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Arctic Ocean vs. ANWR: A hard-earned quest to drill in the icy abyss

Tony Hopfinger,Jill Burke
A polar bear mom and her cubs exploring the beach in Kaktovik. September 7, 2012
Loren Holmes photo
Polar bears napping during a storm in Kaktovik. September 7, 2012
Loren Holmes photo
A polar bear mom and her cubs exploring the tundra in Kaktovik. September 7, 2012
Loren Holmes photo
A polar bear stretches on the tundra in Kaktovik. September 7, 2012
Loren Holmes photo
Polar bear wave, Kaktovik. September 7, 2012
Loren Holmes photo
Polar bears argue over a piece of whale meat in Kaktovik. September 7, 2012
Loren Holmes photo
Young polar bears are chased away from whale meat in Kaktovik. September 7, 2012
Loren Holmes photo
A polar bear, nose red with blood after feeding on a whale carcass, walks the beach in Kaktovik. September 7, 2012
Loren Holmes photo
Polar bears congregate at the carcass of a bowhead whale on the beach in Kaktovik. September 7, 2012
Loren Holmes photo
A polar bear explores the eroding bluff in Kaktovik. September 8, 2012
Loren Holmes photo
A polar bear walks along the beach in Kaktovik at sunset. September 7, 2012
Loren Holmes photo
Polar bears playing in the water during a rainstorm in Kaktovik. September 6, 2012
Loren Holmes photo

Editor's note: This is the third of a four-part series detailing how the nation decided to allow offshore oil drilling in Alaska's Arctic, while at the same time prohibiting oil exploration in the Arctic National Wildlife Refuge. Would hunting for crude in a pristine wilderness be safer than in the Arctic Ocean?

With the Arctic National Wildlife Refuge off limits to oil development, the crude hunt would leave mainland Alaska and head offshore into the treacherous Arctic Ocean. It was the mid-2000s, and then-President George W. Bush’s administration was selling leases for oil exploration far off Alaska’s northern shores.

But the hunt wouldn’t get under way without a series of setbacks, from massive legal and regulatory fights, to the largest oil spill in U.S history, to uproar in Alaska’s rural Native villages. Along the way, billions of dollars were spent, from oil companies buying up leases and developing the technology necessary for drilling in such remote and icy waters, to environmental groups challenging regulators in court.

In some ways, the battle over offshore drilling in the Arctic Ocean mimics the fight over opening ANWR's coastal plain to oil exploration.

MORE: SPECIAL SERIES ON ARCTIC vs. ANWR

Both involve sensitive areas, indigenous cultures and fierce battles. And each has relied on symbols for opposition. In the ANWR fight, the Porcupine caribou was the poster child for animals potentially threatened by development on the coastal plain, known as the 1002 Area. In the offshore battle, polar bears would become the international symbol of a melting Arctic and the growing threat of an industry venturing into the abyss.

But in other ways, the battles are very different. The ANWR debate transpired over decades, with environmentalists winning the war and holding the line to protect the coastal plain.

In comparison, the fight over offshore oil development in the Arctic Ocean has gone on for about eight years. And environmentalists appear to be losing as Royal Dutch Shell begins preliminary drilling this month.

This is the tale of what happened in the years after the ANWR war. Caught in the middle have been more than 8,000 mostly Alaska Native people who live in the far-flung villages dotting the Arctic coastline. They depend on an ecosystem populated with an abundance of animals and fish.

One hundred and fifty years ago, when they still lived in sod igloos and were largely untouched by the Western world, they experienced the first oil boom. Back then it came from ships hunting bowhead whales, using the blubber to make oil. The next oil boom came in the late 1960s, with the discovery of the nation’s largest oil field -- Prudhoe Bay.

Today, two drill ships sit off the shores of Alaska’s Arctic, ready to unleash what may be the third oil boom for those who call the desolate shoreline home.

