Legal Issues Related to Proposed Drilling for Oil and Gas in the ...

Order Code RL31115
Report for Congress
Received through the CRS Web
Legal Issues Related to
Proposed Drilling for Oil and Gas
in the Arctic National Wildlife Refuge
Updated March 18, 2003
Pamela Baldwin
Legislative Attorney
American Law Division
Congressional Research Service ˜ The Library of Congress

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Legal Issues Related to Proposed Drilling for Oil and
Gas in the Arctic National Wildlife Refuge
Summary
Congress is considering whether to permit drilling for oil and gas in the coastal
plain of the Arctic National Wildlife Refuge, Alaska, to designate the area as
wilderness, or to retain the status quo. This area is rich in wildlife and wilderness
values, but may also contain significant oil and gas deposits. Efforts were made in
the 107th to authorize oil and gas leasing in the coastal plain, or to designate the area
as wilderness, but none passed. In the 108th Congress, H.R. 39 would authorize
leasing in the Refuge; H.R. 770 and S. 543 would designate the area as wilderness.
This report provides background on the legal issues surrounding the ANWR
development-related proposals, and will be updated as circumstances warrant.
If the current statutory prohibition against production of oil and gas anywhere
in the Refuge is repealed, then oil and gas development and related activities could
occur not only on the federal lands, but also on Native lands within the Refuge.
Although H.R. 4 in the 107th Congress contained a 2,000 acreage limitation on the
development “footprint” in the coastal plain, H.R. 39 does not. Absent express
language on the point, an acreage limitation would not apply to some, and possibly
not to any, of the Native lands, in which case some or all of the more than 100,000
acres of such lands in the Refuge (inside and outside the officially designated coastal
plain) could be developed. A 1983 Agreement with the Arctic Slope Regional
Corporation (ASRC), a Native Regional Corporation, would govern oil development
on ASRC subsurface holdings in the Refuge, unless these provisions are superseded,
and some assert that the environmental terms of the agreement are lenient. If the
relevant provisions of the Agreement are not superseded by statutory language, it also
appears that the United States would have to obtain a court order to change an ASRC
leasing plan whenever the United States and ASRC disagree as to environmental
harm.
The environmental standard in H.R. 39 — “no significant adverse effect” — has
been used in the past, but could allow a range of adverse effects compared to other
standards that have also been used. New leasing and environmental regulations
would be developed without new environmental impact studies and without any
express requirement to consult with the Fish and Wildlife Service. A limited
environmental impact statement would be prepared on the leasing program, and site-
specific analyses would be completed on proposed drilling and related activities. The
conclusions of the Secretary as to environmental effects would be more difficult to
challenge than usual under the strict standard of review in H.R. 39. H.R. 39 has no
express terms as to revenue sharing with Alaska, but states that leasing would be
under the Mineral Leasing Act, which provides that 90% would go to Alaska and
10% to the federal treasury. In addition, the bill would establish a special Fund with
moneys from the federal share that would mitigate impacts in the area. H.R. 39
would direct the Secretary to prohibit export as one of the terms and conditions of
leases.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
I. Environmental Constraints. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(A). Administration of leasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(B). Compatibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(C). Environmental standard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(D). Technology standard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(E). Specific protections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(F). Possible Effects on International Polar Bear Agreement . . . . . . . 11
(G). Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
II. Native Lands. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(A). The nature and history of Native rights in ANWR . . . . . . . . . . . 14
(B). Current bill provisions and issues . . . . . . . . . . . . . . . . . . . . . . . . 21
III. Access, Rights of Way, and Exports. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
IV. Compliance with NEPA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
V. Judicial Review. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
VI. Disposition of Leasing Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

