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House OKs defense, ANWR bill

LONG HAUL: Measure goes to Senate, where it likely faces a filibuster.

By JIM ABRAMS
The Associated Press

Published: December 19th, 2005 05:43 AM
Last Modified: December 16th, 2007 12:18 PM

WASHINGTON -- House lawmakers opened the way for oil drilling in the Arctic National Wildlife Refuge as one of their last acts of an all-night session early this morning bringing their legislative year to a close.

Best guess for Arctic refuge oil is about 5 percent of U.S. use 1197839919277275

WASHINGTON -- President Bush calls it the most promising source of untapped oil in America and the key to greater energy independence. But how much oil is there in Alaska's Arctic National Wildlife Refuge?

Nobody really knows for certain.

As a Christmas week fight rages in Congress over whether to allow drilling along the narrow coastal strip of tundra 200 miles north of the Arctic Circle, both sides are trying to use the refuge's oil estimates -- as vague as they may be -- to their advantage. Some of the rhetoric has little bearing on reality.

A drilling go--ahead was approved early today by the House, after it was included in a must--pass defense bill. But the issue remains uncertain in the Senate, where the defense measure is subject to a potential filibuster. Drilling supporters still are believed to fall short the 60 votes needed to overcome such a tactic.

"There is considerable uncertainty regarding both the size and quality of the oil resources that exist" in the refuge, according to an analysis by the Energy Information Administration, the government agency that tracks energy statistics.

Even more uncertain is how much of the oil will be worth going after. That will depend largely on the price of oil and the cost of development -- including compliance with a slew of environmental restrictions likely to be imposed to protect the area's abundant wildlife.

A 1998 U.S. Geological Survey assessment still used today concluded it's almost certain there are at least 5.6 billion barrels of recoverable oil and possibly as much as 16 billion barrels (a 5 percent likelihood) beneath the refuge's 1.5 million--acre coastal plain.

The number most frequently cited is 10.4 billion barrels, the amount the report says is the "mean" -- a statistical tool that simply says there's as good a chance to find less than that as there is to find more.

"There's no question there's a range of uncertainty involved that is quite large," says David Houseknecht, a government geologist involved in the 1998 study. Still, he calls it an "educated assessment" based on seismic studies conducted in the mid--1980s and an examination of adjacent geology where oil has been discovered.

The massive Prudhoe Bay oil field, which has produced 13 billion barrels since 1977 and has 3 billion left, sits 65 miles to the west and there are oil fields in Canada to the east.

"In many cases the oil is dripping out of those rocks," says Houseknecht.

But there has never been a well dug in the federal part of the refuge's coastal plain and only one well drilled in a smaller area within the refuge controlled by Alaska natives.

If that well, dug 22 years ago, indicates an oil bonanza, few know it. The results have been kept a closely held secret by the Alaska native corporation and a handful of people at two oil companies that did the drilling.

The oil numbers are "a ballpark, seat--of--the--pants estimate," concedes Roger Herrera of Arctic Power, the lobbying group that for years has tried to persuade Congress to approve oil development in the refuge. But given the adjacent geology, Herrera says, "you can logically expect" a lot of oil to be there.

While the Geological Survey's numbers reflect "technically recoverable" oil, how much of it would be worthwhile for companies to go after would depend on the price of oil, energy experts say. The study estimated that at $30 for each 42--gallon barrel, about three--fourths of the oil may be economically recoverable. At $55 a barrel, the amount would increase to more than 90 percent.

Whenever the debate heats up in Congress over whether to allow development of the Alaska refuge, both supporters and opponents sometimes come up with questionable comparisons.

There is enough oil in the refuge, Interior Secretary Gale Norton said recently, to supply every drop of oil needed by New Hampshire for 315 years, or Maine for 299 years. Her department also notes that it's enough oil for Washington, D.C., for 1,710 years.

Of course, whatever oil comes from Alaska will never make it to New England or the nation's capital, since by all accounts it would probably be bound for West Coast refineries -- or possibly be shipped to Asia, as some lawmakers fear.

Drilling supporters in Congress also are fond of saying the refuge will produce 1 million barrels or more a day, equal to the oil received from Saudi Arabia. In fact, U.S. imports of Saudi oil have averaged 1.6 million barrels a day over the last five years, according to the Energy Information Administration.

At peak production, about 1 million barrels a day -- roughly 5 percent of current U.S. daily consumption -- would flow down the Alaska pipeline from the refuge, but that would not be a sustained amount. Assessments by both the Energy Department and the Geological Survey suggest peak flow probably would be limited to three to five years, depending on the amount of oil found, with lesser amounts being pumped longer.

