the land asthese features might be shown on an ordinary two dimensional map. In thecase of arctic energy development, there is debate over exactly whatfeatures might be counted in assessing the total size of the footprint.

FWS --

Fish and Wildlife Service in DOI. Among other things, manages federalwildlife refuges, including ANWR.

GDP --

Gross Domestic Product. Main indicator of total output in the economyused by the U.S. Department of Commerce; before 1991, GNP was used.

GNP --

Gross National Product. Before 1991, the main indicator of total outputin the economy used by the U.S. Department of Commerce.

Gwich'in --

Athabaskan Indians, situated in east-central Alaska and neighboring areasof northwestern Canada.

Infrastructure --

Physical facilities. In oil development, these include roads, pipelines,drilling pads and structures associated with wells, pumps, facilities forhandling the oil and gas, housing and offices, gravel mines, airports, docks,waste disposal facilities, support services, and others.

INGAA Foundation --

A Foundation of the Interstate Natural Gas Association of America; theofficial name of this foundation uses the acronym. It reported original costestimates of developing a natural gas pipeline for Alaska (the Trans-AlaskaPipeline).

Inholdings --

Non-federal lands within a federal area. For ANWR, inholdings includeNative lands such as those owned by such Native corporations as theKaktovik Inupiat Corporation and the Arctic Slope Regional Corporation.

Inupiat --

Eskimo (specifically, Inuit) people of the Alaska North Slope andbordering areas.

Jago River --

Large north-flowing river in the eastern third of the 1002 area.

Kaktovik --

Native village (population between 200 and 300) located in ANWR onBarter Island; part of the North Slope Borough. Also the site of a U.S.DEWLine station.

Kaktovik Inupiat Corporation --

Native Village Corporation of Kaktovik. (KIC.)

KIC --

Kaktovik Inupiat Corporation.

Kongakut River --

River that lies between the 1002 area and the Canadian Border in the ANSfrontier, and flows into the Beaufort Lagoon.

Kuparuk --

Large oil field located west of Prudhoe Bay. Field formerly operated byARCO, now by Phillips Petroleum. Also, Kuparuk Oil Industrial Center.

LNG --

Liquefied natural gas.

Milne Point --

Oil field located northwest of Prudhoe Bay, operated by BP Exploration(Alaska) Inc., a subsidiary of BP p.l.c.. Drilled and operated briefly byConoco, Inc; once shut-in because of low world oil prices, and nowre-opened.

MLA --

Mineral Leasing Act. Federal law that generally governs the leasing of oiland gas and certain other minerals from federal public lands and revenuesharing from these resources. However, Congress has authorized leasingsome federal lands under other statutory provisions.

NAAQS --

National Ambient Air Quality Standards. Health-based standardsestablished by EPA for concentrations of ozone, sulfur dioxide, nitrogenoxides, particulate matter, carbon monoxide, and lead in outdoor air.

National Petroleum Reserve-Alaska (NPR-A) --

Reserve of approximately 37,000 square miles located on the North Slope,west of Prudhoe Bay, and originally set aside to provide oil for federalmilitary use. Early exploration did not reveal any potential commercial oilresources, and exploration sites were abandoned. Recently reopened toleasing with most recent lease sale held May 1999, and 130 bids totaling$105 million accepted. This name replaced the earlier "Naval PetroleumReserve No. 4."

National Wildlife Refuge System --

A network of lands and waters managed by the Fish and Wildlife Servicein all 50 states and most territories. As of Sept. 30, 2000, it consisted of 93.96 million acres in 530 refuges, 201 waterfowl production areas, and 50wildlife coordination areas. Of these, 76.99 million acres were in Alaska.

Native --

When capitalized, used synonymously with "Alaska Native."

Native Corporation --

Any regional, village, urban, or group corporation established underANCSA. (See also Regional and Village Corporation.)

Native Village --

Any tribe, band, clan, group, village, community, or association in Alaskacomposed of Alaska Natives. (Here, also includes "Native Groups",defined in ANCSA as having less than 25 Natives.) The Bureau of IndianAffairs in DOI recognizes over 220 such Native villages, irrespective ofpopulation.

NCAI --

National Congress of American Indians; major nationwide organizationrepresenting Indian tribes.

