For all the attention being paid to drilling for oil in Alaska's Arctic National Wildlife Refuge (ANWR) so as to -- here's that tired phrase again -- "reduce our dependence on foreign oil," few are listening to what the U.S. industry itself has to say about its possible future windfall. The answer? Not much.
Environmentalists seem to think oil companies are drooling over the prospect of getting their drill bits planted in the 1.5 million acre stretch of pristine Alaskan wilderness. But in fact industry participation in the pro-ANWR campaign has proved minimal. Arctic Power, the lobbying group pushing for the drilling, receives only about 5 percent of its funds from oil companies; the rest comes from the state of Alaska (which depends on oil royalties for over 80 percent of its budget, and tends to support drilling in any form, at any cost).
Indeed, Arctic Power lobbyists have been complaining that as the debate heats up, the oil industry has kept cool, refusing to launch or fund an aggressive campaign for opening ANWR and preferring to throw its weight behind the Senate energy bill as a whole package. "They are not willing to do anything specifically on ANWR," said Arctic Power head Roger Herrera in a March interview with National Journal. "It's very hard to know what they are doing. They don't open their mouths about ANWR to me."
It may be that the industry views an ANWR-focused public-relations campaign as preaching to the Republican choir, whereas the real political headway will be made by picking off Democrats. That is, the left will be swayed more, especially in an election year, by recent Teamster support than by praises sung by Exxon Mobil and friends.
But consider another interpretation. While oil companies certainly wouldn't decline the offer if Congress handed them ANWR, it's relatively small potatoes. First, nobody really knows how much oil lies beneath the coastal plain, and multinational petroleum companies like Exxon Mobil, BP, Royal Dutch Shell, and Chevron Texaco seem in no hurry to find out. In a recent New York Times article, oil company execs admit the venture is scientifically uncertain and will be plagued by expensive lawsuits from environmental groups. As Gerald J. Kepes, managing director for exploration and production issues at the Petroleum Finance Company, a Washington consulting firm for oil companies, told the Times in early March, "It's not clear that this is quite the bonanza some have said."
So the main reason Big Oil is panting around the bargaining table may be to snap up the billions in industry tax breaks that always get tossed around when Congress designs energy legislation.
Moreover, the longer the public eye stays focused on Alaska, the longer oil companies will have to maintain their voluntary 1999 ban on exporting crude oil to the Pacific Rim. Oil-poor East Asian nations can get their oil more cheaply by importing it from directly across the pond than by shipping it halfway around the world from the Middle East, and petroleum multinationals in Alaska have been happy to oblige at a healthy profit. In 1973, after the Middle East oil embargo sent prices skyrocketing, Congress enacted a law forcing oil from the Alaskan pipeline to be sold domestically. But lawmakers, bowing to industry pressure, repealed that law in 1995.
Currently there is nothing legally preventing Alaskan oil -- whether from ANWR or anywhere else -- from being exported. In fact, in the first half of 1999 alone, oil companies made $300 million exporting Alaskan crude to Pacific Rim-based companies like Hyundai and Caltex. Once the question of opening ANWR for drilling sparked debates and attracted attention to the region, however, the industry chose to stop the practice -- at least until the energy-debate storm blows over.
Peter Van Tuyn of the environmental group Trustees for Alaska feels certain that regardless of whether ANWR is opened, the idea of reducing U.S. dependence on foreign oil will soon lose out to the industry's desire for money-in-pocket. "Once the spotlight is off the North Slope, we fully expect the export to resume, because that's where it's always been economical to send," he said.
Democratic Representatives Peter DeFazio and Darlene Hooley of Oregon co-sponsored a bill in 2001 to reinstate a ban on exports of oil produced on Alaska's North Slope. But the legislation was not included in the House energy bill passed in August. "As much as the President would like to claim that drilling in the ANWR is the answer to our energy problems, the fact is that oil companies have drilled in Alaska for the last 20-odd years," said Hooley in a February 14, 2001, press release that could have been written yesterday. "Before the President even begins talking about the ANWR as a solution to our problems, let's use our common sense and make sure the oil that we're already drilling for in Alaska isn't alleviating some other nation's oil dependence."
Except for Hooley's failure to mention that our energy woes will never be solved by more oil in the first place, we couldn't have said it better ourselves.
