Alaskans are on the verge of seeing the oil-rich coastal plain of the Arctic National Wildlife Refuge (ANWR) opened to leasing for the first time – a three-decades-long quest that was, until now, stifled by environmental it and the blocking-and-tackling tactics of Democrats in Washington, DC.
The Senate-passed Republican tax reform bill includes language directing the Department of the Interior to propose at least two lease sales within the next decade in the coastal plain of ANWR, also known as the “1002 area” after the section of the Alaska National Interest Lands Conservation Act (ANILCA) that contains it.
High hopes ride on the House of Representatives keeping the ANWR provision intact as a bipartisan and bicameral conference committee works to merge the competing versions of tax reform.
Our own Congressman Don Young was named to the House conference team, and Sen. Lisa Murkowski is on the team Senate Majority Leader Mitch McConnell has put together. Sen. Dan Sullivan, while not a member of the conference committee, has been an outspoken proponent of drilling in the 1002 area.
Once ANWR clears the conference process, there’s little doubt President Trump will sign it when it reaches his desk. The ANWR language is one of the biggest “” in the tax reform package, which, among other things, slashes the corporate tax rate from 35 percent to 20 percent to encourage investment in the economy.
Before the end of this month, the 70 percent of Alaskans who, like myself, support oil and gas activity in ANWR should be able to check off one of the biggest items on our Christmas lists. This is a big win that will help reinvigorate an economy in its third year of recession. ANWR is that giant box under the tree on Christmas morning, not a stocking stuffer.
We should remember to send a thank you card to President Trump. Don, Lisa, Dan and hundreds of Alaskans have fought long and hard for our right to access the oil reserves under the Arctic coastal plain, but it’s the fact that Trump is in the Oval Office that is the deciding factor. Congress approved opening ANWR once before in 1995, but it was vetoed by then-President Clinton. Elections, as they say, have consequences.
President Trump is Alaska’s new best friend. Trump and members of his administration, including Interior Secretary Ryan Zinke, have thrown their support behind resource development projects here and across the nation as part of the president’s plan to make America energy dominant. In addition to ANWR, the administration has offered unprecedented access to the National Petroleum Reserve-Alaska and, just this week, proposed a new five-year offshore leasing plan that includes acreage in both the Chukchi and Beaufort seas – federal waters the previous administration removed from the current plan.
Opponents of drilling were quick to jump on the recent results of the Interior Department’s lease sale in the NPR-A as evidence of low industry interest in our state. The Bureau of Land Management offering of 16,100 square miles in NPR-A received just seven bids totaling roughly $1.2 million. But the critics ignore a key difference between NPR-A and ANWR: geology east of Prudhoe Bay is believed to be far more favorable to the type of structures that contain a world-class conventional oil reserve than the western half.
The lack of infrastructure in the NPR-A is another reason for the poor results. It wasn’t that long ago that our federal government tried to restrict access to the reserve to helicopter-only, so its little surprise that industry interest is being cautious and focusing on areas around existing leases.
On the other hand, interest in state-owned lands on the North Slope earlier this month brought in a record-breaking $21 million, or an average bid of $110 per acre. The takeaway: interest remains high in Alaska’s resources if the geology is favorable and the access is certain.
Another essential piece of the puzzle is state tax policy and whether it encourages outside investment. The state has made seven significant changes to the way it taxes the oil industry in the past 12 years. Tax policy, and public policy uncertainty in general matters a great deal to oil executives who must decide how best to invest, especially in Alaska where it can take billions of dollars to develop our resources.
Our state is mired in recession and confidence in the local economy slips a little more each quarter. October marked the 25th consecutive month of job losses – the same number of months of job losses as Alaska saw during the recession in the mid-1980s. The difference this time is that we have not yet found the end of the tunnel.
But amid all the doom and gloom, President Trump is setting the stage for new opportunities that will help drive our economic recovery. When we look back, opening ANWR will be a lasting symbol of the Trump presidency.
If we do our part with policies that encourage investment and give industry the chance to discover new oil, we can put Alaska back on the path to a sustainable economy. We must be resolute in our support for the opening of ANWR to capitalize on this moment. Such a significant development would not only increase throughput in the pipeline but would also likely lead to projects in other parts of the oil patch, sparking a broader economic recovery with benefits that would be felt across the state.
The clock is ticking. The stars are aligned – the players are all in place and it is now time to make opening ANWR happen.
Gail Phillips served in the Alaska House of Representatives from 1991 to 2001 and was Speaker from 1995 to 1999. She lives in Anchorage.