NEPA --

National Environmental Policy Act. Requires that certain analyses ofpossible environmental effects of proposed federal actions be completed. Preparation of an updated version of the FLEIS or SupplementalEnvironmental Impact Statement under NEPA might be necessary beforeenergy development in ANWR could proceed, unless Congress specifiedotherwise.

North Slope --

A geographic area of Alaska on the north side of the Brooks Range,exceeding 100,000 square miles (64,000,000 acres) and including foothillsand the relatively flat coastal plain, where the waters drain to the Chukchiand Beaufort Seas. Reaches from roughly Point Lisburne on the ChukchiSea across NPR-A, oil development areas, the 1002 area, and east intoCanada.

North Slope Borough --

Local North Slope government established in 1972 under Alaska state law;boundaries are roughly similar to those of the North Slope itself. Equivalent to a county, it has power to tax property.

NO x --

Nitrogen oxides, one of the principal air pollutants likely to be emitted byoil field operations in ANWR.

Ocean Dumping Act --

Title I of the Marine Protection Research and Sanctuaries Act (also knownas the Ocean Dumping Act). Requires the COE to issue a permit for thedisposal of dredged material at designated sites in any ocean watersincluding the (U.S.) territorial seas, e.g. , for disposal of material dredgedin the construction of channels in open seas needed to get oil/gas tankersto shore facilities.

OECD --

Organization for Economic Cooperation and Development.

OPEC --

Organization of Petroleum Exporting Countries.

Oil in place --

The amount that might be present or "in place" in a given field or area. This figure is just a starting point, since it is not possible to extract all ofthe oil in a field. Estimates are almost always given as a range of numbersand probabilities. (See economically recoverable oil and technicallyrecoverable oil .)

PCH --

Porcupine (River) Caribou Herd. Herd of caribou (variable populationlevels -- from about 120,000 to over 180,000) that winters in centralAlaska and Canada and migrates to ANWR in spring and summer; in mostyears PCH calving is concentrated in the 1002 area; foothills, plain, andcoast of 1002 area are used for feeding and insect relief. The PCH herd isestimated to be about five times as large as the Central Arctic (caribou)Herd (CAH).

Phillips Petroleum --

Major operator on North Slope (in addition to BP). Operates the easternhalf of the Prudhoe Bay field as well as other North Slope fields ( e.g. ,Alpine).

PLAs --

Project labor agreements. Agreements between a project owner or maincontractor and the union(s) representing the craft workers for a particularproject that establish the terms and conditions of work that will apply forthe particular project.

PLO --

Public Land Order. An administrative action relating to public lands takenby the Secretary of the Interior. PLO 2214 withdrew federal lands in theterritory of Alaska to create the original Arctic National Wildlife Range . Although it withdrew the lands from operation of the mining laws, it didnot withdraw the lands from mineral leasing.

Prospect --

In petroleum exploration, a site which is believed to have the potential forcontaining a petroleum accumulation of sufficient size to be of commercialinterest.

Prudhoe Bay --

Bay on the north coast of Alaska, between the 1002 area and the NPR-A. Also, the adjacent on-shore site of the largest oil field ever found in theU.S. Originally estimated to contain 9.6 billion bbl of proven reserves,then revised upward to 13 billion bbl; an estimated 3 billion bbl of reservesare thought to remain. This field is operated by Phillips Petroleum and BP. (The term often is used loosely to refer to all developed areas on the NorthSlope.)

PSD --

Prevention of Significant Deterioration: a regulatory program establishedby the Clean Air Act to protect air quality in areas that meet NationalAmbient Air Quality Standards.

RCRA --

Resource Conservation and Recovery Act. Governs the generation,storage, transportation and disposal of hazardous wastes; in Alaska theprogram is carried out by the U.S. EPA.

Regional Corporations --

Alaska Native Regional Corporation established under ANCSA and thelaws of the State of Alaska. After 1971, the DOI Secretary divided Alaskainto 12 geographic regions, as defined in ï¿½1606 of ANCSA, with eachregion composed as far as practicable of Natives having a commonheritage and sharing common interests.

Reinjection --

Process by which most of the natural gas produced so far on the NorthSlope has been put back into the ground by oil field operators to maintainpressure in the oil reservoir zones.

Rent --

The annual payment made by a lessee to the federal government for theright to a tract obtained for energy production under the Mineral LeasingAct of 1920. Rates are $1.50 per acre per year for the first 5 years and$2.00 per acre per year thereafter.

