[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
                    H.R. 2150, ``NATIONAL PETROLEUM
                      RESERVE ALASKA ACCESS ACT''

=======================================================================

                          LEGISLATIVE HEARING

                               before the

                       SUBCOMMITTEE ON ENERGY AND
                           MINERAL RESOURCES

                                 of the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                        Thursday, June 16, 2011

                               __________

                           Serial No. 112-42

                               __________

       Printed for the use of the Committee on Natural Resources



         Available via the World Wide Web: http://www.fdsys.gov
                                   or
          Committee address: http://naturalresources.house.gov
      



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                     COMMITTEE ON NATURAL RESOURCES

                       DOC HASTINGS, WA, Chairman
             EDWARD J. MARKEY, MA, Ranking Democrat Member

Don Young, AK                        Dale E. Kildee, MI
John J. Duncan, Jr., TN              Peter A. DeFazio, OR
Louie Gohmert, TX                    Eni F.H. Faleomavaega, AS
Rob Bishop, UT                       Frank Pallone, Jr., NJ
Doug Lamborn, CO                     Grace F. Napolitano, CA
Robert J. Wittman, VA                Rush D. Holt, NJ
Paul C. Broun, GA                    Raul M. Grijalva, AZ
John Fleming, LA                     Madeleine Z. Bordallo, GU
Mike Coffman, CO                     Jim Costa, CA
Tom McClintock, CA                   Dan Boren, OK
Glenn Thompson, PA                   Gregorio Kilili Camacho Sablan, 
Jeff Denham, CA                          CNMI
Dan Benishek, MI                     Martin Heinrich, NM
David Rivera, FL                     Ben Ray Lujan, NM
Jeff Duncan, SC                      John P. Sarbanes, MD
Scott R. Tipton, CO                  Betty Sutton, OH
Paul A. Gosar, AZ                    Niki Tsongas, MA
Raul R. Labrador, ID                 Pedro R. Pierluisi, PR
Kristi L. Noem, SD                   John Garamendi, CA
Steve Southerland II, FL             Colleen W. Hanabusa, HI
Bill Flores, TX                      Vacancy
Andy Harris, MD
Jeffrey M. Landry, LA
Charles J. ``Chuck'' Fleischmann, 
    TN
Jon Runyan, NJ
Bill Johnson, OH

                       Todd Young, Chief of Staff
                      Lisa Pittman, Chief Counsel
                Jeffrey Duncan, Democrat Staff Director
                 David Watkins, Democrat Chief Counsel
                                 ------                                

              SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES

                       DOUG LAMBORN, CO, Chairman
               RUSH D. HOLT, NJ, Ranking Democrat Member

Louie Gohmert, TX                    Peter A. DeFazio, OR
Paul C. Broun, GA                    Madeleine Z. Bordallo, GU
John Fleming, LA                     Jim Costa, CA
Mike Coffman, CO                     Dan Boren, OK
Glenn Thompson, PA                   Gregorio Kilili Camacho Sablan, 
Dan Benishek, MI                         CNMI
David Rivera, FL                     Martin Heinrich, NM
Jeff Duncan, SC                      John P. Sarbanes, MD
Paul A. Gosar, AZ                    Betty Sutton, OH
Bill Flores, TX                      Niki Tsongas, MA
Jeffrey M. Landry, LA                Vacancy
Charles J. ``Chuck'' Fleischmann,    Edward J. Markey, MA, ex officio
    TN
Bill Johnson, OH
Doc Hastings, WA, ex officio


                                 ------                                
                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Thursday, June 16, 2011..........................     1

Statement of Members:
    Hastings, Hon. Doc, a Representative in Congress from the 
      State of Washington........................................     6
    Holt, Hon. Rush D., a Representative in Congress from the 
      State of New Jersey........................................     3
        Prepared statement of....................................     5
    Lamborn, Hon. Doug, a Representative in Congress from the 
      State of Colorado..........................................     1
        Prepared statement of....................................     2
    Markey, Hon. Edward J., a Representative in Congress from the 
      State of Massachusetts.....................................     7

Statement of Witnesses:
    Balash, Hon. Joe, Deputy Commissioner of the Alaska 
      Department of Natural Resources, Alaska Department of 
      Natural Resources..........................................    12
        Prepared statement of....................................    13
    Drevna, Charles T., President, National Petrochemical & 
      Refiners Association.......................................    19
        Prepared statement of....................................    21
    Murkowski, Hon. Lisa, U.S. Senator, State of Alaska..........     8
        Prepared statement of....................................    10
    Myers, Eric F., Policy Director, Audubon Alaska..............    30
        Prepared statement of....................................    32
    Pool, Hon. Mike, Deputy Director, Bureau of Land Management, 
      U.S. Department of the Interior............................    49
        Prepared statement of....................................    51
    Sharp, Tim, Business Manager/Secretary Treasurer, Alaska 
      District Council of Laborers...............................    27
        Prepared statement of....................................    29
                                     



  LEGISLATIVE HEARING ON H.R. 2150, THE ``NATIONAL PETROLEUM RESERVE 
                          ALASKA ACCESS ACT.''

                              ----------                              


                        Thursday, June 16, 2011

                     U.S. House of Representatives

              Subcommittee on Energy and Mineral Resources

                     Committee on Natural Resources

                            Washington, D.C.

                              ----------                              

    The Subcommittee met, pursuant to call, at 10:04 a.m. in 
Room 1324, Longworth House Office Building, Hon. Doug Lamborn 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Lamborn, Gohmert, Fleming, Rivera, 
Duncan of South Carolina, Gosar, Flores, Landry, Hastings (ex 
officio), Holt, DeFazio, Costa, and Markey (ex officio).

 STATEMENT OF HON. DOUG LAMBORN, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF COLORADO

    Mr. Lamborn. The Subcommittee will come to order. The 
Chairman notes the presence of a quorum, which under Committee 
Rule 3[e] is two Members. I am told the Ranking Member will be 
here any second.
    The Subcommittee on Energy and Mineral Resources is meeting 
today for a legislative hearing to hear testimony on H.R. 2150, 
the National Petroleum Reserve Alaska Access Act.
    Under Committee Rule 4[f], opening statements are limited 
to the Chairman and Ranking Member of the Subcommittee. 
However, I intend to recognize full Committee Chairman Hastings 
and Ranking Member Markey for opening statements later in the 
proceedings if they wish to make one.
    In addition, I ask unanimous consent to include any other 
Members' opening statements in the hearing record if submitted 
to the clerk by close of business today. Hearing no objection, 
so ordered.
    I recognize myself now for five minutes for an opening 
statement.
    Today's hearing is on H.R. 2150, the National Petroleum 
Reserve Alaska Access Act; but the real subject of today's 
hearing is jobs and energy security.
    Two weeks ago, this Subcommittee examined the tremendous 
promise that Alaska holds in resources, infrastructure, and 
people. But that is just the start. Onshore there are 
potentially an additional 14 billion barrels just waiting for 
development. Currently, in Alaska alone, the oil and natural 
gas industry supports over 43,000 American jobs, and comprises 
16 percent of the State's wealth.
    Today we will hear directly from a representative of 
thousands of those workers, who will join with us in the call 
for more development in the National Petroleum Reserve, Alaska: 
NPRA.
    We will also hear from representatives of the State of 
Alaska talking about the importance of development in NPRA for 
the State and the security of the Trans-Alaska Pipeline. In 
addition, we will hear from a representative from the Refinery 
Association, discussing the important role Alaskan oil plays in 
allowing Pacific Coast refiners to produce and provide 
essential fuel that American consumers rely on every day.
    We will also hear from the Administration. However, we will 
likely not hear about how development in the NPRA has been 
stymied by the inability of the Department of the Interior, the 
Army Corps of Engineers, and the EPA to process permits for the 
pipelines and roads necessary to transport the petroleum out of 
the Petroleum Reserve.
    There is no doubt that the development of NPRA has been 
stopped because of problems within this Administration, and 
these are problems that the President could fix.
    We won't hear the Administration admit that in 2010 it 
issued the fewest leases for oil and gas development since 
1984. In issuing only 1308 leases last year, one-fifth of those 
leases, which were issued in Nevada, this Administration has 
shown that leasing for oil and gas is clearly not a priority.
    In fact, the second year of the Obama Administration 
resulted in only one-quarter the number of new leases in 1994, 
the second year of the Clinton Administration, where they 
issued 4,159 leases, and is about half the number of leases 
issued during the second year of the Bush Administration in 
2002, which issued 2,384.
    This lack of leasing includes not issuing a single lease in 
the State of Alaska in 2010. Last month, in his Saturday 
Presidential Address, President Obama announced his intention 
to hold annual lease sales in NPRA. I am glad that he has 
appeared to reverse that policy of his Administration, and I 
anxiously await his Administration following through with these 
plans. The bill before us today will require the Department to 
ensure annual lease sale offerings.
    It has often been said in front of this Subcommittee that 
our nation does not have a lack of resources to curb our 
foreign dependence, we have a lack of clear policy. This 
Administration has shown that through their actions, they do 
indeed have a clear policy; it is a policy of limiting oil and 
natural gas development, halting job creation, and weakening 
our national security.
    It can and should be the policy of this government to 
develop the resources in our National Petroleum Reserve 
quickly, efficiently, cleanly, and responsibly in order to 
reduce our foreign dependence, create jobs, and keep our 
revenue here at home. The legislation before this Committee 
today will accomplish all these goals.
    I would now like to recognize the Ranking Member for five 
minutes for an opening statement. Mr. Holt.
    [The prepared statement of Mr. Lamborn follows:]

          Statement of The Honorable Doug Lamborn, Chairman, 
              Subcommittee on Energy and Mineral Resources

    Today's hearing is on H.R. 2150, the ``National Petroleum Reserve 
Alaska Access Act'' but the real subject of today's hearing is jobs and 
energy security. Two weeks ago the Subcommittee examined the tremendous 
promise that Alaska holds in resources, infrastructure and people.
    But that is just the start, onshore there are potentially an 
additional 14 billion barrels just waiting for development. Currently 
in Alaska alone, the oil and natural gas industry supports over 43,000 
American jobs and comprises 16% of the State's wealth. Today we will 
hear directly from a representative of thousands of those workers who 
will join with us in the call for more development in NPR-A.
    We will also hear from representatives of the State of Alaska 
talking about the importance of development in NPR-A for the State and 
the security of the Trans-Alaska Pipeline. In addition, we will hear 
from a representative from the refinery association discussing the 
important role Alaskan oil plays in allowing Pacific Coast refiners to 
produce and provide essential fuel that American consumers rely on 
every day.
    We will also hear from the Administration. However, we will likely 
not hear about how development in the NPR-A has been stymied by the 
inability of the Department of the Interior, the Army Corps of 
Engineers and the EPA to process permits for the pipelines and roads 
necessary to transport the petroleum out of the petroleum reserve. The 
is no doubt that the development of NPR-A has been stopped because of 
problems within this Administration, and problems that the President 
could fix.
    We won't hear the Administration admit that in 2010 it issued the 
fewest leases for oil and natural gas development since 1984. In 
issuing only 1,308 leases last year, one-fifth of those leases were 
issued in Nevada, this administration has shown that leasing for oil 
and gas is clearly not their priority.
    In fact, the second year of the Obama Administration resulted in 
only one-quarter the number of new leases as 1994--the second year of 
the Clinton Administration where they issued 4,159 leases, and about 
half the number of leases of the Bush Administration in 2002 who issued 
2,384 leases.
    This lack of leasing includes NOT ISSUING A SINGLE LEASE IN THE 
STATE OF ALASKA IN 2010. Last month in his Saturday Presidential 
Address, President Obama announced his intention to hold annual lease 
sales in NPR-A. I am glad that he has reversed that policy of his 
Administration and I anxiously await his Administration following 
through with these plans. The bill before us today will require the 
Department to ensure annual lease sale offerings.
    It has often been said before this subcommittee that our nation 
doesn't have a lack of resources to curb our foreign dependence, we 
have a lack of clear policy. This Administration has shown that through 
their actions they do have a clear policy. It is a policy of limiting 
oil and natural gas development, halting job creation, and weakening 
our national security.
    It can and should be the policy of this government to develop the 
resources in our National Petroleum Reserve, quickly, efficiently, and 
responsibly in order to reduce our foreign dependence, create jobs and 
keep our revenue here at home. The legislation before this Committee 
today will accomplish all those goals.
    I want to thank all the witnesses for being here today and look 
forward to hearing your testimony.
                                 ______
                                 

STATEMENT OF HON. RUSH HOLT, A REPRESENTATIVE IN CONGRESS FROM 
                    THE STATE OF NEW JERSEY

    Mr. Holt. I thank my friend, the Chairman. Today this 
Subcommittee is considering legislation dealing with oil 
drilling in the National Petroleum Reserve, Alaska, NPRA, as 
you have heard. And the Majority claims that we need this 
legislation because the Administration is blocking, in their 
words--stymied, actually, the Chairman used--oil and gas 
drilling in the Reserve, and slow-walking permits in the NPRA. 
The facts simply don't support that claim.
    As with previous drilling legislation that the Majority has 
been moving through this Committee, to set artificial and 
unnecessary deadlines on the Interior Department and to limit 
environmental review of oil and gas drilling, H.R. 2150 would 
unnecessarily truncate review of permits by the BLM.
    To quote the Chairman, what we are seeking to do here is to 
behave responsibly. H.R. 2150 would direct the Secretary of the 
Interior to ensure that any Federal permitting agency shall 
issue permits for pipelines and roads within 60 days of 
enactment of leases that have an approved permit to drill, and 
within six months of the submission of an application for a 
permit to drill for other leases.
    This directive would appear to require the Interior 
Department to compel other cabinet-level agencies to act, 
something that is far beyond the scope of the Secretary of the 
Interior's authority.
    Furthermore, this directive is unnecessary because there 
are no pending applications with the BLM to construct pipelines 
or roads in the NPRA. This provision would also, it appears, 
prohibit proper NEPA review of future oil and gas pipelines in 
the Reserve.
    H.R. 2150 would require the BLM to develop a plan to 
``ensure that all leaseable tracts in the Reserve are within 25 
miles of an approved road and pipeline right-of-way.''
    Of course, requiring the BLM to invest time and money in 
mapping out a spiderweb of roads and pipelines before we even 
know where future oil and gas production may take place is 
wasteful. Underscoring the difficulty of predicting where 
future production may occur, and thus the infrastructure needed 
to support it, oil companies have been relinquishing numerous 
leases in the NPRA. In the last three years of the Bush 
Administration, oil and gas companies relinquished more than 
100 leases in the Reserve.
    In Fiscal Year 2010, 64 leases were relinquished, and 
already this year, 2011, companies have relinquished 60 leases.
    H.R. 2150 would further require the Secretary to develop 
regulations to require action on drilling permits within 60 
days. However, existing regulations that are already in place 
impose a timeframe on the Department of 90 days to consider 
applications to drill in the NPRA.
    Moreover, there are no pending applications at the BLM for 
permits to drill in the NPRA. H.R. 2150 would require the 
Geological Survey to complete an assessment of the technically 
recoverable oil and gas in the Reserve.
    The USGS just released a new assessment of the undiscovered 
oil and gas reserves in the NPRA about eight months ago. That 
assessment revised previous estimates downward by more than 90 
percent.
    The USGS also completed a study of the economically 
recoverable oil and gas in the Reserve earlier this year. And 
according to the USGS, the average cost of an oil and gas 
assessment is $2.75 million.
    We shouldn't be wasting nearly $3 million to require the 
USGS to redo an assessment completed less than a year ago.
    President Obama and the House Democrats have taken steps to 
encourage drilling in the NPRA. The Chairman said we will not 
hear today how the Administration has stymied oil production in 
Alaska. No, we won't hear about it, unless you are making it 
up, because that is not happening.
    President Obama announced May 14, as the Chairman said, 
that he would direct the Department of the Interior to conduct 
annual lease sales. And I am pleased that it is not the 
President who has reversed himself here; I am pleased that the 
Majority has included similar language in this bill, and that 
the Majority has reversed their position from three years ago, 
when all but 15 Republican Members, so the large majority of 
Republican Members, voted against a similar provision contained 
in the comprehensive energy legislation passed by Democrats on 
the House Floor.
    So we should encourage oil and gas drilling in the NPRA in 
a responsible manner, as President Obama and House Democrats 
have done. I look forward to the testimony. I yield back.
    [The prepared statement of Mr. Holt follows:]

       Statement of The Honorable Rush D. Holt, Ranking Member, 
              Subcommittee on Energy and Mineral Resources

    Thank you Mr. Chairman.
    Today, this subcommittee is considering legislation dealing with 
oil drilling in the National Petroleum Reserve Alaska or NPR-A. The 
majority claims that we need this legislation because the 
Administration is somehow blocking oil and gas drilling in the Reserve 
and slow-walking permits in the NPR-A. However, the facts do not 
support the majority's claims.
    As with previous drilling bills the majority has moved through this 
Committee to set artificial and unnecessary deadlines on the Interior 
Department and limit the environmental review of oil and gas drilling, 
H.R. 2150 would unnecessarily truncate review of permits by the BLM. 
H.R. 2150 would direct the Secretary of the Interior to ``ensure that 
any Federal permitting agency shall issue permits'' for pipelines and 
roads within 60 days of enactment for leases that have an approved 
permit to drill and within 6 months of the submission of an application 
for a permit to drill for other leases. This directive would appear to 
require the Interior Department to compel other Cabinet-level agencies 
to act, something far beyond the scope of the Secretary's authority. 
Furthermore, this directive is unnecessary because there are no pending 
applications with the BLM to construct pipelines or roads in the NPR-A. 
This provision also could prohibit proper NEPA review of future major 
oil and gas pipelines in the reserve.
    H.R. 2150 would require the BLM to develop a plan to ``ensure that 
all leasable tracts in the Reserve are within 25 miles of an approved 
road and pipeline right-of-way.'' Of course, requiring the BLM to 
invest time and money in mapping out a spider-web of roads and 
pipelines, before we even know where future oil and gas production may 
take place is wasteful and counterproductive.
    Underscoring the difficulty of predicting where future production 
may occur and thus the infrastructure needed to support it, oil 
companies have been relinquishing numerous leases in the NPR-A. In the 
last three years of the Bush Administration, oil and gas companies 
relinquished more than 100 leases in the Reserve. In Fiscal Year 2010, 
64 leases were relinquished, and already this year, companies have 
relinquished 60 leases.
    H.R. 2150 would further require the Secretary to develop 
regulations to require action on drilling permits within 60 days. 
However, existing regulations already place a timeframe on the 
Department of 90 days to consider applications to drill in the NPR-A. 
Moreover, there are currently no pending applications at the Bureau of 
Land Management for permits to drill in the NPR-A.
    And H.R. 2150 would require the U.S. Geological Survey to complete 
an assessment of the technically recoverable oil and gas in the 
Reserve. Well, the USGS just released a new assessment of the 
undiscovered oil and gas reserves in the NPR-A in October of 2010. That 
assessment revised previous estimates downward by more than 90 percent. 
The USGS also completed a study of the economically recoverable oil and 
gas in the Reserve earlier this year. According to the USGS, the 
average cost of an oil and gas assessment is $2.75 million. We 
shouldn't be wasting nearly $3 million to require the USGS to redo an 
assessment completed less than 1 year ago.
    President Obama and House Democrats have taken steps to encourage 
drilling in the NPR-A. House Democrats introduced the Increase American 
Energy Production Now Act of 2011 on May 12, which would require at 
least one lease sale per year in the NPR-A. Building on that idea, 
President Obama announced on May 14th in his weekly radio address that 
he would direct the Department of the Interior to conduct annual lease 
sales in the NPR-A. I am pleased that the Majority has included similar 
language in this bill and that they have reversed their position from 
2008, when all but 15 Republican Members voted against a similar 
provision contained in comprehensive energy legislation passed by 
Democrats on the House floor.
    We should encourage oil and gas drilling in the NPR-A as President 
Obama and House Democrats have done. But we should make sure that we 
are drilling in challenging environments like the Arctic responsibly, 
not truncating proper review as the majority proposes in this bill.
                                 ______
                                 
    Mr. Lamborn. OK, thank you, Representative Holt. I now 
recognize the full Committee Chairman for five minutes for his 
opening statement.

