Will Christmas come early? Congress is expected to vote in the coming week on final passage of Republicans’ tax-reform bill, which would also open Alaska’s Arctic National Wildlife Refuge (ANWR) to oil and natural gas drilling. The conference committee responsible for reconciling the House and Senate tax bills — which includes top ANWR drilling proponents Sen. Lisa Murkowski (R-Alaska) and Rep. Don Young (R-Alaska) — is due to unveil their final bill late Friday, setting up potential votes for next week. Murkowski and Senate Majority Leader Mitch McConnell (R-KY) have said ANWR drilling would be in the legislation. Since the bill is being considered under budget reconciliation rules, it only needs 51 votes to pass.
What does it mean? If Congress opens the Arctic National Wildlife Refuge coastal plain to leasing by oil companies, as appears likely, even a relatively small discovery will be economically important in Alaska, drilling advocates say. And if a giant field awaits in the northeast Alaska refuge, something akin to the Prudhoe Bay oil field to the west? That could mean a decades-long boon for the economy, they say. But the arguments, and those of drilling opponents who say unlocking the 19-million-acre refuge won’t interest companies, are often based on years-old data. Opening the refuge has long been a goal of Republican lawmakers. But this latest measure from Sen. Lisa Murkowski, R-Alaska, has hurtled onto Congress’ tax-overhaul bill. There has been little new analysis on factors such as potential jobs or economically recoverable oil, opponents say.
What’s next? Republican efforts to open the Arctic National Wildlife Refuge coastal plain to drilling could soon pass after decades of failed attempts. But if approval comes, oil likely won’t flow for a decade. The measure to allow leasing in the refuge was written by Alaska Sen. Lisa Murkowski and is part of the Senate’s tax-overhaul bill. Republican negotiators with the House and Senate, meeting Wednesday to resolve differences in the tax-overhaul bills that have passed both chambers, agreed to include the ANWR language in a final bill that will go before both houses for a vote, said Rep. Don Young on Thursday, one of the negotiators along with Murkowski.
Pay less in taxes, leave more to invest? Attempts within Congress to strip out tax breaks and other provisions favorable to the nation’s energy sector were largely left out of the tax reform bill presented by Senate and House Republicans Friday. Everything from special treatment for pipeline investors to tax credits for electricity produced from wind turbines will continue as exists under the current tax code. Combined with a reduction in the corporate tax rates from 35 percent to 21 percent, energy companies of all stripes were expected to pay less taxes in the years ahead.
ConocoPhillips and the NPR-A. Oil development in the federally-managed National Petroleum Reserve-Alaska is now dominated by one company: ConocoPhillips. Conoco now controls over 1,000 square miles of the Reserve. Beyond its current developments, the company sees even more opportunity further west. But in that direction lies the off-limits Teshekpuk Lake Special Area. Some groups think the whole area should stay protected. But Conoco is asking the federal government to re-draw the map. Conoco is currently having a lot of success in the Reserve. For example, when the drill site CD5 came online two years ago, the company expected it to produce about 16,000 barrels of oil per day. Now, it’s putting out about 28,000 barrels per day.
How do we rate? Up until 2016, Alaska had the highest credit rating Moody’s Investment Service had to offer. But, global oil prices crashed, and Alaska’s budget followed suit. In less than a year and a half, Alaska went from one of Moody’s highest rated states, to one of its lowest. Credit rating agencies, like Moodys, look at the $2.5 billion hole in the state’s budget, the energy-dependent economy, and how heavily the government leaned on savings to balance the budget — which all looks bad. But, recently, Moody’s changed their outlook.
Week ahead: Arctic drilling measure nears finish line
The Hill, Timothy Cama, December 18, 2017
The oil industry appears interested in ANWR, but how much money will it generate?
Anchorage Daily News, Alex DeMarban, December 17, 2017
Before the Arctic refuge is drilled: Lawsuits, studies and a decade of waiting
Anchorage Dispatch News, Alex DeMarban, December 17, 2017
Energy sector gets boost from tax bill
Houston Chronicle, James Osborne, December 15, 2017
Conoco hopes to crack open off-limits North Slope land
Alaska Public Media, Elizabeth Harball, December 15, 2017
Credit rating agency sees a ‘clear path,’ as Alaska tries to balance its budget
Alaska Public Media, Rashah McChesney, December 15, 2017