In the Blink of an Eye, a Hunt for Oil Threatens Pristine Alaska
For decades, opposition to drilling has left the Arctic National Wildlife Refuge off limits. Now the Trump administration is hurriedly clearing the way for oil exploration.
FAIRBANKS, Alaska — It is the last great stretch of nothingness in the United States, a vast landscape of mosses, sedges and shrubs that is home to migrating caribou and the winter dens of polar bears.
Aside from a Native village at its northern tip, civilization has not dented its 19 million acres, an area the size of South Carolina. There are no roads and no visitors beyond the occasional hunter and backpacker.
But the Arctic National Wildlife Refuge — a federally protected place of austere beauty that during a recent flyover was painted white by heavy snowfall — is on the cusp of major change.
The biggest untapped onshore trove of oil in North America is believed to lie beneath the refuge’s coastal plain along the Beaufort Sea. For more than a generation, opposition to drilling has left the refuge largely unscathed, but now the Trump administration, working with Republicans in Congress and an influential and wealthy Alaska Native corporation, is clearing the way for oil exploration along the coast.
Decades of protections are unwinding with extraordinary speed as Republicans move to lock in drilling opportunities before the 2020 presidential election, according to interviews with over three dozen people and a review of internal government deliberations and federal documents.
To that end, the Trump administration is on pace to finish an environmental impact assessment in half the usual time. An even shorter evaluation of the consequences of seismic testing is nearing completion. Within months, trucks weighing up to 90,000 pounds could be conducting the tests across the tundra as they try to pinpoint oil reserves.
While actual oil production would be a decade or more away, the turnaround represents a prized breakthrough in the Trump administration’s campaign to exploit fossil fuels and erase restrictive policies protecting the environment and addressing global warming.
The Interior Department, which has jurisdiction over the Arctic refuge, has been central to the administration’s regulatory rollback in Alaska and beyond, accommodating the wishes of big businesses to strip down rules on how federal lands can be used. The oil and gas industry has been among the biggest beneficiaries as the administration has relaxed or abandoned regulations meant to safeguard air quality, groundwater supplies and wildlife.
The refuge is not the administration’s only target for stepped-up oil development in Alaska. It is also pushing for more exploration and production offshore and in the National Petroleum Reserve, west of the refuge. All of this is coming despite a glut in domestic oil production that raises the question of whether more oil from the Arctic — which is costly to produce — is necessary or makes economic sense, especially given the need to eventually wean the world off fossil fuels.
The fate of the refuge’s coastal plain is in the hands of Ryan Zinke, the Interior secretary, who has appointed top deputies with deep professional and political ties to Alaska to oversee its development. In 2014, two of the appointees were involved in an unsuccessful court challenge to Obama-era policies that had helped keep the area off limits.
Congressional approval to open the area to oil exploration was inserted in tax overhaul legislation last December under the guise of generating revenue for the federal government, and by next year, the Interior Department expects to begin selling the first drilling leases.
The hurried timeline has created friction, with some specialists in the federal government concerned that environmental risks are being downplayed or ignored. And many outside scientists and environmentalists share the concerns, warning that plans for seismic testing and eventual drilling could harass, injure or kill polar bears and other wildlife.
“It seems as though the administration is in a headlong rush to put the drill bit into the coastal plain,” said David J. Hayes, a deputy Interior secretary in the Obama and Clinton administrations. “Given the virgin territory of the refuge, with the unique wildlife dependency issues, I don’t know how you do this in an artificially fast and truncated fashion.”
Mr. Zinke’s Alaska-friendly appointees, who have long pushed for oil exploration in the coastal plain, say the fears are overstated. They point out that years ago, Congress left open the eventual possibility of allowing development there. Exploration is in the best interest of Alaskans, they say.
“I feel like there is a lot of expectations, hopes and dreams from people who I know and love that are riding on this,” said Joe Balash, one of the appointees, who has worked in Alaskan political circles for two decades and now oversees the Bureau of Land Management.
An Alaska Native company, Arctic Slope Regional Corporation, has been a major force behind the push and stands to enjoy a windfall if drilling proceeds. The corporation, which has been awarded more than $7.5 billion in federal contracts in the past 10 years, expanded its lobbying under the Trump administration, records show, and Mr. Zinke appointed one of its executives to a top post.
