US Senate approves budget bill opening ANWR to oil, gas drilling

Washington (Platts)--3Nov2005

Drilling in Alaska's Arctic National Wildlife Refuge moved one step
closer to reality late Thursday, when the Senate passed a budget
reconciliation bill that includes a provision to open the refuge to oil and
gas drilling.

     The Senate voted 52-47 to pass the omnibus spending measure, designed at
reducing the federal deficit by $35-bil in five years. The ANWR provision
tucked into the bill requires the Interior Department to issue its first two
leases for ANWR oil within two years and assumes $2.4-bil in revenues from
leasing over the next five years. 

     Even though the budget package, with ANWR, has passed the Senate, it has
several hurdles to clear before it would become law. The House still needs to
approve its budget reconciliation bill, which was approved by the Budget
Committee Nov 3. The House budget bill includes provisions not only to open
ANWR to leasing but also to ease restrictions on offshore development.

     If the budget bills pass their respective chambers, negotiators from both
the House and Senate will meet to work out a single piece of legislation,
which then must be approved again in floor votes by both bodies. Because there
are major differences between the House and Senate versions of the bills,
including some controversial cuts to the Medicare and Medicaid programs, those
negotiations could be difficult.     

     Earlier Thursday, the Senate voted 51-48 to block an amendment by
Sen. Maria Cantwell (Democrat-Washington) to remove the ANWR measure from the
budget bill. She argued drilling would not reduce gasoline prices and the
industry had a poor environmental record in northern Alaska. Drilling in ANWR
was too important to be discussed as part of the budget bill and should get
legislative consideration on its own, Cantwell said.

     Drilling supporters, including President George W. Bush, who has made
opening the refuge a cornerstone of his energy policy, have argued the US
needs the estimated 10.5-bil bbl of oil that lies beneath the ANWR coastal
plain. They say ANWR oil could play a key role in reducing US dependency on
foreign sources and improving the nation's energy security.

     Also Thursday, the Senate agreed 83-16 to an amendment sponsored by
senators Ron Wyden (Democrat-Oregon) and Jim Talent (Republican-Missouri) to
prohibit exports of ANWR oil abroad.

                                    --Cathy Landry, cathy_landry@platts.com

     For more information, take a trial to Platts Global Alert at
http://globalalert.platts.com.

Please visit: www.platts.com

Their coverage of energy matters is extensive!!.