Alaska's drilling debate moves offshore

By Kim Murphy
Los Angeles Times
April 26, 2009

ANCHORAGE: Protesters call for new drilling. Days later, federal judges blocked oil and gas leases, ordering a review. (Kim Murphy / Los Angeles Times)

With the oil industry targeting Arctic waters, energy needs are weighed against a region's fragile life cycle.

Reporting from Nuiqsut, Alaska -- The year the oil companies seriously began exploring the icy waters off the Arctic National Wildlife Refuge -- where Nuiqsut whalers have hunted for as long as men have wandered on dark waters -- the villagers lost two bowhead.

The big whales had veered 30 miles from their usual migration path, and the men had no choice but to follow them through ice and mounting swells in their 20-foot boats. Hunters usually can kill the creatures with a fair amount of efficiency after they are harpooned. But this time was different.

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The bowhead, longtime whaling captain Eli Nukapigak said, were "spooked."

One of the whales flipped and dove, with the harpoon line twisted around the propeller, dragging the boat toward the sea floor. The crew managed to leap to safety. Another boat had been towing the second whale back to camp when it was overcome in the fierce seas. The hunters had to cut the whale loose.

"That kind of disaster we don't want to see again," Nukapigak -- dressed in a parka on a recent 10-below-zero spring morning -- said of the 1985 hunt.

For the captain and others in this Inupiat Eskimo village on Alaska's North Slope, that may depend on whether the oil industry is allowed to open more of the iceberg-strewn Arctic waters to drilling.

A federal appeals court this month put the brakes on a plan to lease more than 78 million acres of the Beaufort, Chukchi and Bering seas to oil and gas developers, ordering a full environmental review before the program can proceed. But that could be little more than a speed bump in the rush to commercialize the Arctic, which global warming -- and the resulting shrinking sea ice -- has made accessible as never before.

Though the conservation community has fought successfully over the last decade to protect the Arctic National Wildlife Refuge, the remaining pristine areas of the North Slope have been going fast. In September, the Bureau of Land Management put 1.5 million acres of the National Petroleum Reserve-Alaska, with its shimmering lakes and verdant tundra, up for lease to developers.

Now the battle is moving offshore.

The coast around Prudhoe Bay is already dotted with drilling operations such as BP's Liberty project, which, when completed, will have the world's longest diagonal wells -- reaching eight miles out from facilities near shore. In contrast, the proposed Chukchi Sea leases would start 25 miles offshore and reach 200 miles out.

Obama administration officials have said they will weigh the nation's energy needs against the desire to protect crucial resources. But with active North Slope fields reaching the end of their production life, the allure of an estimated 27 billion barrels of oil and 132 trillion cubic feet of natural gas off Alaska's shores is strong.

Gov. Sarah Palin has warned that without new drilling, the 800-mile-long trans-Alaska oil pipeline could be forced to shut down in as little as 10 years, crippling America's hopes for energy independence, not to mention her state.

"The Alaska offshore is home to some of the most prolific, undeveloped hydrocarbon basins in the world -- reserves that would not only fuel Alaska's economy for decades to come, but oil and gas reserves that would also provide the nation with much-needed energy security," said Pete Slaiby, general manager of Shell Exploration and Production Co.'s Alaska operations.

The company, which had been planning the first major offshore lease development in the Beaufort Sea before it was blocked, argued its case to Interior Secretary Ken Salazar during a recent hearing in Anchorage.

The Interior Department is evaluating not only the 2007-12 offshore drilling plan struck down by the court, but also a more ambitious program rolled out in the waning hours of the Bush administration to expand leases in the Arctic Ocean, from the 74.5 million acres now being offered to 127.5 million by 2015.

Conservationists worry that a major oil spill could knock down the region's delicate house of cards: The ice pack in 2007 was at its lowest level since satellite monitoring began in 1979, putting tremendous stress on animals such as walruses, seals and polar bears that depend on the ice to hunt, rest and avoid the oil industrial zones onshore.

