WASHINGTON (CN) – The Senate on Thursday moved closer to opening the Arctic National Wildlife Refuge to oil drilling, as it rushed its massive tax cut toward passage.
Legislation sponsored by Sen. Lisa Murkowski, R-Alaska, was tacked onto the bill last week after a contentious Senate Committee on Energy and Natural Resources meeting ended with the scuttling of nearly all proposed Democratic amendments.
Garnering votes to clear that first hurdle was imperative: Republicans demanded it to offset their tax cuts.
Republicans claim opening the 19.3 million-acre refuge in northeast Alaska to drilling will draw a total of $2 billion in royalties over 10 years, with half of the money going directly to Alaska. Murkowski called her bill a boon to Alaska’s economy and a step toward national energy security.
But those profits are speculative, said Kara Moriarty, president of the Alaska Oil and Gas Association.
“We can never guarantee what a lease sale will be. Lease sales in Alaska vary greatly,” she said in an interview Thursday. “The last time we had a major offshore lease sale in 2008 it generated $2.6 billion. It’s not unheard of to get a billion from a lease sale but, again, nothing is guaranteed.”
Alaska’s Prudhoe Bay, just west of the ANWR, was tapped for exploration in 1969 and its first lease sale yielded $90 million, or $600 million in 2017 dollars.
Profits from leases for exploratory drilling are inherently uncertain. Arctic oil lease records indicate profits would fall far under the $1 billion projected revenue, according to Bloomberg. It’s more likely lease sales will generate just a fifth of that total in 10 years, or $145 million.
Data used to support the Republicans’ projection is from 2005 and are based on decades-old U.S. Geological Survey records. The agency predicted the 1.5 million acres of coastal plains flagged for exploration inside the refuge may hold between 4 billion and 12 billion barrels of oil, rivaling the roughly 25 billion barrels discovered 40 years ago at Prudhoe Bay.
“The latest estimates are dated but only because no one has had the ability to update that estimation,” Moriarty said. “And they’re conservative. The average prospect could be 10 billion barrels of oil, which isn’t insignificant.
“When Prudhoe was discovered, we estimated 8 billion barrels. Today, Prudhoe has produced 12 billion barrels and counting. There shouldn’t be any doubt the coastal plain will be a giant, but nothing is certain. This is a business of risk, but we think it’s likely to be one of the most prosperous onshore areas in the nation.”
Environmentalists and many Democrats are ardently opposed to opening the ANWR to oil drilling, for environmental reasons, and to keep the oil where it is, against the sure need for it one day, when technology may have made its extraction safer and more efficient.
Adam Kolton, executive director of the Alaskan Wilderness League, said Thursday Murkowski’s bill was about “patent greed” and failed to represent the public interest.
“Alaska is seen as one of America’s greatest treasures. … The refuge is worth far more if protected for future generations than squandered for short-term speculative fixes on oil that won’t come online a decade from now, won’t show peak production until 20 years after that and then will be gone in a generation,” he said.