First ANWR Lease Sale Could Net $7B -- Interior

The first oil lease sales in Alaska's Arctic National Wildlife Refuge could bring in $7 billion -- nearly triple the estimate of a year ago -- the Bush administration said yesterday in asking Congress once again to pass legislation opening up the controversial area to oil and gas exploration.

The $7 billion figure, to be split with Alaska under the terms of current proposal, is drawn from a recent Congressional Budget Office report on the long-term projected price of oil exceeding $50 per barrel in 2010. Interior previously estimated the first sale would attract $2.4 billion in bids.

If Congress approves oil drilling in ANWR this year, the first sale would occur in 2008. A second sale in 2010 could generate nearly another $1 billion, according to Interior.

"The issue of ANWR is one that continues," said Interior Secretary Gale Norton in releasing the department's proposed fiscal year 2007 budget. "There will be a number of opportunities this year to move ahead."

Environmentalists blasted the proposal as contradicting President Bush's State of the Union address last month in which he declared America is "addicted to oil," and called the projections wildly inflated.

"Last week the president had what we thought was a landmark speech about our addiction to oil," said Brian Moore of the Alaska Wilderness League. "It turns out we may be addicted to oil, but he's standing on the corner looking for a fix."

The administration's fiscal 2006 budget request assumed the first sale would generate $2.4 billion and a total of $5 billion over a five-year period, also to be split 50-50 with Alaska. That was the basis for including ANWR drilling in the Senate's filibuster-proof budget reconciliation process. While the Senate passed ANWR in its budget reconciliation bill, it was not included in the final package.

Senate Energy and Natural Resources Committee Chairman Pete Domenici (R-N.M.) said he is planning another effort to move ANWR drilling through the congressional budget process, based partially on recent Iranian oil-supply disruptions. "Clearly the administration continues to recognize ANWR's importance," said Courtney Boone, spokeswoman for Sen. Ted Stevens (R-Alaska), a key drilling supporter.

"We shouldn't even be talking about this," Moore responded. "How many times has Congress said no to this thing?"

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