 STATEMENT OF HON. DOC HASTINGS, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF WASHINGTON

    Mr. Hastings. Thank you very much, Mr. Chairman, for 
holding this hearing on this bill, the National Petroleum 
Reserve Alaska Access Act.
    Just last week I had the privilege of traveling to Alaska 
with our colleagues, Don Young and Alaska Governor Sean 
Parnell, up to the North Slope, and it was an extraordinary 
trip from my point of view.
    As we have heard in testimony at prior hearings, Alaskans 
depend on a robust oil and natural gas industry to fuel their 
economy and create jobs, and America depends on Alaska to 
provide safe and reliable energy to sustain and create jobs 
across the entire country.
    Alaska is, without a doubt, a tremendous energy asset to 
our nation.
    The NPRA was specifically designated in 1923 as a petroleum 
reserve. Its purpose was to help supply our country with 
American energy. These oil and natural gas resources should be 
developed to create jobs here, and make us less dependent on 
Middle Eastern oil.
    Development of the NPRA has enjoyed bipartisan support, 
including from President Obama and House Democrat leaders, so I 
am very hopeful that this will continue with this legislation.
    H.R. 2150 expands energy production by requiring that 
annual lease sales be held in the NPRA. This is a proposal 
recently supported by President Obama.
    However, lease sales alone are not enough. Producing oil 
and natural gas in the NPRA is pointless if there is no way to 
get it out of the NPRA. The real problem is the Federal 
Government's blocking and delaying the permits for necessary 
roads, bridges, and pipelines needed to transport the energy 
out of this area.
    While in Alaska, we visited the site where ConocoPhillips 
has been waiting for three years to receive a permit to 
construct a bridge and pipeline over the Colville River. They 
have discovered oil that is ready to be produced--
ConocoPhillips--and delivered to the American people. It is 
unacceptable that the Federal Government is the obstacle in 
harnessing this energy, American energy.
    To address this problem, the bill sets firm guidelines for 
infrastructure permits to be approved. This will ensure that 
bureaucratic delays will not prevent oil and natural gas 
resources from being transported out of the NPRA.
    Further, the development of the NPRA is imperative to keep 
the Trans-Alaskan Pipeline System operating. TAPS is a conduit 
for transporting oil from the far North across Alaska, for 
shipments to Washington State--my state--and California, and 
for refining and use in the Lower 48.
    TAPS at one time conveyed over two million barrels of oil 
per day, but reduced production has left the pipeline at less 
than half that capacity, threatening a shutdown that would 
impact thousands of good-paying jobs. This bill will help 
ensure that TAPS stays full and operational.
    TAPS is arguably the single most important piece of energy 
infrastructure in our nation. Let me pause at this observation. 
If it was targeted for destruction by a foreign threat, our 
nation would aggressively defend and protect that pipeline. Yet 
the Federal Government policies and inaction are threatening to 
starve TAPS into destruction. We must not let that happen.
    NPRA oil and natural gas is vital to the future of American 
energy production. As gasoline prices hover at highs near $4 
per gallon, it is imperative that Congress take action to 
increase energy production, production that would lower prices, 
create jobs, and lessen our dependence on unstable foreign 
energy.
    So with that, I yield back my time. I thank the gentleman 
for having this hearing.
    Mr. Lamborn. Thank you, Mr. Chairman. And we have one more 
piece of official business to conduct before we hear from the 
distinguished witness, who will consist of our first panel.
    I now recognize the Ranking Member of the full Committee, 
Representative Markey, for his opening statement.

 STATEMENT OF HON. EDWARD MARKEY, A REPRESENTATIVE IN CONGRESS 
                FROM THE STATE OF MASSACHUSETTS

    Mr. Markey. Thank you, Mr. Chairman. Mr. Chairman, I have a 
unanimous-consent request that as we discuss Alaska, as we 
discuss the National Petroleum Reserve Alaska today, I ask that 
we accept a motion that we measure the oil in Alaska not in how 
many barrels of oil could be filled with that oil, but rather 
how many Stanley Cups of oil would be filled. Because in 
Boston, in Boston we are very happy today.
    [Laughter.]
    Mr. Markey. And we know it is not a good day in Canada and 
in the northland, all those rooting for----
    Mr. Hastings. Reserving the right to object.
    [Laughter.]
    Mr. Markey. I am so sorry, Mr. Chairman, this is our day 
for gloating.
    Mr. Lamborn. If it doesn't lead to any rioting.
    Mr. Markey. In Vancouver it does; in Boston, they are doing 
cartwheels.
    The bill we are considering today--and welcome, Senator--
the bill we are considering today would require at least one 
sale annually in the NPRA.
    Well, if this provision sounds familiar to some of my 
colleagues, it should. In 2008, House Democrats passed 
comprehensive drilling legislation on the Floor of the House, 
which required at least one lease sale per year in the NPRA. 
All but 15 of my Republican colleagues voted against that bill 
on the House Floor.
    And it might also sound familiar, from legislation which I 
introduced with other House Democrats earlier this year, the 
Increase American Energy Production Now Act of 2011, introduced 
on May 12, that includes a provision requiring at least one 
lease sale annually in the NPRA.
    But it might also sound familiar, from what President Obama 
has already announced in his weekly radio address. On May 14, 
President Obama announced, ``I am directing the Department of 
the Interior to conduct annual lease sales in Alaska's National 
Petroleum Reserve, while respecting sensitive areas.''
    So President Obama and the Interior Department are already 
speeding up leasing in the NPRA, exactly as this legislation 
would require.
    In 2008, NPRA apparently stood for something that at that 
point we could receive very little support, in terms of 
increasing and celebrating the leasing in the Reserve. But 
perhaps we should think about another meaning for NPRA. And 
that is that we now have a consensus that is building around 
this issue. I hope that everyone understands, however, that the 
bill includes more than an unnecessary provision. The bill 
would waive as well the requirements of the National 
Environmental Policy Act, or NEPA, for the construction of 
roads and pipelines in the NPRA. It would impose artificial and 
arbitrary deadlines on the Department to approve permits for 
the construction of infrastructure, even though there are no 
such applications pending from oil and gas companies.
    And as we are coming up on the debt ceiling, and the 
Majority is attempting to cut key programs, such as Medicare, 
this bill would require the U.S. Geological Survey to waste as 
much as $3 million to conduct an assessment of the oil and gas 
reserves in the NPRA, when the ink is barely dry on the last 
USGS assessment.
    This bill is more of the same drill, baby, drill, speed-
over-safety refrain that we have seen from the Majority during 
this entire Congress. The bill would waive bedrock 
environmental laws, and limit review of drilling permits. The 
bill is not only unnecessary, it is imprudent. The President 
and the Democrats support drilling in the NPRA. That is why we 
passed the legislation in 2008. That is why the President 
supports it.
    What we do not support, though, is waiving the National 
Environmental Policy Act in order to accomplish that goal. I 
yield back the balance of my time.
    Mr. Lamborn. OK, thank you. We will now hear from our first 
panel of witnesses. We have before us the Hon. Lisa Murkowski, 
the senior Senator from the State of Alaska.
    Madame Senator, we are honored to have you here today. Your 
written testimony will appear in full in the hearing record, so 
I ask that you keep your oral statement to five minutes, as 
outlined in our invitation letter to you, and under Committee 
Rules.
    Our microphones are not automatic, so you have to press the 
button to get started. And I realize that you are on a hard 
deadline and have to leave at 10:30.
    Thank you so much for being here, and you may begin.

STATEMENT OF HON. LISA MURKOWSKI, A U.S. SENATOR FROM THE STATE 
                           OF ALASKA

    Senator Murkowski. Thank you, Mr. Chairman. I appreciate 
the invitation to join with you and Ranking Member Holt, thank 
you. Congressman Hastings, thank you for introducing the 
legislation that you have in front of us.
    And to my Congressman, it is good to see you here, as well.
    [Pause.]
    Senator Murkowski. I noticed, I am taking account of that. 
But I am glad that you are here, and I thank you for the 
opportunity to walk across from the Senate side to discuss the 
National Petroleum Reserve Alaska. This is an important issue.
    And as Representative Markey has indicated, this is an area 
where we ought to be able to find agreement; that if we can't 
be producing in the National Petroleum Reserve Alaska, where 
can we produce? So I thank you for the opportunity to discuss 
this today. Because as we talk about what we have in terms of 
potential, this is not only about enhanced opportunities for 
oil, but this is about jobs. This is about energy security. 
This is about reducing the Federal deficit.
    The NPRA is, by name and by law, a petroleum reserve. It is 
not a wildlife refuge, it is not a national park, it is not a 
monument or a wilderness area. Its primary statutory purpose is 
to supply conventional energy resources to our nation.
    The authorizing statute calls for the expeditious 
development of these resources, so it is somewhat amazing that 
we are even having this conversation. If we agreed that this is 
where we should be doing it, why do we have to have legislation 
to advance it?
    Congressman Hastings referenced the ConocoPhillips CD-5 
application up in the Colville River Delta. It was February 5 
of last year that the Corps denied Conoco's Section 404 permit 
for construction of a bridge across the Colville River.
    The bridge is necessary to move personnel, equipment, and 
of course a pipeline, across the delta to the leases that the 
company has bought. This is not just for CD-5, but hopefully 
for CD-6 and CD-7. The process of determining where and when 
and how to construct this bridge really began back in 2004, and 
was negotiated intensely in both an interagency process with 
Federal and state entities, as well as with very, very strong 
local participation, including the nearby village of Nuiqsut.
    This would have been a great story of industry success 
working with government and local residents, and it would be 
the first oil produced from the NPRA. But all of this public 
process, all of this support, didn't matter to the EPA. With no 
public process, or even notice, the Agency designated the 
Colville River as an aquatic resource of national importance, 
and signaled a clear intention to elevate the project to a 
veto, under Section 404 of the Clean Water Act.
    We are still, we are still working through this process 
with the Administration to advance this permit over the 
Colville.
    So the question needs to be asked: How did we get to this 
point? We have to ask again. If we can't be producing from the 
National Petroleum Reserve, where in the world can we get it 
from?
    I would suggest to you that we have a permitting problem; 
we don't have a leasing problem. The leases are out there. We 
can lease every acre there is. But without some assurance of 
basic use and enjoyment of the property, purchasing a lease 
would be a very risky business. And I am cautiously optimistic 
that we will see a better result for CD-5 specifically, but I 
think that there is a bigger problem here.
    If every time a leaseholder wants to produce from the NPRA, 
they have to come to Congress and essentially have a 
Congressional hearing, we are not going to be in a much better 
position next go-around. I think we recognize that we have a 
vastly understated resource estimate within the NPRA, and you 
take this with the highly speculative reassessment of previous 
studies; these delays are going to shrink private investment in 
bidding on NPRA. This will cost taxpayers billions in the 
future, if the bids are low or nonexistent, let alone the lost 
benefits of the royalties, the energy security, and of course, 
most importantly, the jobs that are at stake.
    I want to close with a very brief history lesson. This was 
back in 1980, over 30 years ago. Congressman Young was here. I 
wasn't around yet. But the President at the time, President 
Carter, when he signed ANILCA into law, he stated 100 percent 
of Alaska's offshore areas, and 95 percent of the potentially 
productive onshore oil and mineral areas, will be available for 
exploration or for drilling. That was a statement, that was a 
commitment that our President made 30 years ago.
    Mr. Chairman, this is among the biggest and the worst 
broken promises between the Federal Government and any state. 
And it is shameful, it is unacceptable, and we must change 
this.
    I appreciate your attention to this matter. I would ask 
that my full statement be accepted for the record. Again, thank 
you for your leadership on this issue.
    [The prepared statement of Ms. Murkowski follows:]

   Statement of The Honorable Lisa Murkowski, U.S. Senator, State of 
                                 Alaska

    Chairman Lamborn, Ranking Member Holt, thank you for inviting me to 
speak at this important hearing and thank you for considering 
legislation to expedite the development of the National Petroleum 
Reserve-Alaska, or the NPRA. As Alaska's Senior U.S. Senator and the 
Ranking Member of both the Energy and Natural Resources Committee as 
well as the Appropriations Subcommittee on Interior and the 
Environment, I have a distinct interest in this subject. But it is 
first and foremost as an Alaskan that I come to you in hopes of 
advancing this discussion and our shared goals--those being jobs, 
energy security, and reducing the federal deficit.
    The NPRA is, by name and law, a petroleum reserve. It is not a 
wildlife refuge, a national park, a monument, or a wilderness area. Its 
primary statutory purpose is to supply conventional energy resources to 
our Nation. The authorizing statute calls for the expeditious 
development of these resources so it amazes me that we are having this 
conversation today,
    On February 5th of last year, the Corps of Engineers denied Conoco-
Phillips' Section 404 application for the construction of a simple 
bridge across the Colville River Delta. A bridge was necessary for the 
safe transport of personnel, equipment, and of course a pipeline across 
the delta to leases the company had bought and explored in the area 
known as CD-5, with the hopes of more production from CD-6 and CD-7. 
The process of determining where, when, and how to construct this 
bridge really began in 2004 and was negotiated intensely in both an 
interagency process, with federal and state entities, as well as strong 
local participation, including the nearby Native village of Nuiqsut. 
This would have been a great success story of industry working with 
government and local residents, and it would be the first oil 
production ever from the NPRA.
    But all of this public process, all of this support, didn't matter 
to the EPA. With no public process or even notice, the agency 
designated the Colville River Delta an ``aquatic resource of national 
importance''--an ARNI--and thereby signaled a clear intention to 
elevate the project to a veto under the Clean Water Act Section 404. 
Several months later the Corps decision came back rejecting the 
application. Conoco-Phillips appealed this and we have been working 
extremely hard with the Administration to work through the issues 
raised in the denial.
    Members of the Subcommittee, how did we get to this point? We in 
Congress have to ask ourselves, if we can't get petroleum from the 
National Petroleum Reserve, where in the world can we get it? So I 
commend Chairmen Hastings and Lamborn, together with Congressman Young, 
for putting forth this bill to bring this issue to the forefront. And I 
appreciate the recognition that we have a permitting problem, not just 
a leasing problem. We can lease every acre there is, but without some 
assurance of basic use and enjoyment of this property, purchasing a 
lease would be a very risky venture. I am cautiously optimistic that we 
will see a better result for CD-5 specifically, but there is a major 
problem here. If every time a leaseholder wants to produce from the 
NPRA, it requires Congressional hearings and years of involvement from 
this many elected officials, we will not be in much better position 
next time.
    The danger is that, combined with what we in Alaska know to be a 
vastly understated federal resource estimate of the NPRA, based on 
highly speculative reassessments of previous studies, these delays will 
shrink private interest in bidding on the NPRA. This stands to cost 
taxpayers billions into the future if bids are low or nonexistent, let 
alone the lost benefits of royalties, energy security, and most 
importantly jobs.
    I want to close with a very brief history lesson. Over 30 years ago 
in 1980, while Congressman Young was already here but well before I 
was, President Carter, right when he signed Alaska National Interest 
Lands Conservation Act--or ANILCA--into law and after his re-election 
was lost, stated that ``100 percent of [Alaska's] offshore areas and 95 
percent of the potentially productive [onshore] oil and mineral areas 
will be available for exploration or for drilling.'' Mr. Chairman, this 
is among the biggest and worst broken promises between the federal 
government and any state, and it is shameful and unacceptable. As the 
Interior Department reported last spring when it published its report 
on so-called ``non-producing'' lands, less than one percent of federal 
lands in Alaska, and none of our federal offshore lands, are producing 
any oil or natural gas. This is shameful and unacceptable because it 
represents not only a failure of the federal government to allow U.S. 
taxpayers to benefit from their federal resources, but also because it 
is an outright broken promise to the people of the State of Alaska. I 
doubt very much the statehood agreement, let alone ANILCA, would ever 
have been agreed to if the signatories had any idea that this would be 
the outcome.
    For these reasons, I am glad to see the NPRA getting this attention 
and I hope my colleagues will understand why so many members are 
becoming reluctant to agree to any further land withdrawals anywhere. 
The witnesses, particularly from the State of Alaska, are in good 
position to speak to the merits of this bill and the need for the 
NPRA's resources in preserving the viability of the Trans-Alaska 
Pipeline. I am supportive of this bill and you may look to very similar 
efforts from the Senate.
                                 ______
                                 
    Mr. Lamborn. You are certainly welcome. Thank you for being 
here today. Your full statement will appear in the record. We 
appreciate your attendance. Thank you so much.
    We will now have our second panel of witnesses. And I would 
like to invite to come forward the Hon. Joe Balash, Deputy 
Commissioner of the Alaska Department of Natural Resources, 
within the Alaska Department of Natural Resources. Charles T. 
Drevna, President of the National Petrochemical and Refiners 
Association; Tim Sharp, Secretary-Treasurer of Laborers Local 
No. 942; and Eric Myers, Policy Director, Audubon Alaska.
    Like all witnesses, your written testimony will appear in 
full in the hearing record, so I ask that you keep your oral 
statement to five minutes, as outlined in our invitation letter 
to you, and under Committee Rules.
    Our microphones are not automatic, so you have to turn them 
on when you are ready to begin. And when you have one minute 
left, the yellow light will come on.
    We do have to expedite things this morning. We have a long 
series of votes that are going to begin about 11:30, and we 
have to have not only your statements, but questions and 
answers afterwards. And we have one more panel following.
    So we will try to keep our questions as expedited as 
possible, as well.
    Mr. Balash, you may begin.

   STATEMENT OF HON. JOE BALASH, DEPUTY COMMISSIONER, ALASKA 
                DEPARTMENT OF NATURAL RESOURCES

    Mr. Balash. Thank you. Good morning, Chairman Lamborn, 
Ranking Member Holt, and members of the House Subcommittee on 
Energy and Mineral Resources.
    On behalf of Governor Sean Parnell, the State of Alaska 
welcomes this opportunity to testify to you about our support 
for the objectives of this legislation. I also wish to express 
our eagerness to work with the U.S. Congress and the 
Administration to see that Alaska can meet its potential to 
deliver to the Nation billions of barrels of domestically 
produced oil, and trillions of cubic feet of natural gas, for 
the U.S. economy.
    The National Petroleum Reserve Alaska Access Act is a good 
first step toward realizing the potential that Federal lands in 
Alaska have to provide domestic energy supplies. The provisions 
of the Act are not unprecedented. Construction of TAPS required 
an Act of Congress, and that was at a time when the U.S. 
economy was in the doldrums, actions by OPEC were forcing 
prices into the stratosphere, and Americans were left wondering 
whether we still had what it takes to maintain our presence as 
a world power.
    We hope this legislation is but one piece of a larger body 
of work by the Congress that will once again make clear that 
energy production from America's most prolific hydrocarbon 
province is a national priority.
    Before commenting on the legislation specifically, I would 
like to bring the Committee's attention to the massive energy 
potential in Alaska. As a threshold matter, Alaska's North 
Slope has huge reserves, and is still relatively underexplored. 
According to the U.S. Geological Survey, America's Arctic ranks 
as number one for undiscovered oil potential, and number three 
for natural gas potential, in the world's conventional 
petroleum resources north of the Arctic Circle. This represents 
43 percent of the nation's total oil potential, and 25 percent 
of its gas potential.
    Thus, the issue of whether Alaska can continue to provide a 
significant share of domestic production does not center on 
whether we have enough hydrocarbons to entice investment. With 
$100-a-barrel oil, the viability of Alaska production is 
clearly not solely economic. Its realization will primarily be 
determined by Federal politics and policies relative to Federal 
lands in Alaska.
    If we had a Federal Government that welcomed exploration 
and development, and permitted operations in a timely and 
predictable manner, the economics of filling TAPS would take 
care of itself.
    Ironically, one place in Federal jurisdiction where there 
should be less resistance to oil and gas development is the 
NPRA. The objectives of the NPRA Access Act address many of the 
challenges to development on Federal lands in Alaska.
    Exploration and development in Alaska is a very long-term 
proposition. A predictable leasing program is key to allowing 
companies to make the investment of time, capital, and limited 
human resources necessary to realize tremendous gains from this 
relatively untapped resource.
    The NPRA Access Act recognizes the critical linkage between 
resource and transportation infrastructure, including roads and 
pipelines. Without the means to reach reserves and move them to 
market, these resources are effectively stranded.
    Predictability in regulatory timelines is critical. In 
Alaska, we pride ourselves on doing things right. One way we 
achieve that is by restricting certain activities to very 
specific windows of time throughout the year. Due to these 
limited windows of opportunity to conduct exploration and 
development activities, delays of critical permits for these 
Alaska projects, even if only by 30 days, can push back 
projects by an entire year.
    This is particularly true for exploration conducted in the 
NPRA, since there is little to no permanent year-round surface 
transportation infrastructure, beyond the Spine Road at 
Kuparuk, which is well east of the NPRA boundary.
    Perhaps the most ambitious element of the proposed 
legislation, the call for a plan for approved rights-of-way, 
complements plans put into place by the state. In 2009, 
Governor Parnell directed his Department of Transportation to 
advance the permitting for a road and pipeline corridor from 
Umiat in the southeast corner of NPRA to the Dalton Highway and 
TAPS. More than 90 miles west of the Dalton, Umiat is known to 
contain a discovery of oil at relatively shallow depths, just 
inside the NPRA. The road and pipeline would provide benefits 
not only for access and transportation of oil, but also for 
future exploration and development of gas in the foothills.
    Additionally, the road would benefit the U.S. Army Corps of 
Engineers as it continues cleanup of the former military site 
at Umiat. Whether this road is constructed depends on the 
completion of an EIS by the Corps, and issuance of permits by 
Federal agencies.
    The State of Alaska welcomes Congress's involvement in 
ensuring that access to Federal lands for responsible resource 
development occurs in a timely and predictable manner. Thank 
you.
    [The prepared statement of Mr. Balash follows:]

             Statement of Joe Balash, Deputy Commissioner, 
            Department of Natural Resources, State of Alaska

