[House Report 116-133]
[From the U.S. Government Publishing Office]
116th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 116-133
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ARCTIC CULTURAL AND COASTAL PLAIN PROTECTION ACT
_______
June 27, 2019.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Grijalva, from the Committee on Natural Resources,
submitted the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 1146]
[Including cost estimate of the Congressional Budget Office]
The Committee on Natural Resources, to whom was referred
the bill (H.R. 1146) to amend Public Law 115-97 (commonly known
as the Tax Cuts and Jobs Act) to repeal the Arctic National
Wildlife Refuge oil and gas program, and for other purposes,
having considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Arctic Cultural and Coastal Plain
Protection Act''.
SEC. 2. REPEAL OF ARCTIC NATIONAL WILDLIFE REFUGE OIL AND GAS PROGRAM.
Section 20001 of Public Law 115-97 (16 U.S.C. 3143 note) is hereby
repealed.
Purpose of the Bill
The purpose of H.R. 1146 is to amend Public Law 115-97 to
repeal the Arctic National Wildlife Refuge oil and gas program.
Background and Need for Legislation
The area that later became the Arctic National Wildlife
Refuge (ANWR, or the Arctic Refuge) was first protected by
Secretarial Order in 1960 as the 8.9-million-acre Arctic
National Wildlife Range. In 1980, the Alaska National Interest
Lands Conservation Act (ANILCA, Pub. L. No. 96-487, 94 Stat.
2371) established the 19.6-million-acre Refuge in part ``to
conserve fish and wildlife populations and habitats in their
natural diversity including, but not limited to, the Porcupine
caribou herd . . . polar bears, grizzly bears, muskox, Dall
sheep, wolves, wolverines, snow geese, peregrine falcons and
other migratory birds and Arctic char and grayling.''\1\
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\1\Pub. L. 96-487, Sec. 303(2)(B)(i).
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Approximately 7.2 million acres of ANWR was designated as
wilderness, but not the 1.5-million-acre coastal plain, which
was to be studied for potential oil and gas development under
section 1002 of ANILCA. Section 1003 of ANILCA prohibited any
oil and gas leasing on the coastal plain unless it were
specifically authorized by Congress.
Not all the land in the 1002 area is federal. Approximately
92,000 acres around the town of Kaktovik have been conveyed to
Alaska Native corporations under the Alaska Native Claims
Settlement Act, and a well was drilled on those lands in 1986
by a consortium of two oil and gas companies and two Native
corporations. It is the only well that has been drilled on the
coastal plain, and the results have been kept secret.
For decades, the oil and gas industry has considered the
coastal plain to be one of the more promising areas for
exploration, but the critical importance of the area for
wildlife and nearby tribes has made protecting it a top
priority for the environmental community. The coastal plain is
considered the ``biological heart'' of ANWR, providing
important denning habitat for polar bears and calving ground
for caribou, and hosting more than 200 species of migratory
birds each year.\2\ The U.S. Fish and Wildlife Service
described the Refuge as ``the only conservation system unit
that protects, in an undisturbed condition, a complete spectrum
of the arctic ecosystems in North America'' and said the
coastal plain has ``outstanding wilderness qualities'' and is
``the most biologically productive part of the Arctic Refuge
for wildlife.''\3\ For the Gwich'in people, who do not live in
the coastal plain but depend on the Porcupine Caribou Herd for
subsistence, the coastal plain is ``the sacred place where life
begins.''
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\2\Laura B. Comay et al., Cong. Research Serv., RL33872, Arctic
National Wildlife Refuge (ANWR) (2018).
\3\U.S. Dep't of the Interior, Arctic National Wildlife Refuge,
Alaska, Coastal Plain Resource Assessment (1987), https://www.fws.gov/
uploadedFiles/Region_7/NWRS/Zone_1/
Arctic/PDF/1987leis.pdf.
