Bush administration officials geared up the week of Feb. 28 for the latest push to persuade Congress to open the coastal plain of the Arctic National Wildlife Refuge to oil and gas development with testimony before a Senate committee and a tour of the refuge and Alaska’s North Slope oil operations on the weekend.
Republican congressional leaders also indicated they are ready to press for a vote on ANWR during the budget reconciliation process in the next three weeks.
Budget Committee Chairman Judd Gregg, R.-N.H., said March 1 that it was reasonable to assume ANWR would be part of the budget measure.
Gregg’s committee was expected to begin work soon on the budget language and details could be worked out by March 9 when the panel is expected to begin its formal budget session.
Senate Energy and Natural Resources Chairman Sen. Pete Domenici, R-N.M., told the Associated Press that he was “very optimistic we’re going to get the ANWR provision in this budget.”
Many Senate Democrats and some Republicans oppose oil drilling in ANWR because they believe claims by environmental groups that oil industry activities will destroy the habitat of polar bears, caribou and other wildlife.
Three years ago, Senate Democrats, allied with a few moderate Republicans, defeated a pro-development measure by a 52-48 vote. In 1995, an ANWR drilling provision made it into budget language, but President Clinton vetoed the bill.
A debate on the Senate floor, including a vote on the ANWR provision, is anticipated before the two-week congressional Easter recess March 19.
Given the wider majority of 55 Republicans against 44 Democrats and one Independent, Republican leaders believe they have the best chance yet to gather the 51 votes needed to include ANWR in budget language and avoid a Democratic filibuster.
Lease revenues in 2006 budget
Meanwhile, Interior Secretary Gale Norton told the Senate Energy and Natural Resources Committee March 1 that she is confident in the Bush administration’s revenue forecasts from oil development in ANWR. The administration has included in its 2006 budget request to Congress $2.4 billion in fees it expects Interior to collect from leasing tracts in the refuge.
Government accountants have estimated federal revenues from ANWR within five years of leasing will exceed $2.5 billion.
Open ANWR and they will come
In response to a question from Alaska Sen. Lisa Murkowski, Norton said she is confident oil companies will be active in bidding for the leases, once Congress opens ANWR to exploration and development.
Murkowski cited a Feb. 21 New York Times article that raised the specter of growing oil industry apathy about ANWR. As evidence of the industry’s cooling ardor for ANWR oil development, the Times cited ChevronTexaco, BP and ConocoPhillips’ withdrawal of support from Arctic Power, an Alaska-based advocacy group that lobbies for ANWR development.
“Only two oil companies have discontinued their support for Arctic Power recently, while many others including ExxonMobil, Shell, Anadarko Petroleum, and the American Petroleum Institute (to which all oil companies active in Alaska belong) have renewed their support both for Arctic Power and the opening of the coastal plain,” said oil industry consultant and longtime ANWR lobbyist Roger Herrera.
Too big to ignore, says Brady, ChevronTexaco
Judy Brady, executive director of the Alaska Oil and Gas Association and an Arctic Power board member, said AOGA fully supports opening ANWR to oil development. “The prospectivity of that area is so high, there’s no question that the oil companies are going to explore there,” Brady added. AOGA is an association of Alaska’s oil and gas producers based in Anchorage. Its members include the state’s two top North Slope oil producers, ConocoPhillips Alaska and BP Exploration (Alaska) Inc., as well as ChevronTexaco.
ChevronTexaco, operator of the only oil and gas leases in ANWR and the company that drilled ANWR’s KIC well, continues to support ANWR development, company spokesman Mickey Driver said March 2.
“Opening up ANWR is an important step forward in meeting our nation’s energy needs,” he said. The results of the KIC well remain secret at the request of ANWR leaseholders ChevronTexaco and BP Exploration (Alaska).
As for why ChevronTexaco walked away from Arctic Power in 2000, Driver said the reason “had absolutely nothing to do with internal or external estimates of hydrocarbon potential in ANWR.”
“ChevronTexaco and Arctic Power continue to strongly support opening the ANWR Section 1002 Area (coastal plain) to environmentally responsible oil and gas exploration and development,” he said.
BP holds onto interest in ANWR leases
Herrera said neither BP nor ConocoPhillips has ever publicly stated a loss of interest in the oil potential of the coastal plain or reluctance to participate in a lease sale when the area is opened.
“In fact, their competitive stance with their peers and the way they are actively spending money in the search for oil would indicate clearly that they undoubtedly will participate in an ANWR lease sale when it occurs,” he said.
BP, for example, held onto ANWR leases it acquired decades ago when it placed all its other Alaska exploration acreage on the sales block several years ago.
“One has to conclude that (the oil companies) reasons for their lack of support for the effort to open ANWR are wholly political,” Herrera added.
Murkowski told the committee she was bemused by the Times article because she thought Congress was considering opening ANWR to promote America’s energy independence and not necessarily to enhance the operations of the oil companies.
Norton said she agreed with Murkowski that “it is the American public and the American government that needs to be concerned about America’s domestic production and our reliance on foreign oil.”
“The multinational oil companies can look wherever they want to around the world for their sources, so having our own domestic supply is a uniquely American concern,” she said.
Murkowski said the U.S. Geological Survey has estimated that ANWR’s coastal plain has an even chance of producing 10.4 billion barrels of oil, and could contain 16 billion barrels of oil, most of which will be economic to produce at current prices of about $50 per barrel.
If the environmental community really believed the oil companies have lost interest and think there is no oil in the coastal plain of ANWR, reasoned one Alaska oil patch insider, they would save their campaign money for other causes, and let Congress open the refuge to oil drilling.
Instead the environmental community has renewed its anti-oil development in ANWR attacks in recent weeks.
“ANWR has become ‘an incredible symbol’ for groups looking to put a chink in the armor of those who want to develop oil resources in the refuge,” Murkowski aide Elliott Bundy said March 2. The New York Times and its editorial board are among forces that oppose oil development in ANWR, Bundy added.
Delegation tours ANWR
A congressional delegation, led by Domenici and Murkowski, was to visit ANWR and North Slope oil operations 50 miles west of the refuge’s coastal plain in early March to dramatize the argument that the refuge can be developed in an environmentally sound manner, using modern drilling technology. The group included newly appointed Energy Secretary Samuel Bodman, James Connaughton, head of the White House Council on Environmental Quality, Norton and Republican Sens. John Thune of South Dakota, Jim Bunning of Kentucky and Robert Bennett of Utah.
“We’re going to Alaska this weekend to see ANWR, a resource that can take our dependence away from Saudi Arabia for a million barrels of oil a day for 30 years,” Bunning said March 3.
