(FORTUNE Magazine) – THE OIL SPILL at Valdez, Alaska, according to hysteria in some quarters, now ranks in ignominy with disasters like Bhopal and Chernobyl. Valdez is surely a tragedy, born of the most banal negligence. It is killing wildlife and disrupting livelihoods. But it is not a major disaster, and it has taken no human lives. What would make it disastrous is what it might do to our thinking about developing oil. The prospect that the wounds in Prince William Sound will heal in two or three years seems far likelier than that the $80-million-a-year fishing industry there will be permanently damaged. Neither outcome can be ruled out completely by present, scanty knowledge. But flying over the sound, one is impressed that on this coast at least, nature still holds the overwhelming balance of power. She's got the troops: the booming seas, the scouring winds. It would probably take repeated blunders like Exxon's oil spill to foul this coast for good. By now some readers will have their brickbats ready. Before winding up to heave a few, consider this. If the Valdez oil spill becomes a seminal event in our time, it will more likely be for the political and economic havoc it may cause than for its impact on the environment. Because of Valdez, Congress has already postponed action on a bill to permit exploration in the most enticing oil acreage in North America, the Arctic National Wildlife Refuge, whose initials are pronounced ''Anwar.'' Never mind that those with the most reason to feel aggrieved -- most of the Alaskans interviewed for this story, whose state depends on oil for 85% of its revenues -- overwhelmingly support drilling in ANWR if it is done with care. Resistance to opening other promising areas, notably off the coasts of Florida and California, is also stiffening. If the Valdez mess bars exploration the way Three Mile Island halted the expansion of nuclear power, the nation's growing dependence on oil imports (see charts) could soar. Remember that the two million barrels of oil a day coming down that pipeline from Alaska's Prudhoe Bay played a major role in breaking OPEC's grip. And recall how that grip felt, with its lines at the gasoline pumps and aggravated inflation. ANWR might do almost as much for our energy self-reliance as Prudhoe Bay. The original Prudhoe reservoir, or geological trap, contained roughly ten billion barrels of recoverable oil, of which more than half has now been produced. In the vicinity of the original strike, drilling crews have found new oil-bearing traps that might eventually yield as much as 15 billion barrels more. Some of it is thick and gooey and will be tough to produce. ANWR lies about 60 miles east of Prudhoe Bay. The small part that attracts oilmen, a coastal plain teeming with mosquitoes in summer, is a continuation of similar geology and contains at least 26 structures capable of trapping large quantities of oil and gas. Just to the east of ANWR, the Canadians are producing oil in the Beaufort Sea. Within the refuge, oil is actually seeping to the surface. Three years ago Chevron and British Petroleum drilled an exploratory well on a small parcel of native land excluded from federal jurisdiction. Their findings in the well, called KIC, are a deep, dark secret, but both companies are eager to keep searching. Nothing is sure in oil exploration. But the U.S. Department of the Interior estimates that 600 million to nine billion barrels could flow from the wildlife refuge. If there is a great black hope for the Nineties, this is it.