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Numerous legislative attempts were made in the thirty years
preceding H.R. 1's passage in 2017 to open the Arctic Refuge to
oil and gas development, but none succeeded. The Committee
notes that while the arguments made in previous decades in
favor of opening ANWR were dubious and easily refuted, they
were made in response to underlying conditions--such as rising
gasoline prices, increasing dependence on imports, or declining
throughput in the Trans-Alaska Pipeline System (TAPS)--that
were significant concerns in the past but do not exist at the
present time. Gasoline prices have been fairly stable, with
monthly averages below $3 since October 2014, while the price
impact of opening ANWR is estimated by the Energy Information
Administration to be no more than 3.5 cents per gallon.\4\
Domestic crude production has more than doubled since 2008,
reaching an all-time high of over 12 million barrels per day in
early 2019, but efforts to achieve energy independence have
been abandoned in favor of encouraging unfettered crude
exports, which have been averaging nearly 3 million barrels per
day this year, and are expected to grow. Finally, new
developments underway in the National Petroleum Reserve-Alaska
will provide TAPS with sufficient oil volumes to operate
economically for decades to come. In short, the Committee
believes that even the unpersuasive arguments made in the past
in favor of opening the Reserve to oil and gas development fall
apart completely in light of the current U.S. oil supply
situation.
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\4\U.S. Energy Info. Admin., Analysis of Crude Oil Production in
the Arctic National Wildlife Refuge 11 (2008), https://www.eia.gov/
analysis/requests/2008/anwr/pdf/sroiaf(2008)03.pdf (using $1.44/bbl
price impact in high resource case, with one barrel equaling 42
gallons, which likely overstates the direct impact of ANWR production
on gasoline prices, since the price of crude oil contributes only a
little more than half to the price of gasoline, see U.S. Energy Info.
Admin., Factors Affecting Gasoline Prices (last updated Feb. 13, 2019),
https://www.eia.gov/energyexplained/
index.php?page=gasoline_factors_affecting_prices).
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Nevertheless, Congressional Republicans included
reconciliation instructions in the FY 2018 budget resolution
that allowed the Senate Energy and Natural Resources Committee
to add a revenue-generating ANWR leasing program onto H.R. 1,
the Tax Cuts and Jobs Act,\5\ which needed only 50 votes in the
Senate to pass. The Congressional Budget Office (CBO) estimated
that the language would raise $1.1 billion in federal revenues,
but that estimate was questioned by then-Ranking Members
Grijalva, Huffman, and Lowenthal, who pointed to recent lease
sales in the Arctic that had brought in far less money on per-
acre basis.\6\
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\5\Pub. L. 115-97.
\6\Press Release, Democrats: After Alaska Lease Sale Fails to Raise
Significant Revenue, GOP Must Face Reality on Arctic Refuge Drilling
Plan (Dec. 7, 2017), https://naturalresources.house.gov/media/press-
releases/democrats-after-alaska-lease-sale-fails-to-raise-significant-
revenue-gop-must-face-reality-on-arctic-refuge-drilling-plan.
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H.R. 1 was signed into law on December 22, 2017, becoming
Public Law 115-97. Title II of the law required that two lease
sales offering no less than 400,000 acres in Arctic Refuge be
held, one within four years after enactment and one within
seven years. The law also limited total surface disturbance to
be no more than 2,000 acres, but the Bureau of Land Management
estimates that over 20 drill pads, 200 miles of roads, and 275
miles of pipeline can easily be constructed within the 2,000-
acre limit, covering the breadth of the entire coastal
plain.\7\ Despite the law providing until December 2021 to hold
the first lease sale, officials at the Department of the
Interior have expressed their determination to hold a lease
sale in 2019, two years ahead of schedule.\8\
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\7\2 Bureau of Land Mgmt., Coastal Plain Oil and Gas Leasing
Program Draft Environmental Impact Statement, tbl. B-5.
\8\Yereth Rosen, U.S. Vows First Oil Lease Sale in Alaska Arctic
Refuge This Year, Reuters (May 30, 2019), https://www.reuters.com/
article/us-alaska-oil-refuge/u-s-vows-first-oil-lease-sale-in-alaska-
arctic-refuge-this-year-idUSKCN1T1011.
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The Committee believes that the partisan process used to
force the enactment of an oil and gas drilling program in the
Arctic Refuge, combined with the lack of care the current
administration is taking in implementing that program, the
inadequate or nonexistent consultation with Alaska Natives, the
absence of any compelling public policy argument for drilling
in the Refuge, and the biological and cultural importance of
maintaining the current wilderness characteristics of the
coastal plain, make it imperative to repeal the ANWR oil and
gas program established in Pub. L. 115-97.
