RENEE MONTAGNE, host:
The oil industry made a record bid yesterday for oil and gas leases off Alaska - $2.6 billion. The controversial lease sale offered 29 million acres in the waters of the Chukchi Sea. Those waters are home to the polar bear. The polar bear could be the first species to be listed as threatened with its possible extinction due to climate change. Elizabeth Arnold reports from Anchorage.
Unidentified Man: Twenty-four million, one hundred and three thousand…
ELIZABETH ARNOLD: If you've never been to an oil lease sale, it's sort of like a Sotheby's auction without the glitz and glamour. It was minus 10 outside and inside, geologists in old sweaters, native Alaskans in fur-lined parkas, and a few oil industry execs in suits and snow boots stared at a huge map of the Chukchi Sea. It was divided up into tiny blocks as bids were opened and read over a period of three hours.
Unidentified Man: Block 7012, one bid. Shell Gulf of Mexico, Incorporated, $10,000,006,427.
ARNOLD: Instead of paintings and furniture, chunks of the Arctic Ocean were for sale. And at the end of the bidding, a record total was offered for the rights to drill in 2.7 million acres of seabed over the next 10 years.
Unidentified Man: The highest bid was $105,000,304,581 by Shell Gulf of Mexico.
ARNOLD: That's about $18,000 an acre, if you do the math, and minerals management service director Randall Luthi positively beamed. He estimates a reserve of some 15 billion barrels of recoverable oil in the Chukchi, but he was a bit on the defensive, as his agency's been sued for insufficient consideration of environmental impacts there. Nevertheless, the sale proceeded as planned, and Luthi pledged vigilance.
Mr. RANDALL LUTHI (Minerals Management Service Director): It gives us a great opportunity to show that we can develop these resources the way they should be developed, which includes an environmentally sound and protected manner.
ELIZABETH ARNOLD: The residents of eight remote villages from the coastline 50 miles from the lease sites aren't so sure. While many have supported oil drilling in the past on land, they fear oil spills at sea will hurt their subsistence lifestyle, which includes fishing and harvesting whales and seals. George Edwardson is the president of the Inupiat Arctic Slope communities, who are actively opposing the sale. He says, simply, the sea is our life.
Mr. GEORGE EDWARDSON (President, Inupiat Artic Slope Communities): For me, the reason I push so hard in the direction I'm going, I have seven children - five girls and two boys. And the last two years, those girls have been doing my hunting for me out in the ocean. I have no choice.
ARNOLD: Despite the remoteness and logistical difficulties of drilling in the Chukchi, recent record demand for oil and high prices have led to a renewed interest in the area by the industry. Industry watchdog Rick Steiner shakes his head over the amounts of the bids. He's a professor with the University of Alaska Marine Advisory program. He points out that the minerals management service itself has estimated a 50 percent probability of an oil spill in the lease area, and says more than a dozen species there are already listed as threatened, not to mention new consideration of the polar bear.
Professor RICK STEINER (Alaska Marine Advisory Program, University of Alaska): What we've done to the Arctic ecosystem in the next 10, 20, 30 years looks pretty bad, and to be imposing this additional risk and impact on it knowing that it's going to cause a major oil spill and not caring and going ahead with it anyway, that, you know, it's sort of like the last phase of an addiction where the addict will stop at nothing.
ARNOLD: Shell Gulf of Mexico, consistently the most vigorous bidder, called the sale a great day for Alaska and a great day for Shell. Annell Bay, the vice president for exploration, says the polar bear listing wouldn't make much difference to the company's plans for the leased area. And with a bright, reassuring smile, she repeated Shell's environmental mantra.
Ms. ANNELL BAY (Vice President for Exploration, Shell): Everywhere we operate, we do so safely and responsibly. We not only comply with the regulations, but we go beyond that.
ARNOLD: The lease sale is just part of a larger program aimed at opening millions of acres to offshore oil exploration. Shell and the Minerals Management Service hope it's the first of many lease sales before the administration changes hands. For NPR News, I'm Elizabeth Arnold in Anchorage. Transcript provided by NPR, Copyright NPR.
