Arctic Oil Expansion: Global Danger and Local Threat

"My view was, in 1968 and '69, 'It'll only be five years before the oil industry controls the government in Alaska.' I was dead wrong. It took them 25 years to do it." -Charlie Cole, Former Alaska Attorney General, 1997

Introduction

After a period of gradually declining production, Alaska's North Slope oil fields are in the midst of a rapid expansion, fueled by the pro-development policies of the Democratic administrations of Alaska Governor Tony Knowled President Bill Clinton. Already, Prudhoe Bay and the other 14 producing fields on the North Slope sprawl over 800 square miles. Expansion plans would spread the development east to the borders of the Arctic National Wildlife Refuge, and west to the edge of and eventually into the National Petroleum Reserve-Alaska (NPR-A). Most pressing, however, are the dangerous plans for unprecedented construction of new oil developments offshore in the Beaufort Sea. While the Clinton administration pays lip service to the need to gradually move away from our dependence on fossil fuels because of the clear warning signs of human-induced climate change, it is opening the door to a new and dangerous oil frontier. The Administration is encouraging the development and production of oil reserves through pro-oil subsidies, at great environmental and financial cost; reserves which we can't afford to burn if we are to avoid dangerous climate change.

Background

With the discovery of oil at Prudhoe Bay on Alaska's North Slope in 1968, the economic, political and environmental landscape of the 49th state was changed forever. While many had long suspected that significant oil deposits lay beneath the frozen tundra, few suspected it would turn into the largest oil field in North America.

After much discussion about how to get the oil to market, the proposal adopted was to build the Trans-Alaska Pipeline. The pipeline would ultimately stretch 800 miles from Prudhoe Bay on the Arctic Ocean, across tundra, through the frozen passes of the Brooks Range, and through some of the wildest country in North America to its destination at the port of Valdez in Prince William Sound on the edge of the Gulf of Alaska.

In what turned out to be one of the major environmental battles of the 1970s, environmentalists challenged the plan to bulldoze, blast and dig their way through America's last wilderness lengthwise from north to south. The pipeline would be the largest private engineering project in history, and would also require the first major Environmental Impact Statement under the new environmental laws enacted by the Nixon Administration. In the end, the US Senate voted 51-50 in favor of the plan. Then Vice-President Spiro Agnew, in one of his last official acts before being driven from office, cast the tie breaking vote.

Construction of the pipeline began in 1974, and on June 20, 1977, the first oil flowed through the pipeline and was eventually (under normal conditions the oil takes about six days to travel the length of the pipeline) pumped aboard a tanker in Valdez. At its peak the pipeline carried around 2 million barrels a day from the Prudhoe Bay fields. Today it averages about 1.2 million barrels a day.

While both the construction and operation of the pipeline have been dogged by scandals and cover-ups, accidents and oil spills (totaling 1.2 million gallons since 1977), the real disaster occurred in March of 1989, when the now-infamous Exxon Valdez ran aground on Bligh Reef on it's way out of Prince William Sound. More than 11 million gallons of North Slope crude contaminated 1500 miles of coastline in and around Prince William Sound, a productive fishing area and important habitat for birds, fish and marine mammals. The spill killed more wildlife than any other spill in history. In the end, massive damage awards (9 billion USD) were assessed against Exxon, but evidence of the disaster is still apparent. Most of the fish, bird and marine mammal poulations, and the human communities which depend them, have still not recovered.

In the wake of the Exxon Valdez disaster, and with uncertain oil prices, North Slope expansion slowed for a time. However, the election of Governor Tony Knowles in 1994, and the policies of the Clinton Administration have given the industry a new lease on life. Oil field expansion has also been spurred world-wise by decreased costs due to technological advances and management cost-cutting measures - it is now more economical to produce from small oil fields than it was previously. Furthermore, Governor Knowles declared Alaska 'open for business' to the oil industry, and in concert with the state legislature has reduced royalties and taxes, made leasing terms more favorable and encouraged massive investment in expansion of the Arctic oil fields.

One of the major arguments in the 1970s in favor of building the pipeline, was the need for 'energy independence' and a decreased reliance on imported oil to satisfy the United States' petroleum appetite. So one of the concessions won by opponents was a requirement by the US Congress that the oil produced be exclusively for the domestic market. However, the Clinton administration's 'globalization' policies have overcome the 'national interest' which was being served by the export ban, and in 1995 President Clinton signed legislation ending the ban on the export of North Slope Crude oil. Alaskan oil is now tankered to China, Japan and Korea, providing new impetus to open up new fields, primarily for expanding Asian markets.