Committee Action
H.R. 1146 was introduced on February 11, 2019, by
Representative Jared Huffman (D-CA). The bill was referred
solely to the Committee on Natural Resources, and within the
Committee to the Subcommittee on Energy and Mineral Resources.
The Subcommittee held a hearing on the bill on March 26, 2019.
On May 1, 2019, the Natural Resources Committee met to consider
the bill. The Subcommittee was discharged by unanimous consent.
Chair Grijalva (D-AZ) offered an amendment in the nature of a
substitute. Representative Don Young (R-AK) offered an
amendment designated Young #1 to the amendment in the nature of
a substitute. The amendment was not agreed to by a roll call
vote of 14 yeas and 22 nays, as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Representative Garret Graves (R-LA) offered an amendment
designated Graves #1 to the amendment in the nature of a
substitute. The amendment was not agreed to by a roll call vote
of 14 yeas and 22 nays, as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Representative Garret Graves (R-LA) offered an amendment
designated Graves #2 to the amendment in the nature of a
substitute. The amendment was not agreed to by a roll call vote
of 13 yeas, 22 nays, and 1 present, as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The amendment in the nature of a substitute offered by
Chair Grijalva was adopted by voice vote. The bill, as amended,
was ordered favorably reported to the House of Representatives
by a roll call vote of 22 yeas and 14 nays, as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Hearings
For the purposes of section 103(i) of H. Res. 6 of the
116th Congress--the following hearing was used to develop or
consider H.R. 1146: legislative hearing on March 26, 2019,
titled ``The Need to Protect the Arctic National Wildlife
Refuge Coastal Plain,'' considering H.R. 1146 (Huffman): The
Arctic Cultural and Coastal Plain Protection Act.
Committee Oversight Findings and Recommendations
Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII of the Rules of the House of Representatives, the
Committee on Natural Resources' oversight findings and
recommendations are reflected in the body of this report.
Compliance With House Rule XIII and Congressional Budget Act
1. Cost of Legislation and the Congressional Budget Act.
With respect to the requirements of clause 3(c)(2) and (3) of
rule XIII of the Rules of the House of Representatives and
sections 308(a) and 402 of the Congressional Budget Act of
1974, the Committee has received the following estimate for the
bill from the Director of the Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 21, 2019.
Hon. Raul M. Grijalva,
Chairman, Committee on Natural Resources,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1146, the Arctic
Cultural and Coastal Plain Protection Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Janani
Shankaran.
Sincerely,
Phillip L. Swagel,
Director.
Enclosure.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Bill summary: Current law directs the Department of the
Interior (DOI) to implement an oil and gas leasing program for
federal lands located within the coastal plain of the Arctic
National Wildlife Refuge in Alaska. H.R. 1146 would repeal that
program. CBO estimates that enacting the legislation would
result in the collection of fewer offsetting receipts, but also
would lower payments to Alaska, which would have the effect of
increasing net direct spending by $905 million over the 2019-
2029 period.
Estimated Federal cost: The estimated budgetary effect of
H.R. 1146 is shown in Table 1. The costs of the legislation
fall within budget function 300 (natural resources and
environment) and 800 (general government).
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 1146
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By fiscal year, millions of dollars--
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2019- 2019-
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2024 2029
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INCREASES IN DIRECT SPENDING
Estimated Budget Authority................................. 0 0 0 600 * * 301 1 1 1 1 600 905
Estimated Outlays.......................................... 0 0 0 600 * * 301 1 1 1 1 600 905
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* = between zero and $500,000.
Basis of estimate: For this estimate, CBO assumes that the
legislation will be enacted near the end of 2019.
Background: A provision of Public Law 115-97, the major tax
legislation enacted in 2017, directs DOI to implement an oil
and gas leasing program for 1.5 million acres of federal lands
within ANWR's coastal plain. DOI is required to hold two
sealed-bid-auction lease sales by 2025 and to offer at least
400,000 acres for lease each time. The department is reviewing
public comments and finalizing an environmental impact
statement before holding the first sale.
