US President Donald Trump recently opened one of Alaska’s great wildernesses up to oil exploration, a long-mooted move that sparked both criticism and support. The question of who will do the drilling and who will receive the majority of profits is up for debate, while the measure itself will still have to get through environmentalists in the courts. So what does the future of oil look like in Alaska, a land on the frontlines of climate change?
GlobalData’s energy writer Scarlett Evans writes: “Plans to extend oil exploration into the protected Arctic National Wildlife Refuge (ANWR) have been bandied about since the area was first given its protected status in the 1980s. In recent years, President Trump has made taking over the area a large part of his campaign, calling its coastal plain ‘one of the great potential fields anywhere in the world’ in a speech addressing fellow Republicans in 2018.
“Earlier this year, Interior Secretary David Bernhardt announced the department’s Bureau of Land Management (BLM) had finalised a plan for the 1.5 million-acre coastal plain, one which opens the entire space up for leasing with few restrictions on the carbon footprint of potential operations. According to the BLM report, oil extracted from the area could put the equivalent of anywhere between 0.7 million and 5 million metric tons of carbon dioxide in the atmosphere each year.
“While the move could certainly prove beneficial for the state’s economy, it has sparked widespread backlash from environmentalists. Polls have shown that it is opposed by up to 70% of Americans. Leases for exploratory drilling on the coastal plain could be sold by the end of the year, but such a divisive beginning begs the question of just how successful the measure will be.
“Alaska has been in a gradual state of economic rebound over the past few years, regaining ground following a collapse in oil prices in late 2015 – dropping from over $100 per barrel to $30 per barrel. Rebuilding the oil and gas industry has been an imperative for the state to facilitate economic growth, as over the past four decades the sector has contributed to around 85% of the state’s budget.
“With production from the most lucrative oilfield of Prudhoe Bay beginning to decline, expanding the state’s oil industry to incorporate the ANWR is seen by some as a sure-fire way of revitalising the sector, with the US Geological Survey estimating the plain to hold 10.4 billion barrels of oil.
Sean Clifton, policy and program specialist at the Alaskan Department of Natural Resources oil and gas division, justifies the decision on economic grounds. Clifton tells GlobalData: “Alaska’s economy depends on a thriving oil and gas industry. The coastal plain of the ANWR was specifically set aside by Congress as a highly prospective oil and gas region.
“Opening additional North Slope areas for new resource development has the potential to expand the number of pools contributing to Alaska’s oil production, slow decline in the trans-Alaska Oil Pipeline’s throughput, maintain revenue to the state from royalties and corporate income, production and property taxes, and sustain high-wage employment and business activity in the state economy.”
However, Kristen Miller, conservation director at the Alaska Wilderness League, tells GlobalData: “To say that drilling in the Arctic Refuge can proceed without causing harm to the Arctic environment, is an egregious falsehood. Dangerous oil drilling will compound the devastating climate impacts already being felt in the Refuge. Allowing for the exposure of carbon emissions. It would worsen climate pollution, harming communities already bearing the brunt of the changing climate.”
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