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Arctic Ocean vs. ANWR: A tale of two oil fields

Alex DeMarban
Shell and other oil companies are embarking on offshore oil drilling in Alaska's Arctic. Meantime, the coastal plain in the Arctic National Wildlife Refuge remains off limits to oil drilling.
Aaron Jansen illustration
Joe Kaleak, Sr fixes a harpoon at his house. His son George Kaleak, Sr. caught the first whale of the year the day before. September 6, 2012
Loren Holmes photo
Isabel Kanayurak serves whale meat at a feast celebrating the first whale of the year in Kaktovik. September 6, 2012
Loren Holmes photo
Children play with an iPad at the feast celebrating Kaktovik's first whale of the year. September 6, 2012
Loren Holmes photo
Eddie Rexford pauses while butchering a Bowhead whale head on the beach in Kaktovik. September 6, 2012
Loren Holmes photo
Polar bears approach Karl Brower as he butchers a whale on the beach in Kaktovik. September 6, 2012
Loren Holmes photo
Polar bears play on the beach in Kaktovik. September 6, 2012
Loren Holmes photo
Kaktovik residents butcher a whale head on the beach in Kaktovik. September 6, 2012
Loren Holmes photo
Eddie Rexford butchering a bowhead whale head on the beach in Kaktovik. September 6, 2012
Loren Holmes photo
From left, Eddie Rexford, Karl Brower, and Jonas Mackenzie butcher a bowhead whale head on the beach in Kaktovik. September 6, 2012
Loren Holmes photo
Kaktovik residents butcher and distribute meat from a 44' bowhead whale, the first harvest of the year. September 6, 2012
Loren Holmes photo
Polar bears chase off a dog that escaped from its owner in Kaktovik. The village has one of the largest concentrations of polar bears in the world. September 9, 2012
Loren Holmes photo
Sims store is one of three small stores in Kaktovik, offering an array of canned and frozen foods, but hardly any fresh items, and what they do offer is very expensive. September 8, 2012
Loren Holmes photo
Children celebrate the first successful whale hunt of the year atop a 44' Bowhead whale in Kaktovik on September 5, 2012.
Courtesy Dania Moss
The village of Kaktovik, on Alaska's North Slope, is the only permanent settlement in the Arctic National Wildlife Refuge's special 1002 area, where there is great oil and gas potential. September 10, 2012
Loren Holmes photo
Kaktovik residents begin butchering a 44' Bowhead whale on September 5, 2012.
Courtesy Dania Moss
Rev. Mary Ann Warden, second from right, leads her congregation in worship at the Kaktovik Presbyterian Church. They sing in both English and Inupiaq. September 9, 2012
Loren Holmes photo
Charles Brower, Jr helps butcher Kaktovik's first whale of the year. September 6, 2012
Loren Holmes photo
Issac Akootchook, 90 years old, walks home after church in Kaktovik. September 9, 2012
Loren Holmes photo
Women cut muktuk, or whale skin and blubber, for a feast celebrating Kaktovik's first whale of the year. September 6, 2012
Loren Holmes photo
A new subdivision on the outskirts of Kaktovik looks into the Arctic National Wildlife Refuge's 1002 coastal plain. September 10, 2012
Loren Holmes photo
Family and community members gather at the house of Joe Kaleak for a feast celebrating Kaktovik's first whale of the year. September 6, 2012
Loren Holmes photo

Editor's note: This is the first 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?

KAKTOVIK, Alaska -- On a wind-raked hill overlooking the treacherous Arctic waters where Royal Dutch Shell could soon be drilling for oil, men in rain jackets swung meat hooks into glistening slabs of whale blubber thicker than sofa cushions.

They leaned into bitterly cold drizzle, dragging the chunks across the grass and into sprawling piles of pink-and-black meat. Some grunted as they tossed the meat into the bucket of a front-end loader. The machine then headed toward the village a short walk away, and spread the meat around town, setting it on the ground in bloody piles outside houses.

Welcome to the Iñupiat Eskimo version of grocery home-delivery.

A whaling crew in this village of 250 atop the North American continent killed the 44-foot-long bowhead the day before. Kaktovik villagers would spend the next several days divvying up the meat in an event that plays out each spring and fall in villages across Alaska's Arctic coastline.

"That's our garden," said James Lampe, watching the angry Beaufort Sea pounding the shores. "Pretty soon there'll be caribou, and we'll get caribou. But for now, it's whale time."

The bowhead whales that migrate past Kaktovik each autumn offer a critical, multi-ton source of protein. No roads lead in or out of the village, and unemployment is high. People can't afford to buy all of their food from the store, Lampe said. Not that there's much to buy. Shelves are mostly empty. Milk, fruit and vegetables come in cans.

It's no wonder then that it's hard to find anyone in Kaktovik who supports offshore oil drilling in the Beaufort Sea, which, along with the Chukchi Sea to the northwest of Alaska, make up a swath of U.S. waters in the Arctic Ocean. The villagers' apprehension comes as Shell's hunt for crude off their shores has produced a few jobs for locals and income for the village corporation.

