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House Scraps ANWR, OCS Provisions in Deficit-Reduction Package

This year appeared to be the best opportunity for Congress to open the Arctic National Wildlife Refuge (ANWR) to energy development and expand leasing in protected offshore regions, but that chance may have gone down in flames last Wednesday.

An agreement adopted by the House Rules Committee stripped both ANWR and expanded Outer Continental Shelf (OCS) leasing from the $54 billion deficit-reduction bill.

The provisions were dropped to win support from a group of moderate Republicans, led by Rep. Charles Bass (R-NH), for the budget package. The moderates had threatened to vote against the deficit-reduction package if ANWR stayed in the bill. But the move to shelve ANWR and OCS alienated pro-drilling conservative Republicans. Even with the backing of the moderates, it was clear last week that House Republican leaders did not have the votes to pass the deficit-reduction bill.

The House was scheduled to consider the measure on the floor last Thursday, but it recessed shortly after it convened so that Republican leaders could squeeze out more votes to pass the deficit-cutting measure. In a sign the bill could be in jeopardy as a result of the concessions to the moderates, the House postponed floor consideration of the bill until this week.

"I think it's likely it will be back [this week]," said House Majority Leader Roy Blunt (R-MO) on the House floor. "It's certainly possible."

The move by the Rules Committee was a major win for the centrist Republicans and environmentalists, but a setback for a number of conservative Republicans who told House Speaker Dennis Hastert last week that they would vote against the deficit-cutting measure if ANWR and OCS were scrapped. It also was a big loss for the natural gas industry.

Jack N. Gerard, president and CEO of the American Chemistry Council, said he was "flabbergasted" by the House decision. "Is it going to take skyrocketing heating bills for those who can afford it least, hundreds of thousands more lost jobs and a consumer revolt before they recognize this is a crisis?" The ACC represents major chemical makers, which are large consumers of natural gas.

The dumping of the ANWR and OCS provisions is "deeply disappointing," said David Parker, president of the American Gas Association (AGA), which represents gas utilities. 'The issue is not whether natural gas production harms the environment...The real issue is whether Congress cares about people, or about posturing. It's past time to act."

Before winter ends, Parker called on House leaders to schedule a stand-alone vote to expand access to the OCS. In the meantime, the AGA urged President Bush to immediately open unavailable areas of the gas-rich Lease 181 in the eastern Gulf of Mexico to leasing (see related story).

OCS and ANWR development, which was originally proposed by the House Resources Committee to increase federal revenues, gained significant momentum following Hurricanes Katrina and Rita, which damaged energy infrastructure and caused vast amounts of oil and natural gas production to be shut in in the Gulf of Mexico.

The Rules Committee agreement applies only to the deficit-reduction measure pending in the House (HR 4241) and not to an eventual compromise measure with the Senate, but House moderate Republicans said they were determined to keep ANWR out of a final bill, according to a report in Congressional Quarterly's Green Sheets. Sens. Pete Domenici (R-NM), chairman of the Senate Energy and Natural Resources Committee, and Ted Stevens (R-AK) are equally as determined to keep ANWR in a final bill.

The Senate earlier this month approved development of a small portion of the coastal plain of ANWR as part of its deficit-reduction package, which leaves open the possibility that ANWR could be included in the final report that emerges from the House-Senate conference on the bill (see NGI, Nov. 7).

While Republicans are split in their support for the deficit-reduction package, Democrats are almost uniformly opposed to the bill. House Minority leader Nancy Pelosi (D-CA) has said all House Democrats would vote against the budget package, leaving Republicans to come up with the votes on their own.

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