Northern red tape: Congressman warns Alaska pipeline could be dismantled within 10 years

John Rossomando | Contributor

The Obama administration is setting the stage for the dismantling of the Trans-Alaska Pipeline and poses the greatest threat to its existence today, according to House Natural Resources Committee Chairman Doc Hastings.

The 800-mile pipeline cost $8 billion to construct in the 1970s, and has moved more than 18 billion barrels of crude oil. Three oil companies constructed it, in the face of significant opposition from environmentalists, in response to the 1973 Arab oil embargo.

The federal government approved the pipeline as part of a strategy to secure domestic alternatives to oil from the Middle East. But the Natural Resources Committee notes that the law authorizing the then-controversial pipeline’s construction came with a caveat: If the pipeline should ever cease being viable, it must dismantled.

That day could come within the next decade.

Hastings told The Daily Caller the Trans-Alaska Pipeline remains an important national-security asset today just as it was in the 1970s, because it helps reduce Americans’ dependence on foreign oil.

According to Hastings, the Obama administration has shown a greater interest in appealing to “far-left environmentalists” than in preserving a pipeline that carries approximately 10 percent of the nation’s daily oil output and is responsible for one-third of Alaska’s economic output. (RELATED: Study links El Nino climate to civil wars, unrest)

“Basically, what they’re doing is allowing the pipeline to dry up,” Hastings said. “The bottom line is, you need to have a certain flow of oil through the pipeline to keep it viable, especially when it’s wintertime … because [then] you have some infrastructure problems within the pipeline.”

The flow of oil from Prudhoe Bay along Alaska’s Northern Slope down to Valdez on the state’s southern coast has steadily declined from its peak of 2.1 million barrels per day in 1988 to approximately 650,000 barrels today.

Published estimates from the federal Energy Information Agency suggest that number could decline to 490,000 barrels per day by 2015, a number low enough to endanger the pipeline’s continuing viability. The agency’s estimate for the year 2030 is just 270,000 barrels per day.

Alaska’s deputy commissioner of the its Department of Natural Resources, Joe Balash, told a congressional subcommittee in June the declining flow of oil through the Trans-Alaska Pipeline threatens to physically clog it, endangering the environment.

Indeed, according to Alyeska, the company that manages the pipeline, at these lower production levels the pipeline may become useless as “low flow” permits ice crystals to grow. A low enough flow of oil could also allow surrounding soils to freeze, endangering the pipeline through frost heaves and other ground-buckling phenomena.

Balash also warned Congress that shutting down the pipeline would have a “crushing impact on Alaskans” because one-third of the state’s economy is tied to oil production.

“The loss of North Slope oil production would deprive state and local governments of billions of dollars in annual revenue,” Balash warned. “Rural communities, particularly those that have significantly benefited from oil development such as the North Slope Borough, would face significant decreases in their standard of living.”

Nonetheless, environmental activists have successfully lobbied the Obama administration to keep Alaska’s vast energy resources — including an estimated 45 billion barrels of oil and 114 trillion cubic feet of natural gas — “under lock and key,” in Hastings’ chosen words.

Drilling in places such as the Arctic National Wildlife Refuge and offshore in the Arctic Ocean has proven politically explosive, and environmentalists have successfully lobbied to block oil exploration.

“It doesn’t make any sense not to use those resources,” he insisted, “especially when Alaskans want to use those resources. There seems to be a push from the left to keep us from using American energy, and Alaska is an example of that right now.”

The Sierra Club and other environmental organizations successfully lobbied the Environmental Protection Agency in February to block Royal Dutch Shell from exploring for oil in the Arctic Ocean.

“I put the blame for this squarely on the EPA and the Obama administration who have taken virtually every opportunity to block responsible development of Alaska’s resources,” Alaska Democratic Sen. Mark Begich said in a statement after the EPA’s decision to revoke Shell’s drilling permit. “Their foot dragging means the loss of another exploration season in Alaska, the loss of nearly 800 direct jobs and
many more indirect jobs.”

But Interior Secretary Ken Salazar said this month that the Obama administration had reversed its earlier decision, and that it had granted Shell conditional approval.

A University of Alaska study found that allowing offshore drilling in the Arctic Ocean could generate an average of 54,700 jobs and upwards of 91,500 jobs at peak employment. It could also provide governments with approximately $193 billion in tax revenues.

“This is an existing reserve, and it’s been on the books since the 1920s,” Hastings said.

Hastings pointed to the Obama administration’s refusal to approve a new pipeline, connecting the National Petroleum Reserve in northwestern Alaska with the Trans-Alaska Pipeline, as another example of its threat to the continuing economic viability of Alaskan oil drilling.

Hastings introduced new legislation last month in the hope of forcing the Obama administration’s hand. The Alaska congressman wants to keep the pipeline in use by accelerating oil companies’ access to the National Petroleum Reserve in Alaska (NPR-A).

Not the Strategic Petroleum Reserve, but that other “reserve”: a 23 million-acre oil field set aside in 1923 and never opened for drilling until 13 years ago.

His bill would require government agencies to issue infrastructure permits tied to oil and gas exploration within 60 days after the Interior Department issues essential drilling permits.

It would also require the Interior Department to prepare a right-of-way plan detailing how future leases would be used within 25 miles of an existing pipeline, and to assess just how much oil and gas is present in the NPR-A. Estimates vary widely, from a low of 900 million barrels of oil to a high of 2.7 billion. The NPR-A may also contain as much as 114.36 trillion cubic feet of natural gas.

Hastings said his bill would restore a sense of predictability to the market and help to forestall the pipeline’s demise. The alternative, he says, is to let the pipeline fall into disuse and leave billions of barrels of oil in Alaska, out of reach of the “lower 48.”

“We should be utilizing the resources that are there,” Hastings said. “Alaska is one of the 50 states, and they have the resources to help the other 49.”

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