Alaska Oil, Gas Drilling: Open It Up, Senator Lisa Murkowski Says

JUNEAU, AK — Alaska Sen. Lisa Murkowski introduced legislation to open up Alaska's Arctic National Wildlife Refuge to oil and gas drilling, which she says will generate $2 billion in royalties over the next 10 years —half of which would go to Alaska.

Environmental groups and other critics say those projections are wildly optimistic. Recent sales on Alaska's North Slope didn't meet projected revenue, they said. The drilling legislation would probably generate about $100 million for U.S. taxpayers, said fiscal watchdog Taxpayers for Common Sense. That amounts to one-tenth the amount Murkowski and the Congressional Budget Office predict.

Analysts said oil prices would have to be at least $70 a barrel to justify drilling due to expensive exploration costs in the remote Arctic.

A benchmark for crude oil is about $57 a barrel.

Under current law, oil and gas leasing in the wildlife refuge are barred, the CBO said. The region which includes about 1.5 million acres of federal land on the northeast coast of Alaska.

If passed, the Secretary of the interior would hold two "lease sales" over seven years. At least 400,000 acres of land would be available for lease at each sale, the office said.

"For each lease awarded, lessees would pay the federal government bonus bids to acquire the leases, annual rent to retain the leases, and royalties based on the value of any oil or gas production from the leases," the CBO said.

There would be a 16.67 percent royalty on oil and gas produced in the region. The federal government currently charges royalties of 12.5 percent for oil and gas produced onshore and 18.75 percent for oil and gas produced in the Outer Continental Shelf, the CBO said.

By MATTHEW DALY, Associated Press

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