Push to open up ANWR leaves Alaskan industry experts puzzled

The possibility of oil spills have environmentalists concerned about new pipeline projects in Alaska. There is so much Alaskan natural gas being pumped back into the ground instead of being sold for fuel that the push by President George W. Bush to open up the Arctic National Wildlife Refuge to obtain natural gas has left industry experts in Alaska puzzled.
Every day, oil producers on Alaska's North Slope bring up about 8 mm cf of natural gas as a by-product of oil production, and every day they re-inject the gas back into the Earth. There are currently no buyers for this natural gas, and there are no pipelines or other means in place to ship the gas to market.
Chuck Logsdon, chief petroleum economist for the state of Alaska, told the Seattle Times in April: "Clearly there's lots of stranded gas in the Arctic, both in Alaska and in Canada. We've got lots of it, and it's not going anywhere right now. Heck, we've got a whole bunch of it at Prudhoe Bay that we want to sell." The Alaska Department of Natural Resources reports that natural gas reserves in the North Slope total at least 31 tcf.

More than two-thirds of that is in the Prudhoe Bay field. Oil companies have been pumping oil in Prudhoe Bay since 1977. It is the nation's largest known but untapped gas reserve. Matt Berman, a University of Alaska Anchorage economist, told the Seattle Times: "I can tell you that oil companies aren't looking for natural gas. They're looking for oil." Any gas found in the refuge would be only a "side benefit," and perhaps not commercial even if there were a gas pipeline from Prudhoe Bay to the Lower 48 states.
Political and industry officials have long argued for a pipeline project to deliver North Slope gas to markets. There are a number of proposals that have been suggested over the years for overland gas lines to the Lower 48 states or a LNG system that would ship the fuel by tankers.
Phillips Alaska, BP Exploration, Foothills Pipeline and Marubeni have joined together as the Alaska North Slope LNG Project to explore the possibility of building a natural gas pipeline to take the fuel to markets in the south. Dale Bagley, chairman of the Cook Inlet Pipeline Terminus Group, says they have just completed a $ 20 mm feasibility study and have narrowed potential terminus sites to Nikiski on Cook Inlet, and Anderson Bay near Valdez. The member companies, who are natural gas owners, natural gas producers and natural gas marketers, hope to choose a terminus site soon, and have solicited input from local communities.

Environmental advocates, concerned about the effects of opening up the Alaskan National Wildlife Refuge to oil and gas exploration, also worry about new pipeline projects. The Wilderness Society, a national conservation group based in Washington, DC, says that at Prudhoe Bay, there have been more than 400 oil and toxic chemical spills every year. The group claims that it is possible to increase Alaska oil and gas production without drilling in any of the now protected areas, but pipelines cause problems as well.
The US Geologic Survey recently reported that the average estimate of economically recoverable oil from the Arctic National Wildlife Refuge is 3.2 bn barrels of oil or less than six month's worth fuel for US consumers. But Arctic Power, a group of Alaska companies that supports drilling the Arctic National Wildlife Refuge, argues that the Coastal Plain of ANWR represents the highest petroleum potential onshore area yet to be explored in North America.