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Murkowski proposes 50-50 federal-state revenue split for drilling lease sales in refuge

November 17th | Erica Martinson, ADN Print this article   Email this article  

WASHINGTON — Alaska Sen. Lisa Murkowski on Wednesday released her legislation to allow oil drilling in part of the Arctic National Wildlife Refuge, splitting revenues 50-50 with the state of Alaska.

The move marks a major step forward in her effort to pair the proposal with Republicans' upcoming tax cut legislation.

A Senate budget resolution passed last month included instructions for Murkowski's Energy and Natural Resources Committee to draw up a bill that would add $1 billion to the federal Treasury. For Murkowski, that means an opportunity to open the "10-02" area of ANWR.

Alaska's congressional delegation has been aiming to do so for nearly four decades, without success. Federal law requires an act of Congress to allow drilling in the specified area of ANWR.

The bill requires the interior secretary to hold at least two lease sales within 10 years of the bill's passage, the first within four years, and the second within seven years.

The bill would require that lease sale areas include at least 400,000 acres with a high potential for drilling. But surface development would be limited to 2,000 acres on the surface of the coastal plain.

Those leases would have a royalty rate of 16.67 percent. The bill divides the lease revenues evenly — 50 percent each — between Alaska and the federal Treasury.

Given those parameters and Congressional Budget Office estimates, the committee expects the legislation will raise $1.092 billion in federal revenue over the next 10 years, and an equal amount for Alaska.

Alaska's congressional delegation and Gov. Bill Walker lauded the release as a great success for Alaska.

"The legislation I released tonight will put us on a path toward greater prosperity by creating jobs, keeping energy affordable for families and businesses, generating new wealth, and strengthening our security — while reducing the federal deficit not just by $1 billion over 10 years, but tens or even hundreds of billions of dollars over the decades to come," Murkowski said Wednesday.

"I have no doubt that this legislation, which would lead to producing more energy responsibly by opening up the small section of the 1002 area in ANWR, will help make the United States the world's energy super power again, will dramatically increase our country's national security and lead to American jobs and productive diplomacy around the globe," Alaska Sen. Dan Sullivan said.

And Rep. Don Young, who has moved similar legislation through the House of Representatives more than a dozen times to no avail, said the release is "an important step" to ultimately "strengthen the economic outlook of Alaska and the nation."

"As this effort moves forward, I am committed to protecting Alaska's interests in any and all future negotiations," Young said.

Walker said the bill would give the state the chance to live off its natural resources, fulfilling a promise made at statehood.

But not everyone was happy with the bill.

Environmentalist groups, long opposed to opening ANWR to drilling, said that the legislation would lead the way to destruction of a national treasure.

"This bill would give away Arctic Refuge oil to China and other countries hungry for exports. It would allow roads, pipelines, gravel mines and well pads to be erected across the entire birthing grounds of the Coastal Plain, where caribou calve and where polar bear mothers den," said Adam Kolton, executive director of the Alaska Wilderness League.

Kolton argued that while Murkowski presented a view of limited drilling, "the entire 1.5 million acres could be offered up in two massive lease sales."

Murkowski plans to move the bill through her committee next week.

This story first appeared in the Alaska Dispatch News and is reprinted here with permission.

 

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