"What is reasonable to say is that (the Alaska refuge) could represent between 5 and 10 percent of our national production for a period of 20 to 30 years," says Houseknecht, the government geologist. Domestic oil production averaged 8.6 million barrels a day in 2004.

Drilling opponents also have stretched the statistics.

Environmentalists cite a government study that suggests only 6.7 billion barrels of refuge oil might be economically recoverable if oil prices are $40 a barrel, and note that's "less than 7.3 billion barrels we consume every year."

By that reasoning, the 13 billion barrels of crude that have been pumped over 28 years from Prudhoe Bay, North America's largest oil field, makes up less than two years worth of oil.

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The ANWR provision was attached to a major defense bill, forcing many opponents of oil and gas exploration in the barren northern Alaska range to vote for it. The bill, passed 308-106, also included money for hurricane relief and bird flu preventive measures.

The vote came at 1 a.m. AST as bleary-eyed legislators struggled to wrap up their work for the year.

The House was also taking up a plan to cut deficits by almost $40 billion over five years in legislation hailed by GOP conservatives as a sign their party was returning to fiscal discipline and assailed by Democrats as victimizing medical and education programs that help the poor.

While House lawmakers were heading for the exits, the end was not in sight for the Senate, which can't leave for Christmas until it deals with spending bills and the deficit-cutting package and overcomes a filibuster on renewing the Patriot Act. A Senate vote on the deficit reduction bill could come today.

A $453 billion defense spending bill became the flypaper for issues that have eluded congressional compromise. Those included, along with the ANWR provision, $29 billion in federal aid for victims of Katrina and other storms; an additional $2 billion to help low-income families with home-heating costs; and $3.8 billion to prepare for a possible bird flu pandemic. Of the defense money, $50 billion is for military operations in Iraq and Afghanistan.

Also in the bill is the compromise language worked out between Sen. John McCain, R-Ariz., and the Bush administration banning the cruel, inhumane and degrading treatment of prisoners in U.S. custody.

Democrats and moderate Republicans have for years blocked drilling in ANWR, and its inclusion in the defense bill exposed that bill to a possible filibuster in the Senate that can only be broken with a 60-vote majority.

Democrats complained that they were being forced to accept ANWR drilling with their vote on military spending and hurricane relief.

Rep. David Obey of Wisconsin, the top Democrat on the Appropriations Committee, denounced the ANWR provision and another last-minute addition sought by Senate Majority Leader Bill Frist, R-Tenn.: liability protection for vaccine makers in most circumstances, coupled with a compensation fund to individuals harmed by the shots they receive.

"There is something especially outrageous about the willingness of the majority party leadership to allow the Defense Department bill, in a time of war, to be held hostage to totally unrelated special interest items," Obey said.

GOP conservatives, disturbed that their party has overseen a surge in government spending and massive federal deficits, applauded a provision in the defense bill that would cut all discretionary federal programs, except those affecting veterans, by 1 percent in fiscal 2006, producing savings of $8.5 billion.

They also hoped to cut $40 billion from the deficit, which will hardly make a dent in the nation's $8 trillion debt but would be the first time since 1997 that Congress has reined in the growth in spending on federal benefits programs.

Republicans originally put the savings at $41.6 billion, but that figure was later reduced to $39.7 billion with restoration of Medicare payments for oxygen patients, a late concession to lawmakers with interests in the durable medical equipment industry.

Planned spending on Medicare was estimated to fall by $6.4 billion and Medicaid by $4.8 billion. Another $13 billion would be saved from student loan programs, in part by establishing a fixed 6.8 percent interest rate instead of maintaining lower variable rates.

The largest single savings in Medicare would reduce anticipated federal funding for the private HMOs established under 2003 Medicare legislation.

Officials said the changes to Medicaid include an attempt to make it harder for the elderly to transfer their assets to children or others in order to qualify for federal nursing home benefits.

Lawmakers had to abandon other measures that would have expanded the deficit-cutting package. They agreed, at a cost of $7.3 billion, to eliminate a scheduled 4.6 percent cut in physician payments under Medicare.

The House early today passed, on a 374-41 vote, a separate defense bill that sets Pentagon policy and authorizes military programs. Action on the bill was held up by resistance to an attempt by Republican leaders to attach language, eventually removed, to limit individual political donations to independent organizations, a source of financing that proved especially valuable to Democratic candidates in 2004.

The bill contains a 3.1 percent pay raise for military personnel, an increase in the death gratuity for the families of active duty personnel to $100,000 and an increase in the enlistment bonuses for active duty to $40,000.