CASE NUMBER: 205
CASE MNEMONIC: ALASKA
CASE NAME: Alaska Oil Dispute
A History of the Issue
The ANWR, which was signed into law in 1973 by president Richard Nixon, has remained controversial even since then. Supporters of an end to the oil export ban have proposed many bills that would repeal it. In 1992, oil ban repeal supporters pushed ANWR drilling legislation through the Senate Energy Committee for the first time.(1)
The 1992 election of Bill Clinton to the U.S. presidency and the Democrats' gains in both the Senate and the House of Representatives seemed to elimate the possibility that the ANWR would be repealed. But the 1994 mid-term elections changed the political outlook in Washington, D.C. Senator Frank Murkowski (R-AK) now chairs the Senate Committee on Energy and Natural Ressources and Representative-at-Large Don Young (R-AK) chairs the House Natural Resources Committee. As chairemen of these two powerful committees, Murkowski and Young along with Senator Ted Stevens (R-AK) have been relentless and advocated the opening of oil fields in Alaska's Northern Slope.
The introduction of the resolution has generated enormous amounts of congroversy on both sides. The oil fields in Alaska are important because The United States' dependency on petroleum imports has risen considerably in the past twenty years. The shocks of 1973 and 1980, and the 1978 Khomeini revolution in Iran had serious repercussions in The United States, where Americans had to wait in line for hours to buy gasoline. The Persian Gulf War in 1991 put the U.S.'s access to two-thirds of the world's oil reserves in great danger according to Senator Murkowski.(2)
Opening oil fields in Alaska would decrease U.S. dependency on petroleum imports from the Middle East and Latin America, boost the revenue of American oil companies, would create many American jobs, would lower the price of oil for American oil consumers, would increase federal, state, and local tax revenues, and lower our trade deficit. Alaska's Northern Slope may hold large quantities of oil, but it is impossible to say for sure because exploration is banned by the ANWR. There may also may be large quantities of petroleum reserves in other parts of Alaska. Guesses as the extent of therichness of the oil reserves in Alaska are varied. According to three government studies since 1980, anywhere from 1.69 to 14.77 billion barrels of recoverable oil may be located at the protected ANWR.(3)
Oil companies have intensified their concern about the possible opening of oil fields in Alaska. Petroleum reserves from Alaska's Prudhoe Bay Field appear to be declining, and some geologists have testified that the chances that more oil reserves will be found there appear to be bleak.(4) Arco Alaska Inc. and BP Exploration (Alaska) Inc, whose boards have already approved large-scale exploration and are considering project risk sharing in Alaska, have called upon Congress to open up the Northern Slope for exploration and drilling.(5)
Anti-oil exploration congressmen and conservationists have come under heavy fire for trying to block legislators from repealing the ANWR which freezes development in 19-million acres of Alaskan land. (6) Alaska's senators have called them radicals who are anti-consumer. Congressman Don Young (R-AK) charges that the government has been "infiltrated by preservationists. This is a socialist movement."(7) Protests against oil drilling in the Northern Slope continues nevertheless. While Senator Murkowski has repeatedly denied that oil exploration would have a noticeable affect on the environment, conservationists worry that drilling and potential accidents would jeopardize the animals that populate the ANWR including caribou and polar bears (See questions 21, 25, and 26 for more details). The ANWR is also the home Alaska's Gwich'in Indians, whose hunting ground are protected by the 1973 law.
Extenive political mud-slinging has turned this bill into a high profile issue which reporters often write about in the The Washington Post and other large newspapers and journals. While President Clinton continues to oppose the opening of oil wells in the Northern Slope, he would be forces to veto the whole Fiscal Year 1996 budget to prevent them from opening. The proposed opening of the oil well have never been more important to Alaskans, which receive $983 a year entitlement from the state government.(8) Without a new source of revenue, Alaska's government will not be able to continue to pay this bonus to residents for much longer.
The oil and gas industry scored a big victory on November 9, 1995,
when the House of Representatives passed a bill that would lift the
22-year ban on the export of the Northern Slope's oil in a 289 to
134 vote. Although few conservatives objected to the bill, Rep.
