The Kulluk, Shell conical drilling rig, headed to Unalaska from Canada last year. - Courtesy Photo, Shell

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Congress subcommittee hearing highlights challenges to Alaska oil production

June 2nd 3:12 pm | Alex DeMarban Print this article   Email this article   Create a Shortlink for this article

Alaska's oil-production woes assumed center stage at a subcommittee hearing in Congress this morning that heavily favored industry, with many speakers blasting the administration, environmentalists and federal regulators for putting the state's pipeline in potential limbo while jeopardizing the nation's economic recovery.

Oil flow through the trans-Alaska pipeline has fallen sharply since its peak in the 1980s when it once produced a big chunk of the country's oil. Drop output much further, and the pipeline will shut down, shuttering production in Alaska and increasing U.S. dependence on foreign oil, speakers told the House Subcommittee on Energy and Natural Resources.

The consequences could be dire for the North Slope, where the Inupiaq people have concluded that development and a clean environment are essential to protecting the region's ancient culture based on whaling and hunting, said Richard Glenn, a Barrow whaler and an executive with the Arctic Slope Regional Corp., the region's top Native-owned corporation.

Over the decades, oil production on the Slope hasn't hurt subsistence animals, he said.

"Many of the worries that existed about development in the Arctic were expressed by our people 40 years ago when the Prudhoe Bay oil fields were developed, and yet because of local involvement and changes in technology, we've seen that the animals we were worried about, the environment we were concerned about, has fared well. There's more caribou now, more fish, more waterfowl than before development started."

When Glenn looks at a timeline of falling oil production in Alaska, he's reminded of years of progress in the region, where the borough taxes the oil and gas industry. For example, flush toilets have replaced honey buckets in people's homes, electricity is no longer rationed and shut off at night, and local schools mean students no longer leave their communities to study.

"Without development in the Arctic, the Arctic Slope Native communities will not survive," said Glenn.

Later, Rep. Don Young, R-Alaska, a special guest during the hearing, urged him to clarify that statement.

The North Slope would be forced to cut important services if oil production ended, Glenn said.

Modern infrastructure that requires regular maintenance, such as roads, runways and power plants, would be put at risk. Fire houses could close. Road crews could sit idle in winter, possibly preventing ambulances from reaching homes.

"These are real world possibilities in the absence of continued development in our region," Glenn said.

At the hearing in the Republican-led subcommittee, the deck was stacked against opposing voices.

Young had earlier shouted down the subcommittee's ranking Democrat, Rush Holt, telling him not to ask questions during Young's floor time.

"I'd like to see you move a honey bucket out and dump it in a lagoon," said Young to the ranking Democrat. "I think you might learn a little bit, Mr. Holt."

Holt had said that oil production is up in the U.S. outside of Alaska, and demand for gas is down. He urged more study of the Arctic environment before drilling occurs.

"We need to carefully examine the risks and rewards of drilling in environmentally sensitive and rapidly warming areas of Alaska," he said.

In the audience sat Caroline Cannon, president of the North Slope village of Point Hope, who opposes offshore development.

In a written statement sent to media by the Alaska Wilderness League, she said there's no proven technology to clean an oil spill from Alaska seas, especially when they're covered with ice. A big oil spill could wipe out the Inupiaq culture.

"The animals would either disappear or be so contaminated that my children or grandchildren would be forced to decide which is less harmful to them: contaminated whale meat or processed food shipped up from someplace like Costco. I know genocide is a harsh word but that's what it would be," she said in the statement.

Pro-development speakers at the hearing said a pipeline shutdown would have national fallout.

For example, West Coast refineries would be forced to import oil from Asia, as they did during a temporary shutdown of the trans-Alaska pipeline last year, said David Lawrence, an executive vice president with Shell Energy Resources Company.

Dan Sullivan, the state's Natural Resources commissioner, said a shutdown would cost thousands of jobs and increase the national deficit while enriching other countries such as Venezuela and Saudi Arabia.

The federal government has "proactively shut down resource development in Alaska," he said.

His supporting written testimony to the panel included a list of anti-development actions and policies by the federal government.

For example, in 2010 the Corps of Engineers unexpectedly reversed course and denied Conoco Phillips permits to build a drill pad, a bridge and access roads on the eastern edge of the reserve, Sullivan said in his written testimony.

Sullivan asked Congress to make a national priority out of Gov. Sean Parnell's goal of shipping 1 million barrels daily through the pipeline. Federal permitting decisions need to be expedited and Congress needs to oversee regulatory agencies that disregard federal law, he said.

Drilling offshore hasn't proven easy, speakers said.

To launch exploratory wells in the Chukchi and Beaufort seas, oil company Shell needs more than 30 permits from a variety of agencies, creating "an almost impossible maze to work through," said Lawrence.

Rep. Jeff Duncan, a Repubican from South Carolina, questioned why the EPA has jurisdiction over air quality permits in Alaska's offshore develompent, while a different agency, the Bureau of Ocean Energy, handles that responsibility in the Gulf of Mexico.

 


Alex DeMarban can be reached at alex@alaskanewspapers.com, or by phone at (907) 348-2444.

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