Going to sea to boost Alaska oil production

Drilling: Environmental and energy supply concerns swirl around a facility in Arctic waters.

October 26, 2001|By Marego Athans | Marego Athans,SUN NATIONAL STAFF

PRUDHOE BAY, Alaska - Six miles off the northern Alaskan coast sits the newest frontier in Arctic oil drilling: a 5-acre man-made island crammed with two nine-story-tall oil processing modules, three 9,600- kilowatt turbine-driven generators, two natural gas compressors, producing wells, gas injectors, a shop, warehouse and living quarters.

From the air, the BP PLC project known as Northstar, set to begin production next month, looks like something made of Lego blocks. Beneath the blue-gray water of the Beaufort Sea that surrounds it, however, is a technological first: a dual oil and gas pipeline buried beneath the sea floor, something that has never been done before under icy Arctic waters.

Oil interests expect Northstar, along with several other new developments, to help stem the 11-year decline in Alaska's oil production - particularly important now, they argue, as the nation faces a potential interruption of supplies from the Middle East.

Nearly 14 percent of the oil consumed daily in the United States comes from Persian Gulf countries, according to the U.S. Department of Energy.

"We're far too dependent on foreign sources of oil, and the reliance continues to grow," said Carl Portman, deputy director of the Resource Development Council, which represents Alaska's major industries. "These new fields coming on line are effectively offsetting the decline."

President Bush pressed the same point recently when he urged Congress to pass an energy bill that would open new domestic oil fields, including those in the Arctic National Wildlife Refuge, saying that energy independence would make the nation more secure.

Senate Majority Leader Tom Daschle says he wants lawmakers to take up a comprehensive energy bill before Congress adjourns next month. He says he will allow a vote on a Republican bill that would open the refuge for oil drilling, similar to a bill already passed by the Republican-controlled House. Senators are sharply divided on the issue, mostly along party lines.

The Northstar project is small by Alaska standards, tapping a 13-square-mile field containing 175 million barrels. But it has taken on significance beyond its expected peak production of 65,000 barrels a day, because eventually it could lead to other such projects in the frozen seas off Alaska's North Slope and keep oil coursing down the trans-Alaska pipeline.

Declining production

The North Slope fields that came on line nearly a quarter-century ago now produce about half their peak production of 2.2 million barrels a day, sending 5 percent to 6 percent less oil down the pipeline each year.

Activists from the environmental group Greenpeace have challenged the Northstar project in court and gained widespread publicity in spring 2000 by camping out on the frozen water near the island.

And the Inupiat Eskimos, who live on the North Slope and depend on sea mammals such as bowhead whales for food, fear that a spill could disrupt their centuries-old cultural traditions. But federal courts have permitted the project to move ahead.

The debate over Northstar is similar to that over the Arctic refuge, which is believed to hold between 3.2 billion and 16 billion barrels of oil. But some of the players are lined up on different sides.

Environmentalists argue that drilling in the refuge might disrupt a sensitive ecosystem where more than 200 species, including a large caribou herd, feed on the rich forage that bursts forth in round-the-clock summer sunlight.

Many North Slope Eskimo communities already benefit from onshore oil development through taxes. They favor drilling in a narrow coastal stretch of the refuge because it would generate royalties paid on any oil extracted.

But they feel differently about offshore development in the Beaufort Sea - the part of the Arctic Ocean north and east of Prudhoe Bay - fearing the effect on bowhead whales, seals and other sea life, as well as the wider ecosystem that includes polar bears and eiders.

Disruption of whaling

Rosemary Ahtuangaruak, one of the plaintiffs in the federal suit who lives in the village of Nuiqsut, blamed seismic activity from oil development near a whale migration route several years ago for an unsuccessful whaling season, which she said left the community without the meat it normally relies on through the winter.

Working at the village clinic at the time, Ahtuangaruak said she saw a sharp increase in suicide attempts, domestic violence and alcoholism that winter.

"They were the deepest, darkest days I've ever seen," she said. "There was no subsistence food to fill the cellars. We were calling other villages to get food."

The North Slope borough government, which represents eight predominantly Eskimo communities, has taken a different approach to Northstar.

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