Alaska’s stake in ANWR sale

Alaska will have a lot of cards on the table when leases are sold later this year for drilling aon the coastal plain of the Arctic National Wildlife Refuge.

Right now there are many unknowns, including how much oil and gas actually lies under the coastal plain. Two of the companies likely to bid have a pretty good idea — ConocoPhillips and Hilcorp. Those two apparently have the results of the 1986 well drilled in the coastal plain and will use that information in deciding whether and how much to bid.

Bidding in the big sale will also depend on how the major companies are dealing with environmental issues these days. Some are catering to the green crowd and that is one of the major unknowns since such decisions are made at the highest levels in the companies.

Actually industry has an excellent record for operating in the Alaskan Arctic with minimal impact on the wild creatures. I was part of that world for many years and have experience with pretty much all of the major companies.

One of my good friends and colleagues was Angus Gavin, former executive director of Ducks Unlimited of Canada. After the discovery at Prudhoe Bay, the chairman of ARCO, Robert O. Anderson, hired Angus to monitor industry operations on the North Slope and make sure they did not adversely impact the wild creatures there.

Angus Gavin did his job well and his reports are a treasury of information on how to manage oil operations in a delicate Arctic environment.

Many people have the impression that oil operations necessarily conflict with the lives of caribou, polar bears, grizzly bears and musk oxen. Such wild creatures are an important part of life in the Arctic and their well being is important to us all. Fortunately the companies operating here are well versed in the need to minimize impact on the environment and the animals dependent on it.

Some of the larger companies may sit out the ANWR lease sale because of growing public concerns for the environment, climate change and the wildlife resources of Northern Alaska.

Companies like ConocoPhillips and Hilcorp are taking a more balanced approach and seem to be opting for a middle of the road position that monetizes near-term economic opportunities while making long-range improvement on climatic problems.

The price of oil has been low recently and that could affect interest in the sale, but the companies most likely to be interested have assets that could be deployed for bidding. And since the process of exploring for and developing oil and gas leases takes years, the current economic problems will be long behind us before ANWR hydrocarbons could be brought to market.

For sure there is a lot of oil left to be produced from the Alaskan Arctic, many billions of barrels of it. And this state has huge gas reserves which are essentially untouched and will almost certainly play an important role in the transition to energy sources with reduced impact on climate change.

Hopefully the coronavirus will be a problem of the past long before things get busy in the Arctic National Wildlife Refuge. And that will have an impact on the overall economy including both the price of oil and the vitality of the companies whose fortunes are tied to it.

The upcoming lease sale could have a major impact on Alaska’s future, especially its economy. Let’s all keep our fingers crossed and hope the industry is enthusiastic and responsive.

Tom Brennan is an Anchorage columnist and author of five books. He was a reporter/columnist for The Anchorage Times and an editor and columnist at The Voice of The Times.