Offshore leases are Alaska's only reasonable solution

Spectrum by Gov. Frank Murkowski

This October, the state of Alaska will be offering leases for oil and gas exploration in state waters offshore of the Arctic National Wildlife Refuge.

This may be considered a radical step by some. In fact, it is just about the only rational option the state has to access the state's oil and gas resources to help address the nation's energy problems. Environmental groups have blocked opening ANWR. They said we should go to the National Petroleum Reserve-Alaska instead. We did, and were hit with lawsuits from those same environmental groups. If Alaska can't explore for oil in a petroleum reserve, where can we?

We currently produce oil and gas from three major fields offshore in the Beaufort Sea near Prudhoe Bay, including Northstar, Point McIntyre and Endicott. We already operate a number of miles of oil pipeline coming onshore from those offshore oil fields.

The Native village of Kaktovik is another significant factor in this debate, because its 300 residents own 92,000 acres of land surrounded by ANWR. Federal policies are in conflict at Kaktovik. On the one hand, Congress gave the Natives the land so they could develop their resources to create an economy, provide jobs and hope for their young people, and enjoy a 20th century standard of living. On the other hand, that hasn't happened because Congress has acquiesced to the extreme environmentalists and kept oil and gas development out of ANWR. Kaktovik is land-locked by this federal policy.

The state of Alaska will include offshore ANWR tracts in its October 2004 lease sale. After those leases are developed, Kaktovik will have an access route to get its oil and gas resources to the Trans Alaska Pipeline at Prudhoe Bay.

We are highly aware of the concern of the Inupiat at Kaktovik and other communities on the North Slope about oil drilling in the Beaufort Sea. They are rightly on alert, because the sea provides the bounty on which their culture lives. We will not risk despoiling the Beaufort Sea coast.

The state has a working agreement with the whaling captains, which we achieved when exploring the McCovey area, that we will not engage in drilling activities during the bowhead whale migration. We are listening to the Inupiat. The Department of Natural Resources will continue to dialog with all North Slope residents throughout the upcoming months as we approach the scheduled lease sale. I am confident there will be alignment with all Alaskans on lease term issues.

Americans this summer are faced with average gasoline prices above $2 per gallon. While OPEC set its target price at $22-28 per barrel of oil 2-1/2 years ago, they obviously prefer it at $37, and have agreed to cut production to maintain the high price. America is truly held hostage to the Middle East for its oil.

At its peak, the Trans Alaska Pipeline moved two million barrels a day from Prudhoe Bay, accounting for one-quarter of the nation's domestic production. It is currently transporting one-half its capacity, only one million barrels per day.

The USGS estimates ANWR contains enough recoverable reserves to provide 1.3 million barrels a day, which would offset an increase in imports -- and our dependency -- from some foreign source.

Congress passed a bill allowing exploration and development in ANWR in 1995. It was vetoed by then-President Bill Clinton. If it had not been, oil would be flowing today from ANWR. Political decisions such as this one of Clinton's cost America thousands of jobs, which were simply exported to the Middle East, along with billions of dollars out of our economy. The major factor in our high balance of payments deficit is the cost of imported oil.

Today, Congress is stymied over the energy bill, mired in disputes over MTBE and ethanol subsidies. Bowing to pressures from the extreme environmental lobby, ANWR is no longer in the bill.

But the state of Alaska is not hobbled by Congress's legislative process. We are able to add leases of as much as 350,000 acres of state land offshore of ANWR to ongoing Beaufort Sea lease offerings.

Alaska intends to do its part to bring our energy sources back home to America. Leasing offshore of ANWR is one important step in that direction.

Frank H. Murkowski is the governor of Alaska.