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Democrats question 'sham' revenue projections for Arctic refuge drilling after weak auction

120717 Democrats Question ANWR Revenue pic
A lease sale brought in seven bids covering only about 80,000 acres of the 10 million auctioned from the National Petroleum Reserve Alaska. (U.S. Fish and Wildlife Service via AP)

Democrats are questioning the Congressional Budget Office’s projections of revenue that can be raised by drilling in Arctic National Wildlife Refuge after a federal auction to drill in the National Petroleum Reserve Alaska yielded few bids.

"The dismal response to this lease sale proves what we’ve been saying all along: Even the small amount the GOP claims will be raised by drilling in the Arctic is a sham,” Sen. Maria Cantwell of Washington, the top Democrat on the Senate Energy and Natural Resources Committee, said Thursday. “Congress should strike the language turning the Arctic National Wildlife Refuge (ANWR) into an oilfield and start over."

Energy experts have considered drilling in the National Petroleum Reserve, 23.5 million acres of federal land in the western part of Alaska’s north slope, to be a safer bet than ANWR, since the reserve is already set aside for energy development.

But the Trump administration garnered only seven bids covering about 80,000 onshore acres of the 10 million auctioned from the reserve Wednesday.

ConocoPhillips Alaska Inc., in partnership with Anadarko Petroleum Corp, submitted the seven bids, totaling $1.16 million, raising significantly less than expected.

Before the auction, the administration had hyped the opportunity in the petroleum reserve as the largest single lease sale ever held there.

The modest bidding may signal challenges for Republicans who are moving toward opening the more controversial Arctic National Wildlife Refuge, also in Alaska, to oil and natural gas drilling.

Senate Republicans approved a tax plan last week that includes a provision permitting drilling in the untouched refuge, but the upper chamber still must reconcile that legislation with the House.

The legislation, authored by Sen. Lisa Murkowski, R-Alaska, chairwoman of the Energy and Natural Resources Committee, directed the Interior Department to hold two lease sales for drilling in ANWR over the next decade. It would raise $1.1 billion over that period, according to the Congressional Budget Office.

That would sufficiently fulfill budget instructions from the Republican House and Senate that call for drilling in ANWR to raise $1 billion over a decade to help pay for tax reform.

But some energy experts and Democrats have doubted whether those projections can be met at a time of low, but rising, oil prices, and competition from the shale boom.

Rep. Raul Grijalva of Arizona, the top Democrat on the House Natural Resources Committee, sent a letter Thursday to Keith Hall, director of the Congressional Budget Office, requesting a reassessment of how much revenue drilling in ANWR could generate.

“In light of yesterday’s lease sale in the National Petroleum Reserve, which generated a paltry $1.2 million for an offering of 10.3 million acres, or only 12 cents per acre, we request that you reassess the cost estimate for the provisions that would open the Arctic National Wildlife Refuge to oil and gas leasing,” Grijalva wrote, with Democratic Reps. Jared Huffman and Alan Lowenthal of California.

Democrats have long been successful in blocking Republican efforts to allow energy exploration in a 1.5 million-acre section of the 19.6 million acres of ANWR known as the “1002 area,” where billions of barrels of crude oil lie beneath the coastal plain.

But this year, Republican control of Congress and the White House spurred Senate Republicans to consider the provision with the tax reform measure under budget reconciliation rules that allow it to avoid a filibuster and pass with a simple majority vote. The House's tax bill did not have an ANWR provision.

Murkowski on Wednesday expressed confidence the House and Senate could come to an agreement to “ensure this bill [ANWR] crosses the finish line.”