The border of the 10-02 Area to the west is formed by the Canning River which is a slow flowing braided river flowing south to north.  Directional drilling technology can possibly reach 8 miles away from base with todays technology.  This distance is increased year by year as technology improves.  The USGS, in its 1998 geologic survey of the 10-02 Area proclaimed that two main field areas are expected to exist in the 10-02.  One of which lies in a diagonal direction from the south west corner of the 10-02 very near the Canning River running towards the northeast.  It is unknown exactly how these formations lay underground nor exactly how much oil is in them.  USGS estimates in 1998 based on mid 90s technology estimated between 5 and 16 billion barrels exist in the 10-02.  These figures are based on a 37% recovery rate estimated as average at the time.  Today over 60% recovery rates are normal.  However, because no test wells have been drilled in the 10-02 area (save one) geologists are left to only give an educated guess at the possible reserves there or exactly how and where those reserves lay.

Murkowski’s plan will test Congress and the environmental lobby as it will force them to address the issue of drilling in the Arctic.  The environmental movement supports legislation to try and lock up the 10-02 Area with “wilderness” status designation which prevents oil and gas exploration. Murkowski’s legislation tries to create a work around or middle ground between the States and people of Alaska’s desire to explore for oil and the environmental movement try to prevent it.  Under Murkowski’s plan only land outside the refuge would be affected.  Directional drilling would be used to tap into any reserves reachable with modern technology.

The environmental lobby will be forced to recognize that no land in the refuge would be affected.  Thus they will forced into a position of recognizing this and allowing this activity to happen, or taking a position that any and all development in the Arctic, regardless of location should not be allowed.  Taking this second position however will effectively mean all their arguments for the sanctity of the refuge area being unique and different from any other area were false or without substance.

According to Murkowski 10% of the 10-02’s oil reserves could be accessed using directional drilling from outside of ANWR and up to 80% of its gas could be.  The State of Alaska owns the land to the west across the Canning River and up to 3 miles offshore to the north  of the 10-02 shoreline.  Thus activity here would not fall under the jurisdiction of Congress and theoretically bypass the contentious debate on Capitol Hill.

The question remains however, what the tax revenue rights are between the State and the Federal government in this situation.  Similarly what sort of debate and legal questions will arise in Congress by the opposition as to the sub-surface leasing rights.  Only time and debate will tell the answers. 

Although a bold political move the limited reach of extended reach drilling will be a hard sell to the industry who, from a technological point of view, would much rather be on top of the oil than a long way off to the side of it.  Only test wells in the area will determine the technological feasibility of this proposal once the makeup and location of subsurface formations are revealed. 

Read the text of Senator Murkowski’s speech.