    Chairman Lamborn, Ranking Member Holt, and members of the House 
Subcommittee on Energy and Mineral Resources, on behalf of Governor 
Sean Parnell, the State of Alaska welcomes this opportunity to testify 
to you about our support for the objectives of this legislation. I also 
wish to express our eagerness to work with the U.S. Congress and the 
Administration to see that Alaska can meet its potential to deliver to 
the nation billions of barrels of domestically produced oil and 
trillions of cubic feet of gas for the U.S. economy.
    More specifically, we want to demonstrate to this committee and the 
rest of your colleagues in the Congress the vital role Alaska can play 
in enhancing America's long-term energy security, expanding American 
employment, growing the economy, providing significant revenue to 
federal, state, and local governments, and delivering billions of 
barrels of domestically produced hydrocarbons to the U.S. marketplace. 
At a time when the Congress faces difficult choices between raising 
taxes and cutting spending development of our nation's natural 
resources offers a means to put Americans to work, increase federal 
revenue, and reduce the balance of trades deficit.
    Before getting into substantive matters, I would like to briefly 
mention my professional background as it pertains to this testimony. I 
have been serving as deputy commissioner of the Alaska Department of 
Natural Resources (DNR), a state agency of over 1,100 personnel, since 
December 2010. Under the Alaska Constitution, the primary 
responsibility of the DNR is to maximize the development of the state's 
resources in a manner that furthers the public interest. DNR manages 
one of the largest portfolios of oil, gas, minerals, land, and water 
resources in the world, including approximately 100 million acres of 
uplands, 60 million acres of tidelands, shore lands, and submerged 
lands, and 44,500 miles of coastline. I am responsible for the 
management of the Divisions of Oil and Gas (DOG), Geologic Geophysical 
Survey (DGGS), and Coastal and Ocean Management (DCOM), and the Offices 
of the State Pipeline Coordinator (SPCO), the Alaska Gasline Inducement 
Act Coordinator (ACO), and the Mental Health Land Trust (TLO).
General
    This subcommittee has properly recognized that some of our 
country's biggest challenges center on energy security, national 
security, employment, and the national deficit. Pursuing smart policies 
that promote responsible energy development in America can help the 
country meet and overcome these challenges.
    The National Petroleum Reserve Alaska Access Act is a good first 
step towards realizing the potential federal lands in Alaska have to 
provide domestic energy supplies. The provisions of the act are not 
unprecedented. Construction of TAPS required an Act of Congress--at a 
time when the U.S. economy was in the doldrums, actions by OPEC was 
forcing prices into the stratosphere, and Americans were left wondering 
whether we still had what it takes to maintain our presence as a 
superpower. We hope this legislation is but one piece of a larger body 
of work by the Congress that will once again make clear that energy 
production from America's most prolific hydrocarbon province is a 
priority.
    Before commenting on the legislation specifically, I'd like to 
bring the Committee's attention to the massive energy potential in 
Alaska. Alaska is a leader in promoting all types of energy, including 
our massive renewable energy base of hydro power, geothermal, wind, and 
biomass. We are also a national leader in promoting energy efficiency 
throughout the state. We cannot, however, talk about strategies to 
ensure our country's energy security without discussing our critical 
need to increase domestic production of oil and gas.
Alaska's Role in America's Energy Picture
    Alaska is one of the nation's most critical and prolific oil-
producing states. For more than 30 years Alaska has supplied domestic 
energy supplies to markets in the United States. When unscheduled 
disruptions to this supply occur, such as in August 2006 and in January 
of this year, prices move upward and refineries on the West Coast are 
forced to seek supplies from foreign sources. While production is less 
than 2/3 of its peak production, Alaska still supplies more than 
600,000 barrels of oil every day.
    The artery which gets that domestic energy to market is the Trans 
Alaska Pipeline. Eight hundred miles of 48'' pipe, eleven pump 
stations, several hundred miles of feeder pipelines, and the Valdez 
Marine Terminal constitute the Trans-Alaska Pipeline System (TAPS). It 
is one of the longest pipelines in the world; it crosses more than 500 
rivers and streams and three mountain ranges as it carries Alaska's oil 
from Prudhoe Bay to Valdez.
    Spurred by global concern over the 1973 oil crisis (OPEC embargo) 
and spiking energy prices that resulted in a severe U.S. and global 
recession, the U.S. Congress was instrumental in the approval and rapid 
development of TAPS. Congress approved construction of the pipeline 
with the Trans Alaska Pipeline Authorization Act of 1973. The principle 
focus of this Act is as relevant today as it was in 1973: ``the early 
development and delivery of oil and gas from Alaska's North Slope to 
domestic markets is in the national interest because of growing 
domestic shortages and increasing dependence upon insecure foreign 
sources.''
    Underscoring the urgency of the country's precarious energy 
security position, the Trans Alaska Pipeline Authorization Act also 
halted all legal challenges to delay construction of the pipeline and 
ensured that additional government studies would not be used to delay 
construction. Under its Congressional declaration of purpose the Act 
states: ``The purpose of this chapter is to insure that, because of the 
extensive governmental studies already made of this project and the 
national interest in early delivery of North Slope oil to domestic 
markets, the trans-Alaska oil pipeline be constructed promptly without 
further administrative or judicial delay or impediment. To accomplish 
this purpose it is the intent of the Congress to exercise its 
constitutional powers to the fullest extent in the authorizations and 
directions herein made and in limiting judicial review of the actions 
taken pursuant thereto.''
Alaska's Energy Potential
    Alaska's North Slope, both on and offshore, remains a world-class 
hydrocarbon basin with extraordinary potential. According to the U.S. 
Geological Survey, America's Arctic ranks as number one for 
undiscovered oil potential and number three for gas potential for the 
world's conventional petroleum resources north of the Arctic Circle. 
Nearly 50 billion barrels of conventional undiscovered, technically 
recoverable oil resources and 223 trillion feet of conventional 
undiscovered, technically recoverable gas resources may be found in the 
North Slope and the Arctic OCS off Alaska's northern coast. This 
represents 43 percent of the nation's total oil potential and 25 
percent of its gas potential.
    The development of these resources means jobs, domestic energy 
supplies, and revenues for the federal treasury. A recent study 
conducted by Northern Economics and the Institute for Social and 
Economic Research at the University of Alaska Anchorage examined the 
national benefits associated with commercialization of oil and gas 
resources in the Arctic OCS. Their findings demonstrate that there are 
significant, material gains available to the nation through development 
of domestic natural resources.
    Based on a reasonable set of price estimates for oil and gas ($65/
bbl and $6.40/mmBtu respectively), researchers estimated that $193 
billion in revenues would accrue to federal, state, and local 
governments over a 50-year period. If you assume a price for oil closer 
to what the market is trading at today, that revenue estimate climbs to 
nearly $263 billion. From a jobs perspective, this economic activity 
would generate an annual average of 54,700 jobs nationwide, with an 
estimated cumulative payroll amounting to $145 billion over the same 
time period.
    These extraordinary benefits are those that can be derived from a 
single element of federal lands in the Arctic. In addition, the Arctic 
National Wildlife Refuge (ANWR) and the National Petroleum Reserve-
Alaska contain large resource potential with further economic benefits 
available to the nation. While these benefits are impressive, they are 
based solely on conventional oil and gas resources.
Unconventional Resources
    In addition to conventional oil and gas resources, Alaska's North 
Slope contains massive quantities of unconventional resources: shale 
oil and gas, coalbed methane, deep-basin gas, heavy and viscous oil, 
and gas hydrates (USGS mean estimate is 85 trillion cubic feet). The 
U.S. Department of Energy has estimated that there is 36 billion 
barrels of heavy oil on the North Slope. (No current estimates exist of 
Alaska's shale oil and gas reserves.) Most of these unconventional 
resources are located onshore near existing infrastructure. Energy 
companies are beginning to investigate developing some of these 
resources in Alaska, particularly shale oil.
    The oil fields at Prudhoe Bay and Kuparuk are the two largest 
discovered in North America. The oil and gas contained in those fields 
was captured by geologic structures as the hydrocarbons migrated up 
from the source rocks that produced them. Those source rocks are well-
known by geologists--and they are huge. While their potential is 
unknown, key indicators (thermal maturity, organic chemistry, 
petrophysics, and geomechanics) appear to be analogous to the Eagle 
Ford play in southern Texas.
    Three different source rocks are present, representing distinct 
opportunities for development if a commercial means can be found to 
produce them. Key to that commercial determination is the cost of 
production and transportation. Their location runs from the base of the 
Brooks Range just outside of ANWR and proceeds west in a wide swath 
through the NPR-A all the way to the Chukchi coast.
The Future of Arctic Energy Production
    The importance of federal land to the future of oil and gas 
development in Alaska's Arctic must not be underestimated. Many of the 
most promising oil and gas resources in Alaska are in federal lands. 
Development of these lands, in particular from the OCS, Arctic National 
Wildlife Refuge, and National Petroleum Reserve--Alaska (NPR-A), could 
result in production of over a million barrels of oil a day. 
Unfortunately, the federal government has consistently denied access to 
these lands, made decisions that have added significant delays to 
promising projects, and pursued policies that have chilled the 
investment climate.
    What concerns Alaskans and what should concern all Americans is the 
continued viability of TAPS to operate under its current configuration. 
Under the same law Congress enacted to ensure its construction, once 
TAPS is no longer operating it must be dismantled and removed. Without 
a pipeline to transport crude oil to the northernmost ice-free port in 
the U.S., very little of the potential identified above can ever be 
realized. The viability of TAPS as a continuing critical component of 
our nation's energy security infrastructure is an issue for all 
Americans. It is on this issue that the federal government can play a 
critical role.
    The reduced flow of oil through TAPS has reached a point where the 
pipeline is now approximately two-thirds empty. Continued throughput 
decline raises a host of technical challenges due to the slower 
velocity of oil in the pipeline, longer transit times, and the 
resulting dramatic lowering of the temperature of oil during the winter 
months. These challenges include wax buildup, frost heaves, and ice 
crystals and ice plugs. The likelihood of these problems occurring 
increases with lower throughput, and they can cause additional TAPS 
shutdowns and oil leaks that could harm the environment. This past 
January, TAPS was shut down for five days as the result of a leak at 
Pump Station 1 that was contained in a building.
    The State of Alaska is working with industry to ensure that we are 
prepared to address these additional challenges in the near term as 
TAPS throughput decline continues. But clearly, the most effective way 
to address these technical challenges and the environmental risks that 
they may entail is to increase TAPS throughput.
    The January 2011 shutdown of TAPS, during the heart of a cold 
Alaskan winter, not only focused attention on the significant technical 
challenges of decreased TAPS throughput, but also raised the specter of 
a broader premature shutdown of TAPS. Such a shutdown would 
significantly undermine U.S. national security and energy security 
interests and would devastate the Alaskan economy.
    A premature shutdown of TAPS would result in the stranding of 
billions of barrels of domestic oil in America's largest hydrocarbon 
basin. Oil prices would continue to soar. Thousands of jobs would be 
lost. U.S. refineries would likely have to turn to foreign sources of 
oil, as they did when TAPS shutdown in January, thereby increasing the 
U.S. trade deficit and undermining American national and energy 
security.
    A premature TAPS shutdown would also have a crushing impact on 
Alaskans. It has been estimated that one-third of the Alaska economy is 
connected to the oil industry. The loss of North Slope oil production 
would deprive state and local governments of billions of dollars in 
annual revenue. Government services including education, public safety, 
and health care would be slashed and infrastructure projects would be 
significantly curtailed. Rural communities, particularly those that 
have significantly benefitted from oil development such as the North 
Slope Borough, would face a significant decrease in their standard of 
living.
    But continued TAPS throughput decline does not need to be Alaska's 
or the country's destiny. The massive North Slope hydrocarbon resource 
base remains available for development. What is needed to ensure a 
reversal of this decline are state and federal policies that promote 
increased investment, responsible resource development, and increased 
job creation on the North Slope.
The Need for Investment
    Despite the extraordinary production and massive hydrocarbon 
potential, Alaska remains relatively underexplored compared to any 
other prolific oil and gas region in North America. Only 500 
exploration wells have been drilled within a 150,000-square-mile area 
on the North Slope--an area that maintains the highest undiscovered 
conventional oil and gas potential in Alaska. That calculates to three 
wells per 1,000 square miles. As a comparison, 75,000 square miles 
within the state of Wyoming, endowed with high oil and gas potential, 
has more than 19,000 exploration wells, or about 250 wells per 1,000 
square miles.
    With this remarkable potential, Alaska can play a pivotal role in 
helping our country meet its significant energy and security 
challenges; reduce our reliance on foreign oil; provide thousands of 
high paying jobs; reduce the nation's trade deficit; and provide 
significant revenue to local, state, and federal governments.
The Need for Affirmative Federal Support
    Although both economics and federal policies are in play, the 
viability of TAPS is more of a political issue than an economic one. As 
a threshold matter, Alaska's North Slope has huge reserves and it is 
still relatively underexplored. Thus, the issue of TAPS' viability does 
not center on whether we have enough hydrocarbons to entice investment. 
With $100/barrel oil, predictions that oil prices will remain over $80-
$90 for much of the decade, and Alaska's existing infrastructure to 
transport hydrocarbons, the viability of TAPS is clearly not solely 
economic.
    The State of Alaska is also doing as much as we can to make oil 
production on state lands as globally competitive as possible. The 
Governor's major tax reform legislation will do much to get us to such 
a position. While it is true that 98 percent of all of the oil 
production to date has come from state lands, the lion's share of the 
resource potential belongs to the federal government. In the estimates 
given above, fully 88 percent of the undiscovered technically 
recoverable oil and 79 percent of the gas will be explored for on land 
under federal jurisdiction.
    For these reasons, the long-term viability of TAPS will primarily 
be determined by federal politics and policies. Unfortunately, the 
federal government has consistently denied access to these lands, made 
decisions that have added significant delays to promising projects, and 
pursued policies that have chilled the investment climate, discouraging 
companies from exploring and producing in Alaska. When Shell cannot 
drill one exploratory well in the OCS after five years of spending 
billions of dollars for leases and permits, and ConocoPhillips cannot 
get a permit, again after five years, to build a bridge across the 
Colville River to access CD-5 in the NPR-A, it is the federal 
government that is denying access to abundant hydrocarbon resources 
and, ultimately, jeopardizing the long-term viability of TAPS.
    These are just a few examples of many where federal policies have 
focused on discouraging--not encouraging--the billions of dollars of 
investment needed to increase North Slope oil production. If we had a 
federal government that welcomed exploration and development and 
permitted operations in a timely and predictable manner, the economics 
of filling TAPS would take care of itself.
Protecting Alaska's Environment
    Among the reasons for these actions is concern for the environment. 
This concern, however, is misguided. Failure to advance development of 
Alaska's domestic energy supplies does not advance global environmental 
protection. To the contrary, it does the opposite. When oil and energy 
development in Alaska is shut down by our own government, development 
for such resources is driven overseas to places like Brazil, Russia, 
Iraq, Azerbaijan, and Saudi Arabia. Environmental standards in these 
places are not nearly as strong or strictly enforced as in Alaska, 
where stringent regulations are the hallmark of hydrocarbon production 
on the North Slope.
    Alaska has some of the most stringent environmental policies and 
regulations in the world and we are a leader in research for sound 
natural resource development. We love our state, not only for its 
economic opportunities, but also for its natural beauty, and we are 
very focused on protecting our environment.
    The State of Alaska strongly believes that responsible resource 
development and protecting the environment go hand in hand and we have 
a strong record of upholding the Alaska Constitution's mandate that the 
state pursue responsible resource development in a manner that 
safeguards the environment.
    To ensure responsible resource development occurs in Alaska, the 
state has devised a comprehensive system that imposes rigorous 
environmental protections that meet or exceed federal standards. 
Wherever possible, we have assumed--or are in the process of assuming--
primacy for the issuance of permits.
    Our efforts at protecting the environment and wildlife have been 
successful. For example, when debating the development of TAPS, many 
predicted that oil and gas development would decimate caribou herds. 
These predictions have not come true. In fact, caribou numbers have 
increased dramatically over the past thirty years. The Central Arctic 
caribou herd, which occupies summer ranges surrounding Prudhoe Bay, has 
grown from 5,000 in 1975 to over 66,000 today.
    Even with a robust regulatory regime, the state continues to look 
for ways to improve its regulatory oversight. Later this month, the 
state will release a comprehensive gap analysis conducted to: better 
understand the spectrum of state agency oversight; better understand 
the effectiveness of authorities and enforcement over oil and gas 
operations; and to identify gaps or redundancies in state oversight and 
determine if they need to be filled or eliminated as appropriate.
    Because of the efforts taken by federal, state, and local 
governments and the energy industry, oil and gas development in Alaska 
is conducted in a safe and responsible manner with standards that 
exceed most other jurisdictions in the world.
NPR-A: a Logical First Step
    Ironically, one place in federal jurisdiction where there should be 
less resistance to oil and gas development is the National Petroleum 
Reserve-Alaska (NPR-A). Early in the last century this land was 
specifically set aside by Congress for oil and gas exploration and 
production. As well, the State of Alaska has itself invested heavily in 
this area--and may be the largest single investor in recent exploration 
there. In just the last decade, the state of Alaska has awarded more 
than $180 million in cash exploration incentive tax credits to several 
oil companies to conduct seismic surveys and drill exploration wells in 
the NPRA on land that it does not own. The objectives of the National 
Petroleum Reserve-Alaska Access Act address many of the challenges 
facing exploration and development on federal lands in Alaska.
Leasing
    Access to Lands through predictable leasing programs allows those 
companies interested in exploring, finding, and producing to assess the 
opportunities and plan for participation. Exploration and development 
of oil and gas in Alaska is a long term proposition. A predictable 
leasing program is key to allowing companies to make the long-term 
investment of time, capital, and limited human resources necessary to 
realize tremendous gains from this relatively untapped resource.
Transportation Infrastructure
    The NPR-A Access Act recognizes the critical linkage between 
resource and transportation infrastructure--including roads and 
pipelines. The first production from CD-5--the expansion of the 
Colville River Unit operated by ConocoPhillips--was expected to start 
in 2012. Unfortunately, in February 2010, the U.S. Army Corps of 
Engineers (COE) reversed course and denied ConocoPhillips its permits 
to construct a pipeline and vehicle bridge across the Nigliq Channel in 
the Colville River Delta. Without the means to move it to market, this 
reserve of oil is effectively stranded. Many Alaskans viewed this 
decision as a shutdown of NPR-A development.
    After five years of delays, the status of CD-5 remains uncertain, 
thereby chilling the investment climate over the entire NPR-A. Alaskans 
remain hopeful and we believe that the COE will recognize the efficacy 
of a bridge over the Nigliq Channel and approve ConocoPhillips' permit.
Deadlines for Permits
    Predictability in regulatory timelines is critical. In Alaska, we 
pride ourselves on doing things right. One way we achieve that is by 
restricting certain activities to very specific windows of time 
throughout the year. If a critical permit is delayed by 30 days, the 
consequences to the execution of the project could be enormous.
    Tundra travel in the Arctic is restricted to those months when the 
ground is frozen solid to a depth that ensures the surface will not be 
scarred by exploration activities. Operators need sufficient time to 
mobilize equipment to the site of the exploration activity, to conduct 
the relevant activity, and to demobilize the equipment and return it to 
permanent infrastructure.
    Due to these limited windows of opportunity to conduct exploration 
and development activities, when critical permits are delayed for 
Alaska projects the consequence can be delay of the project for an 
entire year. This is particularly true for exploration conducted in the 
NPR-A since there is little to no permanent, year-round surface 
transportation infrastructure beyond the spine road at Kuparuk.
Planned ROW
    Perhaps the most ambitious element of the proposed legislation, the 
call for a plan for approved rights-of-way for pipeline, road, and 
other surface infrastructure to ensure all leases are within 25 miles 
of an approved right-of-way complements plans by the State of Alaska. 
In 2009, Governor Parnell directed the State of Alaska to advance the 
permitting for a road and pipeline corridor from Umiat to the Dalton 
Highway and TAPS.
    More than 90 miles west of the Dalton, Umiat is known to contain a 
discovery of oil at relatively shallow depths just inside the NPR-A. 
The company holding the leases at Umiat estimates the size of the field 
to be 250 million barrels, with peak production capable of reaching 
50,000 barrels per day.
    The road and pipeline would provide benefits not only for access 
and transportation of oil, but also for future exploration and 
development of gas in the Foothills. The road would also benefit to the 
U.S. Army Corps of Engineers as it continues cleanup of the former 
military site at Umiat. A total of $24 million in state funds have been 
appropriated by the Alaska Legislature to complete the necessary EIS.
Accountability
    Requiring a notification for applicants with specific information 
regarding delays in the issuance of permits is a novel approach that 
will inform operators of the likelihood they will succeed in obtaining 
the necessary permits and authorizations required to proceed with 
responsible development. Such notifications will allow operators to 
make reasoned decisions regarding the timing and efficacy of their 
exploration plans.
Resource Assessment
    Activities currently underway by the USGS should make this 
relatively easy to achieve. SOA had concerns with the last revision 
made to assessments of the oil resources of the NPR-A. We remain 
bullish on the prospects of conventional oil discoveries yet to be 
found, and are certain that significant unconventional resources are in 
place throughout the region.
Conclusion
    The State of Alaska welcomes Congress's involvement in ensuring 
that access to federal lands for responsible resource development 
occurs in a timely, predictable manner. We believe the NPR-A Access Act 
supports Alaska's goal of one million barrels a day through TAPS within 
a decade. By working together to champion such a goal, as well as the 
President's goal of reducing oil imports by one-third, we can 
demonstrate how state and federal governments can come together to curb 
our dependence on foreign oil and create a brighter, more secure future 
for Americans.
    The benefits of increased access to and production from federal 
lands in the Arctic promote numerous interests of America and Alaska:
          Economic and job security
          Trade deficit--promoting resource development in 
        Alaska ensures that we import less oil from overseas
          Federal budget deficit--by providing Americans access 
        to their own lands to produce oil, the federal government is 
        opening the opportunity to earn billions in direct revenues, 
        rather than forcing Americans to help fill the treasuries of 
        countries such as Venezuela, Russia, and, Saudi Arabia.
          Energy security--promoting development of Alaska's 
        massive sources of domestic energy reinforces U.S. energy 
        security.
                                 ______
                                 
    Mr. Lamborn. All right. Thank you for your testimony. Mr. 
Drevna.