More than 500 spills of varying sizes occur on the North Slope each year, on average. The federal government recently estimated there was a 40% chance of a large crude spill from development in the Chukchi Sea. And though spills in open water are notoriously hard to clean up -- Prince William Sound still has oil on some of its beaches from the 1989 Exxon Valdez disaster -- one occurring amid tight chunks of broken ice would present even more problems.

"It is beyond the pale of stupidity that, in the face of everything that's happening in the Arctic, that we would launch a drilling program," said Jim Ayers, a vice president of the marine conservation group Oceana.

The Minerals Management Service, which oversees federal leases on the Outer Continental Shelf, has spent $300 million on environmental studies in the Beaufort and Chukchi seas, officials said. And the chances of a serious spill are low, regional director John Goll said.

"We are absolutely not talking about an Exxon Valdez," he said. "For us, a major spill is 1,000 barrels or more. When folks talk about 50% of [drilling operations] are going to have a spill, remember that anything that puts a sheen in the water is considered a spill. I always say, look back at the record. And it's a pretty strong record right now."

Goll also said that the government had moved to lessen the effects of offshore drilling on the bowhead whale hunt by removing some areas from leasing and limiting oil operations during certain times of the year.

In its opinion, the Washington, D.C., appellate court found that the government had failed to thoroughly weigh the environmental impact of offshore Arctic leasing, and it sent the Minerals Management Service back to the drawing board. The panel also found merit in claims that native Eskimos have a right to seek protection of animals that have been an economic and cultural resource for a millennium.

Endangered bowhead whales -- of which Eskimos may kill a varying quota of usually up to 40 a year -- form one of the backbones of native culture and diet. The hunts, elders say, teach young people a skill that encourages respect and keeps them from fleeing the barren villages that dot the Arctic coast.

There are about 10,500 bowheads, which can grow up to 60 feet long, plying the waters off Alaska's coast. A 2007 survey found nearly half that population living inside the proposed drilling area.

"It would only be a matter of time before something like Exxon Valdez would occur in our subsistence area," said Thomas Napageak Jr., 25, a whaling captain and Nuiqsut's vice mayor.

Some here also worry that the caribou that once could be hunted just outside the village now most often stay miles away. And some of them seem sick.

"This past summer, I saw a caribou that had a tumor on its right hind quarter, and it was the size of a baseball," Napageak said. "A couple months ago, I got one that had green pus on its neck and shoulders."

Even so, Nuiqsut, like other villages across the North Slope, has been lured by oil's promise of jobs and stock dividends.

A ConocoPhillips development seven miles away, on the edge of the National Petroleum Reserve-Alaska, has been a godsend for this village of run-down prefab houses, roaring snowmobiles and old whaling boats near the Colville River Delta.

While other Alaska Natives were struggling last year with soaring fuel prices and had trouble affording food, about 170 Nuiqsut families collected dividends of nearly $30,000 each from the native Kuukpik Corp., which owns land on which the project was built.

Nearly everyone in the village of 400 also collected $1,523 last month from Arctic Slope Regional Corp., which represents Alaska Natives across the North Slope.

(That is on top of the $2,069 Permanent Fund dividend check distributed to all Alaskans last year as their share of the state's invested oil wealth. The government also sweetened the deal with a $1,200 bonus to help compensate for high fuel prices.)

In exchange for the village's blessing to expand its Alpine project, ConocoPhillips has promised to build a road connecting Nuiqsut to the oil site and nearby hunting grounds.

The company also is extending a natural gas pipeline to Nuiqsut, one of the few villages in Alaska that will have gas heat, and is paying $250,000 in compensation for any impacts to hunting and fishing.

"We recognized that development is occurring and that there are benefits to be had," Kuukpik Chief Executive Lanston Chinn said.

"The reality was . . . if oil and gas development is going to proceed, what do we want out of it?"

kim.murphy@latimes.com