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Compass: Feds need to get out of Alaska's way

Perhaps more than any other state, Alaska understands the connection between access to energy resources and good public policy. Alaskans recognize the economic benefits of energy development and want to produce more energy. According to new polling, 83 percent of Alaska voters support increased production of oil and natural gas, including 65 percent who express strong support.

Yet the state's ability to develop its vast energy resources is often stifled by restrictive federal policies. Time and again, Alaska officials draw on the state's extensive energy experience to craft methodical plans for careful exploration only to be thwarted by bureaucratic roadblocks at the federal level.

Long before the five-year odyssey that is the Keystone XL pipeline approval process, ANWR was the national byword for the federal government's sometimes obstructive approach to energy policy. Absent interference from Washington, the Arctic National Wildlife Refuge could be producing a million barrels of oil per day and 150 billion cubic feet of natural gas per year -- enough to fuel South Carolina for a year. Despite ANWR's obvious potential, the State of Alaska is forced to sue the U.S. Fish & Wildlife Service for permission to explore.

Even areas specifically designated for energy production aren't safe from overreach. The Department of Interior's decision to put almost half the acreage in the National Petroleum Reserve-Alaska off limits to oil and gas development rightly drew bipartisan criticism. In addition to impeding production, the plan jeopardizes the future of a new pipeline that could connect offshore resources to the trans-Alaska pipeline. Responsible for carrying 11 percent of the U.S. oil supply, the trans-Alaska is running well under capacity -- transporting just over 500,000 barrels per day, compared to its peak of 2 million barrels. Alaska's plan to boost the pipeline's output is vital to the state's economy and to the nation's energy security.

But it can't happen without greater access to Alaska's resources, including those offshore. Arctic development has the potential to make Alaska the eighth largest oil resource province in the world, ahead of Nigeria, Libya, Russia and Norway. A 2011 study projects development of Alaska's Outer Continental Shelf (OCS) resources could create an annual average of almost 55,000 new jobs and $145 billion in new payroll nationally, as well as a total of $193 billion in government revenue through the year 2057.

Unfortunately, the January ruling by the 9th U.S. Circuit Court of Appeals questioning offshore leases in place since 2008 creates a significant new hurdle. The lack of regulatory and permitting certainty is the equivalent of a "closed for business" sign, discouraging businesses ready to invest billions to develop Alaska's portion of the Arctic's vast resources, which are estimated by the U.S. Geological Survey to make up 13 percent of the world's undiscovered conventional oil resources and 30 percent of its undiscovered conventional natural gas resources.

Alaska's story illustrates the energy choices facing the nation as a whole. Will we take full advantage of our abundant resources to create jobs, grow the economy and exercise positive geopolitical influence as a global energy superpower? Or will we continue to restrict access to some of our most promising resource areas and settle for less than our full potential?

The answer will not hinge on resource quantity, technological capability or availability of willing investors -- all of which we have in abundance. Our success in achieving greater economic and energy security will be determined largely by policy choices.

With production on federal lands dropping between 2009 and 2013 -- 11 percent for oil and 28 percent for natural gas -- and 87 percent of federally controlled offshore acreage off limits to production, increasing access to America's energy resources is vital to our future energy security. To reap the full benefits of our energy abundance, the federal government must remove barriers to responsible energy development. Alaska is an excellent place to start.

Jack Gerard is executive director of American Petroleum Institute. He is in Anchorage for the meeting of the Alaska Oil and Gas Association.



By JACK GERARD