Known as A.S.R.C., it is among 13 regional businesses created in the 1970s to foster economic development among Alaska’s indigenous population. It has myriad financial interests in the state’s oil-rich North Slope region, which includes the refuge’s coastal plain and Prudhoe Bay, home to one of the largest oil fields in North America. And it has been a key financial backer of Senator Lisa Murkowski, the Alaska Republican, who has been the drilling plan’s biggest champion in Congress.
Many Natives on the North Slope — including Inupiat who live in Kaktovik, the village inside the refuge — support oil development. But another group that lives south of the refuge, the Gwich’in, fears oil development would disturb the migration of porcupine caribou, animals it has hunted for centuries and still relies on for much of its food.
A nationwide poll last year by researchers at Yale and George Mason Universities showed that 70 percent of registered voters in the United States opposed drilling in the reserve.
Ms. Murkowski declined to comment, as did Alaska’s other elected representatives in Washington. Mr. Zinke also declined to comment. But he told a Senate committee in March that he was “very bullish on the Arctic.”
A History of Frustration
The struggle over oil exploration in the Arctic National Wildlife Refuge has its roots 50 years ago in the discovery of petroleum reserves around Prudhoe Bay, west of the refuge.
Congress in 1960 had set aside millions of acres in northeast Alaska for wildlife, lands that were largely off the beaten path, geographically and politically, and included the refuge’s coastal plain.
But with the Prudhoe Bay discovery in 1968, the calculus changed. Many thought the plain might hold riches too.
In 1980, when Congress voted to conserve much of the federal land in Alaska, drilling advocates pushed for oil and gas development on the coastal plain. Then, as now, the move was supported by many Alaskans, who generally favor oil development, in part because some of the revenue is returned to them in the form of an annual dividend. Drilling has largely had bipartisan support among Alaskan lawmakers as well.
The advocates were unsuccessful but had an opening: The 1980 bill allowed Congress to authorize oil and gas development at a later date. The 1.5-million-acre coastal plain, identified in Section 1002 of the legislation, has been known since as the 1002 Area.
In 1995, with Republicans controlling both houses of Congress for the first time in decades, legislation was approved to allow development. But Democrats opposed the measure and President Bill Clinton vetoed it.
When Republicans held on to Congress in the 2016 elections and President Trump won the White House, drilling proponents saw another opening.
Ms. Murkowski told reporters within hours of Mr. Trump’s victory that she would renew the push for legislation. That set in motion a furious effort to win congressional approval and position the Interior Department to carry a plan forward.
Congress Takes Action
A flight from Alaska’s central Arctic coast to Fairbanks is a straight shot. But when Mr. Zinke and Ms. Murkowski flew the route in May last year, just a few months into the Interior secretary’s tenure, the pilot made a wide detour to the east.
Below them was the vast 1002 Area, extending between the Brooks Range and the Beaufort Sea, still off limits to oil and gas exploration but now within their political sights.
A few days later in Anchorage, Ms. Murkowski introduced Mr. Zinke at an oil and gas conference. “The only path for energy dominance is a path through the great state of Alaska,” Mr. Zinke told the group.
Seven months later, Congress voted to open the coastal plain to exploration.
Getting approval in the Republican-dominated House of Representatives was not an issue. But in the Senate, Ms. Murkowski needed a bill that could survive a likely filibuster. The solution was to characterize oil exploration as a revenue raiser — with a target of $1 billion for the Treasury over 10 years — and insert it into Mr. Trump’s tax overhaul legislation.
The oil provision authorized two lease sales of drilling rights for at least 400,000 acres each, directing the “Secretary of Interior, acting through the Bureau of Land Management,” to oversee the development. The innocuous-sounding bureaucratic language was intended to fast-track the effort by marginalizing skeptics in another Interior agency, the Fish and Wildlife Service.
At a hearing, current and former Alaska politicians spoke in favor of opening the refuge, as did representatives of two Native corporations, including A.S.R.C. Several A.S.R.C. executives stayed in Washington to press for the measure, part of a push that saw the corporation’s lobbying expenditures nearly double to $590,000 in 2017 from $320,000 the previous year, according to the Center for Responsive Politics, a nonpartisan group.
