January 12, 2006

US Government Opens Alaskan Area to Oil Leases

By Yereth Rosen

ANCHORAGE, Alaska -- 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 Refuge.

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 off-limits.

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 drilling.

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 said.

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 said.

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

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.