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Vol. 11, No. 13 Week of March 26, 2006
Providing coverage of Alaska and northern Canada's oil and gas industry

Senate revives ANWR

Delegation, Arctic Power gird for battle in U.S. House with budget resolution

Rose Ragsdale

For Petroleum News

Having survived the U.S. Senate budget resolution process against all odds, language that calls for opening the coastal plain of the Arctic National Wildlife Refuge to development is moving to the next arena in Congress.

The U.S. House of Representatives is scheduled to debate the proposed blueprint for the FY2007 federal budget during the week of March 26.

The Senate adopted $2.9 trillion legislation March 16, including a provision for oil and gas exploration and development in ANWR. Republicans won narrow 51-49 vote victories on the overall budget resolution and an amendment introduced by Sen. Pete Domenici, R-N.M., to fund the Energy Reserve Fund with revenues from ANWR leases.

ANWR opponents, led by Sen. Maria Cantwell, D-Wash., bypassed an attempt to spike ANWR drilling language in favor of trying to bring down the entire budget resolution if ANWR instruction was included. The effort failed despite hope fostered earlier in the week when several Republican senators vowed to vote against drilling.

The White House included ANWR energy exploration and development in the president’s budget proposal sent to Congress in February, calling for a first lease sale in 2008 and a second in 2010. The budget proposal estimated lease sales would generate $8 billion in bonus revenues, including $7 billion from the 2008 lease sale. The revenue would be split 50-50 with the State of Alaska under a prior agreement.

Senate vote 'miraculous'

Alaska’s two senators lauded the 51-49 Senate vote as a first step toward opening ANWR to development. They said the legislation includes language instructing the Senate Energy Committee to raise $3 billion, which could result in prompt action on the legislation.

“Oil and gas exploration is crucial to our nation’s defense and our domestic energy supply. We believe this is the largest concentration of oil and gas in North America. It must be explored and developed,” said Alaska senior Sen. Ted Stevens.

“This is a critical first step to victory for Alaska,” said Sen. Lisa Murkowski. “Sen. Stevens and I know we still have a few hurdles to clear, and we are committed to seeing this through to the end.”

Jerry Hood, a pro-ANWR lobbyist working for Arctic Power in Washington, D.C., agreed.

“Considering the Senate didn’t have the votes to pass the budget resolution at noon the day of the vote, I call that Senate vote historic and miraculous,” Hood said.

In addition to a green light from the House on the budget resolution, which sets spending and revenue levels for the FY07 budget, Congress also must approve an additional budget reconciliation measure containing the ANWR language. President Bush can then sign the legislation into law.

Funds, with strings attached

In his annual address to the Alaska Legislature March 22, Stevens told state lawmakers to allocate additional funds for Arctic Power to help fight for ANWR’s passage.

“In a question and answer period following his talk, Sen. Stevens said the Legislature should give Arctic Power additional funds, but perhaps they should put restrictions on the funding,” said Stevens’s aide Courtney Boone. “Later in a press conference, the senator said he thinks Arctic Power should have funding but it should come with guidelines from the Alaska Legislature. And he encouraged consultation (by Arctic Power) with the Alaska delegation.”

Hood said Arctic Power’s efforts in 2005 reflected the planning and coordination with the delegation that Stevens wants to ensure happens. “It has been a cooperative, collective team effort since I set foot in Arctic Power’s office,” he said. Hood joined the Arctic Power team early last year.

Tough sledding ahead

Though the pro-ANWR Senate vote gave optimism a shot in the arm, observers say all bets are off on the outcome of the House deliberations.

Getting the House to approve a budget resolution, let alone one including ANWR drilling, is going to be very difficult because of divisiveness within the ranks of GOP members, Hood said.

Just as they did last year, 24 moderate House Republicans sent a letter to Rep. Jim Nussle, R-Iowa, who chairs the House Budget Committee, asking that ANWR drilling be left out of the House version of the budget resolution.

“He is going to have to fashion a package that will attract bipartisan support and that’s where ANWR could play a pivotal role,” Hood said. “There are a lot of conservative Democrats who support ANWR drilling.”

2006 being an election year also will have a moderating influence on extreme views in Congress, he predicted. “They can’t attack entitlement programs the way they did last year,” he said. “This increases our chances, but it’s still a long way from a slam dunk. It’s going to be very difficult.

“That being said, I am optimistic our chances are better this year than they were last year,” Hood said. “That Senate vote was mouth-to-mouth resuscitation, and we’re going to live to fight another day.”

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