Daily GPI / E&P / NGI The Weekly Gas Market Report / Regulatory / NGI All News Access

Senate Budget Resolution Leads to Speculation Over ANWR Drilling

A budget resolution unveiled by a Senate panel Friday calls for the Energy and Natural Resources Committee, as well as its counterpart in the House, to save at least $1 billion over the next decade, leading to speculation that the Senate committee could ultimately push to open a portion of the Arctic National Wildlife Refuge (ANWR) to energy development.

The Senate Budget Committee has scheduled hearings on Wednesday and Thursday (Oct. 4-5), to mark up the 89-page budget resolution for fiscal year (FY) 2018. It calls for the federal government to reduce spending by $5.1 trillion and envisions an on-budget surplus of $197 billion in FY2027. Besides the directive to Energy and Natural Resources, the resolution also orders the Senate Finance Committee to find $1.5 trillion in savings through comprehensive tax reform.

"This budget resolution puts our nation on a path to balance by restraining federal spending, reducing tax burdens, and boosting economic growth," said Sen. Mike Enzi (R-WY), chairman of the Senate Budget Committee. "It is also the first important step in providing Congress with the tools it needs to enact tax reform that will grow America's economy and strengthen hardworking families and small businesses."

The resolution established a Nov. 13 deadline for the House and Senate energy committees to "submit changes in laws within [their] jurisdiction to reduce the deficit" to their respective budget committees.

Alaska's congressional delegation, all Republicans, supports energy development in the 1.5-million acre coastal plain of the ANWR, a region also known as the 1002 Area. And with GOP plans to use the budget reconciliation process as a way to expedite tax reform through Congress, speculation is rife that Alaska Sen. Lisa Murkowski could use her position as chairman of the Senate Energy and Natural Resources Committee to introduce legislation that could ultimately open the 1002 Area to oil and natural gas drilling.

“This provides an excellent opportunity for our committee to raise $1 billion in federal revenues while creating jobs and strengthening our nation’s long-term energy security,” Murkowski said Friday. “I am confident that our committee is prepared to meet the instruction in this resolution.”

Representatives for Sen. Maria Cantwell (D-WA), the ranking member of the Senate Energy and Natural Resources Committee were unavailable to comment on Friday.

According to the U.S. Geological Survey (USGS), the portions of the 1002 Area controlled by the federal government hold an estimated 7.7 billion bbl of technically recoverable oil. The USGS estimate climbs to 10.4 billion bbl with the inclusion of Native lands and adjacent state-controlled water areas within a three-mile offshore boundary.

In March 2005, Cantwell, a critic of ANWR drilling, led an unsuccessful attempt to strike a pro-drilling provision from the FY2006 budget resolution. Two additional anti-drilling amendments introduced by Cantwell in November 2005 were also rejected by the Senate along partisan lines.

But the next month, after the pro-drilling provision was removed from the budget reconciliation package to appease moderate Republicans, then-Sen. Ted Stevens (R-AK) tacked ANWR drilling onto a major defense appropriations bill, with the assumption that Democrats would not oppose military spending for the wars in Afghanistan and Iraq. That gamble failed after drilling supporters failed to get enough votes to override a Democratic filibuster in the Senate. At the time, the vote was viewed as a major setback for the Bush administration and the oil and gas industry.

Alaska first announced plans to assess oil and gas resources within the 1002 Area in 2013, but the plans were rejected by the U.S. Fish and Wildlife Service (FWS). Alaska subsequently sued the FWS in 2014, arguing that it was authorized to explore the region under the Alaska National Interest Lands Conservation Act. A federal court disagreed and blocked the state from conducting 3-D seismic exploration and drilling of the area in July 2015.

Last June, Interior Secretary Ryan Zinke said the department would develop a plan for updating current assessments of undiscovered, technically recoverable oil and gas resources along Alaska's North Slope. The assessment was to focus on federal lands, including the National Petroleum Reserve in Alaska and the 1002 Area.

Recent Articles by Charlie Passut

Comments powered by Disqus