February 02, 2004 --- Vol. 10, No. 13February 2004

Bush includes hopeful ANWR revenues in federal budget

Just as he has done the three previous years of his presidency, George W. Bush today included revenues from lease sales in the coastal plain of Alaska’s Arctic National Wildlife Refuge in his proposed budget submitted to Congress. The president’s budget includes $2.4 billion from lease sales in fiscal year 2005, assuming he can get the Senate to go along with his plan to open ANWR’s coastal plain to oil and gas exploration.

The ANWR revenue represents about one-tenth of 1 percent of Bush’s proposed $2.4 trillion spending plan for 2005, which the administration estimates will run at a $363 billion deficit.

Bush has included ANWR leasing revenue in his proposed budget every year since his election in 2000 but a collection of Senate Democrats and conservation-minded Republicans have blocked efforts to open the area to leasing. Most observers expect it will be hard to break through the wall during this year of presidential politics, especially with the Democratic Party working hard to unseat Bush and all of the major Democratic candidates for president on record in opposition to opening ANWR to drilling.

Bush’s 2005 budget proposes that half of the estimated $2.4 billion in ANWR leasing fees would be directed toward increased funding for the Energy Department’s renewable technology research programs, with the money to be spread over seven years.

The state of Alaska would receive the other half of the lease fees, under the federal law that gives the state 50 percent of all ANWR lease fees and royalties from any eventual production.

The Bush administration wants to lease between 400,000 acres and 600,000 acres in the refuge's coastal plain in 2005, assuming he can win congressional approval in 2004.

The Interior Department estimates ANWR could hold several billion barrels of recoverable oil, with an estimated production of 5 billion barrels if prices hold around $22 per barrel. The Alaska Department of Revenue estimates it would take seven years after congressional approval for production to start.

The Alaska Legislature has appropriated $12.6 million over the past decade for the state’s lobbying efforts to push Congress to open ANWR’s coastal plain to oil companies.

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