Oil and Gas Leasing in the Arctic National Wildlife Refuge (ANWR): The 2,000-Acre Limit
CRS Report for Congress
Oil and Gas Leasing in the Arctic National
Wildlife Refuge (ANWR): The 2,000-Acre Limit
Pamela Baldwin
Legislative Attorney
American Law Division
M. Lynne Corn
Specialist in Natural Resources
Resources, Science and Industry Division
Summary
Congress is again considering whether to permit drilling for oil and gas on the
coastal plain of the Arctic National Wildlife Refuge (ANWR), Alaska, or to maintain
the current statutory prohibition on oil and gas development in the Refuge. The 109th
Congress has considered the issue in authorizing bills, budget reconciliation bills, and
an appropriation bill, but legislation opening the Refuge has not yet passed both
chambers. Several measures would have limited the surface area that could be covered
by certain oil production and support facilities to 2,000 acres of the 1.5 million acres of
the Coastal Plain. These provisions raise several issues: they may not apply to some or
all of the nearly 100,000 acres held by Native Americans in the Refuge that could be
developed if the federal lands are opened to oil and gas development; and exactly what
facilities would be subject to the limitation is not clear, although the limitation could
constrain development if oil and gas discoveries are widespread. This report discusses
both legal and technical aspects of the 2,000-acre limit and will be updated as
circumstances warrant.
Congress is currently considering whether to permit drilling for oil and gas on the
coastal plain of the Arctic National Wildlife Refuge (ANWR), Alaska. (Inaction would
retain the current statutory prohibition on drilling in the Refuge.) Congress has
considered the issue in authorizing bills, budget reconciliation bills — which cannot be1
filibustered in the Senate — and an appropriation bill. The House-passed energy bill,
H.R. 6, authorized leasing in ANWR, but the Senate did not pass a comparable bill, and
the provisions were eliminated before enactment as P.L. 109-58. The Senate passed S.
1 See CRS Issue Brief IB10136, Arctic National Wildlife Refuge (ANWR): Controversies for the
Congressional Research Service ˜ The Library of Congress
comparable House reconciliation measure did not, although an earlier version did. An
attempt to add ANWR leasing to the Defense appropriations bill (H.R. 2863, P.L. 109-
Section 2207(a)(3) of H.R. 6 would have limited the amount of surface area that can
be covered by oil production and support facilities to 2,000 acres of the 1.5 million acres
of the Coastal Plain. Section 4001(f) of the Senate-passed S. 1932 contained a similar
acreage limit, as did § 7(a)(3) of Div.C of H.R. 2863. The H.R. 6 provision would have
directed the Secretary of the Interior to
ensure that the maximum amount of surface acreage covered by production and
support facilities, including airstrips and any areas covered by gravel berms or piers
for support of pipelines, does not exceed 2,000 acres on the Coastal Plain.
Further, §2207(f) would have directed the Secretary to prepare periodic plans to
avoid unnecessary duplication of facilities, and to encourage consolidation of facilities,
among other things. This 2,000-acre “footprint” limitation is frequently cited as one way
to minimize impacts of oil and gas development on the Refuge.2 However, the H.R. 6
provision might not have limited exploratory facilities, and might not have limited some
permanent structures. The acreage limit would have applied to some, and perhaps many,
important development facilities. If facilities were limited as a result, or if oil and gas
discoveries are widespread, some otherwise attractive discoveries could have been
precluded, or the limitation might be lifted at a later date, to permit full development.
Section 2207(a) would have required the Secretary to administer the provisions of
the title in a manner “consistent with the requirements of section 2203.” Section 2203(a)
required, among other things, that the Secretary ensure the receipt of fair market value by
the public for the mineral resources to be leased.
There may have been a tradeoff between the direction to limit surface use for
production and support facilities to 2,000 acres (as well as other constraints) and the
determination of fair market value, since bidders could be expected to discount their bids
or vary their bidding strategy to reflect the limitation.
The Senate measure, S. 1932, was less detailed than the House measure because it
was a part of a budget reconciliation measure and special procedural rules applied, but
leasing language in it and in the DOD appropriation bill was similar to that in H.R. 6.
This report discusses both legal and technical aspects of the 2,000-acre limit.
