Oil Development Set to Revive in Alaskan Frontier

America's newest oil frontier is a place of old petroleum dreams.

A vast federal land reserve at the top of Alaska, long overlooked, could have the Clinton administration's blessing as new territory for oil development.

The US Interior Department is preparing to put the northeast corner of the 23 million acre National Petroleum Reserve-Alaska (NPRA) up for oil and gas leasing, possibly as soon as next year.

Few people believe an "elephant" - like the 13 billion-barrel supergiant Prudhoe Bay field - lurks there. Last year's discovery of a vast oil pool on near NPRA, coupled with advances in technology, has caused the industry and the government to give the area a new look.

Leasing land in the NPRA for oil development is not likely to generate significant resistance, as proposed development of the Arctic National Wildlife Refuge has.

Geologists first searched the reserve in the 1940s for commercial quantities of oil. Only small petroleum deposits were found, and efforts seemed futile. The most recent lease sale, in 1984, drew no bids.

But "now what they want to do is get back in there and look for the right thing," says Tom Allen, Alaska director for the US Bureau of Land Management, the agency leading a required impact study.

The reserve was established by President Warren Harding in 1923 explicitly for its petroleum potential. But Harding had committed a costly geographical blunder: The Alaska oil boom was launched on state land 70 miles to the east, when North America's biggest oil find was struck in 1968 at Prudhoe Bay.

Modern advances that make smaller fields worthwhile to develop and excess capacity in the trans-Alaska oil pipeline make the petroleum reserve newly attractive, says Alaska Natural Resources Commissioner John Shively.

"There's a different mind-set now about what can be done," he says.

The change in attitude about NPRA was also sparked by the discovery last year of the Alpine reservoir, on the east side of the Colville River, the border of the petroleum reserve.

Alpine is under development and is expected to produce 365 million barrels of oil. It piques oil companies' interest in what lies under the west side of the Colville.

"We're looking forward to having a shot at NPRA," said Steve Campbell, manager of corporate communications for Anadarko Petroleum, a partner in Alpine and an independent producer newly drawn to Alaska.

The Alpine field contributes to a gradual westward expansion of North Slope oil infrastructure, helping to make NPRA development logical, Mr. Shively says.

"I see it as sort of the natural progression of going in both directions from Prudhoe Bay. The difference is that in going west, we're going into a petroleum reserve," Shively says.

Going east from Prudhoe is more difficult politically. There lies the Arctic National Wildlife Refuge, a territory the Clinton administration wants protected.

NPRA itself has special places that need protection, some environmentalists say. It is a world-famous breeding ground for birds that migrate from as far away as Argentina and Chile. It is home to caribou, moose, polar bears, musk oxen, raptors, peregrine falcons, and other wildlife that could be chased away by loud industrial development.

But they admit the case against oil development in NPRA, an area set aside for petroleum purposes, is not as strong as it is for the Arctic refuge.