ANWR, Jobs, Energy and Deficit Reduction

Statement for the Record

U.S. Department of the Interior

before the

Committee on Natural Resources

U.S. House of Representatives

Regarding

Development of Oil and Gas

Resources in the

Arctic National Wildlife Refuge

November 18, 2011

Thank you for providing the Department of the Interior the opportunity to submit this Statement for the Record of today's hearing focused on opening the Coastal Plain of the Arctic National Wildlife Refuge to oil and gas development.

As discussed below, because of the enduring values of the Arctic National Wildlife Refuge (Arctic Refuge) as a world class natural area and the preeminent remaining American wilderness, the Administration strongly opposes any industrial development within the Arctic Refuge.

Introduction

Just two days ago, Secretary Salazar appeared before this Committee to discuss the Administration's commitment to promoting safe and responsible domestic oil and gas production as part of a broad energy strategy that will reduce our dependence on foreign oil. Outlined in the Blueprint for a Secure Energy Future, the strategy will result in producing more of our oil and natural gas here at home, using cleaner, alternative fuels, and improving our energy efficiency.

The Department, as steward for federal lands, minerals, endangered species and other trust resources, is responsible for managing 20 percent of the Nation's land mass and more than 1.7 billion acres of the Outer Continental Shelf. Decisions regarding safe and responsible energy development on the public lands and offshore coastal areas are balanced with our mission to ensure that America's spectacular landscapes, fragile ecosystems and habitat, and unique natural life endure for future generations.

However, resources from our public lands and waters are key to our energy strategy. With this in mind, the Department has worked to responsibly expand domestic oil and gas production, while also encouraging alternative sources of energy, including renewables like wind, solar, and geothermal.

The Arctic National Wildlife Refuge

The National Wildlife Refuge System, managed by the U.S. Fish and Wildlife Service, is the world's premier system of public lands and waters set aside to conserve America's fish, wildlife, and plants. The mission of the system is to manage a national network of lands and waters for the conservation, management, and where appropriate, restoration of fish, wildlife, and plant resources and their habitat for the benefit of the public. Nearly 46 million people visit national wildlife refuges each year, and visitation generates almost $1.7 billion in sales for regional economies and results in the employment of tens of thousands of people.

Last year's Deepwater Horizon explosion and oil spill in the Gulf of Mexico has served to highlight the importance of careful scrutiny of oil and gas development issues and the need to develop these resources safely and responsibly. We have been clear that there are some places where oil and gas development is appropriate and some places where it is not. The Arctic National Wildlife Refuge, because of its unique conservation values and importance as wildlife habitat, is a place where development is not appropriate.

A Pristine and Cherished Area

The Arctic Refuge itself is America's finest example of an intact, naturally functioning community of arctic and subarctic ecosystems. Such a broad spectrum of diverse habitats occurring within a single protected unit is unparalleled in North America, and perhaps in the entire circumpolar north. When the Eisenhower Administration established the original Arctic Range in 1960, then-Secretary of the Interior Seaton described it as:

[O]ne of the world's great wildlife areas. The great diversity of vegetation and topography in this compact area, together with its relatively undisturbed condition, led to its selection as ... one of our remaining wildlife and wilderness frontiers.

The original "Arctic National Wildlife Range" was created in 1960 by Public Land Order 2214 "[f]or the purpose of preserving unique wildlife, wilderness and recreational values...." In 1980, the Alaska National Interest Lands Conservation Act (ANILCA) enlarged the area, designated much of the original Range as wilderness under the 1964 Wilderness Act, renamed the whole area the Arctic National Wildlife Refuge and added four additional purposes: to conserve caribou herds, polar bears, grizzly bears, muskox, dall sheep, wolves, snow geese, peregrine falcons, other migratory birds, dolly varden, and grayling; to fulfill international treaty obligations; to provide opportunities for continued subsistence uses; and to ensure necessary water quality and quantity.

And just last December, President Obama recognized the 50^th Anniversary of the creation of the Refuge with a Proclamation stating that:

[i]n the decades since its establishment, the Arctic National Wildlife Refuge has continued to be one of our Nation's most pristine and cherished areas. In the decades to come, it should remain a place where wildlife populations, from roaming herds of caribou to grizzly bears and wolf packs, continue to thrive.

The Presidential Proclamation also reiterated the Administration's commitment to making responsible choices and ensuring the continued conservation of these wild lands.

Oil and Gas Exploration and Development

Section 1002 of ANILCA required that studies be performed to provide information to Congress. These mandated studies included a comprehensive inventory and assessment of fish and wildlife resources, an analysis of potential impacts of oil and gas exploration and development on those resources, and a delineation of the extent and amount of potential petroleum resources. Congress declared in Section 1003 of ANILCA that the "production of oil and gas from the Arctic National Wildlife Refuge is prohibited and no leasing or other development leading to production of oil and gas from the [Refuge] shall be undertaken until authorized by an act of Congress."

