Arctic oil search moves to new turf, new controversies

For decades, economics and practical considerations stalled development in the National Petroleum Reserve. The largest single unit of federal land, it was established by President Warren Harding as a source of energy for the nation's military.

But there has been no commercial oil or gas production yet. The government started exploration in 1944, but activities were only sporadic. The main drilling in Alaska was far to the east, at Prudhoe Bay.

Industry finally gained serious interest in the reserve in the mid-1990s, when Arco Alaska Inc. discovered the Alpine field bordering state land. Alpine, now the westernmost oil-producing field on the North Slope, pumps out more than 100,000 barrels a day and offers a pipeline connection for finds farther west.

Modern technology and lessons learned from the nearly 20 wells drilled in the state's northeastern corner in recent years justify the expansion of development, backers argue.

Environmentalists disagree. Though they accept some oil development in the reserve - "It's not an icon in the way that the Arctic Refuge is," Mr. Senner says - they believe Teshekpuk Lake should be shielded from drilling.

While the proposal to open up Teshekpuk has galvanized a few national organizations, the Yukon Flats proposal has gained less notice. Wedged between the Brooks Range and the White Mountains, the Yukon Flats refuge is bisected by the Yukon River. It is covered with spruce, muskeg, ponds, and thousands of lakes that support Alaska's highest density of breeding ducks.

Hemmed in by mountains, it gets some of the state's most extreme weather - cryogenic cold in the winter and in the summer, thanks to around-the-clock sunlight, temperatures that hit 100 degrees.

The area's oil and gas potential has long been recognized. The US Geological Survey's most recent estimates say the Yukon Flats basin probably holds 173 million barrels of oil, 5.5 trillion cubic feet of natural gas, and 127 million barrels of natural-gas liquids - a resource possibly on the scale of Alaska's mature Cook Inlet basin.

Doyon Ltd., an Athabascan Indian-owned corporation based in Fairbanks, is seeking to trade about 150,000 acres of low-lying wetlands for 110,000 upland acres with oil and gas potential. The swap would change the boundaries, freeing up parcels for petroleum development while folding some privately held holdings into the refuge.

Proponents say the move would not only ensure that the refuge gains ecologically important wetlands, but would open up economic opportunities and energy supplies for the Athabascan Indians.

Doyonbelieves it stands to win a lot from the deal, including jobs. The exchange represents "the only large scale opportunity ever identified on or near our land base," Doyon President Orie Williams said in the corporation's most recent newsletter to shareholders.

Among the boosters of the deal is the administration of Alaska Gov. Frank Murkowski (R). "It's truly a win-win," Tom Irwin, commissioner of the state Department of Natural Resources, said at an Anchorage public hearing. "This is gas that can significantly impact Alaska." Major native organizations, such as the Alaska Federation of Natives, are also backers.

But not all Doyon shareholders support the proposed trade. The tribal council from Fort Yukon, a village near the proposed drilling, has passed a resolution in opposition, and a similar but nonbinding resolution was approved by voice vote at Doyon's annual shareholder meeting in March.

To Ed Alexander, the shareholder who pushed the antitrade resolution, the proposed development will lead to an influx of outside workers, urban hunters, and roads that will cause social and environmental strains. "I think it's going to hurt the people up here for many years to come," says Mr. Alexander.

Critics worry, too, that the swap could open up other protected lands. "This would be a very bad precedent to do a land exchange to facilitate oil and gas development within a wildlife refuge," says Deborah Williams of the Alaska Conservation Foundation.

But the Fish and Wildlife Service argues that a trade is the best chance to protect the refuge because Doyon is already free to drill on its property. "We couldn't stop them," says Jerry Stroebele, superintendent for the eight northern Alaska refuges. "They're entitled to develop their land."

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