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.”