For each lease awarded, the lessee will pay the federal
government a bonus bid (the amount that a company is willing to
pay to acquire a lease), annual rent to retain the lease, and
royalties based on the value of any oil or gas produced. (Those
payments are recorded in the budget as offsetting receipts, or
reductions in direct spending.) The current royalty rate for
oil and gas production in ANWR is 16.67 percent. Alaska will
receive one-half of the gross receipts from the leasing
program.
Direct spending: CBO estimates that enacting H.R. 1146
would increase net direct spending by $905 million over the
2019-2029 period.
Bonus Bids. The U.S. Geological Survey (USGS) estimates
that federal land in ANWR contains an average of 7.7 billion
barrels of technically recoverable oil (oil that can be
extracted using current methods).\1\ Using information from
USGS, the state of Alaska, and representatives from the oil and
gas industry, CBO estimates that, on average, the cost to
produce oil in ANWR will range from $45 to $55 per barrel (in
current dollars). The portion of the technically recoverable
oil that will be extracted will depend on future market prices.
CBO does not expect that natural gas production from ANWR will
be economically viable in the next several years.
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\1\USGS estimates that federal lands in ANWR contain between 4.3
billion and 11.8 billion barrels of technically recoverable oil, and
that there is a 50 percent chance that those lands contain at least 7.7
billion barrels of oil. See U.S. Geological Survey, Arctic National
Wildlife Refuge, 1002 Area, Petroleum Assessment, 1998, Including
Economic Analysis (April 2001), https://pubs.usgs.gov/fs/fs-0028-01.
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Based on the results of lease sales in other areas
perceived to contain large oil resources, CBO expects that oil
companies will actively compete for leases in ANWR because of
its strategic as well as its resource value. In addition, CBO
expects that land in the western portion of ANWR--which
contains the highest estimated concentration of resources--will
be most attractive to bidders and will be leased in the first
sale. Accordingly, we expect that the first sale will produce
the highest bonus bids. Using information from major federal
lease sales in the lower 48 states and onshore and offshore
Alaska, where average bids ranged from roughly $200 to $20,000
per acre (adjusted for inflation to 2019 dollars), CBO
estimates that gross receipts from bonus bids for ANWR leases
will total $1.8 billion over the 2019-2029 period In developing
that estimate, CBO considered a range of projected oil prices,
oil production volume, and total acreage leased. For example,
if bidders were to lease all 800,000 acres that DOI is required
to offer at a minimum, that estimate implies an average bonus
bid of $2,250 per acre.
Because half of those receipts will be paid to Alaska, CBO
estimates that the net federal receipts from bonus bids will
total $900 million over the 2019-2029 period. (Thus, CBO
estimates that enacting H.R. 1146 would increase net direct
spending by $900 million over the 2019-2029 period.
Other Receipts. Federal oil and gas lessees pay rent
annually to the government to hold a lease until production
begins. Based on the annual minimum rental rate in current law
of $3 per acre in the National Petroleum Reserve in Alaska, CBO
estimates that under H.R. 1146, the government would forgo
rental payments totaling about $5 million over the 2019-2029
period.
CBO also estimates that the government will receive royalty
payments on oil produced from ANWR leases. However, using
information from the Energy Information Administration on the
typical period that would be necessary to drill exploratory
wells, complete production plans, and build infrastructure to
produce and transport any oil from ANWR, CBO estimates that no
significant royalty payments will be made until after 2029,
once production begins.
Uncertainty: The amount the government will collect from
bonus bids for ANWR leases is uncertain and could be higher or
lower than CBO estimates. Potential bidders could rely on
assumptions that differ from CBO's, including projections of
long-term prices for oil, production costs, the area's resource
potential, and alternative investment opportunities. In
particular, oil companies may evaluate and compare potential
investments in ANWR with other domestic and overseas investment
options. The factors that affect companies' investment
decisions result in a wide range of possible bonus bids.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in Table 2.
TABLE 2.--CBO'S ESTIMATE OF PAY-AS-YOU-GO EFFECTS OF H.R. 1146
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By fiscal year, millions of dollars--
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2019- 2019-
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2024 2029
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NET INCREASE IN THE DEFICIT
Statutory Pay-As-You-Go Effect............................. 0 0 0 600 0 0 301 1 1 1 1 600 905
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Increase in Long-term deficits: CBO estimates that enacting
the bill would increase on-budget deficits by more than $5
billion in at least one of the four consecutive 10-year periods
beginning in 2030. After considering a range of price and
production scenarios, CBO estimates that under current law, net
royalties will exceed $500 million annually over the years of
peak oil production in ANWR. Under H.R. 1146, the federal
government would forgo those royalties.