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Legal Issues Related to
Proposed Drilling for Oil and Gas
in the Arctic National Wildlife Refuge
Introduction
Congress is currently considering whether to permit drilling for oil and gas in
the coastal plain of the Arctic National Wildlife Refuge (ANWR), to designate the
area as wilderness, or to retain the status quo.1 Current law prohibits the production
of oil and gas in the Refuge, but high prices for oil and natural gas have renewed
debate over whether to open the Refuge to development. H.R. 39 would open the
coastal plain for oil and gas leasing.
The landownerships and laws relevant to possible development in the Refuge
are complex, and the policy choices controversial.2 The environmental protections
provided in H.R. 39 or any other bills that might be proposed, and the effects on the
Refuge and its wildlife that might result from oil and gas development are central to
the debate on whether to open the Refuge to drilling. Legal issues that relate to
possible development of the Refuge and the proposals regarding possible leasing in
ANWR are discussed in this report. This report will be updated as circumstances
warrant.
Background
The Arctic National Wildlife Refuge is managed by the United States Fish and
Wildlife Service (FWS) and consists of approximately 19 million acres located at the
Northeast corner of Alaska directly adjacent to Canada. The coastal plain of the
Refuge on the Beaufort Sea is approximately 1.5 million acres and is the part of the
Refuge that is richest in wildlife and migratory birds, including the Porcupine caribou
herd, polar bears, musk oxen, eagles, snow geese, and many others. The coastal plain
is directly east of Prudhoe Bay, a state-owned oil field that has provided a large
volume of oil, and many experts believe that significant deposits of oil and natural
gas may exist under the Refuge as well. The presence of biological and wilderness
values together with the potential for large hydrocarbon deposits results in the current
controversy over whether to allow oil drilling in the Refuge.
1 See CRS Report RL31278, Arctic National Wildlife Refuge: Background and Issues., M.
Lynne Corn, coordinator.
2 See CRS Issue Brief IB10111, Arctic National Wildlife Refuge (ANWR): Controversies for
the 108th Congress, by M. Lynne Corn, Bernard A. Gelb, and Pamela Baldwin.

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CRS-2
All lands on the North Slope were withdrawn January 22, 1943 by PLO 82.3 In
November, 1957, an application for the withdrawal of lands to create an Arctic
Wildlife Range was filed to protect the area’s wealth of wildlife and migratory birds.
Under the regulations in effect at that time, this application “segregated” the lands
in question, removing them from disposal. This fact was important because on July
7, 1958, the Alaska Statehood Act was passed and on January 3, 1959, Alaska was
formally admitted to the Union. On December 6, 1960 (after statehood), the
Secretary of the Interior issued Public Land Order 2214, reserving the area as the
Arctic National Wildlife Range.4
The Supreme Court has held that the initial segregation of lands before
statehood was sufficient to prevent the passage of ownership of certain submerged
lands within the Refuge to the State of Alaska at statehood.5 If this ruling had been
in favor of Alaska, certain lands beneath the rivers in the coastal plain might have
belonged to the state, which could have developed the resources in them, including
the oil, gas, gravel, and water.
In 1971, Congress enacted the Alaska Native Claims Settlement Act (ANCSA)6
to resolve Native claims against the United States. This Act provided the opportunity
for the selection and conveyance of lands to Native groups – usually either the
surface estate of lands to Native Village Corporations, or the subsurface estate to
Native Regional Corporations, associated with the Village Corporations within each
Region. Usually, the Regional Corporations could receive the lands beneath the
Village Corporations in their area, but subsurface lands beneath refuges were not
available, and in-lieu lands were substituted for them. Under § 22(g) of ANCSA,
surface lands conveyed in refuges were subject to the regulations applicable to the
particular refuge of which they were a part.
In 1980 Congress enacted the Alaska National Interest Lands Conservation Act
(ANILCA),7 which, among other things, renamed the Range8 to be the Arctic
National Wildlife Refuge, and expanded the Refuge to include an additional 9.2
million acres, mostly to the south.9 Section 702(3) of ANILCA designated much of
the original Range as a wilderness area, but did not include the coastal plain. Instead,
Congress postponed decisions on the development or further protection of the coastal
plain. Section 1002 of ANILCA designated a part of the coastal plain of the Refuge
3 8 Fed. Reg. 1,599 (February 4, 1943).
4 25 Fed. Reg. 12,598 (December 6, 1960). Other actions have changed the boundaries of
the Refuge, but are not relevant to this analysis of leasing on the coastal plain.
5 United States v. Alaska, 521 U.S. 1 (1997).
6 P.L. 92-203, 85 Stat. 688, 43 U.S.C. §§ 1601 et seq.
7 P.L. 96-487, 94 Stat. 2374, 16 U.S.C. §§ 3101 et seq.
8 President Carter by Proclamation 4729 of February 29, 1980 had renamed the Range “The
William O. Douglas Arctic Wildlife Range.” ANILCA did not address this proclamation,
but renamed the lands comprising the original Range and the added lands as the Arctic
National Wildlife Refuge.
9 Section 303(2).

