Bush may veto any energy bill that doesn't open Alaska refuge to drilling


WASHINGTON -- President Bush may veto energy legislation unless it carries his controversial proposal to open Alaska's Arctic National Wildlife Refuge to oil and gas exploration, Energy Secretary James D. Watkins told a Senate energy committee hearing yesterday.

Mr. Watkins also released a government study that concluded that the Trans Alaska Pipeline System probably would have to shut down after 18 years unless the potentially large oil and gas fields of the wildlife refuge -- Alaska's last unexploited wilderness -- were opened to drilling within several years.

The proposal to drill in a 1.5 million-acre coastal plain in the refuge and in certain offshore oil fields -- which would require reversing current congressional bans -- was one of the most controversial proposals in the president's long-term national energy strategy unveiled last month, which he later sent to Congress.

House and Senate Democrats lambasted the strategy, saying it favored corporate profits over environmental and energy conservation.

Mr. Watkins' testimony indicated the administration is determined to get its way.

"I believe a national energy strategy without ANWR is a vetoable issue with the president -- it's that important," Mr. Watkins said.

He went on to say that if the area were not used, the whole Alaska oil and gas industry might have to close by 2009, resulting in the abandonment of more than a billion barrels of recoverable crude in the North Slope oil fields.

He said 2009 would be when the flow from the currently producing oil fields in the region, and those expected to come on stream in the 1990s, would dwindle to below economic viability, forcing the pipeline to close. And if it did, he said, any future production on the North Slope could become prohibitively expensive.

"If there is one message coming from this study, it is that delaying exploration or development on Alaska's North Slope may be tantamount to permanent shut-in of the entire region," he said.

Environmentalists have succeeded for a decade in blocking attempts to open the refuge. They have argued that the arctic environment is too fragile and that the oil would do little to curb dependence on imports.

"It would only extend our addiction to oil," Wilderness Society President George Frampton said yesterday.

The oil industry thinks the wildlife refuge's coastal plain offers the best chance for a major oil discovery in the United States.

"It could be a small Middle East," said Alaska Gov. Walter J. Hickel, a proponent of the drilling plan.

The Interior Department has estimated the chances of finding oil there at about one in five. If there is oil, the chances are even that there is at least 3 billion barrels, the department has said.

The North Slope contains the two largest oil fields in North America: the Prudhoe Bay field, the most prolific U.S. oil field, and the Kuparuck River Field to its west.

These two fields and five smaller ones nearby currently produce between 1.8 million and 2 million barrels of crude oil per day, about 25 percent of U.S. domestic production.

But these sources are beginning to decline, Mr. Watkins said. Prudhoe Bay, which accounts for almost three-fourths of the entire North Slope oil output, passed its peak in 1986 and is projected to decline by about 10 percent a year over the next five years.

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