January 12, 2006

US opens Alaskan area to oil leases

By Yereth Rosen

ANCHORAGE, Alaska (Reuters) - The U.S. government paved the
way on Wednesday for oil drilling in an Alaskan region used by
migrating caribou and birds, three weeks after Congress blocked
energy development in the nearby Arctic National Wildlife

The Interior Department gave final approval to develop the
Teshekpuk Lake region, setting up an oil-lease sale in
September. The decision came a year after the Bureau of Land
Management recommended drilling in the region, which lies west
of the wildlife refuge on Alaska's North Slope.

Teshekpuk's 389,000 acres had been protected from oil
exploration since the Reagan Administration. In 1998, when
former President Bill Clinton opened some areas of the North
Slope to the oil industry, the Teshekpuk Lake area was kept

The Arctic wildlife refuge, or ANWR, is 19.6 million acres,
about 50 times larger than the Teshekpuk Lake region. The U.S.
Senate last month once again blocked attempts to open ANWR to

The lake is the biological "heart" of the region, said Dora
Nukapigak, a resident of the Inupiat village of Nuiqsut, the
community closest to Teshekpuk Lake. The lake is about 80 miles

east of Point Barrow, Alaska's northernmost point.

"It's our garden. It's where we gather our food," Nukapigak

Advocates say the region is a source for oil and natural
gas needed by the United States.

Drilling in the region would bring more companies to
Alaska, said Judy Brady, executive director of the Alaska Oil
and Gas Association. "We're very excited about that."

The Bureau of Land Management recommended drilling near
Lake Teshekpuk a year ago and says there are about 1.5 billion
barrels of recoverable oil.

If an oil lease sale is held next September, it could lead
to oil drilling as soon as the winter of 2007-08.

With ANWR closed to exploration, the oil industry is likely
to be attracted to the new opportunity in what is part of the
National Petroleum Reserve-Alaska, said Henri Bisson, Bureau of
Land Management director for Alaska.

"We believe there will be a lot of interest. It's the most
significant oil prospect on the North Slope, absent ANWR," he

Lake Teshekpuk and adjacent land is not part of a wildlife
refuge and does not need Congressional approval for oil

Leasing and subsequent development will be subject to a
series of new restrictions, some added in the past year in
response to local residents' concerns, Bisson said.

Environmentalists expressed disappointment.

"This is fundamentally an industrialization of a critical
wildlife habitat that should be, by any measure, protected,"
said Stan Stenner, executive director of the Audubon Society's
Alaska office. Drilling opponents say the area north of the
lake is a critical habitat for geese in the vulnerable molting
stage and that oil development could attract predators.

The Indiana-sized petroleum reserve, established in 1923,
was largely ignored by the oil industry until the mid-1990s,
when Arco Alaska discovered the 430 million-barrel Alpine field
on state land on the reserve's eastern border.