          STATEMENT OF CHARLES T. DREVNA, PRESIDENT, 
        NATIONAL PETROCHEMICAL AND REFINERS ASSOCIATION

    Mr. Drevna. Good morning, Subcommittee Chairman Lamborn, 
Ranking Member Holt, Chairman Hastings, and members of the 
Subcommittee. I am Charlie Drevna, and I serve as President of 
NPRA, the National Petrochemical and Refiners Association. And 
again, thank you for giving me the opportunity to testify in 
support of the National Petroleum Reserve Alaska Access Act.
    My association and the NPRA Reserve Alaska share the same 
acronym, but we are a little different. National Petrochemical 
and Refiners Association is a trade association. We represent 
high-tech American manufacturers of virtually the entire supply 
of U.S. gasoline, diesel, jet fuel, other fuels, home heating 
oil, and the petrochemicals used as the building blocks for 
virtually thousands of products.
    My NPRA is headquartered in an office building in 
Washington that sits atop a parking garage. The U.S. Geological 
Survey estimates that the National Petroleum Reserve Alaska 
sits on top of more than 2.7 billion barrels of oil, and more 
than 114.3 trillion cubic feet of natural gas. And as Senator 
Murkowski pointed out, these are probably very low estimates.
    These are tremendous energy resources. Our nation needs to 
use them to bring the tremendous benefits to the American 
people.
    For more than 30 years elected officials have been saying 
we need to reduce our reliance on foreign oil. For far longer, 
they have been telling us America needs to create more jobs. So 
we can talk about this for another 30 years, or 40 years, or 50 
years, or we can take action. And producing more oil and 
natural gas in Alaska and elsewhere in the United States is the 
most effective action I believe we can take.
    Lurching from crisis to crisis, and wishing and hoping for 
miraculous new energy sources to magically solve all of our 
problems, isn't the foundation of U.S. energy policy. Instead, 
we need a reality-based policy that looks years down the road, 
and understands the need to develop easily accessible, 
abundant, efficient, reliable, and proven sources of domestic 
energy. This will be the foundation for a more secure future 
for our children and grandchildren.
    My association supports the National Petroleum Reserve 
Alaska Act because it is realistic, practical, and benefits 
America and the American people.
    A report from 2008 said that oil and natural gas 
development in Alaska would have the following impacts, and I 
quote now: ``Reducing world oil prices, reducing the U.S. 
dependence on imported foreign oil, improving the U.S. balance 
of trade, extending the life of the Trans-Alaska Pipeline 
System for oil, and increasing U.S. jobs.''
    Now, some may assume this report was produced by the oil 
industry; but in fact, it was produced by the United States 
Energy Information Administration. Now, this is a non-partisan 
and independent government organization that is respected for 
its objective analyses.
    The National Petroleum Reserve Alaska Act deserves to be 
enacted into law on two levels. First, it will, because it will 
provide a sure and steady supply of domestic oil to enable fuel 
and petrochemical manufacturers to meet the needs of millions 
of Americans throughout the country--living in Alaska, 
Washington, Oregon, California, Nevada, Arizona, and Hawaii.
    And second, because this important legislation, and I 
believe it is just the first step of many actions that we urge 
Congress and the Administration to take, to make more use of 
America's valuable fossil-fuel resources available to serve all 
Americans across the entire nation.
    Let me dispel a myth that has been repeated so often that 
millions of Americans understandably believe it is true. 
Despite what you may have heard, America is not energy-poor. We 
are energy-rich. We have more oil, natural gas, and other 
energy resources under our feet and off our shores than just 
about any country on earth, and we are finding new and 
environmentally safe ways to bring these energy sources to the 
American people all the time.
    Keeping our energy resources locked up and out of reach 
makes about as much sense as a millionaire keeping all his cash 
stuffed in a mattress. We need to take advantage of our energy 
wealth.
    The members of NPRA want to ensure a continuing supply of 
American oil to our refineries and petrochemical manufacturing 
plants, because we want to preserve America's economic and 
national security. Instead of shipping billions of more dollars 
abroad to buy foreign crude, we want to keep more of our 
nation's wealth right here, in our own nation, supporting 
American families and communities.
    Instead of creating millions of jobs abroad, we want to 
produce more oil and natural gas, and more fuels and 
petrochemicals, right here.
    We urge the approval of the National Petroleum Reserve 
Alaska Access Act. It is the first in a series of critical 
measures to lay the foundation for a U.S. energy policy that 
benefits our nation, economy, and all Americans.
    Thank you very much.
    [The prepared statement of Mr. Drevna follows:]

              Statement of Charles T. Drevna, President, 
             National Petrochemical & Refiners Association

I. Introduction
    Good morning Subcommittee Chairman Lamborn and Ranking Member Holt, 
Chairman Hastings, Ranking Member Markey and members of the 
Subcommittee. I'm Charlie Drevna, and I serve as president of NPRA, the 
National Petrochemical & Refiners Association. Thank you for giving me 
this opportunity to testify before the Subcommittee on Energy and 
Mineral Resources of the House Natural Resources Committee in support 
of The National Petroleum Reserve Alaska Access Act.
    My association and the National Petroleum Reserve-Alaska share the 
same acronym, but are in very different locations. The National 
Petrochemical & Refiners Association is headquartered in an office 
building here in Washington that sits on top of a parking garage. The 
U.S. Geological Survey estimates that the National Petroleum Reserve-
Alaska sits on top of more than 2.7 billion barrels of oil and more 
than 114.3 trillion cubic feet of natural gas. These are tremendous 
energy resources, and our nation needs to use them to bring tremendous 
benefits to the American people.
    The National Petrochemical & Refiners Association is a trade 
association representing high-tech American manufacturers of virtually 
the entire U.S. supply of gasoline, diesel, jet fuel, other fuels and 
home heating oil, as well as the petrochemicals used as building blocks 
for thousands of vital products. NPRA members make modern life 
possible, meet the needs of our nation and local communities, 
strengthen economic and national security, and provide jobs directly 
and indirectly for more than 2 million Americans.
    I know that in the public mind, the oil industry is a collection of 
giant companies that do everything--explore and drill for oil, 
manufacture fuels and petrochemicals, and own gasoline stations where 
you fill up your car or truck. But that's a myth, not reality. In fact, 
the concept of ``Big Oil'' is a pejorative that inaccurately seeks to 
homogenize, vilify and discount the tens of thousands of companies and 
millions of American working men and women affiliated with our nation's 
domestic oil industry.
    NPRA member companies engage in what we call ``downstream'' 
manufacturing activities--we don't primarily focus on the ``upstream'' 
work of getting oil out of the ground or offshore, but rather on 
turning oil into useful products. Or to paraphrase an old advertising 
slogan: We don't produce the oil, we make the oil better. The oil that 
comes directly out of the wellhead is useless until it's refined 
through sophisticated manufacturing processes into a transportation 
fuel or turned into a petrochemical--and that is the important work 
carried out by our members.
    The National Petroleum Reserve Alaska Access Act deserves to be 
enacted into law on two levels. First, because it will provide a sure 
and steady supply of domestic oil to enable refineries and 
petrochemical manufacturing plants to make the fuel and other vital 
products needed to serve the millions of Americans living in Alaska, 
Washington, Oregon, California, Nevada, Arizona and Hawaii. And second, 
because this important legislation it is just the first of many actions 
we urge Congress and the administration to take to make more of 
America's valuable fossil fuels resources available to serve the 
American people.
II. America is Energy Rich
    Before I get into the specifics of the merits of this bill, let me 
dispel a myth that's been repeated so often that millions of Americans 
understandably believe it's true. America is not energy poor--we're 
energy rich. We have more oil, natural gas and other energy resources 
under our feet and off our shores than just about any country on Earth. 
And we're finding new--and environmentally safe--ways to bring these 
energy sources to us all the time. Examples include technology for 
extracting oil from shale and from oil sands, and technology for 
bringing vast amounts of natural gas to the surface by using hydraulic 
fracturing. The problem isn't that we lack energy resources. The 
problem is that our government is making it extremely hard--if not 
impossible in some instances--to use them, even with extensive 
environmental safeguards.
    From the Atlantic, to the Gulf of Mexico, to our nation's Pacific 
Coast...from the Marcellus Shale in Pennsylvania and neighboring states 
to the Eagle Ford Shale in Texas...from untapped oil and natural gas 
fields in the Lower 48 states to Alaska...our nation is blessed with 
immense and untold energy riches.
    Keeping our energy riches locked up and out of reach makes about as 
much sense as a millionaire keeping all his cash stuffed in a 
mattress--and then begging for money because he won't give himself 
access to his own fortune. We need to take advantage of our energy 
wealth.
III. Utilize NPR-A
    Let me focus now on the need for Alaskan crude oil and The National 
Petroleum Reserve Alaska Access Act. In testimony May 13 this year 
before the Subcommittee on Energy and Power of the House Committee on 
Energy and Commerce (a copy of which is being submitted with this 
testimony), Lynne D. Westfall, executive vice president of Turner Mason 
& Company, pointed out:
          The region comprised of Alaska, Washington, Oregon, 
        California, Nevada, Arizona and Hawaii was a major exporter of 
        crude oil to the rest of the country in the 1980s. But this 
        region has gradually seen oil production drop. Oil has not been 
        shipped out of the region since 2001.
          These seven states are not connected by pipelines to 
        other parts of the United States and now rely on oil imported 
        from other nations for about 50 percent of their demand.
          ``Without continued production in Alaska, the West 
        Coast will grow more dependent on imports from OPEC.''
          Declining oil production in Alaska ``will fall below 
        the minimum operating rate for the Trans Alaska pipeline in the 
        early 2030s. The economics of production, however, may cause 
        the cessation of supplies well before that time.''
    In fact, we have already seen times in the past few years where the 
low volume of oil being transported by the 800-mile long Trans Alaska 
pipeline has threatened to halt pipeline operations, endangering the 
oil supply to American refiners in the process. The low volume of oil 
in the pipeline has already slowed the speed at which oil travels 
through the vital artery, allowing the oil temperature to cool and 
threatening pipeline malfunctions.
    The loss of the Trans Alaska pipeline would cause many problems. 
Had there been no crude coming from Alaska to the Western states in 
2010 they would have imported more than 73 percent of their crude oil, 
and 71 percent of these imports would have come from OPEC nations.
    Mr. Westfall presents many additional compelling statistics in his 
testimony to clearly establish that people of the West need more oil 
from Alaska. Those who decry America's reliance on imported oil and at 
the same time oppose efforts to bring us more oil from our northernmost 
state are being logically inconsistent.
    Looking in detail at the provisions of the National Petroleum 
Reserve Alaska Access Act, my association believes this legislation has 
a number of beneficial provisions that would avoid bureaucratic delays 
that hold up the process for producing, transporting and delivering 
American oil to American refiners.
    The legislation provides for a streamlined and expedited permitting 
process to accelerate the leasing, exploration and production 
activities in the National Petroleum Reserve-Alaska. This permitting 
process would also speed the building of critical infrastructure needed 
to transport Alaskan oil to the West Coast market. In addition, the 
bill calls on the Department of the Interior to develop a plan for 
coordinating future leases and production activities with access to 
necessary infrastructure.
    Our nation needs to ensure that there are minimal constraints to 
critical energy arteries--roads, bridges and pipelines--that move 
reliable and secure American energy sources to manufacturers that 
produce useful American products. Unfortunately, too often multiple 
government agencies create years of bureaucratic delays in approving a 
permit for a road, a bridge or other needed infrastructure.
    For example, ConocoPhillips, a member of the National Petrochemical 
& Refiners Association, has a ``shovel-ready'' project called CD5 in 
the National Petroleum Reserve-Alaska area that could generate new jobs 
and investment immediately. CD5 alone represents 400 new jobs per year 
during at least two years of construction, plus hundreds more support 
jobs. This project would also generate income for Alaska and the U.S. 
economy. However, the project has faced permitting delays since 2005.
IV: Use Domestic Energy
    Some may be wondering: if we just buy oil, why do the refiners and 
petrochemical manufacturers that NPRA represents care so much about 
where the oil comes from? The Gulf of Mexico, the Gulf of Alaska, the 
Arabian Gulf or wherever--what's the difference? There are a number of 
critically important reasons why we want--and why our nation needs--
robust domestic oil and natural gas production.
    Above all, we want to ensure a continuing supply of domestic oil to 
refineries and petrochemical manufacturing plants because we want to 
preserve America's economic and national security. We share the concern 
of Democrats, Republicans and independents that our nation has become 
too reliant on oil from unstable areas of the world that are too often 
hostile to American interests. We share the concern of all Americans 
about our high national unemployment rate and the terrible suffering it 
is causing families around our country. We share the concern of the 
American people that our nation's debt and deficit are too high. 
Producing more energy right here at home can have a big effect on 
reducing all these problems.
    We also--believe it or not--don't necessarily benefit from high oil 
prices. Our members are the first customers for crude oil, and can't 
manufacture fuels and petrochemicals without oil. In fact, about 70 
percent of the cost of gasoline is determined by oil prices set on 
world commodities markets. Just as a baker doesn't welcome a rise in 
flour prices, or a coffee brewer doesn't welcome increases in the price 
of coffee beans, we don't necessarily welcome increases in oil prices. 
I never try to predict what will happen with fuel prices. But I've 
never heard anyone say that shortages of domestic supply ever put 
downward pressure on the price of any product.
    We've seen President Obama and other administration officials meet 
with officials from Brazil and OPEC nations to encourage oil production 
abroad and to encourage sales of the foreign oil to the United States. 
But why not produce more oil and natural gas right here at home to 
create millions more American jobs beyond the 9.2 million already 
supported by both the ``upstream'' and ``downstream'' petroleum 
sectors?
    Why not keep billions more American dollars right here in our own 
country, supporting American families and communities, instead of 
shipping this wealth abroad to buy foreign crude? Why not hold down 
costs of crude oil by producing more in our own country and relying 
less on oil shipped from foreign nations thousands of miles away?
    Using our own energy resources to a much greater extent would be an 
enormous economic stimulus to our country, at no cost to American 
taxpayers. Besides reducing unemployment, it would flood the U.S. 
Treasury with billions more dollars in taxes and royalty payments from 
oil companies and the workers they employ. What is the alternative? 
Growing energy imports that weaken our economy, wipe out American jobs, 
increase our trade deficit and make us less secure in a dangerous 
world.
V. Conclusion
    The National Petrochemical & Refiners Association is not opposed to 
non-fossil fuels forms of energy. We want all forms of energy to 
compete on a level playing field in a free market, and we want to let 
the best forms of energy win. We understand that no single energy 
source will meet all of our nation's needs, and that we need an ``all 
of the above'' solution to energy challenges.
    NPRA is the association that says ``yes'' to a brighter energy 
future. We say ``yes'' to the spirit of innovation and free market 
competitiveness that led to countless inventions in the past 200 years, 
transforming America from a frontier nation to the leading nation on 
our planet. We say ``yes'' to problem-solving instead of throwing up 
our hands in surrender. We say ``yes'' to building prosperity instead 
of managing scarcity.
    The death of the hydrocarbon molecule has been forecast for a very 
long time, but it will continue providing the American people with 
reliable, secure, abundant and efficient energy for many decades to 
come. The members of NPRA and the hard-working men and women we employ 
are proud to be able to harness this amazing molecule to serve the 
American people every hour of every day.
    The companies that are members of NPRA are often criticized and 
demonized. But in fact, we're not part of America's energy problems--
we're part of the solution to those problems. We believe the path to 
overcoming the energy challenges America faces begins with a national 
commitment to using our own God-given resources to serve the interests 
of our own citizens. Americans haven't achieved success by waiting 
passively for things to happen to us. We've achieved success by taking 
control of our destiny. Our parents and grandparents and earlier 
generations did this, and we and our children and grandchildren can do 
this as well.
    I'm obviously here representing the best interests of the American 
fuel and petrochemical manufacturers that are members of NPRA. We want 
to stay in business, serving the American people, employing American 
workers, paying American taxes, strengthening American communities, 
being good American citizens. We don't want to see American fuel and 
petrochemical manufacturing plants and their workers be replaced by 
foreign competitors--as happened with much of the American textile, 
appliance, auto and electronics manufacturing industries in the 
lifetimes of many of us here today.
    But if we get to the point where more and more of the oil we rely 
on comes from abroad, there's no reason why more and more of the 
gasoline, diesel, jet fuel, petrochemicals and other products we 
manufacture couldn't be made abroad as well. Bad news for NPRA members? 
Absolutely. But more importantly, bad news for American consumers, 
American workers, and the American economy.
    We urge approval of The National Petroleum Reserve Alaska Access 
Act as the first of a series of measures to help bring an end to the 
bad economic news that's hit our country in the last few years, to give 
Americans faster and greater access to our nation's valuable natural 
resources, to generate more revenue for government at all levels, and 
to begin building a better and brighter future for our nation and the 
American people.
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    Mr. Lamborn. OK, thank you. Mr. Sharp.


           STATEMENT OF TIM SHARP, BUSINESS MANAGER/
            SECRETARY TREASURER, LABORERS LOCAL 942

    Mr. Sharp. Good morning. My name is Tim Sharp, and I am the 
Business Manager of the Alaska District Council of Laborers, an 
organization representing approximately 5,000 union 
construction workers. We are mainly construction, maintenance, 
and manufacturing workers employed throughout the State of 
Alaska. We work in the oilfields, on roads and bridges, within 
the building and construction trades industry, as well as 
maintain both public and private infrastructure facilities all 
over the State.
    I am here today and very excited to strongly support H.R. 
2150, or the National Petroleum Reserve Alaska Access Act, 
introduced by Congressmen Young, Hastings, and Lamborn. We are 
in strong support for a number of different reasons, but they 
boil down to two main issues that most impact my membership. 
Most simply put, those are jobs and affordable fuel and energy.
    There was never a question of if the NPRA should be opened, 
only when. We would suggest that with the dwindling amount of 
oil presently being pumped through the Trans-Alaska Pipeline, 
the cost of gas and heating oil for the average American 
increasing to business and commerce-stifling rates, the huge 
number of unemployed construction workers, the extra cost 
burden presently being exacted on our rural Alaskans in the 
form of $6- to $10-dollar-per-gallon fuel, that there is no 
better time than right now.
    There will of course be the inevitable wailing and gnashing 
of teeth from those who have never met a road, bridge, dam, or 
pipeline that they liked, especially from certain organizations 
outside our state run by people that have never even been 
there, that wish to lock up our state out of a misguided 
perception of what they think it should be.
    From the perspective of the people I represent and most 
Alaskans that I know, we need jobs, and we need affordable 
energy and fuel. We see no wisdom in not taking action to begin 
to address the obvious immediately. We feel that this 
legislation is a straightforward approach toward doing so for 
the nation.
    Also to at least show that we are responsible stewards of 
our own state, I would also support any development being tied 
to the most stringent, ecologically friendly engineering 
possible. It means more jobs, it protects the environment, and 
results in cheaper and more abundant energy.
    The other reason for moving this legislation now is that 
the oilfields are not built or developed overnight. I think 
that five years would be a very conservative guess toward a 
minimum timeline in going from permitting to blueprints to 
further exploration, to roads and pad construction, to 
pipelines, and finally to market. However, the upside would be 
that five years of good employment leading up to a time of 
bringing a downward pressure to the price per gallon of 
gasoline or heating fuel. We see no downside for Americans.
    It has also been my observation, after 20 years in the 
Alaskan oilfields, that the amount of spinoff jobs created in 
support of this type of development are huge. There may also be 
large amounts of natural gas to be discovered, tapped, and 
developed as a result of newly concentrated commercial activity 
in the NPRA.
    Finally, and most important, is that Alaska has always had 
the potential to be a huge breadbasket of natural resources for 
America. Shy of permitting and politics, the only thing that 
keeps this from becoming a reality is the extraordinarily high 
cost of energy that it takes to develop them.
    This legislation moves us toward changing that, and helping 
to control our own destiny as a state and as a nation. The only 
thing we can know for sure is that which is not working 
already; and that any further inaction, for lack of political 
will, will only put us farther behind the eight-ball of 
increased dependence on foreign oil, jobs, and energy.
    Please support this timely and much-needed legislation for 
our country, and thank you for taking the time to listen.
    [The prepared statement of Mr. Sharp follows:]

     Statement of Tim Sharp, Business Manager/Secretary Treasurer, 
         Alaska District Council of Laborers, Anchorage, Alaska

    Good Morning,
    I appreciate the invitation from Chairman Lamborn to testify and 
the sub committee for taking the time to listen. My oral testimony will 
be the same as my written remarks.
    My name is Tim Sharp and I am the Business Manager of the Alaska 
District Council of Laborers, an organization representing 
approximately five thousand union workers. We are mainly construction, 
maintenance and manufacturing workers employed throughout the State of 
Alaska. We work in the oilfields, on roads and bridges, within the 
building and construction trades industry, as well as, maintain both 
public and private infrastructure facilities all over the state.
    I am here today and excited to strongly support H.R. 2150 or the 
National Petroleum Reserve Alaska Access Act introduced by Congressmen 
Young, Hastings and Lamborn. We are in strong support for a number of 
different reasons, but they boil down to two main issues that most 
impact my membership. Most simply put, those are jobs, and affordable 
fuel and energy.
    There was never a question of ``f''the NPRA should be opened, only 
``hen'' We would suggest that with the dwindling amount of oil 
presently being pumped through the Trans Alaska Pipeline, the cost of 
gas and heating oil for the average American increasing to business and 
commerce stifling rates, the huge numbers of unemployed construction 
workers, the extra cost burden presently being exacted on our rural 
Alaskans in the form of six to ten dollar per gallon fuel, that there 
is no better time than now.
    There will of course be the inevitable wailing and gnashing of 
teeth from those who never met a road, bridge, dam or pipeline that 
they liked; especially from certain organizations outside our state run 
by people that have never been there, that wish to lock our state up 
out of their own misguided perception of what they think it should be. 
From the perspective of the people I represent and most Alaskans I 
know, we need jobs and we need affordable energy and fuel. We see no 
wisdom in not taking action to begin to address the obvious immediately 
and feel this legislation is a straightforward approach towards doing 
so for the nation.
    Also, to at least show that we are responsible stewards of our own 
state I would also support any development being tied to the most 
stringent ecologically friendly engineering possible. It means more 
jobs, protects the environment and will result in cheaper and more 
abundant energy.
    The other reason for moving this legislation now is that oilfields 
are not built or developed overnight. I would think that five years 
would be a very conservative guess toward a minimum time line in going 
from permitting to blueprints, to further exploration, to roads and pad 
construction, to pipelines, and finally to market. However, the upside 
would be five years of good employment leading up to a time of bringing 
a downward pressure to the price per gallon of gasoline or heating 
fuel. We see no downside for Americans.
    It also has been my observation, after twenty years in the Alaskan 
oilfields, that the amount of spin off jobs created in support of this 
type of development are huge. There may also be large amounts of 
natural gas to be discovered, tapped and developed as a result of newly 
concentrated commercial activity in the NPRA.
    Finally, and possibly most important, is that Alaska has always had 
the potential to be a huge breadbasket of natural resources for 
America. Shy of permitting and politics, the only thing that keeps this 
from becoming a reality is the extraordinarily high cost of energy here 
that it takes to develop them. This legislation moves us towards 
changing that and helping to control our own destiny as a state and a 
nation.
    The only thing we can know for sure is; that which is not working 
already and that any further inaction for lack of political will, will 
only put us further behind the eight ball of increased dependence on 
foreign oil.
    Jobs and energy... Please support this timely and much needed 
legislation for our country.
    Thank you again for taking the time to listen.
                                 ______
                                 
    Mr. Lamborn. Thank you, Mr. Sharp, for your testimony on 
behalf of working families.
    Now I would like to hear from Mr. Myers.


