The following assumptions were used in this analysis. . The sale in FY 1990 is limited to blocks A, B, and C (see figure III-1, page 55, Arctic National Wildlife Refuge, Alaska, Coastal Plain Resource Assessment, U.S. Department of the Interior), . The follow-up sales can occur in all blocks. Bonus based on current estimates of risk and oil probability distributions (except as noted in Scenario 3), Real after tax rate of return of 10 percent, . Inflation rate of 4 percent, The 1987 price of North Slope oil in the lower 48 states is $18.00 per bar rel, the expected price in 2000 is in the range of $20 to $40, and the real expected increase after 2000 is an average 2 percent per year, The current Federal and State tax laws will apply. The CHAIRMAN. The revenue projections, and for a statement on an alternative to the 10 year leasing. Thank you very much, Secretary Horn. Senator MURKOWSKI. The record for questions will be open for how long, Mr. Chairman? The CHAIRMAN. Two weeks. I really must apologize to our next four witnesses: Richard Sanderson, Director of the Office of Federal Activities at EPA, together with our Alaskan panel. I am sorry I have to cut you so short. But Mr. Sanderson, if you would begin. If you would try to sum up within 10 minutes, we would appreciate it. STATEMENT OF RICHARD E. SANDERSON, DIRECTOR, OFFICE OF FEDERAL ACTIVITIES, ENVIRONMENTAL PROTECTION AGENCY Mr. SANDERSON. Thank you, Senator. My statement initially said "good morning." I think I will change it to good afternoon. And I think I will summarize it with about 3 or 4 minutes and then try to answer your questions. As I said, I am Richard Sanderson, Director of the Office of Federal Activities of the U.S. Environmental Protection Agency. I am here at your request to discuss EPA's position on S. 1217, a bill to amend the Mineral Leasing Act of 1920 to authorize the Secretary of the Interior to lease in an expeditious and environmentally sound manner the public lands within the coastal plain of the Arctic National Wildlife Refuge for oil and gas exploration, development, and production. EPA's primary involvement with the issues relating to the decisionmaking process on opening the ANWR to oil and gas activities derives from our environmental review responsibilities under section 309 of the Clean Air Act and the National Environmental Policy Act. Pursuant to these responsibilities, the agency reviews over 250 environmental impact statements annually. Moreover, since 1975 EPA has reviewed and commented on 51 documents from the environmental impact statements associated with oil and gas exploration, leasing, development, and production activities in the State of Alaska. Quickly summarizing, EPA and the Department of Interior agree that, if it is the decision of Congress to open the National Wildlife Refuge, NEPA compliance will be achieved at each stage of leasing and development to assist in the environmental decisionmaking process. EPA understands that the Department of the Interior proposes to use such a tiered EIS process for any oil and gas leasing development in ANWR. Second, EPA now understands that it was and is the Department of Interior's intention that the present responsibility for implementing all existing environmental laws will apply to activities in ANWR. With respect to the bill before us today, S. 1217, EPA has three general concerns. First, it is not clear in the bill whether all present Federal agency responsibilities for the permitting, monitor ing, and enforcement of environmental regulations would be applicable to the oil and gas activities in ANWR. A functioning regulatory structure is now in place for North Slope activities. This should be retained to provide efficient and effective environmental protection. Secondly, EPA is concerned that the 1-year time frame for completion of the initial lease sale will prevent the development of adequate environmental protection measures to effectively deal with problems likely to arise in implementing an oil and gas leasing program in ANWR. There is a consensus that unique environmental impact mitigation technologies will be necessary if ANWR is to be opened to oil and gas exploration and development. A lack of appropriate lead time to design and implement effective environmental safeguards and mitigation measures would worsen potential environmental impacts resulting from these activities. Lastly, EPA is concerned that the bill would preclude further environmental analysis at the lease sale stage. Based upon our discussions with the Department of Interior and recognizing their experience with other lease sale proposals such as those taking place for lands on the outer continental shelf, it is EPA's position that to fully comply with the applicable environmental protection statutes and to provide for the most balanced lease sale decision, lease sale environmental impact statements should precede leasing activities. In the past, these documents have provided the necessary foundation, allowing the lease sale decisionmaking process to proceed in an orderly and environmentally sound manner. We agree with Assistant Secretary Horn that the bill should be amended to reflect these concerns. With that, I conclude my formal remarks and make myself available to any questions you may have. [The prepared statement of Mr. Sanderson follows:] RICHARD E. SANDERSON OFFICE OF FEDERAL ACTIVITIES COMMITTEE ON ENERGY AND NATURAL RESOURCES OCTOBER 13, 1987 Good morning Mr. Chairman and members of the Subcommittee, I am Richard E. Sanderson, Director of the Office of Federal Activities, U.S. Environmental Protection Agency. I am here at your request to discuss EPA's position on S. 1217, a bill to amend the Mineral Leasing Act of 1920 to authorize the Secretary of the Interior to lease, in an expeditious and environmentally sound manner, the public lands within the Coastal Plain of the Arctic National Wildlife Refuge for oil and gas exploration, development and production. EPA's primary involvement with issues relative to the decision-making process on opening the Arctic National - Wildlife Refuge to oil and gas activities derives from our environmental review responsibilities under Section 309 of the Clean Air Act and the National Environmental Policy Act. Pursuant to those responsibilities, the Agency reviews over 250 environmental impact statements annually. Moreover, since 1975, EPA has reviewed and commented on fifty-one EIS documents associated with oil and gas exploration, leasing, development and production activities in the State of Alaska. Under those same |