Joe Scarborough (R-FL) called it a case of "shoveling more
corporate welfare to Big Oil."(9) Environmental groups fear that
lifting the ban on Northern Slope will increase the pressure to
open the ANWR to drilling.
As the powerful Chairman of the Senate Energy and Natural Resources
Committtee, Senator Murkowski wants to make it easier for U.S.
companies to sell liquified natural gas (LNG) to Japan. According
to Murkowski, opening up Japan and other far Eastern countries will
help producers in the U.S. find a new mahor market for gas
sales.(10) If the ban were lifted, Murkowski says that the Alaska
Northern Slope (ANS) exports would be shipped to Japan through the
trans-Panama pileline.(11) A deal with Japan might give the
country access to up to 200,000 b/d of crude oil.(12) The exports,
though, it might be very expensive for Japan.
Lifting the ban would also have implications in Canada, where the
government has already proposed merging the ANWR with Vunntut and
Ivvavik Canadian parks. According to Department of Interior
Director of Office Policy Analysis Brooks Yeager, "This interest
[of the Canadians] is consisent with Canada's stated goal of
protecting the vitality and habitat of the Porcupine River caribou
heard which migrates between the U.S. and Canada and whose calving
grounds are on the ANWR.(13) Yeager's memo said that"cor
ordinating [sic] management" of the parks would facilitate research
on wildlife species, parallel wildlife protection plans,and native
participation. Senator Murkowski says that he supports more joint
research and development but believes it would be absurdfor the
U.S. to surrender control of the ANWR.(14)
Even if the ban is not lifted, The United States already has major
oil interests on the eastern coast of Alaska. In February 1995,
the Oklahoma-based Northwerst Alaskan Pipeline Co. dropped out of
a 20-year old partnership to build a line from Alaska to other
domestic U.S. markets. The two remaining Canadian companies plan
to continue the project though the 4,800 mile pipeline system to
the American West and Midwest has already cost them $22.5
3. Related Cases
(1): Trade Product : = OILGAS
(2): Bio-geography : = POLAR
(3): Environmental Problem : = General [HABIT]
For related issues, see Trade and Export Databases cases VENEZ,
VEN2, CLEAN, SUPER, ECUADOR, EXXON, SHET, and NOROIL
4. Draft Author
B. LEGAL CLUSTER
5. Discourse and Status: DISagree and INPROGress
From senators to conservationists to Alaska residents, a wide
range of opinions about the ANWR continue to divide Americans.
6. Forum and Scope:USA and UNILATeral
7. Decision Breadth
Number of Parties Involved: 1
The number of groups and individuals that would be affected by a repeal of the ANWR is great. Alaskans stand to benefit financially if oil fields were opened in the Northern Slope because the state may raise government bonuses to residents if the bill passes. Alaska currently has no income tax. If oil fields are not opened, Alaska state legislators may be forced to repeal anti-income tax laws. The opening of oil wells at the ANWR would create many American jobs, much of them located in Alaska.
American consumers would also benefit from the act because it would
lessen U.S. dependence on imports and thus lower gasoline prices.
Successful drilling in Alaska's Northern Slope would also bring in
enormous amounts of revenue to federal, state, and local
governments and would lower the United States' trade deficit.
Failure to open the oil fields would be disastrous to petroleum
companies like Arco Alaska and BP exploration which have already
invested millions of dollars in the ANWR under the expectation that
Congress would lift the export ban.
Oil refiners also have a stake in the bill because some of them
fear that opening oil wells would force them to lower their prices.
The independent refining companies fear that opening oil wells
would force them to lower their prices. The independent refining
companies and some state governments fear that oil production in
the ANWR would divert jobs to Alaska. In particular, California
independent producers claim that Alaskan crude oil has already
depressed prices for their production. California independent
refiners, however, disagree with this presumtion.(16)
Conservationists are opposed to opening the Northern Slope to oil production because they fear the negative impacts that oil spills would have on the environment. The Gwich'in Indians who live in the ANWR also oppose oil production in their habitat because they are worried that it would destroy their traditional life style and might kill the caribou which they depend on for food and tools.