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CRS-3
for study. (As a result this part of the plain is sometimes referred to as the “1002
area” or the “Coastal Plain.”) The 1002 area was administratively articulated as
excluding the three townships of land belonging to the Kaktovik Inupiat Corporation
(KIC), a Village Corporation.10 However, these lands geographically are on the coast
of ANWR, and are very important to the wildlife and scenic resources of the area.
Pursuant to § 1431(g) of ANILCA, KIC was entitled to receive additional lands
within the Coastal Plain. These additional lands total 19,588 acres. Section 1003
prohibited oil and gas development in the Refuge as a whole, and “leasing or other
development leading to production of oil and gas from the range” unless authorized
by an Act of Congress.11
In 1983 the United States and the Arctic Slope Regional Corporation (ASRC),
a Native Regional Corporation, executed an agreement (“the 1983 Agreement”)
embodying an exchange of lands under which ASRC would receive title to the
subsurface estate beneath the KIC surface lands. Normally, ASRC would not have
received these lands because they were in a refuge. By the terms of the 1983
Agreement, the ASRC lands in ANWR cannot be developed unless Congress opens
ANWR, the ASRC lands, or both to oil development. Conversely, if Congress opens
ANWR, then the more than 92,000 acres of Native lands ( KIC surface/ASRC
subsurface) in the four townships within the Refuge could be developed. These
extensive Native holdings would be affected by the authorization of oil and gas
development on the coastal plain, and, in turn, could also affect the Refuge and its
resources. In addition, there are individually owned Native allotments within the
Refuge that might be developed if oil and gas drilling is allowed. All types of Native
lands within the Refuge total more than 100,000 acres.
As interest in the possible leasing of the coastal plain has increased, review of
several legal aspects of possible drilling in the Refuge appears timely.
10 Section 1002(b) of ANILCA defines the “coastal plain” as the area identified as such in
the map entitled ‘Arctic National Wildlife Refuge’, dated August 1980.” The Refuge map
published in the Federal Register Notice of the legal description of the boundaries of the
Refuge does not show the native lands as excluded. (48 Fed. Reg. 7980 (February 24,
1983)). We are having trouble obtaining a copy of the original map of the Refuge certified
in August, 1980 (the map referenced in the statute). One copy shows the boundaries of the
KIC lands with the boundaries crossed out by hand, but without any explanation of when
and by what authority these marks appeared or what their significance was intended to be
with respect to the coastal plain. Maps certified in August, 1980 exist labeled Refuge and
Wilderness, but we have not been successful in obtaining any map of that date that depicts
the coastal plain labeled as such. Yet, when the legal description of the boundaries of the
coastal plain (excluding KIC lands then conveyed) were published on April 19, 1983 (48
Fed. Reg. 16838), the introductory material asserts: “By virtue of the map referred to in
section 1002(b)(1), lands in which the surface estate has already been conveyed to Kaktovik
Inupiat Corporation ... are excluded from the coastal plain ....”
11 It is not clear whether this language was intentional, but it may have been intended to
allow preliminary activities in the additional lands that were added to the Refuge.

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Issues
I. Environmental Constraints.
One of the most controversial aspects of any consideration of possible leasing
in the Refuge is what the environmental effects of leasing are likely to be. There
have been vigorous assertions on both sides — either that the bills are highly
protective of the environment, or that they are not. Hence the environmental aspects
of the current bills are of particular interest. Some of the most critical elements in
an analysis of the environmental provisions of the bills are: 1) the agency that would
administer the leasing program; 2) the compatibility of leasing with the purposes of
the Refuge; 3) the standard for environmental protection and how might it function
in practice; 4) the level of industrial technology required; 5) the protections that
would be statutorily provided with respect to the wildlife resources of the Refuge;
and 6) the extent to which administrative decisions and actions implementing a
leasing program would be judicially reviewable. This last item will primarily be
discussed later in this report under the heading “Judicial Review.”
(A). Administration of leasing. Under the National Wildlife Refuge
System Administration Act (“Refuge Administration Act”) on the management of the
National Wildlife Refuge System, it is the Secretary of the Interior acting — “through
the United States Fish and Wildlife Service” — who is to administer Refuge lands.12
This language was added by Congress in 1976 to clarify that management of refuges
could not be administratively assigned to other agencies.13 Under current law, when
evaluating whether to approve an activity in a refuge, the Director of the FWS (or an
FWS officer to whom the duties are delegated) may approve an activity only if it is
compatible with the major purposes for which the System and the particular unit
were created. Longer-term uses must be compatible with all the purposes, major or
otherwise, of both the System and the particular unit.14 The Refuge Administration
Act does not close refuges to possible oil and gas leasing, but many individual units
are withdrawn and leasing is allowed on very few.
Although the Bureau of Land Management (BLM), another agency also in the
Department of the Interior, is currently the general mineral development manager for
the United States,15 the Mineral Leasing Act does not specify that the Secretary of the
Interior is to administer leasing through that agency. Current mineral leasing
regulations recognize the authority of FWS over the wildlife resources on refuge
lands and reserve considerable authority to the Director of FWS with respect to oil
and gas leasing in Refuges:
(a)... Sole and complete jurisdiction over such lands for wildlife conservation
purposes is vested in the Fish and Wildlife Service even though such lands may
12 16 U.S.C. § 668dd(a)(1).
13 P.L. 94-223, 90 Stat. 199.
14 16 U.S.C. 668dd(d).
15 See Secretarial Order 3087, December 2, 1982, as amended February 7, 1983 (48 Fed.
Reg. 8983).

