GOP about to open a refuge in the Arctic to drill


Lawmakers are the closest they have been in decades to letting oil and natural gas companies drill into the Arctic National Wildlife Refuge (ANWR) in northeastern Alaska.

The bill pbaded by the Senate includes a provision that allows for two sales of drilling rights in the coastal plain of the wildlife refuge.

While the House bill version does not include ANWR drilling, the provision is likely to survive in final legislation and become law if it reaches President Trump's desk.

But even after the policy is approved, the drilling of ANWR is far from certain. Companies are unlikely to seize the opportunity to drill there, badysts say, and any exploration is years away.

And even if companies are interested in drilling there, it is almost certain that environmental groups will challenge them at every step of the process. The courts

In addition, if the Democrats elect a president or take the majority in the House or the Senate, they could place significant obstacles, or even stop the drilling, of ANWR altogether.

"There's a lot of maniacal hyperbole about 'God, they're going to start drilling tomorrow.' That could not be further from the truth," said Kara Moriarty, president of the Oil and Gas Association. of Alaska, which has strongly supported the drilling of ANWR for decades, an opinion shared by the majority of Alaska's residents and state leaders.

The US Geological Survey estimates that the coastal plain of the federally owned refuge , the only area that would be open for drilling, could have up to 11.8 billion barrels of oil, although it has not updated the evaluation in years.

Congress reserved ANWR as a refuge in the 1970s, and left the door open to possible drilling in the Coastal Plain, but dictated that lawmakers would have to act to approve it.

According to the provision in the Senate bill, the Department of the Interior would hold auctions for rights to drill in certain parcels, and then collect royalties on oil and gas prices.

The drilling arrangements, written by Sen. Lisa Murkowski Lisa Ann Murkowski Night Finance: The Republican Party reduces tax relief in 0B to beat the deficit hawks | Republicans see two-week spending bill | Fed official urges caution in digital currency | Security of the audit system under scrutiny Do not infiltrate Arctic oil drilling on the fiscal bill The GOP Senate incorrectly tweets that it approved the tax bill MORE (R-Alaska), it is estimated that it will contribute $ 2.2 billion in fees during the first 10 years, with the money coming entirely from the offers, since oil production is not expected to begin within that period. Half of the revenue would go to the Alaska government and the other half to the federal government.

But if part of that oil is taken off the ground depends on a number of factors, the main one is the current price of oil, which in Friday remained below $ 60 in international markets.

Without a price that allows an oil company to recover the high operating costs in Alaska, plus a profit, producers are unlikely to bite.

Kevin Book, managing director of policy consulting firm ClearView Energy Partners, said that judging by price forecasts, he expects oil companies to pay for ANWR leases, but not to produce oil unless prices go up significantly.

"The price is the final arbitrator, you can sell many leases at any price, but you can not produce barrels at any price," Book said.

"Producing oil at a price of $ 35 means very few investment options, and at $ 100 per barrel, almost nothing is ignored."

Pavel Molchanov, a Raymond James researcher, was less optimistic about the industry's interest in ANWR.

"As a practical matter, there is virtually no interest in the industry to drill in ANWR, there is little interest in the industry to invest in Alaska in general, but particularly in ANWR," he said.

Molchanov said that ANWR is a "border exploration" area, on a par with the Great Australian Bight, where the industry has little experience, infrastructure or interest in current economic conditions.

He said that some companies could pay the leases if prices go up in the future, but only a small number.

"It's fundamentally a symbolic change," he said of the opening of ANWR.

One thing that makes drilling in ANWR unattractive is the prospect of facing demands from environmentalists.

The Greens have argued for a long time that drilling would damage the delicate environment and wildlife in the refuge, and that oil and gas would be catastrophic for climate change.

While the opening of ANWR to the drilling would be a great loss for the greens, but they do not plan to give up.

"There will be lawsuits, the process [National Environmental Policy Act] even in the most ideal circumstances, will take time," Sen. Brian Schatz Brian Emanuel SchatzNominated to NOAA swears to abandon family climate company Questions hover over Franken Plan's ethics test of 200 nations 2018 talks to maintain the momentum of the Paris Agreement MORE (D -Hawaii) said, referring to the law that requires environmental reviews of federal government actions.

"So we have the ability to slow down and then we have to win some elections," he said.

Almost all final actions of the Department of the Interior would be subject to litigation, including decisions to hold auctions, approve permits to drill and allow infrastructure.

Earthjustice, a green group that focuses on legal struggles, is likely to be at the center of legal battles.

"The fight to protect the Arctic Refuge has been going on for more than 30 years, and it will continue beyond the pending vote on tax reform," said Marissa Knodel, badociate legislative advisor for the group.

"In the end, we and others who have worked consistently for decades to defend the Arctic Refuge will continue to take whatever action we take, can preserve this treasured landscape for future generations."

But courts are not the only front on which environmentalists are prepared to fight. Greenpeace, for example, is likely to make your signature, eye-catching protests.

"When Shell attempted to drill into the Arctic Ocean, they encountered unprecedented resistance," said Greenpeace spokesman Travis Nichols. "If Trump and his oil and gas cronies try to exploit one of the most vulnerable areas of the planet to obtain more profits for their industry without exit, they are likely to see more of the same."

Other opponents of ANWR drilling are not ready to think about next steps, and I hope they can still prevent the provision in the tax law from becoming law.

"He's been on the hill for 30 years, he's seen all kinds of votes, and the shelter has remained protected," said Kristen Miller, conservation director of the Alaska Wilderness League. "Then, at the end of the day, while they have not voted, we will continue working to make sure that it comes out of any final piece of legislation."

Supporters of drilling recognize the winds against, but say they will not dissuade them.

"Operators in Alaska only factor the time and cost of litigation in their business model today," said Moriarty.

Regarding oil prices, he said that the industry is always in the long game and often optimistic. [19659002] "I think they will not think that the price today will be the same in 40 or 50 years," he said.

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