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Murkowski Bills Would Boost Alaska's OCS Revenues, Lift Crude Export Ban

U.S. Sen. Lisa Murkowski (R-AK) has introduced a pair of bills that call for boosting Alaska's share of revenues from oil and natural gas production from the state's Outer Continental Shelf (OCS) -- as well as increasing the number of lease sales there -- and lifting the U.S. ban on crude oil exports.

Murkowski, who chairs the Energy and Natural Resources Committee, introduced S 1278 -- also known as the Alaska Outer Continental Shelf Lease Sale Act -- on Tuesday. The bill calls for providing revenue sharing in the Alaska OCS region and increasing the number of lease sales in offshore planning areas that cover the Beaufort and Chukchi seas and the Cook Inlet.

Specifically, S 1278 would create two time periods for revenue sharing: from 2016-2026, and 2026 and beyond. During the first 10-year period, which would cover the exploration and development phases for oil and gas drilling, 7.5% of revenues would be shared with the State of Alaska and an additional 7.5% would be divided between coastal political subdivisions. The bill would also allocate:

  • 2.5% to fund competitive grants for workforce development in support of the OCS;
  • 2.5% to fund the Bureau of Land Management's North Slope Science Initiative; and
  • 2.5% to the Secretary of the Department of Interior (DOI) to support offshore development, and establish pipeline rights-of-way on federal land to support development projects in the Beaufort and Chukchi seas.

The remaining 77.5% of revenue collected from 2016-2026 would be directed either toward the federal treasury or reducing the deficit. After the initial 10-year period, the bill calls for dividing the revenue between the federal treasury (50%), the State of Alaska (30%), coastal political subdivisions (7.5%) and the Low Income Heating Assistance Program (LIHEAP), weatherization and Arctic infrastructure (12.5%).

"In the near term, providing energy and revenues to Alaskans requires increasing access in the areas where Alaska already receives revenue sharing like the within the six-mile limit," Murkowski said. "But in the longer term, my legislation will ensure that the State of Alaska and coastal communities supporting development will receive a substantial share of the revenues from production to compensate for impacts from development."

S 1278 would also require a minimum of three lease sales in each of the Beaufort, Chukchi and Cook Inlet planning area during any five-year period, and annual lease sales in the 8(g) zone of the Beaufort and Cook Inlet planning areas.

On Wednesday, Murkowski and 12 other senators introduced a second bill -- S 1312, the Energy Supply Distribution Act -- which would lift the 40-year ban on U.S. oil exports, which Murkowski and other Republicans have long had in their crosshairs (see Daily GPIJan. 7, 2014). The bill would exclude oil stored in the Strategic Petroleum Reserve, but it would, among other things, authorize the creation of a program requested by the U.S. Energy Information Administration (EIA) to share data with Canada and Mexico on cross-border energy flows.

"America's energy landscape has changed dramatically since the export ban was put in place in the 1970s," Murkowski said. "We have moved from energy scarcity to energy abundance. Unfortunately, our energy policies have not kept pace. This legislation builds from bipartisan ideas, linking energy security and infrastructure to expanding exports and helping our allies."

Last week, Murkowski introduced a list of 17 bills covering a variety of energy issues (see Daily GPIMay 7). The Senate Energy and Natural Resources Committee said it will hold three hearings over the next few weeks to discuss the nation's energy policies, as Murkowski and other committee members, including Democrats, assemble a comprehensive energy bill (see Daily GPI, Feb. 24).

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