Mandates: None.
Estimate prepared by: Federal Costs: Janani Shankaran;
Mandates: Jon Sperl.
Estimate reviewed by: Kim P. Cawley, Chief, Natural and
Physical Resources Cost Estimates Unit; H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis; Theresa Gullo,
Assistant Director for Budget Analysis.
2. General Performance Goals and Objectives. As required by
clause 3(c)(4) of rule XIII, the general performance goals and
objectives of this bill is to repeal the Arctic National
Wildlife Refuge oil and gas program.
Earmark Statement
This bill does not contain any Congressional earmarks,
limited tax benefits, or limited tariff benefits as defined
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of
the House of Representatives.
Unfunded Mandates Reform Act Statement
This bill contains no unfunded mandates.
Existing Programs
This bill does not establish or reauthorize a program of
the federal government known to be duplicative of another
program.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Preemption of State, Local, or Tribal Law
Any preemptive effect of this bill over state, local, or
tribal law is intended to be consistent with the bill's
purposes and text and the Supremacy Clause of Article VI of the
U.S. Constitution.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets and
existing law in which no change is proposed is shown in roman):
SECTION 20001 OF PUBLIC LAW 115-97
[SEC. 20001. OIL AND GAS PROGRAM.
[(a) Definitions.--In this section:
[(1) Coastal plain.--The term ``Coastal Plain'' means
the area identified as the 1002 Area on the plates
prepared by the United States Geological Survey
entitled ``ANWR Map--Plate 1'' and ``ANWR Map--Plate
2'', dated October 24, 2017, and on file with the
United States Geological Survey and the Office of the
Solicitor of the Department of the Interior.
[(2) Secretary.--The term ``Secretary'' means the
Secretary of the Interior, acting through the Bureau of
Land Management.
[(b) Oil and Gas Program.--
[(1) In general.--Section 1003 of the Alaska National
Interest Lands Conservation Act (16 U.S.C. 3143) shall
not apply to the Coastal Plain.
[(2) Establishment.--
[(A) In general.--The Secretary shall
establish and administer a competitive oil and
gas program for the leasing, development,
production, and transportation of oil and gas
in and from the Coastal Plain.
[(B) Purposes.--Section 303(2)(B) of the
Alaska National Interest Lands Conservation Act
(Public Law 96-487; 94 Stat. 2390) is amended--
[(i) in clause (iii), by striking
``and'' at the end;
[(ii) in clause (iv), by striking the
period at the end and inserting ``;
and''; and
[(iii) by adding at the end the
following:
[``(v) to provide for an oil and gas
program on the Coastal Plain.''.
[(3) Management.--Except as otherwise provided in
this section, the Secretary shall manage the oil and
gas program on the Coastal Plain in a manner similar to
the administration of lease sales under the Naval
Petroleum Reserves Production Act of 1976 (42 U.S.C.
6501 et seq.) (including regulations).
[(4) Royalties.--Notwithstanding the Mineral Leasing
Act (30 U.S.C. 181 et seq.), the royalty rate for
leases issued pursuant to this section shall be 16.67
percent.
[(5) Receipts.--Notwithstanding the Mineral Leasing
Act (30 U.S.C. 181 et seq.), of the amount of adjusted
bonus, rental, and royalty receipts derived from the
oil and gas program and operations on Federal land
authorized under this section--
[(A) 50 percent shall be paid to the State of
Alaska; and
[(B) the balance shall be deposited into the
Treasury as miscellaneous receipts.
[(c) 2 Lease Sales Within 10 Years.--
[(1) Requirement.--
[(A) In general.--Subject to subparagraph
(B), the Secretary shall conduct not fewer than
2 lease sales area-wide under the oil and gas
program under this section by not later than 10
years after the date of enactment of this Act.
