US Senate Energy and Natural Resources Committee Chair Lisa Murkowski (R-Alas.) released proposed legislation on Nov. 8 that would authorize oil and gas leasing on the Arctic National Wildlife Refuge’s Coastal Plain to raise nearly $1 billion for the proposed Fiscal 2018 federal budget. The measure aims to satisfy instructions to the committee in H. Con. Res. 71 to reduce the federal budget deficit by that amount from 2018 through 2027.
Committee Democrats criticized the idea when it was discussed in a Nov. 2 hearing (OGJ Online, Nov. 3, 2017). “As we sit here today discussing opening ANWR to drilling, it feels more like a political exercise,” Sen. Debbie Stabanow (Mich.) said. The committee will meet on Nov. 15 to mark up Murkowski’s bill.
It would require the US Interior secretary to conduct at least two lease sales on ANWR’s Coastal Plain within a 10-year period once the bill became law. At least 400,000 acres would be offered each time in areas identified as having the highest potential for discovering hydrocarbons. Initial leasing would occur during at least the initial 4 years, and a second sale would be held no later than 7 years after the bill became law.
The secretary also would authorize as much as 2,000 acres of the Coastal Plain to be covered by production and support facilities—including air strips and any area covered by gravel berms or piers to support pipelines—during the leases’ terms.
The legislation would generate an estimated $1.092 billion of revenue over 10 years, according to the Congressional Budget office’s evaluation. It would establish a 16.67% royalty rate for ANWR Coastal Plain production compared with established onshore federal royalty rates of 12.5% and offshore royalty rates of 18.75%. Rental, bonus, and royalty receipts would be equally split between state and federal governments.
Production would help refill the 800-mile Trans-Alaska Pipeline System, which crosses the state from Prudhoe Bay on the North Slope to Valdez farther south. It moved more than 2 million b/d at its peak in the late 1980s, but shipped an average 517,868 b/d in 2016.
Contact Nick Snow at [email protected].
