Obama's Arctic Refuge Drill Ban Won't Change Much, For Now

Jan 26, 2015
Originally published on January 27, 2015 11:14 am

President Obama says he will ask Congress to give wilderness status to protect more than 12 million acres of the Arctic National Wildlife Refuge. The president announced his intention Sunday in a video, describing the area as a pristine habitat with abundant wildlife.

"It's very fragile," he said. "That's why I'm very proud that my Department of Interior has put forward a comprehensive plan to make sure that we're protecting the refuge and that we're designating new areas, including coastal plains, for preservation."

But Obama's action could put billions of barrels of oil beneath the wilderness out of reach of energy companies. Industry representatives are criticizing the decision, but they also say Obama's request will have little immediate effect.

Obama's request for wilderness status reverses a recommendation by the Reagan administration in 1987 to allow drilling in a small area of the ANWR. In the intervening quarter of a century Democrats and Republicans have continuously sparred over the issue and no drilling has taken place.

Erik Milito of the American Petroleum Institute, which represents the industry's views, says that, despite the glut of oil on the market today because of the U.S. shale boom, the country will eventually need the oil from ANWR.

"If you look at Department of Energy forecasts, we're gonna need oil and natural gas to fuel this economy for decades to come," Milito says. "So, we gotta plan well ahead so we have the ability to fuel this economy for future generations."

He points to a U.S. Geological Survey estimate that projects ANWR contains between 5 billion and 16 billion barrels of oil. He says the industry would likely find even more once it begins drilling.

Fadel Gheit, a managing director and oil expert at Oppenheimer & Co., says he believes the president's decision does not change the outlook for developing the ANWR reserves significantly.

"It will make life more difficult for the industry; it will put another hurdle — but technology will always bring the hurdle down," Gheit says.

He says the shale revolution reduces the urgency of tapping the ANWR oil.

"There's really no need to take a chance on ANWR, since ANWR is still a very sensitive area," he adds.

Gheit says the shale oil glut gives the oil industry five to 10 years to develop the technology it needs to convince the public that it can drill safely in such an environmentally sensitive place.

It's virtually certain the new Republican-controlled Congress will reject the president's recommendation. But Obama's request does effectively block drilling for the next two years and he could veto a congressional bill to allow it.

But if Republicans keep control of Congress and the country elects a Republican president, Obama's effort to protect ANWR from drilling could be swept aside.

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Transcript

MELISSA BLOCK, HOST:

President Obama will ask Congress to grant wilderness status to more than 12 million acres of the Alaskan National Wildlife Refuge. The president announced his plan in a YouTube video yesterday, describing the area as a pristine habitat with abundant wildlife.

(SOUNDBITE OF VIDEO)

PRESIDENT BARACK OBAMA: But it's very fragile, and that's why I'm very proud that my Department of Interior has put forward a comprehensive plan to make sure that we're protecting the refuge and that we're designating new areas including coastal plains for preservation.

BLOCK: The president's action could put billions of barrels of oil out of reach of energy companies. As NPR's John Ydstie reports, industry representatives are criticizing the decision, but they also say Obama's request will have little immediate effect.

JOHN YDSTIE, BYLINE: President Obama's request for wilderness status reverses as a recommendation by the Reagan administration back in 1987 to allow drilling in a small area of the ANWR. In the intervening quarter of a century, Democrats and Republicans have continuously sparred over the issue, and no drilling has taken place. Erik Milito of the American Petroleum Institute, which represents industry's views, says despite the glut of oil on the market today because of the U.S. shale boom, the country will eventually need the oil from ANWR.

ERIK MILITO: If you look at Department of Energy forecasts, we're going to need oil and natural gas to fuel this economy for decades to come. So we've got to plan well ahead so we have the ability to fuel this economy for future generations.

YDSTIE: Milito points to a U.S. Geological Survey estimate that projects ANWR contains between five and 16 billion barrels of oil. He says industry would likely find even more once it begins drilling.

Fadel Ghiet, a managing director and oil expert at Oppenheimer and Company, says he believes the president's decision does not change the outlook for developing the ANWR reserves significantly.

FADEL GHIET: It will make life more difficult for the industry. It will put another hurdle, but technology will always bring the hurdle down.

YDSTIE: And Ghiet says the shale revolution reduces the urgency of tapping the ANWR oil.

GHIET: There is really no need to take a chance on ANWR since ANWR is still a very sensitive area.

YDSTIE: Ghiet says the shale oil glut gives the industry 5 to 10 years to develop the technology it needs to convince the public that it can drill safely in such an environmentally sensitive place. It's virtually certain the new Republican-controlled Congress will reject the president's recommendation, but Obama's request does effectively block drilling for the next two years, and he could veto a Congressional bill to allow it. But if Republicans keep control of the Congress and the country elects a Republican president, Obama's effort to protect ANWR from drilling could be swept aside. John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.