ANCHORAGE, Alaska - Across the western Arctic sprawls an Indiana-sized land mass dotted with lakes, populated by migratory birds and other wildlife, and packed with potential oil riches.

The National Petroleum Reserve of Alaska (NPR-A), wedged between the foothills of the rugged Brooks Range and the icy Arctic coastline, is about 120 miles from the better-known Arctic National Wildlife Refuge (ANWR).

Teshekpuk Lake, North Slope, Alaska The BLM may also allow drilling in and around the vast Teskekpuk Lake, which sits near the Arctic coastline and is currently off-limits to development. Until now, its shores were considered too important to birds, caribou and wildlife to allow oil rigs. (Photo/(c) 1997 Gary Braasch)

The NPR-A was set aside 80 years ago as an energy storehouse for the U.S. military, but the reserve has yet to send a barrel of oil to market.

The Bush administration hopes to change that and is pushing an ambitious strategy for oil development in the NPR-A as Congress refuses to open drilling in ANWR.

Plans recently drafted by the U.S. Bureau of Land Management (BLM) would open vast stretches of the 23 million-acre NPR-A to new oil drilling and relax environmental restrictions in other areas where leases already exist.

With oil development expanding west from Prudhoe Bay, the focus on the petroleum reserve makes sense, said Henri Bisson, the BLM's Alaska director. "It's just a natural progression. The time is right for exploration in the NPR-A," he said.

The BLM wants to open 8.8 million acres in the reserve's northwestern third to oil development. That plan would replace specific regulations -- like those limiting truck travel over the delicate tundra and restrictions on drilling in rivers and streams -- with more general guidelines.

The proposal is cheered by industry backers. They have high hopes for the reserve, which could hold 5.9 billion to 13.2 billion barrels of oil, according to government estimates.

"The future of our industry and the future of our state will really lie in the development of the NPR-A," Mark Huber, vice president of the oil field service company Doyon Universal Services, said at a recent Anchorage public hearing.

But environmentalists have a different view.

A 'LEASE EVERYTHING' STRATEGY

"I don't know whether there is a strategy, other than "lease everything'," said Stan Senner, director of Alaska Audubon.

Senner's remark comes as the BLM is proposing to change environmental safeguards in the reserve's northeast section to match the more general ones proposed for the northwest. The northeast section is where companies have leased nearly 1.5 million acres for exploration during the past four years.

The BLM may also allow drilling in and around the vast Teskekpuk Lake, which sits near the Arctic coastline and is currently off-limits to development. Until now, its shores were considered too important to birds, caribou and wildlife to allow oil rigs.

Critics say the BLM is caving to companies pushing to cut costs. They point to the specifics of the new rules for the northwest section, such as the allowance for gravel roads and airstrips if they are "necessary to carry out exploration more economically" and drilling in rivers or streams if "it is determined that there is no feasible or prudent alternative."

"Every single thing can be waived for economic reasons, which makes it all meaningless," said Eleanor Huffines of The Wilderness Society.

Geology justifies the proposals, BLM's Bisson said.

Beneath Teshekpuk Lake there may be as much as 2.2 billion barrels of oil, he said. It lies within the same geologic formation that produced most North Slope oil discoveries.

A strict interpretation of existing rules, including mandatory buffers around streams, would make it difficult to extract some of the oil, he said.

"We have more than sufficient protections to steer away from sensitive areas," Bisson said. "But we also have the ability to make an exception if there's no reasonable alternative. I think it's a mistake to go into a place and just absolutely say, "no exceptions'."

Industry supporters like the proposed changes.

Clinton-era leasing restrictions were too extreme, said Larry Houle, executive director of the Alaska Support Industry Alliance, an oil field service association. "There was a political agenda being pushed by the stipulations, and it was an anti-development agenda," he said.

Houle, who served on a BLM advisory panel, cited some examples. One rule bars tundra travel unless there is 12 inches of frozen ground and six inches of snow cover. Another requires three-mile buffers for waterways. Instead of such prescriptive mandates, he said, rules should emphasize performance goals.

Companies could abide by existing rules by using such techniques as directional drilling, but choose not to, said Anchorage environmental consultant Pamela Miller.

"If they felt the government was going to hold them to the stipulations, they probably could figure out a way to do it. But why should they? It's going to cost them more money," Miller said.

Inupiat Eskimos of the North Slope also are concerned.

If the BLM decides to drop environmental protections, "I don't think that Nuiqsut or any other village will support development in NPR-A," said Thomas Napageak, an elder from Nuiqsut, the Inupiat village on the reserve's eastern border.

Copyright 2003 Reuters Ltd

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