New exploration in Alaskan Petroleum Reserve

Jan 14, 1997 01:00 AM

The Clinton administration has agreed to explore the oil prospects in an Arctic Coast petroleum reserve, a move Alaska sought to boost its sagging oil income. The US Interior Department plans to study potential drilling areas and the environmental steps that would be needed to protect wildlife in the north-east part of the National Petroleum Reserve-Alaska, said Deborah Williams, who heads the agency in Alaska. The reserve, a 23 million-acre area that stretches across the western part of Alaska's north slope, was set aside as a US Navy oil stockpile in 1923. The reserve is west of Prudhoe Bay, the mainstay of Alaska's oil industry, and the Arctic National Wildlife Refuge, an area that remains closed to oil exploration. The US Geological Survey has estimated the reserve could hold anywhere from 820 mm to 5.4 bn barrels of oil. State geologists estimate Prudhoe Bay will have produced 12 billion barrels by the time the oil peters out in the next few decades. Cam Toohey, who heads Arctic Power, an oil-industry group, said pushing for federal approval to drill in the wildlife refuge is the top priority, but "there's great potential for the National Petroleum Reserve, too.'' The research on the reserve should be done within 18 months, and the Interior Department would decide after that whether to sell oil leases there, Williams said. The state and federal governments would share proceeds from the oil sales. State officials have focused on obtaining approval for drilling in the wildlife refuge, which they believe offers the best prospect for a big oil strike to offset declining production at Prudhoe Bay. The reserve, however, could help pad the petroleum royalties the state collects and keep oil flowing through the trans-Alaska pipeline, state officials said. The Clinton administration remains opposed to drilling in the Arctic National Wildlife Refuge because of the possible environmental harm to caribou and other wildlife. Unlike the refuge, where drilling would require action by Congress, oil exploration in the petroleum reserve needs only Interior Department approval. Conservationists opposed to development in the wildlife refuge do not raise the same objections over drilling in the petroleum reserve, acknowledging that it has long been designated as an oil stockpile. The federal government has drilled exploratory wells in the petroleum reserve twice, after World War II and during the energy crisis in the 1970s. Some oil leases were sold in the early 1980s, but the area was not developed and the leases have expired.

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