[(B) Sale acreages; schedule.--
[(i) Acreages.--The Secretary shall
offer for lease under the oil and gas
program under this section--
[(I) not fewer than 400,000
acres area-wide in each lease
sale; and
[(II) those areas that have
the highest potential for the
discovery of hydrocarbons.
[(ii) Schedule.--The Secretary shall
offer--
[(I) the initial lease sale
under the oil and gas program
under this section not later
than 4 years after the date of
enactment of this Act; and
[(II) a second lease sale
under the oil and gas program
under this section not later
than 7 years after the date of
enactment of this Act.
[(2) Rights-of-way.--The Secretary shall issue any
rights-of-way or easements across the Coastal Plain for
the exploration, development, production, or
transportation necessary to carry out this section.
[(3) Surface development.--In administering this
section, the Secretary shall authorize up to 2,000
surface acres of Federal land on the Coastal Plain to
be covered by production and support facilities
(including airstrips and any area covered by gravel
berms or piers for support of pipelines) during the
term of the leases under the oil and gas program under
this section.]
DISSENTING VIEWS
We strongly oppose H.R. 1146. This bill would repeal
Section 200001 of Public Law 115-17, eliminating the
authorization of an oil and gas development program in the 1002
Area of the Arctic National Wildlife Refuge (ANWR).
ANWR encompasses 19.64 million acres in northeastern Alaska
and is a unit of the National Wildlife Refuge System.\1\ ANWR,
while managed by the U.S. Fish and Wildlife Service, is not
entirely owned by the federal government. The Alaska Native
Claims Settlement Act of 1971 (ANCSA, 43 U.S.C. 1601 et seq.)
transferred parts of ANWR to Native Corporations but requires
that subsurface lands in national wildlife refuges created
before 1971 be managed according to the refuge's regulations,
and oil development is restricted in the other 18.07 million
acres of ANWR accordingly.\2\ Thus, oil and gas activities in
ANWR, even on lands owned by Alaska Natives, must be authorized
by Congress. While Congressional authorization is required by
law, the Committee Minority believes that Alaska Natives should
be able to exercise their right to develop minerals on their
lands if they so choose.
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\1\U.S. Fish and Wildlife Service. About the refuge. https://
wvvw.fws.gov/refuge/Arctic/about.html.
\2\M. Lynne Com, Michael Ratner, and Laura B. Comay. Arctic
National Wildlife Refuge (ANWR): An Overview. (Congressional Research
Service, RL33872), (2017).
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The Coastal Plain or 1002 Area within ANWR encompasses 1.57
million acres and was set apart by Congress at the time of
ANWR's creation due to its potential for oil and gas
development. Under Section 1002 of the Alaska National Interest
Lands Conservation Act (Public Law 96-487), Congress directed a
study of the resources in the Coastal Plain. Under Section 1003
of that Act, Congress prohibited oil and gas development in
that area unless specifically authorized by Congress.\3\ This
study was completed in 1987 and recommended full energy
development of the 1002 Area.
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\3\M. Lynne Com, Michael Ratner, and Laura B. Comay. Arctic
National Wildlife Refuge (ANWR): An Overview. (Congressional Research
Service, RL33872), (2017).
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Congress finally acted to authorize oil and gas development
in the 1002 Area in the Tax Cuts and Jobs Act of 2017.\4\ The
law restricts development to 2,000 acres (one ten-thousandth of
ANWR's acreage) and could result in the development of 10.4
billion barrels of oil.\5\ The Administration must hold one
lease sale within 4 years of enactment and a second lease sale
within 7 years of enactment.\6\
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\4\Public Law 115-97. In 1995, H.R. 2491 authorized the development
of the 1002 Area but was vetoed by President Bill Clinton. https://
library.cqpress.com/cqalmanac/document. php?id=cqal95-1100433.
\5\US Senate Energy & Natural Resources Committee. At Last:
Congress Approves Legislation to Open Alaska's 1002 Area. December 20,
2017, https://www.energy.senate.gov/public/index.cfm/2017/12/at-last-
congress-approves-legislation-to-open-alaska-s-1002-area.
\6\Public Law 115-97.
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The oil and gas sector has historically served as a
significant source of employment, revenue, and reliable energy
for the State of Alaska and Alaska Natives.\7\ Nevertheless,
the Members of the Committee Majority, representing districts
from the lower 48 States, wish to eliminate oil and gas
production in Alaska, along with the thousands of jobs
supported by the industry.