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CRS-5
be subject to prior rights for other public purposes or, by the terms of the
withdrawal order, may be subject to mineral leasing.
(b)... [t]here is to be no drilling or prospecting under any mineral lease heretofore
or hereafter issued on lands within a wildlife refuge except with the consent and
approval of the Secretary with the concurrence of the Fish and Wildlife Service
as to the time, place and nature of such operations in order to give complete
protection to wildlife populations and wildlife habitat on the areas leased, and all
such operations shall be conducted in accordance with the stipulations of the
Bureau on a form approved by the Director [of the National Wildlife Refuge
System].16

This protective posture is repeated in another regulation that provides:
Leases shall be issued subject to stipulations prescribed by the Fish and Wildlife
Service as to the time, place, nature and condition of such operations in order to
minimize impacts to fish and wildlife populations and habitat and other refuge
resources on the areas leased. The specific conduct of lease activities on any
refuge lands shall be subject to site-specific stipulations prescribed by the Fish
and Wildlife Service.17
Given that there are no statutory requirements that mineral leasing be through
the BLM, and that since 1976 there is a statutory requirement that management of
refuges be by the Secretary through the FWS, it is not clear by what authority BLM
would be the lead agency with respect to leasing in refuges unless this is clearly
stated in the ANWR leasing statute. Even if the Refuge Administration Act could
be interpreted as only addressing the surface management of refuges, it can be asked
whether the approval of the Secretary for leasing in refuges must be given through
FWS, which is to say with the concurrence of the Director of FWS. We are not
aware of any Departmental interpretation of these issues.
Under current procedures, refuges in Alaska that are open to leasing are not to
be available until the FWS has first completed compatibility determinations.18 A new
compatibility policy and new regulations were published on October 18, 2000, and
became effective November 17, 2000.19 “Compatible use” is defined as a “proposed
or existing wildlife-dependent recreational use or any other use of a national wildlife
refuge that, based on sound professional judgment, will not materially interfere with
or detract from the fulfillment of the National Wildlife Refuge System mission or the
purpose(s) of the national wildlife refuge.”20 Native lands in Alaskan refuges that are
subject to certain restrictions under § 22(g) of ANCSA are expressly subject to the
regulations on compatibility in 50 C.F.R. 25 and 26.21
16 43 C.F.R. § 3101.5-1.
17 43 C.F.R. § 3101.5-4.
18 43 C.F.R. § 3101.5-3.
19 65 Fed. Reg. 62484 and 65 Fed. Reg. 62458, respectively.
20 50 C.F.R. § 25.12(a) and see 16 U.S.C. § 668ee, which is nearly identical.
21 50 C.F.R. § 25.21(b).

