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Victory at Hand?

Fight Over ANWR More Than Symbolic for Stevens and Murkowski

Republican leaders in Congress appear close to finally being able to pass the far-reaching energy bill that has eluded them in recent sessions. And they are also on the verge of a major symbolic victory in the debate over the nation’s energy policy, opening the Arctic National Wildlife Refuge to resources exploration after more than a quarter-century of struggle over the issue. The emotional battle over the future of ANWR has been particularly personal for Alaska’s Senators, who have framed the issue as not only vital to national security because it could lessen America’s dependence on foreign sources of oil, but also critical to their state’s economy.

With their victory seemingly at hand on ANWR, Republican Sens. Ted Stevens and Lisa Murkowski sat with Roll Call’s Morton M. Kondracke and Emily Pierce for a Q&A.

ROLL CALL: Now what is the legislative situation with respect to ANWR and energy legislation as a whole for that matter? Do you expect that there’s going to be a budget so that we’re dealing with a 51-vote problem or a 60-vote problem?

SEN. TED STEVENS: The legislative situation with ANWR: It’s in the budget resolution, it went to conference with the House, we expect that out within the next two or three weeks at the most, we expect ANWR to come out and be presented in both the House and Senate as part of the reconciliation process. With the energy bill …

SEN. LISA MURKOWSKI: The energy bill is in the works right now, [Senate Energy and Natural Resources] Chairman [Pete] Domenici [R-N.M.] has indicated that he wants to see that out of committee and into markup within the next several weeks, and ANWR will not be included as part of our energy bill. Now as far as the other aspects of energy policy that relate to Alaska, we can go down that route, you know, but as far as ANWR goes …

STEVENS: But [ANWR] will be included in the reconciliation package that comes after the budget resolution is approved, and he said that he will move the energy bill as soon as the budget is approved. … [Methyl tertiary butyl ether] is a key issue that we’re still working behind the scenes to try and help resolve, because the energy bill is very important to our state, as well as the nation.

ROLL CALL: Can you follow up on MTBE? Are you going to try to move that into separate legislation?

STEVENS: The House deals with the MTBE issue and the Senate usually deals with the ethanol issue, but we’re never able to get the two resolved in conference. This bill has failed now for the last three Congresses because of MTBE.

ROLL CALL: Back to ANWR, you’ve been trying to get ANWR opened up for how many years?

STEVENS: The agreement was made in the 1980 Alaskan National Wilderness Conservation Plans Act in 1980 in a bill that passed the House and Senate and came out of conference before the election, and the Senate passed the bill, both the Senate and the House. President Carter asked [then-Arizona Rep.] Mo Udall to hold it up until after the election because he wanted to veto it and then require the next Congress to send him another bill. When [Carter] lost the election, he asked Mo to send him the bill and he signed it and that committed us to the amendment, which is the Tsongas-Jackson Amendment. … That amendment required that there be an environmental impact statement … that there [would] be no irreparable harm to the Arctic by this oil and gas development. … We have now sought approval of that process for 24 years.

ROLL CALL: And what chance, on a percentage basis, is there of your actually getting it finally done this year?

STEVENS: Ninety-nine percent. I think anyone that opposes now, with the process of what is going on in the world as far as oil supplies, is acting contrary to the national interest. We’ve argued, argued and argued about the national security impact of having domestic oil supplies. Now, 60 percent of our oil is coming in from offshore, we now see that China, India and many of the developing nations are increasing their consumption of oil. China this past year, 2004, passed Japan in terms of oil consumption. It became the second largest consumer of oil in the world. But I’m reliably informed that less than 15 percent of their people consume oil products and the rate of their increase in utilization is dramatic. India, however, with more population than China, also is moving forward in utilization of oil energy, and those two together will soon put the whole world in a position of bidding against the two of them for oil supplies no matter where they come from.

MURKOWSKI: But it’s not just national security. … It’s also the fact that for the first time in quite some time, the American consumer is starting to feel it. You drive by that filling station and, my husband said to me the other day, he said, “I went in to Costco and before I went in the price of gas was $1.98 and I came out and they had changed it and now it’s up to $2.11.” Now, that was a pretty extreme jump in one day, but people are seeing this and saying, “Wait a minute, what’s going on here and what is being done to deal with it?” And I think we are at that point where there is a level of public awareness that we haven’t had in some time.

STEVENS: … I really believe that we’re seeing a turning point. I was in Seattle over the weekend, a place where normally they’ve been antagonistic really, and they were very placid about their success in getting ANWR. Their two Senators aren’t, but this is sort of the Chamber of Commerce-type group, and they’re very much in support.

ROLL CALL: In terms of the estimates of how much oil could come out of ANWR, it’s a very small percentage of the daily usage of America.