Current Law on Development of ANWR. ANWR contains federal lands and
nonfederal lands held by Native Americans. Section 1003 of the Alaska National Interest3
Lands Conservation Act (ANILCA) prohibits oil and gas development in the Refuge
unless Congress authorizes it. Under a 1983 Agreement (described below), if Congress
2 Supporters of the limitation favor development, and argue that by limiting surface development,
environmental impacts will be reduced. Opponents of ANWR development argue that what they
see as major impacts (e.g., caribou displacement, dust, subsistence and recreation resources)
would still occur, and an acreage limit would create a false sense of a safety net for the Refuge.
3 P.L. 96-487, 94 Stat. 2374, 16 U.S.C. §§ 3101, et seq.
repeals § 1003, and allows oil and gas development on the federal lands, development
may also proceed on the Native American lands in the Refuge.4
Native American Lands in ANWR. The Alaska Native Claims Settlement Act5
(ANCSA) resolved the claims of Alaska Natives against the United States, in part by
establishing Native village corporations that could select surface land holdings, and
Native regional corporations, associated with the village corporations, that could select
primarily subsurface rights. The Kaktovik Inupiat Corporation (KIC) selected
approximately three townships of lands in the geographic coastal plain of ANWR (a
township is typically 23,040 acres). However, the legal boundaries of the Coastal Plain,
as a term defined under ANILCA, were administratively drawn so as to exclude these
three townships from the defined Coastal Plain. Also under ANILCA, KIC was entitled
to select a fourth township, for a total of approximately 92,000 acres. This township is
within the area administratively defined as the Coastal Plain.
In addition, there are several thousand acres of claimed or conveyed Native-owned
allotments in the Refuge. These are basically surface ownerships, with the federal
government reserving the oil, gas, and coal rights. Although allotments were originally
restricted titles, under P.L. 108-337, allotments may now be subdivided and dedicated as
if the surface estate were held in unrestricted, fee-simple title, a fact that could facilitate
development on them if the Refuge is opened.
The Arctic Slope Regional Corporation (ASRC), the regional corporation associated
with KIC, initially could not select lands within ANWR under the terms of ANCSA, but
did receive the subsurface of these lands pursuant to a 1983 land exchange agreement,
known as the 1983 Agreement or the Chandler Lake Agreement, negotiated by then
Secretary of the Interior James Watt. ASRC lands are defined in the agreement as
including, as the context requires, the surface lands as well.6 However, ASRC’s oil and
gas cannot be developed unless and until Congress authorizes oil and gas development
on the federal lands in the Coastal Plain, on the ASRC lands, or both.
Appendices I and II of the 1983 Agreement contain terms and stipulations that would
govern oil exploration activities on ASRC lands unless superseded by legislation or
regulations. In addition, par. B.9 of Appendix II states that any oil and gas production
activities on ASRC lands (which are both within and outside the Coastal Plain) shall be
in accordance with the substantive statutory and regulatory requirements governing oil
and gas exploration that are designed to protect the wildlife, habitat and environment of
the coastal plain, ASRC lands, or both. Therefore, it appears that oil and gas production
activities on ASRC lands would be subject to the same environmental requirements as
those governing oil and gas production on federal lands.
4 For a more detailed discussion of legal issues related to the Native lands in ANWR, see CRS
Report RL31115, Legal Issues Related to Proposed Drilling for Oil and Gas in the Arctic
National Wildlife Refuge (ANWR), by Pamela Baldwin.
5 P.L. 92-203, 85 Stat. 688, 43 U.S.C. §§ 1601, et seq.
6 An owner of a mineral estate typically also has the right to use as much of the surface as is
reasonably necessary to develop the minerals.
Applicability of the 2,000-Acre Limit to Native Lands. The House-passed
H.R. 6 did not address how the 2,000-acre limit might apply to oil and gas development
on Native lands in ANWR, but the leasing regulations to be issued by the Secretary might.