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PLO 2214, which withdrew lands to create the original Arctic National Wildlife
Range, withdrew the lands from operation of the mining laws, but not from the
mineral leasing laws. Congress in § 1003 of ANILCA reserved to itself the decision
of whether to lease the coastal plain area.22 The current bills would authorize oil and
gas leasing and address both management and compatibility.
H.R. 39 states in § 3(a) that leasing is to be under the Mineral Leasing Act
(MLA)23 and administered by the Secretary — which term is defined in § 2(2) as the
Secretary of the Interior or the Secretary’s designee. As noted above, generally
leasing under the MLA is conducted by the BLM, with conditioning authority in
FWS when the leasing is in a refuge. Because there is no reference to the usual
powers of the Director of FWS, and because, under § 3 of H.R. 39, the Secretary is
to impose environmental constraints through new leasing regulations and other
measures, the role of the FWS is ambiguous.
In 1981, a court found the administrative assignment of responsibility for
studying the coastal plain area under § 1002 of ANILCA to the United States
Geological Survey rather than to FWS to be unlawful because the Refuge
Administration Act requires that the Refuge System be administered by the Secretary
of Interior through FWS, absent a clearly expressed legislative intent to the
contrary.24 H.R. 39 does not expressly assign leasing responsibilities to the BLM,
although that result may be implied by the reference to leasing being under the MLA.
Arguably, placing BLM in charge of the leasing program for ANWR and evidently
reducing the otherwise applicable role of FWS could divorce the mineral
development aspects from the biological/wildlife purposes and the expertise of FWS
personnel, and may result in the coastal plain of ANWR receiving less protection
than lands in other refuges do under current law and regulations. The bill does not
expressly modify the usual authority of FWS to manage and protect the Refuge
resources and to condition mineral leases. Therefore, an argument can be made that
FWS retains that authority, and would develop the environmental constraints on
surface disturbance in the leasing regulations. However, the intent of Congress in
this regard is not clear. As the legislation evolves, the respective jurisdictions of
BLM and FWS in this context may be clarified.
Both the 1983 Agreement and many past bills in Congress continued
responsibility for ANWR leasing with the FWS, subject to congressionally enacted
direction. Pursuant to §1002 of ANILCA, the FWS adopted regulations (see 50
C.F.R. Part 37) governing the exploratory activities that took place in the Refuge
(B). Compatibility. Section 3(c)(1) of H.R. 39 states that for purposes of the
National Wildlife Refuge Administration Act, the oil and gas leasing program and
activities authorized in that section are deemed to be compatible with the purposes
22 16 U.S.C. § 3143.
23 This language also raises issues in connection with the revenue-sharing provisions. See
“Revenues” below.
24 Trustees for Alaska v. Watt, 524 F. Supp. 1303 (D. Ak. 1981), aff’d 690 F. 2d 1279, 1307
(9th Cir. 1982).

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for which the Arctic National Wildlife Refuge was established, and that no further
findings or decisions are required to implement this determination. (Emphasis
added.) This provision both answers the compatibility question and appears to
eliminate the usual compatibility determination processes. Arguably too, it raises
additional ambiguities as to what extent and by whom impacts resulting from
activities occurring on federal and Native lands may be regulated. (See Native Lands
section below.) The general statement that leasing “activities” are compatible
arguably may encompass a great many actions such as construction and operation of
port facilities, staging areas, personnel centers, etc.
(C). Environmental standard. H.R. 39 uses “no significant adverse effect”
on fish and wildlife, their habitat, subsistence resources, and the environment as the
standard that is to guide leasing. This phrase is not defined, but has been used in the
past. It was used in § 1002 of ANILCA as the standard for the limited exploration
allowed under that section, throughout the 1983 Agreement, and in past bills that
would have authorized leasing.25 Arguably, it could be seen as analogous to the
standard used in the National Environmental Policy Act (NEPA), which is
“significant effect on the quality of the human environment.” (In practice this has
been interpreted as addressing only significant adverse effects.) Although the
contexts are different, judicial interpretation of NEPA may provide guidance in
applying the standard.
The standard of significant adverse effects might allow considerable
environmental harm before the threshold is crossed. Although the standard has been
used before, Congress has also chosen other, more protective, language at times. For
example, the language Congress used with respect to exploration in environmentally
sensitive areas of the National Petroleum Reserve - Alaska was to “assure the
maximum protection of such surface values consistent with the requirements of this
Act for the exploration of the reserve.”26 Another example of other language
Congress has used is the Wilderness Act of 1964, which requires that mineral leases
in wilderness areas “shall contain such reasonable stipulations as may be prescribed
by the Secretary of Agriculture for the protection of the wilderness character of the
land consistent with the use of the land for the purposes for which they are leased,
permitted, or licensed.27 A statute that addresses already existing mining rights in
national parks requires that mining rights be “subject to such regulations prescribed
by the Secretary of the Interior as he deems necessary or desirable for the
25 See H.R. 4 and S. 388 in the 107th Congress, and H.R. 1320 and S. 1220, 102d Congress.
H.R. 1320 defined the term as follows: “The term ‘significant adverse effects’ means those
effects on habitat quality or availability which, despite the reasonable application of
mitigation measures involving appropriate technology, engineering, and environmental
control measures, including siting and timing restrictions, are likely to result in widespread
long-term reductions in the natural abundance or distribution of a species of fish or wildlife
on the coastal plain.”
26 42 U.S.C. § 6504(b).
27 Act of September 3, 1964, 78 Stat. 890, 893, 16 U.S.C. § 1133(d).

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