ANWR Oil: Native Lands and State Waters

ANWR Oil: Native Lands and State Waters

Order Code RS21170
March 12, 2002
CRS Report for Congress
Received through the CRS Web
ANWR Oil: Native Lands and State Waters
Bernard A. Gelb
Specialist in Industry Economics
Resources, Science, and Industry Division
Summary
As part of its deliberations over energy policy, Congress is deciding whether to
continue to protect the ecosystem of the Arctic National Wildlife Refuge (ANWR) or to
open it to oil and gas development – with good prospects of finding economically
recoverable amounts of oil. A new preliminary report by the U.S. Geological Survey
(USGS) presents a broader assessment of economically recoverable oil than included in
the USGS’s 1998 study, but not necessarily more favorable or unfavorable.
The coastal plain of Alaska just east of present oil production sites is the virtually
undisturbed home to a wide variety of plants and animals. This “1002 Area” is part of the
Arctic National Wildlife Refuge. Created in 1960, the Refuge was expanded and made
off-limits to oil and gas development in 1980 explicitly to conserve “fish and wildlife
populations and habitats in their natural diversity" and for other purposes. The large fields
to its west suggest that the potential for oil could extend into the 1002 Area. Reprocessed
seismic data from the 1002 Area supports this suggestion of oil potential in ANWR.1 This
report examines a new USGS report in a context apart from the broader controversial
issue of whether to seek oil in ANWR.
The USGS 1998 Report
Several assessments of oil and gas resources in ANWR have been made over the
years – of varying nature and scope. The most recent study of oil and gas prospects in the
Refuge was that done by the USGS (U.S. Department of the Interior) in 1998. USGS
scientists gathered new data from nearby fields both onshore and offshore, and examined
reprocessed seismic data collected in the Refuge in 1984-1985. USGS published a
detailed report on the oil and gas potential in 1999.2
1 For more extensive information and discussion concerning ANWR see CRS Report RL31278,
Arctic National Wildlife Refuge: Background and Issues.
2 U.S. Department of the Interior, Geological Survey. The Oil and Gas Potential of the Arctic
National Wildlife Refuge 1002 Area, Alaska. U.S.G.S. Open File Report 98-34. 1999.
Congressional Research Service ˜ The Library of Congress

CRS-2
In the 1999 report, USGS estimated that there is a 95% chance that there are at least
4.3 billion barrels (bbls) and a 5% chance there are at least 11.8 billion bbls of technically
recoverable oil (recoverable with current technology, but ignoring costs) in the federal
1002 area, with a mean estimate of 7.7 billion bbls (see table). Estimated economically
recoverable amounts are smaller. The USGS estimated that, if the price of crude oil is $24
per barrel (1996 dollars), there is a 95% chance of at least 2.03 billion bbls and a 5%
chance of 9.4 billion bbls or more of economically recoverable oil in the federal 1002 area,
with a mean estimate of 5.2 billion bbls. In addition, estimates of economically recoverable
oil increase if a higher price is used and decrease with a lower price. After the September
11 attacks and the associated brief and mild increase, oil prices ranged between $18 and
$20. In mid-March 2002, the price was about $24 per barrel. Prices can be expected to
continue to fluctuate,
Native Lands and State Waters
While the USGS, in 1998, studied, assessed, and prepared estimates for a larger area
than the Federal 1002 area, its published report included estimates of economically
recoverable oil only for the Federal area. The study covered adjacent lands beneath Alaska
state waters (to the 3-mile line) and native lands “within the 1002 area,” as well as the
federal portion of the 1002 area.3 Because of the close proximity of these lands, it can be
argued that more complete assessment data on the non-federal areas may be useful in
policymaking decisions regarding ANWR.
Alaskan Natives have various property interests related to the issue of oil drilling in
ANWR that may present complex legal issues for refuge management if the coastal plain
is opened to oil and gas exploration and development.4 Over 100,000 acres of ANWR,
some within the legal description of the 1002 area, are owned by Alaska Natives either
individually or collectively. Between and within groups of Natives, there is disagreement
over whether to open ANWR and the 1002 area to oil and gas exploration and
development. Regulation of development on these lands is problematic, and often is not
considered explicitly in legislative proposals.5
The USGS 2002 Report
In a brief March 2002, designated as preliminary, USGS presented assessment data
in a way that allows readers to deduce its estimates of the amount of economically
recoverable oil in adjacent lands beneath Alaska state waters (to the 3-mile line) and native
lands “within the 1002 area.” This was done by presenting figures for the Federal 1002
3 The report appears to indicate a misunderstanding of the fact that most, but not all, of the Native
lands are outside the 1002 area but are within the Refuge. Some of the Native Lands are
geographically on the coastal plain but outside the “1002" coastal plain area that was articulated
in response to 1980 legislation. USGS appears to have meant that it studied and now is addressing
Native lands within the Refuge.
4 For further discussion of legal complications, see CRS Report RL31115, Legal Issues Related
to Proposed Drilling for Oil and Gas in the Arctic National Wildlife Refuge.
5 For a discussion of current legislative proposals on ANWR, see CRS Issue Brief IB10094,
Arctic National Wildlife Refuge: Legislative Issues, updated regularly.