8. Legal Standing: LAW
C. GEOGRAPHIC FILTERS
Geographic Domain: North America
Geographic Site: North
Geographic Impact: The United States
10. Sub-National Factors
11. Type of Habitat
Habitat Type: POLAR
D. TRADE FILTERS
12. Type of Measure: Regulatory Ban [REGBAN]
The ANWR is a regulatory ban because the law prevents all producers from drilling oil in the Northern Slope in any manner. Despite the seeming unity of the Republican Party on the issue, the Senate Environment and Public Works Commitee is now chaired by Senator John Chafee (R-RI) "who . . . has no lover for the drive to protect property rights welling up in the West and the South."(17) The pro-oil forces' power in Congress and even in parts of the Clinton Administration now are nevertheless very strong. According to the November 18, 1994 issue of Greenwire, even the National Economic Council and then-NEC Chairman Robert Rubin "are skepticaland ask a lot of tough questions about the environment . . . The greenies [preservationists] are [Vice-President Al] Gore's staff,and when the greenies and the economic guys collide, it's a bit of a mismatch."(18) While Senator Murkowski and his supporters say that lifting the ban will lower prices for American consumers and decrease our dependency on foreign oil, environmentalists fear that the pro-oil senators and congressmen's approach is designed solelyto benefit industry. But critics of preservationists say that the Republican-led plan would make environmental statues less burdensome on consumers.(19) In an interview with Oil & Gas Journal, Senator Murkowski said that ANWR leasing for oil exploration would raise more than $3 billion for the federal government and would supplement diminishing shipments from Prudhoe Bay. In the interview, he emphasized that oil exploration wouldhave few environmental implications. Congress should decide energy issues on the basis of "sound science, not emotion," Murkowski said.(20)
13. Direct vs. Indirect Impacts: INDIRect
The INWR has an indirect impact in this case because it is an environmental law which in turn has had a trade impact on Alaskan oil.
14. Relation of Measure to Impact:
Directly Related to Product: YES - OILGAS
Indirectly Related to Product: NO
Not Related: NO
Process: YES - SPLL, HABIT
Part of the ANWR's purpose is to protect the Northern Slope from
development or destruction. This law has therefore extensively
linked trade and environment.
15. Trade Product Identification:
Product type: petroleum, oil
16. Economic Data:
If the ANWR were repealed, thousands of jobs would be created. It's impossible to say exactly how many jobs would be created or what the industry output would be because the Northern Slope has not yet been explored.
17. Degree of Competative Impact:
How the question regarding the strength of the relationship between
the ANWR oil and the environment is answered depends on who answers
it. Most people agree that the oil ban does keep oil prices higher
than they could be, forces the Americans to forego the creation of
a large number of jobs and tax revenue, and keeps the The United
States dependent on petroleum imports. What people don't agree on
is the extent to which oil drilling would threaten the wildlife
and Gwich'in Indians that live in the area
and would be disastrous if an oil spill occurred. Oil project
supporters saythat the environmental impact of opening and
exploring wells in the Northern Slope would have negligible impacts
on the environment.
Thus the extent that developing the ANWR would affect the
environment depends on which argument you believe. No oil
drillingis permitted in the Northern Slope, so there has not yet
been any environmental cost in this case.
18. Industry Sector: OILGAS
19 Case Exporters and Importers:
Case Exporter: Alaska, The United States
Case Importer: The United States, Japan
E. ENVIRONMENTAL FILTERS
20. Environmental Problem Type: [HABIT]
Because of the geographic location of the ANWR, the oil drilling
could have a number of effects on the environment. Any oil spill
would be disastrous and would be difficult to clean up because of
the cold weather in the Northern Slope. Animals that might be
influenced by an oil spill include polar bears, caribou, and
anumber of fish that inhabit the water near it. As well as the sea
and land being affected by oil spills, the nature of the product
pollutes the air during usage, thus causing global warming and
21. Species Information:
Many Species may be affected by oil drilling in the ANWR. Some of these species are:
American bison: Bison bison
Black bear: Ursus americanus
Dall mount. sheep: Ovis dalli
Grizzly bear: Ursus Arctos
Gwich'in Indians: Homo sapien
Inupiat Indians: Homo sapien
Killer whale: Orcinus orca
Narwhal: Monodon monoceros
Northern fur seal: Callarhinus ursinus
Northern sea lion: Eumetopias jubatus
Moose: Alces alces
Porcupine caribou: Rangafer tarandus
Sitka deer: Cervus nippon
White whale: Delphinapteris beluga
Balsam poplar: P. balsamifera
Cotton wood: P. deltoids
Dwarf willow: Salix chamaetia
Paper birch: Betulaceae papyrifera
Sitka spruce: Pinaceae sitchensis
Western hemlock: Tsuga heterophylla
Western red cedar: Cupressaceae nootkatensis
White spruce: Pinaceae alba
Willow ptarmigan: Lagopus lagopus
22. Impact and Effect: HIGH and REGULatory
23. Urgency and Lifetime:
Lifetime of Species: Varies
Oil companies have not yet begun drilling in the Northern Slope, but if the ANWR were repealed they would do so immediately. The urgency is immediate because this bill is pending on Capitol Hill and will be sent to the president very soon.