Netherlands-based Shell has staked out undersea territory above neighboring Camden Bay, about 70 miles northwest of Kaktovik, where in federal waters the oil giant and other wildcatters discovered oil two decades ago. Shell recently launched preliminary well work at another prospect hundreds of miles away in the Chukchi Sea. Now Shell's drillers are just days away from doing the same in the Beaufort. It's the first such drilling in the nation's swath of Arctic Ocean in two decades.

More oil companies likely won't be far behind if Shell taps an oil bonanza, potentially turning the long-quiet Beaufort into something of an industrial zone. That's a frightening prospect for many Arctic residents, even though federal officials, including U.S. Interior Secretary Ken Salazar, have said a spill in the shallow Beaufort Sea is unlikely.

MORE: SPECIAL SERIES ON ARCTIC vs. ANWR

Shell officials say they've taken an unprecedented and multilayered strategy to prevent accidents and oil spills. But it's not the risk of an oil spill that has Arctic residents worried. It's the devastation a worst-case scenario -- a gusher under sea ice -- would cause.

Although they live more than 600 miles north of Prince William Sound -- the scene of the 1989 Exxon Valdez oil spill -- the memory of that grounding lives on. So does a more recent oil spill. In 2010, when an oil-well blowout in the Gulf of Mexico destroyed a rig and unleashed the largest oil spill in U.S. history, Alaskans could relate intimately to what Southerners, shrimp fishermen and tourism businesses would be going through for years to come. And the residents of the Far North stared out at the Arctic Ocean and wondered what would happen to them if Shell had an accident.

The fear is especially acute in Kaktovik, a village near the Canadian border that sits on the edge of two potentially massive oil fields. While Shell prepares to drill offshore nearby, Kaktovik is also close to another giant oil reserve that may be more accessible and safely tapped than venturing into the Arctic Ocean.

In the village's back yard is the 19-million-acre Arctic National Wildlife Refuge, or ANWR for short. The South-Carolina-sized swath of tundra and mountains, dubbed the nation's last great wilderness, ranks as the nation's largest refuge.

Safer drilling prohibited

In a paradox worthy of fiction, a 1.5-million-acre coastal swath of the refuge contains what may be the nation's last great hope for a giant, conventional oil discovery on land -- one that wouldn't require drill ships and undersea pipelines. Drilling on ANWR's coastal plain wouldn't pose the risk of oily water lapping at the Arctic coastline, or killing whales, seals and walruses that the people of Kaktovik and other villagers depend on.

The coastal plain makes up 9 percent of ANWR and is known as the 1002 area. The federal government estimates the area could contain 5.7 to 16 billion barrels of recoverable oil. That's about 8 percent of the nation’s undiscovered oil, according to the Congressional Budget Office. If estimates hold, that would put ANWR on par with early projections for Prudhoe Bay, the nation's largest oil field, which was discovered in the late 1960s and is located on state land 115 miles west of Kaktovik.

Despite ANWR's stunning potential, the riches have flowed not to the oil industry, but to the conservation groups that persuaded Congress for decades to prevent oil-drilling in the refuge.

The environmentalists' poster child for preserving the coastal plain is the 170,000-strong Porcupine caribou herd. The ungulates are another key protein source for Kaktovik families, raising questions about whether drilling in the refuge would disturb the herd. There is also growing interest in seeing the coastal plain as a sort of refuge for polar bears, which are finding themselves on land more often as the Arctic ice cap continues to melt.

But ANWR vs. Arctic Ocean drilling presents an easy choice for many Kaktovik residents.

While a lot of villagers oppose opening ANWR's coastal plain to oil exploration, if given a choice, some say they'd much rather see drilling in the 1002 area than in their ocean garden.

They wonder how oil exploration can be off limits in the refuge, including 100,000 acres owned by the local Native corporation, Kaktovik Iñupiat Corp., and yet be permitted in the Arctic Ocean. And this just two years after the nation's worst oil spill highlighted the inadequacy of cleanup efforts in open waters.

There's no question where drilling should occur if you're George Kaleak Sr., the stocky whaling captain whose crew struck the whale that lay in pieces on the grass before him. Kaleak nodded toward the direction of the refuge, where clouds capped the reddening tundra and snow dusted the mountains of the distant Brooks Range.

"Responsible oil development," he said, then cocked his head toward the beach, "versus irresponsible bullshit."

MORE: SPECIAL SERIES ON ARCTIC vs. ANWR

If the Arctic's sea ice moves in after an oil spill -- along with winter darkness and howling storms -- the oil won't be cleaned up for months, he said. There is no deepwater port in Alaska's Arctic to stage spill-response vessels and icebreakers, let alone any roads to truck equipment to the shoreline.

"I always asked (Shell officials) that question, 'Can you show me how you'll clean oil from ice?' They haven't done it," Kaleak said. "That threatens all the copepods, arthropods, all the things those whales eat. If these are gone, then the whales will be gone."

How the nation reached a point where offshore drilling is OK but land-based drilling in ANWR is prohibited is a study in opposites.

Twist of fate

Today, Republicans overwhelmingly favor opening the coastal plain to oil development, including presidential candidate Mitt Romney. But decades ago, Republicans were the ones laying the groundwork for the creation of the refuge.