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\7\Alaska Resource Development Council. Alaska's Oil and Gas
Industry, http://www.akrdc.org/oil-and-gas.
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The oil industry is the largest source of unrestricted
revenue to Alaska. Since Alaska became a state in 1959, the oil
and gas industry has contributed almost 90 percent of the
State's unrestricted General Fund and over $180 billion in
total State revenue.\8\ Overall, the oil industry supports over
110,000 direct and indirect jobs.\9\ In 2016, average earnings
in the industry were 2.5 times higher than the State
average.\10\ Since the 1950s, oil and gas operators have
invested over $55 billion in developing infrastructure in the
North Slope and Cook Inlet.\11\
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\8\Alaska Resource Development Council. Alaska's Oil and Gas
Industry, http://www.akrdc.org/oil-and-gas.
\9\Alaska Resource Development Council. Alaska's Oil and Gas
Industry, http://www.akrdc.org/oil-and-gas.
\10\Alaska Resource Development Council. Alaska's Oil and Gas
Industry, http://www.akrdc.org/oil-and-gas.
\11\Alaska Resource Development Council. Alaska's Oil and Gas
Industry, http://www.akrdc.org/oil-and-gas.
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The Alaska Native Claims Settlement Act (ANCSA) established
Native Regional Corporations to manage and promote economic
development for Alaska Natives. There are 12 Alaska-based
Native Regional Corporations and a 13th Regional Corporation
represents non-resident Alaska Natives. Each Regional
Corporation redistributes 70 percent of all revenues received
from subsurface estate resources (including oil and gas) evenly
among all 12 Regional Corporations in proportion to the number
of Alaska Natives in each region, at least half of which must
be redistributed among Village Corporations.\12\ Since the
enactment of ANCSA, Regional Corporations have received over $1
billion in receipts from subsurface estate resources.\13\
Accordingly, Alaska Natives will benefit from energy
development in the 1002 Area.
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\12\Alaska Resource Development Council. Alaska Native
Corporations. http://www.akrdc.org/alaska-native-corporations.
\13\Alaska Resource Development Council. Alaska Native
Corporations. http://www.akrdc.org/alaska-native-corporations.
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The Village of Kaktovik is located on the coast of ANWR
near the 1002 Area. The Kaktovik Inupiat Corporation owns
92,000 acres of surface lands, all of which are located within
ANWR.\14\ This means that the people of Kaktovik will benefit
greatly from oil and gas drilling revenues and jobs in the 1002
Area. Notably, H.R. 1146 does not mention the Inupiat residents
of the Coastal Plain, only the Gwich'in, who live more than 100
miles away from the 1002 Area. The Committee Majority did not
invite any residents of the Village of Kaktovik to testify on
this legislation. The two hearing witnesses who reside in the
Village of Kaktovik were invited to testify by the Committee
Minority.
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\14\Arctic Slope Regional Corporation. Kaktovik. https://
www.asrc.com/Communities/Pages/Kaktovik.aspx.
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With modern drilling technology, surface disturbance
associated with drilling operations in the 1002 will be
limited. Current operations on the North Slope near the 1002
Area utilize directional drilling, allowing for more production
with less environmental impact. In 1970, when operations began
in Prudhoe Bay, a 65-acre gravel pad could only support a
drilling radius of 5,000 feet beneath the surface. Today, a 12-
acre gravel pad can support a drilling radius of roughly 22,000
feet. This technology will only improve over time, enabling
even more development with less impact to the surrounding
community.\15\
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\15\ConocoPhillips. Alaska Western North Slope Overview. (May
2017).
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We recognize that, just as local Alaskan communities are
reliant on the oil and gas industry for jobs, a tax base, and a
supply of electricity, they are also dependent upon the health
of various species for subsistence and tourism purposes. Oil
and gas development activities in the Coastal Plain must take
the welfare of species such as caribou, musk oxen, polar bear,
and migratory birds into account. The people of Kaktovik, as
well as the Gwich'in, rely on species within ANWR for their
food source. We support the use of mitigation techniques on oil
and gas operations to ensure the health of these species for
subsistence.
Don Young.
Rob Bishop.
[all]