Alaskas delegation senator lisa measure cows ki is the chair of the hearing. Welcome back, everyone. Sorry for the extra tenminute delay but we have finished at least these tranche of voting and hopefully well have an opportunity to get through this last panel with an opportunity for questions and conclude the hearing before we have another round of votes. So thats the hope here. This second panel is perhaps more of our technical panel. We have several witnesses present to help answer questions about modern development on the north slope and what it might look like in the future. Joining us today are mr. Aaron shut. Aaron is the president and ceo of doyon limited. Thank you for being here. You also brought your son with you, which is a great Educational Opportunity for him and we appreciate you both being here. Low w lois epistone is epstein is with us. She has been before the committee before. Following ms. Epstein, we will have mr. Richard glenn, also a frequent flyer here to the to the energy committee. He is the executive Vice President for land and Natural Resources with the Arctic Slope Regional Corporation and its good to have you back, richard. Pat is known to many alaskans and many here in washington, d. C. Hes the former special assistant for Alaska Affairs at department of the interior during the previous administration. So welcome back, pat. And last on our panel is matthew cronan, he is a biologist, a former Research Professor at the university of alaska fairbanks and some of us know him as the caribou man, but certainly one is that is wellversed in the biology of many of these issues that we have been discussing. So thank you all for traveling the distance to be here today. Thank you not only for your contributions before the hearing, but also for the good work that you do in your respective areas. Aaron, if you would like to lead the panel off with your comments, again, try to stick to five minutes if your can. Your full statement will be incorporated as part of the record and then well have an opportunity for questions. So welcome. Thank you, madam chairwoman, members of the committee. Its a very great opportunity to be here to testify today. I am the president and chief executive officer of doyon limited. I am a tribal member and a doyon shareholder. Doyon is one of the 13 native corporations in the southern portion of the National Wildlife refuge lies within our region. Doyon supports the opening of the anwar coastal plain to oil and Gas Development if it can be shown to be consistent with the protection of the porcupine caribou herd. Gwichsin people rely on that herd for survival. We encourage the United States government to offer the qwichin a chance to be heard whether or not it opens anwar up to oil and Gas Development. That operates in the oil and gas industry, its doyon drilling. With eight of the most unique and advanced rigs in the industry and theyre designed especially for the arctic. And doyon drilling has led the industry in innovation over its 40 years of existence. Were proud of that leadership role as it fits with our corporate value with a commitment to employee safety and sound environmental practices. When Congress Last debated open anwar in 2005, supporters many made arguments about the use of technology and how it would minimize the impact on anwar, and since then a lot of these claims have borne out in the industry and were going to share some of them today. A couple of them are directional, extended reach multilateral drilling techniques that have been developed and perfected in that timeframe. That allows wells to be drilled in all directions from a well pad kind of like spokes on a bicycle wheel. Directional drilling has been around since the 1970s, but at that time it was did not allow the reach that we can now. So you could drill a couple of square miles around a pad. Ive got a figure here thats been shown before in the hearing today. You can see a couple of three square miles using Technology Front 1970s and fastforward to the one on the farright, a 12acre pad where a drill rig can reach out and cover 125 square miles. That means that you can space pads and modern development up to 10 miles apart and that there is little to no surface impact between those pads. Thats a fairly dramatic shift in technology in that time period. Id like to say the impact of those tech lodgeal changes anol not theoretical. Weve got another graph. Doyon well 142, thats five production wells drilled from a single surface well bore. Each of those pentlateral wells the total length is over 39,000 feet. 28,000 feet of that i understand is in the production zone. If doyons client has developed these same resources 20 years ago, it likely would have required probably three drill pads and multiple wells on each of those pads to access the resources we are able to access from a single surface location. Doyon is currently building an extended reach drilling rig, also referenced earlier in the hearing, rig 26, that will be able to reach out even further. The 35,000 horizontal feet that was mentioned by several people earlier today and thats the capability that allows to reach tout for the full 125 square miles from a single surface well pad. For perspective of those here in the room, rig 26 will be able to drill from here on capitol hill and hit a target the size of certainly this room at the National Harbor resort and Convention Center on Potomac River six miles away. Rig 26 is being developed to allow our client to develop known but currently untapped Oil Resources from existing surface infrastructure. In other words, our