Slightly more than a month after President George W. Bush took office, Republicans in the US Senate introduced an energy incentives and conservation bill that would open 8% (1.5 million acres) of the Arctic National Wildlife Refuge (ANWR) for oil and gas exploration.
On the conservation side, the bill would provide incentives for renewable energy, including solar and wind power, and give consumers tax breaks for energy-efficient appliances, homes and cars.
On the energy production side, the bill would offer millions of dollars in tax incentives and regulatory relief for oil, gas, coal and nuclear production.
It also would expand help programs for low-income families facing high energy bills.
Environmental groups already have tagged the bill a bad proposal that encourages burning fossil fuels and increased pollution. They say it doesn't provide enough encouragement for conservation. Former President Jimmy Carter called reporters to argue against drilling on ANWR, saying it has only a small amount of oil that can't be produced for another 10 years.
Meanwhile Senate Majority Leader Trent Lott, R-Miss., said he is waiting for Bush to present a long-term energy package. After that, he said he hoped the Senate would pass a comprehensive energy package this summer. The United States is facing an energy crisis that will "pose the greatest threat to future economic prosperity in this country," if Congress doesn't deal with it, he said.
Sen. Frank Murkowski, R-Alaska, who introduced the measure, said the bill should reduce US dependence on imported oil to 50% from 56% during the next decade. A lot of that oil will come from Alaska. "This isn't a tax bill favoring Big Oil," he said, but a package that will help smaller, independent producers.
On the other hand, major companies will be the prime producers of the 11 billion to 16 billion bbl of oil believed to lie beneath the 1.5 million-acre coastal plain of ANWR. The oil can be developed without harming the environment, he said.
Just before Bush stepped into the White House, however, Bruce Babbitt, on his way out the door as he finished his term as President Bill Clinton's secretary of the interior, said offshore leases proposed near ANWR and Teshepuk Lake need more study. He ordered the delay of Lease Sale 176 until that study could be completed, probably by June 30, 2002. If the study organization approves the property for leasing, the land would go into the next 5-year leasing schedule.
The government leased offshore property from 1979 to 1998, and 84 of the 688 parcels leased remain in effect. Thirty exploration wells have discovered commercial oil at five sites, but the only one in development is BP's Northstar prospect.
Phillips Alaska Inc. was scheduled to begin drilling an offshore exploration well at its McCovey prospect, north of and between Cross and Reindeer islands, 12 miles off the North Slope of Alaska. They set aside the plan because exploration and production activity in oil and gas fields in the north and south have overburdened the state's permitting division. Phillips plans 12 exploratory wells this year.
The staff of that division simply didn't have time to process the permit for drilling this winter. That will delay the project for a year, since the company needs the winter cold to build ice roads to the drilling site on the Beaufort Sea. Chevron Corp. and Alberta Energy Co. are partners in the prospect.

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