Drowning polar bears

From an industry perspective, the new oil frontier looks increasingly promising. The Chukchi and Beaufort seas, which make up a slice of the Arctic Ocean north of Alaska, are estimated to hold up to 27 billion barrels of crude. Shell alone has so far spent nearly $5 billion in the hopes of striking it big in the Chukchi and Beaufort.

Where the early 1990s saw Shell abandon Alaska in favor of offshore drilling in the Gulf of Mexico, the new millennium rejuvenated the company's Arctic hunt for riches. Oil prices had rebounded, while technology had advanced to make major oil plays in the far north more realistic and economical. At a 2005 federal offshore sale, Shell bid $44 million for leases in the Beaufort, including around prospects it had explored years earlier.

But the first hint that Shell’s reemergence as an Arctic oil hunter was in jeopardy was already unfolding before that lease sale.

It wasn’t environmentalists or coastal villagers who were throwing up roadblocks. It was happening inadvertently amongst employees working for the very agency -- then called the Minerals Management Service (MMS) -- that regulates offshore oil drilling in federal waters. It was the busiest MMS had been in Alaska since at least the early 1990s. And many in the agency’s Alaska division were ecstatic to see the federal government promoting offshore lease sales and oil exploration in the Arctic Ocean.

Meantime, a group of researchers within the agency had been documenting for decades how oil development might affect endangered bowheads -- giant whales that Alaska Natives living mostly above the Arctic Circle depend on for food. The scientists had also been tracking polar bears -- a spin-off of the aerial whale study -- and had gathered years of observational data on the bears’ movements and where they tended to congregate.

In September 2004, Charles Monnett, who had been a key participant in many studies on Arctic wildlife and ecology for MMS, was conducting an annual bowhead survey for MMS when he made a startling discovery. The Beaufort, normally covered with lots of sea ice, was wide open “for 100 miles -- 200 miles, in some cases,” Monnett would recall in a 2007 interview:

There was a storm that shut us down. We went back on our next rotation a couple weeks later and saw a white object in the water that looked weird and realized it was a drowned (polar) bear. We saw another one on another flight. Another one on another flight. And over a period of several days -- week -- there's scattered (dead) bears. A couple were pretty close to (the village of) Kaktovik, another one was pretty far out. And we saw one that was really bloated. You could see it for miles. ... We took a couple photos, but they were unrecognizable. ... These kinds of things you don't know the significance of until later.

Monnett was struck enough by the potential implications of the dead, floating polar bears to write a paper, published with co-author Dr. Jeffrey Gleason in the journal Polar Biology in 2006. Monnett's observations, and his declaration of them to the world, would become a potential threat to Shell's 2005 lease investment, along with other upcoming Arctic lease sales.

At the time, Monnett wrote in his paper that "drowning related deaths of polar bears may increase in the future if the observed trend of regression of pack ice and/or longer open water periods continues."

He has since been reassigned from the federal agency and has come under scrutiny over what his bosses will characterize only as a federal investigation into matters of scientific integrity. Gleason, who has since left Alaska, has also been pulled into the investigation.

Monnett’s and Gleason’s paper continued: "Polar bears swimming offshore in the Beaufort Sea risk contact with oil, if spilled and strikes by ships. Our observations of higher numbers of swimming polar bears in open water than previously supposed should be considered by analysts and managers relative to marine transportation, ice-breaking, oil and gas development and other potential activities in open water."

The image of polar bears drowning at sea was so compelling to Al Gore that he referenced Monnett's work in his global warming film, “An Inconvenient Truth.” When Monnett later fell under investigation -- even though it wasn't known if his polar bear research had anything to do with the probe -- he was skewered in the media. "Global Warming Industry Rocked by Polar Bear Fraud," was how Fox News headlined an article about the Monnett investigation.

Regardless of Monnett's future troubles, the federal government was already looking at whether to list the polar bear as threatened under the Endangered Species Act, anticipating that climate change could put the bear's survival at risk. And this came just as MMS was readying to sell more oil exploration leases in the Arctic Ocean.

