December 16, 2017
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Balancing the budget with ‘fantasy’ oil revenue is no reason to open ANWR to drilling

AP | BDN
AP | BDN
Caribou graze on a section of the Arctic National Wildlife Refuge in Alaska.

The tax cut plan being pushed by Republican leadership in Washington would leave a big hole in the federal budget. One way the White House and Republican congressional leadership hope to plug that hole is by allowing oil drilling in Alaska’s Arctic National Wildlife Refuge, which has been off limits to oil and gas exploration for decades.

The budget proposal released by the White House in May books nearly $2 billion in revenue from oil and gas lease sales in ANWR over the next decade. The House and Senate leadership have put similar revenue estimates from ANWR drilling into their budget-writing instructions. Building a budget based, in part, on “fantasy” oil and revenue is irresponsible, as is opening ANWR to exploration and production. Congress went down a similar road in 2005. Sen. Susan Collins has consistently voted against opening ANWR to drilling and was among seven Republicans in 2005 to vote for a proposal to strip from the budget the inclusion of expected revenue from drilling in the arctic refuge.

“If we begin drilling in the Arctic National Wildlife Refuge now, we will be wasting resources that should rightfully be available for future generations. If we increase energy efficiency and further develop alternative energy sources, we can effectively reduce our reliance on foreign oil, save consumers money, and protect the environment,” Collins said in 2005.

It was the right standard then, and it is the right standard now.

As with so many critical issues before Congress, moderate senators, such as Collins, must stand up for reason over politics and budget-balancing gimmicks.

ANWR is “the largest unexplored, potentially productive geologic onshore basin in the United States,” the U.S. Energy Information Administration reported in 2000. But, no one knows how much oil lies under the 19 million-acre refuge. Only one test well has been drilled there, and its results have remained secret.

Even if there are sizeable oil and gas deposits there, drilling in ANWR will be very expensive. With oil selling for just $50 per barrel and U.S. oil production from lower-cost sources at high levels, it does not make economic sense for companies to go after expensive oil in Alaska.

“Industry does not want to drill in those places right now because prices are relatively weak,” Pavel Molchanov, senior vice president and equity research analyst at Raymond James & Associates Inc., recently told E&E News. “The idea that companies would jump at the chance to drill in the Arctic is somewhat of a fantasy.”

Given the complexity of operating in the arctic, only large oil and gas companies would be likely to participate. Those companies, such as ExxonMobil and BP, have reduced spending on exploration in recent years so are unlikely to jump into arctic drilling.

Lack of interest from oil companies is a good reason to reject this budget gambit. There are also compelling environmental reasons to keep ANWR off limits to fossil fuel exploration. Although few Americans will ever see it, there is value in protecting the last, large intact ecosystem that is unharmed by human activity. The value is both local, for native Alaskans who count on the refuge’s caribou herd and other wildlife for their survival, and global. If the ecosystem is disrupted or destroyed by exploration and drilling activity, it cannot be restored to its current state.

Opening ANWR to drilling would also continue America’s reliance on burning fossil fuels, which are a major contributor to climate change, which already threatens the villages near the refuge.

Despite economic and environmental concerns, the Trump administration is working behind the scenes to allow exploration in ANWR, though it is up to Congress to determine whether oil and gas drilling can take place there. The U.S. Fish and Wildlife Service has ordered its Alaska regional director to update a memo from the 1980s to allow exploratory drilling, according to documents obtained by The Washington Post.

Congress, led by thoughtful members such as Collins, must put long-term American interests above short-term budget gimmicks and political posturing and continue to protect the Arctic National Wildlife Refuge.

 


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