           STATEMENT OF ERIC MYERS, POLICY DIRECTOR, 
                         AUDUBON ALASKA

    Mr. Myers. Mr. Chairman, members of the Subcommittee, thank 
you for the opportunity to provide this testimony on the topic 
of today's hearing. My name is Eric Myers, and I serve as the 
Policy Director for Audubon Alaska. Today I am representing the 
National Audubon Society.
    Both as a longtime resident of Alaska, as well as a citizen 
of the United States, I believe this is a very important topic. 
With more than 450 chapters across the country and more than a 
million members, volunteers, and supporters, Audubon has a long 
history of involvement with the National Petroleum Reserve 
Alaska, and advocates for a responsible and balanced approach 
to resource development in Alaska, which includes the only 
Arctic ecosystem in the United States.
    Audubon is not opposed to oil and gas development, and 
recognizes that we are all consumers of energy. At the same 
time, Audubon supports a careful and measured approach to 
resource development in America's Arctic that should include a 
continuing commitment to the conservation and protection of 
special areas with exceptional biological values.
    Alaska has benefitted greatly from oil development and the 
associated revenues, but these fiscal benefits have not come 
without cost. Since the discovery of oil at Prudhoe Bay in 
1968, North Slope development has grown from a single 
operational oilfield to a sprawling industrial complex, 
extending across 100 miles of America's Central Arctic. More 
than 30 major oilfields have been developed, with more than 
5,500 exploration and production wells, and more than 390 
gravel pads, connected by more than 500 miles of road and 600 
miles of pipeline, and supported by some 20 airstrips, various 
production plants, production facilities, refineries. This 
infrastructure has used more than 50 million cubic yards of 
gravel mined from North Slope rivers and tundra.
    Impacts include oil spills, both large and small, too 
numerous to count; displacement of wildlife; air pollution, 
water pollution; elimination of wilderness values; and the loss 
of significant subsistence harvest opportunities in the Central 
Arctic across the Coastal Plain, between the Canning River to 
the east and the Colville River to the west. This industrial 
development has permanently transformed Alaska's North Slope, 
and is projected to continue far into the future.
    Incremental industrialization is now moving west, with the 
proposal to develop permanent new infrastructure on the Federal 
public lands inside the NPRA.
    Audubon believes that the current law enacted by Congress 
appropriately recognizes that there is room for both future oil 
production, as well as protection, within the NPRA. The NPRA is 
the largest single land-management unit in the United States. 
Congress enacted the Naval Petroleum Reserves Production Act in 
1976, and explicitly recognized that the NPRA contains far more 
than just potential hydrocarbon resources.
    Current law recognizes the need for balanced management of 
our public lands and the NPRA, specifically calling for the 
protection of special areas with important surface values and 
exceptional biological resources. At more than 22 million 
acres, the NPRA spans a large portion of the entire North 
Slope. It is larger than 12 states. Were it a state, it would 
fall somewhere between South Carolina and Maine in size.
    Audubon believes that within such a vast landscape, it is 
both reasonable and appropriate that there be a balance in 
development and conservation. This is the position that 
Congress itself has endorsed in the statutes that govern the 
NPRA when it enacted the Naval Petroleum Reserves Production 
Act in 1976, and transferred management from the Navy to the 
Department of the Interior, expressly requiring protection of 
exceptional surface values.
    Congress itself recognized two areas in particular, 
Teshekpuk Lake and the Utukok River Uplands, and deserving 
maximum protection because of the exceptional biological values 
found in these areas.
    In keeping with the American land ethic of balanced land 
management, Congress has recognized in the NPRA the value of 
the nation's public lands includes far more than just the 
wealth and economic gain that can be extracted.
    Teshekpuk Lake has been a particular focus of Audubon's 
work in the past 10 years. The Teshekpuk Lake special area 
includes the most important goose-molting habitat in the 
Arctic, and provides vital habitat for tens of thousands of 
geese that gather annually in the area, including Brant, 
greater wet-fronted geese, snow gees, and Canada geese. These 
waterfowl rely on the wetlands in the area, and migrate back 
south to their wintering grounds across the Lower 48.
    It is important to recognize that both Democratic and 
Republican administrations have recognized the importance of 
this area, and Presidents with disparate philosophies, such as 
Jimmy Carter and George W. Bush, have both taken actions to see 
this area protected.
    Consistent with the Congressional requirement to conduct an 
expeditious program of competitive leasing, the BLM has 
conducted numerous oil and gas leases, leasing more than 6.8 
million acres to date. Half of those lease sales were in the 
past decade, and the vast majority of the 13.4 million acres 
have been leased in the Northwest and Northeast planning areas 
multiple times. There have been four lease sales in the 
Northeast planning area alone, in 1999, 2004, 2008, and 2010. 
Most recently within the last year. And there will be another 
lease sale held within the calendar year.
    My point, sir, is simply to say that there is, there has 
been leasing by the BLM, and the current law is important to 
maintain. And that the proposals that are reflected in this 
legislation would abandon the protections that have previously 
been recognized by Congress. I will stop there. Thank you.
    [The prepared statement of Mr. Myers follows:]

             Statement of Eric F. Myers, Policy Director, 
                   Audubon Alaska, Anchorage, Alaska

