Alaska to pursue offshore drilling

Oct 22, 2004 02:00 AM

Alaska Gov. Frank Murkowski said he plans to initiate offshore drilling along the coast of Alaska's Arctic National Wildlife Refuge. The federally protected refuge is off limits to drilling, but the state's jurisdiction extends three miles offshore from ANWR's coastline, Murkowski said during the annual meeting of the Interstate Oil and Gas Compact Commission in Oklahoma City.
"I intend to put some lease sales together offshore," Murkowski told. "I'd like to see something done in the next year."

Such action could stir up a number of legal questions and challenges, he said. It could be viewed as a violation of the ban on drilling in ANWR and force the government's hand.
"Who's oil is it?" Murkowski said. "The only way to protect yourself is to drill on your side."

Murkowski, who was elected governor of Alaska in 2002, served 22 years in the US Senate and was chairman of the Senate Energy and Natural Resources Committee. Efforts to allow oil exploration in ANWR recently failed due to "extreme environmental activism" and Senate Democrats such as Tom Daschle and John Kerry.
"There's just no solid reason why we can't initiate exploration in that area," Murkowski said.

The failed proposal limited drilling to 2,000 acres of the 19 mm acre refuge, which covers the state's northeast corner, he said. He pointed to Alaska's Prudhoe Bay, the largest oil field in North America, as evidence that oil exploration can be done without harming the environment. The Trans-Alaska Oil Pipeline is another good reason to allow oil and gas development in ANWR, Murkowski said.
"The infrastructure is already there," he said. "We've got an 800-mile pipeline, and it's half full."

But environmentalists argue that ANWR's coastal plain is a biologically rich area, where animals, including the porcupine caribou, come to nest and raise their young. The coastal plain offers them protection against predators because the area lacks the foliage predators use for cover. Environmental groups contend drilling activity could push the animals onto more dangerous lands.
Murkowski, chairman of the IOGCC, also urged the industry to pull together to convince Congress to pass a comprehensive energy bill that promotes domestic production, alternative energy and reduced dependence on foreign oil.
"It's going to have to be driven, and this organization is going to have to drive it," he said.

The average price of gasoline has surpassed $ 2 a gallon, oil is above $ 50 a barrel and higher natural gas prices are on the horizon.
"Demand is outstripping supply. The problem is going to be with us for a long time," Murkowski said. "We need an energy policy that recognizes reality."
Murkowski also expressed concerns about the nation's diminishing supply of natural gas and touted Congress' recent approval of incentives to build a gas pipeline from Alaska's North Slope.
"Our hunger for natural gas is expected to grow 25 % over the next 20 years," he said.

The incentives included $ 18 mm worth of loan guarantees for the $ 20 mm project, which will take years to complete.
The pipeline would carry up to 6 bn cfpd of gas from Alaska to the lower 48 states. That's about 20 % of US gas production, Murkowski said.

Source: RigZone
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