The congressional super committee searching for ways to pare at least $1.2 trillion from the federal deficit should open up the Arctic National Wildlife Refuge for oil and gas drilling instead of hiking taxes, a top House Republican said today.
Rep. Doc Hastings, R-Wash., the head of the House Natural Resources Committee, said he would be making that controversial ANWR drilling recommendation to the 12-member panel, which is holding its first public meeting tomorrow.
Under Congress’ debt ceiling deal, the newly created deficit reduction committee has until Nov. 23 to approve a plan to cut $1.2 trillion or more from the deficit over the next decade, with the group’s final package subject to straight up-or-down votes in the House and Senate. If the committee fails to reach a compromise or it doesn’t pass Congress, there would be automatic, across-the-board cuts in domestic and defense spending beginning in 2013.
Since Republicans on the panel and in the House are unlikely to support any plan that hikes taxes as a way to raise revenue, the lawmakers on the joint committee need to search for other solutions, Hastings noted.
“They need to find a means to increase revenue to the federal government without raising taxes (and) this is a logical extension of that,” Hastings said. “Increasing American energy production is one of the easiest ways to generate federal revenue” and opening up ANWR “makes good economic sense.”
According to the U.S. Geological Survey, there are an estimated 10.4 billion barrels of oil harbored in the refuge’s coastal plain — which, at peak production, could supply the U.S. with up to 1.45 million barrels of oil daily. Hastings said that over the life of production in the refuge, that could generate $150 billion to $296 billion in royalties to the federal government. And that could translate to several billions of dollars in new revenue over the next 10 years — the time frame on which the deficit-cutting committee is focusing.
But opening up ANWR is a political hot potato even in an ordinary year, and the 2012 presidential campaign is already in full swing. Hastings’ idea is unlikely to gain much traction with the six Democratic members on the joint deficit-cutting committee, including Sen. John Kerry, D-Mass., who has been a vocal critic of allowing drilling in the region.
Environmentalists say the potential oil gains from drilling in ANWR would be small and aren’t worth the risks of damage to wildlife and habitat.
Hastings insisted his ANWR idea isn’t far-fetched and stressed that there may be a chance to build new support for the idea by capitalizing on recently high oil prices and motorists’ anger over costs at the pump.
“Maybe with the price of oil and where it is, the price of gasoline and where it is, … some of these members will have an epiphany,” Hastings said.
Hastings will suggest expanded domestic drilling in his House Natural Resources Committee’s formal recommendations to the deficit-cutting panel next month. Hastings did not rule out using more informal tactics — including one-on-one conversations with super committee members — to advance his ideas.
“This is a work in progress,” Hastings said. “I’ll be doing whatever i can to advance what i think is important.”
Hastings could be floating the ANWR idea as way to steer the panel toward some middle ground, including possibly broadening oil and gas drilling opportunities in other areas, including the eastern Gulf of Mexico and the Atlantic and Pacific coasts.
A statutory ban bars drilling in the eastern Gulf through 2022, unless Congress changes the law. The Obama administration also has said it is not planning on offering any new drilling leases in the Pacific or Atlantic oceans from 2012 through 2017, the next five-year leasing period for the outer continental shelf. Still, lawmakers could force the issue.
Oil and gas industry leaders generally supported Hastings’ plan.
“We have vast portions of this country — federal acreage — that is off limits to development, whether it’s ANWR or the OCS, or certain areas of the lower 48,” said Chevron CEO John Watson. “I think it’s important that all these areas be made available over time for energy development.”
Since other areas could provide similar revenue dollars to the federal government even if ANWR remains off limits energy policy should be part of the super committee’s deficit-cutting work, Watson added.
“There is an opportunity for our industry to contribute both jobs and to deficit reduction through the activity that our industry conducts,” Watson said. “So I hope that energy policy will be considered (by the panel).”
American Petroleum Institute President Jack Gerard said even modest steps to expand domestic drilling could help trim the deficit while bolstering the U.S. economy. API unveiled a study Wednesday that touted the benefits of new drilling in ANWR, currently off-limits of the outer continental shelf and other regions.
“Even some portion of that could make a significant contribution to our debt issues, job creation matters and energy security,” Gerard said.
Drilling advocates last prevailed in advancing an ANWR drilling plan through the Senate in 2005, when the chamber voted narrowly to add the proposal to an unrelated budget bill. But the drilling provisions ultimately were stripped out of the measure, after House Republican leaders encountered resistance from more than two dozen moderates in their party.
In recent years, ANWR drilling advocates have tried new tactics to make the idea more attractive. A recent gambit by Alaska’s senators — Republican Lisa Murkowski and Democrat Mark Begich — would have allowed oil companies to use horizontal drilling techniques to explore the refuge’s reserves as long as their footprint was not within the federally protected area.