Riparian --

Areas alongside streams and rivers; in the 1002 area these are oftenvegetated with low brush that is attractive habitat to a number of species. Frequently serve as corridors for wildlife movement.

Rolligon --

Large vehicles with enormous soft tires that spread their weight evenlyacross the surface.

Royalty --

A payment by a lessee to the federal government under the MineralLeasing Act of 1920 for oil or gas produced on federal land. Currently, theroyalty rate is set at 12.5%.

Sadlerochit Spring --

A "special area" in the southernmost part of the 1002 area. During thesection 1002 study, 4,000 acres around the spring were closed toexploration. The spring maintains a flow of water at 50-58F year-round,and keeps the river open for nearly 5 miles downstream, even in winter. It represents the extreme northern range of some plants and birds, andprovides wintering habitat for fish; muskoxen frequent the area.

SDWA --

Safe Drinking Water Act. Manages a permit program to protectunderground sources of drinking water (USDWs) from contamination byinjection through wells. In Alaska, U.S. EPA has primary responsibilityto issue permits authorizing subsurface injection of nonhazardousindustrial wastes associated with oil exploration and development. TheAlaska Oil and Gas Conservation Commission shares regulatory authorityover underground injection wells. (See AOGCC).

SEIS --

Supplemental Environmental Impact Statement; in a declaratory judgmentaction in 1991, a judge held that DOI should have prepared a SEIS at thattime to encompass new information about the 1002 area in connection withthe Department's recommendation that Congress legislate to permitdevelopment.

Special Area --

Areas of natural beauty or prolific wildlife areas, habitats, and ecosystemsin the 1002 area. Five special areas were specifically named in the FLEISas potential set-asides; these total more than 52,000 acres.

TAGS --

TransAlaska Gas System. Proposed subsurface pipeline delivery systemto supply natural gas to LNG processing facilities on the North coast ofAlaska.

TAPS --

Trans-Alaska Pipeline System. Transports oil Prudhoe Bay to Valdez, aport on Alaska's south coast. The pipeline was completed and opened in1977.

tcf --

Trillions of cubic feet, e.g. , of natural gas.

Technically recoverable oil --

Oil which has been successfully prospected and may be extracted given thescientific and technological knowhow, resources, infrastructure, etc.;however, its extraction is limited by such factors as the market price of oil,which is related to its supply and demand. (See economically recoverableoil and oil in place .)

Trans-Alaska Pipeline Authorization Act --

Federal law which authorized construction of TAPS and by granting a rightof way over federal lands ( P.L. 93-153 , 87 stat. 584, 43 U.S.C. 1651 etseq .). In addition, federal law had generally prohibited the export of oiltransported through pipelines which had been granted a right of way overfederal lands (30 U.S.C.ï¿½185(u)). However, an amendment enacted in1996 permits oil shipped through the pipeline to be exported though onlyunder certain very restrictive conditions (30 U.S.C.ï¿½185(s)).

Tundra --

Major ecological community of the arctic and high elevation alpine areas,characterized by usually waterlogged soil sitting on permafrost, and by lowgrowing plants such as mosses, lichens, and dwarf forms of woody plants.

USDW --

Underground source of drinking water.

USGS --

U.S. Geological Survey. A DOI agency that, among other things, conductsmineral and energy resource assessments of the U.S. and the world; advises on prospecting and extraction of petroleum and mineral resourceson federal lands; evaluates national water resources.

Village Corporation --

Alaska Native Village Corporation organized under ANCSA and the lawsof the State of Alaska as a business corporation (for profit or non-profit)to hold, invest, and/or distribute lands, property, funds, and other rightsand assets on behalf of a Native village (as defined in ANCSA).

WEFA Group, The --

Economic consulting group, now merged with "DRI" (not an acronym),forming DRI-WEFA. In 1990, published a study of the economic impactof the possible development of ANWR (See also CEPR.)

Wellhead Price --

The price paid a producer in the producing field. It is often calculatedbased on the delivered or first sale price, less the cost of associatedtransport. Transport tariffs are generally related to pipeline length. In thecase of North Slope oil (or gas) -- where there pipeline cost is (or wouldbe) substantial, the implied price at the wellhead would be commensuratelylow.