MURKOWSKI: It is not a small amount. I mean, if you take the mean average, that’s a 25-year supply of what we’ve been getting out of Saudi Arabia. That is not insignificant. That is twice what the Texas oil fields have produced, so the mean estimate is what we’re talking about here and it is not an insignificant amount.

STEVENS: And what [critics of ANWR] don’t tell you is they assume that it’s as if the nation had no other supply of oil … that it would last that small time. That’s absurd, absolutely absurd. …

The original estimate from Prudhoe Bay was about 1 billion barrels. We’ve produced 16-plus billion barrels so far from that one area. This projection now ranges from four to about 18 and that would be the second greatest, largest, oil development on the continent, the first was crude oil. … We believe that it’s trapped there, that it’s capable of really holding oil, it’s the largest structure on the North American continent.

ROLL CALL: Is it true that there hasn’t been a test drilling there for 20 years?

STEVENS: There has been, there was a well drilled there on what we call a tight well at Kaktovik which was not the place selected by the industry, mind you, but selected by the Department of Interior, and that was a secret well. The results are still sealed and available only to the secretary of the Interior.

ROLL CALL: What is the basis, then, for determining that there’s 10.4 billion barrels?

STEVENS: The geology and the seismic that was run.

ROLL CALL: How long will it take before oil actually gets pumped out of the place?

STEVENS: Depends on how much litigation there is as we proceed to try to go ahead. Remember the pipeline was delayed for four years, and we finally had to get an act of Congress to close the courts and any further litigation in order to get the pipeline built. That passed by one vote. We have threats of litigation. I don’t think we can tell you unless we get some understanding of the national security aspects, which I would hope you’d mention the fact that the time the oil pipeline controversy was before the Senate there was no filibuster, there was no threat of filibuster. It was an up or down vote, and everybody knew national security was involved, and that was the reason we had a tacit understanding in those days that any matter affecting national security is not subject to the right of filibuster.

ROLL CALL: That was when?

STEVENS: That was in the ’70s.

ROLL CALL: So you anticipate several years of litigation before anybody can actually start drilling?

STEVENS: We don’t know how long it will be. They’ve threatened everything, they’ve threatened anything and all to delay.

ROLL CALL: They being?

STEVENS: The extreme environmental people.

MURKOWSKI: But if you didn’t have litigation, it’s still going to take several years to do the studies, to do the seismic work, determine where it is you’re going to drill. One thing that people don’t appreciate is we don’t have the option up north of a 365-day season. You’ve got a season when you can explore that is dictated by the state and by the Senate based on the level of frozen tundra. The state will tell you, you can begin your exploratory season beginning Jan. 3, and the season shuts down April 15, and that’s the window of time that you have to operate. So, it’s a slower process than what you’re going to find in other places.

STEVENS: … I’m told that just the permitting will take a couple of years. Someone estimated there’s 71 different permits to drill that first well … EPA, clean air, all of the various permits involved in state and federal regulation. It’s going to take some time. I think that the time may come when we may want to accelerate that process, but we’ll have to wait and see.

ROLL CALL: What do you think of critics who predict that the $2.5 billion that the budget assumes is much more than what the government can actually expect to make in terms of …

STEVENS: They compare the bids and areas and known structures for just leases on federal land, but there haven’t been many of them. They’re very cheap areas, totally areas that the industry is just not interested in at all to the bids that were made at Prudhoe Bay. The oil industry, or at least I just got a letter from Jim Mulva, president of Conoco-Phillips, and he had heard that someone had said during the debate that the industry wasn’t interested there, and he said, “That is absolutely not true, you can quote me, that is not true, we are very interested in that area.” The concept of what people are looking at there is that they take the averaging of these areas that are really not of their interest and they say that’s what they expect. When you go back and look at the process, the basic value of oil that is the basis for that is $25 a barrel, and I asked them to change it and they said they wouldn’t do it because they’d be entering into the debate, this is CBO. But beyond that is the difference in the estimate of the amount of oil. If you take 1 billion barrels and you take $25 oil, you can come out with a different projection of what will be the amount that is bid. I think it is very conservative, you know, the bids on ANWR at Prudhoe Bay were enormous. By the time this land is leased, we’re looking at oil being valued internationally at well over $100 a barrel. That’s another specious argument trying to say this is not worth it and that it doesn’t belong in the budget resolution. The budget resolution and the reconciliation act, in order to be in there, you have to have a reasonable prospect of revenue, it’s dealing with the protection of revenue to have legislation in the reconciliation act. We’re going to face that when it comes up. …

ROLL CALL: Did the requirement have to be that you get revenue in the first year?

STEVENS: Five years.

ROLL CALL: So what revenue will you derive in five years if there is no production for many years?

