Sat, Feb

Abraham Sees Congress Backing Alaskan Oil Drilling

U.S. Energy Secretary Spencer Abraham said Wednesday he was optimistic the new Congress would vote next year to allow oil drilling in an Alaskan wildlife refuge.

WASHINGTON − U.S. Energy Secretary Spencer Abraham said Wednesday he was optimistic the new Congress would vote next year to allow oil drilling in an Alaskan wildlife refuge.

With Republicans in next year's 100-member Senate increasing their majority to 55 lawmakers, President George W. Bush has his best chance yet for winning approval of a key part of his national energy plan -- opening the Arctic National Wildlife Refuge (ANWR) to drilling.

"I think that the prospects (for Congressional approval of ANWR oil drilling) have certainly improved and we're excited about that," Abraham told reporters following a speech to a government advisory coal panel. He said ANWR drilling could boost domestic oil production by as much as 1.5 million barrels a day.

Abraham said some of the newly-elected senators "have expressed support for (ANWR drilling), and that's a good sign."

Republican Sen. Pete Domenici of New Mexico, who chairs the Senate's energy committee, said he will have enough votes early next year to tack on language that would allow the start of ANWR exploration to the annual budget bill that funds the federal government.


"With oil hovering at $50 a barrel, and likely to stay there for several months, the market mandates congressional action. We can develop ANWR without harming the environment or the wildlife. Now is the time to do that," Domenici said on Wednesday in a statement.

Only a simple majority of 51 Senate votes is needed to open ANWR by way of the budget bill, which cannot be filibustered. In the past, a coalition of Senate Democrats and moderate Republicans have blocked ANWR drilling by preventing the 60 votes necessary to end a filibuster on energy legislation.

The budget bill could permit drilling in ANWR by authorizing the Interior Department to collect fees from oil companies for leasing tracts in the refuge for energy exploration.

Domenici plans to offer such language when the Senate Budget Committee takes up the funding bill in February or March. "It's one of the first things we do next year," said a Domenici aide.

Environmental groups say they will again oppose the drilling plan but acknowledge that they will have a tougher fight this time around. The South Carolina-sized refuge is home to an abundance of wildlife, including massive caribou herds, snow geese and polar bears.

Abraham said with oil prices so high, he believes energy companies are eager to invest the billions of dollars it will cost to bring ANWR's huge oil reserves to market.

"In a marketplace in which oil is in the $47-$48 range today and went higher (to almost $56 a barrel) just a few weeks ago, it's hard for me to believe that there wouldn't be a lot of enthusiasm about finding additional (oil) reserves," he said.

The government estimates ANWR could hold between 5.7 billion and 16 billion barrels of oil. The U.S. market consumes about 20.4 million barrels of oil a day.

ANWR covers about 19 million acres, but the Bush administration wants to limit drilling to the refuge's 1.5-million acre coastal plain. To win support in the Senate, the House of Representatives has approved drilling operations that would cover no more than 2,000 acres at any one time.

If Congress gave energy companies access to the refuge, it would take at least a decade before the oil would begin flowing, according to the Energy Information Administration.

The Energy Department's analytical arm said ANWR's output would reach 800,000 barrels per day (bpd) a decade after production began, based on a mean estimate of 10.4 billion barrels of recoverable oil reserves in the refuge.

If higher oil reserves of 16 billion barrels were found, the EIA said ANWR production would peak at 1.5 million bpd.

Using lower oil reserves estimates of 5.7 billion barrels, the refuge would add 590,000 bpd to domestic production, EIA said.

Source: Reuters