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Providing coverage of Alaska and northern Canada's oil and gas industry
October 2005

Vol. 10, No. 43 Week of October 23, 2005

ANWR clears major hurdle in Senate

Budget reconciliation bill headed to Senate floor; Alaska, Hawaii delegations introduce environmental protections companion measure

Rose Ragsdale

Petroleum News Contributing Writer

The U.S. Senate Energy and Natural Resources Committee voted 13-9 Oct. 19 to authorize oil and natural gas drilling in the 1002 area of the Arctic National Wildlife Refuge in the mark up of its portion of FY06 budget reconciliation legislation.

Committee Chairman Sen. Pete Domenici, R-N.M., offered ANWR drilling as the sole means of meeting his committee’s task of raising federal revenues by $2.4 billion. A Domenici spokesman said ANWR drilling authorization would increase revenues by $2.5 billion.

Two lease sales in next five years

Domenici didn’t include many details in his reconciliation language, including the number of acres subject to drilling, to better ensure it will not be subject to a budget point of order during floor debate that Democrats could use to block its passage.

However, the Senate language released Oct. 14 does call for two lease sales before Oct. 1, 2010, and sends half of the proceeds to the State of Alaska.

Protection bill introduced

Alaska and Hawaii’s delegations, meanwhile, jointly introduced a bill Oct. 19 that maps out more specifics for oil and gas exploration of ANWR’s 1.5-million-acre coastal plain (1002 area). The measure, the Arctic Coastal Plain Domestic Energy Security Act of 2005, aims to provide full environmental protections and economic assistance to affected communities as part of legislation to open the Arctic coastal plain to oil and gas development, according to a statement from the delegations.

Amendments could have blocked budget bill

Drilling opponents on the Energy committee, primarily Democrats, attempted to block the ANWR provision Oct. 19 with several amendments, but were voted down by a majority of members.

One such amendment, offered by Sen. Jeff Bingaman, D-N.M., called for the federal environmental review process for ANWR drilling to be in line with federal rules for energy production in other wildlife refuges.

Drilling proponents said they voted against the amendment because if any amendments not directly related to revenue raising had been approved the budget bill would have run afoul of Senate procedural rules that would have required a three-fifths majority vote on the Senate floor instead of a simple majority. Republicans included ANWR drilling in the budget reconciliation bill expressly to avoid a Democratic filibuster that would have required 60 votes to overcome.

Bipartisan support

“The vote clearly indicated that we continue to enjoy bipartisan support on this issue,” said Jerry Hood, a lobbyist with strong ties to labor who is promoting ANWR drilling on behalf of Alaska-based Arctic Power.

Democrats Louisiana Sen. Mary Landrieu and Hawaii Sen. Daniel Akaka voted to include the measure in the reconciliation package that will be debated on the Senate floor. The bill now goes to the Senate Budget Committee, which is expected to fold it into broader legislation next week and send it to the Senate floor.

Observers expect the Senate to vote on budget reconciliation legislation in early November.

The Oct. 19 vote marked the second significant hurdle that ANWR has cleared in the budget process this year. Both houses of Congress approved a compromise $2.57 trillion budget resolution, H. Con. Res. 95, in April that contained the drilling provision. The measure survived all subsequent efforts to strip it from the budget bill.

Hood acknowledged that the fight for ANWR drilling in Congress is far from over, but added that “it’s always nice to get a positive vote under your belt.”

“I’m now more hopeful than I have been that we will pass a final budget bill in a few weeks, and it will contain ANWR,” Alaska Sen. Lisa Murkowski said late Oct. 19.

New bill limits drilling

Alaska Sens. Ted Stevens and Lisa Murkowski and Hawaii Sens. Daniel Inouye and Akaka said they intend their new legislation to codify all of the environmental and economic provisions that have been proposed to protect the environment, wildlife and residents of the Arctic coastal plain from impacts should oil or gas be discovered in the area.

“While Congress, as part of the reconciliation process, will clearly express its intent that full environmental and economic protections be provided to the Arctic coastal plain, this legislation is intended to go one step further and to codify those protections and aid. It simply is an insurance policy that protects the environment and the residents of Alaska when ANWR development proceeds,” said Murkowski, who sponsored the bill.

“We’ve been after this for more than 20 years, and now Congress is prepared to open the Arctic coastal plain to oil and gas development,” said Stevens. “We believe this is the greatest reservoir for oil and gas on the North American continent so it really must be explored and developed.”

The measure, similar to traditional House-passed legislation to open the 1002 area of ANWR to limited development, requires that no more than 2,000 acres of the surface of the entire coastal plain – both federal and Native-owned lands – be impacted by development, that development can result in no “significant adverse impacts” on the coastal plain and that the “best commercially available technology” be employed.

Measure protects Natives, wildlife

The bill allows the Secretary to designate up to 45,000 acres of the coastal plain as special areas for protection and specifically requires that the 4,000-acre Sadlerochit Spring area be protected for wildlife. It requires that directional drilling be used to minimize surface impacts and includes other restrictions such as seasonal drilling limitations that will prevent impact on caribou and other migratory animals during the Arctic summer.

The bill, which requires that efforts be made to work out Project Labor Agreements to guarantee that Alaska workers benefit from opening of the coastal plain, also sets up a mitigation impact fund to provide aid to communities affected by oil development, most likely the City of Kaktovik and the North Slope Borough.

The bill, which duplicates many of the provisions to open ANWR contained in proposed Reconciliation Act provisions, also clarifies that all Native-owned lands can be opened to oil development, but that they must also be opened under terms of the 2,000-acre surface disturbance limitation contained in the bill.

Bill conveys last of land claims

The language also conveys the last 2,000 acres of lands owed to the Kaktovik Inupiat Corp. and the Arctic Slope Regional Corp. stemming from the 1971 Alaska Native Claims Settlement Act.

In addition, the bill calls for the Secretary of the Interior to consult with Alaskans and Kaktovik residents to gain their advice and knowledge before approving development activities on the coastal plain. To facilitate that consultation, the bill creates a state coordinator to be appointed by Alaska’s governor and requires that the government pay for a local coordination office to be opened in Kaktovik to make it easier for North Slope residents to express their viewpoints on development to federal agencies.

The Senators said they hoped the measure will be seen as a reasonable clarification of authority and passed by Congress after the main Reconciliation Act clears, opening ANWR to development later this fall.

“Our hope would be that all sides would agree that these provisions make sense to implement provisions to open ANWR. The environmental provisions can be done administratively by the Secretary based upon the authority in the Reconciliation Act, but still spelling out the provisions are useful for the peace of mind of all concerned,” Murkowski added.






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