STEVENS: The threat of litigation does not delay the projection of the money you could get in five years.

MURKOWSKI: Yeah, you’re talking about production and actual oils coming out of the ground that we can fill. We’re also going to derive revenue from the leasing itself.

STEVENS: And this is totally leasing.

MURKOWSKI: Yes, absolutely. There’s no way we could get to production within the …

STEVENS: And if you look at the money that was spent for leases on Prudhoe Bay, that is conservative.

MURKOWSKI: And you have to look at the federal leases. It’s kind of a mixture of apples and oranges when you talk about the state versus the federal leases, and some of those opponents have been looking to the numbers, the dollars that have been coming off of some of the state leases. That’s an aspect as well.

STEVENS: And very marginal oil and gas lands.

ROLL CALL: On the environmental objection, what is it, 19 million acres, 17 million acres?

MURKOWSKI: 19.5 is the whole …

STEVENS: 19 million acres, almost, 18 plus, in the Arctic Wildlife Refuge area. Originally there was a 9 million acre Arctic Wildlife Range created by the secretary of the Interior, as a matter of fact I wrote the order that he signed that puts it on that 9 million acres. That was expanded in 1980 to 18-plus million acres, but one and a half million was left out for this oil and gas development. That was the concession made to Alaska.

ROLL CALL: Which is the northernmost open …

STEVENS: It was always open, it’s never been closed. It was open under the range, it was not closed under the 1980 act, it’s always been open for oil and gas exploration. But there was a requirement that before they could proceed they had to have the approval of Congress of the environmental impact statement.

MURKOWSKI: There’s really three different areas of land status within ANWR itself, within the refuge. There is a wilderness area that is about 8 million acres, there is the range area which is about 10, and then you have the 1.5 along the top, the 10-02 area, that is neither fish nor fowl, it is not wilderness, it was never designated wilderness and it’s not as it is mentioned. It’s not that refuge.

ROLL CALL: Now, within that 1.5 million acres, what do you estimate the footprint of oil production could be like?

MURKOWSKI: Well what we’re talking about and the number that continues is 2,000 acres of developable land. There is a recognition now that we are able to go in and do the exploration, do the production, on a footprint that is greatly reduced. Prudhoe Bay is a 6,500-acre field. … We’re able to just keep reducing down because of the technology that we have out there, which is directional drilling. As Sen. Domenici said, it looks like a bunch of porta-potties all lined up, and in fact they’re 10 feet apart, 25 of them, all reaching out in different areas to provide for the level of production coming out of that field.

STEVENS: It’s more efficient and because they had those limitations on use of the land during the period that it’s possible to operate there, they do concentrate their activities and they move out from one area. It’s less expensive, more efficient and very productive. You understand there’s been several step-off areas from the original development of Prudhoe … and every one of them used less land than the original. …

ROLL CALL: So what does the experience of Prudhoe and other modern drill sites tell you about the impact on wildlife?

MURKOWSKI: You look at the caribou. People are very concerned about the impact to the caribou. The herd there in Prudhoe has grown tenfold since we’ve been operating on the North Slope. The caribou utilize the gravel paths because they sit up just a little bit higher on the tundra, and it allows for a breeze to come through and keep the bugs away. They have not been stopped or deterred by the pipeline, they actually use the pipeline as a wind break in the winter time. It is not the issue that people would like you to believe that it is.

ROLL CALL: Sen. Stevens, you had said that if you didn’t get ANWR, you were going to retire. Are you really serious about that?

STEVENS: I did not say that. I said I would seriously have to consider whether I’d run again. For a while I felt like a white rat, you know, just running around in circles every year, every year same people, same arguments, and nobody would listen. They really wouldn’t. And we were very concerned because I feel responsible. We had blocked this 1980 bill, and my colleagues killed it in 1978. When it came back in ’79, I went to the committee and I was on the committee, we were both on the committee and we were working to try and get this off, he still voted against it. But [then-Sen. Scoop] Jackson [D-Wash.] finally said, “Look, if you will work with us we will meet your primary objective, which is to see that the Arctic is open to exploration of oil and gas.” And they wrote it in fact in the 102 section, the whole section, and I accepted it. I can show you on my wall downstairs the ad that was put in the paper at the time by my political base saying, “Come home Ted, you’re making a mistake, don’t trust those people.” I did trust them, I trusted the Congress, and year after year I began wondering if I’d made the most serious mistake of my life because we could have blocked this bill and Reagan was elected in 1980, they never would have passed it again, and that is one of my worst guilt complexes I have over this whole process. It did not need to happen. If Jackson and [former Sen. Paul] Tsongas [D-Mass.] had lived, we would not have had this delay, they were honorable people and they would have seen to it that Congress kept its word. Congress has been motivated by these extreme environmentalists who violently criticize Tsongas and Jackson for the compromise they made with me, but it was one that was made with me personally, and I went back out and I got some people on our side to vote for this bill in 1980 to get it past Senate to conference. I got it out of conference and then Carter started fooling around with it, so we didn’t think it would ever become law, and then he signed it and we were forced in 1981 to try to repeal it.