However, H.R. 6, applied to oil and gas activities in the Coastal Plain of ANWR, which
was defined as the area identified on a map (now missing) referenced in ANILCA, and
“as described in appendix I to part 37 of title 50, Code of Federal Regulations.” This CFR7
definition of the boundary of the Coastal Plain was published in 1983, and excludes from
the defined Coastal Plain the three townships then held by KIC. The description was not
changed to reflect the fourth KIC township. Therefore, arguably three KIC townships are
outside the defined Coastal Plain and one township is inside, with ASRC holdings
underlying all of them. If the applicability of the 2,000-acre limitation to Native lands
were to be litigated, a court might possibly find that (1) the provision is not
“environmental protection” referred to in the 1983 Agreement, and therefore does not
apply to development of any ASRC lands; (2) ASRC lands within the defined Coastal
Plain (i.e., the fourth township lands) are subject to the 2,000-acre limit, but the others are
not; or (3) all ASRC lands in the Refuge are bound by the restriction because of the
wording of par. B.9 of Appendix II of the 1983 Agreement. The House-passed H.R. 6 did
not address how the 2,000 acres would be allocated among ASRC and federal lessees if
the acreage limit applies to ASRC lands. The Senate developed a new map of the Coastal
Plain in connection with the Senate budget reconciliation measure. This map shows the
Native lands as being within the Coastal Plain, but the bill does not clarify the intended
applicability of leasing restrictions.
The limitation arguably would not apply to surface use of the three townships of KIC
lands and allotments not in the defined Coastal Plain, and possibly not to those lands,
wherever located, that are not being used as support for ASRC development. Therefore,
it is possible that the 2,000-acre limit would not apply to some or all of the nearly 100,000
acres of Native lands that, under the 1983 Agreement, could be opened to oil and gas
development in ANWR if the federal lands are.
Furthermore, the limitation might not apply to exploratory activities, which ASRC
could conduct under the 1983 Agreement, which arguably is favorable to ASRC.8
Dispersion of Footprints. Technological advances have significantly reduced
the size of oil drilling facilities in recent decades. However, assuming there were
commercial finds, it is unlikely that full development of the Coastal Plain could be
accomplished from a single compact site, and development could require a dispersed
network of drill pads, roads, pipelines, gravel mines, and other structures. Even with
advanced drilling techniques, there are limits to the lateral reach of drilling from a given
wellhead. The current record in northern Alaska is 3.78 miles from one wellhead.9 (The
coastal plain is approximately 104 miles long and between 16 and 34 miles wide.) The
extent of needed infrastructure (in both quantity and type) cannot be determined until or
7 48 Fed. Reg. 7936, 7980 (February 24, 1983).
8 For example, if ASRC and the United States disagree as to the environmental impacts of
ASRC’s exploratory activities, the United States must get a court to agree with its restrictions.
9 See CRS Report RL32108, North Slope Infrastructure and the ANWR Debate, by M. Lynne
Corn, and see CRS Report RL31022, Arctic Petroleum Technology Developments, by Bernard
A. Gelb et al.
unless discoveries are actually made. Discoveries in the western part of the Refuge could
necessitate fewer structures since some support or production structures might be located
just outside of the Refuge’s boundaries. Smaller, widely scattered fields would likely
necessitate greater infrastructure than a few larger fields. Failure to find economic
discoveries could lead to relatively minor, transient disturbance; important, scattered, or
numerous finds could produce impacts lasting decades or possibly a century or more.
To What Facilities Does the Acreage Limitation Apply? There is little
consensus in the ANWR debate on what facilities and features might be considered to be
part of development’s footprint. The House-passed H.R. 6 required the Secretary to
develop regulations, stipulations, and other implementation measures. The wording does
not appear to include features some scientists, Natives, or environmentalists might wish:
areas under elevated pipelines, or affected by blowing dust or visual impacts, etc. The
potentially limited facilities can be divided into two categories: (1) areas directly covered
with gravel (e.g., gravel roads, drill pads, airfields, culverts, bridges, ports, causeways,
pump stations, water treatment facilities); and (2) areas whose surface is removed or
covered (e.g., gravel mines, pipeline supports, water impoundments).
Airstrips and pipeline supports were expressly limited in §2007. But more debatable
is the applicability of the limitation to other facilities: gravel mines, bridges, water
impoundments, and causeways are examples. DOI’s regulations that define the facilities
to be limited would critically affect not only industry bids but also ultimately the potential
for constraints on development.
As the Alpine model makes clear, new fields can make relatively small surface
disturbance.10 But as fields expand with new discoveries, surface disturbance increases.