If the environmentalists were behind the curve in fighting to preserve the Arctic Ocean, drowning polar bears would be a rallying call to gear up for battle -- just as the iconic Porcupine caribou had done in protecting ANWR. Media across the globe ran stories about drowning polar bears and started to look more closely at climate change in the Arctic -- as well as the oil companies venturing to the far north.

'Getting everyone’s attention'

Led by groups such as the Arizona-based Center for Biological Diversity, the environmentalists found a shared interest in slowing down Shell amongst those living in the coastal villages dotting the Arctic coastline. By 2007, when Shell had hoped to start drilling beneath the Beaufort Sea, communities were already pushing back.

Taking MMS to federal court in 2007, the North Slope Borough and the Alaska Eskimo Whaling Commission were ready to stop Shell's advance. Attorneys for the borough and commission argued:

Shell’s exploration activities pose a concrete, definite, and imminent threat to subsistence hunters on the North Slope. The level of activity planned for this summer is unprecedented, and scientific studies of the effects of lower levels of similar drilling activity in the same area establish that exploration will impede subsistence hunting, placing at risk the lives of Inupiat hunters and jeopardizing the health and mental well-being of communities across the Alaskan Arctic.

Edward Itta, then the mayor of the North Slope Borough, was already on record as opposing offshore drilling -- part of a campaign promise. Better to try to clean up oil on land -- including in ANWR -- than in ice-choked waters, Itta and others reasoned.

Despite a massive PR blitz, which included dozens and dozens of meetings with coastal villagers, Shell officials were met with resistance. Some locals felt Shell didn’t take the worries of indigenous hunters seriously enough. Those skeptical also believed that MMS and other agencies had minimized the effects underwater noise and development might have on whales and other marine life.

“This lawsuit was a way of getting everyone’s attention and to get our concerns addressed,” Itta told The New York Times at the time.

It worked. Shell's drilling plans were shelved until the case was resolved, the first of what would be year after year of delays for the company.

Shell, however, remained bullish on the Arctic Ocean, and it came out spending big in early 2008 when the federal government held another oil lease sale. The Chukchi Sea sale broke records, netting $2.6 billion in high bids. Shell made the single-highest bid for a tract, spending $105 million. In all, Shell spent $2.1 billion at the lease sale.

A few months after the Chukchi lease sale, the polar bear was officially listed as threatened.

In its ruling, the U.S. Interior Department cited “loss of sea ice habitat caused by climate change" as the main reason. Climate change was the big worry, but the government went on record as saying human threats could become increasingly important to consider as polar bear numbers decline. Those threats include "oil and gas operations, subsistence harvest, shipping and tourism," according to the Interior Department at the time.

But the department stopped short of proposing a sweeping ban on offshore drilling in the Arctic Ocean. Bears and industry would be allowed to co-exist. Still, the feds would go on to designate more than 187,000 square miles of the Arctic (an area of mostly sea ice larger than California) as critical habitat for polar bears, a decision that at the time left many questions unanswered for both oil companies’ future plans and Alaska Natives who depend on the ocean.

Finding common ground

Just as the plight of polar bears and whales had dominated much of the controversy and legal battles facing Shell's future in the Beaufort and Chukchi seas, the fate of Alaska's Iñupiat people was entering the conversation in new ways.

Where Shell once had an adversary in Mayor Itta, he began softening his position on offshore drilling. The North Slope Borough, under Itta’s direction, declined to join new legal fights mounting against Shell’s Arctic crawl.

He, along with Native business interests in the region, questioned the merits of the polar bear habitat designation. They thought the decision would hurt their quality of life if it delayed oil and mining jobs -- along with the money such industries generate for communities. Resource development had become a part of modern Native life, and to limit access to it would be denying new opportunities to villagers.

The argument became one of intertwining needs. Yes, an oil spill harming marine life would be awful. So, too, would be restrictions on traditional hunts out of fears that animals like polar bears were in peril (not unlike what happened when the bowhead whale was listed as endangered in the 1970s). For Itta, ensuring his people had an influential voice and self-determination in the stewardship of the land and sea was the most crucial element -- a stewardship not based on extremes, but adaption to evolving conditions.

