Friday, November 04, 2005

Senate backs oil drilling in Alaskan refuge


Senate backs oil drilling in Alaskan refuge

By Tom Doggett

WASHINGTON (Reuters) - The U.S. Senate on Thursday voted to allow oil drilling in Alaska's Arctic National Wildlife Refuge (ANWR), narrowly rejecting a Democratic attempt to strike the plan from a budget bill.

Drilling supporters said developing the refuge's 10.4 billion barrels of crude would raise $2.4 billion in leasing fees for the government, reduce U.S. reliance on foreign oil imports and create thousands of American jobs.

However, it remains far from clear whether a final version of a federal budget-cutting package can be approved by both chambers of Congress. The U.S. House of Representatives plan would open ANWR to drilling, but also aims to cut politically sensitive programs such as food stamps and Medicaid.

"This vote today sends a signal to OPEC and the rest of the world that America is serious about meeting more of its own energy needs. America will not let our consumers or our economy be held hostage to runaway global oil prices," said Republican Pete Domenici of New Mexico, who chairs the Senate Energy and Natural Resources Committee.

U.S. President George W. Bush hailed the Senate for passing legislation that sets out a "common sense approach" to improving the U.S. energy situation.

"We can and should produce more crude oil here at home in environmentally responsible ways. The most promising site for oil in America is a 2,000 acre site in the Arctic National Wildlife Refuge, and thanks to technology, we can reach this energy with little impact on the land or wildlife," Bush said in a statement issued in Mar del Plata, Argentina, where he was attending a 34-nation Summit of the Americas.

The United States has to import almost three out of every five barrels of oil it consumes, with total demand averaging about 20.5 million barrels a day this year.

ANWR is "the nation's single greatest prospect for future oil," said Senate Majority Leader Bill Frist of Tennessee.

Opponents said there was not enough oil in the refuge to lower gasoline prices by more than a penny per gallon, and what crude is there would not get to the market for at least a decade. They also warned drilling would threaten ANWR's habitat for migratory birds, polar bears, caribou and other animals.

"America wants a better energy plan than putting a sweetheart deal (for oil companies) in the budget," said Democrat Maria Cantwell of Washington, who was the main sponsor of the amendment to strike the drilling language.

"Let's not pollute one of the last great remaining wildlife refuges in America," she said, referring to more than 500 oil spills that occur annually on the nearby Alaskan North Slope.

The Senate voted 48 (yes) to 51 (no) on her amendment to remove the ANWR provision from the budget bill.

Lawmakers also voted, 83 to 16, to ban ANWR oil from being exported to China and other countries to ensure the crude stays in the U.S. market.

"There is no assurance that even one drop of Alaskan oil will get to hurting Americans," said Democrat Ron Wyden of Oregon, who opposed ANWR drilling but co-sponsored the oil export ban amendment.

The Senate also rejected, 48 to 51, another Cantwell amendment to stop ANWR oil production if the Alaskan government sued to get a bigger share of the leasing revenue, which the drilling plan splits 50-50 with the federal government.

When Alaska became a state, it kept 90 percent of the lease revenue from oil production and the government received 10 percent. Alaska's legislature has indicated it may sue to maintain the 90-10 split with the ANWR revenue.

Domenici said Cantwell's revenue-sharing amendment was a "back door attempt to kill ANWR" drilling.

ANWR sprawls across 19 million acres, about the size of South Carolina. Republicans have sought to pry open the refuge to energy exploration for more than two decades, while Democrats and environmental groups have argued that Congress should focus on stricter energy conservation measures.

Under both Senate and House drilling plans, the refuge's 1.5 million-acre coastal plain would be opened for energy exploration, but no more than 2,000 acres of the surface area could be covered by production and support facilities, such as airstrips and piers to hold up pipelines.

The close vote in the Senate on striking the ANWR provision may make it difficult for the chamber to accept in a final budget bill the House's proposal to open offshore waters to drilling where energy exploration is now banned.

The Senate is expected to approve its bill cutting federal spending by around $35 billion over five years. The House of Representatives' version seeks to slash more than $50 billion, and a floor vote has not yet been scheduled. The spending cuts are intended to help reduce the federal budget deficit.