    Thank you for the opportunity to provide testimony to the 
Subcommittee on Energy and Mineral Resources on the topic of today's 
hearing.
    My name is Eric Myers and I serve as the Policy Director for 
Audubon Alaska. Today I am representing the National Audubon Society. 
With more than 450 chapters across the country and more than one 
million members, volunteers and supporters, Audubon has a long history 
of involvement with the National Petroleum Reserve Alaska (NPRA) and 
advocates for responsible and balanced approach to resource development 
in Alaska, which includes the only Arctic ecosystem in the United 
States.
    Audubon is not categorically opposed to oil and gas development and 
recognizes that we are all consumers of energy. At the same time, 
Audubon supports a careful and measured approach to resource 
development in America's Arctic that should include a commitment to the 
conservation and protection of special areas and exceptional biological 
values.
    Today's hearing is focused on the NPRA, the largest single land 
management unit in the United States. Established by President Harding 
in 1923, the NPRA was originally intended to help meet the Navy's needs 
as it converted from coal to oil. In 1976, Congress enacted the Naval 
Petroleum Reserves Production Act (NPRPA) and removed management of the 
NPRA from the Navy and transferred it to the Department of the Interior 
(DOI) while expressly requiring the protection of exceptional surface 
values.
    At more than 22 million acres, the NPRA spans a large portion of 
the entire North Slope. The NPRA is larger than 12 states; were it a 
state, it would fall somewhere between South Carolina and Maine in 
size. Audubon believes that within such a vast landscape it is both 
reasonable and appropriate that there be a balance of development and 
conservation.
    This is the position that Congress itself has endorsed in the 
statutes that govern the NPRA. The mandate for balance has also enjoyed 
bi-partisan support as reflected in the NPRA management actions taken 
by both Democratic and Republican administrations.
    The NPRPA requires the Secretary of the Interior to determine 
whether and/or where to lease lands in the NPRA for oil and gas 
development while also requiring ``maximum protection'' of areas 
identified as having ``significant subsistence, recreational, fish and 
wildlife, or historical or scenic value.'' In the 1976 legislation 
Congress itself identified two areas in particular--the Teshekpuk Lake 
and the Utukok River Uplands--as deserving of ``maximum protection'' 
because of the exceptional biological values in these areas.\1\
---------------------------------------------------------------------------
    \1\ 42 USC Sec. 6504
---------------------------------------------------------------------------
    Congress appropriately provided a mandate for balanced resource 
management of the NPRA directing that the Secretary ``shall include or 
provide for such conditions, restrictions, and prohibitions as the 
Secretary deems necessary or appropriate to mitigate reasonably 
foreseeable and significantly adverse effects on the surface resources 
of the National Petroleum Reserve in Alaska.'' \2\ As recognized in the 
first Integrated Activity Plan (IAP) prepared for the Northeast 
Planning Area, the NPRPA ``encourages oil and gas development in NPRA 
while requiring protection of important surface values.'' \3\
---------------------------------------------------------------------------
    \2\ 42 USC Sec. 6506a
    \3\ 1998 NE NPRA Final IAP/EIS, Vol 1: Introduction--Purpose and 
Need, p. I-1
---------------------------------------------------------------------------
    Congress has thus expressly provided that while energy development 
is an important reason for the initial establishment of the NPRA it is 
not a mandate to the exclusion and detriment of other important values 
and public interest priorities such as protection of the natural 
ecosystems that support subsistence.
    In keeping with the American ethic of balanced land management 
Congress has recognized that in the NPRA the value of the Nation's 
public lands includes more than the just the wealth and economic gain 
that can be extracted.
Special Areas and Exceptional Biological Resources in the NPRA
    The NPRA has a remarkable diversity of ecosystems that remain 
intact at the landscape scale that are also essential to supporting a 
wide range of subsistence harvest activities for more than 40 
communities spread across northern and western Alaska.
    The NPRA and the immediately adjoining Arctic waters sustain 
exceptional natural resources and values. These include: fish 
resources, marine mammals (seals, whales, walrus, polar bears), 
migratory birds, large mammals (caribou, moose, wolverine, wolf, 
grizzly bear and other furbearers); threatened and endangered species; 
rare Arctic ecosystem types (e.g., sand dunes); designated Important 
Bird Areas; archeological, anthropological, and paleontological 
resources; and wilderness/wild river values.
    The NPRA includes four existing designated Special Areas recognized 
by the BLM as having extraordinary biological values. These include: 
Teshekpuk Lake, the Utukok River Uplands, Kasegaluk Lagoon and the 
Colville River. As noted, Congress specifically recognized the 
Teshekpuk Lake and Utukok Uplands areas as warranting ``maximum 
protection'' when it enacted the NPRPA in 1976 and past presidential 
administrations as philosophically disparate as those of former 
President Jimmy Carter and former President George W. Bush have 
embraced the need for protection of these areas.
    Exceptional biological values in existing Special Areas include the 
concentrated calving grounds of two of Alaska's largest caribou herds 
(i.e., the Western Arctic Caribou Herd and the Teshekpuk Lake Caribou 
Herd); vitally important nesting, molting and staging habitat for 
migratory waterfowl, seabirds and shorebirds; essential habitat for 
various marine mammal species including polar bear, walrus, spotted 
seal, and beluga whale; internationally recognized raptor nesting 
concentrations; and exceptional predator populations including grizzly 
bears, wolves and wolverine.
    A particular focus of Audubon's work in the past ten years has been 
to assure the protection of the unique assemblage of biological 
resources found in the vicinity of Teshekpuk Lake, the largest 
freshwater lake on the North Slope and the third largest lake in 
Alaska. The Teshekpuk Lake Special Area includes the most important 
goose molting habitat in the Arctic and provides vital habitat for tens 
of thousands of geese that gather annual in the area, including Brant, 
Greater white-fronted geese, Snow geese, and Canada geese. In the fall, 
the waterfowl that rely on the wetlands in this area migrate back south 
to their wintering grounds across the Lower 48 states. Teshekpuk Lake 
has been recognized and designated as an Important Bird Area of Global 
Significance for the many breeding and migrating birds that rely upon 
the area.
    The area around Teshekpuk Lake also includes the concentrated 
calving and insect relief areas for the Teshekpuk Lake Caribou Herd 
which provides a critical subsistence harvest resource for North Slope 
communities. The Western Arctic Caribou Herd Working Group, an 
organization comprised of subsistence users from small communities 
across northern and western Alaska, has identified and recommended that 
the lands surrounding Teshekpuk Lake should not be leased or developed 
for oil and gas.
    Over time, the unique values of the Teshekpuk Lake area have been 
acknowledged and set aside for protection by both Democratic and 
Republican administrations.
Oil and Gas Leasing & Exploration in the NPRA
    Consistent with the Congressional requirement to ``conduct an 
expeditious program of competitive leasing of oil and gas in the 
Reserve'' \4\ the BLM has conducted numerous oil and gas lease sales 
within the NPRA. Management plans for the Northeast Planning Area (4.6 
million acres) and Northwest Planning Area (8.8 million acres) have 
been completed that govern approximately 13.4 million acres, including 
the lands within the NPRA regarded as having the greatest oil 
potential.\5\
---------------------------------------------------------------------------
    \4\ 42 USC Sec. 6506a
    \5\ An Integrated Management Plan for the South Planning Area was 
initiated by BLM but subsequently suspended. Resource assessment 
indicated that the South NPR-A planning area contains very limited oil 
reserves or approximately 2 percent of the undiscovered oil in NPR-A. 
See: http://www.blm.gov/ak/st/en/prog/planning/npra_general/
south_npra.html
---------------------------------------------------------------------------
          There have been ten lease offerings in the NPRA since 
        1982 in which nearly 6.8 million acres have been leased.
          Half of those lease sales were in the past decade and 
        the vast majority of the 13.4 million acres within the 
        Northeast and Northwest Planning areas have been offered for 
        lease multiple times.
          There have been four lease sales in the Northeast 
        Planning Area alone (1999, 2004, 2008, and 2010).
          The most recent NPRA lease sale offering was 
        conducted by the Obama Administration less than a year ago in 
        August 2010.
    The Obama Administration has announced it will conduct annual lease 
sales in the NPRA, with another sale anticipated before the end of this 
calendar year.
    Recent activities in the NPRA include extensive 3-D seismic survey 
work and the completion of 30 exploration wells on federal and Native 
land.
Hydrocarbon Potential in the NPRA
    In October 2010, the United States Geological Survey (USGS) updated 
its 2002 analysis of the hydrocarbon potential of the NPRA and 
substantially revised downward the estimate of technically recoverable 
oil in the NPRA. The USGS analysis of drilling and seismic data found 
an unanticipated and abrupt transition from oil to gas approximately 
15-20 miles west of the Alpine oil field along with poor reservoir 
quality in key formations.
        U.S. Geological Survey (USGS) geologists have interpreted 
        results of exploratory drilling to show that formations thought 
        to be oil prone are actually gas prone. The new data have also 
        indicated that actual reservoir quality is inferior to the 
        reservoir quality inferred in the 2002 assessment (Houseknecht 
        and others, 2010). The change in paradigm results in a decline 
        in the estimated mean value of undiscovered oil from 10.6 
        billion barrels of oil (BBO) to 895 million barrels of oil 
        (MMBO).\6\
---------------------------------------------------------------------------
    \6\ United States Geological Survey, ``Economic Analysis of the 
2010 U.S. Geological Survey Assessment of Undiscovered Oil and Gas in 
the National Petroleum Reserve in Alaska'' (May 2010)
---------------------------------------------------------------------------
    The updated USGS estimate of 895 MMBO of technically recoverable 
oil (mean estimate) in the NPRA is less than ten percent of the prior 
2002 estimated quantity of oil. The USGS also estimated undiscovered 
technically recoverable natural gas resources of 52.8 TCF (mean 
estimate). This estimate also resulted in a downward revision but 
remains at roughly ninety percent of the natural gas estimated in the 
prior 2002 assessment.
    In May 2010, USGS published its estimate of undiscovered 
hydrocarbon resources in the NPRA that can be economically recovered 
(i.e., commercially developed at a range of market prices). This 
analysis further reduced the prospect of significant oil development in 
the NPRA.
    At a price of $90 per barrel ($10 per MCF gas price) and an 
estimated 895 MMBO of technically recoverable oil, USGS projects 
economically recoverable reserves of 502 MMBO (mean estimate) under a 
scenario with a 10-year delay for gas pipeline capacity and 358 MMBO 
with a 20-year-delay assumption. (The USGS anticipates a 10-year to 20-
year delay between expenditures for discovery of gas accumulations and 
production that would rely upon construction of a new gas pipeline.)\7\
---------------------------------------------------------------------------
    \7\ Because of limited oil potential and high costs, the USGS has 
concluded that future oil development in the NPRA will be a by-product 
of gas exploration and exploration for gas will drive the discoveries 
of oil. The USGS analysis concluded that at a market price in the 
conterminous United States of $8 per thousand cubic feet (MCF) and with 
the assumption of a 10-year pipeline delay, the economic non-associated 
gas resources at the 95th-fractile, mean, and 5th-fractile estimates 
are predicted to be 4.5 TCF, 17.5 TCF, and 39.4 TCF, respectively. In 
the case of a 20-year pipeline delay, the economic gas resources at the 
95th-fractile, mean, and 5th-fractile estimates are predicted to be 0.9 
TCF, 7.3 TCF, and 24.5 TCF, respectively. With a superabundance of 
relatively inexpensive natural gas in the Lower 48, however, prospects 
for construction of a natural gas pipeline from the North Slope are 
poor as reflected by the recent cancellation of BP and Conoco-Phillips 
efforts to build the Denali Pipeline project. See: http://www.adn.com/
2011/05/17/v-printer/1867232/bp-conoco-drop-bid-for-alaska.html
---------------------------------------------------------------------------
NPRA Hydrocarbon Potential in the Context of National Energy Demand
    Considerable attention has been given of late to the rising price 
of gasoline. It has been argued in some quarters that more aggressive 
development of NPRA will help ``lower energy costs'' but this claim 
cannot be supported objectively.
    The ``Drill Baby Drill'' rhetoric most famously associated with 
Alaska's former Governor will not bring down the price of gasoline at 
the pump. Any such representations do a great disservice to the 
American public, misleading consumers and providing a false hope that 
will not be realized.
    The price of oil is driven by international market considerations 
that are well beyond the ability of NPRA development to influence. Even 
assuming the most robust USGS estimate of oil reserves as informed by 
the most current data, there is simply not enough oil volume to move 
prices downward to any significant degree.
    Putting the oil potential of the NPRA into the larger national 
context, the United States consumes 19.58 MMBO per day or approximately 
587 MMBO per month.\8\ The total economically recoverable oil in the 
NPRA identified by the USGS is insignificant: the entire projected 
economically recoverable reserves of 502 MMBO \9\ (mean estimate) 
accounts for less than one month of consumption for the United States.
---------------------------------------------------------------------------
    \8\ Annual Energy Outlook 2011, Energy Information Administration 
http://www.eia.gov/forecasts/aeo/excel/fig93.data.xls See: Figure 93 
(figure data)
    \9\ USGS mean estimate assuming only a 10-year delay in gas 
pipeline access. United States Geological Survey, ``Economic Analysis 
of the 2010 U.S. Geological Survey Assessment of Undiscovered Oil and 
Gas in the National Petroleum Reserve in Alaska'' (May 2010).
---------------------------------------------------------------------------
    To address the issue of excessively high oil prices attention 
should be directed to curtailing rampant speculation in oil markets. As 
reported recently by the head of the Commodity Futures Trading 
Commission, nearly 9 of 10 traders in oil are financial speculators and 
not actual end users of oil.\10\
---------------------------------------------------------------------------
    \10\ K. Hall, ``Chief regulator says speculators swamping oil, 
grain markets'', Anchorage Daily News (June 10, 2011) http://
www.mcclatchydc.com/2011/06/09/115551/key-regulator-speculators-
swamping.html
---------------------------------------------------------------------------
    If reducing the price of gasoline at the pump is the goal, 
attention should be concentrated on the Wall Street banks and hedge 
funds that are driving up oil prices through excessive speculation 
which may account for a significant fraction of the price.\11\
---------------------------------------------------------------------------
    \11\ The impact of speculation on oil prices has also been noted by 
the government of Saudi Arabia. Diplomatic cables between the Saudis 
and the former Administration show speculation has been raised in 
meetings between U.S. and Saudi officials, in one-on-one meetings with 
American diplomats and at least once with former President George W. 
Bush himself. Saudi officials have conjectured that speculation 
represented approximately $40 of the overall oil price when oil was at 
its height. http://www.mcclatchydc.com/2011/05/25/114759/wikileaks-
saudis-often-warned.html See also: http://www.mcclatchydc.com/2011/05/
13/114190/speculation-explains-more-about.html
---------------------------------------------------------------------------
Declining Industry Interest in the NPRA
    The oil industry's ``on-the-ground'' actions reinforce the 
conclusion that the NPRA has only limited oil potential. As a result of 
the many past lease sales, nearly 6.8 million acres have been leased 
across large portions of the NPRA, extensive 3-D surveys have been 
conducted, and exploration wells have been drilled.
    However, in the past several years, the industry has been 
abandoning leases in the NPRA at a record pace, reinforcing the 
conclusion that the NPRA is fundamentally a gas province; that key 
formations hold more gas than oil; and there is poorer reservoir 
quality than originally anticipated. Of the nearly 6.8 million acres 
previously leased, approximately three-quarters of the tracts have been 
given up by the industry.
    Limited oil potential in the NPRA, combined with the glut of 
natural gas in Lower 48 markets and the superabundance of natural gas 
already available from developed fields on the North Slope, has 
rendered the NPRA an area of limited appeal.
    No exploration wells were drilled in the NPRA during the winter of 
2010-2011 and there are no pending applications to drill additional 
exploration wells.\12\ In the most recent NPRA lease sale (August 
2010), 1.8 million acres were offered. Only a few individual tracts 
were leased within the vicinity of already unitized areas.
---------------------------------------------------------------------------
    \12\ Ted Murphy, BLM Alaska State Office (personal communication)
---------------------------------------------------------------------------
    Notably, industry lease relinquishments have included tracts both 
on federal lands within the NPRA as well as leased areas in State of 
Alaska coastal waters immediately adjacent to the NPRA. Leases were 
most recently relinquished in Smith Bay and Harrison Bay, state waters 
along the north coast of the NPRA.
Future Development Within the NPRA and the Proposed CD-5 Road/Bridge 
        Project
    While the NPRA has limited prospects as a major oil province, there 
is interest on the part of Conoco-Phillips Alaska Inc. (Conoco) in 
developing some ``satellite'' oil resources associated with the 
existing Alpine oil field that is located within the Colville River 
Delta immediately to the east of the NPRA.
    This includes the so-called ``CD-5 project'', a proposal by Conoco 
to build a permanent all-weather surface road from the Colville River 
Delta with a bridge and suspended pipe over the Nigliq Channel to 
access the CD-5 production drilling pad inside the NPRA. (The Nigliq is 
a large channel in the Colville River Delta defining the westernmost 
edge of the Delta and the eastern boundary of the NPRA.)
    There is no question that oil and gas development on Alaska's North 
Slope will continue far into the future and Audubon fully anticipates 
development of the Cononco satellite prospects on the eastern edge of 
the NPRA. The essential issue in the case of this development is not 
whether oil and gas development will take place in the NPRA, but rather 
where and how it will occur.
    The proposed road and bridge project would be the first permanent 
oil production road and infrastructure within the NPRA and the manner 
in which this project proceeds has important implications for future 
development of the NPRA. The CD-5 project proposal is not only relevant 
in terms of ``opening'' NPRA, the project design has very significant 
implications for the Colville River Delta, an area with unique 
biological qualities found nowhere else on the North Slope.
    The all-weather road and bridge proposal has a long history of 
controversy because it is at odds with prominent representations made 
by the oil industry regarding development of Alpine as a roadless 
project in order to prevent damage to the exceptional ecological values 
of the Colville River Delta. To this day, Conoco-Phillips touts 
roadless Alpine oil field development on its website:
        Alpine - The company continues to develop environmentally-
        sensitive and technologically advanced approaches to oil 
        extraction, including the Alpine field on the Western North 
        Slope. The $1.3 billion initial construction cost resulted in a 
        roadless development that operates more like an offshore 
        development. In winter, an ice road is constructed from Kuparuk 
        to the main Alpine facility to transport supplies for the rest 
        of the operating year.\13\
---------------------------------------------------------------------------
    \13\ http://alaska.conocophillips.com/EN/about/operations/Pages/
index.aspx (emphasis added)
---------------------------------------------------------------------------
        Directional drilling, zero-waste discharge, roadless 
        development and other innovations minimize the Alpine 
        development's environmental footprint on the Arctic.\14\
---------------------------------------------------------------------------
    \14\ http://www.conocophillips.com/EN/about/worldwide_ops/country/
north_america/pages/alaska.aspx (emphasis added)
---------------------------------------------------------------------------
    The importance of maintaining the biological integrity of the 
Colville River Delta was a key consideration during the original Alpine 
oil field development process. This included a specific provision that 
future development in the Delta adhere to a roadless design unless 
either a more environmentally preferred alternative was developed or 
roadless development was determined to be infeasible (Special Condition 
10).\15\
---------------------------------------------------------------------------
    \15\ Letter from M. Combes, Environmental Protection Agency to Col. 
K. Wilson, United States Army Corps of Engineers, dated June 9, 2009.
---------------------------------------------------------------------------
    The project, as proposed by Conoco, with a permanent all-weather 
road, bridge and suspended pipeline over the Nigliq channel stands in 
sharp contrast to the commitment to roadless development at Alpine. The 
high-quality habitats in the Colville River Delta have long been 
recognized for their unique value. The Colville River drains nearly 
one-third of the North Slope and the United States Fish and Wildlife 
Service (USFWS) has identified the Delta as the largest and most 
productive river delta in northern Alaska. The EPA has identified the 
Colville delta as an Aquatic Resource of National Importance.
    After careful review, the Alaska District of the Army Corps of 
Engineers (Corps) concluded that the Conoco project proposal was not 
the ``least environmentally damaging alternative'' (or LEDPA) as 
required by the Clean Water Act. The Corps found that there are other, 
less damaging project design alternatives that would accomplish the 
purpose of accessing the CD-5 site to produce oil. These alternatives 
include a roadless alternative with a pipeline under the Nigliq channel 
using horizontal directional drilling (HDD) which the Corps has 
identified as feasible and practicable.
    The administrative record before the Corps reflects a long history 
of opposition to Conoco's proposed project design by both the EPA and 
the U.S. Fish and Wildlife Service (USFWS).
    It should also be noted, as recently reported by the Wall Street 
Journal, that the CD-5 permit denial was ``a rare step by the Alaska 
district engineer, who has denied just two of nearly 3,000 permit 
applications, including the Conoco proposal, since he took command in 
June 2009.'' \16\
---------------------------------------------------------------------------
    \16\ http://online.wsj.com/article/
SB10001424052702304563104576357800795837470.html ``Bureaucratic Rift 
Stalls Alaska Well'', Wall Street Journal (June 2, 2011)
---------------------------------------------------------------------------
    The Colville River Delta provides habitat for nearly 80 species of 
birds and is within the range of three species listed as threatened 
under the Endangered Species Act (Spectacled eider, Steller's eider, 
and polar bear), is an area used by another Endangered Species Act 
candidate species (Yellow-billed loon), and the Delta provides 
important habitat for hundreds of thousands of migratory shorebirds. In 
addition, the Colville River Delta has been designated an Important 
Bird Area (IBA) of Continental Significance and the area contains 
approximately 70 percent of the fish overwintering habitat on the North 
Slope. Spotted seal and beluga whale are known to seasonally occur in 
the Nigliq channel
    Of particular note are concerns about the impact a permanent road 
would have on the Colville River Delta surface flow hydrology that is 
essential to the long-term health and productivity of the Colville 
River Delta. Construction of a road would disrupt this surface flow 
which is vital to the long-term maintenance and health of the Delta's 
habitat.
    The proposed bridge and suspended pipeline also present the risk of 
a catastrophic spill. The Nigliq channel can carry significant 
discharge volumes (most of the flow) when an ice jam occurs in the main 
channel during breakup. If even a relatively minor leak in the pipeline 
should occur concomitant with a seasonal flood event the potential for 
a major spill exists. While an HDD alternative is not without risk, 
proper design, maintenance and monitoring can limit the risk of leaks. 
An under-channel pipe would not be vulnerable to a complete 
catastrophic failure.
    Another concern about the Conoco proposal is that the road would 
allow the Colville River Delta to become the main staging area for 
future development in the NPRA. Industrialization of the Delta is a 
long-anticipated concern of itself--further wetlands fill, additional 
laydown pad, facility construction, loss of habitat, disruptive 
operations, traffic, etc.--and the fundamental reason for inclusion of 
the roadless development stipulation. As the CD-5 project is proposed, 
Conoco would create an operations center for future development of the 
eastern NPRA in the center of the most hydrologically active and 
resource rich river delta in Alaska's arctic.
    Consistent with the Clean Water Act, the Corps determined that 
there are other practicable alternatives that meet the need of the 
project--to transport hydrocarbons from CD-5 back to the Alpine for 
processing--that would have less adverse impact on the aquatic 
ecosystem.\17\
---------------------------------------------------------------------------
    \17\ ``U.S. Army Corps of Engineers denies permit application for 
CD-5 drill pad'', U.S. Army Corps of Engineers, Alaska District Public 
Affairs Office, Press Release No. 10-02 (February 5, 2010)
---------------------------------------------------------------------------
    When the Alpine project was first developed there were many 
representations, as reflected to this day on Conoco-Philips' website, 
about roadless development. The CD-5 proposal now being advanced 
contradicts that commitment. As articulated in comments by the EPA in 
correspondence to the Corps dated June 9, 2009 regarding the Conoco's 
proposal:
        As you are aware, EPA is not opposed to continued exploration 
        and development of oil and gas resources in the NPR-A. EPA is 
        firm in our understanding that this can occur in a reasonable 
        manner through the construction of alternatives that are the 
        least environmentally damaging. During EPA's evaluation of the 
        applicant's previous proposal EPA found a road-less alternative 
        to be the least environmentally damaging practicable 
        alternative (LEDPA).. . .EPA believes there are practicable 
        alternatives that do not involve a bridge and road crossing of 
        the Nigliq Channel and CRD [Colville River Delta] that have 
        less adverse effect on the aquatic environment.. . .[A]n 
        alternative that includes use of the existing airstrip in 
        Nuiqsut, development of a ``Nuiqsut hub'' for logistical 
        operations with road access to CD-5 drill site via the proposed 
        Kuukpik spur road, and HDD of the pipeline under the Nigliq 
        Channel warrants a detailed analysis.\18\
---------------------------------------------------------------------------
    \18\ Letter from M. Combes, Environmental Protection Agency to Col. 
K. Wilson, United States Army Corps of Engineers, dated June 9, 2009.
---------------------------------------------------------------------------
    Many of the foreseeable impacts that would follow from approval of 
a permanent road, bridge and elevated pipeline would be avoided with an 
alternative road configuration using and developing infrastructure at 
and around Nuiqsut. A more complete analysis of the Nuiqsut Operations 
Center (NOC) alternative is needed. This alternative has never been 
given detailed analysis by the BLM. In the 2004 Alpine FEIS process, 
the NOC alternative was regarded as not ``economically viable'' and 
eliminated from detailed consideration.\19\
---------------------------------------------------------------------------
    \19\ Alpine Satellite Development Plan Final EIS http://
www.blm.gov/eis/AK/alpine/eisdoc/final/07sec02.pdf Section 2.6.8 
(September 2004)
---------------------------------------------------------------------------
    Since the time the Alpine Final EIS was completed, the price of oil 
has more than doubled and oil company profits have soared. Substantive 
consideration of the NOC alternative is especially relevant because of 
the Memorandum of Agreement between Conoco and Kuukpik Corporation that 
calls for the construction of a new road that will connect Nuiqsut and 
the CD-5 platform.
    Written comments jointly prepared by the Kuukpik Corporation, the 
Native Village of Nuiqsut and the City of Nuiqsut express clear support 
for expansion of oil field support services in the Nuiqsut area so that 
the community can develop ``as the main hub supporting future oil and 
gas activities in NPR-A'' \20\ providing a competitive advantage to 
Nuiqsut-based businesses and generating local employment opportunities. 
These comments note that expanded use of the existing Nuiqsut airport 
and ``[s]hifting air traffic out of the far more sensitive wildlife 
habitat of the Delta to the already developed area around Nuiqsut would 
be very beneficial.'' \21\
---------------------------------------------------------------------------
    \20\ Kuukpik Corp., Native Village of Nuiqsut and City of Nuiqsut 
to U.S. Army Corps of Engineers, letter dated July 21, 2009.
    \21\ Ibid.
---------------------------------------------------------------------------
    The history of oil development on the North Slope has been one of 
incremental industrial sprawl. The Clean Water Act appropriately 
requires that the least environmentally damaging practicable 
alternative be identified.
    The ultimate decision on how the CD-5 project proceeds will provide 
an important measure of whether the promise for responsible development 
is kept.
        ``The National Petroleum Reserve Alaska Access Act''
    There are several elements to the draft legislative proposal under 
review by the Subcommittee (H.R. ___ ``The National Petroleum Reserve 
Alaska Access Act''). These include provisions that would:
          enact a fundamental change to existing policy and law 
        in the NPRPA that would undermine the requirement for balance 
        that Congress has appropriately established in law for 
        management of the NPRA, the nation's single largest land 
        management unit;
          compel oil and gas leasing in areas irrespective of 
        their exceptional biological value or sensitivity;
          establish arbitrary fixed timelines for permit 
        decisions and other authorizations regardless of their 
        complexity;
          require the Department of the Interior to engage in 
        extensive and wasteful planning about speculative rights of way 
        in the NPRA; and
          require the Department of the Interior to undertake a 
        redundant study of hydrocarbon resources within the NPRA after 
        having just recently completed such an analysis.
    For all of the reasons discussed above, Audubon does not believe 
the provisions of this draft legislative proposal are either necessary 
or beneficial and would urge the Subcommittee to defer further action 
on the proposal.
Conclusion
        1.  Balance: Under current law, the Congress has appropriately 
        recognized that the NPRA contains more than just potential 
        hydrocarbons, including extraordinary surface values of 
        national significance. Congress has properly required that oil 
        and gas development in the NPRA should proceed in a manner that 
        balances energy development with other public interests in the 
        protection and conservation of the NPRA's special areas and 
        exceptional biological resources.
        2.  Leasing & Oil Potential: The BLM has diligently undertaken 
        a leasing and exploration program, as directed by Congress, 
        having held numerous oil and gas sales, leased more than 6.8 
        million acres (an area the size of Massachusetts) and overseen 
        seismic survey work and exploration as intended by Congress. 
        The NPRA will undoubtedly make a future contribution to the 
        Nation's oil supply but only in modest quantity. Seismic and 
        drilling results have shown that the NPRA is largely a gas 
        province with relatively little oil development potential.
        3.  Protection of Special Areas: With enactment of the NPRPA, 
        Congress explicitly called for the protection of special areas 
        in the NPRA, specifically identified the Teshekpuk Lake and the 
        Utukok River Upland areas as well as recognized that other 
        areas with important surface values should also be identified 
        and protected. Over time, recognition of the need to conserve 
        the exceptional biological areas in the NPRA has been embraced 
        by both Democratic and Republican administrations.
    Finally, it should again be noted that Audubon recognizes that 
there will be future oil development in the NPRA. As future development 
proceeds there are important issues of national interest regarding 
where and how that development is undertaken.
    In the NPRA, the nation's largest land management unit, Audubon 
believes there is both room as well as need to balance future 
development with strong protection of special areas and extraordinary 
biological values.
                                 ______
                                 