It started in 1960, when President Dwight Eisenhower's administration turned 9 million federal acres into the Arctic National Wildlife Range, the original name of today's larger ANWR. A young Ted Stevens, who would later spend decades as Alaska's U.S. senator fighting to open the coastal plain, wrote the language to establish the range when he served as an Interior Department attorney.

Some Alaskans saw the refuge as an exchange for lifting a federal ban that was preventing the state from owning large swaths of the Arctic. It turned out to be a valuable deal for the young state of Alaska, unlocking 20 million acres of land for potential development, including what would eventually become Prudhoe Bay, according to research by longtime Alaska journalist and historian Michael Carey in a 2004 article published in the Anchorage Press. This area, what Alaskans call the North Slope oil patch, today funds some 90 percent of state government through taxes, fees and royalties paid by companies that hold leases to pump oil on Alaska's lands.

But Alaskans who were hoping to someday see oil drilling in ANWR would later swallow a bitter pill.

In 1980, Democratic President Jimmy Carter strong-armed Congress into turning about one-fourth of Alaska into federally protected lands under the Alaska National Interest Lands Conservation Act. The act supersized ANWR and introduced a new hurdle for mineral leasing, more than doubling its size and shutting off oil and gas development without congressional approval.

Carter's move sparked protests in Alaska -- his effigy was burned in Fairbanks, Alaska's second-largest city. Still, the deal left open the possibility for oil development in the coastal plain. In 1987, President Ronald Reagan's Interior Department recommended the federal government sell leases for oil exploration on that coastal plain. A measure doing so made it through both houses of Congress just once -- in 1996. The bill died with a strike from Democratic President Bill Clinton's veto pen.

Hit-and-run by ANWR

Many pro-development Alaskans still boil with anger over the prohibition of drilling in ANWR, especially now as declining oil at Prudhoe Bay and other North Slope oil fields threatens state coffers. Even though the state wouldn't earn as much in oil royalties from ANWR's development because the coastal plain has been designated federal land, Alaska would likely share in much of the revenue. It would also help keep Alaska's oil patch busy for decades to come, advocates say.

In Kaktovik, some residents believe they were ignored and railroaded by the refuge's creation. Perhaps they were. During a hearing in Washington, D.C., in the late 1950s, before ANWR was born, Stevens was asked whether Alaska Natives were consulted about the proposal. Carey detailed this event in his ANWR article:

"Through this whole thing, we have made it quite clear we would not affect any rights of the Native people in this area ... there has been no objection and apparently, to my knowledge, no consultation with them, because there is no interference with their rights," said Stevens, as documented by Carey.

Tell that to the folks in Kaktovik.

ANWR encompasses the village and the land owned by the Kaktovik Iñupiat Corp., including in the 1002 coastal plain. Without congressional approval, the corporation can't permit oil exploration on its own land, even though billions of barrels of oil may be at stake.

Just how much oil lies beneath the ground remains a closely guarded secret.

In the mid-1980s, oil companies BP and Chevron drilled the only well ever permitted in the refuge, thanks to an exemption from Congress. Called the KIC well because it was drilled on the Kaktovik corporation's land, the well results have never been made public. But village entities, such as the corporation and tribe, have long supported drilling in ANWR, even if some individual villagers don't agree.

From some members of Congress to environmental groups, opposition arose to ensure the oil industry wouldn't drill in ANWR again.

Around that same time in the 1980s, oil companies started to move offshore. Shell and others tapped the first-ever exploratory wells in federal offshore waters in the Arctic. By 1993, those companies had sunk dozens of bits into the Beaufort Sea and a handful in the Chukchi Sea. Sometimes they found sizable stashes, but oil prices had sunk too low to pay for the huge production costs. The companies were done with Arctic offshore exploration in Alaska in the early 1990s.

Then, about a dozen years later, Shell returned to the Far North, stunning federal regulators by snatching up leases in the Beaufort in 2005. In 2008, Shell alone bid $2.1 billion to secure acreage in the Chukchi Sea, part of a record-high $2.6-billion federal offshore lease sale.

Two years later, the Deepwater Horizon offshore oil rig exploded in the Gulf of Mexico, leaving an uncontrolled oil gusher on the ocean floor. By then, Shell had invested hundreds of millions of dollars to return to the Arctic. It wouldn't give up, despite increased regulations and ongoing legal challenges by environmentalists.

Meantime, as for drilling in ANWR's coastal plain, that dream was all but dead, thanks to a highly successful and decades-long campaign by environmentalists, who had convinced Congress that the northeast corner of Alaska is one of America's last pristine wildernesses.

And so now the United States has decided that drilling in the icy waters of the Arctic Ocean is OK even if it might present more risks to the ecosystem than punching oil wells on the coastal plain.

That's the path that we, as a nation, chose. And now Shell's getting busy to make it a reality as Kaktovik residents wrap up their whaling season.

MORE: SPECIAL SERIES ON ARCTIC vs. ANWR

Contact Alex DeMarban at alex(at)alaskadispatch.com