Illusory revenues from ANWR strike again

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"Illusory revenues from ANWR strike again"

Sen. Lisa Murkowski (R-AK) wants to pay for nuclear loan guarantees and clean energy incentives in exchange for one of our most precious natural treasures, the Arctic National Wildlife Refuge.  Kristen Miller of the Alaska Wilderness League has the story:
Last week, Sen. Joe Lieberman (ID-CT) called drilling in the Arctic Refuge a big “no-no.” You would think that message would be loud and clear to Sen. Lisa Murkowski (R-AK), who tried to use the scheme as a bargaining chip for her vote on a comprehensive climate and energy package.

Yet this week, she’s at it again – falling back on a more traditional scheme to replace the caribou, polar bears and millions of birds that depend on the Arctic Refuge’s Coastal Plain with oil rigs. Now she’s promising to pay for nuclear loan guarantees and clean energy incentives in exchange for one of our most precious natural treasures. Yesterday, Senator Murkowski addressed the CQ-Roll Call Group Forum “The Role of Natural Gas in the New Economy,” and said that the revenues generated by oil drilling in the Arctic Refuge could offset the $13 billion addition to the deficit projected by the Congressional Budget Office for the American Clean Energy Leadership Act, S. 1462, passed by the Senate Energy Committee in 2009.  Senator Murkowski said “I have identified my pay fors.  It’s ANWR.” (go to 29:40)

A brief history lesson: Just five years ago, the Republican leadership tried to include Arctic Refuge drilling in the budget reconciliation process. The potential revenues they promised if the oil rigs could start pumping? $2.4 billion.

Meanwhile, an economic analysis of these speculative revenues at that time found that estimate was based on a scenario in which oil companies would pay 50 times more than the average rate on Alaska’s North Slope for every single acre they would lease in the Arctic Refuge. These revenues would have apparently come from the same oil companies who were so interested in accessing the Arctic Refuge (they’ve long kept their data on how much oil could be found on the Refuge’s Coastal Plain secret) that they’d dropped out of the lobbying effort to get in there in the first place.

Back in 2005, it seemed like somebody was spinning an awfully long yarn. Today, in 2010, it seems like that yarn has gotten about $10 billion longer. As a longtime Arctic activist said: “This would be like saying she would pay for the Senate energy bill with money from the tooth fairy.”

Again, this is a tried and true scheme among Arctic drilling proponents. Here’s a sampling of the ways they’ve tried to spend these illusory revenues in the past:

  • H.R. 6107 in the 110th Congress would have invested the federal share of the revenue from Arctic drilling into a trust fund dedicated, in part, to oil shale and tar sands development and coal based gasification and combustion technologies.
  • H.R. 5890 in the 109th Congress would have invested the federal share of the lease and royalty revenue from Arctic drilling into an energy trust fund dedicated, in part, to coal-to-liquid fuel activities cellulose biomass ethanol and to extend tax incentives for solar and fuel cell property.
  • H.R. 2863 in the 109th would have invested the federal share of the lease and royalty revenue from Arctic drilling in a “Gulf Coast Recovery Fund”, dedicating 80 percent of wildly speculative bonus bids in FY08 and FY10 for state and local governments affected by Hurricanes Katrina, Rita, and Wilma.  It would also dedicate 20 percent of royalties to hurricane victims in FY15. The rider would also have dedicated 5 percent of bonus bids, rentals and royalties to low-income home energy assistance program (LIHEAP).
  • Amendment 68 of the House Energy Policy Act of 2003 (H.R. 6) would have allowed the federal share of Arctic leasing revenues to be used to provide energy assistance to low- and fixed-income individuals under LIHEAP.
  • Amendment 3133 of the Senate Energy Security Policy bill of 2002 (S. 517), would have devoted federal Arctic leasing revenues to the Conservation, Jobs, and Steel Reinvestment Trust Fund.
  • President George W. Bush’s 2003 Budget Proposal would have devoted the Arctic leasing funds to help the nation reduce its dependence on fossil fuel”¦to increase land conservation and [to] reduce maintenance backlogs on public lands.
  • Amendment 296 to the Securing America’s Future Energy Act of 2001 (H.R. 4), would have provided that the federal share of Arctic leasing revenues be used for the Renewable Energy Technology Investment Fund and the Royalties Conservation Fund.