Massive Expansion - East, West and Offshore

At present, the two major North Slope Operators, ARCO Alaska Inc. (ARCO) and BP Exploration (Alaska) Inc.(British Petroleum), plan to invest over 5 billion USD over the next 5 years on new North Slope expansion, exploration and development projects, and drill over 1,000 new production wells.

ARCO's plans are focussed to the west of the existing Prudhoe Bay oil field complex, with the new Alpine field on the Colville River delta. This is the first Alaskan Arctic oil field to be developed entirely in a floodplain, with potentially dire consequences for local wildlife, fish, and for the village of Nuiqsut, only ten miles away. British Petroleum is moving to the east, planning to open up it's Badami field near Mikkelsen Bay during 1998, and with future plans to move further east to the Point Thomson Unit on the edge of the Arctic National Wildlife Refuge. British Petroleum, ARCO, Chevron, Exxon and other oil companies continue to press to open this last five percent of the North Slope wilderness not available to them for drilling or development - the coastal plain of America's Arctic Refuge.

At the same time, both companies are looking offshore. Both the Alaska and US governments have been selling leases offshore for nearly 20 years, and 30 exploratory wells have been drilled in the Beaufort Sea since 1982. However, tangling with the Arctic ice pack on a year round basis has heretofore been considered too financially and environmentally risky. But with impetus from both the State and Federal governments, BP and ARCO judge that they can deal with the extreme conditions presented by Arctic storms, freeze-up, break-up and the surge of the pack. They also must solve the difficult problem of how to get the oil ashore and into the Trans-Alaska Pipeline safely.

ARCO's plans seem to have been thwarted for the moment. The Warthog exploratory well off Camden Bay which was drilled during the 1997/98 winter season was apparently dry, or at least does not seem to have turned up enough oil to warrant the huge development costs and risks associated with this development. Or perhaps the company is biding its time, letting others take the first big risks.

British Petroleum, on the other hand, is moving forward with two offshore development projects in the Arctic, called 'Northstar' and 'Liberty', where the oil will be pumped ashore using the unprecedented and untested technology of pipelines buried beneath the sea-bed of the Arctic Ocean - posing major risks of oil spills below the Arctic ice.

Northstar

BP's Northstar project is located about 6 miles north of Point Storkersen, just west of Prudhoe Bay. An existing gravel island, Seal Island, from which Shell drilled the first exploratory well in the area in 1982, will be enlarged to approximately 465 by 410 feet, and will be the platform for up to 30 wells, production facilities, and accomodation for a production crew of 50 workers. The estimated size of the field is 145 million barrels of oil, and estimates of BP's investment in the project run from 500 million to 1.5 billion USD. The project has a design life of 15 years.

Currently, an Environmental Impact Statement is being prepared for the project, which is expected to be published in June of 1998, more than 18 months after the originally proposed date. BP would like to begin construction on the project in the winter of 1998/99, and bring the field into production in the year 2000.

There are three main areas of controversy surrounding the project: one, the proposal to build a sub-seabed pipeline in the permafrost in order to get the oil ashore; two, the 'sweetheart' deal done behind closed doors by the State of Alaska with BP in order to make the project financially viable; and three, the cumulative effects of industrialisation on the wildlife and ecology of the Beaufort Sea.

The pipeline

BP's plans call for two sub-seabed pipelines (one for oil and one for gas) to be buried in a trench 7-9 feet beneath the ocean floor between Seal Island and Point Storkersen; one to transport the oil to the Trans-Alaska Pipeline, and the other to supply gas for heat and power. The trenching and laying of the pipeline would take place in the winter months.

Not only would the pipeline be subjected to the usual stresses and strains and occasional failures associated with pipelines (642 reported spills totaling 1.2 million gallons have been reported by the operators of the Trans-Alaska Pipeline since it opened in 1977), but these potential problems would occur in the potentially unstable permafrost beneath the sea floor, which is itself below the Arctic ice pack for about 10 months of the year. How will BP deal with the hazards to the pipeline associated with ice 'scouring' and 'gouging' the seabed? How will British Petroleum deal with the possibility of leaks or spills under the Arctic ice? While the ice is frozen solid in winter, the possibility exists to use vehicles on the ice. During the brief 'open water' season it is often possible to use boats, though drifting ice presents a continuous hazard. But what about the broken-ice conditions during freeze up in the autumn and break up in the spring, when the pipeline will be accessible by neither boats nor vehicles? And what about the danger of winter storms and rafting sea ice to the production facility itself? These are just some of the questions that the Environmental Impact Statement will have to answer.

