Budget Committee says more Arctic oil drilling needed to balance US budget

The Senate Budget Committee has given its approval to oil exploration in a pristine wilderness region in northeastern Alaska on the grounds that additional oil revenues are needed to balance the federal budget.

The Committee included revenues from expected drilling in the Arctic National Wildlife Refuge (ANWR) in its annual Budget Resolution. The resolution – which is legislation to determine ceilings for budget spending – suggests the additional oil revenues are necessary to balance the federal budget.

The oil industry estimates that there is between 6 and 16 billion barrels of recoverable oil beneath a 1.5 million acre tract on the North Slope of Alaska. This area is a specially designated area within the 19 million-acre ANWR, known as the ‘Coastal Plain’. This region was designated by Congress in 1981 as requiring special study to determine its oil and gas potential and the effects of development on the environment. In 1987, the Department of Interior recommended development. Congressional and presidential authorisation is required before the Coastal Plain can be opened.

The Budget Resolution now moves to the full Senate where another amendment to delete the drilling provision is expected.

The Wilderness Society (TWS) has condemned the resolution. “In an era of trillion dollar surpluses, it is ludicrous for the Senate Budget Committee to suggest through this resolution that we need to plunder the natural treasure of the Arctic Refuge to balance the federal budget,” said Rindy O’Brien, TWS vice president of public policy. “Three weeks ago, with oil prices above $34 per barrel, the Alaska Congressional delegation argued that we need to drill in the refuge to reduce oil prices. Now that oil prices have dropped below $27 a barrel, this week their argument has conveniently ‘morphed’ into budget balancing.”

The Budget Committee’s approval comes after Sen. Frank Murkowski (R-Alaska) introduced legislation that would allow oil development in the Arctic Refuge earlier this month. Ninety-five percent of the North Slope is already available to oil and gas exploration and development.

“You don’t pawn family heirlooms for extra cash when you have more than enough money to pay all your bills,” said Jim Waltman, TWS director of refuges and wildlife. “Clearly, this resolution is nothing more than a scam – an outrageous justification for destroying our nation’s greatest northern wilderness.”

Waltman told edie that the odds are against the legislation going through, but that the Budget Committee’s move indicates the Republicans are serious about pursuing drilling in the Refuge. He points out that they mounted a similar campaign in 1995 which was eventually vetoed by President Clinton. Waltman said that although the Republicans believe the oil price rises to be their trump card they will face stiff opposition. “I don’t understand their budget balancing argument, though,” Waltman added. “Particularly as prices are now dropping. They used the same approach in 1995 when there was a deficit, and they still failed.”

The real threat could come from a Republican President, however. “George W. Bush has indicated that he supports oil drilling in the Refuge,” said Waltman.” So we feel we really need to stop this Bill in its tracks now and win over members of Congress just in case Bush gets in.”

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