So Senator Murkowski’s recommendation to pay for clean energy incentives and nuclear loan guarantees under S. 1462 is just another attempt to use Arctic drilling as the solution to an unrelated problem.

Fortunately, when it comes to the climate bill, Arctic drilling is a non-starter, and Sen. Murkowski’s proposal was immediately dismissed. “That’s just not going to happen,” said Sen. Joe Lieberman (I-CT). “We’re looking at a lot of things, and that one is a no-no.” Even Sen. Mary Landrieu (D-LA), typically in lockstep with her Alaskan sister senator, understands that drilling in the Arctic Refuge has no place in the climate bill. “I voted to drill in ANWR, but I understand that there might be some trade-offs necessary,” she told reporters in the Capitol. “And that could be one of the trade-offs to protect ANWR, to open up drilling in other places.”

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7 Responses to Illusory revenues from ANWR strike again

  1. We will be fighting this battle for a long time to come. In 20 years, a warmer climate will appear far more dangerous than it does now, but there also will be a serious crude oil and gasoline shortage along with very high prices for them. The pressure to drill, drill, drill in the U.S. and the arctic may well be unsurmountable by then.

  2. Wes Rolley says:

    I have never understood the mentality that thinks we should take a constrained resource (oil) and use it up as quickly as we can. I have always thought that we will need to use the oil in ANWR eventually, but why now?

    Now? Because it allows the radical right to continue their war against the Endangered Species Act. I am really concerned that one time Chair of the House Committee on Natural Resources, Richard Pombo, is trying for a comeback in a different district, and continues to rail against the ESA. http://www.facebook.com/video/video.php?v=579591027844

    Philip is right, we will be fighting this battle for a long time to come. I probably will not live to see the end, and the way things are going, I may not care to.

  3. Skip Dihlay says:

    A typical drilling rig is smaller than a single wind turbine. After drilling a well, it is removed. I suspect the most vocal opponents are people that have never visited any one of Alaska’s National Parks. This is not a National Park. 19 million acres. In the lesser 48 they build 8 lane freeways accross wildlife lands and swamps.

  4. Chris Winter says:

    Yes they do. Europe, meanwhile, supports genuinely useful mass transit systems. You’re familiar with the story that GM, Standard Oil et. al. bought up trolley systems in 45 cities and dismantled them so they could sell buses to those cities? As the cause of the general lack of urban mass transit in the U.S., this is disputed (Google “Los Angeles trolley system”), but I think it contributed.

    In any case, diminishing a wildlife refuge for six months worth of oil is not a wise choice, and the argument that as much or more wild land has been destroyed elsewhere for other purposes is not germane.

  5. PaulinMI says:

    Skip,
    You’re dealing with crackpots here. Context and scale is not remotely considered by them.

    And we know the real reason for obtaining access to ANWR is the beach front property for tropical resorts in 2100 !

    Good grief, where do these people work? Do they ever leave the house?

  6. BBHY says:

    I just love the way conservatives are strictly free market capitalists until you get to nuclear energy, then they all become socialists!

  7. Chad says:

    Where are these dollar figures coming from and how are they calculated? Given that the number of barrels of oil in ANWR number several billions, we should expect to collect tens of billions in royalties, even more in tax revenue on the corporate profits, and a few more tens of billions from taxes on the workers and secondary economic activity surrounding the extraction…all over a few decades, of course.

    How about we cut a deal with conservatives – all the money from the above resources goes into a dedicated environmental fund? Frankly, oil and natural gas are not the problem, and we can reasonably safely burn all the high-quality sources of them. The enemy is coal and “unconventional” oils.