The A.S.R.C. officials were joined by Natives from Kaktovik in the Senate gallery on Dec. 20, when the bill was approved on a straight party-line vote, and later that day on the South Lawn of the White House and in the Oval Office.
During a cabinet meeting, Mr. Trump praised the decision to open land that “for 40 years this country was unable to touch.” And in a message posted to Twitter, Mr. Zinke wrote, “It was a key part of @realDonaldTrump budget.”
‘Great Alaskan Friends’ at Interior
Mr. Zinke had been preparing for this moment since he took office.
As his confirmation hearing, he had promised a fresh approach to Alaska, and he went about delivering on that pledge by filling important jobs at the Interior Department with Alaska and Arctic exploration in mind.
A Washington lobbyist, David Bernhardt, was appointed deputy secretary. Mr. Bernhardt had represented Alaska in litigation against the federal government, including an unsuccessful lawsuit in 2014 that sought a review of the state’s plan for exploring oil and gas resources within the coastal plain of the refuge. Earlier, he served at the Interior Department under President George W. Bush.
A campaign manager to Ms. Murkowski, Steve Wackowski, was named senior adviser for Alaskan affairs. He had also had a job as operations manager for a joint venture focused on remote sensing in North Slope oil fields, his résumé said. An owner of that venture is Kaktovik Inupiat Corporation, a Native company that has surface rights in the refuge and a stake, along with A.S.R.C., in another partnership seeking to conduct seismic testing there.
A third official with Alaska ties, Mr. Balash, now oversees the Bureau of Land Management, giving him direct oversight of Arctic exploration. His first day on the job was the day after the tax legislation passed.
Mr. Balash grew up in Alaska and served as chief of staff to Senator Dan Sullivan, the Alaska Republican. In 2014, when the state sued the federal government, he was commissioner of the Alaska Department of Natural Resources.
“Given my background and work history,” Mr. Balash said, “I felt privileged to be able to work on this project. It has been something that, obviously, has been a subject of some debate.”
Drilling proponents cheered the appointments.
“We had no friends under Obama,” said Rebecca Logan, chief executive of the Alaska Support Industry Alliance, a trade group representing over 500 companies that provide oil field services. “Now, we’ve got the Interior Department where there are great Alaskan friends.”
Despite the close ties, industry officials insist they are not getting a free pass.
“I’m not expecting a rubber stamp,” said Kara Moriarty, the chief executive of the Alaska Oil and Gas Association, who has a framed photo with Mr. Zinke in her Anchorage office. “I’m expecting a very diligent and thorough process.”
But those who oppose drilling in the refuge, including many Democrats in Washington, suspect the Department of Interior is not being so diligent. Representative Raúl M. Grijalva, the Arizona Democrat who will become chairman of the Natural Resources Committee next month, said he would probably call a hearing about the Arctic development with the goal of slowing it down.
“We can make sure that corners are not being cut,” said Mr. Grijalva, who last week called for Mr. Zinke to resign because of ethics allegations against him, prompting a personal attack from the secretary.
Scores of environmental organizations are also watching closely, ready to sue whenever an opportunity arises.
“There are groups out there who will fight this tooth and nail, no matter what,” Mr. Balash said. “It is fair to say I’ve been lawyered up on this project from Day 1.”
A Rush to Sell Leases
One time-consuming hurdle for big drilling projects is getting the environmental clearances. During the Obama administration, the environmental review of drilling prospects in another part of Alaska ran well over 1,000 pages and took two and a half years to complete.
Not this time.
A draft environmental impact statement on the coastal plain leasing plan is expected to be released soon, with the finished version to follow next spring, just a year after being ordered. And a separate assessment of seismic testing is also expected any day, that one just months in the making.
The hurry-up follows a directive from Mr. Bernhardt, the deputy secretary, limiting all environmental impact statements to one year and 150 pages, or 300 pages for “unusually complex” projects. Mr. Bernhardt cited the need to reduce paperwork.
Mr. Balash, of the Bureau of Land Management, said the shorter time frame was also possible in part because the bureau was relying on past scientific studies. “It’s not as though we’re starting from scratch,” he said. Older studies may be less useful, however, because of changes in the Arctic related to warming.
Completing the environmental impact statement by next spring should allow the department to sell leases in 2019, Mr. Balash said, even faster than in the language of the 2017 tax bill.