    Mr. Lamborn. OK, thank you. And I want to thank all of you 
for your testimony. You have come great distances to be here, 
and we appreciate that.
    I would like to ask my first question to Mr. Sharp. In your 
testimony you mentioned that you observed a large amount of 
spinoff jobs that are created by expanding energy development. 
Can you elaborate on what exactly these kinds of spinoff jobs 
are? That is the first part of my question.
    And second, will expanding energy development indirectly 
help the rest of the country, as well? Mr. Sharp.
    Mr. Sharp. Thank you. I guess it would be the same answer 
of both. In other words, those jobs that would be created would 
impact immediately the Lower 48, in terms of supply, in terms 
of foundries, the potential for steel, manufacturing of all 
oilfield supplies. It would be, it would be huge in the Lower 
48, much like we have seen in the past. If you look at these 
suppliers for Prudhoe Bay right now, they are, more often than 
not, American-made products, and you would just be seeing more 
and more of those things--whether from Texas, whether from the 
foundries of Ohio, or throughout the United States.
    Mr. Lamborn. Thank you. Mr. Balash--I hope I have 
pronounced that correctly--like other oil-producing regions, in 
some Alaskan communities, the oil and gas industry is the 
lifeblood. These jobs are high-paying, and according to the 
American Petroleum Institute, there are over 43,000 jobs in 
Alaska supported by the oil and gas industry.
    Can you tell me about the different opportunities for 
people between having a robust oil and gas industry, or the 
other kinds of employment opportunities that are available 
apart from the energy sector?
    Mr. Balash. Thank you, Mr. Chairman. As you noted, the 
number of jobs supported by the energy industry in Alaska are 
particularly high-paying. They are able to support very solid 
elements and pillars within the community, both in terms of 
gainful employment, but also in terms of social contributions 
by those employees that can afford to participate in the larger 
community activities.
    Aside from energy, we have primarily seasonal and service-
based opportunities. The commercial fishing processing type of 
employment is periodic and intermittent. Construction also 
varies with the seasons, and the types of other employment 
opportunities in Alaska are few and far between. Mining is one 
bright spot in addition to energy.
    And so these opportunities for projects to occur are 
incredibly important to the State as a whole, but especially, 
and in particular, to the communities in question on the North 
Slope, as you move farther west and east, and become closer to 
proximity of the local villages.
    Mr. Lamborn. All right, thank you, Commissioner. Mr. Myers, 
there are two wildlife refuges in the Lower 48, the Rainey 
Wildlife Refuge in Louisiana and the Bakers Sanctuary in 
Michigan. These are not petroleum reserves; these are wildlife 
refuges that are owned by your organization. And they allow oil 
and gas development, or have in the past.
    If oil and gas development is good enough for these two 
areas, why isn't it good enough in Alaska, which is what we are 
talking about--a petroleum reserve?
    Mr. Myers. Mr. Chairman, as I said earlier, Audubon is not 
opposed to oil and gas development; it is a question of where, 
and under what circumstances. And in the case of the, I am not 
familiar with the second property you mentioned, but in the 
case of Rainey Sanctuary, there was divided, the state 
interest, and Audubon inherited a surface state interest. And 
there was some production; there is no production now. And I 
don't believe there is any further intention of production on 
that property.
    But the question fundamentally is not whether there should 
be oil and gas development; it is a question of where and how. 
In the case of the National Petroleum Reserve, the NPRA, under 
the Federal law that was enacted in 1976, Congress itself took 
great care to acknowledge that the NPRA included far more than 
just petroleum resources.
    And so the position that I have tried to identify today is 
not that there is categorical opposition to oil and gas 
development, but it is a question of how you go about it. And 
if there is enough room in such a large landscape to ensure 
that there is protection, as well as production.
    Mr. Lamborn. OK, thank you. Now I will recognize Ranking 
Member Holt.
    Mr. Holt. Thank you, Mr. Chairman. A question for Mr. 
Balash and Mr. Drevna. What is the pronunciation of your name? 
I am sorry, Balash?
    Mr. Balash. Balash, thank you.
    Mr. Holt. Balash, I beg your pardon. About three quarters 
of the leased acres in NPRA have been either relinquished or 
allowed to expire over the last few decades. And in fact, they 
are being relinquished at a greater and greater rate, so that 
this year 60 leases have been relinquished. Why do you think 
that is? I would like to ask each of you for a short answer, 
please.
    Mr. Balash. Ranking Member Holt, I am aware of one company 
in particular who is going through the process of plugging and 
abandoning a known discovery. That is FEX Alaska. They have a 
known discovery in the western part of NPRA, the closest 
discovery to Barrow that has been found to date.
    As their company has changed leadership, they have 
redirected their corporate approach. They put that property up 
for sale prior to engaging in these P and A activities, and 
found no buyers. The distance and the regulatory gauntlet that 
has to be run to transport that discovered oil resource from 
the western central part of NPRA to the east, and tying into 
the existing infrastructure at Prudhoe Bay, is daunting.
    Mr. Holt. Given the amount of oil they would expect to get 
there. Is that right, Mr. Drevna?
    Mr. Drevna. Sorry, I can't comment on the exact amount of 
oil. What I can comment on is, it is very difficult to have a 
short answer to a very complex question.
    The process of obtaining a lease--getting the permits, 
developing the lease, and trying to really determine if there 
are economically recoverable quantities of oil and natural 
gas--is not an overnight proposition. It is not like leasing an 
apartment.
    So there are leases that are gained and returned all the 
time. The point we are trying to make is that, if we don't get 
a process that has----
    Mr. Holt. But Mr. Drevna, 76 percent of the leases have 
been relinquished or abandoned. Companies make hard-headed 
decisions and we in policy circles shouldn't live in a world of 
wishful thinking any more than a hard-headed business does.
    The fact is that the recoverable oil there hasn't become 
real, and companies are deciding that it is just not worth it. 
That seems pretty apparent.
    Mr. Drevna. Would you like me to respond to that, sir?
    Mr. Holt. Well, in just a moment. We have here the gas 
pipeline project. Mr. Sharp, I am always looking forward to 
good jobs for hard-working people. This would have been the 
largest private construction project in history. But it is 
abandoned for hard-headed decisions, when you look at what will 
be available.
    So you know, no companies are asking the BLM for permits to 
build pipelines or roads. There are none pending with the 
Department. So let me ask Mr. Myers, isn't this really just 
about economics?
    Mr. Myers. The industry's on-the-ground action certainly 
reinforces the conclusions that are reflected in the USGS 
analysis, that the NPRA is not likely to provide the bonanza of 
oil that it once was thought to.
    In the past several years, the industry has relinquished or 
allowed to expire about three quarters of the tract. I think an 
important point is that the BLM has engaged in an aggressive 
leasing program consistent with its mandates under the Naval 
Petroleum Reserves Production Act. There has been exploration 
wells drilled, but that basically what they have found is that 
it is a gas province, rather than oil province, and there is no 
market for gas.
    Mr. Holt. Well, my time has expired. But of course, what 
this bill does, then, is ask the BLM, or the USGS rather, to do 
another survey because they didn't like the answer of the last 
one, which is just not there in the numbers that some might 
wish it would be. Thank you.
    Mr. Lamborn. Thank you, Mr. Holt. Thank you. I would like 
to now recognize the Chairman, Representative Hastings.
    Mr. Hastings. Mr. Lamborn. Mr. Drevna, you attempted to 
respond to an observation that was just made. Would you go 
ahead and respond?
    Mr. Drevna. Thank you, sir, Mr. Chairman. Again, the 
leasing process is one that is very complicated. If you look at 
the history of leasing throughout, whether it is oil, coal, 
gas, it is a process of prospecting. You have to make those 
hard-headed decisions you mentioned, Ranking Member Holt, about 
where to go, where to drill, how to drill.
    And then when you throw on top of that the delays, the 
interminable delays that companies see in getting the necessary 
permits. It reminds me of the old Yogi Berraism: No one goes to 
that restaurant anymore; it is too crowded. It is just that it 
is not worth the time and effort for these companies.
    Our members have told us that until we get a process up 
there that really streamlines things and allows us to go in and 
develop and process, these leases are not going to be 
forthcoming. That is the bottom line.
    Mr. Hastings. Let me follow up on that, because in my 
opening statement I made reference to the pipeline, and made 
reference to the fact that it is at about half its capacity. 
The intent of this legislation is to have some certainty in 
connecting to that pipeline, and I think that is a very, very 
important part of how you are going to develop these resources 
up here.
    So I would like to ask Mr. Balash, Mr. Drevna, and Mr. 
Sharp, an open-ended question. If we don't start producing up 
there, whether we are talking about the Reserve or whether we 
are talking about Beaufort or Chukchi, or even ANWR, to the 
west, and that pipeline does not have the capacity to continue 
on, what are the consequences, with the economy and jobs in 
Alaska? And Mr. Balash, I will start with you.
    Mr. Balash. Well, from a state perspective, being a little 
bit parochial, Alaska quite simply would be devastated 
economically. Oil provides 85 percent of the revenue that funds 
our state government. We are a top-heavy state; most of the 
revenue is collected at the state level, and redistributed to 
our communities for education, K-12, university, and health 
programs.
    Without TAPS, without oil revenue coming into our state 
Treasuries, it would be a total collapse.
    Mr. Hastings. Mr. Drevna.
    Mr. Drevna. Expanding, going farther south, and starting in 
Washington and going down the coast all the way to Arizona, 
they are very, very dependent on the Alaska reserves. What we 
have seen over the past years now is we have seen, I think, as 
you mentioned, Mr. Chairman, at a peak, about 2.1 million 
barrels a day heading south to fuel the refineries along the 
West Coast. Now it is about 655,000 barrels a day.
    From what the engineers tell us, that is unsustainable. 
What we are seeing now--besides the potential devastation to 
the pipeline, which is a very, very dire situation, as was just 
mentioned--we are getting colder oil now, and in order to 
process that oil, we have to heat it because it is not being 
heated because the pipeline is not being used to capacity.
    Now, if you will allow me to go on a little farther.
    Mr. Hastings. Well, real quickly, because I want Mr. Sharp 
to respond to that.
    Mr. Drevna. OK. That is the impact on the pipeline. The 
impact on the domestic refineries and jobs is going to be, if 
we are not going to get it from Alaska--and we are not going 
to--and California is not going to allow Canadian oil sands 
soon, where are we going to get it from?
    We are either going to get it continually from foreign 
nations, Russia and other OPEC countries, or we are going to 
ship Canadian crude to China and the Pacific Rim, have it 
refined there, and sent back to the United States.
    Mr. Hastings. Right. Mr. Sharp.
    Mr. Sharp. Yes. It is not a matter of what would, it is 
happening right now.
    In Fairbanks, the energy prices are so cost-prohibitive, 
people are literally leaving the state, leaving Fairbanks in 
particular. It is interesting to me, Mr. Holt's talk of all 
this gas. We are coming out of the ground with a training and 
apprenticeship school right now. I can't get gas to heat and 
fuel my training school. I live in Alaska; it doesn't make any 
sense.
    But yes, it would be devastating to the economy. It would, 
it would change the face of Alaska as we know it, and not in a 
good way.
    Mr. Hastings. I just want to make an observation before my 
time runs out. It appears to me, after my trip up there and 
listening to a number of people testify on this issue, I quite 
frankly see a back-door effort to starve the pipeline. Once you 
starve the pipeline, you take away all that potential up there.
    I just think the focus needs to be, and I think all of you 
up there, especially that are impacted, need to focus on how 
important it is to keep that pipeline full. Because without 
that pipeline, all of what we are talking about in the future, 
even from a national security standpoint, which you alluded to, 
Mr. Drevna, is at risk.
    So thank you very much, Mr. Chairman.
    Mr. Lamborn. All right, thank you. Mr. Fleming.
    Mr. Fleming. Thank you, Mr. Chairman. Gentlemen, I am from 
Louisiana. And you know, of course, it is legendary now, the 
problems we have had with the oil spill and so forth. And as 
you know, we started out with a moratorium; then we had a de 
facto moratorium, then a permitorium, and now we have a 
slowatorium.
    It is obvious that the Administration is doing everything 
it can to throw a monkey wrench into the gears, to slow things 
down, do whatever it can to be sure that we reduce our energy 
production in this country.
    Now, why, I don't quite understand, but that is obvious. I 
am hearing the same sort of testimony here today that this is 
going on in Alaska as well.
    Now, to address a point here before I get to a question. 
The statement is made by the other side time and time again 
that there are less oil reserves in the United States, and that 
production is going up. That is exactly opposite to the truth.
    For instance, offshore drilling in the United States, 
production has dropped from 1.7 million barrels a day to 1.59 
million barrels a day, and going down. Their permit process is 
way off of what it has traditionally been. So we don't know 
where the bottom is going to be in this fall-off of production.
    Having said that, the USGS says that the United States now 
has more oil reserves than any country in the world: 1.3 
trillion barrels equivalent, when you get to coal, natural gas, 
and oil; and, of course, in my district alone, there is the 
Hainesville Shale, which has the largest natural gas deposit in 
North America, the fourth largest in the world. We didn't know 
it existed five years ago.
    So the elephant in the room here, gentlemen and members of 
the Committee, is that the Administration flatly wants to 
reduce oil production, to the benefit of so-called alternative 
forms of energy, which do not make sense in the marketplace. 
They still are not technologically where they need to be, and 
this creates a conundrum that we are talking about today.
    So I will quickly get to my question. Mr. Drevna, in your 
testimony you discussed the importance that Alaskan crude plays 
for West Coast refiners. You also point out that these 
refineries import about 50 percent of their crude product from 
overseas.
    However, if the Trans-Alaska Pipeline were to shut down in 
2010, they would have imported over 73 percent of their crude 
product, over 70 percent of this from OPEC nations.
    Do you have an estimate of how many Americans are employed 
at these refineries?
    Mr. Drevna. Yes, sir. I believe that currently we have 
about 16 to 17,000 direct, on-the-payroll employees in 
refineries up and down the Coast. But when you take into 
consideration the jobs that those jobs generate, as Tim had 
mentioned earlier, you are talking anywhere up to the 200- to 
240,000 jobs. Which I would suggest is significant. Good high-
paying jobs.
    Mr. Fleming. Yes, that was going to be my followup point. 
The petroleum sector jobs are wonderful; I mean, even the 
entry-level jobs are much better than the average job out 
there. So we are talking about excellent jobs, and benefits 
that would go with them.
    Can you explain to the Committee what the result would be 
if Alaskan crude supply continues to diminish?
    Mr. Drevna. Well, as I mentioned before to the Chairman, if 
it continues to diminish and as the pipeline goes away, then 
what are we going to feed those West Coast refineries with?
    In California right now you have a low-carbon fuel standard 
that says you can't use the Canadian crudes. Well, those 
Canadian crudes are going to be used. If they are not used in 
the United States, they are going to be used elsewhere. The 
rest of it is going to have to come from foreign sources.
    And that is if the situation were to continue where we 
would get the crude from the foreign sources, but after a while 
the logical, or illogical conclusion, as one might suggest, 
would be that it would be much more efficient and less 
expensive to actually refine the product overseas, and bring it 
to the United States. Thus putting those 240,000 jobs at severe 
risk.
    Mr. Fleming. So what we are looking at is continued loss of 
jobs in a terrible job market today we have in this country, 
higher and higher energy prices, more and more dependency on 
foreign sources of oil. At our peak, we were at 60 percent 
self-dependent, now we are 30 percent self-dependent, or 60 
percent dependent on other sources; and it looks like it is 
going to continue to go down.
    Yet we have more conventional forms of energy than any 
country in the world. It makes absolutely no sense to me, Mr. 
Chairman. I thank you, and I yield back.
    Mr. Lamborn. All right, thank you. Mr. Duncan. Excuse me, 
Mr. Young. I am sorry.
    Mr. Young. Thank you. This is an interesting hearing. I 
have reviewed this bill, and I highly support it. But I hope, 
Mr. Chairman, we add to it.
    You heard the Senator say something about permits. I am 
just curious about, they talk about having lease sales in Pet 
4. We had two of them in 2010. There have been 100 of them in 
inactive leases that have been relinquished, and there have 
been 11 of them expired. That is because of the 10-year rule.
    Now, Mr. Holt keeps saying well, there is no oil there. 
They have done no 3-D work, is that correct? Does anybody know, 
Mr. Balash? Did they do any 3-D work?
    Mr. Balash. Mr. Congressman, limited 3-D seismic work has 
been done.
    Mr. Young. But was the State involved in this?
    Mr. Balash. We have been supporting exploration through 
credits on the production taxes.
    Mr. Young. My point is, the DOI report went from 10 billion 
to 2 billion.
    Mr. Balash. Mr. Congressman, I believe that is a self-
fulfilling prophecy that has occurred; that the most 
prospective areas of NPRA were deferred from leasing and 
drilling activities.
    Mr. Young. That is what I----
    Mr. Balash. The 2010 assessment was based on the wells that 
had been drilled in the last decade, which were in the least 
prospective areas of NPRA for oil.
    Mr. Young. That is what I asked the question for. Because 
this has not been explored. The leases that were given were 
relinquished because they couldn't drill, and it is expensive 
oil. It is a long way away from the pipeline. Until we have a 
big pool, you can't afford to put the infrastructure in to do 
it. That is our biggest challenge.
    We can go all to the pipeline, I think the gentleman, Mr. 
Hastings, mentioned the fact, Mr. Audubon Society and Sierra 
Club and Defenders of the Earth, you are all trying to take and 
strangle the pipeline. What the members of this Committee don't 
realize, if the pipeline shuts down, it has to be pulled up. 
That is what they are trying to do. They are trying to starve 
the pipeline, and there is no doubt about that in my mind.
    This is to be drilled. I hope this Committee will take and 
pass out ANWR; if you don't want to drill in PET-4, we will 
drill in ANWR. This isn't the last pristine area in Alaska; we 
have those priorities set aside, and now to say this is the 
habitat--and, by the way, I was up there last week. There were 
many, many, many geese right around the wells. Landing. Laying 
their eggs. The goslings were going to be out in about six 
weeks or less. So don't tell me it affects the birds; in fact, 
the birds are in better shape than they were before. They are 
not, in fact, being endangered and threatened. Those that don't 
believe me, go down to the golf courses around here.
     Voice. Mr. Young----
    Mr. Young. I didn't ask you a question.
     Voice. Could I----
    Mr. Young. I did not ask you a question. OK. Second, this 
area, you know, we have this idea of the bridge being set aside 
by the EPA, primarily. The EPA is what is the real snot on the 
handkerchief. This is really what it is.
    Because they stopped the building of that bridge, and it is 
on Native land, Mr. Chairman. This is not Federal land. And if 
I get my way, I will make sure the EPA can't do anything to 
Native lands. We gave those lands to the Natives for their 
economic and social well-being. They have drilled wells on 
their land. And yet they can't build a bridge across Colville 
to expand their finds and their drilling. The cost of the 
state, too.
    Mr. Sharp, you have a training school. How many people are 
you training for pipeline work?
    Mr. Sharp. Congressman, we are training as many as the 
market allows us to put to work. Right now, that is not as many 
as we would like to see. We have 100 active apprentices in 
Local 942, probably the same in Local 341 in Anchorage. But it 
is very sporadic in terms of the ability to get them into the 
oilfield under the pipeline.
    Mr. Young. Is most of that work being done on maintenance? 
Or is it, are you training them to build pipelines, too?
    Mr. Sharp. We are training both, Congressman.
    Mr. Young. Both of them. This has been one of the knocks on 
the industry, because there has been an awful lot of outside 
oil workers coming from, all due respect, Louisiana and other 
areas to Alaska, and then return.
    How many jobs do you think the pipeline, and if we get PET-
4 open, would be created?
    Mr. Sharp. Congressman, I would not want to take a guess, 
except to say that right now just the legacy jobs alone in 
Prudhoe, the regular maintenance jobs are between 9 and 12,000.
    When I worked on the Trans-Alaska Pipeline, my local union 
alone had 11,000 people, and that is from one of the four 
pipeline unions that are involved--not to mention all the 
building trades unions or the spinoff work. And the other work 
then would have to still be done, the regular construction 
projects. Congressman, it would be huge. I would like to, I 
would like to stay away from that question, because I know 
whatever answer I give it will be wrong. But it will be 
thousands and thousands and thousands of jobs.
    Mr. Young. I thank you. And I am running out of time, Mr. 
Chairman. Thank you.
    Mr. Lamborn. All right, thank you. And I hope we have kept 
everything in the correct order, those who were here at the 
opening gavel, in the order of seniority, and then everyone in 
order as they arrived afterwards. So Mr. Duncan.
    Mr. Duncan of SC. Thank you, Mr. Chairman. And I want to 
thank you for holding this hearing; it has been very 
informative. I appreciate the Chairman of the Committee issuing 
this piece of legislation.
    I just wanted to say that the testimony today just proved 
what we already have heard over and over in this Committee, and 
that is that Alaskans want this. That Alaskans want more oil 
and natural gas leasing and sales in their state.
    In fact, when I sat down with the former Speaker of the 
House from Alaska, she told me that a vote in the Alaska House 
of Representatives was 51 to one in favor of allowing leasing 
permits and drilling within the State of Alaska. I think 
Senator Murkowski confirmed that this morning. I have never 
heard it been used, the snot on the handkerchief, Mr. Young, 
but I like that. I am going to borrow that from you at some 
point in time.
    But not only does Alaska want this, and Alaskans want this, 
but America needs this. We know this is the, the National 
Petroleum Reserve. I think the question isn't there whether the 
area has oil and natural gas.
    And it is a time for this Administration to quit talking 
about meeting America's energy security needs, and actually 
start doing something about it.
    And we are learning this morning about this area. But it 
strikes me as odd that no one from the other side of the aisle 
is taking the opportunity to listen to you guys, and understand 
what is going on in Alaska, and understanding that we do have 
the reserves there. We can tap those, we can access those with 
bridges and pipelines that are necessary.
    And so again, I will say that it is time for the 
Administration to quit talking, and to start walking the walk, 
lessening our dependence on Middle Eastern sources of energy 
controlled by a cartel, and start tapping American resources to 
meet our energy needs.
    I don't have a question for you guys, because I have 
listened to the testimony today, and you are answering all the 
questions that I had. So I want to thank you for being here, 
and I want to commend you for pursuing this very vital time in 
American history for tapping American resources. So Mr. 
Chairman, I will yield back my time, because I know there are 
others that want questions.
    Mr. Lamborn. All right, thank you. And we are trying to 
finish before votes being called very, very soon. Mr. Landry.
    Mr. Landry. Thank you, Mr. Chairman. I just want to thank 
Mr. Duncan, as well as you all, for expressing that. That is 
exactly, what he said is exactly the same point that I will 
have. And I won't try to repeat it, and I will try to be brief.
    But I think what others on the other side of the aisle 
don't understand is that we don't know what is under the ground 
there until we have an opportunity to do proper 3-D 
seismograph, then do exploration wells.
    I mean, look, they thought we were running out of natural 
gas. Well, it has gone, I mean, we have so much natural gas 
now, we are starting to export it. You know?
    I wanted to tell you something, Mr. Sharp. I am with you. I 
want you and your people to go to work, and the only way we can 
go to work, the only way that we can feed this economy is 
through affordable energy.
    The reason they are not over here is because they are 
embarrassed; because they know that you-all guys are right.
    And Mr. Myers, I respect the Audubon Society, but you all 
are wrong. OK. I hunt on property next to the Audubon Society's 
pieces of property. That oil and gas production doesn't affect 
those birds one lick.
    In fact, I am getting ready to have to leave here and go to 
a meeting with the head of an oil and gas company, who showed 
me pictures of his oil and gas rig that President Obama is 
going to require him to remove off the floor of the Gulf of 
Mexico, where he is going to be in violation of multiple laws 
for destroying some of the most exotic endangered coral in the 
world. OK?
    Not only that, it is one of my favorite fishing spots. That 
is the kinds of things that you all have to realize you all are 
doing. Oil and gas exploration and conservation, and the 
protection of animals, go hand in hand.
    Last weekend in the Gulf of Mexico I fished a tournament 
where they broke a record for the number of blue marlin caught, 
and they shattered the big-eye tuna Mississippi State record, 
and you all are going to tell me that the BP oil spill has 
destroyed the Gulf of Mexico. Please, please, please understand 
that we cannot move this economy and this country unless we 
provide Americans with affordable energy, and it starts with 
drilling out there in Alaska. Help these guys help you and your 
organization.
    Thank you. Mr. Chairman, I yield back.
    Mr. Lamborn. All right, thank you. Mr. Flores.
    Mr. Flores. Thank you, Mr. Chairman. I was struck by the 
testimony of Mr. Balash. I wasn't here to hear it, but I did 
read it, and it is deja vu all over again. In 1973, what were 
we faced with? As you said, it was high oil prices. We were 
faced with a moribund economy.
    But we did something different back then. We approved the 
Trans-Alaska Pipeline. And here we are, in 2011, and we are 
facing the same situation. High oil prices, high gasoline 
prices, and a moribund economy. And we have people that would 
rather get our oil from the Middle East, and rather get our oil 
from Brazil, than grow the American economy with American oil, 
and create American jobs for Mr. Sharp.
    I don't get it. We are going in the wrong direction in this 
country; but with this Act, we hopefully will turn this 
silliness around.
    I do have a question for you, Mr. Balash. And then Mr. 
Sharp, I am going to try to get to you in just a second, if we 
can be brief.
    Mr. Balash, could you tell me a little bit--and if this is 
a repeat question, I apologize for it, because I wasn't here 
before. What could we do in addition to this bill to better 
facilitate a more efficient and transparent permit processing 
structure with the Corps? Is there anything we need to do 
there?
    Mr. Balash. Thank you, Mr. Congressman. I think that the 
Corps is one of a handful of agencies involved in these 
permitting decisions. The legislation specifically calls out 
the Department of the Interior for action, but as we have come 
to understand the regulatory process in Alaska, there is an 
alphabet soup of agencies out there that we have to deal with. 
With different----
    Mr. Flores. Could I interrupt you? I mean, what would you 
recommend we do for this Act in order to help you with that 
alphabet soup? That is basically shutting down the entire U.S. 
economy every day.
    Mr. Balash. I would be happy to provide the Committee with 
a written summary of the specific agencies involved in most of 
these decisions. The Corps is a leading actor because of the 
wetlands issues, and the Fish and Wildlife Service as well. 
Those would be the two primary agencies to deal with.
    Mr. Flores. If you would send that to us as quickly as 
possible, I would appreciate it.
    Mr. Sharp, I think you were passed over on a question a 
minute ago that Mr. Holt asked, and I think you might have an 
answer for this. Can you tell us how the pace of permitting is 
impacting jobs and your constituents?
    Mr. Sharp. Yes, sir. It is, it is impossible for oil 
companies, it is a closed-for-business message. Because the oil 
companies not only have to get over the initial permitting--the 
lease, then the permitting. At the end of the day, Shell Oil 
right now is held up on a project that they invested in years 
ago. Millions of dollars a month are being spent, and they are 
held up on the permits.
    It generates downstream very quickly to nobody going to 
work. We have a membership of about 13- to 1400 in Fairbanks; I 
have 500 people working. Everybody needs their job. So it is, I 
understand why the oil companies aren't going after the leases, 
because of all the hurdles that they have to do to get it from 
lease to market, in a reasonable time on their investment.
    Mr. Flores. Thank you. Mr. Myers, I just want to let you 
know I have been to the North Slope. I have driven the Haul 
Road, and the allegations that are being made about these types 
of activities by your organizations and your affiliates are 
absolutely incorrect.
    Mr. Chairman, thank you. I yield back.
    Mr. Hastings. Could I respond to that?
    Mr. Flores. I will yield to Mr. Hastings.
    Mr. Hastings. I appreciate your yielding, and I am going to 
make an announcement. The Department of the Interior just put 
out a news release that is embargoed until 11:30; I am about 
three minutes early on this. I hope the Department of the 
Interior will forgive me for that.
    But I just want to mention that they have announced that 
they are going to expedite lease sales in the National 
Petroleum Reserve Alaska. Now, I want to make two observations 
in that regard.
    Perhaps these hearings and exposing what is going on is 
accelerating the Administration to move. In that case, I am 
very pleased with that.
    But second, what I think it probably does more than 
anything else is it talks about the importance of moving this 
piece of legislation. Because if you are going to accelerate 
leases, you are going to have to have infrastructure if, in 
fact, there are product there to move. So those two things I 
just want to make, and I hope the Department forgives me for 
being two or three minutes early on this.
    So I thank the gentleman for yielding. I yield back.
    Mr. Lamborn. All right, thank you all. That concludes the 
questions for this panel of witnesses. Thank you all for being 
here.
    Like all witnesses, your written testimony will appear in 
full in the hearing record. I would ask that if anyone has any 
further questions to you, that they submit to you in writing, 
that you would respond to those. And they will need to get 
those questions to you by the end of business today? Is that 
correct? Within 10 days.
    So thank you for the thousands and thousands of miles you 
have traveled to be here, and for your testimony.
    We will now have our next panel come up. I would like to 
invite forward the Hon. Mike Pool, Deputy Director of the 
Bureau of Land Management within the U.S. Department of the 
Interior.
    Like all of our witnesses, your written testimony will 
appear in full in the hearing record, so I ask that you keep 
your oral comments to five minutes, as outlined in our 
invitation letter and under Committee Rules.
    Our microphones are not automatic, so you have to press the 
button to be able to talk and be heard. And at four minutes a 
yellow light will come on, and a red light will come on at five 
minutes.
    Thank you for being here, and we appreciate your testimony.