24 Substitute: NO
Scientists have created the technology to power automobiles with solar, nuclear, and electric energy, but these cars are not efficient enough, cheap enough, or in the case of electrically operated cars, safe enough. (21) Agriculture Secretary Dan Glickman has suggested using corn-derived ethanol as an automated fuel. Unfortuneately, the enormous amount of energy reqired to grow corn and process it into ethanol makes it an inefficient fuel.(22)
F. OTHER FACTORS
25. Culture: YES
The opening of the Northern Slope and the ANWR to drilling could have a great impact on the thousands-year old culture of the Gwich'in Indians who live in the area. The Porcupine caribou provides the Gwich'in Indians with up to seventy-five percent of the protein in their diet(23) The Gwich'in Indians use every part of the caribous they catch, even the small intestine and the stomach.(24) One member of the Gwich'in tribe in Arctic village said, "[I]t is not just what we eat, is who we are. Our whole way of life as a people is tied to the Porcupine caribou. It is in our language, and our songs and stories."(25) If the Porcupine caribou died out, the Gwich'in Indians' culture might be destroyed and they may be forced to move.
The Inupiat Indiats of Coastal Plain, though, disagree with the Gwich'in Indians' position. According to the Inupiat vice-president of Arctic Slope Corp., the Gwich'in Indians "were sufficiently confident that their own oil on their own land could be safely produced that they opened them to leasing" but are unwilling to concede that oil can be produced by the Inupiats without damaging the caribou.(26) The Inupiat Indians' corporation controls mineral rights in the Coastal Plain under the Alaska Native Claims Settlement Act of 1971. The Gwich'in Indians, who have charged that their rights are threatened under several international human rights covenants, sued the U.S. Department of Interior for not adequately addressing environmental impact studies.(27)
26. Human Rights: YES
Since the Gwich'in Indians inhabit the Northern Slope, a good case can be made that repealing the ANWR would vioulate their human rights. The Gwich'in Indians, who have claimed that their rights are being violated under several international human rights covenants, sued the U.S. Department of Interior for not adequately addressing environmental impact studies.(28) One Gwich'in Indian, Tribal Leader Sara James, has brought her case to Washington, D.C. in Congressional testemony.
27. Transborder Issues: NO
28. Relevant Literature:
"Alaska Lawmakers Take Power in 104th," E and P Envoronment 20 January 1995: no page provided.
Anderson, Ross, "Clique with Clout Targets Alaska's Natural Resources," The Seattle Times 25 June 1995: B6.
"ANWR Reserve Estimates Up, Now Down," E and P Envirornment 18 Aug., 1995: no page provided.
Byrnes, Patricia, "Legislative Outlook: Dreary; Environmental Legislation," Wilderness 22 June 1995: 4.
Clifford, Frank, "Chill Falls Over Arctic Refuge; The GOP Congress May Allow Long-Thwarted Oil Drillings in Alaska's Most-Celebrated Caribou Calving Grounds. For Many, The Economic Lure Outways Any Threat To Wildlife and Native Culture, Rethinking the Environment," Los Angeles Times 10 July 1995: A1.
