Drilling in ANWR cut from US House budget bill

Nov. 21, 2005
US House Republican leaders withdrew language authorizing oil and gas leasing within the Arctic National Wildlife Refuge from their version of the federal budget bill on the eve of its floor consideration.

US House Republican leaders withdrew language authorizing oil and gas leasing within the Arctic National Wildlife Refuge from their version of the federal budget bill on the eve of its floor consideration.

The Nov. 9 action came less than a week after the Senate approved its budget measure with the provision intact. It was a reversal of previous years, when ANWR leasing authorization cleared the House but was stopped in the Senate.

A spokesman for Rep. Don Young (R-Alas.) said the lawmaker was not pleased with the decision, but would not elaborate. Young is a member of the House Resources Committee, which approved budget language including ANWR leasing authorization on Oct. 26.

The House Budget Committee sent a full budget bill, which included $2.5 billion of estimated ANWR leasing and royalty revenues from 2006 through 2010, to the floor on Nov. 3 for final consideration.

Republican moderates opposed to the provision, led by Rep. Charles F. Bass (R-NH), presented a letter with 26 signatures to Speaker J. Dennis Hastert (R-Ill.), Majority Leader Roy D. Blunt (R-Mo.), and Rules Committee Chairman David T. Dreier (R-Calif.) at the leadership’s weekly meeting.

The group’s apparent threat to vote with Democrats against the budget bill convinced House Republican leaders to pull the ANWR provision. Observers suggested that the tactic of including it in budget legislation, which helped it survive in the Senate by heading off a filibuster, had the reverse effect in the House this time.

“There will be no drilling in ANWR,” said Bass. “I conveyed the moderate Republicans’ concern with this provision to the leadership, that message was heard and the provision was removed from the bill.”

Revival possible

But the provision remains in the Senate’s budget bill, and could be put back in during the budget reconciliation conference with the House. “It’s still a priority,” a spokeswoman for the Senate Energy and Natural Resource Committee’s majority said.

Rep. Edward J. Markey (D-Mass.), a senior minority member of the House Resources Committee, agreed. “Today, the Republican leadership is desperately seeking to keep the budget reconciliation bill from sinking by throwing overboard the terrible idea of drilling for oil and gas in a national wildlife refuge,” he told reporters.

“But President Bush and the Republican leadership clearly wish to drag this dead weight back into the boat when the House and Senate meet in Conference,” said Markey, who sponsored an amendment to strip the ANWR leasing provision from the budget bill.

The House Republican leadership’s action followed new estimates by the US Geological Survey that 88%, or 5.1 billion bbl, of undiscovered but technically recoverable oil resources within ANWR could be economically found, developed, produced, and transported to markets at a sustained $42/bbl market price.

The Oct. 25 report, which updated an earlier assessment that used 1996 data, was based on 2003 technology and cost information, the latest available year for actual cost data, the Department of the Interior division said.

It incorporated new technologies, such as horizontal drilling and satellite-cluster field development, which have become standard operating procedures on Alaska’s North Slope, according to USGS.

The upper end of the evaluated price range was $55/bbl in 2003 dollars, or $60/bbl in current terms, it indicated.

OCS gas plan halted

House Republican leaders also pulled from the budget bill a provision, the Ocean States Option Act, which would have given coastal states the right to request development of natural gas resources in federal waters off their shorelines.

It effectively ended congressional consideration of such a plan since the Senate had not taken it up. It also prompted immediate reactions from the American Gas Association and the American Chemistry Council (ACC).

AGA Pres. David Parker called it “deeply disappointing” that the House would not get to vote on the provision “at a time when American households face record-high bills for heating their homes with natural gas.”

Citing US Energy Information Administration estimates, Parker said the average US household can expect to pay more than $1,000 for gas heat this winter, 41% more than in the 2004-05 winter heating season and more than double the $586 average paid in the 1999-2004 period.

“It doesn’t have to be this way-especially since enormous amounts of natural gas lie beneath land and water areas held for the public benefit by the federal government,” said Parker.

“I’m flabbergasted that some in Congress continue to live in a fantasy world in which the government encourages use of natural gas while cutting off supply, and then they wonder why prices go through the roof,” said ACC Pres. Jack N. Gerard. “Is it really 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 as a crisis?”

He said that House Resources Committee Chairman Richard Pombo was to be commended for trying to reduce domestic gas prices by championing the provision.

“Many in Congress are being swayed by narrow, special interests using scare tactics to prevent America from tapping into its own energy sources. The real scare will come this winter when many Americans will have to choose between heating their homes and buying Christmas presents-or even putting food on the table,” Gerard said.