In justifying the pace, Mr. Balash said many people had “been waiting for this for a very long time.”
Opponents say that having leases in the hands of oil companies before the 2020 elections would make halting the drilling program more difficult should a Democrat win the White House. They also complain that the public has been sidelined in the interest of speed. Although the fate of the Arctic refuge is a federal issue of national interest, just one hearing has been held outside Alaska.
“There’s going to be damage, going to be long-lasting effects from what they do,” said Geoffrey L. Haskett, president of the National Wildlife Refuge Association and a former Alaska regional director with the Fish and Wildlife Service, the managing agency of the refuge. “I just can’t imagine that what we’re going to see is going to be adequate,” he added, referring to the environmental evaluations.
The rushed schedule has led to rifts between the Bureau of Land Management and the Fish and Wildlife Service, which was forced into a secondary role by the language of the tax bill. Greta Burkart, an aquatic ecologist who resigned in June after more than seven years with the service in Alaska, said the accelerated process had further marginalized the agency.
Dr. Burkart said that was one of the reasons she resigned. “I felt there was little that Fish and Wildlife could do at that point,” she said.
She said that scientists were given less time than usual to provide expert comment on draft sections of the environmental reviews — just 48 hours in some cases — and that their comments were sometimes not acknowledged. Other current and former employees, who spoke on the condition of anonymity for fear of reprisals, had similar complaints.
The decision to conduct an environmental assessment of the seismic testing proposal, a less rigorous review than a full environmental impact statement, was especially troubling for many drilling opponents.
They point to damage done to the tundra by seismic testing in the mid-1980s; some vehicle tracks from that work remain visible more than 30 years later. And they worry about the disruption of polar bears.
The population of polar bears in the southern Beaufort Sea has been declining for years as climate change has reduced the extent of sea ice in the Arctic. The population is now estimated at 800 to 900 animals.
Pregnant bears dig winter dens in the snow on the coastal plain, and if those dens are not detected during the seismic work, the mothers and their newborn cubs could be disturbed or endangered by the heavy trucks.
Steven C. Amstrup, chief scientist with Polar Bears International, a conservation group, said the coastal plain in the refuge “ “is the most important maternal denning area” for the southern Beaufort Sea population.
Dr. Amstrup, a former United States Geological Survey zoologist who has studied the bears for three decades, said his research had shown that the heat-sensing technology used to detect dens would probably miss about half the dens, which would probably be disturbed during the seismic work.
Jeff Hastings, chairman of SAExploration, part of the seismic-testing joint venture, said improved technology would prevent damage to the tundra this time around. He also said his company was working with the Interior Department on ways to protect the bears by holding off on testing in some areas until after the animals have left their dens, for example.
Corporate Muscle, Alaskan Style
When Mr. Zinke went in search of influential Alaskans to fill top posts in his Interior Department, he turned to people who had worked for elected officials in the state and for past Republican administrations in Washington.
He also looked to A.S.R.C., a multibillion-dollar business that stands to gain the most financially if drilling commences in the 1002 Area. Tara Sweeney, its former executive vice president for external affairs, is now assistant secretary for Indian affairs. Her federal financial disclosure form, filed in February, showed that at A.S.R.C. she had been paid more than $1 million over the prior 13 months, including incentives from previous years.
The cultural accents on the grounds of A.S.R.C.’s corporate offices in Anchorage honor the traditions of its 13,000 Native shareholders, and feature Inupiaq sculptures and a diorama of a whaling festival. But inside the 10-story building, A.S.R.C. reveals itself as a powerful conglomerate poised to take full advantage of any oil and gas exploration to come.
Its subsidiaries include an energy services outfit, a fuel-refining and marketing operation and a construction company, all at the ready to supply services to oil companies that acquire drilling rights. A.S.R.C. also has a stake in the seismic-testing partnership lined up to explore the 1002 Area, as well as rights to drill on 92,000 acres within 1002.
More than 30 years ago, BP and Chevron drilled a single test hole in the 1002 Area on land leased from A.S.R.C. and Kaktovik Inupiat Corporation. The results of that test, which have been kept secret, may hold clues about the reserves that could help explain A.S.R.C.’s enthusiasm for drilling.
