ANWR: Gulf Funding Gambit Helps Seal Vote for Arctic Drilling

Senate supporters of Arctic National Wildlife Refuge oil drilling secured a narrow win last night by steering leasing revenues toward Gulf Coast levees and other protections, a move that delivered a key vote for passage of the fiscal year 2007 budget resolution.

The $2.8 trillion budget blueprint passed 51-49 last night, but that vote is only one of several congressional steps needed to ultimately allow leasing on ANWR's 1.5 million acre coastal plain. Last year, the Senate also backed ANWR leasing but the effort ultimately fell apart in the House.

"Look, it's tough," said Sen. Pete Domenici (R-N.M.), a key drilling backer, after the vote. "But one step at a time, and it is a pretty good one right now. ... I think there is a reasonably good chance in the end that we get something like this done this time."

The Congressional Budget Office projects $6 billion in ANWR lease sale revenues, which would be split 50-50 with the state of Alaska. As a result, the budget blueprint gives a $3 billion reconciliation instruction to the Senate Energy and Natural Resources Committee, with the assumption it will be met by authorizing ANWR leases through the budget reconciliation process.

Sen. Mary Landrieu (D-La.) was the only Democrat to back the budget resolution after she struck a deal that creates a $10 billion fund for coastal protection and recovery efforts. The fund would draw money from three sources: ANWR revenues, digital spectrum sales and receipts from offshore drilling.

Sen. David Vitter (R-La.) offered the amendment containing the deal -- which passed by voice vote -- shortly before final passage of the budget. Landrieu said the budget vote was difficult but needed for her state.

"This was not an easy decision," she told reporters. "It was not a pleasant decision. But it was a necessary decision.

"I came here to represent the state of Louisiana," she added.

The deal allows "significant and sure funding to build levees in Louisiana higher and stronger and to restore America's wetlands, which protect not only Louisiana but America's only energy coast," Landrieu argued, saying the measure would steer money primarily to Louisiana, Texas, Mississippi and Alabama.

Drilling opponents stressed that ANWR leasing still faces a host of hurdles.

"There are a couple of people who could have helped to block this budget maneuver [and] didn't, and the result is we are back where we were last year, in the same fight," said Sen. John Kerry (D-Mass.) shortly after the vote last night. "But I think it will run into the same kind of buzzsaw it did before, and on we go. We will continue to fight."

Advocates of ANWR leasing are using the budget process as a vehicle because budget measures cannot be filibustered. Supporters are well shy of the 60 Senate votes needed to break a filibuster on the issue.

The Gulf funding deal

Under Vitter's gulf funding amendment, either the Commerce or Energy committees -- or both -- would create a "Gulf Coast Protection, Reconstruction and Recovery Fund" to be paid for by some combination of the three sources. The deal was brokered with Domenici and other key drilling backers.

Landrieu said the plan would provide $2 billion per year for the next five years for levees and several other coastal restoration efforts. Under the amendment, coastal assistance funding from the spectrum sales and outer continental shelf energy revenues only kick-in if receipts exceed Congressional Budget Office estimates. The offshore revenues steered toward the gulf restoration would encompass lease bids, rents, royalties and payments associated with royalties-in-kind, the amendment states.

The amendment passed by voice vote with no debate. "This is a vital first step that can get us on the path to self-sufficiency, to taking care of these crucial needs without constantly having to ask Congress for direct federal appropriations," said Vitter in a prepared statement last night. "Rather than having to come back here every two or three months for additional appropriations, it would be far better to have a stable revenue source that can help us meet these needs directly. This amendment helps to achieve that goal."

The ANWR issue never turned into a floor fight this year despite heavy behind-the-scenes lobbying and strategizing. Sen. Maria Cantwell (D-Wash.) decided against offering an amendment to strike the reconciliation instruction. She instead focused on making the vote on final passage a referendum on drilling when it was apparent opponents lacked the votes to prevail on an amendment to strike the reconciliation instruction.

Last year, drilling backers broke through in the Senate with a 51-49 majority enabled by several pro-development members replacing drilling opponents following the 2004 elections.

Lawmakers also approved a separate Domenici amendment aimed at tapping planned ANWR revenues to help fund energy programs authorized by the recently passed energy law. The amendment creates a $450 million fund by steering $150 million annually from projected ANWR revenues in fiscal years 2009 through 2011.

The votes

Three of the seven GOP lawmakers that oppose ANWR drilling voted for the budget last night: Sens. Olympia Snowe (Maine), John McCain (Ariz.) and Gordon Smith (Ore.). In contrast, Republican Sens. Susan Collins (Maine), Lincoln Chafee (R.I.), Mike DeWine (Ohio) and Norm Coleman (Minn.) voted against it.

Snowe's plans became a topic of speculation after she secured a win on her Medicare amendment Wednesday. Environmentalists had been hopeful that anti-drilling GOP moderates would oppose final passage of the budget.

"Senator Collins voted to protect the Arctic refuge, Senator Snowe voted to drill in the Arctic refuge," said Lydia Weiss of Defenders of Wildlife.

The future

Asked why he thought ANWR may succeed this year after collapsing last year, Domenici said, "This really does the right thing by the coast. It will help them once and for all in the right way."

But several more steps would be needed before ANWR leasing could occur. Both chambers would have to pass a budget that paves the way for ANWR drilling, and then leasing would have to be authorized through the subsequent budget reconciliation process.

Last year, the Senate budget resolution included reconciliation instructions to Domenici's committee and the Senate reconciliation package authorized leasing. But ANWR was jettisoned from the House spending reconciliation bill amid revolt by anti-drilling GOP moderates, who joined with Democrats united against GOP spending cut plans.

"We are very confident we can defeat any attempt to include Arctic drilling in any budget bill on the House side," said Athan Manuel, who heads U.S. PIRG's Arctic campaign.

He added it may be difficult for the House to strike a deal with the Senate on a budget plan this year, citing provisions in the Senate plan that may face rough sledding in the House -- pointing to passage of Sen. Arlen Specter's (R-Pa.) amendment that added $7 billion to health and education programs.

One wrinkle this year is that ANWR is the only reconciliation item in the Senate budget, which avoided tax cuts and mandatory spending cuts. It is unclear how the House will approach the issue -- the kick-off of the budget process there has been delayed until after recess. Election-year politics and the shortened session are considered further barriers to completing budget deals this year.

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