Congressional Democrats using turnabout in budget bill to take back ANWR leases

  • The Arctic National Wildlife Refuge's coastal plain in summer. (Loren Holmes / ADN)

Almost exactly four years after Republicans used a budget bill to get oil and gas leasing in the Arctic National Wildlife Refuge coastal plain through Congress by the slimmest of margins, Democrats are turning the tables.

When House Democrats passed the $1.75 trillion Build Back Better Act Nov. 19 without any Republican support, they set the stage for what is shaping up to be a mirror image of the political melodrama centered around drilling for oil along ANWR’s north coast that played out in late 2017. Much like how the overall Tax Cuts and Jobs Act signed by former President Donald Trump had virtually no Democratic support, the Build Back Better budget reconciliation bill has been lambasted as a package of wasteful spending and job-killing taxes. Many Democrats have dubbed it the “human infrastructure” bill, building on the much more bipartisan $1.2 trillion Infrastructure Investment and Jobs Act President Joe Biden signed into law earlier this month.

Both the 2017 tax law and the reconciliation bill headed for debate in the Senate contain the seemingly ill-fitting ANWR provisions to avoid the 60-vote Senate threshold and a filibuster, which almost assuredly would have killed the 2017 rider mandating lease sales and would probably do the same today to Democrats’ language to repeal it, with both sides holding slim majorities at the respective times.

More specifically, Republicans, largely led by Sen. Lisa Murkowski, who then chaired the Senate Energy and Natural Resources Committee, in 2017 justified inclusion of the ANWR lease sale in the budget bill on the grounds that the sales would generate upwards of $1.1 billion over 10 years for the Treasury, according to the nonpartisan Congressional Budget Office.

CBO analysts wrote in a report on the Build Back Better Act that the federal leasing provisions are too broad to generate budget estimates.

Republicans have long sought to launch oil drilling in the area, citing the economic and national security boon of the estimated 10.4 billion barrels of oil and 8.6 trillion cubic feet of natural gas contained in the deposit, according to a U.S. Geological Survey analysis.

Alaska’s all-Republican congressional delegation hailed passage of the ANWR lease sale legislation — via 51 Republican votes in the Senate — as a historic step towards economic prosperity in the state, while national Democrats and local environmental organizations derided it as a purely political move that would only help exacerbate climate change.

But by using the budget process to pass the ever-contentious ANWR provision, Republicans set Democrats up to repeal it the same way.

This time, the narratives have flipped, and with Vice President Kamala Harris acting as the tie-breaking vote in an otherwise 50-50 Senate, so have the political circumstances.

The first lease sale held by Bureau of Land Management officials shortly before Biden took office in January netted $14.4 million in winning bids, most of which came from the state-owned Alaska Industrial Development and Export Authority, or AIDEA. Half of the lease revenue also went to the state of Alaska, per language in the 2017 tax bill.

The members of the Alaska delegation and other backers of ANWR oil leasing largely blamed the political tug-of-war over the issue for deterring bidders.

Industry sources, however, generally say the National Petroleum Reserve-Alaska on the other side of the North Slope is more attractive for companies. Politics aside, it is seen as more prospective geologically and importantly is closer to existing infrastructure.

The ANWR language in the Build Back Better Act is straightforward; it would repeal the lease program provision from the 2017 tax bill and refund all lease-related payments to the lessees within 30 days after it is signed into law.

As of early November, AIDEA had spent just more than $12.8 million on its leases, an amount that includes the initial bids, the first year of rent and administrative costs, according to spokeswoman Colleen Bryan.

Murkowski said in a prepared statement following the House vote on the Build Back Better Act that Democrats’ resource provisions are some of the most partisan in the entire 2,400-page bill and will only eventually benefit Russia, China and OPEC nations.

“In the midst of high energy prices and mounting inflation, responsible domestic (energy) production from Alaska, including the prospective 1002 area is needed more than ever. Despite that , House Democrats and the Biden administration are trying to throw it all away through an illegal taking that would fundamentally alter how U.S. leases have been administered for decades,” Murkowski said. “We will do everything we can to strike the ANWR provision — and others — from the reconciliation bill when it comes to the Senate.”

The ANWR coastal plain is regularly called the “1002 area”, a reference to the section of the 1980 Alaska National Interest Lands Conservation Act, or ANILCA, that describes it. ANILCA established many of the designated federal areas in Alaska, including ANWR.

Section 1002 of the exhaustive legislation called for the initial wildlife and hydrocarbon resource assessments and outlines the subsequent steps for oil and gas exploration and development if Congress were to approve it.

Zack Brown, a spokesman for Rep. Don Young, wrote in an email after the House vote that in a “worst-case scenario,” the State of Alaska could sue the administration in an effort to maintain the existing leases.

Murkowski also urged AIDEA leaders to sue federal officials ahead of the House vote. More generally, she has expressed a belief that some Democrats’ own misgivings over portions of the massive spending bill could ultimately sink it.

AIDEA actually already sued Interior agency leaders and Biden Nov. 4 for using an executive order the day they took office to suspend the lease sale program they were directed by Congress to carry out.

Justice Department attorneys have not yet responded to AIDEA’s complaint filed in the U.S. District Court of Alaska.

Elwood Brehmer can be reached at [email protected].

Updated: 
11/24/2021 - 10:55am