A Senate panel plans to meet this week to mark up a proposal to open a portion of the Arctic National Wildlife Refuge (ANWR) to oil and gas development, which may require the Department of Interior (DOI) to hold at least two lease sales for the region over the next decade.
The Senate Energy and Natural Resources Committee has scheduled a meeting Wednesday to consider reconciliation legislation attached to a $4 trillion federal budget bill for fiscal year 2018, which the Senate passed along mostly partisan lineson Oct. 19. The legislation includes language to open 2,000 acres of the 1.5-million acre coastal plain portion of ANWR, a region also known as the 1002 Area, to energy development. ANWR covers 19 million acres in total.
Specifically, the language repeals the portion of Section 1003 of the Alaska National Interest Lands Conservation Act that bars energy development of the 1002 Area, according to a descriptionof the chairman’s mark version of the proposal. It also directs the secretary of the DOI to manage an oil and gas leasing program according to the Naval Petroleum Reserves Production Act of 1976.
The proposal further stipulates that DOI conduct the first lease sale within four years after the proposal is enacted, followed by a second lease sale within seven years of enactment. Each lease sale must contain at least 400,000 acres “and be comprised of those areas that have the highest potential for the discovery of hydrocarbons,” the description said.
A royalty rate of 16.67% would be imposed for leases from each sale, with 50% of the revenues allocated to the State of Alaska, and the remaining 50% given to the federal government. The Congressional Budget Office estimates the proposal would raise $1.092 billion over a 10-year period.
“Our instruction is a tremendous opportunity both for our committee and our country,” said Sen. Lisa Murkowski (R-AK), the committee’s chairman. She said the proposal “will put Alaska and the entire nation on a path toward greater prosperity by creating jobs, keeping energy affordable for families and businesses, generating new wealth, and strengthening our security, while reducing the federal deficit not just by $1 billion over 10 years, but tens or even hundreds of billions of dollars over the decades to come.”
The committee held a marathon hearing over the proposal on Nov. 2. In general, the oil and gas industry and Republican allies in Congress support opening the 1002 Area to energy development, while Democrats and environmental groups are opposed. Native American tribes in the area are divided over the proposal.
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