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area alone and the totals for the entire study area. USGS presents these figures along with
its previously published estimates of technically and economically recoverable oil in the
Federal 1002 area.6
Thus, it appears that USGS estimated that there is a 95% chance that there are at
least 1.5 billion barrels (bbls) and a 5% chance there are at least 4.2 billion bbls of
technically recoverable oil in lands under state waters adjacent to the Federal 1002 area
and in Native lands, with a mean estimate of 2.7 billion bbls (see table). Similarly, it
appears that USGS estimated that, if the price of crude oil is $24 per barrel (1996 dollars),
there is a 95% chance of at least 0.9 billion bbls and a 5% chance of at least 3.7 billion bbls
of economically recoverable oil in the non-federal 1002 portion of the study area, with a
mean estimate of 2.4 billion bbls.
From the above, it can be concluded that adjacent state waters and Native lands
account for about one fourth of the assessed resources in the USGS study area. However,
as noted by USGS, although significant accumulations may exist under State waters and
in Native lands, they will be difficult to develop without access to Federal land.
6 U.S.G.S. Frontier areas and resource Assessment: the case of the 1002 Area of the Alaska
North Slope. by Emil D. Attanasi and John D. Scheunemeyer. U.S.G.S. Open File Report 02-119,
March 2002. The report is preliminary and has not been reviewed for conformity to USGS
editorial standards and stratigraphic nomenclature.

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Probability of the Presence and Recoverability of Oil in the Federal
1002 Area, Adjacent State Waters, and Native Lands
(billions of barrels)
95% Chance
5% Chance
This Much
Mean
This Much
Crude Oil
or More
Estimate
or More
Total
Technically recoverable
5.72
10.36
15.96
Economically recoverable at
. . . a market price of $30 per barrel
4.22
8.80
14.35
. . . a market price of $24 per barrel
2.94
7.60
13.08
. . . a market price of $18 per barrel
0.66
3.55
8.89
Federal 1002 Area (previously published)
Technically recoverable
4.25
7.69
11.80
Economically recoverable at
. . . a market price of $30 per barrel
2.98
6.30
10.47
. . . a market price of $24 per barrel
2.03
5.24
9.37
. . . a market price of $18 per barrel
- 0 -
2.40
6.15
Land Under Adjacent State Waters and Native Lands (preliminary)
Technically recoverable
1.47
2.67
4.16
Economically recoverable at
. . . a market price of $30 per barrel
1.24
2.50
3.88
. . . a market price of $24 per barrel
0.91
2.36
3.71
. . . a market price of $18 per barrel
0.66
1.15
2.74
Sources: U.S. Department of the Interior, Geological Survey. The Oil and Gas Potential of the
Arctic National Wildlife Refuge, 1002 Area, Alaska. U.S.G.S. Open File Report 98-34
(Washington, DC:1999) Summary and Table EA4; and U.S.G.S. Frontier areas and resource
Assessment: the case of the 1002 Area of the Alaska North Slope. By Emil D. Attanasi and John
D. Scheunemeyer. U.S.G.S. Open File Report 02-119, March 2002.