What’s next for ANWR?

Drilling provision’s fate rests in hands of House-Senate negotiators after Thanksgiving recess, possibly next year

Rose Ragsdale

Petroleum News Contributing Writer

With passage of a budget reconciliation bill in the U.S. House of Representatives, a provision allowing oil and gas drilling on 2,000 acres of the coastal plain of the Arctic National Wildlife Refuge has moved one step closer to becoming law.

But congressmen, lobbyists and bystanders agree the measure still faces very tough sledding before it lands on President Bush’s desk for signature.

The House passed a $50 billion package of spending cuts by two votes early Nov. 18, ending more than a week of heated negotiations among the Republican majority over contents of the controversial bill. The measure passed 217-215 around 1:45 a.m.

With Democrats unified in opposing the measure, Republican conservatives and moderates cobbled together a victorious deficit-cutting package, after more than a week of haggling in which disgruntled moderates convinced House leaders to strip ANWR drilling from the legislation and to restore a small portion of the food stamp cuts. Eleventh-hour negotiations for compromises and concessions continued right up until the final vote.

A reluctant Rep. Joe Barton, R-Texas, cast the final vote. He had previously threatened to vote against the measure when the leadership dumped ANWR. The vote, scheduled for 15 minutes, was kept open for nearly a half-hour. Fourteen GOP moderates voted against the bill.

Pro-drilling lawmakers such as Barton, who chairs the House Energy and Commerce Committee, and Resources Committee Chairman Rep. Richard Pombo, R-Calif., have said they will press for inclusion of ANWR in a final conference report, and it is a paramount reconciliation priority for several Senate lawmakers.

An exasperated Rep. Don Young, R-Alaska, sent a letter Nov. 18 to his House colleagues in which he said the House apparently needed a refresher course in supply and demand. Young referenced two recent memos from Rep. Charles Bass, R-N.H., who led GOP moderates, mostly from the Northeastern states, in their campaign against ANWR drilling. The first memo urged House members to vote no on ANWR, and the second memo pledged federal funds for the Low Income Home Energy Assistance Program.

“SUPPLY affects DEMAND!” wrote Young. “It is time to open ANWR and help address our nation’s energy needs.”

Disarray among House Republicans

Frank said: “One factor in (ANWR’s) defeat was the drop in the president’s popularity (Polls show Bush’s approval ratings at their lowest levels since he took office) and his inability to maintain unity among the GOP ranks.” Frank also noted that the Republican Party misses the vote-gathering powers of Texas Rep. Tom DeLay — nicknamed “The Hammer” — who has stepped aside as House Majority Leader because of legal problems. Rep. Roy Blunt, R-Mo., replaced DeLay.

“Not every blunt instrument is a hammer,” Frank quipped.

Though ANWR drilling did not survive in the House, it was part of a $35 billion budget reconciliation bill passed by the Senate Nov. 3. This means the drilling language has a solid chance of being included in compromise legislation that House and Senate leaders are expected to take up when they return to Washington, D.C. after the two-week Thanksgiving recess.

Threading the needle

“Right now, anything I would say would be speculation,” Hastert said when asked directly if he thought ANWR was likely to come back in conference.

Rep. Ed Markey, D-Mass., a leading anti-drilling Democrat, predicted ANWR would be back. “I think there is a high probability we will see it in the conference report,” he told E&E Daily after the early morning vote.

But Rep. Sherwood Boehlert, R-N.Y., who opposes drilling and voted for the reconciliation bill, told E&E Daily that he believes enough moderates have drawn a line in the sand to keep ANWR out.

“I feel very confident. We have seen exactly what happened here. The Democrats are holding fast. They are unified against it,” Boehlert said. “We know we have enough Republicans in our moderate group to affect the final outcome of any final conference report that is unacceptable to us, and it would be unacceptable if ANWR were in it. We feel very confident we have got the numbers.”

Several of the moderates who voted for the budget have said they would not do so if ANWR is added, including Bass, Boehlert, Rep. Wayne Gilchrest, R-Md., and others. Boehlert said there are more than 11 GOP members who would not agree to a conference package with ANWR.

But Westerner Republicans “may take a stronger position” against issues vital to Northeastern moderates if they oppose ANWR drilling, said Cody Stewart, executive director of the Congressional Western Caucus.

Rep. Dennis Rehberg, R-Mont., said opening ANWR to drilling is crucial to his state’s energy interests and that if Northeasterners expect Montana taxpayers to pony up for the Low Income Home Energy Assistance Program, they should agree to open up ANWR in return. Northeastern and Midwestern states have been pushing for the additional $1 billion in reconciliation for the low income energy program because of high energy costs.

Spending cuts an issue

Republicans originally planned $35 billion in savings by trimming the growth of Medicaid, food stamps, student loan subsidies and other benefit programs.

But House conservatives, upset with the deficit and a surge in spending for hurricane disaster relief, forced GOP leaders to raise the ante to almost $50 billion in savings. In doing so, they forced a more politically difficult vote because the budget plan in the House took far greater aim at programs for the poor than did the Senate’s version.

Other difficult issues facing House-Senate negotiators include cuts to Medicare, Medicaid, student loans and milk-income subsidies.

Offshore oil and gas drilling language also failed to make it into the House bill, but a hotly debated provision allowing the sale of public lands to mining companies did survive. The language reinstates rights of the private sector to buy mining claims on public lands, ending a 10-year moratorium. It also updates lease pricing for the first time in over a century. The purchase price of land for mining would be $1,000 per acre or “fair market value,” whichever is more, about 200 times more than it was before the moratorium took effect. The move could transfer into private hands up to 20 million acres of public lands on Western ranges, national forests and even national parks.

Moderates in both the House and Senate say the final bill will smooth out many of the House bill’s rough edges.

December or after Jan. 1?

But Frank Maisano, director of strategic communications for the Washington, D.C. law office of Bracewell & Giuliani, says action could be put off until next year.

“In essence, the Congress is out. They will return though for a number of items, including the tax package vote in the House, which is likely on Dec. 6. The House will return for a limited session on the week of Dec. 5, and the Senate is expected to return for a limited session on Dec. 12,” Maisano said in his Nov. 21 newsletter.

Either way, pro-drilling advocates in both the House and Senate are expected to insist on restoring the ANWR provision to the legislation during negotiations in December. Otherwise, they have threatened to kill the overall budget proposal.

But predicting an outcome with this Congress is virtually impossible, said Herrera. “The differences between the House and Senate versions of the budget bills are great. Consequently, it is difficult to forecast what might come out of conference,” he said. “My guess is that a conference report will be possible, and it will contain ANWR. If that happens, the final bill will be passed in both chambers.

“However, predicting such a straightforward scenario is rather silly considering all the strange things that have surrounded ANWR so far this year — i.e. easy passage in the Senate, no passage in the House, Mr. DeLay’s indictment, hurricanes, price of oil, White House problems, etc., etc.”

“Most of those issues are still in play, so anything could happen,” Herrera added.

—The Associated Press and E&E Daily contributed to this report