Any day now, the Trump administration is expected to formally seek input from oil and gas companies on what areas they want to lease for oil in the Arctic National Wildlife Refuge. The action represents another step toward the administration’s goal of holding an oil and gas lease sale this year in the refuge’s coastal plain—an area considered sacred by the Gwich’in people and important habitat for caribou, polar bears, migratory birds, and other wildlife.
In the event the Trump administration is able to overcome four significant legal challenges from states and Indigenous and environmental groups to hold the lease sale, the question quickly becomes whether anyone will show up to bid. For oil and gas companies, the list of cons is growing long. Before the coronavirus pandemic, the significant financial, engineering, and regulatory hurdles already made exploration and development in the refuge a serious gamble for industry, complete with a far-from-certain payoff, costly litigation, and a rapidly warming Arctic with melting permafrost that threatens infrastructure.
These factors are compounded by:
- A new financial paradigm in which nearly all major U.S. banks have stated they will not back oil and gas activities in the Arctic Refuge, citing climate change and Indigenous rights
- A coronavirus-induced oil glut that has cost oil companies billions, raising questions about what entity would have the financial wherewithal to take on such a risky and expensive endeavor at this time
- The prospect of a new administration that would have myriad paths to quash oil development in the Arctic Refuge. The Biden campaign has made clear that, if elected, the new administration would seek to permanently protect the refuge.
One challenge, however, has been largely overlooked to date: the refuge’s shortage of available fresh water, particularly in the winter. Oil drilling in the Arctic would require an extraordinary amount of water, from building ice roads and ice pads, to well stimulation and production, to supplying workers’ base camps. The Trump administration’s workaround banks on oil companies’ ability to build a massive seawater treatment plant on the coast of the Arctic Refuge.
Building a seawater treatment facility in a remote national wildlife refuge, however, is a costly and legally dubious proposition. The authors’ review shows that gaining access to water would likely require companies to make at least $1 billion in capital investments and clear about a dozen permitting hurdles. Furthermore, these permitting hurdles would offer a new administration additional legal and regulatory leverage to block development from going forward.
Demand: Oil and gas exploration and development require a lot of water
The Trump administration’s final environmental impact statement for an oil and gas leasing program in the refuge avoids providing a clear picture of how much water will be required for energy development. Rather, it punts the issue by suggesting that “additional NEPA analysis at the site-specific level would assess water needs and measures to address water supply issues.”
Regardless, estimates about water use scattered throughout the administration’s environmental review quickly add up. Projections include:
- Ice roads would require 1 million to 1.5 million gallons of water per mile per year
- Ice pads would require up to 5 million gallons of water per year
- Worker camps would require 3,000 to 6,000 gallons of water per day
- Drilling would require 420,000 to 8 million gallons of water per well—with more than 400 wells proposed
- Oil production of 50,000 barrels of oil per day—a rate that could span decades—would require approximately 2 million gallons of water per day
Water is a nonnegotiable ingredient for oil exploration and production activities. Without consistent and reliable access to water each year—on the magnitude of hundreds of millions of gallons per year—the proposed oil and gas program in the Arctic Refuge simply doesn’t work.
Supply: The refuge doesn’t have a lot of water to spare
The oil and gas industry’s water needs are at direct odds with the Arctic Refuge’s ability to conserve water quantity and fish and wildlife populations —two of its congressionally mandated purposes.
Unlike other areas on Alaska’s North Slope, free-flowing water is limited in the Arctic Refuge’s coastal plain. There is a paucity of deep lakes; most of the ponds and lakes are shallow and freeze to the bottom during the winter. A study of 119 of the largest lakes in the refuge found only 1.1 billion gallons of water by the end of the winter season. With the Trump administration limiting oil and gas operators’ winter water withdrawals to 15 percent to 30 percent of unfrozen water, there’s just not enough to go around.
The coastal plain has several large rivers; however, these, too, typically freeze over from October to June. Significantly, the U.S. Fish and Wildlife Service (FWS) has filed more than 150 instream flow reservation water right applications in the refuge. The applications protect fish and wildlife species by keeping water in the rivers and mean that the FWS would have seniority over any other applications for water use. In other words, what little water is not frozen in the winter is already spoken for.
Oil and gas operators may be able to pull some water from aquifers, but the U.S. Bureau of Land Management’s environmental review suggests that “while these shallow groundwater zones do exist, they are typically very small.”
Overall, the data on water in the refuge are woefully inadequate; most assumptions are based on limited, nearly 30-year-old studies. Moreover, climate change is undoubtedly altering the refuge’s water resources. This dynamic environment not only means additional stress on the fish and wildlife that rely on freshwater resources, but it also means that the oil and gas industry will have very little information or precedent to inform their bet.
The Hail Mary: A costly and risky seawater treatment plant
The administration has acknowledged the likely gap between oil industry demand and available surface water, noting that “sources may not be sufficient to meet water needs.” In its environmental review, therefore, the administration analyzes the impacts of a seawater treatment plant along the refuge’s coast. The review considers a facility with a 15-acre footprint and a 30-mile road and pipeline that connects to an anchor field development site.
However, there are two major hurdles to building a seawater treatment plant on the coast of the Arctic Refuge: cost and permitting.
First, CAP estimates that building a massive facility on Alaska’s North Slope would cost oil companies at least $1 billion, based on comparable facilities built in Alaska and the Lower 48. The true cost of building this seawater treatment facility could well be greater, given the high costs and engineering challenges associated with building and maintaining anything in a remote and rapidly changing Arctic environment.
Second, seawater treatment plants are energy-intensive operations that have a negative impact on their immediate environment. The facilities produce heavy emissions and can harm fish populations that become entrained by the intake device. The plants typically pump the brine byproduct back into the ocean, where it can alter ecosystems by warming temperatures, decreasing oxygen levels, increasing salinity, and introducing other contaminants and chemicals.
CAP estimates that, in order to build a seawater treatment plant, oil and gas companies would need to obtain about a dozen permits and approvals from different state and federal authorities to comply with the National Environmental Policy Act, the Endangered Species Act, the Marine Mammal Protection Act, the Clean Water Act, and the Clean Air Act, among other environmental protection laws.
Significantly, federal agencies could use their authority and discretion to deny approval of necessary permits, which can effectively block oil projects from moving forward. Similar permits or approvals have stalled other proposed projects in Alaska, from mining in Bristol Bay, to exploratory drilling in the Beaufort Sea, to seismic acquisition in the Arctic Refuge.
Oil drilling in the Arctic Refuge will exacerbate climate change; violate the human rights of the Gwich’in people; and threaten polar bears, caribou, migratory birds, and other wildlife populations. The mounting legal challenges may be enough to stop the Trump administration’s lease sale. If not, the moral, regulatory, and financial obstacles associated with oil drilling in the refuge—access to fresh water among them—should stop any serious energy company from participating.
Kate Kelly is the director of public lands at the Center for American Progress. Sally Hardin is the interim director for the Energy and Environment War Room at American Progress. Jenny Rowland-Shea is a senior policy analyst for public lands at American Progress.
The authors would like to thank Tricia Woodcome for her contributions to this column.