The U.S. Interior Department estimates that full development of lands with oil potential in the Arc- tic National Wildlife Refuge could result in $3.04 billion per year to the state of Alaska and $52 mil- lion yearly to the North Slope Borough, according to the newly-released Draft Environmental Impact Statement, or DEIS, for ANWR leasing. If lease sales are held in 2019 or 2020 it would still take a decade or more for exploration and development of discoveries, the DEIS said. New direct payroll related to ANWR could be $29 million a year during exploration (650 jobs at peak); $97 million yearly during development (680 jobs at peak) and $125 million/year during production (730 jobs, permanent). A caveat is that 36 percent of oil con- tractor workers and 28 percent of oil production employees typically reside outside Alaska, so only two-thirds of the payroll would remain in the state.

The estimates are based on scenarios of possible discoveries and development including three major discoveries over time, one each in ANWR’s “high” and “medium” potential areas of the coastal plain and a third later in a “low” potential area. What isn’t apparent in the DEIS is how potential state and local revenues are estimated and what production assump- tions they are based on. These would be in appen- dices in the DEIS that were not available due to the federal government shutdown. There is also concern that the estimates may be optimistic

What if ANWR has no oil? Geologists’ views differ

Alaskans have come to believe that large oil discoveries will be made in the coastal plain of the Arctic National Wildlife Refuge, where lease sales may be held in 2019 or 2020. However, some exploration geologists harbor doubts about ANWR’s prospective resources. “I don’t see what I hear in the political talk,” about the refuge’s geologic potential, said Richard Garrard, a geologist with NordAq Energy who is familiar with the North Slope. Geologically, ANWR’s coastal plain is an extension of the Brooks Range, which is to the south. “How many oil fields have been discovered in the Brooks Range? None,” Garrard noted. The results of one exploration well drilled in ANWR in the early 1980s, the KIC No. 1, are confidential but Gerrard said he is unimpressed by data available to the public from wells drilled offshore, on state submerged lands, just north of the refuge. “There’s no reason why the geology is much different a few miles to the south, in the coastal plain,” Garrard said.
It’s possible, even likely, that there could be shallow oil deposits in the coastal plain based on known oil seeps but these could also be small, not the giant fields many expect. Small oil finds and one large gas discovery have been made in the area immediately west of ANWR, on state lands in the Point Thomson area, where there is similarity in the geology. Some geologists also believe the coastal plain may be more prone to natural gas discoveries than oil. If advanced “3-D” seismic can be done there could be indications of gas vs. oil. However, nothing will really be known until exploration wells are drilled.

Garrard also said the seeming lack of enthusiasm for ANWR over the years from major oil companies is also telling. The push for exploration seems to be mainly coming from Alaska’s political leaders as well as from Arctic Slope Regional Corporation, an influential Alaska Native corporation which owns
a 91,000–acre inholding in the central part of the coastal plain. Roger Herrera, a BP geologist who has worked extensively on promoting ANWR’s opening after retiring, has frequently cited his concern over seeming lack of interest from major companies which have knowledge of the area. However, BP and Chevron did negotiate an exploration agreement with ASRC in the 1980s and now hold rights in the inholding. The two companies’ current interest is unknown. It’s possible that large companies are just leery of the political radioactivity of ANWR and reputational damage for any public company getting involved. Also, there may be a feeling in the industry that Chevron and BP have inside knowledge based on their agreement with ASRC and the drilling of the one exploration well. However, if lease sales are held companies are still likely to make offers. The question is how robust the bidding will be.

Polar bears will be point of contention in ANWR

Meanwhile, one potential glitch in the planned ANWR lease sales is polar bears, which are protected by the Endangered Species Act. There is concern that infrared sensing, the accepted technology used
on the North Slope for detecting maternal polar bear dens in winter, will be less effective in the ANWR coastal plain because of terrain differences from the flat central slope area further west where infrared sensing has been used. Even there, studies by federal scientists have demonstrated only a 50 percent success rate in detecting snow covered bear dens. Problems in protecting bear dens will be an issue in litigation. The DEIS is just the first step. Interior expects to get a final EIS out in 2019 and possibly hold the first of two lease sales in the same year, but the schedule could slip with expected lawsuits.