Although the area described by section 1002 of ANILCA is only 10 percent of the total Refuge acreage, it includes most of the Refuge's coastal plain and arctic foothills ecological zones. The Arctic Refuge is the only area on Alaska's North Slope where petroleum development is specifically prohibited by Congress. The coastal plain is also critically important to the ecological integrity of the whole Arctic Refuge, providing essential habitats for numerous internationally important species such as the Porcupine Caribou herd and polar bears. The compactness and proximity of a number of arctic and subarctic ecological zones in the Arctic Refuge provides for greater plant and animal diversity than in any other similar sized land area on Alaska's North Slope.

The Arctic Refuge is also an important part of a larger, international network of protected arctic and subarctic areas. In Canada's Yukon Territory, the government and First Nations people protected the coastal tundra and adjacent mountains by establishing Ivvavik and Vuntut National Parks, where oil exploration and production are not allowed.

Updating the Refuge Management Plan

In the spring of 2010, the U.S. Fish and Wildlife Service initiated public discussions about the issues surrounding stewardship of the Arctic Refuge and future goals for that management. These discussions served as the foundation for development of a plan to ensure the long-term conservation of fish, wildlife and plants, and to sustain outdoor recreational opportunities and environmental education and interpretation in the Arctic Refuge.

The draft Comprehensive Conservation Plan (CCP) and Environmental Impact Statement (EIS), outlines a 15-year management plan for the refuge. Conservation plans are revised periodically for every refuge around the country, as a matter of course. The draft plan contains six alternatives for long-term management, ranging from the continuation of current practices to the recommendation of up to three geographic areas (including the Arctic Refuge coastal plain) for potential inclusion within the National Wilderness Preservation System, and the potential recommendation of four additional Wild and Scenic Rivers in the refuge. The draft plan does not identify a preferred alternative among the six presented; all of the options remain under active consideration and the Fish and Wildlife Service is conducting a series of public meetings and reviewing public comments before finalizing the plan, which will ultimately identify a preferred alternative. Similar to the current management plan, the CCP will not include any decisions regarding oil and gas development on the Arctic Refuge.

The involvement of the public has been and will continue to be a critical part of the multi-year CCP development process. The Service collected public comments on the draft plan from August 12 through November 15, 2011. In addition to the public comment period, the Fish and Wildlife Service held a series of public meetings in Alaska, a full list of which is available at: http://arctic.fws.gov/ccp.htm. The Service will consider public comments before selecting a preferred alternative, and anticipates the release of a revised CCP and final EIS in the Summer of 2012 and a final decision by the end of 2012.

The New Energy Frontier

The energy industry is a key component of the nation's economy. When President Obama took office, America imported 11 million barrels of oil a day. The President has put forward a plan to cut that by one-third by 2025, and we are on the right path. We are already making progress towards that goal. Overall, oil imports have fallen by 9 percent since 2008 and net imports as a share of total consumption declined from 57 percent in 2008 to less than 50 percent in 2010.

Secretary Salazar has set goals for the Department's energy programs that will ensure that energy development on our public lands and oceans is done in the right way, in the right places and with the right protections for the environment and the safety of workers.

Recognizing that America's oil supplies are limited, we must develop our domestic resources safely, responsibly, and efficiently, while at the same time taking steps that will ultimately lessen our reliance on oil. We are making significant progress toward these ends. Total U.S. crude oil production was higher in 2010 than in any year since 2003. Oil production from the federal OCS increased by a third from 2008 to 2010. Oil production from onshore public lands increased 5 percent from 2009 to 2010. U.S. natural gas production is up 7 percent from 2008, and is at its highest level in more than 30 years.

We are working hard to build on this success. In 2010, the Bureau of Land Management (BLM) held 33 oil and gas lease sales covering 3.2 million acres and in 2011, BLM scheduled an additional 32 lease sales and has held 28 to date. The BLM has scheduled an additional 33 lease sales for 2012. In 2010, the Department offered 37 million offshore acres in the Gulf of Mexico for oil and gas exploration and production. And the 2012-2017 Outer Continental Shelf (OCS) Oil and Gas Leasing Proposed Program, discussed in more detail below, makes more than 75 percent of undiscovered technically recoverable oil and gas estimated on the OCS available for development.

Offshore Oil and Gas Reform and Development

As discussed at Wednesday's hearing before the Committee, the Department has put in place a new set of rigorous safety and operational standards for the development of oil and gas resources on the Outer Continental Shelf. The most extensive in U.S. history, these reforms strengthen requirements for everything from well design and workplace safety to corporate accountability, and are helping to ensure that the United States can safely and responsibly expand development of its energy resources consistent with our stewardship responsibilities.

