U.S. Sen. Lisa Murkowski says President Barack Obama seems willing to work with Alaska to resolve some of the issues that have stymied oil development both on and offshore in the past few years.
Murkowski met with the president last week after requesting a one-on-one meeting with him to talk primarily about oil and gas development issues, especially in light of the explosive political situation in the Middle East and the U.S.'s reliance on foreign oil when it could be encouraging domestic production in Alaska.
"The commitment he gave was one of willingness to work with Alaska to advance some of these initiatives," Murkowski said in an interview Tuesday. "He could have said, 'Look, I just think exploration in the Arctic is too risky.' He did not go there."
Since Obama took office in 2009, Alaska has been at the center of contentious political fighting and legal action over resource development. Much of it has played out in lawsuits, usually filed by environmental groups or Native organizations to overturn an action by the federal government or to force a federal agency to take a stronger environmental position. Those cases have ranged from overturning federal leases issued to oil companies wanting to explore in the Chukchi Sea to the U.S. Fish and Wildlife Service designation of several species as threatened or endangered and setting aside more than 187,000 square miles as critical habitat for polar bears.
Most recently, Shell Oil Co. decided to cancel plans for drilling at least one exploratory well in the Beaufort Sea this summer after it was unable to get an air quality permit, among other federal approvals. The company has said it's spent five years and more than $3 billion on its OCS Alaska plans without drilling a single well. The U.S. Environmental Protection Agency had issued the air permit but it was challenged by Native and environmental groups and overturned by the Environmental Appeals Board, a part of the EPA.
Murkowski said Obama seemed familiar with the Shell issue and agreed it was a problem that needed to be addressed. "He expressed a level of understanding about what had happened with the Shell permit," she said. "He knew that it had been the environmental appeals board that had put the kibosh on that."
Murkowski said she had wanted to sit down with the president to talk about how to get more oil production on the North Slope and in the Arctic in order to keep the trans-Alaska pipeline operating.
"My conversation was almost exclusively about how we fill up the pipeline," she said. "I said most people do not understand that the pipeline is not a piece of infrastructure that can continue with declining inputs. There is a point where it just doesn't work anymore. And when it doesn't work anymore the law says it has to be decommissioned. And, I said, that means taking it down piece by piece.
"And he looked at me like, well, I didn't realize that's what it means. It's gone. And then you really have stranded resources."
Oil company experts have said the pipeline could be running too low on oil for sustainable operation as soon as 2014. The line is now carrying about 630,000 barrels of oil a day. Pipeline officials have said they are already starting to see "low flow" problems and that there will be serious operational issues if throughput drops below 500,000 barrels a day. Problems occur because the slow speed of the oil through the line, which runs 800 miles from Prudhoe Bay to Valdez, allows water to drop out which would freeze in cold winter temperatures and generates a buildup of wax and sludge.
Alyeska Pipeline Service Co. has been studying low flow and expects a report on the issue in the next few months. Meanwhile, company president Tom Barrett told the Legislature last week that engineers are working on ways to add heat to the line as a stopgap measure. He urged lawmakers to do whatever it took to encourage more oil production on the North Slope.
Murkowski said she wanted Obama to understand the part his administration is playing in preventing oil from getting into production and then into the pipeline. She pointed out that agencies are working against each other; for instance, Interior will be amenable to a project but then the EPA will come in and undercut Interior.
"My mission (was) to convey to him that the domestic product that we have been supplying the country for the past 30 years -- at times up to 20 percent of our domestic production -- has come from North Slope oil … that we lose the ability to have that now as well as into the future because that asset will be gone … And I think he got that picture."
Murkowski said she was encouraged because the administration sent a high-level Interior Department official to Alaska this week to try to work out problems related to a stalled ConocoPhillips project in the National Petroleum Reserve-Alaska. The project, known as CD-5, was delayed when the federal government denied a permit to build a bridge across the Colville River to reach a production drilling site. Both Fish and Wildlife and EPA had opposed the bridge and a road system, saying it would harm sensitive waterfowl habitat in the area. The U.S. Army Corps of Engineers denied the permit but said the company could bury a pipeline under the river.
Murkowski's status as ranking member on the Senate Energy and Natural Resources Committee is likely what prompted the president to meet with her, she said.
"He wants to try to advance an energy policy and I think he wants to hear what might be in the realm of possible coming from the Republican side," she said. "So we had a little conversation on that after I got my oil stuff out on the table."
Murkowski is scheduled to address the Legislature on Thursday and plans to talk to lawmakers about oil development, she said.
Contact Patti Epler at patti(at)alaskadispatch.com.