Bill Horn, a Reagan administration official who helped negotiate the deal that gave A.S.R.C. drilling rights in the 1002 Area, recalled how people involved in the drilling left that testing in 1986 “hot to trot” about the potential reserves.
With nearly $2.7 billion in annual revenue, A.S.R.C. is the largest of the Alaska Native corporations and ranks 169th on Forbes’s nationwide list of private companies by revenue. Still, A.S.R.C. has little name recognition outside Alaska, allowing it to attract relatively little attention while lobbying.
“We like being under the radar,” said Teresa Imm, the company’s senior vice president for resource development, who was among the executives who traveled to Washington last year to press for the tax legislation. Over the past decade, the company has spent more than $3 million on lobbying, according to data from the Center for Responsive Politics.
Some of the A.S.R.C. leaders, including Ms. Imm, are not Alaska Natives, but the company has had the ability to speak and act on behalf of Native communities. Ms. Imm said A.S.R.C. was simply trying to make good on promises to develop the land for its shareholders.
But there are deep disagreements over A.S.R.C.’s role in the drilling campaign, and whether its corporate interests align with those of Native families who have lived off the land for generations.
Some, like Sam Alexander, a Gwich’in formerly from Fort Yukon, say A.S.R.C. has gone too far.
“Native corporations are not tribes,” said Mr. Alexander, who teaches at the University of Alaska Fairbanks. “The only thing Native about them is their name. They are just corporations.”
A.S.R.C. officials say that the company has never represented itself as a tribe, but that its shareholders are members of various Alaskan tribes.
For decades, the Gwich’in have led the Native opposition to drilling, arguing that opening the 1002 Area could affect the porcupine caribou, a major source of food and a spiritual touchstone.
“We are asking to continue to live the way we always have,” said Bernadette Demientieff, the executive director of the Gwich’in Steering Committee, which opposes oil development in the refuge and recently joined with the Sierra Club to try to persuade banks to hold back financing for exploration. The steering committee has also worked with environmental groups to persuade politicians to defend the refuge from drilling.
Matthew Rexford, the tribal administrator of Kaktovik and the president of Kaktovik Inupiat Group, said the drilling could be done responsibly and should go forward. Unlike the Gwich’in, Mr. Rexford’s village stands to benefit financially.
“I have given this a lot of thought, and our community has given this a lot of thought,” he said. “We do feel it can be done in an environmentally safe and sound manner.”
But some Inupiat have reservations. “Think about what’s going to happen to this land if there is an oil spill and the response that’s going to come along with it,” Adrienne Aakaluk Titus, a community organizer in Fairbanks, said at hearing in Kaktovik.
The muscle of the Native corporations has not been lost on Alaskan politicians like Ms. Murkowski, who has supported their interests and been rewarded in return.
Under federal law, the corporations are considered “disadvantaged,” meaning they receive preference in contracting. A.S.R.C. and the other 12 regional corporations received $3.3 billion in contracts in the 2017 fiscal year, federal data show.
Beginning in 2009, there was a move in Congress to curtail the preferential treatment. An investigation by a Senate subcommittee found that the corporations were among the largest federal contractors, often landing high-value contracts without having to bid. Senator Claire McCaskill, the Missouri Democrat who led the subcommittee, complained that the corporations relied “heavily on non-Native managers” and employed “relatively few of their shareholders” as she pushed for changes to contracting practices, some of which went into effect in 2011.
Ms. Murkowski helped limit the changes, defending the work of the Native corporations and arguing, along with other Alaskan officials, that her Senate colleagues should not use income alone to measure disadvantage. “We’re talking about a population many times without a road system or water supply system,” she said in 2011.
A year earlier, when Ms. Murkowski lost the Republican Senate primary, she took the unusual step of seeking re-election as a write-in candidate. It was a complicated feat that leaned heavily on her support among the Native corporations.
The corporations set up a political action committee that spent $1.6 million to back her successful campaign. A.S.R.C. was one of the largest supporters, contributing $200,000.
A year ago, after the tax bill passed, the A.S.R.C.’s newsletter featured a photograph on its cover from an Oval Office celebration with Mr. Trump. Ms. Murkowski, beaming, appeared surrounded by Alaska Natives and A.S.R.C. officials.
By: By Henry Fountain and Steve Eder
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