In the field: Oil production pipes cross the tundra at the Alpine facility operated by Phillips Alaska on the western side of Alaska's Prudhoe Bay. PHOTO By MICHAEL PENN

"I'm not aware of any state, that its revenue is dominated so much by one industry," said Larry Persily, deputy commissioner of revenue.

The oil and gas industry "is critically important to Alaska," said Dave Dittman, an Anchorage pollster. "It's Alaska's industry."

In 2000, oil and gas activity supported 33,573 jobs, or 12 percent of private sector employment in Alaska, and $1.4 billion of payroll, or 20 percent of non-government wages, according to an industry-sponsored study conducted by two research firms.

Even that understates the impact of petroleum in the 49th state.

In the state fiscal year that ended June 30, the oil industry's contribution to the state general fund in corporate income taxes, severance taxes, property taxes and royalties was $1.95 billion, according to Persily. The state general fund for the year was $2.37 billion, making oil's contribution 82.3 percent. To date, the industry has pumped $48.37 billion into the general fund, not including lawsuit settlements of about $5.5 billion going into a separate reserve fund that has been used to balance the budget.

In the same fiscal year, an additional $310 million from oil production went into the Alaska Permanent Fund, which pays annual dividends to residents who have lived in the state for more than one calendar year, regardless of age.

Last year's payout was a record $1,963.86 per person. In 24 years, oil has contributed about $9.7 billion to the permanent fund. Although the fund was established in the 1970s to ensure stability in state government operations once oil production declined, the dividend is now considered an entitlement by most Alaskans.

Oil field facilities: The airport, hotels and maintenance buildings for oil production facilities at Deadhorse sit next to Lake Colleen on the flat tundra of Prudhoe Bay. PHOTO By MICHAEL PENN

With Alaskans invested in oil, residents are better informed than Americans generally about the industry's environmental record, said pollster Dittman. That's why they overwhelmingly support exploration in ANWR while a majority of Americans, "scared" by environmental groups in fund-raising appeals that contain "outright lies," have expressed reservations, he said.

Environmental groups have put out poll results that show Alaskans divided. The Alaska Conservation Alliance commissioned annual polls from 1998 to 2000 showing a nearly even split when residents were asked if ANWR should be "protected from oil drilling."

But the pollster, Ivan Moore of Anchorage, said respondents apparently considered the word "protect" ambiguous, noting that other polls consistently show 70 percent support for drilling. Many Alaskans think the refuge could be protected from oil drilling even while it was going on, he said.

In February, the League of Conservation Voters Education Fund did a more specific poll. Alaskans were asked to choose between not drilling because ANWR is "a national treasure" and because the oil that could be recovered is only a small portion of U.S. consumption, or drilling because oil deposits could reduce gas prices, while drilling will affect only 2,000 acres of 19 million in the refuge. Fifty percent said drilling should be allowed while 38 percent said it should not.

Dittman said the real test is the Legislature. Of 60 legislators, only three voted against a resolution this year urging Congress to open the ANWR coastal plain to oil exploration. In recent years, the Legislature has provided funding totaling $3.75 million to Arctic Power, a private industry group that lobbies Congress to open ANWR to drilling.

On the front lines: Don Mickey of Phillips Alaska at the Alpine facility explains the drilling process in front of a well head during a tour in June. PHOTO By MICHAEL PENN

"It's the largest oil field in America that will be discovered and developed there," Knowles said. "And this is something that has been anticipated ever since the wildlife refuge was created."

Alaska has more wildlife refuges and park acreage than all other states combined, the governor added.

Alaska's three-member, all-Republican congressional delegation argues that the ANWR coastal plain must be developed to ensure the nation's independence from unfriendly oil-producing nations. A voice-mail greeting in the Washington, D.C., office of Chuck Kleeschulte, an aide to Sen. Frank Murkowski, tells callers that 57 percent of America's oil comes from other nations.

The North Slope has played a major role in the national energy picture. At the peak, in the late 1980s, the various oil fields there and in Cook Inlet in Southcentral Alaska produced 2 million barrels of oil a day, about a quarter of U.S. production. Now Alaska production has dropped by half, and the North Slope gives the nation about one in six barrels of its domestic oil, even as oil imports have increased to more than half of the overall U.S. supply.

But the Alaskans battle a perception that the industry, based on its record to date, would despoil the last sizable chunk of pristine wilderness in the world.

"Misleading propaganda" is holding up the issue in the House, said Alaska Rep. Don Young. Industry supporters say environmentalists' complaints about numerous oil spills on the North Slope are misleading to non-Alaskans because the reporting law requires any and all spills to be documented, no matter how small.

"There's probably more oil spilled in a Wal-Mart parking lot on a daily basis than on the North Slope, from oil seeping out of cars," Dittman said.

"Very few spills escape the gravel pads on which we operate," said Ronnie Chappell, spokesman for British Petroleum, which operates the Prudhoe Bay unit.

Even critics concede that the industry has made significant technological progress since the huge Prudhoe Bay strike in 1968. The 429-million-barrel Alpine oil field, west of Prudhoe Bay, which went into production last November, is touted as the new way for the industry. It was constructed without permanent overland access, with ice roads used during the winter to transport equipment to the site.

The 97-acre site itself is much smaller for the size of the oil field Ð 40,000 acres Ð than has been the industry norm. And Alpine is the first field to come on line with full horizontal drilling technology, allowing a much greater underground reach with less surface disturbance. Although sized to produce 80,000 barrels of oil a day, it has been exceeding expectations, with more than 97,000 barrels extracted one day in early July.

As far as on-site waste, there's a "zero discharge" policy, says Dawn Patience, a spokeswoman for Phillips Petroleum, which owns 78 percent of the oil field.

In Kaktovik, an island village just off the arctic coast and technically the only community of people living within the boundaries of ANWR, city leaders, Native elders and Ð according to a survey Ð a majority of residents say they are confident that the oil industry would do the best possible job in protecting the environment and wildlife in the nearby coastal plain.

"I know it'd be nice for ANWR to be opened up and developed responsibly," said Charlie Brower, a whaling captain. "We know they can do it right. They've got the technology."

Environmentalists say there's plenty of oil to pump out of the National Petroleum Reserve-Alaska, a 23-million-acre area just west of Alpine set aside by President Harding in 1923. This spring, Phillips announced it found oil of commercially viable volumes there.

Chappell, the BP spokesman, said that while the company conducts Prudhoe Bay media tours and handles requests for information, it's not getting into the fray about whether NPR-A should be explored fully before the coastal plain is opened.

"As a business, we're focused on maintaining production on existing fields," as well as studying the possibility of a natural gas pipeline to the Lower 48, he said. "Our plate is very, very full. ... The oil we produce in Alaska and elsewhere in the world is produced to meet real human needs. This isn't about what the oil industry wants or needs."

As for the coastal plain, Chappell concluded: "At BP, we are waiting for the nation to make a decision about that area."