A sweet deal for BP

The Northstar leases were originally held by Shell, who drilled an exploratory well on Seal Island in 1982, but decided it was too risky and expensive to develop. The lease was then sold to another company, Amerada Hess. British Petroleum purchased the leases from Amerada Hess in 1985. Then, in a private deal, Governor Knowles renegotiated the terms of the lease with, giving much more favorable terms to British Petroleum. The deal was then approved by the Alaska State Legislature. In a lawsuit brought by two Alaska citizens against this deal, this arrangement is alleged to be against the Alaska State Constitution. Although the case failed on the first round, it is currently under appeal. Not surprisingly, British Petroleum topped the list of lobbying salaries and expenses at the state capital in Juneau in both 1995 and 1996.

Cumulative effects of Arctic Industrialisation

The unique adaptations which allow large mammals to survive in the Arctic, along with the fragile ecology which supports them, are very poorly understood. What studies have been done generally show the plants and animals of the region to be extremely sensitive to ANY disturbance. For instance, even footprints left in the tundra remain for many years. The sprawling and expanding industrial complex at Prudhoe Bay which now covers 800 square miles will soon spread from the borders of the Arctic Refuge in the east to the edge of, and perhaps into the NPR-A. To date, no account has been taken of the cumulative effects of the noise, disturbance and the chronic hydrocarbon and chemical pollution associated with any oil production activities on the whales, seals, polar bears and other wildlife of the Beaufort Sea, as well as on the delicate ecology which supports them.

Liberty

British Petroleum's Liberty project is located 6 miles offshore in Foggy Island Bay, which lies east of the Sagavanirktok River delta, which forms the eastern arm of Prudhoe Bay. A gravel island, measuring 345 feet by 680 feet at the surface will be constructed in about 22 feet of water, and will support 22 wells, production facilities and accomodation for a production crew of about 50. The size of the field is estimated to be 120 million barrels of oil, and the facilities have a design life of 15 years.

The US Minerals Management Service (MMS) has initiated the Environmental Impact Statement Process, and a draft is expected to be issued in October of 1998. British Petroleum intends to begin construction on the project in December of 1999, and begin initial production operations in December of 2000.

Like with the Northstar project, British Petroleum proposes to pump the produced oil ashore in a 6 mile long pipeline in a trench buried beneath the seabed. The pipeline would then go aboveground and connect with the pipeline servicing the Badami Field which in turn connects with the Trans Alaska Pipeline.

The Liberty pipeline has all of the same risks and potential problems as the Northstar pipeline: ice movement, scouring of the seabed, and the intractable problem of what to do when something goes wrong beneath the seabed, beneath the ocean, which is covered with Arctic ice for most of the year. Although it is argued that the site is less vulnerable than the Northstar site because it is in shallower water and inside the barrier islands which dot the Beaufort coast, one has to wonder whether this is in fact an argument in favor of Liberty, or against Northstar? The project will also mark yet another incursion into hitherto undisturbed area. In addition, it is right up against a unique Arctic environmental phenomenon.

The Boulder Patch

Most of the sea-bottom in the nearshore of the Beaufort Sea is soft, sandy mud, and the movement of ice through the area makes life difficult for anything more than a basic benthic (bottom dwelling) community. However, just to the west of the proposed Liberty project lies the 'Boulder Patch', a unique area of the Beaufort sea, where the bottom is strewn with rocks ranging in size from pebbles up to boulders 2 meters in diameter. This area supports a rich and varied community of plants and animals, including extensive kelp beds, anemones, corals and fish. In fact, the laminaria kelp actually grows 90% of its annual length in darkness below the sea ice. The entire area is an extremely important biological area, and became very controversial when BP was developing its Endicott field, just to the west.

There were major concerns about the effects of Endicott oil field construction and drilling waste disposal on the productivity of the Boulder Patch, and extensive research was conducted in the parts of this community nearest to that oil field. However, the Liberty Production Island is proposed to be built even closer to the Boulder Patch, only a mile away, and this area has received very little study to date.

Conclusion

Oil development in the Alaskan Arctic has already wrought significant environmental damage and habitat destruction. The onshore expansion of oil fields from Prudhoe Bay eastward towards the Arctic National

Wildlife Refuge is continuing, although the American public have stepped forward time and time again to defend this protected area. Public opinion polls show most Americans support protection of this wilderness area and President Clinton has already vetoed legislation that would have opened it to drilling by oil companies.

To the west, expansion is already proceeding rapidly, and ARCO seems intent on pushing its way past is new Alpine development on the Colville River delta and into the NPR-A. The Clinton Administration is currently considering new leasing in this area.

It is clear that there will inevitably be severe local environmental impacts as a result of the massive expansion of the oil industry on Alaska's North Slope. There is also the threat of human induced climate change which is caused by the burning of coal, oil and gas. Pumping huge sums of money into new oil development is irresponsible in the face of the need for dramatic action to protect the planet from human-induced climate change.