Yet the reaction to the spill has turned many in Congress against opening ANWR now. Much of the public is in an anti-Exxon mood, and some are calling for boycotts. Environmentalists opposed to drilling see a chance to outlaw it in ANWR forever. Says Randall Snodgrass of the Wilderness Society in Washington: ''I think the battle has been won from our standpoint.'' Even Alaska's Republican Senator Frank Murkowski, who like the rest of his state's tiny, three-man delegation on Capitol Hill supports drilling, now considers it ''premature'' to bring legislation to the Senate floor. Before that can be done, he says, the oil industry must develop stronger contingency plans to deal with tanker spills. But if the cleanup goes well and the indignation dies down, oilmen think the opening of ANWR will have another chance. Says Charles DiBona, president of the American Petroleum Institute: ''The options are to produce it there or ship it in from Saudi Arabia. People aren't totally irrational.'' FOR NOW public outrage seems to feed only on the direst of predictions, and headlines are often salted to taste. Take that spill. John Robinson, head of the National Oceanic and Atmospheric Administration's hazardous-materials response unit, believes it has spread itself so widely that no amount of effort by Exxon and the people of Prince William Sound can ever clean it up. Now that's a headline. But according to Robinson, a calm and thoughtful industrial engineer who seems oddly out of place amid the roiling activity of Valdez, the action of wind and wave will make the spill all but invisible to the untrained eye by this summer. And whatever toxic effects the oil has may be flushed out in two years. Robinson isn't promising this, mind you. It could turn out worse. It's just his hunch. Robinson says it's lucky that North Slope crude is fairly heavy. Lighter oils, such as the Arabian crude spilled by the Amoco Cadiz off the coast of France 11 years ago, are more toxic. The Cadiz dumped seven times as much oil as the Exxon Valdez, and small parts of the affected coast have not yet recovered. Prudhoe Bay oil is more likely to kill by smothering. Once it's broken up and flushed out, wildlife stands a good chance of making a quick comeback. While angry and frustrated, most Alaskans view the spill mainly as a problem to be surmounted rather than a reason to turn against Big Oil. That's the view at the Chugach Alaska Corp., one of 12 regional companies owned by natives, in this case the Eskimos, Aleuts, and Indians in the region surrounding Prince William Sound. Chugach, with three canneries on the sound and 85% of its $50 million in annual revenue coming from fishing, may be the entity that stands to lose most from this spill. After struggling in the mid-Eighties, Chugach made a profit in 1987 and 1988. This year was supposed to be nirvana. The state government was predicting that the salmon harvest in Prince William Sound would climb from 13 million fish to 43 million. Now that harvest is uncertain at best. Yet, says Michael Chittick, Chugach's non-native president, ''we've always been a supporter of the oil industry and still are. When our board of directors met a week after the accident, we reaffirmed our support. We favored, and still favor, developing the Arctic Wildlife Refuge.'' At the same time, Chittick wants the oil industry to operate under greater safeguards. He recommends that if the state increases taxes on the industry, the money should go to rehabilitate the sound. He is pressing Exxon to hire for its cleanup effort Chugach natives displaced by the spill. Says Chittick: ''We thought that would be better than shouting 'You bad guys!' '' HOW DO ALASKANS regard the wildlife, particularly those dead sea otters that have appeared on the evening TV news? With a good deal less sentimentality than people who see them only in zoos or from the decks of cruise ships, that's how. ''They're a pain,'' says Brad Faulkner, 31, an Alaskan Harvard graduate whose views reflect his self-interest as a fisherman. ''Their numbers have bloomed since they were put on the endangered species list, and they are killing off the Dungeness crabs. Saving them and washing beaches is just cosmetic to me.'' Valdez dealt Faulkner a crushing setback. He had planned to buy a boat for $70,000, and a permit to fish in Prince William Sound for $180,000. Now he's put off buying both. ''It was my dream to fish there,'' he says. ''This tears my heart out.'' Would he shut down the oil industry? ''I don't know any fishermen who would do that. I worked for BP on the North Slope, and they do a good, clean job. But the oil companies should have a designated spill-cleanup team ready to move at all times.'' Faulkner, like many other Alaskans, does favor banning exploration in Bristol Bay on Alaska's west coast, whose salmon catch dwarfs the revenues of Prince William Sound. Several oil companies have fought off all court challenges to drilling their leases there. The courts may consent to reconsider the question in light of Valdez. If Alaskans sound less alarmed than their fellow citizens in the lower 48 states, it is perhaps because they have lived closer to disaster than most. Had the Exxon Valdez not run aground in the wee hours of March 24, Valdezians would have awakened to commemorate the anniversary of the great Alaskan earthquake, which occurred on the very same day in 1964. The waterfront was leveled, and most of the fishing boats went down in the ensuing tidal wave. The town has since been rebuilt, and local humor can run to sacrilege. Sweatshirts have appeared in the shops reading TANKER FROM HELL and VALDEZ, A SLICK OPERATION. Walter Hickel, who was sworn in as Secretary of the Interior four days before the Santa Barbara oil spill in 1969, says, ''We should come down very hard on the industry's laxness. But if we don't produce oil here, we'll produce it somewhere else and ship it to the U.S. and we'll face the same risks. The world doesn't just stop.'' Hickel's sure doesn't. He is well remembered in Alaska for, among other things, erecting the Hotel Captain Cook in downtown Anchorage soon after the earthquake as a sign of faith in the future. Now, through one of his companies, Yukon Pacific, he is negotiating sales contracts and obtaining permits to build a gas pipeline from the North Slope to Valdez, where he plans to liquefy the gas for shipment to Japan, South Korea, and Taiwan. The principal objection to developing ANWR is that drilling rigs, buildings, and trucks would damage the fragile environment. The least credible worry is the danger to caribou. Most Alaskans thumb their antlers at the thought. Recalls Faulkner from his Prudhoe stint: ''Caribou seem to like the oil fields. They are all over the roads, and they won't move no matter how much you honk.'' Caribou like to climb up on the raised gravel roadway to get a slight breeze and escape the worst of the mosquitoes lurking in the marshy tundra. Says Bob Atwood, owner and publisher of the Anchorage Times: ''When the oil runs out and the industry pulls out and cleans up, as required by law, that will affect the caribou.'' Somewhat more serious is concern that the industry's scars -- storage pools, tracks, roads -- will last forever. That's unlikely, but they could last a long time. The tundra is frozen solid for about ten months a year, and the brief growing season lasts only six weeks. Nature will heal any remaining scars slowly, and depending on the type of scar not always completely. But heal she will. The less healing needed the better, naturally. State and federal authorities should keep the heat on by making frequent and rigorous inspections. Under pressure, the industry has improved the way it operates at Prudhoe Bay. Trucks now drive only on gravel or ice to avoid tracking up the tundra. And the industry has learned to shrink the size of the gravel ''pads'' on which exploration and production take place by drilling diagonally to reach distant parts of the reservoirs. IN THE RUSH to lift oil in the early years, the companies were sometimes careless. In hundreds of minor spills, contaminated water overflowed to the nearby tundra from storage basins that hold rock cuttings and drilling fluids, some toxic. A 1988 report by three environmental groups -- Trustees for Alaska, the Natural Resources Defense Council, and the National Wildlife Federation -- found a decline in discharges from the basins that violated state standards but was critical of many of the industry's practices. But William Reilly, the new chief of the U.S. Environmental Protection Agency, says that ''oil and gas development on the North Slope has been conducted responsibly'' and that ''environmental impacts have been kept to a minimum.'' The Valdez incident, it can be hoped, should be a useful prod to Big Oil. When the emotion dies down, the lesson should be, in the words of Michael Burns, president of Key Bank of Alaska: ''Never again. But not never again take a risk. Never again be unprepared.'' With that as the motto, development must go on.

CHART: NOT AVAILABLE CREDIT: SOURCES: AMERICAN PETROLEUM INSTITUTE; FORTUNE ESTIMATES CAPTION: Consumption is climbing again...

CHART: NOT AVAILABLE CREDIT: SOURCES: AMERICAN PETROLEUM INSTITUTE; FORTUNE ESTIMATES CAPTION: ...imports account for a growing share...

CHART: NOT AVAILABLE CREDIT: SOURCES: AMERICAN PETROLEUM INSTITUTE; FORTUNE ESTIMATES CAPTION: ...and the bill has turned back up