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Vol. 10, No. 51 Week of December 18, 2005
Providing coverage of Alaska and northern Canada's oil and gas industry

ANWR or else

Stevens engages in day-to-day battle for ANWR; Christmas recess no certainty

Rose Ragsdale

Petroleum News Contributing Writer

Republican Congressional leaders vowed the week of Dec. 12 to do whatever it takes to gain passage of a controversial bill allowing oil and gas drilling on the coastal plain of the Arctic National Wildlife Refuge even if it means no Christmas recess.

The bill is currently part of the Senate’s $35 billion five-year spending cut package, but Senate leaders appear to have hit an impasse in conference committee as ANWR opponents fight to keep it out of a final conference report. The $50 billion House of Representatives version of the deficit-cutting package does not include ANWR.

GOP moderates pressured House leaders to drop ANWR drilling and House Democrats, in a rare show of unity, unanimously opposed the budget bill because of cuts to health entitlement spending. Unless Republican leaders can find a way to shake ANWR free of this political vise, the drilling provision may be doomed.

“It (ANWR) seems dead. The Democratic Party is in pretty hard lockstep against this bill,” said Brian Riedl, a budget analyst with the Heritage Foundation, according to a report in E&E Daily Dec. 12.

ANWR to join Pentagon measure

But Congressional Republicans began exploring a new tactic Dec. 14 in hopes of winning approval of both $45 billion in budget cuts and the drilling plan.

Lawmakers and senior aides said they will tack the drilling proposal onto a Pentagon spending bill that is among those that must pass before Congress heads home for the holidays.

The switch, they said, could clear the way for approval of the spending cuts sought by conservatives and the Arctic drilling plan that is a priority of Republicans and the Bush administration, provided they could defeat any filibuster.

“It’s going to be on one bill or the other before I go home,” said Sen. Ted Stevens, R-Alaska, a leading proponent of opening the Arctic plain to oil production.

Stevens and other congressional leaders have vowed to fight for the drilling plan, which is as close to approval as it has ever been in a quarter century of debate.

The idea of adding it to the defense spending measure took on new urgency after House leaders suggested it might be the only way to win approval of both the budget cuts and the drilling initiative.

The Pentagon measure, already tied up in another dispute over treatment of terror detainees, is likely to be one of the final bills passed this year and could also contain aid for the hurricane-ravaged Gulf Coast as well as money for avian flu preparation, making it a difficult bill to resist.

But unlike the budget reconciliation bill, the defense spending measure would require 60 votes for passage to overcome a Senate filibuster by Democrats. Aides told the New York Times they were trying to determine whether attaching the drilling provision to the Pentagon measure would prompt a filibuster and whether they could round up the 60 votes to break one. The budget measure had been the first choice of the drilling advocates, since it is exempt from filibuster under Senate rules.

Senate Budget Chairman Gregg, who’s in favor of including ANWR in the defense spending bill, was quoted in press reports as saying, “I don’t know” if Stevens will be able to pull together the needed 60 votes, but it might work because senators would be reluctant to hold up money for the troops, hurricane relief, avian flu preparedness and possibly Low Income Home Energy Assistance.

“It’s really a specious argument” to block such initiatives over ANWR, he said.

The Senate Budget Chairman said he would push to include it in reconciliation if Stevens was unsuccessful.

Gregg also said that with ANWR still in play, “everything’s in limbo” on the budget bill, although press reports said negotiators were moving forward per orders from Senate Majority Leader Bill Frist, R-Tenn., and House Speaker Dennis Hastert, R-Ill., to wrap up negotiations by Dec. 15.

Frist said Dec. 14 he and Hastert are working “to find the best way to ‘thread the ANWR needle’ to help our country when it comes to energy independence.”

Leaders sign off on defense bill

Senate Defense Appropriations Subcommittee Chairman Stevens said Dec. 15 and that the ‘Big Four’ leaders of the Defense Appropriations subcommittees have signed off on the plan.

“Yes, it’s on,” Stevens said.

“It suits me,” added Senate Appropriations Chairman Thad Cochran.

Senate Minority Leader Reid called the strategy “outrageous,” and Sen. John Kerry, D-Mass., dubbed it “appalling.”

But according to press reports even strong House ANWR opponents did not say they would vote against the Pentagon bill given the importance of passing the measure before Congress adjourns for the holidays.

Christmas recess no certainty

Nothing says Congress has to take a Christmas recess, according to Stevens aide Courtney Boone. “Sen. Stevens can remember sitting in the chair in the Senate New Year’s Eve one year,” Boone said Dec. 15. “And Sen. Cochran, R-Miss., has vowed to not go home without his Katrina package.”

Meanwhile, 57 congressmen sought to sway their moderate colleagues Dec. 14, reminding them in a letter of the broad support across the country for opening ANWR, including that of labor unions and ANWR residents, themselves.

Lobbying continues

Kaktovik residents wrote GOP members in Congress a letter Dec. 8, urging support for ANWR drilling and outlining their reasons.

“We felt it was important to bring facts and clarity back to the discussion about leasing on the coastal plain,” said Lon Sonsalla, mayor of the Inupiat village of approximately 300. “There has been an incredible amount of distortion on this issue. The mainstream Republicans’ advocate a pragmatic approach to federal policies. Our aim is to dignify their hard work with important information that has been obscured by years of rhetoric.

“Leasing ANWR actually reflects a rare alignment of local, state and national purpose,” Sonsalla added.

Others joined the chorus pleading for Congress to open the 1.5-million-acre 1002 area of the refuge to drilling, including columnist George F. Will of the Washington Post.

“A quarter of a century of this tactic applied to ANWR is about 24 years too many,” said Will in a Dec. 15 editorial. “If geologists were to decide that there were only three thimbles of oil beneath area 1002, there would still be something to be said for going down to get them, just to prove that this nation cannot be forever paralyzed by people wielding environmentalism as a cover for collectivism,” he added.

On Dec. 12 Interior Secretary Gale A. Norton also emphasized the long-term significance for America’s energy security and economy of opening 2,000 acres to energy development in the vast 19 million-acre refuge.

In a statement, the Interior secretary responded to ANWR drilling opponents who say the 10 years needed for energy development is too long to wait for oil to flow from the area. ”Families all across this land spend 18 years planning for their children’s college education. Those same children deserve a government that will invest seven to 10 years in their future energy security,” she said.

More revenue for Uncle Sam

But perhaps the biggest recent boost to ANWR’s chances came from the Congressional Budget Office Dec. 8.

The Congressional Budget Office said energy companies may pay as much as $10 billion for the rights to drill for crude oil in ANWR, double the government’s official estimate. The higher revenue figure could turn some U.S. lawmakers in favor of ANWR drilling to help offset the huge federal budget deficit.

The nonpartisan CBO said if long-term oil prices were roughly $50 a barrel in 2010 — equal to $45 a barrel in today’s dollars — oil companies may pay $10 billion or more in bids to lease tracts in the refuge.

That is double the CBO’s official estimate of $5 billion in bids that would be raised over the 2008-2010 period from ANWR leases, which is based on oil prices in the range of $25 to $35 a barrel.

Revenue from the bids would be split equally between the federal government and the State of Alaska.

U.S. crude oil prices are currently around $60 a barrel, and the Energy Department has forecast oil prices will stay high in the next few years.



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