client wont have to build new pads, roads or pipelines on the surface to produce known oil reserves. The changes in the technology have allowed smaller well pads on the slope, north slope, and they are up to 70 smaller and 70 to 80 fewer pads since prudhoe bay was developed in the 1970s. What that looks like is a 19,000acre footprint goes down to just a few Hundred Acres to develop the alpine field on the western side. Finally, this has also been referenced ive got to upside down there. The impact of exploration on the environment is very minimal. The difference between exploration and production, you can see here a location in the mpra with our rig 141 and then weve got the summer version of the same lotion, senator sullivan mentioned this before, also upside down, where there is almost no lasting surface impact from exploration. So i wanted to close my testimony here by saying how Important Oil and gas is to the economy of the state and to our company. We obviously have a large presence in the alaska oil and gas economy. It was developed because it was the available economy to us as a corporation in the 1970s with the development of prudhoe bay and were very proud that we employ thousands of our native alaska shareholders and we do it in an environmentally safe and protection of our employees is paramount, but to provide income to our workers, a single drill could have an impact of 4 million for our shareholders on those rigs. Those numbers are not theoretical either. Thats the reality weve ah had for many years times the number of rigs we have working. So in short, madam chairwoman, were very proud to be here today, were supportive in opening anwar, but only if we can assure ourselves of the protection of the porcupine caribou herd as i mentioned earlier in my testimony. Thank you very much. I appreciate the visuals as well. Lets next go to ms. Epstein. Welcome. Thank you very much, chairman murkowski and also those shes not here to Ranking Member cantwell, senator king and other members of the committee for inviting me to testify at this important hearing on a Critical National public lands issue. My name is lois epstein and i am the Arctic Program director for the Wilderness Society and my home is in anchorage. Our organization scientists began working in this region in the arctic in the 1930s and as an alaska licensed engineer, i am proud to be part of legacy. The arctic National Wildlife refuge say vast willeder innocence landscape of tundra plains, dramatic peaks and coastala luns. There is no other place like it in america. For thousands of years, the area has been home to different animals and sustains them. It provides habitat for more than 45 spees seefs animals including one of the largest cara bu herds, wolves, smooep, and over whun 60 species of birds who my great from the refuge to breed there from all 50 states. The Arctic Refuge is the crown jufl our nations wildlife refuge sx. The 1. 5 million acre coastal plain is recognizinged as the biological heart of the refuge. Coastal plain is as important to our nations heritage as yellow stone and the grand canyon where we dont choose to drill. Now, cron trast this pristine wild place with oil and Gas Production which is compensate and messy and a lot has mott changed over the years to make it less so. Even the most well financed operators have blowouts and spills. Just this year bp a production well blowout due falling perma froflt and specialists had to fly in to prevent a safety disaster. This week, the state is looking at all wells with similar designs because they are concerned for the potential for additional blowouts. In 2012, rep saw had an exploratory well blowout on the north slope that spewed roughly 42,000 gallons of drilling muds. It took a month to plug that well because frigid temperatures prevented work on many days. According to the states spill database, there have been 121 crude oil spills during the past five years or approximately two per month. A 2010 state study showed almost five spills each year object north slope over 1,000 gallons. I think its important to recognize theyre not all small spills. Oil Development Infrastructure would sprawl over vast parts of the coastal plain and not be confined 2,000 acres as some have said. The 2,000 eric calculation does not include roads, gravel mines or pipelines except for the limited places where the support posts touch the ground. There also would be year round air pollution and noise from generator, trucks, aircraft and processing facilities, Long Distance pipelines and gravel roads that could der ter some cara bu from crossing and it cost them energy and wastes from Drilling Operations and living quarters that, i disposal. Directional or extended reach drilling which is not a new technology will have the same impacts. Directional drilling reduces only one concern and thats pad size. Roads and air strips ever still needed, pipelines are still required and pollution and industrial noise and toxic spills are stinl ef vit able. Because of higher costs due to longer wells, Directional Drilling may or may not be used used by industry for exploratory drilling. As discussed at the may 10th, 2011, hearing in this committee, Oil Companies prefer not to use Directional Drilling for exploratory wells because doing so provides less Technical Information about subsurface conditions. Directional drilling rhetoric is in some respects a trojan horse for access to the entire coastal plain for oil production. Nikker the 2,000 acre provision norris Directional Drilling would prevent entire coastal plain from becoming