Under President Barack Obama’s administration, Itta felt his people were finally being heard in Washington. ANWR remained off limits. The nation and the state of Alaska were intent on drilling in the Arctic. Oil companies were already mobilizing. Itta knew there was no stopping it and felt that working with regulators and the oil industry, instead of fighting them in court, was now the right approach, as he said in a 2010 Alaska Dispatch interview:

I sincerely believe that they are not the enemy. I do not believe that any oil industry folks go up there deliberately to do harm to our region; that is fallacy. But I do believe that they are ignorant in a lot of ways about what is driving us, but they are learning, and that's good.

Among the lessons Shell officials learned was to respect the fall whaling season, agreeing to cease activity while hunters harvest bowheads.

Meantime, predictable court battles between environmentalists and federal regulators waged on. As for Shell executives, they continued to refine their plans and stay the course, confident their company would eventually get the go-ahead to drill.

This optimism -- which carried a hefty price tag for Shell -- had analysts speculating on just how much oil might be hiding beneath the seabed. To date, Shell has spent nearly $5 billion, and federal regulators have only recently given the company the OK to begin drilling offshore wells -- the first punched in the ocean’s seabed in more than two decades. Right now, Shell can drill only to 1,400 feet, stopping a few thousand feet before it penetrates oil and gas.

But Shell might have been drilling in the Arctic sooner were it not for the worst oil spill in U.S. history.

Out of control

Nearly two years after the polar bear was listed, a catastrophic event entirely out of Shell's control unfolded in the Gulf of Mexico. In April 2010, just months before Shell was again set to drill in the Arctic, the Deepwater Horizon oil platform suffered a well blowout while drilling a deepwater prospect for BP.

The explosion of the Deepwater Horizon killed 11 workers. By the time BP stopped the out-of-control well, nearly 5 million barrels of crude had polluted the Gulf of Mexico. This environmental and public-relations nightmare reverberated to those living along the shores of the Arctic Ocean, while at the same time adding another wrinkle in Shell's drilling plans.

MMS, the federal offshore regulatory agency, was in the hot seat as investigators pieced together what happened and whether MMS had skimped on oversight. One month after the Deepwater Horizon exploded, there was an MMS employee meeting at the Alaska office. Employees feasted on a cake decorated with former Alaska Gov. Sarah Palin’s campaign slogan during her failed run for vice president in 2008: “Drill, Baby, Drill.”

It was meant as a joke, but it couldn’t have come at a worse time for MMS, which was facing heavy scrutiny for the Deepwater Horizon disaster happening under its watch. Interior Secretary Ken Salazar had enough. MMS was soon renamed and sliced into separate government divisions, a recognition of the need for better oversight of offshore oil drilling.

As for Shell, its Arctic ambitions were up in the air. The waters off Alaska’s northern and northwestern shores are very shallow compared to the 5,000 feet the Deepwater Horizon was operating at in the Gulf of Mexico. But the Arctic poses its own unique challenges: icy conditions, hostile weather, and the lack of ports and infrastructure. A Shell spokesman has noted that the company has had to search for some of the world's best engineers, at times competing with the space exploration industry.

MORE: SPECIAL SERIES ON ARCTIC vs. ANWR

Despite Shell officials reassuring regulators the company was poised, ready and capable of mopping up any spills, the Obama administration played it safe in a post-Deepwater Horizon world. The feds called off drilling in the Arctic Ocean while more research was done on the implications of a spill in the cold, icy waters. Over the next couple of years, there would be more stop-and-go action, until finally Shell’s drill ships would head north.

Today, the ships are in position in the Arctic Ocean. One has begun preliminary drilling in the Chukchi Sea. The second drill ship hovers over a prospect in the Beaufort Sea, waiting for Iñupiat whalers to wrap up their bowhead hunts.

Back on shore, the caribou are migrating southward across the Arctic National Wildlife Refuge, the last untapped wilderness.

Contact Jill Burke at jill(at)alaskadispatch.com and Tony Hopfinger at tony(at)alaskadispatch.com