New ANWR opening tryBudget bills include provisions aimed at congressional approval of exploration Alan Bailey Petroleum News
A new effort to open the coastal plain of the Arctic National Wildlife Refuge for oil and gas exploration and development crossed one hurdle on Oct. 19 when the U.S. Senate passed a budget resolution for fiscal year 2018. Although the bill did not explicitly mention ANWR, the budget reconciliation section of the bill clearly targets the refuge by requiring the Senate Committee on Energy and Natural Resources to “report changes in laws within its jurisdiction to reduce the deficit by not less than $1 billion for the period of fiscal years 2018 through 2027.”
The reconciliation section of the bill also requires the committee to recommend by Nov. 13, 2017, a means of achieving the $1 billion deficit reduction. The recommendation will become part of a budget reconciliation bill which will then be put to the Senate for consideration.
Petroleum News understands that, for this to happen, the House of Representatives must also pass the same budget resolution bill as the one passed in the Senate, despite the fact that on Oct. 5 the House did pass a similar budget resolution with identical language requiring the House Committee on Energy and Natural Resources to make a recommendation for reducing the deficit by $1 billion.
The ANWR option During the Senate floor debate on the budget resolution bill Sen. Lisa Murkowski, chair of the Senate Committee on Energy and Natural Resources, said that her committee would consider a number of options for meeting the $1 billion target but that opening a portion of the ANWR coastal plain would be the best of the options. She said that, through the use of modern development techniques, only about 2,000 surface acres of the so-called 1002 area of the coastal plain would likely be impacted. Revenues would presumably originate from oil and gas leasing, and potentially from oil and gas royalties.
Then, if both the Senate and the House pass a budget reconciliation bill that includes the ANWR language, the opening of part of the ANWR coastal plain would become law - Interior Secretary Ryan Zinke has indicated that the Trump administration favors opening ANWR, so it seems clear that the president would sign into law legislation involving the opening of the refuge.
The use of the budget process as a tool for opening ANWR presumably relates to the improved odds that the Senate will approve the opening through this mechanism, rather than through a separate bill specifically aimed at the ANWR question. Unlike most bills considered by the Senate, a budget reconciliation bill can be passed by a simple majority of 51 senators. Any other bill is subject to the possibility of being derailed by a filibuster, a derailing procedure that can only be overcome by a supermajority of 60 votes.
The 1002 area ANWR, it its current form, was established in 1980 under the Alaska National Interest Lands Conservation Act. Although that act placed much of the refuge off limits to oil and gas development, the act did offer the possibility of at some time opening for development the northern strip of the refuge, on the eastern extension of the North Slope coastal plain. This part of the refuge, the 1002 area, is thought highly prospective for oil and gas. But under the terms of ANILCA the 1002 area can only be opened for oil and gas exploration if the U.S. Congress passes an act authorizing the opening. So far the passage of an authorizing act has proved elusive, with the Senate, in particular, proving reluctant to enact an opening. But supporters of a 1002 area opening see this new congressional maneuver as a feasible means of achieving their objectives.
“This budget resolution offers a tremendous opportunity to secure the future of Alaska, from long overdue federal tax reform to responsible energy development in a small part of the non-wilderness 1002 area,” Murkowski said in response to the Oct. 19 passage of the Senate budget resolution. “Tonight was just the first step, but we are now on a path that will allow us to create jobs, generate new wealth, keep energy affordable, and protect our national security.”
Environmental organizations have a different perspective.
“This move by the Senate poses a grave threat to the Arctic Refuge, and Americans should be outraged at the shameless hijacking of the federal budget process. This fight is far from over,” said Jamie Williams, president of the Wilderness Society. “The Arctic Refuge is simply too fragile and special to drill, and we have a moral obligation to protect it for future generations of Americans.”
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