Cabinet in Full-Court Press for Arctic Drilling

Bush administration officials stepped up their public campaign for Arctic National Wildlife Refuge oil drilling yesterday as lawmakers prepare for a critical phase of budget reconciliation talks that will determine if the ANWR effort survives.

Conferees are expected to be named this week for the five year spending cut package, and informal talks are under way. ANWR has emerged as a key sticking point as lawmakers seek to reach a deal before the holiday break.

Against this backdrop, Interior Secretary Gale Norton made two public appearances yesterday to promote ANWR drilling, calling it a key part of the U.S. energy security she says can be developed safely using stringent environmental restrictions. Energy Secretary Samuel Bodman and Labor Secretary Elaine Chao also appeared in public to rally support yesterday.

Norton said the Bush administration supports restricting export of oil produced in ANWR and predicted high home heating costs would help secure enough votes to win congressional approval. "We have no objection to legislation that would require the ANWR oil to be sold here in the United States," Norton said yesterday morning at the Heritage Foundation, the first of her two appearances yesterday promoting ANWR development.

The Senate's budget reconciliation plan authorizes ANWR leasing; the House version does not. The Senate plan includes language added by Sens. Ron Wyden (D-Ore.) and Jim Talent (R-Mo.) that blocks exports of ANWR oil. ANWR is thought to contain about 10 billion barrels of oil and would produce about a million barrels per day when fully brought on line, according to federal estimates.

The House language authorizing ANWR leasing also included the export restriction, but the whole ANWR package was jettisoned from the House reconciliation bill amid a revolt by GOP moderates. As Senate lawmakers return to town this week, Brian Moore, legislative director of the Alaska Wilderness League, said House moderates are holding firm. "There is no weak link in their chain," he said yesterday.

But at a National Press Club appearance yesterday afternoon with Labor Secretary Chao, Norton said she was optimistic that ANWR would be included in a final budget reconciliation deal. "I think that we can [get enough votes]," she said. "I think there are lots of things that are being explored, and I'm optimistic that one of those will allow this to go forward.

"I think for many of those who have voted against ANWR in the past, who are in the New England region or the Great Lakes region, they are seeing more dramatic evidence today about the effect of high heating oil prices," Norton said, adding there is greater awareness of the effects of high energy costs on the manufacturing sector.

'An inside Congress type of negotiation'

Norton said yesterday morning she has spoken with lawmakers to share Interior's information about the issue. But she added, "Right now, it is really an inside Congress type of negotiation."

ANWR is a priority for key lawmakers including Sens. Pete Domenici (R-N.M.) and Ted Stevens (R-Alaska), as well as many House members who support tapping more domestic supply. According to news reports and sources close to the issue, Stevens -- the chairman of the Defense Appropriations Subcommittee -- is willing to hold up the defense bill to get his way on Arctic development.

But a coalition of House GOP moderates, whose leverage on the issue is significant with House Democrats united against GOP spending cut plans, have very publicly vowed to reject any reconciliation package that includes ANWR.

An issue to watch as negotiations continue is whether efforts by Stevens and others to court Democrats who back drilling but oppose GOP spending cut plans can bear any fruit. Thirty House Democrats voted in support of ANWR development earlier this year. Cody Stewart, an aide who directs the Congressional Western Caucus, said members are hoping they can gain Democratic backing.

"Members on a one-on-one basis are talking with colleagues across the aisle," he said. Betsy Holahan, a spokeswoman for the Senate Budget Committee, said lawmakers remain hopeful of a deal on the budget package but did not speculate as to whether ANWR would be included. "We hope to have it passed before the holidays," she said of the budget package yesterday.

Norton said ANWR drilling is needed because "America is on the cusp of an energy crisis." She said it is vital to tap more sources of domestic supply to offset declining domestic production, especially amid growing worldwide oil demand. "China has been locking up long-term energy supplies around the world," Norton said.

Energy Secretary Bodman also pressed the issue yesterday. "We must expand domestic production of oil and natural gas in environmentally responsible ways, starting with ANWR," said Bodman as part of his statement accompanying the release of the Energy Information Administration's annual energy outlook for 2006.

Chao, in her appearance with Norton yesterday to press the case for ANWR, cited labor union estimates that developing ANWR could create anywhere from 200,000 to 700,000 jobs and said the number could be even higher.

Reprinted from E&E Daily with permission from Environment & Energy Publishing, LLC. 202/628-6500.