Clifford, Frank and Lacey, M., "Alaska Legislator Pushes to Loosen U.S. Grip on Lands; Econvironment: GOP's Private Interests and States to Control Sites, Santa Monicas, Redwoods Are Targets," Los Angeles Times 18 Mar. 1995: A1
"Congress: More Buzz on Committees and Legislation," Greenwire 18 Nov. 1994: no page provided.
Connolly, Paul, "Murkowski's Chevron Holdings Raise Supicians Among Environmental Groups; Senator Frank H. Murkowski, Alaska," Oil Daily 27 June 1995: 1.
Crow, Patrick, "ANWR Leasing Issue Destined To Heat Up Again in Congress," Oil and Gas Journal 28 Aug. 1995: 33.
---,"Congress Moves To Revamp U.S. Laws On Environment." Oil and Gas Journal 10July 1995: 25.
---, "Energy Policy Directions," Oil and Gas Journal 23 Jan. 1995: 24.
Dellios, Hugh, "New Endangered Species: Laws Preserving Environment; Outlook Grim for Greens under GOP," Chicago Tribune 20 Nov. 1994: 14.
Dizard III, Wilson, "GOP Control of Congress To Stall Environmentalists, Speed Energy Development," Coal Dec. 1994: 8.
Fadope, Cece Modupe, "GOP Control of Congress' Environmental impact Remains To Be Seen," Chemical Engineering Dec. 1994: 8.
Fan, Aliza and Lande, Laurie, " Republican Congress Expected To Give Sympathetic Review To Industry Issues; Oil and Gas Industries," The Oil Daily 10 Nov. 1994: 29,
Garner, W. Lynn, "This New Congress Means Business," Public Utilities Fortnightly 1994 15 Mar. 1995: 29.
"Industry Seeks to Change Laws," E and P Environment 17 Feb. 1995: no page provided.
Isikoff, Machael, et. al., "Of Tobacco, Torts, and Tusks," Newsweek 28 Nov. 1994: 30.
Kanamine, Linda and Miller, Ken, "Oil Industry Hears The Call of the Wild/Budget Plan May Open Up Arctic Refuge To Exploratio," USA Today 19 May 1995: 4A.
Kenworthy, Tom, "Arctic Wildlife Refuge Termed Vulnerable to Drilling; Environment: New Administration Study Says Oil Exploration Would Seriously Harm Fragile Ecosystem," The Los Angeles Times 3 Sept. 1995: A28.
Meyerhoff, Al, "The Fine Print on The Contract with America; Environment: The New Congress Is Set To Roll Back Laws Protecting Forests and Streams and Controlling Oil Drilling," Los Angeles Times 12 Jan. 1995: 1.
"Legislation: A Roundup of Committee Agendas, Greenwire, 23 Dec. 1994: no page provided.
Murkowski, U.S. Senator Frank, "An Advocate for Producers," interview conducted by Petroleum Independent, Petroleum Independent Jan 1995: 34
Music, Kimerly, "Murkowski Predicts End To ANS Export Ban During First Quarter; Senator Frank Murkowski Pushes For Alaska North Slope Oil Exports in 1995," The Oil Daily 13 Jan. 1995: 1.
---. "Senate, House Begin Serious Work To Capture $1.3 Billion in ANWR Revenue For 1996 Budget; Arctic National Wildlife Refuge," The Oil Daily 3 Aug. 1995: 1.
Nelsen, Kristen, "Shared Risks Build More Fields, Top Oil Execs Say," Alaska Journal of Commerce 30 Jan. 1995: sec. 1; pg. 1.
"New U.S. Congress Has Little Time for Action on Energy, Environment," Oil and Gas Journal 6 March 1995: 21.
"Senate Okays ANS Exports, Deepwater Relief," Oil and Gas Journal 22 May 1995: 28.
Senate Will Review Korea Fuel Oil Deal; ANS Export Ban Also High on Murkowski's List," Platt's Oilgram News 13 Jan. 1995: 1.
"Slope Exploration Slow But Hopes Remain High," Oil and Gas Journal 15 May 1995: 55.
"'Technical' Panel Considers ANWR Issue," E and P Environment 4 Aug. 1995: no page Provided.
U.S. House of Representatives Resolutions: H.R. 961, H.R. 1361, H.R. 1858, H.R. 1905, H.R. 1977, H.R. 1977, H.R. 2002, H.R. 2099.
