Alaska refuge coveted by oil industry. Environmentalists are fighting to protect area from development

It is one of the remotest spots on Earth. High above the Arctic Circle, dog sleds are the most reliable form of transportation. The Arctic National Wildlife Refuge may be remote, but it is not forgotten. Up to 29 billion barrels of oil and 64 trillion cubic feet of natural gas lie beneath the tundra, making the area potentially the largest onshore field in the United States. The US Interior Department and the oil industry want to open it up for exploration, a move conservationists say will become the biggest environmental battle of the next two years.

By 1980, Congress had set aside almost 19 million acres into the refuge. Congress recognized the oil and gas potential of the coastal plain area and asked the secretary of the interior to report on the prospects.

Interior Secretary Donald P. Hodel's report, released last November, recommended leasing the coastal plain because of the potentially enormous oil reserves and their ``contribution to the vital need for domestic sources of oil and gas.'' Any oil found in the area ``would enhance national security, produce a more favorable balance of trade ... and provide economic benefits to the nation,'' the secretary concludes.

A number of environmental groups have formed the Alaska Coalition to coordinate their opposition to the Interior Department's plan. Coalition members reached a different conclusion after reading the department's assessment of the area.

In addition to estimating its energy potential, the report describes the refuge as ``the only conservation system unit that protects, in an undisturbed condition, a complete spectrum of various Arctic ecosystems in North America.'' Alaska Coalition chairman Tim Mahoney says, ``The coastal plain is vitally important to the health of the ecosystems and the health of the wildlife within the refuge. There is nothing else like it, and never will be again.''

It is precisely because of the coastal plain's uniqueness that environmentalists want Congress to designate it a ``wilderness'' area, a special category of federal lands kept in their natural, undisturbed, state. A large part of the concern stems from the use of the coastal plain as the primary calving grounds of the Porcupine caribou herd (named after the Porcupine River).

The oil industry argues:

National security and economic stability depend on domestic energy production.

The coastal plain area of the Arctic National Wildlife Refuge (ANWR) represents America's best prospect for new discoveries of petroleum.

The industry has proved in the last 15 years of Prudhoe Bay operations that drilling can occur in environmentally sensitive areas.

The Central Arctic caribou herd on the North Slope near Prudhoe Bay has tripled in number since oil operations began, and industry biologists expect the Porcupine herd to adapt as well.

Local Eskimos want Congress to approve exploration, with appropriate environmental safeguards, to replace declining revenues from Prudhoe Bay. According to Oliver Leavitt, a local Eskimo leader, ``Our future as a people and our claim to economic justice turns on the decisions Congress will make.''

The oil industry sees another potential oil embargo on the horizon and wants to ensure adequate domestic reserves to prevent future energy blackmail. By November of last year the US was at ``a higher level of dependence than at the time of the 1973-74 oil embargo,'' says Michael Johnson, a manager of economics and planning for Conoco.

The Alaska Coalition counters the embargo argument by pointing out that the ANWR will supply only 4 percent of the nation's oil needs even at peak production.

``When we developed Prudhoe Bay, there were no regulations,'' says Roger C. Herrera. ``We could have done anything we wanted.'' Mr. Herrera is the manager of exploration and lands for the Standard Alaska Production Company. Since then the rules governing industry behavior have increased greatly. ``We simply can't do anything on our own any longer,'' Herrara says.

``The industry has spent about $6.5 billion since 1979 on exploration in Alaska without any success. ... The companies are frustrated,'' he says. ``[The ANWR] is the Holy Grail. Without it, many companies will give up the ghost and leave.''

Even industry officials admit that they have a tough road ahead. Congress must be persuaded to go along with Secretary Hodel's recommendation and at the same time be prevented from designating the land covering the coastal plain area a protected wilderness. Many environmentalists agree that the area will eventually be explored, but they would like to delay that point for as long as possible.