 STATEMENT OF HON. MIKE POOL, DEPUTY DIRECTOR, BUREAU OF LAND 
          MANAGEMENT, U.S. DEPARTMENT OF THE INTERIOR

    Mr. Pool. Thank you, Mr. Chairman. And thank you for the 
opportunity to discuss H.R. 2150, the National Petroleum 
Reserve Alaska Access Act. The bill directs the Department of 
the Interior to continue a program of competitive oil and gas 
leasing in the NPRA, and to update the NPRA Fossil Fuel 
Resource Assessment.
    With me today is Douglas Duncan. He is the Associate 
Coordinator for the Energy Resources Program at U.S. Geological 
Survey. Mr. Duncan is available to respond to any questions on 
the resource assessment portion of the bill.
    On May 14, 2011, as part of an effort to increase safe and 
responsible domestic oil production, President Obama directed 
the Secretary of the Interior to conduct annual oil and gas 
lease sales in the NPRA, and Secretary Salazar has affirmed 
this commitment.
    The Department supports the goal of facilitating the 
development of oil and gas resources in the NPRA in an 
environmentally responsible manner.
    In 1923, President Harding signed an Executive Order 
establishing the Naval Petroleum Reserve on the North Slope of 
Alaska. The U.S. Navy conducted the first modern oil 
exploration program of the area from 1944 to 1953. The Naval 
Petroleum Reserve's Production Act of 1976 transferred 
responsibility to the Department of the Interior.
    In 1980 Congress directed the Department to conduct an 
expeditious program of competitive oil and gas leasing in the 
Reserve. Since 1999, BLM has offered six lease sales in NPRA, 
and over 1.6 million acres are currently under lease in the 
area. BLM plans to conduct a lease sale in December of 2011, 
and in 2012, and each year thereafter.
    The BLM is required to balance the exploration and 
development of oil and gas resources with other values, 
including the protection of wildlife habitat and the 
subsistence values of rural residents and Alaska natives.
    We accomplish this on the nearly 23-million-acre NPRA 
through a careful planning process, which includes public 
input.
    The U.S. Geological Survey has also studied the area. USGS 
resources assessment report was updated in October 2010; and in 
2011, the USGS released its assessment of the economic 
recoverability of undiscovered conventional oil and gas 
resources within the NPRA.
    Facilitating responsible development in the NPRA poses 
unique challenges. The potential environmental and public 
health impacts of production, exploration, and development can 
be more difficult to ascertain, given the often harsh 
conditions of the area. As a result, planning and exploration 
activities can take longer than other areas of the United 
States.
    The Administration remains firmly committed, however, to 
facilitate development in the region.
    The Department has concerns with the leasing and 
authorization provisions of H.R. 2150. The bill's provisions 
requiring leasing in areas of NPRA most likely to produce 
commercial quantities of oil and gas may conflict with 
decisions reached through the BLM's carefully conducted public 
land planning process.
    The Department has additional concerns, including the 
requirement that the Secretary consult with the Department of 
Transportation on all surface disturbance, rather than only 
major roads and pipelines; the requirement that the Secretary 
must ensure that other Federal permitting agencies comply with 
the deadlines set forth in the bill; and the implication that 
all requested permits must be issued--regardless of the 
availability of alternatives or the actions of potential 
impacts.
    In addition, the Department is concerned that the timelines 
required by the bill may not be compatible with the public 
involvement comments and review requirements of other laws, 
including the Environmental Policy Act. Also of concern is the 
suggestion that the Department must preapprove rights-of-way on 
millions of acres of lands that industry may never seek to 
develop. If enacted, these requirements would likely divert BLM 
resources, and result in delay of further development of NPRA 
resources in an environmentally responsible manner.
    Finally, the BLM's existing regulations already establish 
timelines for appropriate authorizations and require prompt 
notification of any delays.
    The BLM's leasing program in the NPRA ensures that safe and 
responsible exploration and development of domestic oil and 
natural gas resources can be done in a manner that protects 
wildlife and habitat, and honors the subsistence values of 
rural residents and Alaska natives.
    We welcome the opportunity to work with the Committee, the 
oil and gas industry, the Alaska Native community, and the 
public to continue to develop NPRA in an environmentally 
responsible manner.
    Thank you for the opportunity to present the views of the 
Department on H.R. 2150. I would be glad to answer any 
questions.
    [The prepared statement of Mr. Pool follows:]

  Statement of Mike Pool, Deputy Director, Bureau of Land Management, 
                    U.S. Department of the Interior

    Thank you for the opportunity to discuss H.R. 2150, the National 
Petroleum Reserve Alaska Access Act. The bill directs the Department of 
the Interior to continue a program of competitive oil and gas leasing 
in the National Petroleum Reserve in Alaska (NPR-A). The Department 
supports the goal of facilitating the development of oil and gas 
resources in the NPR-A in an environmentally responsible manner. On May 
14, 2011, as part of an effort to increase safe and responsible 
domestic oil production, President Obama directed the Secretary of the 
Interior to conduct annual oil and gas lease sales in the NPR-A, and 
Secretary Salazar has affirmed this commitment.
    Many of the activities called for in H.R. 2150 are within the scope 
of existing Department authorities and consistent with our priorities 
and activities already underway. Under these authorities, 191 tracts 
are currently leased by the Bureau of Land Management (BLM) in the NPR-
A with a leased acreage of over 1.6 million acres. We would like to 
work with the Committee to move toward our shared goal of improving the 
efficiency of the oil and gas leasing and development process while 
maintaining safety and environmental standards in the NPR-A.
Background
    In 1923, President Harding signed an executive order establishing 
the Naval Petroleum Reserve Number 4, on the North Slope of Alaska. The 
Order reserved to the Navy all oil and gas resources within the 
Reserve, and prohibited private production from all areas not then 
covered by a valid entry, lease or application. The U.S. Navy conducted 
the first modern oil exploration program of the area from 1944 to 1953. 
The Naval Petroleum Reserves Production Act of 1976 renamed the area 
the National Petroleum Reserve in Alaska, and transferred authority and 
administrative responsibility to the Department of the Interior. The 
Act directed the Department to commence further exploration of the 
Reserve, but prohibited petroleum production, and all developments 
leading to production of petroleum, from the Reserve. In 1980, an 
appropriations enactment superseded the prohibition on the production, 
and directed the Department to conduct an expeditious program of 
competitive oil and gas leasing in the Reserve. Under subsequent 
amendments to the Naval Petroleum Reserves Production Act of 1976, and 
implementing regulations, the BLM is required to balance the 
exploration and development of oil and gas resources with, among other 
values, the protection of wildlife, habitat, and the subsistence values 
of rural residents and Alaska Natives.
    The BLM manages nearly 23 million acres in the NPR-A. In 2004, the 
BLM completed planning for 8.8 million acres in the Northwest NPR-A 
Integrated Activity Plan/Environmental Impact Statement (IAP/EIS). The 
BLM completed the 4.6 million acre Northeast NPR-A Supplemental IAP/EIS 
in 2008 with the assistance of the North Slope Borough as a cooperating 
agency. In 2010, the BLM moved to establish consistent management 
direction for the entire NPR-A, including the unplanned southern 
portion of the Reserve, through an Integrated Activity Plan/
Environmental Impact Statement. A Draft IAP/EIS is planned for May of 
2012.
    Through a careful planning process which includes public input, the 
BLM has in place an active leasing program in the NPR-A, under which 
lease sales have been offered in 1999, 2002, 2004, 2006, 2008, and 
2010. Over 1.6 million acres are currently under lease in the NPR-A. In 
December, 2011, the BLM plans to conduct a lease sale of tracts. The 
BLM also plans to hold a lease sale in 2012 and each year thereafter.
    The U.S. Geological Survey (USGS) also has studied the area. A USGS 
report from October 2010 entitled ``Petroleum Resource Assessment of 
the National Petroleum Reserve in Alaska,'' found an estimated 896 
million barrels of conventional, technically recoverable oil and 53 
trillion cubic feet of conventional, undiscovered gas within NPR-A and 
adjacent state waters. In 2011, the USGS released its assessment of the 
economic recoverability of undiscovered, conventional oil and gas 
resources within the NPR-A and adjacent state waters. This new analysis 
estimates that approximately 350 to 500 million barrels of undiscovered 
oil are economically recoverable at $90 per barrel. Additional studies 
are ongoing.
    It should be noted that facilitating responsible development in 
Alaska, including in the NPR-A, poses unique challenges. The potential 
environmental and public health impacts of production, and exploration 
and development can be more difficult to ascertain given the often-
harsh conditions of the area. As a result, planning and exploration 
activities can take longer than in other areas of the U.S. The 
Administration remains firmly committed, however, to facilitating 
environmentally responsible development in this region.
H.R. 2150/Leasing & Authorizations
    H.R. 2150 directs the Department (BLM) to continue a program of 
competitive oil and gas leasing in the NPR-A, and to facilitate 
permitting of drilling and surface development activities in an 
environmentally responsible manner. The bill specifically requires the 
Department to conduct at least one lease sale annually from 2011 
through 2021 in those areas of the reserve most likely to produce 
commercial quantities of oil and natural gas (Sec. 3). As noted above, 
the Administration supports annual lease sales in the NPR-A and has 
committed to holding them, while respecting environmentally sensitive 
areas. Efforts to begin this annual lease sale are already underway 
with existing authorities.
    The bill requires the Secretary of the Interior to consult with the 
Department of Transportation (DOT) for all surface development 
activities; to ensure that other federal agencies meet specific 
timelines for issuing appropriate authorizations; and to submit a plan 
for approval of potential rights-of-way on an area covering nearly 23 
million acres (Sec. 4). Also, the bill requires the Secretary to 
promulgate regulations which establish deadlines and sets forth 
specific actions the Department must take if deadlines are not met 
(Sec. 5).
    The Department has concerns with the leasing and authorization 
provisions in H.R. 2150. For example, the bill's provisions requiring 
leasing in areas of NPR-A most likely to produce commercial quantities 
of oil and natural gas may conflict with decisions reached through the 
BLM's careful public land-use planning process. These decisions balance 
protection of wildlife, habitat, and subsistence values with oil and 
gas exploration and development.
    The Department has additional concerns with the bill, including:
          the requirement that the Secretary consult with the 
        DOT on all surface disturbance, rather than only on major roads 
        and pipelines [Sec. 4(a)];
          the requirement that the Secretary must ensure that 
        other federal permitting agencies comply with the deadlines set 
        forth in the bill [Sec. 4(b)];
          the implication that all requested permits must be 
        issued, regardless of a proposed action's potential impacts or 
        the availability of alternatives [Sec. 4(b)];
          the timelines required by the bill that may not be 
        compatible with the public involvement, comment, and review 
        requirements of other laws, including the National 
        Environmental Policy Act [Sec. 4(b)].;
          the suggestion that the Department must pre-approve 
        rights-of-way on millions of acres of lands that industry may 
        never seek to develop [Sec. 4(c)].
    If enacted, these requirements would likely divert BLM resources 
and result in delay of further development of NPR-A resources in an 
environmentally responsible manner. Further, the BLM's existing 
regulations already establish deadlines for appropriate authorizations 
and require prompt notification of any delays.
H.R. 2150/Resource Assessment
    The bill requires the Department (U.S. Geological Survey) to 
complete an updated comprehensive assessment of technically recoverable 
conventional and unconventional fossil fuel resources in the NPR-A 
(Sec. 6). As noted, the USGS recently completed an updated assessment 
of the conventional oil and gas resources of NPR-A. The Department has 
concerns with this requirement. Because the USGS used all available 
information in its 2010 assessment and no new data or information has 
become available since that time, the USGS believes there is no need to 
reassess these resources now.
    The USGS has started evaluating the unconventional petroleum 
resources in NPR-A, with the plan to assess these resources in the 
future. A coalbed methane assessment for the North Slope including NPR-
A was completed in 2006; the mean estimate of undiscovered, technically 
recoverable resources indicated a potential for about 18 trillion cubic 
feet (TCF) of coalbed gas. The results for other unconventional 
resources on the North Slope, including shale gas and tight gas, are 
expected to be available in 2-3 years.
    It is not clear from the language in the bill whether a coal 
assessment would be required. The North Slope of Alaska contains coal 
resources [which are the source of the coalbed methane], but the cost 
of mining and transporting the coal would be substantial. Earlier this 
year, the USGS, in cooperation with the Department of Energy, National 
Energy Technology Laboratory, published a database compilation of 
published and nonconfidential unpublished coal data from the Cook Inlet 
and North Slope areas of Alaska. Despite the database, there are 
relatively few data with which to conduct a robust coal assessment.
Conclusion
    The BLM's leasing program in the NPR-A ensures that safe and 
responsible exploration and development of domestic oil and natural gas 
resources can be done in a manner that also protects wildlife and 
habitat, and honors the subsistence values of rural residents and 
Alaska Natives. We welcome the opportunity to work with the Committee, 
the oil and gas industry, the Alaska Native community, and the public 
to continue to develop the NPR-A in an environmentally responsible 
manner. Thank you for the opportunity to present the views of the 
Department on H.R. 2150. I will be glad to answer any questions.
                                 ______
                                 
    Mr. Lamborn. All right, thank you. They have just called 
votes. It is down to 13 minutes of the first 15-minute vote.
    Thank you very much for being here. I will ask that in our 
round of questions, everyone try to keep it to two minutes, and 
that way we can be out of here with about eight or so minutes 
to go.
    So I will ask just one question, and then the Ranking 
Member will have a question or two.
    Director Pool, in 2010 this Administration issued the 
fewest leases for oil and gas development since 1984, in 
issuing only 1308 leases last year. This is the second year of 
the Obama Administration, and only one-quarter of the number of 
leases in 1994, which was the second year of the Clinton 
Administration, which was at the time 4,159 leases, and about 
half the number of the second year of the Bush Administration 
in 2002, where they issued 2,384 leases.
    Now, as you know, oil and gas development takes time. It is 
like a pig in a python. The increases that we have seen in 
domestic production today are the result of much of the leasing 
that took place at the end of the Clinton Administration and 
the beginning of the Bush Administration five to 10 years ago.
    Can we expect that the slowdown in leases that we have seen 
last year and previously by this Administration, to result in 
declining production in the future?
    Mr. Pool. Thank you, Mr. Chairman. I can respond to what we 
have been doing with the NPRA, and this is since 1999. And that 
was since 1999, we were offering the lease sales every two 
years. And since that time, we have offered 250 tracts of about 
two and a half million acres, all of which have been 
relinquished by industry.
    In 2010 we offered 190 tracts for leasing in the NPRA, and 
we only received five lease offers by industry, which is about 
30,000 acres. So systematically over time, we have been 
responsive to conduct and make available and facilitate oil and 
gas leasing in the NPRA.
    We have no pending backlog of applications for permit to 
drill. We have no pending backlog of rights-of-way to 
facilitate pipelines and roads. We have issued four APDs, and 
they have not been pursued by industry as of yet. So there is 
no delay in permitting or processing as it relates to the 
Bureau of Land Management responsibilities in the NPRA.
    Mr. Lamborn. Representative Holt.
    Mr. Holt. Thank you. Just to move along briefly, I thank 
you for coming. I would like to ask for some short answers, 
then, if you could.
    The assessment by the USGS was completed less than a year 
ago, is that correct?
    Mr. Pool. That is correct.
    Mr. Holt. Do you see any reason why that would be a, 
methodologically, a poor assessment? Or any reason why it would 
be out of date?
    Mr. Pool. I think I will allow my colleague to answer that 
question.
    Mr. Holt. Identify yourself, please.
    Mr. Duncan (USGS). I am Douglas Duncan; I am the Associate 
Coordinator of the Energy Resources Program for the U.S. 
Geological Survey.
    Mr. Holt. And I would like to give you a lot of time to 
reply, but unfortunately there isn't a lot.
    Mr. Duncan (USGS). I will be very brief. Our assessment is 
very current. And without additional information from 
additional drilling or seismic profiling, including 3-D 
seismic, there would be no reason for us to reassess or update 
that assessment.
    Mr. Holt. And this assessment was based on wells that had 
been drilled.
    Mr. Duncan (USGS). That is correct.
    Mr. Holt. Which presumably were not the least promising. I 
mean, the witness earlier said well, the assessment was done on 
the basis of the least promising wells. I presume the wells 
that had been drilled were what the knowledgeable people 
thought were the most promising.
    Mr. Duncan (USGS). That is correct.
    Mr. Holt. OK, thank you. And Mr. Pool, the bill would 
require that all leaseable tracts be within 25 miles of an 
improved road or pipeline. Do you agree with that? Would you 
like to see that done? Does the BLM agree with that 
requirement?
    Mr. Pool. Congressman, I think that from our perspective, 
that it depends on which leases have been issued and industry's 
pursuit to develop those particular leases, their proximity to 
existing roads, and the need for new roads or pipelines, 
through BLM's authorization process.
    Mr. Holt. OK. Could the required consultation with the 
Department of Transportation improve matters? Would that speed 
things up, or slow things down?
    Mr. Pool. In my view, it is unnecessary. I think we clearly 
have, with our own regulations, we are very accustomed to 
processing permits, the application for permit to drill, 
including those right-of-way authorizations for pipelines and 
roads. We already have the infrastructure in place to do that.
    Mr. Holt. And the announcement today from Interior suggests 
that things are moving along at the rate that the requests for 
permits would warrant. Is that a correct interpretation?
    Mr. Pool. Yes. What we are planning, and we hoped to 
announce this early next week, it will go through the 
Federation Notice, is an open solicitation for expressions of 
interest. And this affords the industry to express the BLM for 
certain parcels or tracts that we would like to see offered for 
the lease sale come December.
    And just to complement that, it doesn't preclude the Bureau 
of Land Management, which oftentimes we do, we will look at our 
planning system. And by Bureau motion, we will also offer these 
various tracts up for lease sale.
    Mr. Holt. So putting aside some of the provisions of the 
bill that might actually be damaging, such as waiving 
environmental reviews and so forth, is there a need for this 
legislation?
    Mr. Pool. I think we have everything in place. And we have 
demonstrated that over time. This Administration is clearly 
committed to facilitating oil and gas development. I think that 
we currently have all the regulations and authorities we need 
to continue to advance oil and gas development in NPRA.
    Mr. Holt. OK. I wish there was more time for discussion. I 
thank the Chairman, I thank the witnesses, and I yield back.
    Mr. Lamborn. Thank you. I am going to take the final two 
minutes of my time.
    Mr. Pool, if everything is in place, why is no oil being 
produced in the NPRA?
    Mr. Pool. Mr. Chairman, we have been, I think, very 
proactive for a number of years in terms of lease 
administration. I pointed out earlier the statistics associated 
with the number of relinquishments. We have only issued four 
applications for permits to drill.
    We have currently no wells in production. The fact is that 
we have, on a biannual basis--and now we are going to move to 
an annual basis--making parcels available for lease. We are 
fully prepared, if they want to pursue those leases, develop 
those leases, to provide the needed ancillary authorizations 
for both rights-of-way to accommodate pipelines and roads.
    To the extent that market conditions, oil and gas prices, 
other outside influences impact or----
    Mr. Lamborn. Or other agencies. EPA, Corps of Engineers.
    Mr. Pool. Well, I will let them speak for themselves. But I 
can just let you know within the NPRA, that is our 
jurisdiction, and we have been very responsive--not only on 
lease sales, but we are fully prepared to process whatever 
permits may come our way.
    Mr. Lamborn. But there is no production today.
    Mr. Pool. Not today.
    Mr. Lamborn. Thank you. That will conclude this hearing. 
Thank you for your testimony. I would ask you to respond to any 
questions that are submitted to you in writing by members of 
the Committee within the next 10 days.
    Thank you for being here. And if there is no further 
business, this Subcommittee is adjourned.
    [Whereupon, at 11:43 a.m., the Subcommittee was adjourned.]

                                 
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