Expanding safe and responsible oil and gas production from the OCS is a key component of our comprehensive energy strategy to grow America's energy economy, and will help us continue to reduce our dependence on foreign oil and create jobs here at home.

And the Department's recently-announced Proposed OCS Program for 2012-2017 will advance safe and responsible domestic energy exploration and production by making available for development more than three-quarters of undiscovered oil and gas resources estimated on the OCS, and includes substantial acreage for lease in regions with known potential for oil and gas development. This proposal promotes responsible development and is informed by lessons learned from the Deepwater Horizon tragedy and the reforms that we have implemented to make offshore drilling safer and more environmentally responsible.

A key part of safe and responsible development of our oil and gas resources is recognizing that different environments and communities require different approaches and technologies. The Proposed Program reflects this recognition, and accounts for issues such as current knowledge of resource potential, adequacy of infrastructure including oil spill response capabilities, Department of Defense priorities, and the need for a balanced approach to our use of natural resources. The majority of lease sales are scheduled for areas in the Gulf of Mexico, where resource potential and interest is greatest and where infrastructure is most mature.

But it also includes frontier areas, such as the Arctic, where we must proceed cautiously, safely, and based on the best science available. In the Alaska OCS, the Proposed Program recommends that the current inventory of already-leased areas in the Arctic should be expanded only after additional evaluations have been completed, and in a manner that accounts for the Arctic's unique environmental resources and the social, cultural, and subsistence needs of Native Alaskan communities.

Onshore Oil and Gas Reform and Development

There is also no shortage of available federal lands already leased for oil and gas development and permitted for drilling operations. As of September 2011, BLM has leased more than 38 million acres of federal lands for oil and gas development. Industry is currently producing on over 12 million of those federal acres, about 32 percent of leased acreage. BLM also held 28 oil and gas lease sales last fiscal year, and has 34 sales on public lands scheduled this year.

These and future sales are benefitting from necessary reforms that the Department has put in place that require adequate planning and analysis to identify potential areas with minimal environmental impacts and to avoid time consuming and costly litigation. The Department's balanced approach to responsible conventional energy development combines these reforms with effective budgeting to provide appropriate planning and support for conventional energy development, which has been the target of increased appeals and protests in recent years.

In Alaska, land use planning efforts are underway for the National Petroleum Reserve-Alaska (NPR-A). According to the U.S. Geological Survey's recently-updated assessment, the 23 million-acre NPR-A contains an estimated mean volume of 896 million barrels of technically-recoverable undiscovered oil and 52.8 trillion cubic feet of undiscovered natural gas. On May 14, 2011, President Obama directed the Department of the Interior to conduct annual oil and gas lease sales in the National Petroleum Reserve-Alaska (NPR-A). In response to the President's announcement, BLM-Alaska will conduct an oil and gas lease sale within the NPR-A on December. 7, 2011. This will be the seventh lease sale since 1999. Presently, there are 169 leases covering 1.3 million acres in NPR-A.

Of all the oil and gas parcels identified for lease nationwide in 2009, 49 percent were protested and, of those, more than half had to be withdrawn from leasing. In contrast, just over 1 percent of the parcels offered in 1998 were protested. Responsive reforms taken by the Department focus on making oil and gas leasing more predictable, increasing certainty for stakeholders, including industry, and restoring needed balance to the development process, and include:

• engaging the public in the development of Master Leasing Plans prior to leasing in certain areas where significant new oil and gas development is anticipated. The intent is to fully consider other important natural resource values before making a decision on leasing and development in an area; and
• ensuring potential lease sales are fully coordinated both internally and externally, including public participation, and interdisciplinary review of available information, as well as on-site visits to parcels prior to leasing when necessary to supplement or validate existing data.

BLM has also made progress processing permits to drill – BLM processed approximately 5,200 such permits in fiscal year 2011. And the bureau continues to strengthen its Oil and Gas Inspection, Enforcement, and Production Accountability program, where it has begun a pilot program that uses risk-based inspection protocols for production inspections.

Finally, as part of the Blueprint the Administration announced, and has called on Congress to enact, a series of legislative principles intended to provide a framework for the efficient and responsible development of our domestic resources. These include measures to advance three primary objectives, which are to provide incentives for the prompt development of oil and gas leases; provide the tools for the federal government to oversee offshore oil and gas development activities on a timely and effective basis; and to ensure a fair return for the American public and accountability for safety violations and oil spills.

Conclusion

The Administration is working hard to promote the safe and responsible development of domestic oil and gas as part of a broad energy strategy intended to reduce our dependence on foreign oil. Alaska is an important producer of oil for the United States and an important component of these efforts, and the Administration is taking steps to promote production in Alaska that meets the highest scientific, safety, and environmental standards.

But the enduring values of the Arctic National Wildlife Refuge as a world class natural area and the preeminent remaining American wilderness make it inappropriate for any industrial development, and the Administration strongly opposes any effort to do so.