U.S. Senate Resolutions: S. 70, S. 395, S. 1026, S. 1033.
Watkins, T.H., "Beyond Mile Zero Possible Oil Development in Arctic National Refuge," Wilderness 22 Mar. 1995: 9.
Walsh, Campion, "ANS Ban May Go, But Industry Should Expect Little Else; Ban on Petroleum Exports From Alaska North Slope," The Oil Daily 23 June 1994: 3.
Wasserman, Harvey, "Green Alert; Republican Congress and Environmental Protection," The Nation 6 Feb. 1995: 153.
Williams, Marla and Gilmore, Susan, "Alaska Will Play Big Role As Power Shifts in Congress -- Washington State To Lose Clout on Regional Issues," The Seattle Times 18 Nov. 1994: B3.
About the Author
The author is a second-year M.A. candidate at The American University in The School of International Service's Comparative Politics program. He holds a B.A. in Latin American Studies and a B.A. in Foreign Language/Communications Media Studies also from The American University.
(1) U.S. Senator Frank Murkowski of Alaska, "Oil in Alaska," The Christian Science Monitor 1 June 1992: 20.
(2) U.S. Senator Frank Murkowski of Alaska, "An Advocate for Producers; Interview with Senator Frank Murkowski," interview conducted by Petroleum Independent Jan. 1995: 34.
(3) "'Technical' Ranel Considers ANWR Issue," E and P Environment 4 Aug. 1995: no page provided.
(5) Kristen Nelson,"Shared Risks Build More Fields, Top Oil Execs Say," Alaska Journal of Commerce 30 Jan. 1995: 1.
(6) Frank Clifford and Mark Lacey,"Alaska Legislator Pushes to Loosen U.S. Grip on Lands; Environment: GOP's Young Wants Private Interests and States to Control Sites. Santa Monicas, Redwoods Are Targets," Los Angeles Times 18 Mar. 1995: A1
(8) Kim Murphy, Oil-Rich, Tax-Free Alaska Faces Major Budget Crunch," The Washington Post 11 Oct. 1995: A16.
(9) Dan Morgan, "House Votes for Oil Drilling: Bill Lifts Ban on Exports From Alaska's North Slope,"The Washington 9 Nov. 1995. The bill also exempts companies that undertake risky underwater drilling in the Gulf of Mexico from Royalty payments.
(10) "Alaska Lawmakers Take Power in 104th," E and P Environment 20 Jan. 1995: no page provided.
(11) Kimberly Music, Negotiations Clear Way for Bill Lifting Ban on Exports of Northern Slope Crude," The Oil Daily 17 May 1995: 1.
(12) Alan Kouski, "Strong ANS Prices Fail to Muffle Interest in Allowing Exports; Alaska Northern Slope Petroleum," The Oil Daily 8 Dec. 1994: 2.
(13) Merging U.S.-Canadian Arctic Areas Considered," Oil and Gas Journal 29 Aug. 1994: 35.
(15) Ray Tyson, "U.S. Partner Drops Out of Alaska Gasoline Project," Platt's Oilgram News 24 Feb. 1995: 2.
(16) Frank Clifford and Mark Lacey.
(17) "More Buzz on Committees and Legislation,"Greenwire 18 Nov. 1995: no page provided.
(19) Hugh Dellios, "New Endangered Species: Laws Preserving the Environment; Outlook Grim for Greens under GOP," Chicago Tribune 20 Nov. 1994: 14.
(20) "Energy Policy Directions."
(21) "The Future of Energy: The Battle for World Power," The Economist 7 Oct. 1995: 23-26.
(22) Alan P. Gray, "Corn as Fuel: An Energy Loser," The Washington Post 29 Oct. 1995: C6.
(23) Patrick Crow, "ANWR Leasing Issue Destined to Heat Up Again," Oil and Gas Journal 28 Aug. 1995: 33.
(24) "Of the Caribou People," The Christian Science Monitor 8 Jan. 1992: 16-17.
(27) "Inupiat Eskimos, Gwich'in Indians Disagree About Oil," The Christian Science Monitor 30 July 1991: 7.
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