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February 2006

Vol. 11, No. 8 Week of February 19, 2006

ANWR: Another year, another battle

U.S. Congress awaits Congressional Budget Office budget review before committing to 1002 area drilling provision, other measures

Rose Ragsdale

For Petroleum News

Republican leaders in Congress will take two more weeks to decide whether to offer up oil-rich deposits in the coastal plain of the Arctic National Wildlife Refuge for exploration and development in the fiscal 2007 federal budget.

A top energy priority for the White House and many federal lawmakers is extracting a potential 10 billion barrels of oil from the 1.5-million-acre 1002 Area in ANWR, a tree-less coastal region that Congress set aside for petroleum development decades ago.

But getting a drilling measure through Congress has proven to be a tall order in the face of vehement opposition from environmental groups, many Democrats and a few moderate Republicans as well as widespread misconceptions among the public about potential environmental risks.

Late last year, an ANWR drilling provision failed in Congress after pro-development forces mounted a yearlong battle that narrowly missed victory. Undaunted, Senate leaders vowed to try again this year.

The beginnings of that effort coalesced when members of the Senate Energy and Natural Resources Committee laid plans to draft by Feb. 17 an assessment of resource revenue needed to meet requirements of the $2.8 trillion budget the White House sent to Capitol Hill Feb. 6.

But the deadline for completing the committee’s “Views and Estimates” letter on the budget got a two-week extension to March 3, said Kevin Sweeney, an aide to Sen. Lisa Murkowski, R-Alaska.

Private meeting postponed

Murkowski had planned to meet privately with other members of the Energy Committee Feb. 15 to discuss including ANWR drilling in the budget this year. She told reporters Feb. 14 that getting ANWR drilling into the Energy Committee’s assessment of the budget would be the first step in a new congressional battle to win approval for the measure.

But the meeting plans fell through when the Congressional Budget Office announced it would conduct its own analysis of President Bush’s entire budget and submit the findings to Congress, Sweeney said Feb. 15.

“The senators want to wait to do their assessment until after they get a CBO score on the budget,” he explained.

The White House has estimated that an initial oil and gas lease sale in ANWR would generate $7 billion in revenue and a follow-up sale would produce another $1 billion. The estimate is based on earlier calculations by the CBO and the Energy Information Administration. If Congress approves ANWR drilling in the current budget, the first lease sale could be held in 2008 and the second in 2010. Under a negotiated agreement, the federal government would split ANWR revenue 50-50 with the State of Alaska.

ANWR’s chances of being included in the Republican-controlled Senate’s budget estimate and winning final approval in the Senate are good because budget bills require only a simple majority for passage and would be immune to a Democratic filibuster, observers say.






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