In the ANWR context, this means that an initial lease offering of 200,000 acres (the
minimum required in H.R. 6) may not be seriously constrained by the wording of the
2,000-acre limit in §2207(a)(3), but scattered, numerous finds could reduce the remaining
available acreage so as to constrain industry’s participation in future lease sales. In this
light, the Secretary’s obligation to develop plans for consolidation of facilities would
become both critical and more difficult, since the Secretary would need to allow for
potential future discoveries.
Exploration in the ANWR Terrain. Exploration on the North Slope has typically
been accomplished with ice roads and ice pads. But in the 1002 area, exploration may be
more difficult than in previously developed areas. Liquid fresh water is much more scarce
and the terrain more rolling in the Coastal Plain — conditions that elsewhere have
resulted in the use of gravel roads for safety reasons.11 Also, the warming trend of the last
few decades has cut the season for ice construction from over 200 days to about half of
10 At Alpine, on 40,000 acres of state, Native, and federal land west of Prudhoe Bay, development
initially consisted of about 100 acres of pads, a road, and an airstrip, plus a 150-acre gravel mine.
Approved expansion will create five new drill pads and 28 miles of new gravel roads, making an
additional 251 acres of roads, causeways, and other structures, plus a 65-acre gravel mine, for a
total of 566 acres (p. 1036 in U.S. Dept. of the Interior, Bureau of Land Management, Alpine
Satellite Development Plan, Final Environmental Impact Statement, Sept. 2004).
11 State of Alaska, Dept. of Natural Resources, Div. of Oil and Gas, Supplement to North Slope
Areawide Best Interest Finding, July 24, 2002, 3 pp.
its previous length.12 In combination, these factors might necessitate permanent
exploration facilities (e.g., roads, pads, and gravel mines) in ANWR, and if the 2,000 acre
limit does not apply to exploration facilities, these facilities could be located throughout
the Coastal Plain. If exploration is successful, facilities on specific leases might be
converted to production facilities, raising the issue of whether such converted facilities
would be limited once they are used in production.
Interaction of Acreage Limit and Economics. A company’s investment
calculus would affect the amount the company would bid for a lease — or its willingness
to bid at all. A very large prospect, near existing development at the coast, close to gravel
sources and the limited year-round liquid fresh water, would likely generate industry
interest even under tight environmental restrictions. Large but widely scattered or less
convenient prospects would present opportunities which could be profitable under some
regulatory scenarios, but not others. And small, or otherwise unattractive prospects might
not be of interest under any foreseeable conditions. A lessee will judge whether and how
quickly to proceed13 based on the size of the field, quality of the oil, expected prices,
regulatory costs, and other considerations. This decision may be affected by limits on the
operation of the field such as the size of the drill pads, access to fresh water, or limits on
gravel roads (forcing expensive seasonal limitations and air transport for work crews).
All else being equal, if restrictions (including acreage limitations) became more costly,
fewer prospects might be developed.
If the footprints of production and support (and possibly exploration) facilities
throughout the Coastal Plain were strictly limited to a total of 2,000 acres, a tradeoff could
occur between this limit and the determination of fair market value for them, unless the
facilities subject to limits were defined very narrowly or discoveries prove limited.
Responses to Acreage Limits. The acreage limitation will be closely watched
both from the perspective of its putative contribution to limiting adverse environmental
affects and its possible constraint on development. If development legislation is enacted,
environmentalists will likely focus on a strict interpretation of the limit and on DOI’s
mandate in §2207(f) to consolidate and minimize the footprint. Development proponents
will likely focus on its costs. Depending on how much oil is found, how it is distributed,
and where the limit is applied, the effect of the 2,000-acre limit could range from being
irrelevant to a significant factor affecting any development. In the latter case, industry’s
response could be expected to include technological improvements, a shift of facilities to
uncontrolled areas, a changed bidding strategy, an effort to obtain regulatory or legislative
relief, or a combination of these options.
12 National Research Council, Cumulative Effects of Oil and Gas Activities on Alaska’s North
Slope, Mar. 2003, pp. 134-137 and figs. 7-8.
13 For diligence requirements under the Mineral Leasing Act, see 30 U.S.C. §226(e) and (i).