industrialized. An Arctic Refuge drilling is not shed. The flow is up 6 during the past three years and the Alaska Department of Natural Resources expects the pipelines throughput to continue increase through the late 2020s. I have a figure two in my testimony shows that. Significant new discovers not on federally protected lands including in the National Petroleum reserve will increase production and this new technology that weve heard about is also very useful in existing oil fields to increase production. Notably drilling in the Arctic Refuge is not necessary to ensure that the transalaska oil pipeline remains viable for decades. The most recent report on leasing was issued with limited documentation of february, 2012. Report estimates 5 billion in bonus bids for coastal plan leases between the state and federal governments. Crude oil prices were approximately twice as high in 2012 as they are now making Arctic Refuge drilling significantly less attractive today and for the foreseeable future. It is highly unlikely revenue and bonus bids on Arctic Refuge coastal plains will come close to estimates. Since 2000, the average north slope onshore bid as been 34 an acre. In summary, inclusion of the Arctic Refuge in the budget is less about meeting revenue targets and more about approving a controversial problematic Oil Development without the possibility of a filibuster. It would be a black mark for alaska and that congress with future generations to industrial lies and essentially destroy such a unique place. Thank you for this opportunity to discuss this unique and important region. Im happy to answer your questions. Thank you, ms. Epstein. Mr. Glenn, welcome. Thank you, madam chairman, committee members. Im happy to see that the other half of the Arctic Coalition of america is here so thank you for staying for the hearing. Senator king. My names richard glenn, im the Vice President of lands for Arctic Slope Regional Corporation. Its an Alaskan Native Corporation created by congress in 1971. Its head quartered on the north slope and it includes villages that extend from the west to the east in the arctic region of alaska from point hope, point lay, wainwright, poc testify to vic and the pas. Village residents there have depended on resources from the land, rivers, and the ocean. Im a tribal member. Mr. Who shot is a trooibl member. The man who spoke before me say tribal member, our lieutenantgovernor is a trooibl member and i was particularly stunned by the Ranking Members comments that said she didnt see tribal members. And mooib maybe she just didnt find enough tribal members that agreed with her position. I hope that you hear from all of the tribal members of the state of alaska. The majority of whom support safe, responsible, exploration and development in anwr. And im also not here to debate the sacredness of the land on either side of the brooks range, the north or the south. For us, all the lands are sacred. They contain the bones of our ancestors and im not talking about ancient people, im talking about people in living memory. We didnt start brurg our dead until around the 1920s or so my great grandparents were the first generation of folks who were buried right after the flu epidemics swept through the region. Before those days, the tradition was to leave the residents however temporary it was when a person died. So ancient sod houses up until the early 19 hundreds carry the bones of our people. And some of my ancestors bones are in prud doe bay. Others are scattered along the coastal plain. Our people are named after the places. The places are named after the people. And some of it is state land, some of it is federal land, some of it is native owned land, but its all equally sacred. But we depend on that land for development and food. And i dont wish to trivialize anyones dependence because ours is equally as important. We own a piece of this heritage, 92,000 arks of land on the coastal plain of anwr along with matthew rex Fords Village corporation. These lands hold resource potential for oil and Gas Development. Im a geologist by training. I help drill and develop Natural Resources on the north slope. I know the practices related to drilling and ive seen the evolution over the past 50 years and 30 or so years of my own professional life from really simple drilling, cementing and production to the or nate and efficient diagrams that youve seen here on the postters that were present sod effectively. The reduced footprint is real. Hundreds of square miles drained by tens of acres of development. Senator king asked how many wells are we talking about . How much surface impact . We have real world answers to those questions. Theyre here at the table, theyre here in the audience. In the west end of todays exploration west on the covel river delta and just to the west where the native folks from another village 100 miles also own some resource potential, 500 wells have been drilled down to depths around 8,000 or 9,000 feet and radiating outward as far as five or six hundred miles. On these 500 wells, production wells, injector wells. Theyre done from four basic central facilities for drilling covered u covering maybe 300 acres of land. So now were talk real world examples, real world numbers of wells for at its peak hundreds of thousands of Barrels Per Day in production. Thats the kind of development that we envision moving into the coastal plain of anwr. This is a cartoon. This diagram shows dramatic exaggerations. If youd follow the scale of this map, the dots themselves are two miles across each. The we will symbols thems