ROLL CALL: One side of this question is, if you get ANWR after so many years, do you then just retire because you’ve fulfilled your career objective in a way?

STEVENS: You know, I’m 82 this year. And I still have four years left of my term, three and a half years. I’ll make my decision then. Although what I said at the time was, if we keep getting frustrated, frustrated, frustrated like this, I’m going to have to reconsider why I want to stay in this institution. Mainly because, as I said at that time, if you go back and look at it, that I trusted the system, not just the two Senators that authorized it, but I trusted the system, that Congress would keep the commitment made to our state, which I accepted. And I’ve lost a lot of that trust.

ROLL CALL: A lot of people, in talking about the energy debate, have said, the Republicans are really just focused on production, they’re not focused on conservation or they’re not focused on alternative fuels and whatnot. I wanted to see if I could get you to talk a little bit about the things that you’re working on or that you feel the Republicans are working on, on those types of issues and the things that you think are important that are also going to be in the energy bill. Obviously ANWR’s just a part of the energy policy, even though it’s not going to be in the bill.

MURKOWSKI: Well, and it’s important that you raise it because I think we do get too sidelined into just the production side of the debate because, quite honestly, that’s the most contentious side, and so you’ve got to get your ammunition and you’ve got to get out and work, and that’s what’s making the news. But what needs to be recognized is the focus on conservation, is the focus on alternative and renewables. It can go through what we’re trying to keep together through this new energy bill, you do see that focus on conservation, you do see the focus on the alternatives. I have been pushing in my state … we get focused on the fossilized fuels because we’ve got unlimited quantities, whether it’s oil, gas, coal, but the fact of the matter is that we are also incredibly rich in our ability to take off when it comes to some of the renewables. We have wind generation opportunities along our coastline that are unparalleled, we’ve got tidal, we’ve got geothermal, the whole Aleutian chain is nothing but a string of active volcanoes, where if we can figure out how to harness that geothermal energy. We had a presentation just last week about the opportunities that could present themselves in the ocean currents.

There is a lot out there that needs to be explored. Where it gets a little muddied I think is, and people are saying special interests, is when you look at some of the tax credits or the incentives for some of these projects, are unproven, and absolutely they are unproven. That isn’t part of the problem. And until we can give that boost, give that incentive, to see if we can’t commercialize some of this stuff, then we’re always going to be half in and half out. We’re still going to be reliant on our production from our oil because we haven’t figured out how to make that transition or we haven’t helped along that transition for the alternatives to the renewable. And so that is a focus that an energy bill, if it is to be successful, if it is to get through the Congress, it has to have that balance.

ROLL CALL: How hard do you think it’s going to be to get an energy bill this year considering the fact that a lot of the so-called sweeteners were passed with the international corporate tax bill. Is that going to make it harder for you guys since it’s just going to be raw policy?

MURKOWSKI: You know, you would like to think that at some point in time raw policy actually has a place here in Washington, D.C. I long for that day. You know, we recognize that it has been many years since we last had an energy policy pass Congress, and I would like to think that it’s high time that we are finally at that point where, and again it may go back to my comments earlier about the public awareness of where we are. I mean, look what’s happening, it’s not just the price of gasoline at the pump, it’s what people are paying on their natural gas bill when they’re, you know, we’re all going to start to turn on our air conditioning here pretty soon. People are looking at their utility bills and saying, “Whoa, what is happening?” There’s getting to be a greater debate about [liquefied natural gas] facilities around the country’s coastline.

You know, the brownout that we had just a couple of summers ago, people are starting to make connections about energy and energy consumption and the fact that at some point in time we pay for it, and so I think more questions are being asked about, well, what are we doing about bringing down the price of natural gas? You mean, my utility bill is just going to keep going up or what’s in sight for it? What are the options? And I think you’ve got your American public clueing in more to what is going on and asking the question of their Representatives and saying, “What are you doing then? What are you doing about conservation? What are you doing for alternatives and renewables, and what are you doing to make my life easier?” We’re going to see the stress on the economy. We’re already seeing the high cost of energy eating into what we have to pay out on a monthly basis, and people are paying attention. So, I think we are looking at a better prognosis for passage of an energy bill.

You know, when it comes down to things that are going to make your economy move along, if you don’t have reliable, affordable energy it doesn’t happen.

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